Directors Report of V-Guard Industries Ltd.
Mar 31, 2023
Your Directors take pleasure in presenting their 27th Annual Report on the business and operations of V-Guard Industries Ltd. (''the Company''), together with the Audited Financial Statements for the financial year ended March 31, 2023.
The summarized standalone and consolidated results of your Company with previous year''s figures are given in the table below:
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(? in crore) |
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|
Particulars |
Financial Year ended |
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|
Standalone |
Consolidated |
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|
31.03.2023 |
31.03.2022 |
31.03.2023 |
31.03.2022 |
|
|
Revenue from operations |
4049.60 |
3476.67 |
4126.04 |
3500.19 |
|
Other Income |
14.97 |
10.92 |
16.44 |
10.76 |
|
Total Income |
4064.57 |
3487.59 |
4142.48 |
3510.95 |
|
Operating expenditure |
3748.84 |
3142.52 |
3806.13 |
3159.96 |
|
Operating profit before Depreciation, Interest & Tax |
315.73 |
345.07 |
336.35 |
350.99 |
|
Finance Cost |
15.92 |
7.52 |
16.19 |
7.88 |
|
Depreciation and amortization expense |
58.44 |
47.50 |
64.42 |
49.15 |
|
Profit Before Tax |
241.37 |
290.05 |
255.74 |
293.96 |
|
Tax Expense: |
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|
a) Current Tax |
35.89 |
69.01 |
40.26 |
70.61 |
|
b) Deferred Tax |
26.15 |
(5.76) |
26.42 |
(5.08) |
|
Profit After Tax |
179.32 |
226.80 |
189.05 |
228.44 |
|
Basic EPS (?) |
4.15 |
5.27 |
4.38 |
5.29 |
|
Diluted EPS (?) |
4.12 |
5.23 |
4.35 |
5.25 |
Your Company recorded Net Revenue from Operations of ? 4049.60 Cr. on standalone basis, for the Financial Year ended March 31, 2023. Revenue grew by 16.48% compared to ? 3476.67 Cr. recorded during the previous Financial Year. The Profit After Tax for the year is ? 179.32 Cr., whereas in the previous Financial Year, it was ? 226.80 Cr. The segment wise performance of the Company is detailed under the section Management Discussion and Analysis Report which forms part of this Annual Report.
The consolidated Net Revenue from Operations for the Financial Year under review was ? 4,126.04 Cr., with a growth of 17.88% over ? 3,500.19 Cr. for the previous Financial Year. On consolidated basis, the Company earned a Profit After Tax of ? 189.05 Cr. for the Financial Year 2022-23, against ? 228.44 Cr. recorded during the previous Financial Year. The
consolidated financial results comprises of full year financial performance of Guts Electro-Mech Ltd. and V-Guard Consumer Products Ltd. It also includes financial performance of Sunflame Enterprises Private Ltd. post its acquisition i.e. from January 12, 2023 onwards.
3. TRANSFER TO RESERVES
During the year under review, no amount was transferred to any of the reserves by the Company.
4. SCHEME OF AMALGAMATION BETWEEN THE COMPANY AND SIMON ELECTRIC PRIVATE LTD. (SEPL) AND THEIR SHAREHOLDERS AND CREDITORS
The hon''ble National Company Law Tribunal, Kochi (NCLT Kochi) on March 31, 2023, approved the Scheme of Amalgamation of Simon Electric Private Ltd. (SEPL) (Transferor Company) with V-Guard
Industries Ltd. (Transferee Company) and their respective Shareholders and Creditors in compliance with sections 230 to 232 and other applicable provisions of the Companies Act, 2013 (the Act). NCLT Kochi fixed March 25, 2023, as appointed date for the merger. The said Scheme of Amalgamation was duly approved by the Shareholders and Creditors of the Company in the Court convened meetings held on November 14, 2022. Your Company filed the relevant form with Registrar of Companies, Kerala on April 28, 2023, pursuant to which Scheme became effective from the appointed date. Pursuant to the NCLT Kochi order and the Scheme of Amalgamation, Board of Directors in their meeting held on May 03, 2023 issued and allotted 10,83,008 equity shares of your Company having face value of ?1 each to the shareholders of SEPL in the share swap ratio of 0.0076646:1.
Pursuant to said Scheme of Amalgamation, the authorized capital of the Company increased from ? 50,00,00,000 (Rupees Fifty Crore Only) divided into 50,00,00,000 (Fifty Crore) Equity Shares of ? 1/-(Rupee One Only) each to ?1,91,50,00,000 (Rupees One Hundred and Ninety One Crore and Fifty Lakhs Only) divided into 1,91,50,00,000 (One Hundred and Ninety One Crore and Fifty Lakhs) Equity Shares of ? 1/- (Rupee One Only) each w.e.f. the appointed date.
i. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
Your Company had acquired 74% of equity capital of GUTS Electro-Mech Ltd (GUTS) in August 2017 by way of purchase of shares from the erstwhile promoters & their associates and subscription of new shares issued by GUTS vide Share Subscription and Shareholders Agreement (SSHA) dated August 31, 2017. As per the terms of the SSHA, the Company on September 01, 2022, acquired the balance 5,11,119 equity shares of ? 10/- each constituting 26% of equity capital of GUTS, held by erstwhile promoter of GUTS. Therefore, Guts Electro-Mech Ltd. became wholly owned subsidiary of your Company effective from even date.
V-Guard Consumer Products Ltd. (VCPL), continues to be a Wholly Owned Subsidiary of the Company which is engaged in the business of manufacturing and selling of various electronics, electricals and consumer durables.
Your Company acquired 100% equity shares of M/s. Sunflame Enterprises Private Ltd. (Sunflame) for
an amount of ? 680.33 Cr on January 12, 2023 and subsequently Sunflame became a Wholly Owned Subsidiary of your Company. Sunflame is engaged in the business of manufacturing and marketing a wide range of kitchen appliances. The acquisition is in line with V-Guard strategy to become a significant player in domestic kitchen appliances segments. The strong brand recall of ''Sunflame'' and ''Superflame'' brands, with wide product portfolio enables deeper engagement with consumers across geographies. The strong product development capabilities of Sunflame along with established state-of-the-art manufacturing facility at IMT Faridabad, with front-end and back-end linkages will lead to shortened ''Time to market. The acquisition of Sunflame is a strategic fit with multiple levers for unlocking significant synergies in areas like geography, product portfolio and channels.
Presently, the Company does not have any material subsidiary.
The Policy for determining Material Subsidiaries, adopted by your Board, in conformity with Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), can be accessed on the Company''s website at https://www. vguard.in/uploads/downloads/Policy-on-Material-subsidiarv.pdf.
6. CHANGES TO THE SHARE CAPITAL Authorised Share Capital:
During the year, the Authorized share capital of your Company, pursuant to the Scheme of Amalgamation of Simon Electric Private Ltd. (Transferor Company) with V-Guard Industries Ltd. (Transferee Company), increased from ? 50,00,00,000 (Rupees Fifty Crore Only) divided into 50,00,00,000 (Fifty Crore) Equity Shares of ? 1/- (Rupee One Only) each to ? 1,91,50,00,000 (Rupees One Hundred and Ninety One Crore and Fifty Lakhs Only) divided into 1,91,50,00,000 (One Hundred and Ninety One Crore and Fifty Lakhs) Equity Shares of ? 1/- (Rupee One Only) each.
Issued, Subscribed and Paid-up Share Capital:
During the year under review, your Company allotted 3,48,623 equity shares at face value of ? 1/-. Your Company further allotted 2,17,000 and 66,875
number of equity shares of face value of ? 1/- at a premium of ? 67.75/- and ? 70.36/- respectively under ESOS 2013 to employees of the Company. The Paid-up Capital of the Company, as at March 31, 2023 was ? 43,21,74,432/-.
7. DIVIDEND
I n line with the Dividend Distribution Policy of the Company, the Board of your Company in its meeting held on May 30, 2023 has recommended a final dividend of ? 1.30/- (One Rupee and Thirty Paisa Only) @ 130% per equity share of ? 1/- (Rupee One Only) for the Financial Year 2022-23 payable to those members whose name/s appear in the Register of members/ list of beneficiaries as on August 17, 2023 i.e. the cut-off date/record date. The total final dividend payout will amount to ? 56.18 Crore (approx.). The payment of final dividend is subject to the approval of members in the 27th Annual General Meeting ("AGM") of the Company to be held on August 24, 2023.
The Register of Members and Share Transfer Books will remain closed from August 18, 2023 (Friday) to August 24, 2023 (Thursday) (both days inclusive) for the purpose of payment of final dividend for the Financial Year 2022-23, if declared at the ensuing AGM.
Pursuant to the Finance Act, 2020 read with the Income-tax Act, 1961, the dividend paid or distributed by a company shall be taxable in the hands of the shareholders w.e.f. April 1, 2020. Accordingly, in compliance with the said provisions, your Company shall make the payment of dividend after deduction of tax at source at the prescribed rates. For the prescribed rates for various categories, the shareholders are requested to refer to Notice of 27th Annual General Meeting and the Finance Act, 2020 and amendments thereto.
8. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
The details of unpaid or unclaimed dividend(s) & shares transferred to IEPF during the year, pursuant to the applicable provisions of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and the dividend(s) which are due for transfer to IEPF in the forthcoming years, are provided in the Report of Corporate Governance forming part of this Annual Report.
Details of Nodal Officer
The details of the nodal officer appointed by the Company under the provisions of IEPF is available on the website of the Company at https://www.vguard. in/uploads/downloads/Nodal-officer-communication-details.pdf
9. PUBLIC DEPOSITS
Your Company has not invited or accepted any deposits within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), from public during the year under review. Therefore, no amount of principal or interest was outstanding, as on the balance sheet closure date.
10. MATERIAL CHANGES AND COMMITMENTS IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year to which the financial statements relate and the date of the Report.
11. CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business of the Company during the Financial Year 2022-23.
12. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS/ COURTS/ TRIBUNALS
There were no significant material orders passed by the Regulators/ Courts/ Tribunals which would impact the going concern status of the Company and its future operations. However, during the year, NCLT Kochi had approved the scheme of amalgamation between SEPL and your company as detailed above.
13. CREDIT RATING
The Company''s credit facilities are rated by M/s. ICRA Ltd. The Company continues to have long-term rating of [ICRA] AA (pronounced as ICRA double A)
and short-term rating of [ICRA] A1 (pronounced as ICRA A one plus). The outlook on the long-term rating remains stable.
14. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to provisions of Listing Regulations, the Company has provided Business Responsibility and Sustainability Report (BRSR) which forms part of this Annual Report. The BRSR indicates the Company''s performance against the principles of the ''National Guidelines on Responsible Business Conduct.
15. BOARD OF DIRECTORS AND ITS COMMITTEES
a) Composition of the Board of Directors
As on March 31, 2023, the Board of Directors of the Company comprised of eight Directors, with two Executive and six Independent Directors. The composition of the Board of Directors meets the requirement of provisions of Regulation 17 of the Listing Regulations and Section 149 of the Act.
b) Change in office of Directors and Key Managerial Personnel of the Company during the year under review and details of Directors seeking Appointment/Re-appointment at the 27th Annual General Meeting
The members of the Company in their 26th Annual General Meeting held on July 28, 2022, re-appointed Mr. Ramachandran V, Wholetime Director and Chief Operating Officer, who retired by rotation as per the provisions of the Act.
Since Mr. B Jayaraj, Non-Executive NonIndependent Director had intimated his desire to retire from the Board of the Company, he did not opt for re-appointment in the 26th Annual General Meeting. Therefore, his Directorship ceased w.e.f. July 28, 2022.
The Board of Directors in their meeting held on May 30, 2023 appointed,
i) Mr. Ishwar Subramanian (DIN: 01473535) as Additional Director in the capacity of NonExecutive Independent Director for a period of five (5) years and
ii) Mr. Antony Sebastian K (DIN: 01628332) as Additional Director in the capacity of Executive Director for a period of four (4) years.
The Resolutions seeking shareholders'' approval for appointment of Mr. Ishwar Subramanian and Mr. Antony Sebastian K forms part of the Notice of AGM and will be placed in the ensuing AGM.
In compliance with the provisions of the Act, Mr. Ramachandran V is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.
A brief resume of the Directors proposed to be re-appointed, their expertise in specific functional areas, name of companies in which they hold directorships, Committee membership/s / Chairmanship/s, shareholding, wherever applicable, etc. as stipulated under Secretarial Standard-2 issued by ICSI and Regulation 36(3) of the Listing Regulations, is appended as an Annexure to the Notice of the ensuing AGM.
During the year under review, Mr. Vikas Kumar Tak was appointed as Company Secretary and Compliance Officer of the Company w.e.f. February 02, 2023, consequent to the resignation of Ms. Jayasree K from the said post from even date.
As on March 31, 2023, Mr. Mithun K Chittilappilly (DIN - 00027610), Managing Director, Mr. Ramachandran V (DIN - 06576300), COO & Whole Time Director, Mr. Sudarshan Kasturi, Chief Financial Officer and Mr. Vikas Kumar Tak, Company Secretary are the Key Managerial Personnel (KMP) of your Company.
c) Criteria for Determining Qualifications, Positive Attributes and Independence of a Director
The Nomination and Remuneration Committee has formulated Nomination, Remuneration and Evaluation Policy, which details the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178(3) of the Act and
the Listing Regulations. The Nomination, Remuneration and Evaluation Policy is available on the website of the Company at the link https:// www.vguard.in/uploads/policies/Nomination-Policy.pdf
d) Declaration by Independent Directors
The Company has received necessary declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed under Section 149(6) of the Act and Regulation 25 (8) read with Regulation 16 of Listing Regulations (as per the amendment in SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2021). The Company has also received from them declaration of compliance of Rule 6 (1) & (2) of the Companies (Appointment and Qualifications of Directors) Rules, 2014, regarding online registration with the Indian Institute of Corporate Affairs (âMCAâ) at Manesar, for inclusion/ renewal of name in the databank of Independent Directors. The Independent Directors have also confirmed that they have complied with the Company''s Code of Conduct for Independent Directors prescribed in Schedule IV of the Act. Accordingly, all the Independent Directors of the Company had registered their names with data bank of IICA. The Board of Directors of the Company have taken on record the declarations and confirmation submitted by the Independent Directors after undertaking due assessment of the veracity of the same.
e) Certificate from Practicing Company Secretary
Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the Listing Regulations, M/s. Keyul M Dedhia & Associates, Practicing Company Secretaries, Mumbai, has certified that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as Director of the Company by the Securities and Exchange Board of India/ Ministry of Corporate Affairs or any such statutory authority and the certificate forms part of the Report of Corporate Governance forming part of this Annual Report.
f) Number of Meetings of the Board of Directors
The Board meets at regular intervals to consider and approve financial results, business policies and strategic proposals apart from other items of business. The Board and Committee meetings are pre-scheduled, and a tentative annual calendar of meetings is circulated to the Directors in advance to ensure participation of all Directors.
During the year under review, five Board meetings were held on May 19, 2022, July 27, 2022, October 27, 2022, December 09, 2022 and February 02, 2023. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations. The details of the Board meetings are given in the Report on Corporate Governance which forms part of this Report. The Company provides all the Board members the facility to participate in the meetings of Board and its committees through Video Conferencing/ Other Audio-Visual Means.
Pursuant to the requirements of Schedule IV to the Act and the Listing Regulations, a separate Meeting of the Independent Directors of the Company was held on August 25, 2022, and the Directors reviewed the matters enumerated under Schedule IV(VII)(3) to the Act and Regulation 25(4) of the Listing Regulations. All the Independent Directors attended the said meeting.
g) Statutory Committees of the Board
Pursuant to the requirements under the Act and the Listing Regulations, the Board of Directors have constituted various Committees such as Audit Committee, Nomination and Remuneration Committee, Stakeholders'' Relationship Committee, Corporate Social Responsibility (âCSRâ) Committee and Risk Management Committee. The composition and terms of reference of the Committees and number of meetings held during the year under review are given in the Report on Corporate Governance forming part of this Annual Report. All the recommendations made by the Committees of the Board including the Audit Committee were accepted by the Board.
Mr. B Jayaraj retired from Board of Directors of the Company with effect from July 28, 2022 and consequently, he vacated his Membership and Chairmanship from Corporate Social Responsibility Committee on even date. The Corporate Social Responsibility Committee of the Company had elected Mr. Mithun K Chittilappilly as the Chairman of the Corporate Social Responsibility Committee with effect from July 28, 2022. As of March 31, 2023, the Corporate Social Responsibility Committee comprised of three members viz; Mr. Mithun K Chittilappilly [Chairman], Mr. Cherian N Punnoose and Mr. George Muthoot Jacob.
The Corporate Social Responsibility Committee met thrice during the financial year under review i.e. on May 16, 2022, July 26, 2022 and February 01, 2023, respectively. The Corporate Social Responsibility Committee recommended the amount of CSR spent for the Financial Year and the various CSR programs/activities to be carried out by the Company to the Board, for its consideration and approval.
Pursuant to the provisions of the Act and the Listing Regulations, annual evaluation of the performance of the Board, the Directors and its committees of the Board was evaluated through an external agency.
The Nomination and Remuneration Committee of the Company has engaged an external agency to carry out the performance evaluation of each individual Director, Committee and Board as a whole. Performance evaluation was carried out through a digital platform, based on a structured questionnaire, formulated taking into consideration the criteria approved by the Nomination and Remuneration Committee.
Evaluation criteria of the Board was made based on the role played by the Board in the governance, overall functioning, evaluating strategic proposals, financial reporting process, internal controls and its effectiveness and review of risk management process. The evaluation of individual Director was carried out based on various parameters such as participation in the Board and its Committee meetings, contribution towards strategic proposals, suggesting risk mitigation measures, putting in place internal controls, governance, leadership and talent development and managing external stakeholders. Performance evaluation of various committees of the Board was carried out based on the criteria such as constitution, effective functioning of the committees as per the terms of reference, periodical suggestions and recommendations given by the committees to the Board, etc.
I n the meeting of Independent Directors held during the year, the members considered evaluation of the performance of the Chairman based on criteria such as giving guidance to the Board and ensuring the independence of the Board, etc. The performance of the NonIndependent Directors was also evaluated based on their contribution made to the growth of the Company, strategic initiatives and Board deliberations.
In terms of Regulation 25(7) of the Listing Regulations, the Company familiarizes its Directors about their roles and responsibilities at the time of their appointment through a formal letter of appointment. The draft letter of appointment / re-appointment is available on the website of the Company at the link https:// www.vguard.in/uploads/downloads/Drat-LOA-website.pdf
Sessions are conducted at the meetings of the Board and its various Committees on the relevant subjects such as Company, strategic initiatives, status of manufacturing plants, merger updates, acquisition proposals and regulatory updates. All efforts are made to keep Independent Directors aware of major developments taking place in the industry, the Company''s business model and relevant changes in the law governing the Company''s business. The details of the programs/sessions conducted for familiarization of Independent Directors can be accessed on the website of the Company link https://www. vguard.in/uploads/downloads/Familiarisation-Program-ID-2022-23.pdf
j) Directors'' Responsibility Statement
Pursuant to Section 134(3)(c) and 134(5) of the Act, the Directors to the best of their knowledge and belief, confirm:
i. That in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
ii. That they had selected such accounting policies and applied them consistently, and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2022-23 and of the profit and loss of the Company for that period;
iii. That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. That they had prepared the annual accounts on a going concern basis;
v. That they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
vi. That they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
16. AUDIT RELATED MATTERSa) Statutory Auditors
The members in the 26th Annual General Meeting of the Company had approved the appointment of M/s. Price Waterhouse Chartered Accountants LLP (Registration No. 012754N/ N500016) as the Statutory Auditors of the Company, for a term of 5 (five) years to hold office from the conclusion of the 26th Annual General Meeting until the conclusion of the 31st Annual General Meeting of the Company to be held in the calendar year 2027.
The Board has duly examined the Statutory Auditors'' Report to the accounts, which is self-explanatory. The Auditor''s Report for the Financial Year ended March 31, 2023 does not contain any qualification, reservation or adverse remarks.
As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, on recommendation of the audit Committee, the Board of Directors has re-appointed M/s. BBS & Associates, Cost Accountants, as Cost Auditors for the Financial Year 2023-24 to conduct audit of cost records maintained by the Company. The appointment and remuneration payable to the Cost Auditors were approved by the Board, based on the recommendation of the Audit Committee. The requisite resolution for ratification of remuneration payable to the Cost Auditors, by the members of the Company is set out in the Notice of the ensuing AGM. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Act and that they are not disqualified from appointment within the meaning of the said Act.
The Cost Audit Report for the Financial Year
2021- 22, issued by M/s. BBS & Associates, Cost Accountants, was filed with the Ministry of Corporate Affairs on August 23, 2022. The Cost Audit Report does not contain any qualifications, reservations or adverse remarks.
M/s. BBS & Associates, Cost Accountants are in the process of carrying out the cost audit for applicable products during the financial year
2022- 23. The Report to be issued by M/s. BBS & Associates, Cost Accountants will be considered by the Board of Directors.
Pursuant to the provisions of Section 204(1) of the Act read with Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and Regulation 24A of the Listing Regulations, the Board had appointed M/s. Keyul M Dedhia & Associates, Practicing Company Secretaries, Mumbai, as Secretarial Auditors of the Company for the Financial Year 2022-23 as recommended by the Audit committee.
The Secretarial Auditors have submitted their report, confirming compliance by the Company of all the provisions of applicable corporate laws. The Secretarial Auditor noted the deviation in composition of the Board in terms of Section 152 of the Act with respect to Directors eligible to retire by rotation. Out of the total strength of the Board, the offices of two of the Directors were liable to retire by rotation as per the provisions of Section 152 (6) of the Act. Mr. B Jayaraj, who was liable to retire by rotation, opted not to offer himself for re-appointment and retired on July 28, 2022, resulting in shortfall in the number of Directors eligible to retire by rotation as per the provisions of the Act. However, after the appointment of Mr. Antony Sebastian K as Additional Director in the capacity of Executive Director, liable to retire by rotation, w.e.f. May 30, 2023, the Board now has adequate number of Directors as per the relevant provisions of the Act. To resolve the deviation for the interim period, the Board of Directors recommended to take corrective measures if any, as per the provisions of the Act. The Secretarial Audit Report for the Financial Year 2022-23 is annexed as Annexure-I which forms part of this report.
Pursuant to the provisions of Section 138 of the Act, the Board of Directors, on recommendation of the Audit Committee appointed M/s Mahajan & Aibara Advisers LLP, Mumbai, as the Internal Auditor of the Company for the Financial Year 2022-23.
During the year under review, neither the Statutory Auditors nor the Secretarial Auditors or the Cost Auditors has reported to the Audit Committee, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees.
18. POLICY MATTERSa) Nomination, Remuneration and Evaluation Policy
In terms of provisions of Section 178(3) of the Act, the Nomination and Remuneration Committee of the Company has formulated and recommended to the Board a policy, containing the criteria for determining qualifications, competencies, positive attributes and independence for appointment of a Director (Executive/Non- Executive) and it highlights the remuneration for the Directors, Key Managerial Personnel and other employees, ensuring that it covers the matters mentioned in Section 178(4) of the Act. No change has been made in the Nomination, Remuneration and Evaluation Policy during the Financial Year under review. The Nomination, Remuneration and Evaluation Policy is available on the website of the Company at the link https://www.vguard. in/uploads/policies/Nomination-Policv.pdf.
b) Vigil Mechanism / Whistle Blower Policy
Your Company, as required under Section 177 (9) of the Act and Regulation 22 of the Listing Regulations, has established a Whistle Blower Policy, which enables the Directors and Employees to report instances of unethical behaviour, fraud or violation of Company''s Code of Conduct. The policy provides for direct access to the Chairperson of the Audit Committee and for safeguarding the employees and Directors who raises grievances against victimization. The policy has been circulated amongst the employees of the Company working at various locations, divisions/units.
The policy formulated in line with the provisions of the Act and the Listing Regulations is available on the website of the Company https://www.vguard.in/uploads/downloads/ WHISTLEBLOWER-POLICY.pdf
c) Corporate Social Responsibility Policy
In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (CSR) Committee and framed a CSR policy which details the programs / activities that can be carried out under various program heads and the same is available on the website of the Company https:// www.vguard.in/uploads/policies/CSR-Policy.pdf.
The Company''s CSR Programmes are focused on three broad program areas, viz. Edu-care and Skill Development Programs, Health Care Programs, Build India & Relief. During the year, the Company carried out several initiatives under
the CSR programme heads, through V-Guard Foundation, a Section 8 Company formed by the Company. A report on CSR activities is attached as Annexure-II forming part of this report.
The Company has formulated Enterprise Risk Management policy in accordance with the guidelines provided under the Charter of the Risk Management Committee of the Board of Directors, and pursuant to Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Risk Management Charter and Policy institutionalize a formal risk management function and framework consisting of risk management process, risk governance and communication structure.
The Risk Management policy provides a structured, consistent, and continuous process across the whole organization for identifying and assessing risk, deciding on mitigations, and reporting on the opportunities and threats that may affect the achievement of its strategic objectives.
Pursuant to the provisions of Regulation 43A of the Listing Regulations, the Board of Directors of the Company has adopted a Dividend Policy which details the dividend philosophy of the Company, the factors which are considered by the Board while recommending / declaring dividend, suggested band for proposing dividend payout, periodicity of dividend, circumstances in which special dividend is considered, etc. The said policy is given in Annexure-III to this report and placed on the website of the Company at https:// www.vguard.in/uploads/downloads/DIVIDEND-POLICY.pdf
19. OTHER MATTERSa) Internal Financial Controls
The Company has Internal Control Systems commensurate with the nature of its business, size and complexities. The Audit Committee reviews the adequacy and effectiveness of the internal control system and monitors the implementation of audit recommendations. During the year under review, the Internal Audit division of the Company conducted detailed
review of control processes in key control areas. No significant deficiencies were reported during the test of IFC.
Further, the Statutory Auditors of the Company also reviewed Internal Controls over Financial Reporting of the Company as on March 31, 2023, and issued their report which forms part of the Independent Auditor''s report.
b) Particulars of Loans, Guarantees and Investments
Particulars of Loans, Guarantees and
Investments pursuant to Section 186 of Act is given hereunder:
During the period under review, the Company has made further investment in equity shares of V-Guard Consumer Products Ltd. (''VCPL''), Wholly Owned Subsidiary, for an amount of ? 61.29 Crore, thus leading to total investment of ? 121.09 Crore.
During the period under review your Company purchased remaining 26% of the equity shares of Guts Electro-Mech Ltd. (Guts) and thus, Guts became a Wholly Owned Subsidiary of the Company during the period.
The Company has invested an amount of ? 680.33 Cr. during the period under review for the purchase of entire equity shares of M/s. Sunflame Enterprises Private Ltd. (''Sunflame''). Therefore, Sunflame became a Wholly Owned Subsidiary of the Company during the period.
The Company continues to extend Corporate Guarantee to VCPL for a limit not exceeding ? 50 Crore and to Guts for a limit not exceeding ? 8 Crore to facilitate for availing credit facilities from financial institutions/banks to meet its operational requirements.
Further, details of loans and investments as on March 31, 2023, are set out in the Note 6, 7 & 8 to the standalone financial statements of the Company.
c) Financial Position and Performance of Subsidiaries, Joint Ventures and Associates
The consolidated financial statements of the Companies are prepared in accordance with
Indian Accounting Standards (IND AS) notified under Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Act, (Ind AS compliant Schedule III), as applicable to the consolidated financial statements and the same forms an integral part of this Report.
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries, for the Financial Year 2022-23 is given in Form AOC-1 which forms an integral part of this Annual Report.
In accordance with Section 136(1) of the Act, the Annual Report of your Company containing inter alia, financial statements including consolidated financial statements, has been placed on the Company''s website at https://www.vguard.in/ investor-relations/annual-reports. Further, the financial statements of the Subsidiaries are also placed on the Company''s website at https://www. vguard.in/investor-relations/financial-results.
Any member desirous of inspecting or obtaining copies of the audited financial statements, including the consolidated financial statements of the Company, audited financial statements in respect of the Subsidiary companies may write to the Company Secretary at [email protected].
d) Any Revision made in Financial Statements or Board''s Report
The Company has not revised the Financial Statements or Board''s Report in respect of any of the three preceding Financial Years.
e) Employee Stock Option Scheme 2013
During the year under review, the Nomination and Remuneration Committee granted the following options at ? 1/- each under ESOS 2013:
a. 91,407 options on May 19, 2022,
b. 86,868 options on July 27, 2022 and
c. 1,23,651 options on February 02, 2023
The above options will vest over a period of four years from the date of grant on time and performance basis.
During the year under review, the Board of Directors allotted the following shares of face value of ?1/- to employees who exercised options granted to them as per ESOS 2013:
a. 3,48,623 equity shares at face value
b. 2,17,000 equity shares at a premium of ? 67.75 and
c. 66,875 equity shares at a premium of ? 70.36
During the year, 1,27,117 no. of options granted at ? 1/- each were cancelled due to separation of employees. The options cancelled were made available in the Scheme for considering future grants
The disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and Section 62(1)(b) of the Act, read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 is provided in Annexure-IV which forms part of this Report.
In compliance with Regulation 26(3) of the Listing Regulations and the Act, the Company has framed and adopted Code of Conduct for Directors and Senior Management (the Code), which provides guidance on ethical conduct of business and compliance with laws and Regulations.
All members of the Board and Senior Management personnel have affirmed the compliance with the Code as on March 31, 2023. A declaration to this effect, signed by the Managing Director in terms of the Listing Regulations is given in the Report of Corporate Governance forming part of this Annual Report. The Code is made available on the Company''s website at https://www.vguard.in/uploads/ policies/Code-Conduct-for-Board-Senior-Management.pdf.
Pursuant to Section 134 and Section 92(3) of the Act read with Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the details forming part of the Annual Return
of the Company containing the particulars prescribed, in Form MGT-7, as on March 31, 2022, is made available on the Company''s website at https://www.vguard.in/uploads/downloads/ MGT-7-31-03-2022.pdf.
The draft of Form MGT-7, as on March 31, 2023, is made available on the Company''s website at https://www.vguard.in/uploads/downloads/ Annual-Return-2023.pdf.
h) Management Discussion and Analysis Report
Pursuant to Regulation 34(2)(e) of the Listing Regulations, a detailed Management Discussion and Analysis Report for the Financial Year under review is presented in a separate section, forming part of the Annual Report.
The state of the affairs of the business along with the financial and operational developments has been discussed in detail in the Management Discussion and Analysis Report.
i) Related Party Transactions
All related party transactions which were entered during the Financial Year were in the ordinary course of business and on arm''s length basis. During the year under review, there were no materially significant related party transactions entered by the Company with the Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interests of the Company.
A statement of all related party transactions is presented before the Audit Committee on quarterly basis, specifying the nature, value and terms and conditions of transactions. Since all the related party transactions entered during the Financial Year were on an arm''s length basis and in the ordinary course of business, no details are required to be provided in Form AOC-2 as prescribed under Section 134(3)(h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014. Disclosures as per Ind-AS 24 have been made in note 45 of the financial statements for the year ended March 31, 2023.
In accordance with the requirements of the Listing Regulations, the Company has also adopted Policy on Materiality and dealing with
Related Party Transactions and the same has been placed on the website of the Company at https://www.vguard.in/uploads/downloads/ POLICY-MATERIALITY-DEALING-RELATED-PARTY-TRANSACTIONS.pdf
j) Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Report on Corporate Governance as required under Regulation 34(3) read with Schedule V of the Listing Regulations forms part of this Annual Report. Further as required under Regulation 17(8) of the Listing Regulations, a certificate from the Managing Director and Chief Financial Officer is annexed with this Report.
A certificate from M/s Keyul M. Dedhia and Associates, Practicing Company Secretaries, confirming the compliance of the Company with the conditions of Corporate Governance, as stipulated under the Listing Regulations, is attached to the Report of Corporate Governance.
k) Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information pertaining to 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 furnished in Annexure-V and forms part of this Report.
l) Particulars of Remuneration details of Directors, Key Managerial Personnel and Employees
The remuneration details of Directors and Key Managerial Personnel and ratio of remuneration of each Director to the median of employees'' remuneration as per Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure-VI. In accordance with the provisions of Section 197(12) of the Act and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and particulars of remuneration of top ten employees who have drawn remuneration not less than the limits specified in the Rules are available with the Company and in terms of provisions of Section 136(1) of the Act, this report is being sent to the members without this detail and any member desirous of obtaining information may write to the Company and the same shall be provided through electronic mode till the date of the ensuing Annual General Meeting and the details are made available on the Investor Relations section of the website of the Company www.vguard.in.
Mr. Mithun K Chittilappilly, Managing Director and Mr. Ramachandran V, Executive Director and COO, of the Company has not received any remuneration or commission from any of the subsidiary companies. Further, the Company doesn''t have any holding company, hence, there does not arise a circumstance of any remuneration or commission from holding company.
m) Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has in place a policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment as per the guidelines provided in the policy. All women employees (permanent, temporary, contractual and trainees) are covered under this policy and it has been circulated amongst the employees of the Company and the same is exhibited on the notice board of all the business locations/divisions of the Company. During the year under review, the Company has not received any complaint.
n) The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.
20. COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, applicable Secretarial Standards issued by the Institute of Company Secretaries of India (âICSIâ), i.e. Secretarial Standard-1 (âSS-1â) and Secretarial Standard-2 ("SS-2"), relating to ''Meetings of the Board of Directors'' and ''General Meetings, respectively, have been duly complied by the Company.
21. LISTING OF SHARES
The equity shares of the Company are listed on National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE). The listing fee for the Financial Year 202324 is paid to both the Stock Exchanges.
22. CODE OF PRACTICES AND PROCEDURES FOR FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION
The Board has formulated the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (Fair Disclosure Code) for fair disclosure of events and occurrences that could impact price discovery in the market for the Company''s securities and to maintain the uniformity, transparency and fairness in dealings with all stakeholders and ensure adherence to applicable laws and regulations. The same is available on the website of the Company at https://www.vguard.in/ uploads/policies/CODE PRACTICES PROCEDURES FAIR DISCLOSURE UPSI.pdf.
23. PREVENTION OF INSIDER TRADING
The Board has formulated a code of conduct for regulating, monitoring and reporting of trading of shares by Insiders. This code lays down guidelines,
procedures to be followed and disclosures to be made by the insiders while dealing with shares of the Company and cautioning them on consequences of non-compliances. The same is available on the website of the Company at https://www.vguard.in/uploads/ policies/Code-Conduct-lnsider-Trading.pdf.
24. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE 2016
During the year under review, the Company has neither made any application nor any proceeding is pending under the Insolvency and Bankruptcy Code 2016.
25. DETAILS OF NON-COMPLIANCE WITH REGARD TO CAPITAL MARKETS DURING THE LAST THREE YEARS
There have been no instances of non-compliance by the Company with regard to Capital Markets during the last three years.
26. ACKNOWLEDGEMENT
Your Board of Directors place on record their sincere appreciation for the steadfast commitment and performance showcased by the employees at all levels during all times, especially in the volatile environment witnessed during the year under review. The relentless performance of the employees over the years has continued topline growth. The Directors also sincerely thank channel partners, shareholders, various Government & other Statutory Authorities, Banks, Financial Institutions and Analysts for their continued assistance, co-operation and support.
Mar 31, 2022
Your Directors'' take pleasure in presenting their 26th Annual Report on the business and operations of the Company, together with the Audited Financial Statements for the year ended March 31, 2022.
The summarized standalone and consolidated results of your Company with previous year''s figure are given in the table below:
|
('' in crores) |
||||
|
Particulars |
Financial Year ended |
|||
|
Standalone |
Consolidated |
|||
|
31.03.2022 |
31.03.2021 |
31.03.2022 |
31.03.2021 |
|
|
Revenue from Operations |
3474.65 |
2699.00 |
3498.17 |
2721.24 |
|
Other Income |
5.60 |
2.92 |
5.43 |
2.55 |
|
Finance Income |
7.34 |
18.18 |
7.34 |
18.18 |
|
Total Income |
3487.59 |
2720.10 |
3510.94 |
2741.97 |
|
Operating Expenditure |
3142.52 |
2392.51 |
3159.95 |
2409.14 |
|
Operating Profit before Depreciation, Interest & Tax |
345.07 |
327.59 |
350.99 |
332.83 |
|
Finance Cost |
7.52 |
5.60 |
7.88 |
6.10 |
|
Depreciation and Amortization Expense |
47.50 |
37.32 |
49.15 |
38.63 |
|
Profit Before Tax |
290.05 |
284.67 |
293.96 |
288.10 |
|
Tax Expense: |
||||
|
a) Current Tax |
69.01 |
86.30 |
70.61 |
87.73 |
|
b) Deferred Tax |
(5.76) |
(0.61) |
(5.08) |
(1.52) |
|
Profit After Tax |
226.80 |
198.98 |
228.43 |
201.89 |
|
Basic EPS (?) |
5.27 |
4.64 |
5.29 |
4.68 |
|
Diluted EPS (?) |
5.23 |
4.61 |
5.25 |
4.65 |
Your Company recorded Net Revenue from Operations of ? 3474.65 crs on standalone basis, for the Financial Year ended March 31, 2022. Revenue grew by 28.74% compared to ? 2699.00 crs recorded during the previous Financial Year. The Profit After Tax for the year grew by 13.98% to ? 226.80 crs from ? 198.98 crs recorded in the previous Financial Year. The segment wise performance of the Company is detailed under the section Management Discussion and Analysis Report which forms part of this Annual Report.
The consolidated net revenue from operations for the Financial Year under review was ? 3498.17 crs, with a growth of 28.55% over ? 2721.24 crs for the previous Financial Year. On consolidated basis, the Company earned a Profit After Tax of ? 228.43 crs for the
Financial Year 2021-22, against ?201.89 crs recorded during the previous Financial Year. The consolidated numbers included the financial performance of Guts Electro-Mech Limited and V-Guard Consumer Products Limited (VCPL), Subsidiary Companies.
All the segments performed well during the year, despite the transitional impact due to COVID - 19 pandemic on the business. The Company was able to overcome the supply chain challenges faced in the previous financial year due to the pandemic. Elevated commodity prices impacted the margins across segments. Though the inflationary environment is expected to pose challenge on the business, your Directors are confident that economic activities will recover gradually and desired growth will be achieved in the coming financial year.
3. SCHEME OF ARRANGEMENT BETWEEN THE COMPANY AND SIMON ELECTRIC PRIVATE LIMITED (SEPL) AND THEIR SHAREHOLDERS AND CREDITORS
During the year under review, the Board of Directors has approved Scheme of Amalgamation amongst the Company, SEPL (Transferor Company) and their respective Shareholders and Creditors in compliance with sections 230 to 232 and other applicable provisions of the Companies Act, 2013 (the Act) and also as per the Section 2(1B) and other relevant provisions of the Income Tax Act, 1961. Upon effecting the Scheme of Amalgamation, the Simon''s Indian business will be merged with the business of the Company. The value of the transaction is ? 27.3 crs and the equity shares of the Company will be issued and allotted to the shareholders of SEPL.
The Scheme of Amalgamation shall be subject to the approval of National Company Law Tribunal (NCLT), Shareholders and Creditors of both the Companies. The Company has received Observation letters vide dated May 13, 2022, from both the Stock Exchanges BSE Limited and National Stock Exchange of India Limited (NSE).
SEPL is a private limited company incorporated on August 02, 2006 and is a wholly owned subsidiary of Simon Holding SL and Simon SA, Spain. The Registered office of SEPL is located at XIII/300 E-27(XXXV/565), 5th Floor, KCF Tower, Kakkanad Desom, Thrikkakara P.O, Kanayannur Taluk, Vazhakkala, Ernakulam-682021. SEPL is engaged in the business of manufacturing and trading of electrical wiring accessories, such as electrical switches, sockets, fan regulators and home automation products. The net revenue from operations for the period ended September 30, 2021 is ?5.78 crs.
Simon Group, founded in the year 1916 in Olot, Spain, is over 100 years old with more than ⬠330 Mn in global turnover. Headquartered in Barcelona, Spain and currently led by the fourth generation of the founding family, it has presence in more than 100 countries worldwide. The Group''s business focus includes switches, sockets, small electrical equipment, connectivity solutions, indoor/outdoor & architectural lighting, automation & control systems and electric vehicle chargers. Simon Group has a direct presence in more than 18 countries, with 4,000 employees, 180 patents and 60 design awards, making it a leading global player in its chosen business areas.
Simon Group is also a winner of several prestigious global design awards like Red Dot Award, IF Design Gold Award, Plus X Award and Delta Award in various categories.
4. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
As on March 31, 2022, the Company''s investment in Guts Electro-Mech Ltd., which is engaged in the business of manufacture and supply of MCB & RCCB, continues at 74%.
During the year under review, the Company formed V-Guard Consumer Products Limited (VCPL), as Wholly Owned Subsidiary, for focusing more on manufacturing and development activities and achieve manufacturing excellence. VCPL is engaged in the business of manufacturing and selling of various electronics, electricals and consumer durables. All manufacturing units planned by the Company in respect of various product categories will be set up under VCPL. Wholly Owned Subsidiary set up its first manufacturing facility for production of Stabilizer and Digital UPS in Pantnagar, Uttarakhand, and commercialized the unit in March 2022.
Presently, the Company does not have any material subsidiary.
The Policy for determining Material Subsidiaries, adopted by your Board, in conformity with Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), can be accessed on the Company''s website at www.vguard.in.
5. CHANGES TO THE SHARE CAPITAL
During the year under review, the Company has allotted 4,21,380, 5,54,848, 3,50,000 and 27,248 number of equity shares of ? 1/-, ? 34.64, ? 68.75 and ? 71.36 respectively under ESOS 2013. The Paid-up Capital of the Company, as at March 31, 2022 was ? 43,15,41,934.
6. DIVIDEND
Your Directors are pleased to recommend a Dividend of ? 1.30 (One Rupee Thirty Paise) per equity share of ? 1/- each (130% on the equity share capital) for
the financial year 2021-22. The dividend, if declared as recommended, at the ensuing Annual General Meeting of the Company, would involve an outflow of ? 56.10 crs. Dividend would be payable to all the shareholders/ Beneficial Owners whose names appear in the Register of Members / Register of Beneficial Owners respectively as on July 21, 2022.
The Registers of Members and Beneficial Owners will remain closed from July 22, 2022 to July 28, 2022(both days inclusive).
7. INVESTOR EDUCATION AND PROTECTION FUND
Transfer of Unpaid/ Unclaimed Dividend & Share Application Money to Investor Education and Protection Fund (IEPF)
Pursuant to the provisions of Section 124(5) of the Companies Act, 2013 (the Act) unclaimed/ unpaid dividend of ? 3,71,322 which was lying in the Unpaid Dividend Account for the Financial Year 2013-14 was transferred during the year under review to IEPF.
Reminders are sent regularly to the Shareholders who have not claimed the dividend amount, to claim the same from the Company failing which, the unclaimed dividend lying in the unpaid account for seven years shall be transferred to IEPF within thirty days from the due date for transfer of unpaid dividend. Unclaimed dividend in respect of the financial year 2014-15 is due for transfer to IEPF on September 2, 2022.
Transfer of Equity Shares to Investor Education Protection Fund Authority (IEPFA)
In terms of Section 124(6) of the Act read with Rule 6 of the IEPFA (Accounting, Audit, Transfer and Refund) Rules, 2016 (as amended from time to time), shares on which dividend has not been paid or claimed by a shareholder for a period of seven consecutive years or more shall be transferred to the Demat Account of IEPFA within a period of thirty days of such shares become due for transfer. Upon transfer of such shares, all benefits (like dividend, bonus, split, consolidation etc.), if any, accruing on such shares shall also be transferred to the demat / bank Account of IEPF(A) and the voting rights on such shares shall remain frozen till the rightful owner claims the shares. The Shares transferred to the Demat Account of IEPFA can be claimed back by the shareholder by following the procedure prescribed under the aforesaid rules.
The procedure to be followed by the shareholders are detailed on the website of the Company, www.vguard.in, under ''Investor Relations''.
During the year under review, the Company was required to transfer 9,102 equity shares, which were held by 16 shareholders to IEPFA, as dividend had not been encashed or claimed on the above shares during the seven consecutive years from the Financial Year 2013-14. The Company was able to transfer only 8,302 equity shares to IEPFA, as demat account of one shareholder holding 800 equity shares is under suspension since October 2009. The Company filed form IEPF - 3 for furnishing details of shares which could not be transferred to IEPFA.
The details of the nodal officer appointed by the Company under the provisions of IEPF is given below and the same is disseminated on the website of the Company www.vguard.in
|
Name of the Company Secretary designated as Nodal Officer |
Jayasree K |
|
Direct Phone No. |
91- 484 433 5000 91 - 7356956793 |
|
Email ID |
|
|
Address |
V-Guard Industries Ltd. 42/962, Vennala High School Road, Vennala, Ernakulam - 682028 |
8. FIXED DEPOSIT
The Company has not accepted any deposit within the meaning of Chapter V of the Act and the Rules framed thereunder during the year under review.
9. MATERIAL CHANGES AND COMMITMENTS IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the financial statements relate and the date of the Report.
10. CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business of the Company during the Financial Year 2021-22.
During the year under review, the Board of Directors has not sought any approval of the shareholders of the Company through Postal Ballot process pursuant to the provisions of Sections 108 & 110 of the Act read with Rule 20 & 22 of the Companies (Management and Administration) Rules, 2014 (as amended) and Regulation 44 of the Listing Regulations.
12. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS / COURTS / TRIBUNALS
There were no significant material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.
The Company''s credit facilities are rated by Investment Information and Credit Rating Agency of India Limited (ICRA Ltd.). The Company continues to have long-term rating of [ICRA] AA (pronounced as ICRA double A) and short-term rating of [ICRA] A1 (pronounced as ICRA A one plus). The outlook on the long-term rating remains stable.
14. BUSINESS RESPONSIBILITY REPORT
The Ministry of Corporate Affairs, Government of India, in July 2011, came out with the ''National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business''. These guidelines contain certain principles which are to be adopted by companies as part of its business practices and disclosures regarding the steps taken to implement these principles through a structured reporting format, viz., Business Responsibility Report. Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Company has prepared the Business Responsibility Report which forms part of this Annual Report.
15. BOARD OF DIRECTORS AND ITS COMMITTEES
a) Composition of the Board of Directors
As on March 31, 2022, the Board of Directors
of the Company comprised of nine Directors, with two Executive and seven Non-Executive Directors, which includes six Independent Directors. The composition of the Board of Directors meets the requirements of provisions of Regulation 17 of the Listing Regulations and Section 149 of the Act.
b) Change in office of Directors and Key Managerial Personnel of the Company during the year under review and details of Directors seeking Re-appointment at 26th Annual General Meeting
The members of the Company in their 25th Annual General Meeting held on August 5, 2021, re-appointed Mr. Ramachandran V, Director and Chief Operating Officer, who retired by rotation. The members also re-appointed Mr. Mithun K Chittilappilly, Managing Director, for a period of five years with effective from April 1, 2021 and re-appointed Ms. Radha Unni, Independent Director, for a second term of five consecutive years, effective from September 27, 2021. Further the members appointed Prof. Biju Varkkey as Independent Director for a term of five consecutive years effective from May 26, 2021.
As per the provisions of Section 152 of the Act, Mr. B Jayaraj, Director, is liable to retire by rotation at the ensuing Annual General Meeting, being longest in office. He intimated his desire to retire from the Board of the Company and has not opted for re-appointment at the ensuing Annual General Meeting. In compliance with the provisions of aforesaid Section, the office of Mr. Ramachandran V, is liable for retirement by rotation at the ensuing Annual General Meeting and offers himself for re-appointment.
c) Criteria for Determining Qualifications, Positive Attributes and Independence of a Director
The Nomination and Remuneration Committee has formulated Nomination, Remuneration and Evaluation Policy, which details the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178(3) of the Act and the Listing Regulations. The policy forms part of this report.
d) Declaration by Independent Directors
Mr. Cherian N Punnoose, Mr. C J George, Mr. Ullas K Kamath, Ms. Radha Unni, Mr. George Muthoot Jacob and Prof. Biju Varkkey, Independent Directors, have furnished a declaration stating that they meet the criteria of independence as envisaged in Regulation 16 of the Listing Regulations and Section 149(6) of the Act.
e) Certificate from Practicing Company Secretary
Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the Listing Regulations, M/s. Keyul M Dedhia & Associates, Company Secretary in Practice, Mumbai, has certified that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as Directors of the Company by the Securities and Exchange Board of India/Ministry of Corporate Affairs or any such statutory authority and the certificate forms part of the Report of Corporate Governance forming part of this Annual Report.
f) Number of Meetings of the Board of Directors
The Board meets at regular intervals to consider and approve financial results, business policies and strategic proposals apart from other items of business. The Board and Committee meetings are pre-scheduled, and a tentative annual calendar of meetings is circulated to the Directors in advance to ensure participation of all Directors.
During the year under review, seven Board meetings were held, and meetings of Subcommittees were also held. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations. The details of the meetings are given in the Report on Corporate Governance which forms part of this Report. The Company provides all the Board members the facility to participate the meetings of Board and Subcommittees through Video Conferencing / Other Audio-Visual Means.
Pursuant to the requirements of Schedule IV to the Act and the Listing Regulations, a separate Meeting of the Independent Directors of the
Company was held on March 25, 2022, and the Directors reviewed the matters enumerated under Schedule IV(VII)(3) to the Act and Regulation 25(4) of the Listing Regulations. All the Independent Directors attended the said meeting.
g) Statutory Committees of the Board
Pursuant to the requirements under the Act and the Listing Regulations, the Board of Directors has constituted various Committees of Board such as Audit Committee, Nomination and Remuneration Committee, Stakeholders'' Relationship Committee and Corporate Social Responsibility (CSR) Committee.
The composition and terms of reference of Audit Committee, Nomination and Remuneration Committee and Stakeholders'' Relationship Committee and number of meetings held during the year under review are given in the section, Report on Corporate Governance forming part of this Annual Report.
The CSR Committee of the Company as of March 31, 2022 comprised of four members, Mr. B Jayaraj, Mr. Cherian N Punnoose, Mr. Mithun K Chittilappilly and Mr. George Muthoot Jacob. Mr. B Jayaraj, Director is the Chairman of the CSR Committee.
The Committee met twice during the year under review, on May 26, 2021 and February 1, 2022. The Committee recommended the amount of CSR spent for the financial year and the various CSR programs/activities to be carried out by the Company to the Board, for its consideration and approval.
The Board constituted a Risk Management Committee in line with the requirements of Regulation 21 of the Listing Regulations. The Committee consists of four members, Mr. Ullas K Kamath, Independent Director, Mr. Mithun K Chittilappilly, Managing Director, Mr. Ramachandran V, Whole-time Director and Mr. Sudarshan Kasturi, Chief Financial Officer. During the year under review, the committee met twice to discuss the various risks identified and the mitigation processes.
Pursuant to the provisions of the Act and the Listing Regulations, annual evaluation of the performance of the Board, the Directors and Sub-committees of the Board was evaluated through an external agency.
The Nomination and Remuneration Committee of the Company has engaged an external agency to carry out the evaluation of performance of each individual Director, Sub- committee and Board as a whole. Performance evaluation was carried out through an external platform, based on a structured questionnaire, formulated taking into consideration the criteria approved by the Nomination and Remuneration Committee.
Evaluation criteria of the Board was made based on the role played by the Board in Governance, overall functioning, evaluating strategic proposals, financial reporting process, internal controls and its effectiveness and review of risk management process. The evaluation of individual Director was carried out based on various parameters such as participation in the Board and its Committee meetings, contribution towards strategic proposals, suggesting risk mitigation measures, putting in place internal controls, governance, leadership and talent development and managing external stakeholders. Performance evaluation of various Sub- committees of the Board was carried out based on the criteria such as constitution, effective functioning of the Sub-committees as per the terms of reference, periodical suggestions and recommendations given by the Sub-committees to the Board etc.
In the meeting of Independent Directors held during the year, the members considered evaluation of the performance of the Chairman based on criteria such as giving guidance to the Board and ensuring the independence of the Board etc. The performance of the NonIndependent Directors was also evaluated based on their contribution made to the growth of the Company, strategic initiatives and Board deliberations.
i) Directors'' Responsibility Statement
Pursuant to the provisions under Section 134(5) of the Act, with respect to Directors''
Responsibility Statement, the Directors confirm:
i. That in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
ii. That they had selected such accounting policies and applied them consistently, and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
iii. That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. That they had prepared the annual accounts on a going concern basis;
v. That they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
vi. That they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
16. AUDIT RELATED MATTERSa) Statutory Auditors
M/s. S R Batliboi & Associates LLP, Chartered Accountants with Firm Registration Number - 101049W / E300004 will hold office, up to the conclusion of the ensuing Annual General Meeting, completing their second term of five years as Statutory Auditors as per the provisions of Section 139(1) of the Companies Act, 2013.
The Board of Directors upon the recommendation of the Audit Committee proposes to the shareholders the appointment of M/s. Price Waterhouse Chartered Accountants LLP (Registration No. 012754N / N500016) as Statutory Auditors of the Company, for a term of 5 (five) years to hold office from the conclusion of 26th Annual General Meeting until the conclusion of 31st Annual General Meeting of the Company to be held in the calendar year 2027.
As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors has re-appointed M/s. BBS & Associates, Cost Accountants, as Cost Auditors for financial year 2022-23 to conduct audit of cost records maintained by the Company. The appointment and remuneration payable to the Cost Auditors were approved by the Board, based on the recommendation of the Audit Committee. The requisite resolution for ratification of remuneration payable to Cost Auditors, by the members of the Company is set out in the Notice of the ensuing AGM. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Act and that they are not disqualified from appointment within the meaning of the said Act.
The Cost Audit Report for the financial year
2020- 21, issued by M/s. BBS & Associates, Cost Accountants, was filed with the Ministry of Corporate Affairs on August 25, 2021. The Cost Audit Report does not contain any qualifications, reservations, or adverse remarks.
The Cost Audit Report for the Financial Year
2021- 22 to be issued by M/s. BBS & Associates, Cost Accountants will be considered by the Board of Directors.
M/s. Keyul M Dedhia & Associates, Company Secretaries, Mumbai, were appointed as Secretarial Auditors of the Company for the financial year 2021-22 pursuant to Section 204 of the Act. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as Annexure-I to this report.
During the year under review, neither the Statutory Auditors nor the Secretarial Auditors or the Cost Auditors has reported to the Audit Committee, under
Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees.
18. POLICY MATTERSa) Nomination, Remuneration and Evaluation Policy
In terms of provisions of Section 178(3) of the Act, the Nomination and Remuneration Committee of the Company has formulated and recommended to the Board a policy, containing the criteria for determining qualifications, competencies, positive attributes and independence for appointment of a Director (Executive/Non- Executive) and it highlights the remuneration for the Directors, Key Managerial Personnel and other employees, ensuring that it covers the matters mentioned in Section 178(4) of the Act. Nomination, Remuneration and Evaluation Policy approved by the Board forms part of this Report as Annexure-II.
b) Vigil Mechanism / Whistle Blower Policy
The Company has adopted a Whistle Blower Policy, which enables the Directors and Employees to report instances of unethical behavior, fraud or violation of Company''s Code of Conduct. The policy provides for direct access to the Chairperson of the Audit Committee and safeguarding the employees and Directors who raises grievances against victimization. The policy has been circulated amongst the employees of the Company working at various locations, divisions/units.
The policy formulated in line with the provisions of the Act and the Listing Regulations is available on the website of the Company www.vguard.in.
c) Corporate Social Responsibility Policy
In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (CSR) Committee and framed a CSR policy which details the programs / activities that can be carried out under various program heads and the same is available on the website of the Company www.vguard.in.
The Company''s CSR Programmes are focused on Health Care and Education, Infrastructure Development, Sustainable Livelihood and Social Empowerment & Welfare, Arts and Culture. During the year, the Company carried out several initiatives under the CSR programme heads, through V-Guard Foundation, a Section 8 Company formed by the Company. A report on CSR activities is attached as Annexure-III forming part of this report.
The Company has formulated Enterprise Risk Management policy in accordance with the guidelines provided under the Charter of the Risk Management Committee of the Board of Directors, and pursuant to Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Risk Management policy provides a structured, consistent, and continuous process across the whole organization for identifying, assessing, deciding on mitigations and reporting on the opportunities and threats that may affect the achievement of its strategic objectives.
The Company has enhanced Enterprise Risk Management Charter and Policy to institutionalize a formal risk management function and framework consisting of Risk Management Process and Risk Governance and Communication Structure. For detailed framework and outcome refer to Enterprise Risk Management section in the Management Discussion and Analysis Report.
Pursuant to the provisions of Regulation 43A of the Listing Regulations, the Board of Directors of the Company has adopted a Dividend Policy which details the dividend philosophy of the Company, the factors which are considered by the Board while recommending / declaring dividend, suggested band for proposing dividend payout, periodicity of dividend, circumstances in which special dividend is considered etc. The said policy is given in Annexure-IV to this report and posted on the website of the Company www.vguard.in.
19. OTHER MATTERSa) Internal Financial Controls
The Company has Internal Control Systems commensurate with the nature of its business, size and complexities. Audit Committee reviews the adequacy and effectiveness of internal control system and monitors the implementation of audit recommendations. During the year under review, the Internal Audit division of the Company conducted detailed review of control processes in key control areas. No significant deficiency was reported during the test of IFC.
Further, the Statutory Auditors of the Company also reviewed Internal Financial Controls over Financial Reporting of the Company as on March 31, 2022 and issued their report which forms part of the Independent Auditor''s report.
b) Particulars of Loans, Guarantees and Investments
During the year under review, the Company has not given any loan falling under the provisions of Section 186 of the Act. The Company extended Corporate Guarantee to V-Guard Consumer Products Ltd. (VCPL), Wholly Owned Subsidiary, for availing of credit facilities for a limit not exceeding ? 50 crs from financial institutions/ banks.
Investment was made in equity shares of VCPL and the amount invested till the date of this report is ? 89.69 crs. No other investment is made during the year under review.
c) Financial Position and Performance of Subsidiaries, Joint Ventures and Associates
The financial summary of Subsidiary companies are as follows:
|
? in crs |
||
|
Particulars |
2021-22 |
2020-21 |
|
Guts Electro-Mech Limited |
||
|
Revenue from Operations |
59.43 |
55.28 |
|
Profit Before Tax |
4.48 |
5.30 |
|
Profit After Tax |
2.87 |
4.13 |
|
V-Guard Consumer Products Limited |
||
|
Revenue from Operations |
0.40 |
- |
|
Profit Before Tax |
(2.22) |
- |
|
Profit After Tax |
(2.00) |
- |
Consolidated Financial Statements of the Companies are prepared in accordance with Indian Accounting Standards (IND AS) notified under Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Act, (Ind AS compliant Schedule III), as applicable to the consolidated financial statements and the same forms an integral part of this Report.
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries, for the Financial Year 2021-22 is given in Form AOC-1 which forms an integral part of this Annual Report.
In accordance with Section 136(1) of the Act, the Annual Report of your Company containing inter alia, financial statements including consolidated financial statements, has been placed on the Company''s website, www.vguard.in. Further, the financial statements of the Subsidiaries are also placed on the Company''s website.
The audited financial statements including the consolidated financial statements of the Company and audited financial statements in respect of the Subsidiary companies shall be available for inspection. Any member desirous of inspecting the above documents may write to the Company and the facility to inspect the documents electronically shall be provided.
d) Any Revision made in Financial Statements or Board''s Report
The Company has not revised the Financial Statements or Board''s Report in respect of any of the three preceding Financial Years.
e) Employee Stock Option Scheme 2013
During the year under review, 37,706 and 17,688 no. of options of ? 1/- each, being the options for time based vesting for the fourth year were vested in respect of the grant made on May 19, 2017 and July 31, 2017 respectively. Options to the extent of 47,023 of ? 1/- each were vested on time basis for the fourth year in respect of grant made on January 22, 2018.
Further, options to the extent of 8,691 of ? 1/-each were vested, for the third year of vesting in respect of grant made on May 30, 2018. 11,765 no. of options of ? 1/- each were vested during the year in respect of the grant made on July 31, 2018, for the third year. 14,286 no. of options of ? 1/- each were vested during the year in respect of grant made on January 31, 2019 being the options for the third year of vesting.
Also, 5,896 no. of options of ? 1/- each were vested on time basis being the options for the second year of vesting in respect of grant made on November 5, 2019. Options to the extent of 3,14,800, 2,05,478, 55,822 and 4,396 no. of options of ? 1/- each, being the options for time based vesting for the first year were vested in respect of the grant made on May 22, 2020, August 27, 2020, February 03, 2021 and March 19, 2021 respectively
The Nomination and Remuneration Committee granted options to the extent of 1,47,685, 1,14,365, 2,51,143 and 59,980 no. of options at ? 1/- each under ESOS 2013 on July 30, 2021, October 28, 2021, February 02, 2022 and March 25, 2022 respectively and it will be vested over a period of four years from the date of grant, based on time and performance basis.
During the year, 39,476 no. of options granted at ? 1/- each were cancelled due to separation and nonachievement of performance parameters. The options cancelled were made available in the Scheme for considering future grant.
The disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and Section 62(1)(b) of the Act, read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 is provided in Annexure-V which forms part of this Report.
In compliance with Regulation 26(3) of the Listing Regulations and the Act, the Company has framed and adopted Code of Conduct (the Code) for Directors and Senior Management, which provides guidance on ethical conduct of business and compliance of law.
All members of the Board and Senior Management personnel have affirmed the compliance with the Code as on March 31, 2022. A declaration to this effect, signed by the Managing Director in terms of the Listing Regulations is given in the Report of Corporate Governance forming part of this Annual Report. The Code is made available on the Company''s website www.vguard.in.
g) Annual Return
The details forming part of the Annual Return of the Company containing the particulars prescribed under section 92 of the Act, in Form MGT-7, as on March 31, 2021, is made available on the Company''s website www.vguard.in.
Also, the draft of Form MGT-7, as on March 31, 2022, is made available on the Company''s website www.vguard.in.
h) Management Discussion and Analysis Report
As per the terms of Regulation 34(2)(e) of the Listing Regulations, the Management Discussion and Analysis Report forms part of this Annual Report.
i) Related Party Transactions
All related party transactions which were entered during the Financial Year were in the ordinary course of business and on an arm''s length basis. There were no materially significant related party transactions entered by the Company with the Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interests of the Company.
A statement of all related party transactions is presented before the Audit Committee on quarterly basis, specifying the nature, value and terms and conditions of transactions. Since all the related party transactions entered during the financial year were on an arm''s length basis and in the ordinary course of business, no details are required to be provided in Form AOC-2 as prescribed under Section 134(3) (h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.
In accordance with the requirements of the Listing Regulations, the Company has also
adopted Policy on Materiality and dealing with Related Party Transactions and the same has been placed on the website of the Company www.vguard.in.
j) Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements. The Report on Corporate Governance as required under Regulation 34(3) read with Schedule V of the Listing Regulations forms part of this Annual Report. Further as required under Regulation 17(8) of the Listing Regulations, a certificate from the Managing Director and Chief Financial Officer is annexed with this Report.
k) Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information pertaining to 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 furnished in Annexure-VI and forms part of this Report.
l) Particulars of Remuneration details of Directors, Key Managerial Personnel and Employees
The remuneration details of Directors and Key Managerial Personnel and ratio of remuneration of each Director to the median of employees'' remuneration as per Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure-VII. In accordance with the provisions of Section 197(12) of the Act and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and particulars of remuneration of top ten employees who have drawn remuneration not less than the limits specified in the Rules are available with the Company and in terms of provisions of Section 136(1) of the Act, this report is being sent to the members without this detail and any member desirous of obtaining information may write to the Company and
the same shall be provided through electronic mode till the date of the ensuing Annual General Meeting and the details are made available on the website of the Company www.vguard.in.
m) Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has in place a policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment as per the guidelines provided in the policy. All women employees (permanent, temporary, contractual and trainees) are covered under this policy and it has been circulated amongst the employees of the Company and the same is exhibited on the notice board of all the business locations/ divisions of the Company. During the year under review, the Company has not received any complaint.
20. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the various Secretarial Standards issued by the Institute of Company Secretaries of India.
21. LISTING OF SHARES
The equity shares of the Company are listed on National Stock Exchange of India Limited (NSE) and BSE Ltd. (BSE). The listing fee for the Financial Year
2022-23 is paid to both the Stock Exchanges.
22. CODE OF PRACTICES AND PROCEDURES FOR FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION
The Board has formulated Code of Practices and Procedures for Fair Disclosure of Unpublished
Price Sensitive Information (Fair Disclosure Code) for fair disclosure of events and occurrences that could impact price discovery in the market for the Company''s securities and to maintain the uniformity, transparency and fairness in dealings with all stakeholders and ensure adherence to applicable laws and regulations. The copy of the same is available on the website of the Company www.vguard.in.
23. PREVENTION OF INSIDER TRADING
The Board has formulated code of conduct for regulating, monitoring and reporting of trading of shares by Insiders. This code lays down guidelines, procedures to be followed and disclosures to be made by the insiders while dealing with shares of the Company and cautioning them on consequences of non-compliances. The copy of the same is available on the website of the Company www.vguard.in.
24. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE 2016
During the year under review, the Company has neither made any application nor any proceeding pending under the Insolvency and Bankruptcy Code 2016.
25. ACKNOWLEDGEMENT
Your Directors place on record their sincere appreciation for the steadfast commitment and performance showcased by the employees at all levels during all times, especially in the uncertain environment witnessed during the year under review. The relentless performance of the employees over the years has led to excellent growth trajectory. The Directors also sincerely thank channel partners, shareholders, various Government & other Statutory Authorities, Banks, Financial Institutions and Analysts for their continued assistance, co-operation and support.
Mar 31, 2019
The Directors have great pleasure in presenting Twenty Third Annual Report on the business and operations of the Company, together with the Audited Financial Statements for the year ended March 31, 2019.
1. FINANCIAL SUMMARY
The summarized standalone and consolidated results of your Company and its subsidiary are given in the table below:
(Rs. in crores)
|
Financial Year ended |
||||
|
particulars |
Standalone |
consolidated |
||
|
31.03.2019 |
31.03.2018 |
31.03.2019 31.03.2018 |
||
|
Revenue from operations (Gross) |
2,566.44 |
2,321.27 |
2,594.01 |
2,335.26 |
|
Other Income |
10.55 |
7.45 |
12.34 |
7.38 |
|
Finance Income |
7.71 |
3.66 |
7.71 |
3.66 |
|
Total Income |
2,584.69 |
2,332.38 |
2,614.06 |
2,346.30 |
|
Operating expenditure |
2,347.01 |
2,134.34 |
2,369.70 |
2,144.90 |
|
Operating profit before Depreciation, Interest, Tax & Exceptional Item |
237.68 |
198.04 |
244.36 |
201.40 |
|
Finance Cost |
1.27 |
1.66 |
1.76 |
2.04 |
|
Depreciation and amortization expense |
21.82 |
19.11 |
23.01 |
19.68 |
|
Profit Before Tax and Exceptional Item |
214.59 |
177.27 |
219.59 |
179.68 |
|
Profit Before Tax Tax Expense: |
214.59 |
177.27 |
219.59 |
179.68 |
|
a) Current Tax |
49.78 |
45.23 |
51.37 |
45.55 |
|
b) Deferred Tax |
(0.71) |
(1.04) |
0.17 |
(0.92) |
|
Profit After Tax |
165.52 |
133.08 |
168.05 |
135.06 |
|
Basic EPS (?) |
3.88 |
3.13 |
3.92 |
3.16 |
|
Diluted EPS (?) |
3.82 |
3.08 |
3.86 |
3.10 |
2. company performance
The Standalone Gross Revenue from operations for the financial year ended March 31, 2019 was Rs. 2,566.44 crores, as against Rs. 2,321.27 crores for the previous financial year, an increase of 12% (GST adjusted). Profit Before Tax for the year under review was Rs. 214.59 crores, a growth of 21% compared to Rs. 177.27 crores in the previous financial year. The Profit After Tax for the year grew by 24% to Rs. 165.62 crores from Rs. 133.08 crores in the previous financial year. The Company was able to achieve the growth in turnover and profit despite some challenges such as unfavourable weather conditions, floods in Kerala during Onam and volatility in commodity and currency. Growth was driven by Water Heaters, Fans and Wires categories. The segment wise performance of the Company is detailed under the Section Management Discussion and Analysis which forms part of this Annual Report.
The consolidated net revenue from operations for the Financial Year under review was Rs. 2,594.01 crores, with a growth of 11% over Rs. 2,335.26 crores for the previous financial year. Consolidated Profit Before Tax for the year was Rs. 219.59 crores over Rs. 179.68 crores for the previous financial year. On consolidated basis, the Company earned a Profit After Tax of Rs. 168.05 crores for the Financial Year 2018-19, against Rs. 135.06 crores for the previous financial year. These consolidated figures include the financial performance of GUTS Electro-mech Limited, subsidiary Company. The consolidated figures for Financial Year 2017-18 include seven months of the subsidiaryâs results.
3. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
The Companyâs equity investment in Guts Electro-mech Ltd., which is engaged in the business of manufacture and supply of MCB & RCCB, continues at 74% as on March 31, 2019. During the year under review, the Company has not made any investment in any other entity. Presently, the Company does not have any material subsidiary.
The Policy for determining Material Subsidiaries adopted by your Board, in conformity with Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âthe Listing Regulationsâ), can be accessed on the Companyâs website at www.vguard.in.
4. CHANGES TO THE SHARE CAPITAL
During the year under review, the Company has allotted 3,70,436, 4,84,253 and 4,03,774 number of equity shares of Rs. 1/-, Rs. 34.64 and Rs. 71.36 respectively under ESOS2013. The Paid-up Capital of the Company, as on March 31, 2019, has increased to Rs. 42,69,34,094/-, due to allotment of shares under ESOS2013.
5. DIVIDEND
The Board of Directors is pleased to recommend a final Dividend of Rs. 0.80 (80 paise) per equity share of Rs. 1/- per share (80% per equity share of Rs. 1/- each). The final Dividend, if declared as recommended, would involve an outflow of Rs. 41.17 crores including Dividend Distribution Tax, if approved by the Shareholders at the ensuing Annual General Meeting. Dividend would be payable to all the Shareholders/Beneficial Owners whose names appear in the Register of Members as on July 17, 2019.
The Register of Members will remain closed from July 18, 2019 to July 24, 2019 (both days inclusive).
6. INVESTOR EDUCATION AND PROTECTION FUND
Transfer of unpaid/ unclaimed Dividend & Share Application Money to Investor Education and protection Fund (IEpF)
Pursuant to the provisions of Section 124(5) of the Companies Act, 2013 (âthe Actâ) unclaimed/ unpaid dividend of Rs. 4,41,340/- which was lying in the Unpaid Dividend Account for the financial year 2010-11 was transferred, during the year under review, to IEPF.
Further, unpaid dividend of Rs. 6,075/- for the financial year 2008-09 lying in the Unpaid Dividend IPO Drop Account, which ought to have been transferred to IEPF in the year 2016-17, was transferred during the year under review, along with interest @ 12% per annum amounting to Rs. 1,887/- for the period of delay.
As per the provisions of Section 125 of the Act, the share application money lying as unclaimed for seven years need to be transferred to IEPF established by the Central Government. An amount of Rs. 2,78,600/was lying as unclaimed in the refund account for a period of seven years and the amount ought to have been transferred on March 04, 2015. During the year under review, the Company transferred the said amount along with interest @ 12% per annum amounting to Rs. 1,22,120/- for the period of delay to the IEPF.
Reminders were sent to the Shareholders who have not claimed the dividends for earlier years to claim the same from the Company failing which, the unclaimed dividend lying in the unpaid account for seven years will be transferred to IEPF after the due date for transfer.
Pursuant to the provisions of the IEPF (Uploading of information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company has filed the necessary form and uploaded the details of unclaimed amounts lying in unpaid dividend accounts, as on July 31, 2018, with the Ministry of Corporate Affairs.
Unclaimed dividend in respect of the Financial year 2011-12 will be due for transfer to IEPF on August 24, 2019.
Transfer of Equity Shares to Investor Education protection Fund Authority (IEpFA)
In terms of Section 124(6) of the Act read with Rule 6 of the IEPFA (Accounting, Audit, Transfer and Refund) Rules, 2016, (as amended from time to time), shares on which dividend has not been paid or claimed by a shareholder for a period of seven consecutive years or more shall be credited to the Demat Account of IEPFA within a period of thirty days of such shares becoming due for transfer. Upon transfer of such shares, all benefits (like dividend, bonus, split, consolidation etc.), if any, accruing on such shares shall also be credited to the Account of IEPF and the voting rights on such shares shall remain frozen till the rightful owner claims the shares. Shares which were transferred to the Demat Account of IEPFA can be claimed back by the shareholder by following the procedure prescribed under the aforesaid rules.
During the year under review, the Company has transferred 19,018 equity shares to IEPFA as dividend had not been encashed or claimed on the above shares during the seven consecutive years from the financial Year 2010-11 to 2017-18.
Details of Nodal Officer
The details of the nodal officer appointed by the Company under the provisions of IEPF are given below and the same is disseminated in the website of the Company viz., www.vguard.in.
|
Name of the Company Secretary as Nodal Officer |
Jayasree K |
|
Direct Phone No. |
91 484 - 433 5000 |
|
Email ID |
|
|
Address |
V-Guard Industries Ltd 42/962, Vennala High School Road, Vennala, Ernakulam - 682028 |
7. FIXED DEPOSIT
The Company has not accepted any deposit within the meaning of Chapter V of the Act and the Rules framed thereunder.
8. MATERIAL CHANGES AND COMMITMENTS IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the Report.
9. CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business of the Company during the Financial Year 2018-19.
10. POSTAL BALLOT
During the year under review, the Board of Directors had sought approval of the Shareholders of the Company through Postal Ballot process pursuant to the provisions of Sections 108 & 110 of the Act read with Rule 20 & 22 of the Companies (Management and Administration) Rules, 2014 (as amended) and Regulation 44 of the Listing Regulations, in respect of the Ordinary Resolution set out in the Postal Ballot Notice dated August 28, 2018. The voting results are given below;
Date of Postal Ballot Notice: August 28, 2018
Declaration of Results: Friday, September 28, 2018 at 5.00 p.m.
Voting Period: August 29, 2018 to September 27, 2018
|
Sl |
particulars of |
Type of |
No. of votes |
votes cast in favor |
votes cast against |
||
|
No. |
Resolution |
Resolution |
polled |
No. of votes |
% |
No. of votes |
% |
|
1 |
To appoint Ms. Radha Unni, as an Independent Director |
Ordinary Resolution |
364,134,814 |
364,133,267 |
99.99 |
1,547 |
0.01 |
11. SIGNIFICANT OR MATERIAL ORDERS PASSED BY REGULATORS / COURTS / TRIBUNALS
There were no significant material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.
12. CREDIT RATING
The Companyâs bank facilities are rated by Investment Information and Credit Rating Agency of India Limited (ICRA Ltd.). The Company continues to have long-term rating of [ICRA]AA (pronounced ICRA double A) and short-term rating of [ICRA]A1 (pronounced ICRA A one plus). The outlook on the long-term rating remains stable.
13. BUSINESS RESPONSIBILITY REPORT
The Ministry of Corporate Affairs, Government of India, in July 2011, came out with the âNational Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Businessâ. These guidelines contain certain principles which are to be adopted by companies as part of its business practices and disclosures regarding the steps taken to implement these principles through a structured reporting format, viz., Business Responsibility Report. Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Company has prepared the Business Responsibility Report forming part of this Annual Report.
14. BOARD OF DIRECTORS AND ITS COMMITTEES
A. composition of the Board of Directors
As on March 31, 2019, the Board of Directors of the Company comprises of nine Directors, of which two are Executive and seven are Non-Executive Directors, which includes, five Independent Directors. The composition of the Board of Directors is in compliance with the provisions of Regulation 17 of the Listing Regulations and Section 149 of the Act.
B. Change in office of Directors and Key Managerial personnel of the company During the Year under Review and Details of Directors Seeking Re-appointment at the 23rd Annual General Meeting
The members of the Company in their 22nd Annual General Meeting held on July 31, 2018, re-appointed Mr. Ramachandran V, Whole-time Director, as a Director, liable to retire by rotation and Mr. Mithun K Chittilappilly as the Managing Director for a term of three years with effect from April 01, 2018. Pursuant to Regulation 17(1A) of the Listing Regulations, approval of the members was sought in the AGM, for continuation of directorship of Mr. A K Nair, Independent Director, who had attained 75 years of age, till the expiry of current term of office.
During the year under review, the members of the Company, appointed Ms. Radha Unni, as an Independent Director, for a period of three years effective from September 27, 2018, through Postal Ballot process. The Company has received declaration from her confirming that she meets the criteria of Independence laid down in Section 149(6) of the Act and Regulation 16 of the Listing Regulations.
In accordance with the provisions of Section 152 of the Act and the Companyâs Articles of Association, Ms. Joshna Johnson Thomas, Director, retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment. The Board recommends the re-appointment for consideration of the Members of the Company at the ensuing Annual General Meeting.
The present term of office of Mr. Cherian N Punnose, Mr. C J George and Mr. Ullas K Kamath, Independent Directors, who were appointed for a consecutive period of five years effective from July 29, 2014, expires on July 28, 2019. Pursuant to the provisions of the Act and based on the recommendation of the Nomination and Remuneration Committee, the Board proposes re-appointment of retiring Directors, as Independent Directors, for second term of five consecutive years from July 29, 2019 upto July 28, 2024.
The Notice dated June 25, 2019, of the ensuing Annual General Meeting includes the proposal for re-appointment of Directors and their brief resume, specific information about the nature of expertise, the names of the Companies in which they hold directorship and membership/ chairmanship of the Board Committees as stipulated in the Listing Regulations.
C. Criteria for Determining Qualifications, Positive Attributes and Independence of a Director
The Nomination and Remuneration Committee has formulated Nomination, Remuneration and Evaluation Policy, which details the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178(3) of the Act and the Listing Regulations. The policy forms part of this report.
D. Declaration by Independent Directors
Mr. C J George, Mr. Cherian N Punnoose, Mr. Ullas K Kamath, Mr. A K Nair and Ms. Radha Unni, Independent Directors, have furnished a declaration that they meet the criteria of independence as envisaged in Regulation 16 of the Listing Regulations and Section 149(6) of the Act.
E. Certificate from Practicing Company Secretary
Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the Listing Regulations, M/s. Keyul M Dedhia & Associates, Company Secretary in practice, Mumbai, has certified that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority and the certificate forms part of the Report of Corporate Governance forming part of this Annual Report.
F. Number of Meetings of the Board of Directors
The Board meets at regular intervals to adopt financial results and decide business policies and strategic proposals apart from other items of business. The Board and Committee meetings are pre-scheduled and a tentative annual calendar of meetings is circulated to the directors in advance to ensure participation of all Directors.
During the year under review, five Board meetings were held and meetings of Sub-Committees of the Board were also held. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations. The details of the Meetings are given in the Report on Corporate Governance which forms part of this Report.
Pursuant to the requirements of Schedule IV to the Act and the Listing Regulations, a separate Meeting of the Independent Directors of the Company was held on March 22, 2019, and the Directors reviewed and assessed the matters enumerated under Schedule IV(VII)(3) to the Act and Regulation 25(4) of the Listing Regulations. All the Independent Directors, except Mr. Ullas K Kamath, attended the meeting.
G. Statutory committees of the Board
Pursuant to the requirement under the Act and the Listing Regulations, the Board of Directors has constituted various Committees of Board such as Audit Committee, Nomination and Remuneration Committee, Stakeholdersâ Relationship Committee and Corporate Social Responsibility (âCSRâ) Committee.
The composition and terms of reference of Audit Committee, Nomination and Remuneration Committee and Stakeholdersâ Relationship
Committee and number of meetings held during the year under review are given in the section, Report on Corporate Governance forming part of this Annual Report.
The CSR Committee of the Company comprises of three members, Mr. Kochouseph Chittilappilly, Mr. Cherian N Punnoose and Mr. Mithun K Chittilappilly. Mr. Kochouseph Chittilappilly, is the Chairman of the Committee and the members of the Committee met three times during the year under review, on May 30, 2018, October 25, 2018 and January 31, 2019. The Committee recommended the amount of CSR spent for the financial year and the various CSR programs/activities to be carried out by the Company to the Board, for its consideration and approval.
H. performance Evaluation
Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, the Directors (excluding the Director being evaluated) as well as the Sub-Committees of the Board. The Nomination and Remuneration Committee of the Company has carried out evaluation of performance of each individual Director. Performance evaluation was made on the basis of structured questionnaire considering the indicative criteria prescribed in the Nomination, Remuneration and Evaluation Policy of the Company read with SEBI Guidance Note on Board Evaluation.
Evaluation of the Board was made based on the role played by the Board in decision making, evaluating strategic proposals, discussing annual budgets, assessing adequacy of internal controls, review of risk management procedures etc. The evaluation of individual Director was carried out based on various parameters such as participation in the Board and its Committee meetings, contribution towards strategic proposals, suggesting risk mitigation measures, supporting in putting place internal controls, governance, leadership and talent development and managing external stakeholders. Performance evaluation of various Sub-Committees of the Board was carried out based on the criteria such as constitution, effective functioning of the Sub-Committees as per the terms of reference, periodical suggestions and recommendations given by the Sub-Committees to the Board etc.
A separate meeting of Independent Directors of the Company was held during the year under review, in which the members evaluated the performance of the Chairman based on criteria such as giving guidance to the Board and ensuring the independence of the Board etc. The performance of the non-independent directors was also evaluated based on their contribution made to the growth of the Company, strategic initiatives and Board deliberations.
I. Directorsâ Responsibility Statement
Pursuant to the provisions under Section 134(5) of the Act, with respect to Directorsâ Responsibility Statement, the Directors confirm:
I. That in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
II. That they had selected such accounting policies and applied them consistently, and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
III. That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
IV. That they had prepared the annual accounts on a going concern basis;
V. That they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
VI. That they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
15. AUDIT RELATED MATTERS
A. Statutory Auditors
M/s. S R Batliboi & Associates LLP, Chartered Accountants, Kochi, with Firm Registration Number - 101049W/E300004 were re-appointed as Statutory Auditors of the Company for a period of five consecutive years at the Annual General Meeting (AGM) of the Company held on July 31, 2017, to hold office from the conclusion of 21st AGM till the conclusion of 26th AGM to be held in the year 2022, on a remuneration fixed by the Board of Directors.
Re-appointment was made subject to ratification by the Members at every subsequent AGM held during the tenure of re-appointment. Pursuant to the amendment made to Section 139 of the Act by the Companies (Amendment) Act, 2017, effective from May 07, 2018, the requirement of seeking ratification of the members for the appointment / re-appointment of the Statutory Auditors has been withdrawn from the Statute. Hence, the resolution seeking ratification of the members for re-appointment at the ensuing AGM is not being sought.
The Auditorsâ Report for the financial year 2018-19 does not contain any qualification, reservation or adverse remark. The Auditorsâ Report is enclosed with the financial statements in the Annual Report.
B. cost Auditors
As per Section 148 of the Act read with Rules framed thereunder, M/s. RA & Co., Cost Accountants, Mumbai (Firm Reg. No. 000242) has been re-appointed as Cost Auditors for the financial year 2019-20 to conduct cost audit of the accounts maintained by the Company in respect of various products prescribed under the applicable Cost Audit Rules. The remuneration of Cost Auditors has been approved by the Board of Directors based on the recommendation of the Audit Committee. The requisite resolution for ratification of remuneration of Cost Auditors by members of the Company is set out in the Notice of ensuing AGM. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Act and that they are not disqualified from appointment within the meaning of the said Act.
The Cost Audit Report for the financial year 2017-18, issued by M/s. RA & Co., Cost Auditors, in respect of the various products prescribed under Cost Audit Rules was filed with the Ministry of Corporate Affairs on August 21, 2018. The Cost Audit Report does not contain any qualifications, reservations or adverse remarks.
The Cost Audit Report for the financial year 2018-19 to be issued by M/s. RA & Co., Cost Auditors will be considered by the Board of Directors.
c. Secretarial Auditors
M/s. Keyul M Dedhia & Associates, Company Secretaries, Mumbai, were appointed as Secretarial Auditors of the Company for the financial year 2018-19 pursuant to Section 204 of the Act. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as Annexure- I to this report.
The Secretarial Auditors have observed that there was a delay in transfer of share application money of Rs. 2,78,600/- pertaining to Initial Public Offer (IPO) and unclaimed dividend of Rs. 6,075/- on drop shares which was lying in escrow account for the Financial Year 2008-09 to Investor Education and Protection Fund. The amounts were transferred to IEPF after the due date for transfer. The Company had transferred the amount with interest to IEPF before March 31, 2019.
Boardâs clarification for the observation:
There was an inadvertent omission to transfer the said amounts on the due date and the amounts were transferred to IEPF with interest @ 12% per annum for the period of delay from the due date of transfer till the date of transfer.
There are no other qualifications or adverse remarks or disclaimer of the Secretarial Auditors in the Report issued by them for the financial year 2018-19 which call for any explanation from the Board of Directors.
16. REPORTING OF FRAUDS
During the year under review, neither the Statutory Auditors nor the Secretarial Auditors or the Cost Auditors has reported to the Audit Committee, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees.
17. POLICY MATTERS
A. Nomination, Remuneration and Evaluation policy
In terms of provisions of Section 178(3) of the Act, the Nomination and Remuneration Committee of the Company has formulated and recommended to the Board a policy, containing the criteria for determining qualifications, competencies, positive attributes and independence for appointment of a Director (Executive/ Non-Executive) and it highlights the remuneration for the Directors, Key Managerial Personnel and other employees, ensuring that it covers the matters mentioned in Section 178(4) of the Act. Nomination, Remuneration and Evaluation Policy approved by the Board is given in Annexure II to this Report.
B. vigil Mechanism / Whistle Blower policy
The Company has adopted a Whistle Blower Policy for Vigil Mechanism for Directors and Employees to report to the Management instances of unethical behaviour, fraud or violation of Companyâs code of conduct. The mechanism provides for adequate safeguards against victimisation of employees and Directors who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in exceptional cases. None of the person has been denied access to the Audit Committee. The policy has been circulated amongst the employees of the Company working at various locations, divisions/units. During the year under review, the Company has not received any instances of genuine concerns from Directors or employees.
The policy amended in line with the provisions of the Act and the Listing Regulations is available on the website of the Company www.vguard.in.
C. corporate Social Responsibility policy
In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a CSR Committee and framed a CSR policy which details the programs / activities that can be carried out under various program heads. CSR policy of the Company is available on the Companyâs website viz., www.vguard.in. The Companyâs CSR activities are focused on Health Care and Education, Infrastructure Development, Sustainable Livelihood and Social Empowerment & Welfare and Sports, Arts and Culture.
During the year, Company carried out several initiatives under the CSR program, directly as well as through agencies. A report on CSR activities is attached as Annexure III forming part of this report.
D. Risk Management policy
The Company has developed and implemented risk management framework detailing risks associated with its business, process of identification of risks, monitoring and mitigation of these risks. Risk Management committee constituted by the Board identifies Corporate level risks at the beginning of the financial year which are cascaded down to product/functional risk groups for inclusion in their risk matrices. Corporate risks are strategic risks impacting the Company in the areas of new products, information security, digitization etc. Product risk groups also identifies and monitors product specific risks and key product risks are included in Corporate Risks. Quarterly updates on Corporate risks and its mitigation plans are presented to Risk Management Committee and Board.
E. Dividend policy
Pursuant to the Regulation 43A of the Listing Regulations, the Board of Directors of the Company has adopted a Dividend Policy for determining circumstances and parameters under which Dividend pay-out could be made on periodical basis. The policy highlighted the factors to be considered by the Board of Directors at the time of recommending/declaring of Dividend. The said policy is given in Annexure IV to this report and posted on the website of the Company www.vguard.in.
18. OTHER MATTERS
A. Internal Financial controls
The Company has Internal Control Systems commensurate with the nature of its business, size and complexities. Audit Committee reviews the adequacy and effectiveness of internal control system and monitors the implementation of audit recommendations. During the year under review, the Internal Audit division of the Company conducted detailed review of control processes in key areas and identified design gaps, process automation opportunities and management check points which will help in strengthening the processes and monitoring mechanisms. Key controls in operational, financial and IT processes were tested to provide assurance regarding compliance with the existing policies and significant operating procedures and no significant weaknesses/deviations were noted in operation of controls. Further, the Statutory Auditors of the Company also carried out audit of Internal Financial Controls over Financial Reporting of the Company as on March 31, 2019 and issued their report which forms part of the Independent Auditorâs report.
B. particulars of Loans, Guarantees and Investments
During the year under review, the Company has not given any loan, provided any guarantee or made any investment falling under the provisions of Section 186 of the Act.
C. Financial position and performance of Subsidiaries, Joint ventures and Associates
GUTS Electro-mech Ltd., Subsidiary Company reported Revenue from Operations of Rs. 60.23 crores for the FY 2019 (Previous Year: Rs. 47.11 crores). The financial summary of subsidiary company is as under:
(Amt in lakhs)
|
particulars |
2018-19 |
2017-18 |
|
Revenue from |
6,022.50 |
4,710.57 |
|
Operations |
||
|
Profit Before Tax |
593.01 |
70.74 |
|
Profit/(Loss) After Tax |
311.14 |
(28.55) |
Consolidated Financial Statements of the Company are prepared in accordance with Indian Accounting Standards (IND AS) notified under Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Act, (Ind AS compliant Schedule III), as applicable to the consolidated financial statements and forms an integral part of this Report.
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiary, for the Financial Year 2018-19 is given in
Form AOC-1 which forms an integral part of this Annual Report.
In accordance with Section 136(1) of the Act, the Annual Report of your Company containing inter alia, financial statements including consolidated financial statements, has been placed on the Companyâs website, www.vguard.in. Further, the financial statements of the subsidiary have also been placed on the Companyâs website.
The audited financial statements including the consolidated financial statements of the Company, audited financial statements in respect of the subsidiary company shall also be kept open for inspection at the Registered Office of the Company from 11.00 A.M. to 1.00 P.M. for a period of 21 days upto the date of the ensuing AGM. The aforesaid documents relating to subsidiary Company can be made available to any member interested in obtaining the same upon a request made to the Company.
D. Any Revision Made in Financial Statements/ Boardâs Report
The Company has not revised the Financial Statements or Boardâs Report in respect of any of the three preceding financial years.
E. Employee Stock Option Scheme 2013
During the Financial Year 2015-16, the Company had granted 9,06,280 options to the eligible employees to be vested over a period of three years in accordance with the Employee Stock Option Scheme (ESOS) 2013. Vesting of options for the first & second year had been completed and during the year under review, considering the parameters for vesting of options, 86,567 no. of options of Rs. 1/- each and 2,67,014 no. of options of Rs. 71.36 each were vested to eligible employees, being the vesting for the third year of the grant. During the year under review, 1,05,797 no. of options were cancelled due to non-achievement of parameters for performance vesting.
Further, 63,000 no. of options of Rs. 1/- each and 5.67.000 no. of options of Rs. 68.75 each, being the options for time based vesting for the Second year, were vested for the grant made on May 04, 2016. Options to the extent of 48,654 of Rs. 1/- each were vested on time basis, for the Second year in respect of grant made on June 16, 2016. In respect of grant made on August 08, 2016, options to the extent of 2,42,578 of Rs. 1/- each were vested on time basis for the second year of vesting.
Further, 42,000 no. of options of Rs. 1/- each and 1,68,000 no. of options of Rs. 121.80 each were also vested during the year under review, on time basis, towards the Second year, in respect of the grant made on August 08, 2016. In respect of grant made on October 21, 2016, options to the extent of 28,994 of Rs. 1/- each were vested on time basis towards the second year.
Further, options to the extent of 37,707 and 23,580 of Rs. 1/- each were vested on time basis towards the first year in respect of grants made in May 2017 and July 2017 respectively. In respect of grant made on January 2017, options to the extent of 15,462 of Rs. 1/- each were vested on time basis for the second year.
Options to the extent of 47,007 of Rs. 1/- each were vested on time basis for the first year in respect of grant made on January 22, 2018.
The Nomination and Remuneration Committee made several grants under ESOS2013, during the year under review to various eligible employees and the options granted will be vested over a period of four years from the date of grant. 46,354 nos. of options were granted on May 30, 2018 at face value of Rs. 1/- each. Further, 99,452 nos. of options were granted on July 31, 2018 and 76,190 nos. of options were granted on January 31, 2019 at a face value of Rs. 1/- each respectively.
The disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and Section 62(1) (b) of the Act, read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014, is given as Annexure V to this Report.
F. code of conduct
In compliance with Regulation 26(3) of the Listing Regulations and the Act, the Company has framed and adopted Code of Conduct (âthe Codeâ) for Directors and Senior Management. The Code provides guidance on ethical conduct of business and compliance of law. The Code is available on the Companyâs website www.vguard.in.
All Members of the Board and Senior Management personnel have affirmed the compliance with the Code as on March 31, 2019. A declaration to this effect, signed by the Managing Director in terms of the Listing Regulations is given in the Report of Corporate Governance forming part of this Annual Report.
G. Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 is enclosed as Annexure VI.
H. Management Discussion and Analysis
As per the terms of Regulations 34(2)(e) of the Listing Regulations, the Management Discussion and Analysis forms part of this Annual Report.
I. Related party Transactions
All related party transactions which were entered during the financial year were in the ordinary course of business and on an armâs length basis. There were no materially significant related party transactions entered by the Company with the promoters, directors, key managerial personnel or other persons which may have a potential conflict with the interests of the Company.
A statement of all related party transactions is presented before the Audit Committee on quarterly basis, specifying the nature, value and terms and conditions of transactions. Since all the Related Party Transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business, no details are required to be provided in Form AOC-2 prescribed under clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.
In accordance with the requirements of the Listing Regulations, the Company has also adopted the Policy on Materiality and dealing with Related Party Transactions and the same has been placed on the website of the Company at www.vguard.in. The Company does not have a material unlisted subsidiary as defined under Regulation 16(1)(c) of the Listing Regulations.
J. corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements. The Report on Corporate Governance as required under Regulation 34(3) read with Schedule V of the Listing Regulations forms part of this Annual Report. The Auditorsâ Certificate on compliance with Corporate Governance norms is also attached to this Report. Further as required under Regulation 17(8) of the Listing Regulations, a certificate from the Managing Director and CFO is being annexed with this Report.
K. conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information pertaining to 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 furnished in Annexure VII and forms part of this Report.
L. particulars of Remuneration details of Directors, Key Managerial personnel and Employees
The remuneration details of Directors and Key Managerial Personnel and ratio of remuneration of each director to the median of employeesâ remuneration as per Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure VIII. In accordance with the provisions of Section 197(12) of the Act and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and particulars of remuneration of employees are available with the Company. In terms of provisions of Section 136(1) of the Act, this report is being sent to the members without this annexure and the details are open for inspection at the Registered Office of the Company from 11.00 A.M. to 1.00 P.M. for a period of 21 days upto the date of ensuing AGM. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.
M. Disclosure under The Sexual Harassment of Women at Workplace (prevention, prohibition and Redressal) Act, 2013
The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment as per the guidelines provided in the policy. All women employees (permanent, temporary, contractual and trainees) are covered under this policy. The policy has been circulated amongst the employees of the Company and the same is exhibited in the notice Board of all the business locations/divisions of the Company. During the year under review, no complaint was received.
19. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the various Secretarial Standards issued by the Institute of Company Secretaries of India.
20. LISTING OF SHARES
The equity shares of the Company are listed on the National Stock Exchange of India Limited (NSE) and BSE Ltd. (BSE). The listing fee for the Financial Year 2019-20 has been paid to the credit of both the Stock Exchanges.
21. CODE OF PRACTICES AND PROCEDURES FOR FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION
The Board has formulated code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (âFair Disclosure Codeâ) for fair disclosure of events and occurrences that could impact price discovery in the market for the Companyâs securities and to maintain the uniformity, transparency and fairness in dealings with all stakeholders and ensure adherence to applicable laws and regulations. The copy of the same is available on the website of the Company at www.vguard.in.
22. PREVENTION OF INSIDER TRADING
The Board has formulated code of conduct for regulating, monitoring and reporting of trading of shares by Insiders. This code lays down guidelines, procedures to be followed and disclosures to be made by the insiders while dealing with shares of the Company and cautioning them on consequences of non-compliances. The copy of the same is available on the website of the Company at www.vguard.in.
23. ACKNOWLEDGEMENT
Your Directors place on record their sincere appreciation for the steadfast commitment and highly motivated performance by employees at all levels which was instrumental in sustained performance of the Company. Your Directors also sincerely thank all the stakeholders, business partners, government & other statutory bodies, banks, financial institutions, analysts and shareholders for their continued assistance, cooperation and support.
For and on behalf of the Board of Directors
S/d S/d
Kochouseph chittilappilly Mithun K chittilappilly
Date: May 29, 2019 Chairman Managing Director
Place: Ernakulam (DIN: 00020512) (DIN: 00027610)
Mar 31, 2018
The Directors have great pleasure in presenting Twenty Second Annual Report on the business and operations of the Company along with the Audited Standalone and Consolidated Statements of Accounts for the Financial Year ended March 31, 2018.
1. FINANCIAL HIGHLIGHTS
The summarized standalone and consolidated results of your Company and its subsidiary are given in the table below:
(Rs. in crores)
|
Financial Year ended |
|||
|
Particulars |
Standalone |
Consolidated |
|
|
31.03.2018 |
31.03.2017 |
31.03.2018 |
|
|
Revenue from operations (Gross) |
2,321.27 |
2,114.20 |
2,335.26 |
|
Other Income |
7.45 |
8.59 |
7.38 |
|
Finance Income |
3.66 |
4.87 |
3.66 |
|
Total Income |
2,332.38 |
2,127.66 |
2,346.30 |
|
Operating expenditure |
2,134.34 |
1,905.60 |
2,144.90 |
|
Operating profit before Depreciation, Interest, Tax & Exceptional Item |
198.04 |
222.06 |
201.40 |
|
Finance Cost |
1.66 |
2.10 |
2.04 |
|
Depreciation and amortization expense |
19.11 |
16.24 |
19.68 |
|
Profit Before Tax and Exceptional Item |
177.27 |
203.72 |
179.68 |
|
Profit Before Tax |
177.27 |
203.72 |
179.68 |
|
Tax Expense: |
|||
|
a) Current Tax |
45.23 |
61.15 |
45.55 |
|
b) Deferred Tax |
-1.04 |
-2.03 |
-0.92 |
|
Profit After Tax |
133.08 |
144.60 |
135.06 |
|
Basic EPS (Rs.) |
3.13 |
3.42 |
3.16 |
|
Diluted EPS (Rs.) |
3.08 |
3.37 |
3.10 |
2. COMPANYâS PERFORMANCE
During the Financial Year 2017-18, on a standalone basis, your Company achieved a net revenue from operations of Rs. 2,321.27 crores as against Rs. 2,114.20 crores for the previous financial year, an increase of 10% year-on-year. Profit Before Tax for the year under review was Rs.177.28 crores, which is lower by 13% as compared to Rs. 203.74 crores in the previous financial year. The Profit After Tax for the year under review was Rs. 133.09 crores, lower by 8%, as against Rs. 144.62 crores in the previous financial year. There was a significant increase in advertising expenses related to the launch of a new brand identity which had a temporary impact on profits.
The consolidated net revenue from operations for the Financial Year under review was Rs. 2,335.26 crores. Consolidated Profit Before Tax for the year was Rs. 179.69 crores. On consolidated basis, the Company earned a Profit After Tax of Rs. 135.05 crores for the Financial Year 2017-18.
The segment wise performance of products of the Company is detailed under the Section Management Discussion and Analysis Report which forms part of this Annual Report.
3. NEW BRAND IDENTITY
After forty glorious years of existence, the Company unveiled its new identity and announced its new vision for the brand. The new identity marks the evolution of the 40-year-old Company into a new generation, technology-driven smart organization. As part of the brand evolution, the Company unveiled a new logo featuring sleek black and royal gold colours representing modernity and premium values. The brand unveiled a new tag line, âBring Home A Better Tomorrowâ with the promise of delivering thoughtful products and experiences to its consumers.
4. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
During the year under review, the Company acquired 74% equity shares of Guts Electro-Mech Ltd., an unlisted public company situated at 163/C, 164/E, IDA Phase II, Cherlappally, Hyderabad, by way of direct purchase from the existing shareholders and through subscription of equity shares by private placement. The subsidiary Company is engaged in manufacturing and selling of switchgears, circuit breakers, relays, current transformers and similar electromechanical products. Its plants are located at Hyderabad and Haridwar.
5. LAUNCH OF NEW PRODUCTS
In order to widen the kitchen appliances portfolio, the Company, during the year under review, launched Rice cooker in the markets of Andhra Pradesh and Telangana. The Company also launched Modular Switches in Kerala, as an extension to the Wires and Switchgear category. The Company also launched Air Coolers in the markets of Delhi and Hyderabad. These products have been well accepted by the trade and consumers. In addition to launching new products, the Company has also introduced new and innovative products in existing categories viz., Digital UPS, Fans and Stabilizers.
6. CHANGES TO THE SHARE CAPITAL
During the year under review, the Company has allotted 4,18,664, 4,35,744 and 1,66,762 number of equity shares of Rs. 1/-, Rs. 34.64 and Rs. 71.36 respectively under ESOS2013. The Paid-up Capital of the Company, as on March 31, 2018, has increased to Rs.42,56,75,631/-, due to allotment of shares under ESOS2013.
7. DIVIDEND
The Board of Directors is pleased to recommend a final Dividend of Rs. 0.70 per equity share (70 paise per equity share of Rs. 1/- each). The final Dividend, if declared as recommended, would involve an outflow of Rs. 35.86 crores including Dividend Distribution Tax, if approved by the Shareholders at the ensuing Annual General Meeting. Dividend would be payable to all the Shareholders/Beneficial Owners whose names appear in the Register of Members as on July 24, 2018.
The Register of Members and Share Transfer Books will remain closed from July 25, 2018 to July 31, 2018 (both days inclusive).
In accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy. The Policy is available at the following weblink:- https://www.vguard.in/ investor-relations/corporate-governance.
8. TRANSFER OF UNPAID DIVIDEND AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
As per Section 124(5) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ) the Company is required to transfer the dividend amount which remains unpaid or unclaimed for a period of seven years from the date of transfer to the unpaid dividend account, to the IEPF. Further, as per the provisions of Section 124(6) of the Companies Act, 2013 read with the Rules, all the shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the Company to IEPF Authority.
Accordingly, the Company has transferred an amount of Rs.4,53,405/- which was lying in the Unpaid Dividend Account for the Financial Year 2009-10, to the IEPF. The corresponding shares whose dividend has unclaimed for seven consecutive years were transferred to the IEPF. During the year under review, the Company has transferred 71,602 equity shares to IEPF as dividend had not been encashed or claimed on above shares during the seven consecutive years from the financial Year 2009-10 to 2016-17. The shares which were lying in the IPO escrow Account also have been transferred to IEPF.
Pursuant to the provisions of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company has filed the necessary form and uploaded the details of unclaimed amounts lying with the Company, as on July 31, 2017 with the Ministry of Corporate Affairs.
Unclaimed dividend in respect of the Financial year 2010-11 will be due for transfer to IEPF on August 24, 2018.
9. fixed deposit
The Company has not accepted any deposit within the meaning of Chapter V of the Companies Act, 2013 and the Rules framed thereunder.
10. material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report
No material changes and commitments affecting the financial position of the Company occurred between the end of the Financial Year to which this financial statements relate and the date of this Report.
11. change in the nature of business, if any
There was no change in the nature of business of the Company during the Financial Year 2017-18.
12. Postal ballot
During the year under review, the Board of Directors had sought approval of the Shareholders of the Company by Postal Ballot process pursuant to the provisions of Sections 108 & 110 of the Companies Act, 2013 read with Rule 20 & 22 of the Companies (Management and Administration) Rules, 2014 (as amended) and Regulation 44 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (Listing Regulations) in respect of the Ordinary and Special Resolutions set out in the Postal Ballot Notices dated March 27, 2017, November 09, 2017 and February 19, 2018. The detailed voting results are given in the section, âReport on Corporate Governanceâ forming part of this Annual Report.
13. Significant or material orders passed by REGULATORS / COURTS / TRIBUNALS
There were no significant material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.
14. credit RATING
During the year under review, ICRA Limited has upgraded the long-term rating of the Company from [ICRA]AA- to [ICRA]AA. The outlook on the long-term rating has been revised to âStableâ from positive.
15. Business responsibility report
Regulation 34(2)(f) of Listing Regulations mandates inclusion of Business Responsibility Report (âBRRâ) as part of Annual Report for top 500 listed companies based on market capitalization. In Compliance with the regulation, the Company has prepared a BRR which describes the initiatives taken by the Company from an environmental, social and governance perspective for the financial year 2017-18 and the same forms part of this Annual Report.
16. board of directors and its committees
A. composition of the Board of Directors
The Board of Directors of the Company comprises of eight Directors, of which two are Executive and six are Non-Executive Directors, which includes, four Independent Directors. The composition of the Board of Directors is in compliance with the provisions of Regulation 17 of the Listing Regulations and Section 149 of the Act.
B. Change in office of Directors and Key Managerial personnel of the company during the year under review and details of Directors seeking appointment/re-appointment at the 22nd Annual General Meeting
The members of the Company in their 21st Annual General Meeting held on July 31, 2017, approved the re-appointment of Mr. Mithun K Chittilappilly, Managing Director, as a Director, liable to retire by rotation.
During the year under review, Mr. Kochouseph Chittilappilly, Chairman of the Board, stepped into Non-Executive Category, effective from August 01, 2017.
In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Mr. Ramachandran V, Wholetime Director, is liable to retire by rotation in the ensuing Annual General Meeting and being eligible offers himself for re-appointment.
The Board of Directors in their meeting held on March 23, 2018, re-appointed Mr. Mithun K Chittilappily (DIN:00027610), as Managing Director of the Company for a period of three years effective from April 01, 2018, subject to the approval of the members in the ensuing Annual General Meeting.
The Notice dated July 03, 2018, of the ensuing Annual General Meeting includes the proposal for appointment / re-appointment of Directors and their brief resume, specific information about the nature of expertise, the names of the Companies in which they hold directorship and membership/ chairmanship of the Board Committees as stipulated in Listing Regulations.
The Board of Directors of the Company at their meeting held on May 19, 2017, appointed Mr. Sudarshan Kasturi, Senior Vice President - Finance of the Company, as Chief Financial Officer and Key Managerial Personnel, effective from June 01, 2017, on superannuation of Mr. A Jacob Kuruvilla, on May 31, 2017.
c. Declaration by Independent Directors
Mr. C J George, Mr. Cherian N Punnoose, Mr. Ullas K Kamath and Mr. A K Nair, Independent Directors, have furnished a declaration that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(b) of Listing Regulations.
D. Number of Meetings of the Board of Directors
The Board meets regularly to discuss and decide on various matters as required and due to business exigencies, certain decisions are taken by the Board through circulation from time to time. During the Financial Year 2017-18, the Board of Directors of the Company met five times, on May 19, 2017, July 31, 2017, October 25, 2017, January 22, 2018 and March 23, 2018. Additionally, several committee meetings were also held.
Pursuant to the requirements of Schedule IV to the Act and Listing Regulations, a separate Meeting of the Independent Directors of the Company was also held on March 23, 2018, and the Directors reviewed and assessed the matters enumerated under Schedule IV(VII)(3) to the Act and Regulation 25(4) of the Listing Regulations.
All the Independent Directors, except Mr. Ullas K Kamath, attended the said meeting.
The details of the Meetings are given in the Corporate Governance Report which forms part of this Report. The intervening gap between the Meetings was within the period prescribed under the Act.
E. committees of the Board
Pursuant to the requirement under the Act and Listing Regulations, the Board of Directors has constituted various Committees of Board such as Audit Committee, Nomination & Remuneration Committee, Stakeholdersâ Relationship and Share Transfer Committee and Corporate Social Responsibility (âCSRâ).
The composition and terms of reference of Audit Committee, Nomination and Remuneration Committee and Stakeholdersâ Relationship and Share Transfer Committee and number of meetings held during the year under review are given in the section, Report on Corporate Governance forming part of this Annual Report.
The CSR Committee of the Company comprises of three members, Mr. Kochouseph Chittilappilly, Mr. Cherian N Punnoose and Mr. Mithun K Chittilappilly. Mr. Kochouseph Chittilappilly, is the Chairman of the Committee and the members of the Committee met three times during the year under review, on May 19, 2017, October 25, 2017 and January 22, 2018. The Committee recommended to the Board the amount of CSR to be spent for the financial year and the various CSR programs/activities to be carried out by the Company, for its consideration and approval.
F. Performance Evaluation
Pursuant to the provisions of the the Act and Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, the Directors (excluding the Director being evaluated) as well as the Sub-Committees of the Board. Further, the Nomination & Remuneration Committee of the Company has carried out evaluation of performance of each individual Director. Performance evaluation was made on basis of structured questionnaire taking into account the indicative criteria prescribed in the Nomination Remuneration and Evaluation Policy of the Company read with SEBI Guidance Note on Board Evaluation. Evaluation of the Board was made based on role played by the Board in decision making, evaluating strategic proposals, discussing annual budgets, assessing adequacy of internal controls, review of risk management procedures etc. The evaluation of individual Director was carried out based on various parameters such as participation in the Board and its Committee meetings, contribution towards strategic guidance, risk mitigation, internal controls, governance, leadership and talent development and managing external stakeholders. Performance evaluation of various Sub-Committees of the Board was carried out on the basis of criteria such as constitution, effective functioning of the Sub-Committees as per the terms of reference, periodical suggestions and recommendations given by the Sub-Committees to the Board etc.
A separate meeting of Independent Directors of the Company was held during the year under review, in which the members evaluated the performance of the Chairman based on criteria such as giving guidance to the Board and ensuring the independence of the Board etc. The performance of the non-independent directors was also evaluated based on their contribution made to the growth of the Company, strategic initiatives and Board deliberations.
G. Directors Responsibility Statement
In terms of the requirements of Section 134(3) (c) read with Section 134(5) of the Act, the Board of Directors of the Company, hereby state and confirm that:
i. in the preparation of the annual accounts, the applicable accounting standards had been followed. Proper explanation relating to material departures, if any, is provided wherever applicable;
ii. such accounting policies were selected and applied consistently and had made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for the period;
iii. proper and sufficient care were taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the annual accounts were prepared on a going concern basis;
v. the internal financial controls to be followed by the Company were laid down and such internal financial controls were adequate and were operating effectively; and
vi. proper systems to ensure compliance with the provisions of all applicable laws were devised and such systems were adequate and operating effectively.
17. AUDIT RELATED MATTERS
A. Statutory Auditors
M/s. S R Batliboi & Associates LLP, Chartered Accountants, Kochi, with Firm Registration Number - 101049W/E300004, were appointed as the Statutory Auditors of the Company, to hold office from the conclusion of 21st Annual General Meeting until the conclusion of 26th Annual General Meeting of the Company to be held in the financial year 2022.
The requirement relating to ratification of Auditors by the members of the Company at every AGM has been dispensed with by the Companies Amendment Act, 2017 vide Notification No. S.O. 1833(E) dated May 07, 2018. Pursuant to the said amendment, during the five-year term of appointment / re-appointment of Statutory Auditors, ratification of the appointment / re-appointment by the members in the Annual General Meeting is not required. Accordingly, business item of ratification of re-appointment of Statutory Auditors is not included in the Notice dated July 03, 2018, calling 22nd Annual General Meeting of the Company.
The Auditorsâ Report for the Financial Year 2017-18, does not contain any qualification, reservation or adverse remarks.
B. cost Auditors
M/s. Ajeesh & Associates, Cost Accountants, Ernakualm, were appointed as the Cost Auditors of the Company for the Financial Year 2016-17 and the Report was considered by the Board in its meeting held on July 31, 2017. There were no qualifications, reservations or adverse remarks made by Cost Auditors.
M/s. RA & Co., Cost Accountants, Mumbai, were appointed as the Cost Auditors of the Company for the Financial Year 2017-18 and the Audit Report will be considered by the Board of Directors.
The Board of Directors in their meeting held on May 30, 2018 re-appointed M/s. R A & Co., Cost Accountants, Mumbai, (Firm Registration No. 000242) as the Cost Auditors of the Company for the Financial Year 2018-19 and fixed the audit fee payable to them. As per the provisions of the Section 148 of the Act, read with Companies (Audit and Auditors) Rules, 2014, audit fee payable to the Cost Auditors is to be ratified by the members of the Company. Your Directors have proposed a resolution in item no. 4 of the Notice dated July 03, 2018, for the ensuing Annual General Meeting, for approval of the audit fee.
c. Secretarial Auditors
The Board of Directors, pursuant to the provisions of Section 204 of the Act, appointed M/s. Keyul M Dedhia & Associates, Company Secretaries, Mumbai, as the Secretarial Auditors of the Company, to carry out the Secretarial Audit for the Financial Year 2017-18. Secretarial Audit Report, issued by M/s. Keyul M Dedhia & Associates, Secretarial Auditors in Form No. MR -3 forms part of this Report and is annexed herewith as Annexure I.
The Secretarial Audit Report for the Financial Year 2017-18, does not contain any qualification, reservation or adverse remarks.
18. POLICY MATTERS
A. Nomination Remuneration and Evaluation policy
In terms of provisions of Section 178(3) of the Act, the Nomination and Remuneration Committee of the Company has formulated and recommended to the Board a policy, containing the criteria for determining qualifications, competencies, positive attributes and independence for appointment of a Director (Executive/NonExecutive) and it highlights the remuneration for the Directors, Key Managerial Personnel and other employees, ensuring that it covers the matters mentioned in Section 178(4) of the Act. Nomination Remuneration and Evaluation Policy approved by the Board is given in Annexure II to this Report.
B. vigil Mechanism/whistle Blower policy
Your Company had, before coming into force of the Act, voluntarily adopted a Whistle Blower Policy for Vigil Mechanism for Directors and Employees to report to the Management about the unethical behaviour, fraud or violation of Companyâs code of conduct. The mechanism provides for adequate safeguards against victimisation of employees and Directors who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in exceptional cases. None of the person has been denied access to the Audit Committee. The policy has been circulated amongst the employees of the Company working at various locations, divisions/units. During the year under review, the Company has not received any instances of genuine concerns from Directors or employees.
The said policy has been amended in line with the provisions of the Act and Listing Regulations and it provides for adequate protection to the whistle blower against victimization or discriminatory practices. The Policy is available on the website of the Company at www.vguard.in in the page âInvestor Relationsâ.
c. corporate Social Responsibility policy
In terms of provisions of Section 135 of the Act read with The Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of the Company has adopted a policy on Corporate Social Responsibility (âCSRâ). The
Companyâs CSR policy allows carrying on activities under all the programs listed in the Schedule VII to the Act. During the year, Company carried out several initiatives under the CSR program, directly as well as through agencies. The said policy is posted on the website of the Company www. vguard.in.
Pursuant to the provisions of Section 135 of the Act, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, Corporate Social Responsibility activities undertaken during the year is annexed to this report as Annexure III.
During the year under review, the Company has formed a Section 8 Company, in the form of a Company limited by guarantee, V-Guard Foundation in accordance with the provisions of Section 135 of the Act, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, to carry out CSR activities of the Company.
D. Risk Management policy
The Company has developed and implemented a risk management framework detailing various risks associated with the business of the Company, the process of identification of risks, monitoring and mitigation of identified risks. Risk Management Committee constituted by Board identifies Corporate Risks at the beginning of financial year which are cascaded down to the product/functional risk groups for inclusion in their risk matrices and monitoring progress in every quarter. Corporate risks are strategic risks impacting the Company in the areas of new products, information security, digitization etc. Product risk groups also identifies and monitors product specific risks and the key product specific risks are included in the Corporate Risks. Quarterly updates on the Corporate Risks and the mitigation plans are presented to Risk Management Committee and Board.
A detailed note on Risk Management is given under the section Management Discussion and Analysis Report, which forms part of this Annual Report.
E. Dividend policy
As per Regulation 43A of Listing Regulations, top 500 listed Companies shall formulate a Dividend policy. Accordingly, the Board of Directors of the Company has adopted a Dividend Policy for determining circumstances and parameters under which Dividend pay-out could be made on periodical basis. The policy highlighted the factors to be considered by the Board of Directors at the time of recommending/declaring of Dividend. The said policy is given in Annexure IV to this report and posted on the website of the Company www.vguard.in.
19. OTHER MATTERS
A. Internal Financial controls
The Company has Internal Control Systems commensurate with the nature of its business, size and complexities. Every quarter, Audit committee reviews the adequacy and effectiveness of internal control system and monitors the implementation of the audit recommendations. During the year under review, the Internal Audit Division of the Company, has tested key controls in operational, financial and IT processes to provide assurance regarding compliance with the existing policies and standard operating procedures etc. and no significant weaknesses/deviations were identified in design or operation of the controls.
Further, the Statutory Auditors of the Company also carried out audit of the Internal Financial Controls over Financial Reporting of the Company as on March 31, 2018 and issued their report which forms part of the Independent Auditorâs report.
B. particulars of Loans, Guarantees and Investment
The Company had provided financial assistance to the extent of â5.40 Crores to Mr. Gopal Singh Cintury, vide agreement dated May 24, 2016 for construction of factory building at Plot No.2200, West - Pandam Block, Duga Ilaka, Gangtok, East Sikkim. The Board of Directors in their meeting held on July 31, 2017, has increased the loan amount to â6.40 crores vide an addendum dated August 21, 2017, to the agreement dated May 24, 2016, considering revision in the scope of construction activities.
During the year under review, the Company has extended a Corporate Guarantee in favour of ICICI Bank Ltd, Kadavanthra Branch, Kochi, in respect of the overall credit facility of â8.00 crores, consisting of â5.00 crores of working capital facility with inter-changeable sub-limits for non-fund-based limits and â3.00 crores working capital term loan facility, availed by GUTS Electro-Mech Ltd, Subsidiary Company.
During the year under review, the Company acquired majority stake in equity shares of GUTS Electro-mech Ltd., a Company having its registered office at Hyderabad and is engaged in manufacturing and selling of switchgears, circuit breakers, relays, current transformers and similar electromechanical products. The total shareholding of the Company in GUTS Electro-mech Limited is 14,54,223 equity shares of Rs.10 each and the same constitutes 74 per cent of the paid- up share capital. To satisfy the requirement of minimum number of members as per the first proviso of section 187 of the Act, equity shares to the extent of 500 nos. has been transferred to the nominees of the Company, who will act as registered owners on behalf of the Company. The equity investment is made mainly to secure supply for switchgear business vertical of the Company.
C. Financial Position and Performance of Subsidiaries, Joint Ventures and Associates
Your Companyâs subsidiary, GUTS Electro-mech Ltd., registered a turnover of Rs. 4,710 lakhs during the FY 17-18 (Rs. 4175 lakhs during FY 2016-17). The financial summary of Guts Electro- mech Ltd., is as under:-
(Amount in lakhs)
|
Particulars |
2017-18 |
2016-17 |
|
Total Revenue |
4760.79 |
4274.08 |
|
Profit/(Loss) Before Tax |
70.74 |
19.30 |
|
Profit/(Loss) After Tax |
(28.55) |
53.68 |
The Board has reviewed the financial statements of the subsidiary. The Consolidated Financial Statements of the Company and its subsidiary, prepared in accordance with the Act and applicable Accounting Standards along with all relevant documents and the Auditorsâ Report thereon form part of this Annual Report.
Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Companyâs subsidiary, as on March 31, 2018 in the prescribed Form AOC-1 is attached to the financial statements of the Company, which forms part of this Annual Report.
In accordance with the provisions of Section 136(1) of the Act, the Annual Report of the Company, contain the standalone and the consolidated financial statements of the Company and the audited financial statements of the subsidiary company have been placed on the website of the Company, www.vguard.in. The audited financial statements in respect of the subsidiary company shall also be kept open for inspection at the Registered Office of the Company from 11.00 A.M. to 1.00 P.M. for a period of 21 days upto the date of ensuing Annual General Meeting. The aforesaid documents relating to subsidiary Company can be made available to any Member interested in obtaining the same upon a request made to the Company.
D. Any revision made in the Financial Statements or Boardâs Report
The Company has not revised the Financial Statements or Boardâs Report in respect of any of the three preceding financial years.
E. Employee Stock Option Scheme 2013
During the Financial Year 2015-16, the Company had granted 9,06,280 options to the eligible employees to be vested over a period of three years in accordance with the Employee Stock Option Scheme (ESOS) 2013. Vesting of options for the first year had been completed and during the year under review, considering the parameters for vesting of options, 3,84,808 number of options were vested to eligible employees, being the vesting for the second year of the grant. During the year under review, 5,936 no. of options were cancelled due to non-achievement of parameters for performance vesting.
Further, 63,000 no. of options of Rs.1/- each and 5.67.000 no. of options of Rs.68.75 each, being the time based vesting for the first year, were vested for the grant made on May 04, 2016. Options to the extent of 48,651 numbers were vested on time basis, for the first year in respect of grant made on June 16, 2016. In respect of grant made on August 08, 2016, options to the extent of 2,48,808 were vested on time basis for the first year of vesting. During the year under review, 26,992 no. of options were cancelled, out of the grant made on August 08, 2016.
Further, 42,000 no. of options of Rs.1/- each and 1.68.000 no. of options of Rs.121.80 each were vested during the year under review, on time basis, towards the first year, in respect of the grant made on August 08, 2016. In respect of grant made on October 21, 2016, options to the extent of 28,994 were vested on time basis towards the first year. Further, options to the extent of 15,460 numbers were vested on time basis in respect of grant made on January 30, 2017.
The Nomination and Remuneration Committee made several grants under ESOS 2013, during the year under review to various eligible employees and the options granted will be vested over a period of four years from the date of grant. 2,01,100 no. of options were granted on May 19, 2017 at face value of Rs.1/-. Further, 1,25,776 nos. of options were granted on July 31, 2017, and 2,50,768 no. of options were granted on January 22, 2018, at face value of Rs.1/- respectively.
The Nomination and Remuneration Committee in its meeting held on July 31, 2017 granted 29,078 nos. of options on variable basis and the same would be vested at the end of third year.
The Company had obtained the approval of members for grant of options to the extent of 1,12,00,000 under ESOS 2013, by way of a special resolution passed through Postal Ballot process in May, 2013. With a view to attract new talents and retain existing talents and to provide industry standard compensation, the Nomination and Remuneration Committee has granted options under ESOS to eligible employees from time to time. The options for which approval of members had sought been completely utilized for making various grants from time to time.
As equity based compensation schemes are an effective tool to reward the employees including the professional Directors in the growth pace of the Company and helps in retaining the existing key resources and attract new talents who are required for the future growth, with the approval of the members at their 20th Annual General Meeting held on July 26, 2016, the Board has created further options to the extent of 22,50,000 for making grant(s) under ESOS to eligible employees from time to time. Subsequent to the approval of the members of the Company, the Nomination and Remuneration Committee has granted 20,77,830 numbers of options from time to time.
As the Board desired to provide equity based compensation to employees at various levels, it has been decided to increase the number of options available for further grant under ESOS and approval of the members was sought through Postal Ballot Process on April 30, 2017, for creation of options to the extent of 2,00,000 number of options and further, sought the approval of the members on December 11, 2017 through postal ballot for additional options exercisable into not more than 10,00,000 equity shares of the Company under ESOS 2013.
The disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and Section 62(1) (b) of the Act, read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 is given as Annexure V to this Report.
F. code of conduct
As prescribed under Regulation 26(3) of the Listing Regulations, a declaration signed by the Managing Director affirming compliance with the Code of Conduct by the Directors and Senior Management of the Company for the Financial Year 2017-18 is described in âReport on Corporate Governanceâ forming part of this Annual Report.
G. Extract of Annual Return
Extract of the Annual Return in Form No. MGT-9 forms part of the Boardâs Report and is annexed herewith as Annexure - VI.
H. Management Discussion and Analysis Report
As per requirements of Listing Regulations, a detailed review of the developments in the industry, performance of the Company, opportunities and risks, internal control systems, outlook etc. of the Company is given under the head Management Discussion and Analysis Report, which forms part of this Annual Report.
I. Related party Transactions
During the financial year ended March 31, 2018, all transactions with the Related Parties as defined under the Act, read with Rules framed thereunder were in the âordinary course of businessâ and âat armâs lengthâ basis. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other Designated Persons which may have potential conflict with interest of the Company at large. A statement of all related party transactions is presented before the Audit Committee on quarterly basis, specifying the nature, value and terms and conditions of transactions.
Your Company does not have a âMaterial Unlisted Subsidiaryâ as defined under Regulation 16(1)(c) of the Listing Regulations. The related party transactions policy is uploaded on the Companyâs website at the web-link https://www.vguard.in/ investor-relations/corporate-governance.
Form AOC-2 containing particulars of contracts or arrangements entered into by the Company with related parties referred in Section 188(1) of the Act, is attached as Annexure VII.
J. Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance and continues to be compliant with the requirements of the Corporate Governance as included in the Listing Regulations. The Report on Corporate Governance, as stipulated under Regulation 27 of the Listing Regulations, forms part of the Annual Report. The certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance, as stipulated under Regulation 27 of the Listing Regulations, has been annexed with the said report.
K. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is furnished in Annexure VIII and forms part of this Report.
L. Particulars of Remuneration details of Directors, Key Managerial Personnel and Employees
A statement containing the details of the Remuneration of Directors, KMPs and Employees as required under Section 197(12) of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as Annexure IX to this Report.
M. Disclosure as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has in place, policy on Prevention, Prohibition and Redressal of Sexual Harassment for women at workplace in accordance with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up as per the statutory requirements, to redress complaints regarding sexual harassment. The policy has set guidelines on the redressal and enquiry process that is to be followed by complainants and the ICC, whilst dealing with issues related to sexual harassment at the work place. All women employees (permanent, temporary, contractual and trainees) are covered under this policy. The policy has been circulated amongst the employees of the Company and the same is exhibited in the notice Board of all the business locations/divisions of the Company. During the year under review, the Company has not received any complaint of sexual harassment.
20. REPORTING OF FRAUDS BY AUDITORS
During the year under review, neither the Statutory Auditors nor the Secretarial Auditors has reported to the Audit Committee, under Section 143 (12) of the Act, any instances of fraud committed against the Company by its officers or employees.
21. LISTING OF SHARES
The equity shares of the Company are listed on the National Stock Exchange of India Limited (NSE) and BSE Ltd. (BSE). The listing fee for the Financial Year 2018- 19 has already been paid to the credit of both the Stock Exchanges.
22. ACKNOWLEDGEMENT
The Board wishes to place on record its sincere appreciation to the Companyâs customers, vendors, central and state government bodies, auditors, legal advisors, consultants, registrar and bankers for their continued support to the Company during the year under review. The Directors also wish to place on record their appreciation for the dedicated efforts of the employees at all levels. Finally, the Board expresses its gratitude to the members for their continued trust, co-operation and support.
For and on behalf of the Board of Directors
S/d S/d
Kochouseph Chittilappilly Mithun K Chittilappilly
Date : May 30, 2018 Chairman Managing Director
Place : Kochi (DIN: 00020512) (DIN: 00027610)
Mar 31, 2017
The Directors have great pleasure in presenting the Twenty First Annual Report of the Company on the business and operations together with the Audited Financial Statements for the Financial Year ended March 31, 2017.
1. Financial Summary (rs in crores)
|
Particulars |
Year ended 31.03.2017 |
Year ended 31.03.2016 |
|
Revenue from operations (Gross) |
2,179.19 |
1,877.1 1 |
|
Less: Excise Duty |
28.56 |
14.83 |
|
Revenue from operations (Net) |
2,150.63 |
1,862.28 |
|
Operating expenditure |
1,935.58 |
1,684.27 |
|
Operating profit before Depreciation, Interest, Tax & Exceptional Item |
215.05 |
178.01 |
|
Finance Cost |
2.10 |
8.92 |
|
Depreciation and amortization expense |
16.24 |
15.36 |
|
Other Income |
13.46 |
7.23 |
|
Profit Before Tax & Exceptional Item |
210.17 |
160.96 |
|
Profit Before Tax |
210.17 |
160.96 |
|
Tax Expense: |
||
|
a) Current Tax |
60.40 |
51.05 |
|
b) Deferred Tax |
-2.03 |
-1.77 |
|
Profit After Tax |
151.80 |
111.68 |
|
Basic EPS (Rs.) |
3.59 |
2.66 |
|
Diluted EPS (Rs.) |
3.54 |
2.63 |
2. Company''s Performance
During the Financial Year 2016-17, the Company has registered a net revenue from operations ofRS,2,150.63 crores, as compared to RS,1,862.28 crores in the previous year, an increase of 15% year-on-year. Profit Before Tax for the year under review was RS,210 crores, higher by 30%, as compared to RS,161 crores in the previous year. Profit After Tax for the year under review was RS,152 crores, grown by 36% over RS,112 crores of the previous year. Segment wise performance of products of the Company is detailed under the Section Management Discussion and Analysis Report which forms part of this Annual Report.
3. Details of New Projects
During the year under review the Company has expanded its manufacturing facility of Electronic Voltage Stabilizer at Rangpo in Sikkim by putting up an additional unit, and the enhanced production at full capacity after expansion is 20 Lakhs units per annum. Considering the increased demand for Electric Water Heater, a new manufacturing unit was commissioned in the state of Sikkim during the year under review.
As the demand for the product, House Wiring Cable has been increasing each year, the Board had decided to increase the production capacity at Chavadi, Coimbatore. The project of expansion of House Wiring Cable manufacturing facility has been completed and enhanced production capacity per month is 8.7 lakhs coils. Increased manufacture of House Wiring Cable has necessitated to go for backward integration, by setting up a unit of PVC Compounding, one of the major raw-materials and the unit started commercial production during the year under review.
4. Changes to the Share Capital
During the year under review, the Company had increased the Authorized Capital of the Company from RS,35 crores to RS,40 crores pursuant to the approval of members in the Annual General Meeting held on July 26, 2016 and subsequently, the Company had increased the Authorized Capital of the Company from RS,40 crores to RS,50 crores pursuant to the approval of members in the Extraordinary General Meeting held on March 6, 2017.
During the year under review, the Company has subdivided the Equity Shares of face value of H10/- to Re.1 pursuant to the approval of shareholders in the Annual General Meeting held on July 26, 2016. The sub-division of shares was made effective from September 1, 2016.
During the year under review, the Company has allotted 6,75,790, 17,06,920 and 89,465 number of shares at Re.1, H48.50 and H99.90 respectively under ESOS 2013 of the Company. Both the number and prices of shares allotted have been adjusted in line with the face value of shares after sub-division.
The Board of Directors of the Company has made a bonus issue of shares in the ratio of 2:5 to all the eligible shareholders by capitalizing an amount of RS,12.13 crores from the free reserves as on March 31, 2016, pursuant to the approval of shareholders in the Extraordinary General
Meeting held on March 6, 2017.
The Paid-up Capital of the Company as on March 31, 2017 has increased to RS,42,46,54,461/- due to allotment of shares under ESOS and Bonus issue.
5. Dividend
The Board of Directors are pleased to recommend a final Dividend of RS,0.70 per share (70 Paise per Equity Share of Re.1 each). The final Dividend, if declared as recommended, would involve an outflow of RS,35,77,73,931/-, including Dividend Distribution Tax, if approved by the Shareholders at the ensuing Annual General Meeting. Dividend would be payable to all the Shareholders/beneficial owners whose names appear in the Register of Members as on July 24, 2017.
The Register of Members and Share Transfer Books will remain closed from July 25, 2017 to July 31, 2017 (both days inclusive).
6. Transfer of Unpaid Dividend to Investor Education and Protection Fund (IEPF)
Pursuant to the provisions of Section 124(5) and (6) of the Companies Act, 2013, your Company has transferred an amount of H3,75,480/- which was lying in the Unpaid Dividend Account of the Financial Year 2008-09 to IEPF. Unclaimed Dividend in respect of the Financial Year 200910 will be due for transfer to IEPF on August 25, 2017.
7. Fixed Deposit
The Company has not accepted any deposit within the meaning of Chapter V of the Companies Act, 2013 and the Rules framed there under.
8. Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the financial statements relate and the date of the report.
No material changes and commitments affecting the financial position of the Company occurred between the end of the Financial Year to which this financial statements relate and the date of report.
9. Change in the Nature of Business, if any
There was no change in the nature of business of the Company during the Financial Year 2016-17.
10. Postal Ballot
The Board of Directors had sought approval of the Shareholders of the Company by Postal Ballot process pursuant to the provisions of Sections 108 & 110 of the Companies Act, 2013 read with Rule 20 & 22 of the Companies (Management and Administration) Rules, 2014 (as amended) and Regulation 44 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (Listing Regulations) in respect of the Special Resolutions set out in the Postal Ballot Notice dated March 27, 2017. The detailed voting results are given in the section, ''Report on Corporate Governance'' forming part of this Annual Report.
11. Significant or Material Orders passed by Regulators / Courts / Tribunals
There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future during the year under review.
12. Business Responsibility Report
As per Regulation 34(2)(f) of the Listing Regulations, a separate section, ''Business Responsibility Report,'' describing the initiatives taken by your Company from environmental, social and governance perspective, forms part of this Annual Report.
13. Board of Directors and its Committees
A. Composition of the Board of Directors
The Board of Directors of the Company comprises of eight Directors, of which three are Executive and five are Non-Executive Directors, which includes, four Independent Directors. The composition of the Board of Directors is in compliance with the provisions of Regulation 17 of the Listing Regulations and Section 149 of the Companies Act, 2013.
B. Change in Office of Directors and Key Managerial Personnel of the Company during the year under review and details of Directors seeking appointment/re-appointment at the 21st Annual General Meeting
The members of the Company in their 20th Annual General Meeting held on July 26, 2016, approved the re-appointment of Mr. Ramachandran Venkataraman, as Whole Time Director for a period of four years with effect from June 1, 2016 to May 31, 2020. In the said meeting, the members also approved the reappointment of Mrs. Joshna Johnson Thomas, as a Non-Executive Director, liable to retire by rotation.
Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Mithun K Chittilappilly, Managing Director, is liable to retire by rotation in the ensuing Annual General Meeting and being eligible, offers for re-appointment.
The Notice dated July 3, 2017 of the ensuing Annual General Meeting includes the proposal for reappointment of Director and his brief resume, specific information about the nature of his expertise, the names of the Companies in which he hold directorship and membership/chairmanship of the Board Committees, as stipulated in Listing Regulations.
The Board of Directors of the Company at their meeting held on May 19, 2017 appointed Mr. Sudarshan Kasturi, Senior Vice-President - Finance of the Company as Chief Financial Officer & KMP of the Company with effect from June 1, 2017, considering the superannuation of Mr. A Jacob Kuruvilla on May 31, 2017.
C. Declaration by Independent Directors
Pursuant to sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations, the Independent Directors of the Company viz. Mr. Ullas K Kamath, Mr. Cherian N Punnoose, Mr. A K Nair and Mr. C J George have given declaration to the Company that they qualify the criteria of independence, as required under the Companies Act, 2013 and the Listing Regulations.
D. Number of Meetings of the Board of Directors
During the Financial Year 2016-17, the Board of Directors of the Company, met ten times, on May 4, 2016, June 16, 2016, July 26, 2016, August 8, 2016, September 21, 2016, October 21, 2016, January 30, 2017, February 27, 2017, March 17, 2017 and March 28, 2017.
A separate meeting of the Independent Directors of the Company was held on March 28, 2017 and the Directors reviewed and assessed the matters enumerated under Schedule IV(VII)(3) to the Companies Act, 2013 and Regulation 25(4) of the Listing Regulations. All the Independent Directors except Mr. C J George attended the said meeting.
E. Committees of the Board
The Sub-Committees of the Board comprises of Audit Committee, Nomination and Remuneration Committee, Stakeholders'' Relationship and Share Transfer Committee and Corporate Social Responsibility (CSR) Committee.
The terms of reference of Audit Committee, Nomination and Remuneration Committee and Stakeholders'' Relationship and Share Transfer Committee were aligned with the requirements of the Companies Act, 2013 and Listing Regulations. A detailed note on the said Committees of the Board of Directors is given in the section, ''Report on Corporate Governance'' forming part of this Annual Report.
The CSR Committee of the Company comprises of three members, Mr. Kochouseph Chittilappilly, Mr. Cherian N Punnoose and Mr. Mithun K Chittilappilly. Mr. Kochouseph Chittilappilly, is the Chairman of the Committee and the members of the Committee met three times during the year under review, on May 4,
2016, October 21, 2016 and January 30, 2017. The Committee recommended to the Board the amount of CSR to be spent for the financial year and the various CSR programs/activities to be carried out by the Company, for its consideration and approval.
F. Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board of Directors, has carried out an annual performance evaluation of Board, Sub-Committees of Board and individual directors, based on the criteria laid down in the Nomination Remuneration and Evaluation Policy of the Company read with SEBI Guidance Note dated January 5, 2017.
The performance evaluation of the Board was carried out on a questionnaire template on the basis of criteria such as effective role played by the Board in decision making, evaluating strategic proposals, discussing annual budgets, assessing the adequacy of internal controls, review of risk management procedures etc.
The performance evaluation of various Sub-Committees of the Board was carried out on the basis of criteria such as constitution of the Sub-Committees in accordance with the provisions of the Companies Act, 2013 and Listing Regulations, effective functioning of the Committees as per the terms of reference, periodical suggestions and recommendations given by the Sub-Committees to the Board etc.
The performance evaluation of individual directors was carried out both by the Nomination and Remuneration Committee and the Board based on criteria such as active participation in the Board deliberations, role played in evaluation of strategic proposals, contributions made for adoption of better corporate governance practices by the Company etc.
A separate meeting of Independent Directors of the Company was held during the year under review, in which the members evaluated the performance of the Chairman based on criteria such as giving guidance to the Board and ensuring the independence of the Board etc. The performance of the non-independent directors was also evaluated based on their contribution made to the growth of the Company, strategic initiatives and Board deliberations.
G. Directors'' Responsibility Statement
In terms of the requirements of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Board of Directors of the Company, hereby state and confirm that:
i) in the preparation of the annual accounts, the applicable accounting standards had been followed. Proper explanation relating to material departures, if any, is provided wherever applicable;
ii) such accounting policies were selected and applied consistently and had made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for the period;
iii) proper and sufficient care were taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) the annual accounts were prepared on a going concern basis; and
v) the internal financial controls to be followed by the Company were laid down and such internal financial controls were adequate and were operating effectively.
vi) proper systems to ensure compliance with the provisions of all applicable laws were devised and such systems were adequate and operating effectively.
14. Audit Related Matters
A. Statutory Auditors
M/s. S R Batliboi & Associates LLP, Chartered Accountants, Kochi, with firm registration number -101049W/E300004, who are the Statutory Auditors of the Company will hold office, up to the conclusion of the ensuing Annual General Meeting. The Board of Directors upon the recommendation of the Audit Committee proposes the re-appointment of M/s. S R Batliboi & Associates, LLP, Chartered Accountants, as the Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of 26th Annual General Meeting as per the provisions of Section 139 of the Companies Act, 2013, subject to ratification of members at every Annual General Meeting within the period of the tenure of re-appointment.
The Auditors'' Report for the Financial Year 2016-17, does not contain any qualification, reservation or adverse remarks.
B. Cost Auditors
M/s. Ajeesh & Associates, Cost Accountants, Ernakulam, were appointed as the Cost Auditors of the Company for the Financial Year 2016-17 and the Audit Report will be considered by the Board of Directors. There were no qualifications, reservations or adverse remarks made by Cost Auditors in their Report for the Financial Year 2015-16.
The Board of Directors in their meeting held on May 19, 2017, has approved the appointment of M/s. RA & Co. Cost Accountants, Mumbai, (Firm Registration No. 000242) as the Cost Auditors of the Company for the Financial Year 2017-18 and also fixed the audit fee payable to them. As per the provisions of the Section 148 of the Companies Act, 2013, read with Companies (Audit and Auditors) Rules, 2014, audit fee payable to the Cost Auditors is to be ratified by the members of the Company. Your Directors have proposed a resolution in item no. 5 of the Notice dated July 3, 2017 for the ensuing Annual General Meeting, for approval of the audit fee.
C. Secretarial Auditors
The Board of Directors, pursuant to the provisions of Section 204 of the Companies Act, 2013, appointed M/s. Keyul M Dedhia & Associates, Company Secretaries, Mumbai, as the Secretarial Auditor of the Company, to carry out the Secretarial Audit for the Financial Year 2016-17. Secretarial Audit Report, issued by M/s. Keyul M Dedhia & Associates, Auditors in Form No. MR -3 forms part of this Report and is annexed herewith as Annexure-2. The Auditors have observed that in some instances there were delay in submitting disclosures received from designated employees under SEBI (Prohibition of Insider Trading) Regulations, 2015. Clarification for the above observation is that the delay in filing was due to oversight and disclosures were made subsequently.
15. Policy Matters
A. Nomination Remuneration and Evaluation Policy
Pursuant to the provisions of Section 178(3) of the Companies Act, 2013, the Nomination and Remuneration Committee of the Company has formulated and recommended to the Board a policy, containing the criteria for determining qualifications, positive attributes and independence of a Director and it highlights the remuneration for the Directors, Key Managerial Personnel and other employees, ensuring that it covers the matters mentioned in Section 178(4) of the Act. Nomination Remuneration and Evaluation Policy approved by the Board is given in Annexure 1 to this Report.
B. Vigil Mechanism/Whistle Blower Policy
Your Company had, before coming into force of Companies Act, 2013, voluntarily adopted a Whistle Blower Policy, to enable its employees and Directors to report any genuine grievances, illegal or unethical behavior, suspected fraud or violation of laws, rules and regulations, conduct, to the Ombudsman or Vigil Officer. The Whistle blower also has access to the Audit Committee Chairman. The policy has been circulated amongst the employees of the Company working at various locations, divisions/units. During the year under review, the Company has not received any instances of genuine concerns from Directors or employees.
The said policy has been amended in line with the provisions of Companies Act, 2013 and Listing Regulations and it provides for adequate protection to the whistle blower against victimization or discriminatory practices. The Policy is available on the website of the Company at www.vguard.in., in the page ''Investor Relations''.
C. Corporate Social Responsibility Policy
The Board of Directors of the Company has adopted a policy on Corporate Social Responsibility, pursuant to the provisions of Section 135 of the Companies Act, 2013, read with The Companies (Corporate Social Responsibility Policy) Rules, 2014. The said policy is posted on the web site of the Company www. vguard.in. During the year under review, the Board of Directors amended the CSR policy of the Company to include Government Aided Schools in the list of beneficiaries.
In terms of Section 135 of the Companies Act, 2013 read with The Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on Corporate Social Responsibility activities of the Company is given in Annexure 3 to this report.
D. Risk Management Policy
The Company has developed and implemented a risk management framework detailing various risks associated with the business of the Company, the process of identification of risks, monitoring and mitigation of identified risks etc. As per the risk profile, the various risks associated with the Company are classified as marketing risks, product risks, inventory risks, compliance risk, financial risks, project risks and Organization risks. The Board has constituted a Risk Management Committee to monitor and review the risks identified by various product risk groups and suggest measures to mitigate the risks identified. A detailed note on Risk Management is given under the section Management Discussion and Analysis Report, which forms part of this Annual Report.
E. Dividend Policy
As per Regulation 43A of Listing Regulations the top 500 listed Companies shall formulate a Dividend policy. Accordingly, the Board of Directors of the Company during the year under review has adopted Dividend Policy for determining circumstances and parameters under which Dividend pay-out could be made on periodical basis. The policy highlighted the factors to be considered by the Board of Directors before or at the time of recommending/declaring of Dividend. The said policy is given in Annexure-5 to this report and posted on the web site of the Company www. vguard.in.
16. Other Matters
A. Internal Financial Controls
The Company has Internal Control Systems commensurate with the nature of its business, size and complexities. Every quarter, Audit committee reviews the adequacy and effectiveness of internal control system and monitors the implementation of the audit recommendations. During the year under review, the Internal Audit Division of the Company, has tested key controls in operational, financial and IT processes to provide assurance regarding compliance with the existing policies and standard operating procedures etc. and no significant weaknesses/deviations were identified in design or operation of the controls.
Further, the Statutory Auditors of the Company also carried out audit of the Internal Financial Controls over Financial Reporting of the Company as of March 31, 2017 and issued their report which forms part of the Independent Auditor''s report.
B. Financial Position and Performance of Subsidiaries, Joint Ventures and Associates
The Company has no subsidiary, associate or has not entered into any joint venture and hence not required to disclose any information.
C. Any revision made in the Financial Statements or Board''s Report
The Company has not revised the Financial Statements or Board''s Report in respect of any of the three preceding financial years.
D. Employee Stock Option Scheme 2013
During the Financial Year 2013-14, the Company had granted 91,73,220 options to eligible employees to be vested over a period of three years in accordance with the Employee Stock Option Scheme (ESOS) 2013. Vesting of options for the first two years had been completed and during the year under review, considering the parameters for vesting of options, 23,40,270 number of options were vested to eligible employees, being the vesting for the last year of the grant. Out of the options granted, total number of 20,70,190 options were cancelled till the Financial Year 2016-17.
The Company had made a grant of 9,06,280 number of options to eligible employees during the Financial Year 2015-16 with a vesting period of three years from grant. During the year under review, considering the parameters for vesting, 2,92,730 number of options were vested to eligible employees and 6,310 number of options were cancelled.
The Nomination and Remuneration Committee made several grants under ESOS 2013, during the year under review to various eligible employees and the options granted will be vested over a period of four years from the date of grant. 27,00,000 and 3,00,000 numbers of options were granted on May 4, 2016 at fair market value of H96.25 and face value of Re.1 respectively. Further 1,85,360 number of options were granted on June 16, 2016, at face value of Re.1.
The Company had obtained the approval of members for grant of options to the extent of 1,12,00,000 under ESOS 2013, by way of a special resolution passed through Postal Ballot process in May, 2013. With a view to attract new talents and retain existing talents and also to provide industry standard compensation, the Nomination and Remuneration Committee has granted options under ESOS to eligible employees from time to time. The options for which approval of members had sought has been completely utilized for making various grants from time to time.
As equity based compensation schemes are an effective tool to reward the employees including the professional Directors in the growth pace of the Company and helps in retaining the existing key resources and attract new talents who are required for the future growth, with the approval of the members at their 20th Annual General Meeting held on July 26, 2016, the Board has created further options to the extent of 22,50,000 for making grant(s) under ESOS 2013 to eligible employees from time to time. Subsequent to the approval of the members of the Company, the Nomination and Remuneration Committee has granted 20,77,830 numbers of options from time to time. As the Board desires to provide equity based compensation to employees at various levels, it has been decided to increase the number of options available for further grant under ESOS 2013 and approval of the members was sought through Postal Ballot Process for creation of options to the extent of 2,00,000 number of options.
During the year under review, the Company has subdivided its equity shares from face value of H10/- to Re.1 effective from September 1, 2016. The number of options granted before the date of sub-division has been adjusted in line with the face value of shares after sub-division.
During the year under review, the Board of Directors has made a bonus issue of shares in the ratio of 2:5 with the approval of the members of the Company. As per the provisions of Employee Stock Option Scheme approved by the members of the Company, the Nomination and Remuneration Committee has made a fair and reasonable adjustment in the number of options and to the exercise price in case of corporate action of bonus issue. Accordingly, the Committee has granted additional options in respect of all outstanding options which were granted at face value and fair market value and are to be vested and exercised in the ratio of 2:5 and revised the exercise price in case of all options which were granted at fair market value. Options to the extent of 33,66,710, convertible into equivalent number of equity shares with face value of Re.1 each were granted to eligible employees as part of making fair and reasonable adjustment for corporate action of bonus issue.
Details of stock options pursuant to SEBI (Share Based Emplyee Benefits) Regulations, 2014 is given in the Annexure - 4, which forms part of this Report.
E. Code of Conduct
As prescribed under Regulation 26(3) of the Listing Regulations, a declaration signed by the Managing Director affirming compliance with the Code of Conduct by the Directors and Senior Management of the Company for the Financial Year 2016-17 is described in ''Report on Corporate Governance'' forming part of this Annual Report.
F. Extract of Annual Return
Extract of the Annual Return in Form No. MGT-9 forms part of the Board''s Report and is annexed herewith as Annexure - 6
G. Management Discussion and Analysis Report
As per requirements of Listing Regulations, a detailed review of the developments in the industry, performance of the Company, opportunities and risks, internal control systems, outlook etc. of the Company is given under the head Management Discussion and Analysis Report, which forms part of this Annual Report.
H. Particulars of Loans, Guarantees and Investments
During the year under review, the Company had accorded approval to give loan up to an amount of H5.40 crores, to Mr. Gopal Singh Cintury for the construction of factory building at West - Pandam Block, Duga Ilaka, East Sikkim, which has been taken on lease by the Company for setting up of manufacturing unit for stabilizers .
I. Related Party Transactions
During the year under review, the Company has not entered into any contract or arrangements with related parties as per the provisions of Section 188(1) of the Companies Act, 2013.
J. Corporate Governance
Your Company has complied with the Corporate Governance norms as stipulated under the Listing Regulations. A detailed report on Corporate Governance forms part of this Annual Report. A certificate from Statutory Auditors confirming compliance of the Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.
K. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information pertaining to conversation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is furnished in Annexure 7 and forms part of this Report.
L. Remuneration details of Directors, Key Managerial Personnel and Employees
The details of remuneration of Directors, Key Managerial Personnel and the Statement of employees in receipt of remuneration exceeding the limits prescribed under Section 134 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including any amendment thereof has been provided in Annexure 8 to this Report.
M. Disclosure as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company is committed in providing and promoting a safe and healthy work environment for all its employees. It has zero tolerance towards sexual harassment at the workplace and has adopted a policy for ''Prevention and Redressal of Sexual Harassment at the Workplace'' in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed there under for prevention and redressal of complaints of sexual harassment at workplace, along with a structured reporting and redressal mechanism. The Company has also constituted an Internal Complaints Committee, to inquire into complaints of sexual harassment and recommend appropriate action. The policy has been circulated amongst the employees of the Company and the same is exhibited in the notice Board of all the business locations/divisions of the Company. During the year under review, the Company has not received any complaint of sexual harassment. The Company has also conducted awareness programs during the year under review for its employees.
17. Event(s) occurred after the Balance Sheet Date
The Board of Directors of the Company in their meeting held on May 19, 2017, accorded approval for acquiring 74% equity stake for cash consideration of RS,6.18 crores in GUTS Electro-mech Ltd., a Company having its registered office at Hyderabad and is engaged in manufacturing and selling of switch gears, circuit breakers, relays, current transformers and similar electromechanical products. Its plants are located at Hyderabad and Haridwar and has achieved a turnover of RS,29.93 crores during the Financial Year 2015-16. The equity investment is made mainly to secure supply for switch gear business vertical of the Company.
The Board has also nominated Dr. George Sleeba and Mr. A Jacob Kuruvilla, to represent the Company on the Board of GUTS Electromech Ltd., on reconstitution of its Board. The transaction will be completed during the Financial Year 2017-18 after obtaining approval from various statutory authorities.
18. Listing of Shares
The equity shares of the Company are listed on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The listing fee for the Financial Year 201718 has already been paid to the credit of both the Stock Exchanges.
19. Acknowledgement
The Board wishes to place on record its sincere appreciation to the Company''s customers, vendors, central and state government bodies, auditors, legal advisors, consultants, registrar and bankers for their continued support to the Company during the year under review. The Directors also wish to place on record their appreciation for the dedicated efforts of the employees at all levels. Finally, the Board expresses its gratitude to the members for their continued trust, co-operation and support.
For and on behalf of the Board of Directors
S/d S/d
Kochouseph Chittilappilly Mithun K Chittilappilly
Chairman Managing Director
(DIN:00020512) (DIN: 00027610)
Date: May 19, 2017
Place: Kochi
Mar 31, 2015
Dear Members,
The Directors have great pleasure in presenting the Nineteenth Annual
Report of the Company on the business and operations together with the
audited financial statements for the year ended 31st March, 2015.
1. Financial Summary
(Rs. in lakhs)
Particulars Year ended Year ended
31.03.2015 31.03.2014
Revenue from operations (Gross) 1,75,994.74 1,53,792.61
Less : Excise Duty 1,402.67 2,036.30
Revenue from operations (Net) 1,74,592.07 1,51,756.31
Operating expenditure 1,61,290.79 1,39,501.69
Operating profit before Depreciation, 13,301.28 12,254.62
Interest, Tax & Exceptional Item
Finance Cost 2,061.43 2,106.31
Depreciation and amortization expense 1,543.91 1,203.86
Other Income 448.71 483.88
Profit Before Tax & Exceptional Item 0,144.66 9,428.33
Exceptional Item - -
Profit Before Tax 0,144.66 9,428.33
Tax Expense:
a) Current Tax 3,048.44 2,250.54
b) Deferred Tax 24.07 164.39
Profit After Tax 7,072.15 7,013.40
Balance in Profit & Loss account 18,656.84 14,014.84
brought forward
Adjustment on account of change in (106.32) -
useful life of fixed assets
Profit available for appropriation 25,622.67 21,028.24
Appropriations
a) Transfer to General Reserve 800.00 800.00
b) Dividend proposed 1,348.79 1,343.13
c) Tax on Dividend proposed 274.58 228.27
d) Balance carried to Balance 23,199.30 18,656.84
Sheet
2. Company's Performance
During the Financial Year 2014-15, the Company has registered net
revenue from operations of Rs. 1,745.92 crores, as compared to Rs.
1,517.56 crores in the previous year, an increase of 15% year-on-year.
Profit Before Tax for the year under review was Rs. 101.45 crores,
higher by 7.61%, as compared to Rs. 94.28 crores in the previous year.
Profit After Tax for the year under review was Rs. 70.72 crores, which
remained at same level of the previous year. Performance of each
product vertical is detailed under the Section Management Discussion
and Analysis which forms part of the Annual Report.
3. Changes to the Share Capital
During the year, the Company has vested 56,606 and 1,83,869 number of
options of Rs. 10/- and Rs. 485/- respectively to eligible employees
under ESOS 2013 and out of total number of 2,40,475 options vested, the
employees have exercised 51,241 and 74,380 number of options of Rs.
10/- and Rs. 485/- respectively. The options exercised were allotted
and subsequent to the allotment, the paid-up capital of the Company as
on 31st March, 2015 has increased to Rs. 29.97 crores.
4. Appropriations made from the profits
a) Transfer to Reserves
Your Directors proposes to transfer an amount of Rs. 8.00 crores to
the General Reserve out of the profits available for appropriation
during the year.
b) Final Dividend
Your Directors are pleased to recommend a final dividend of Rs. 4.50
per share (45% on par value of Rs. 10/- per share). The final
dividend, if declared as recommended, would involve an outflow of Rs.
13.49 crores and Rs. 2.74 crores towards dividend tax, resulting in a
total outflow of Rs. 16.23 crores. If approved by the shareholders at
the ensuing Annual General Meeting, the dividend will be paid as per
the applicable regulations. Dividend would be payable to all the
shareholders / beneficial owners whose names appear in the Register of
Members as on the Book Closure Date.
The Register of Members and Share Transfer Books will remain closed
from 28th July, 2015 to 3rd August, 2015 (both days inclusive).
5. Fixed Deposit
The Company has not accepted any fixed deposits during the year under
review.
6. Material changes and commitments, if any, affecting the financial
position of the Company which have occurred between the end of the
Financial Year of the Company to which the financial statements relate
and the date of the report.
No material changes and commitments affecting the financial position of
the Company occurred between the end of the Financial Year to which
this financial statements relate and the date of report.
7. Change in the Nature of Business, if any
There was no change in the nature of business of the Company during the
Financial Year 2014-15.
8. Significant or Material Orders passed by Regulators / Courts /
Tribunals
During the year under review, there were no significant or material
orders passed by the regulators or courts or tribunals impacting the
going concern status and Company's operations in future.
9. Board of Directors and its Committees
A. Composition of the Board of Directors
The Board of Directors of the Company comprises eight Directors of
which three are Executive and five are Non-Executive Directors, which
includes, four Independent Directors. The composition of the Board of
Directors is in compliance with Clause 49 of the Listing Agreement and
Section 149 of the Companies Act, 2013.
B. Details of Directors and KMPs of the Company and change in their
offices
Mr. Kochouseph Chittilappilly (Executive Chairman, DIN: 00020512)
One of the promoters of V-Guard Industries Limited, a visionary and a
person with a strong commitment to the principles of Quality and Good
Governance, Mr. Kochouseph Chittilappilly has lead the Company to the
heights of many achievements.
He holds a Master's degree in physics. He was appointed as the
Executive Vice Chairman of the Company by the members in their meeting
held on 25th July, 2012 for a term of 3 years effective from 1st April,
2012 and was re-designated as Chairman of the Board effective from 1st
November, 2012. The Board of Directors, upon the recommendation of the
Nomination and Remuneration Committee, in their meeting held on 16th
March, 2015, re- appointed Mr. Kochouseph Chittilappilly, as Executive
Chairman of the Company, for a term of 3 years, with effect from 1st
April, 2015, subject to the approval of the members in the ensuing
Annual General Meeting.
Mr. Cherian N Punnoose (Vice Chairman, DIN: 00061030)
Mr. Cherian N Punnoose is a Chartered Accountant having vast experience
in the field of Finance and General Administration in various
organisations. He was appointed by the members as an Independent
Director, in their meeting held on 29th July, 2014, for a term of 5
years. He has been appointed as the Chairman of the Audit Committee of
the Board.
Mr. Mithun K Chittilappilly (Managing Director, DIN: 00027610)
He holds a Master's degree in Marketing & Finance. He has played an
active role in taking the Company to new markets in Non-South India
thereby building the brand pan India. He was instrumental in
introducing various new products to the portfolio and has led many new
initiatives in the Company. He was appointed as the Managing Director
of the Company by the Members at their meeting held on 25th July, 2012,
for a period of three years with effect from 1st April, 2012.
The Board of Directors, upon the recommendation of the Nomination and
Remuneration Committee, in their meeting held on 16th March, 2015, re-
appointed him as the Managing Director for a period of 3 years w.e.f.
1st April, 2015, subject to the approval of the members in the ensuing
Annual General Meeting. He is liable to retire by rotation.
Mr. Ramachandran Venkataraman (Director- Marketing and Strategy, DIN:
06576300)
Mr. Ramachandran Venkataraman, a Masters' in Management Studies
(Marketing) having vast experience in the field of Marketing and
Strategy, was appointed by the members of the Company as a Whole-time
Director, in their meeting held on 23rd July, 2013, effective from 1st
June, 2013. Presently, he is leading various transformation
initiatives in the Company.
In terms of section 152 of the Companies Act, 2013, Mr. Ramachandran V,
Director - Marketing and Strategy, is liable to retire by rotation at
the ensuing Annual General Meeting and being eligible, offers himself
for re-appointment.
Mr. C J George (Independent Director, DIN: 0003132)
Mr. C J George was appointed as an Independent Director, by the Members
of the Company in their Meeting held on 29th July, 2014 for a term of 5
years. He is holding Master's degree in Commerce and Certificate of
Financial Planning. He is having vast experience in the field of
Finance, Capital Market, General Administration and is presently the
Managing Director of Geojit BNP Paribas Financial Services Limited, a
Company listed at BSE Ltd. and National Stock Exchange of India Ltd.
The Board has also appointed him as the Chairman of Nomination and
Remuneration Committee and Stakeholders' Relationship and Share
Transfer Committee.
Mr. A K Nair (Independent Director, DIN: 00009148)
Mr. A K Nair was appointed as an Independent Director, by the Members
of the Company in their Meeting held on 29th July, 2014 for a term of 5
years. He is a Mechanical Engineer and Management degree holder, having
more than 45 years of Industry experience especially in the field of
Engineering, Finance, Management and General Administration.
Mr. Ullas K Kamath (Independent Director, DIN: 00506681)
Mr. Ullas K Kamath, was appointed as an Independent Director, by the
Members of the Company in their Meeting held on 29th July, 2014 for a
term of 5 years. He is a member of the Institute of Chartered
Accountants of India, Institute of Company Secretaries of India, holds
a degree in Law and has also attended Advanced Program at The Wharton
Business School, USA and Harvard Business School, USA. He is currently
the Joint Managing Director of Jyothy Laboratories Limited.
Mrs. Joshna Johnson Thomas (Non-Executive Director, DIN: 02613030)
Mrs. Joshna Johnson Thomas was appointed as a Non-Executive Director
liable to retire by rotation, by the Members of the Company in their
Meeting held on 29th July, 2014. She holds a Management degree in
Human Resources and is having rich experience in the Human Resources
areas with her association with many organisations.
Mr. A Jacob Kuruvilla (Chief Financial Officer & Compliance Officer)
Mr. A Jacob Kuruvilla, Chief Financial Officer of the Company has been
noted as a Key Managerial Personnel by the Board in its meeting held on
2nd May, 2014. He is also designated as the Compliance officer as per
Clause 49 of the Listing Agreement and Chief Investor Relations Officer
under SEBI (Prohibition of Insider Trading) Regulations, 2015.
Mrs. Jayasree K (Company Secretary)
Mrs. Jayasree K, Company Secretary of the Company has been noted as a
Key Managerial Personnel by the Board in its meeting held on 2nd May,
2014.
The Notice dated 7th July, 2015 of the ensuing Annual General Meeting
includes the proposals for re-appointment of the Directors. Brief
resume of the directors proposed to be re-appointed have been provided
in the notice convening the ensuing Annual General Meeting. Specific
information about the nature of their expertise and the names of the
Companies in which they hold directorship and membership / chairmanship
of the Board Committees, as stipulated under clause 49 of the Listing
Agreement, have also been included.
C. Declaration by Independent Directors
The Company has received necessary declarations from the Independent
Directors stating that they meet the criteria of independence as
specified in Section 149(6) of the Companies Act, 2013 and Clause 49 of
the Listing Agreement.
D. Number of Meetings of the Board of Directors
During the Financial Year 2014-15, the Board of Directors of the
Company, met five times, on 2nd May, 2014, 29th July, 2014, 4th
November, 2014, 16th January, 2015 and 16th March, 2015.
A separate meeting of the Independent Directors of the Company was also
held on 21st March, 2015, and the Directors held reviews and assessment
enumerated under Schedule IV(VII) (3) to the Companies Act, 2013 and
Clause 49II(B)(6)(b) of the Listing Agreement. All the Independent
Directors of the Company attended the meeting.
E. Committees of the Board
The Sub-Committees of the Board comprises of Audit Committee,
Nomination and Remuneration Committee, Stakeholders' Relationship and
Share Transfer Committee and Corporate Social Responsibility (CSR)
Committee.
During the year under review Audit Committee and Nomination and
Remuneration Committee were re-constituted. Mr. Ullas K Kamath,
Independent Director, was inducted as a member of the Audit Committee.
Mrs. Joshna Johnson Thomas, was appointed as a member of the Nomination
and Remuneration Committee and Mr. Kochouseph Chittilappilly, a member
of the said Committee has resigned.
The terms of reference of Audit Committee, Nomination and Remuneration
Committee and Stakeholders' Relationship and Share Transfer Committee
were aligned with the requirements of the Companies Act, 2013 and
Clause 49 of the Listing Agreement. A detailed note on the said
Committees of the Board of Directors is given in the Corporate
Governance Report forming part of the Annual Report.
The CSR Committee of the Company comprises of three members, Mr.
Kochouseph Chittilappilly, Mr. Cherian N Punnoose and Mr. Mithun K
Chittilappilly. Mr. Kochouseph Chittilappilly, is the Chairman of the
Committee and the members of the Committee met five times during the
year under review, on 2nd May, 2014, 29th July, 2014, 4th November,
2014, 16th January, 2015 and 16th March, 2015 and recommended to the
Board, the various CSR programs / activities to be carried out by the
Company, for its consideration and approval.
F. Performance Evaluation
Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the
Listing Agreement, the Board of Directors, has carried out an annual
performance evaluation of its own, Sub-Committees of Board and
individual directors, based on the criteria laid down in the Nomination
Remuneration and Evaluation Policy of the Company.
The performance evaluation of the Board was carried out on a
questionnaire template on the basis of criteria such as flow of
information to the Board, effective role played by the Board in
decision making etc.
The performance of evaluation of various Sub- Committees of the Board
were carried out on the basis of criteria such as constitution of the
sub- committees in accordance with the provisions of the Companies Act,
2013 and Clause 49 of the Listing Agreement, effective functioning of
the committees as per the terms of reference etc.
The performance of evaluation of individual Directors was carried out
both by the Nomination and Remuneration Committee and the Board on the
basis of criteria such as active participation in the Board
deliberations, contributions made for adoption of better corporate
governance practice by the Company etc.
A separate meeting of Independent Directors of the Company was held
during the year under review, in which the members evaluated the
performance of the Chairman on the basis of criteria such as giving
guidance to the Board and ensuring the independence of the Board etc.
The performance of the non-independent directors was also evaluated on
the basis of their contribution to the Board deliberations.
G. Directors' Responsibility Statement
In terms of the requirements of Section 134(3)(c) read with Section
134(5) of the Companies Act, 2013, Board of Directors of the Company,
hereby state and confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards had been followed. Proper explanation relating to material
departures, if any, is provided wherever applicable;
ii) such accounting policies were selected and applied consistently and
had made judgments and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at
the end of the Financial Year and of the profit of the Company for the
period;
iii) proper and sufficient care were taken for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
iv) the annual accounts were prepared on a going concern basis; and
v) the internal financial controls to be followed by the Company were
laid down and such internal financial controls were adequate and were
operating effectively.
vi) proper systems to ensure compliance with the provisions of all
applicable laws were devised and such systems were adequate and
operating effectively.
10. Audit Related Matters
A. Statutory Auditors
M/s. S R Batliboi & Associates LLP, Chartered Accountants, Kochi, with
firm registration number - 101049W, who are the Statutory Auditors of
the Company will hold office, upto the conclusion of the ensuing Annual
General Meeting. The Board of Directors upon the recommendation of the
Audit Committee proposes the re-appointment of M/s. S R Batliboi &
Associates, LLP, Chartered Accountants, Kochi, as the Statutory
Auditors of the Company to hold office from the conclusion of the
ensuing Annual General Meeting till the conclusion of 21st Annual
General Meeting as per the provisions of Section 139 of the Companies
Act, 2013.
The Auditors' Report for the Financial Year 2014- 15, does not contain
any qualification, reservation or adverse remarks.
B. Cost Auditors
M/s. Ajeesh & Associates, Cost Accountants, Ernakulam, were appointed
as the Cost Auditors of the Company for the Financial Year 2014-15.
Since the Company was not required to carry out Cost Audit mandatorily
for the Financial Year 2014-15, it is not required to file the Audit
Report with the Ministry of Corporate Affairs.
Vide the Companies (Cost Records and Audit) Amendment Rules, 2014, the
Company has to now maintain cost records and get the same audited by a
Cost Accountant in practice. Accordingly, the Board of Directors in
their meeting held on 4th May, 2015, have approved the appointment of
M/s. Ajeesh & Associates, Cost Accountants, Ernakulam, as the Cost
Auditors of the Company for the Financial Year 2015-16 and also fixed
the audit fee payable to them subject to ratification by members at the
ensuing Annual General Meeting. Necessary resolution for ratification
of remuneration payable to Cost Auditors for the Financial Year 2015-
16 has been included in the notice dated 7th July, 2015, convening the
ensuing Annual General Meeting and requisite details have been provided
in the explanatory statement of the notice.
C. Secretarial Auditors
The Board of Directors, pursuant to the provisions of Section 204 of
the Companies Act, 2013, appointed M/s. Keyul M Dedhia & Associates,
Company Secretaries, Mumbai, as the Secretarial Auditor of the Company,
to carry out the Secretarial Audit for the Financial Year 2014-15.
Secretarial Audit Report
Secretarial Audit Report, issued by M/s. Keyul M Dedhia & Associates,
Secretarial Auditors in Form No. MR -3 forms part of this Board Report
and is annexed herewith as Annexure 1.
While confirming that the company has complied with the provisions of
applicable acts, rules, etc., the auditors made few observations. The
Board's clarifications for the same are as follows.
Intimation to stock exchanges regarding allotment of shares under ESOS:
Company has provided all information relating to allotment of shares to
eligible employees under ESOS 2013, along with requisite declarations
and disclosures to the stock exchanges, where the shares of the Company
are listed, at the time of seeking approval for listing of the shares
alloted and therefore, separate intimation in respect of allotment of
shares was not given.
Intimation regarding date on which dividend shall be paid/ dispatched
not included with filing of result: The Company had made the payment of
dividend to the shareholders within the time specified. However, the
date of disbursement of dividend was not included in the intimation
filed with the Stock Exchanges, regarding recommendation of dividend.
Filing of annual return on foreign liabilities and assets with RBI: In
the said case, omission in intimation was by oversight. Same will be
complied with, in future.
11. Policy Matters
A. Nomination Remuneration and Evaluation Policy
Pursuant to the provisions of Section 178(3) of the Companies Act,
2013, the Nomination and Remuneration Committee of the Company has
formulated and recommended to the Board a policy containing the
criteria for determining qualifications, positive attributes and
independence of a director and it highlights the remuneration for the
Directors, Key Managerial Personnel and other employees, ensuring that
it covers the matters mentioned in Section 178(4) of the Act.
Nomination Remuneration and Evaluation Policy approved by the Board is
given in Annexure 2 to this Report.
B. Vigil Mechanism / Whistle Blower Policy
Your Company had, before the coming into force of Companies Act, 2013,
voluntarily adopted a Whistle Blower Policy, to enable its employees
and Directors to report any genuine grievances, illegal or unethical
behavior, suspected fraud or violation of laws, rules and regulations,
conduct, to the Ombudsman or Vigil Officer. The Whistle blower also has
access to the Audit Committee Chairman. The policy has been circulated
among the employees of the Company working at various locations,
divisions / units.
The said policy has been amended in line with the provisions of
Companies Act, 2013 and Clause 49 of the Listing Agreement and it
provides for adequate protection to the whistle blower against
victimization or discriminatory practices. The Policy is available on
the website of the Company www.vguard.in., in the page 'Investor
Relations'
C. Corporate Social Responsibility Policy
The Board of Directors of the Company has adopted a policy on Corporate
Social Responsibility, pursuant to the provisions of Section 135 of the
Companies Act, 2013, read with The Companies (Corporate Social
Responsibility Policy) Rules, 2014, as amended. The said policy is
posted on the web site of the Company www.vguard.in./CSR.
In terms of Section 135 of the Companies Act, 2013 read with The
Companies (Corporate Social Responsibility Policy) Rules, 2014, the
annual report on Corporate Social Responsibility activities of the
Company is given in Annexure 3 to this report.
D. Risk Management Policy
The Company has developed and implemented a risk management framework
detailing various risks associated with the business of the Company,
the process of identification of risks, monitoring and mitigation of
identified risks etc. As per the risk profile, the various risks
associated with the Company are classified as marketing risks, product
risks, inventory risks, compliance risk, financial risks and
Organisation risks. In compliance with the provisions of Clause 49 of
the Listing Agreement, the Board has constituted a Risk Management
Committee to monitor and review the risks identified by various product
risk groups and also suggest measures to mitigate the risks identified.
During the year under review, the Board of Directors has adopted an
Enterprise Risk Management Policy, formalizing the Company's policy of
identification, assessment, monitoring, mitigation and reporting
procedures of enterprise risks and covering the structure and role of
various forums constituted for monitoring and reviewing the risks.
12. Other Matters
A. Internal Financial Controls
Company had adequate internal financial controls in place with
reference to the Financial Statements. During the year under review,
the controls were evaluated by the Internal Audit Team and no
significant weakness was identified, in design or operations of the
controls.
B. Financial Position and Performance of Subsidiaries, Joint Ventures
and Associates
The Company has no subsidiary, associate or has not entered into any
joint venture and hence not required to disclose any information.
C. Any revision made in the Financial Statements or Board's Report
The Company has not revised the Financial Statements or Board's Report
in respect of any of the three preceding Financial Years.
D. Employee Stock Option Scheme 2013
The Company had, during the Financial Year 2013-14, granted 9,17,322
options to eligible employees to be vested over a period of three years
in accordance with the Employee Stock Option Scheme (ESOS) 2013. Out of
the total number of options granted, 24,004 numbers of options were
cancelled during the said year.
During the year under review, the Company had obtained in-principle
approval of the Stock Exchanges where the shares of the Company are
listed, for listing of 11,20,000 number of options granted under ESOS
2013. Considering the parameters for vesting of options, 2,40,475
number of options were vested during the first year to eligible
employees and out of total number of shares vested, 1,25,621 numbers of
options were exercised by the employees. Details of options granted,
vested and exercised are given in the Annexure 4, which forms part of
this Report.
E. Code of Conduct
As prescribed under Clause 49 of the Listing Agreement, a declaration
signed by the Managing Director affirming compliance with the Code of
Conduct by the Directors and Senior Management of the Company for the
Financial Year 2014-15 forms part of the Corporate Governance Report.
F. Extract of Annual Return
Extract of the Annual Return in Form No. MGT -9 forms part of the
Board's Report and is annexed herewith as Annexure 5
G. Management Discussion and Analysis Report
As per provisions of Clause 49 of the Listing Agreement, a detailed
review of the developments in the industry, performance of the Company,
opportunities and risks, internal control systems, outlook etc. of the
Company is given under the head Management Discussion and Analysis
Report, which forms part of this Annual Report.
H. Particulars of Loans, Guarantees and Investments
During the year under review, the Company had granted inter corporate
loan of Rs. 5.00 crores, to Sakthi Accumulators Pvt. Ltd., Bangalore,
one of the vendors of the Company at an interest rate of 18% per annum
and the loan is repayable in five years after three years from the date
of disbursement of last installment.
I. Related Party Transactions
During the year under review, the Company has not entered into any
contract or arrangements with related parties as per the provisions of
Section 188(1) of the Companies Act, 2013, read with Clause 49 of the
Listing Agreement. There was nil information to be given in Form AOC-2
and accordingly, the same is not provided.
J. Corporate Governance
Your Company has complied with the Corporate Governance norms as
stipulated under the provisions of Clause 49 of the Listing Agreement
entered into with the Stock Exchanges. A detailed report on Corporate
Governance forms part of the Annual Report. A certificate of Statutory
Auditor confirming compliance of the Corporate Governance requirements
by the Company is attached to the Report on Corporate Governance.
K. Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The information pertaining to conversation of energy, technology
absorption, foreign exchange earnings and outgo as required under
section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the
Companies (Accounts) Rules, 2014, is furnished in Annexure 6 and forms
part of this Report.
L. Remuneration Details of Directors, Key Managerial Personnel and
Employees
The details of remuneration of Directors, Key Managerial Personnel and
the Statement of employees in receipt of remuneration exceeding the
limits prescribed under Sections 134 and 197 of the Companies Act, 2013
read with Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 as amended, has been provided in
Annexure 7 to this Report.
M. Disclosure as per the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company is committed in providing and promoting a safe and healthy
work environment for all its employees. It has zero tolerance towards
sexual harassment at the workplace and has adopted a policy for
'Prevention and Redressal of Sexual Harassment at the Workplace' in
line with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed
thereunder for prevention and redressal of complaints of sexual
harassment at workplace, along with a structured reporting and
redressal mechanism. The Company has also constituted an Internal
Complaints Committee, to inquire into complaints of sexual harassment
and recommend appropriate action. The policy has been circulated among
the employees of the Company and the same is exhibited in the notice
Board of all the business locations / divisions of the Company. During
the year under review, the Company has not received any complaint of
sexual harassment.
13. Acknowledgement
The Board wishes to place on record its sincere appreciation to the
Company's customers, vendors, central and state government bodies,
auditors, legal advisors, consultants, registrar and bankers for their
continued support to the Company during the year under review. The
Directors also wish to place on record their appreciation for the
dedicated efforts of the employees at all levels. Finally, the Board
expresses its gratitude to the members for their continued trust,
co-operation and support.
For and on behalf of the Board of Directors
Sd/- Sd/-
Kochouseph Chittilappilly Mithun K Chittilappilly
Chairman Managing Director
Place: Kochi
Date : 4th May, 2015
Mar 31, 2014
Dear Members,
The Directors have great pleasure in presenting the Eighteenth Annual
Report of the Company on the business and operations together with the
audited financial statements for the year ended 31st March, 2014.
1. Financial Results (Rs. in lakhs)
Particulars Year ended Year ended
31st March,
2014 31st March,
2013
Revenue from operations (Gross) 153,792.61 138,371.92
Less : Excise Duty 2,036.30 2,350.47
Revenue from operations (Net) 151,756.31 136,021.45
Operating expenditure 139,501.69 125,027.93
Operating profit before Depreciation,
Interest, Tax & Exceptional Item 12,254.62 10,993.52
Finance Cost 2,106.31 1,997.06
Depreciation and amortization expense 1,203.86 1,141.10
Other Income 483.88 362.21
Profit Before Tax & Exceptional Item 9,428.33 8,217.57
Exceptional Item - -
Profit Before Tax 9,428.33 8,217.57
Tax Expense:
a) Current Tax 2,250.54 1,562.29
b) Deferred Tax 164.39 363.77
Profit After Tax 7,013.40 6,291.51
Balance in Statement of Profit &
Loss brought forward 14,014.84 9,645.53
Profit available for appropriation 21,028.24 15,937.04
Appropriations
a) Transfer to General Reserve 800.00 700.00
b) Dividend proposed 1,044.66
Tax on Dividend proposed 228.27 177.54
c) Balance carried to Balance Sheet 18,656.84 14,014.84
2. Company''s Performance
During the financial year ended 31st March, 2014, the Company achieved
12% growth in its net revenue from operations which grew to Rs. 1,517.56
crores in 2013-14 from Rs. 1,360.21 crores in 2012-13. Operating profit
before interest, depreciation and tax for the year under review was Rs.
122.55 crores, as compared to Rs. 109.94 crores of preceding year,
registering a growth of 11%. Profit After Tax for the financial year
ended 31st March, 2014 was Rs. 70.13 crores, higher by 11% than Rs. 62.91
crores in financial year 2012-13. Growth of each product vertical is
detailed under the Section, Management Discussion and Analysis which
forms part of the Annual Report.
3. Changes to the Share Capital
There was no change in the share capital of the Company, during the
year under review.
4. Appropriations made from the profits
a) Transfer to Reserves
Your Directors transferred an amount of Rs. 8.00 crores to the General
Reserve account, out of the profits available for appropriation during
the year, which is in accordance with the Companies (Transfer of
Profits to Reserves) Rules, 1975.
b) Final Dividend
Your Directors are pleased to recommend a final dividend of Rs. 4.50 per
share (45% on par value of Rs. 10/- per share). The final dividend, if
declared as recommended, would involve an outflow of Rs. 13.43 crores and
Rs. 2.28 crores towards dividend distribution tax, resulting in a total
outflow of Rs. 15.71 crores. If approved by the shareholders at the
ensuing Annual General Meeting, the dividend will be paid as per the
applicable regulations.
The Register of Members and Share Transfer Books will remain closed
from 19th July, 2014 to 29th July, 2014 both days inclusive.
5. New Projects
The project of doubling the capacity at the Kashipur plant in
Uttarakhand from 3.3 million coils per annum to 6.6 million coils per
annum in two phases has been completed and commercial production has
started. Construction of warehouse at Angamaly and Perundurai has been
completed and the work relating to construction of central warehouse at
Palakkad has been commenced. With a view to enhance the overall
customer service experience, process effectiveness and operational
efficiency, a transformation initiative was carried out in the customer
service domain and a new service delivery model is being
institutionalized with the support of robust IT solution. The new
service delivery system being implemented by the Company would become a
new benchmark for customer service in the electrical appliance
industry.
6. Productivity Improvement & Cost Reduction Activities
Newly Constituted Industrial Engineering Department of the Company is
actively engaged in auditing the process across its manufacturing
locations as well as warehouses to identify possible opportunities for
improving productivity and thereby achieving cost reduction. Standard
production norms development, Method improvements, Material Handling
systems development and Process Automation are initiated in various
locations with the active support of respective plant management during
the year. They are also closely working with selected manufacturing
locations for bringing operational excellence in manufacturing by
introducing the concepts of Lean manufacturing during the financial
year 2014-15.
7. Fixed Deposit
The Company has not accepted any fixed deposits during the year.
8. Board of Directors
The Company had, pursuant to the provisions of clause 49 of the Listing
Agreement entered into with Stock Exchanges, appointed Mr. C J George,
Mr. A K Nair and Mr. Cherian N Punnoose as Independent Directors of the
Company under the category of directors liable to retire by rotation.
As per Section 149(4) of the Companies Act, 2013, which came into
effect from 1st April, 2014, every listed public company is required to
have at least one-third of the total number of directors as Independent
Directors and such directors are not liable to retire by rotation.
The Board of Directors of your Company, in terms of provisions of
Sections 149, 150 and 152 of the Companies Act, 2013, are seeking the
approval of members for the appointment of all the three Independent
Directors to hold office as per the tenure of appointment mentioned in
the Notice of the ensuing Annual General Meeting of the Company.
The Board has as per the provisions of Section 161 of the Companies
Act, 2013, appointed Mr. Ullas K Kamath and Mrs. Joshna Mithun, as
Additional Directors on the Board of the Company with effect from 2nd
May, 2014 and they will hold office upto the date of the ensuing Annual
General Meeting. The Company has received notices under Section 160 of
the Companies Act, 2013, along with the deposit proposing their
candidature for the office of Director and your Directors are seeking
the approval of members for their appointment.
The details of Directors being recommended for
appointment/re-appointment as required in Clause 49 of the Listing
Agreement are contained in the Notice convening the ensuing Annual
General Meeting of the Company.
Appropriate resolution(s) seeking your approval to the
appointment/re-appointment of Directors are also included in the
Notice.
9. Employee Stock Option Scheme 2013
During the year under review, the Company has instituted ESOS 2013,
with a view to reward the employees of the Company in line with the
growth of the Company. The members of the Company accorded their
approval by way of special resolution under Section 81(1A) of the
Companies Act, 1956, passed on 14th May, 2013, through postal ballot
procedure for implementation of ESOS 2013 in accordance with SEBI
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 for issue of options exercisable into not more than
11,20,000 equity shares of the Company.
Under the Scheme, the Company has granted 9,17,322 options to eligible
employees which works out to 3.07% of the paid up share capital of the
Company as at 31st March, 2014. Details of the options granted and
pricing formula and other details are given in the Annexure A to the
Directors'' Report.
10. Human Resources
Your Company believes in the ability of each of its employees and hence
provides ample opportunities to tap into their potential and also
invest in their growth and development. Their combined Experience,
Knowledge and Vigour continue to be our competitive advantage.
Talent Acquisition, Talent Development, and Talent Management have been
the key focus areas for benchmarking and further development. In line
with this commitment, this year, the Company has strengthened its focus
to align the business functionally and build individuals'' capability.
With the Vision to be an "Employer of Choice" in its operating
geographies, your Company undertook several projects in FY 2013-14 to
create building blocks for a world-class organisation. Some of these
initiatives are:
- Revamping of Talent Acquisition processes with the best market
practices implemented across levels including employment verification,
medical check up, and psychometric test.
- Revamping of online Performance Management system.
- Service being the back bone of the Company, it has been strengthened
further through introduction of training and certification program
covering close to 1000 employees.
- Partnering with outsourcing agency to supplement the manpower
requirements in customer service and support services.
The employees are encouraged to live the vision and values adopted by
the Company and develop themselves as good corporate citizens. During
the year, an Engagement Survey was carried out to assess the engagement
level. Based on the findings, a detailed action plan was put in place
to further the engagement bar higher in the years ahead. Employee
relations continued to be strengthened across all locations through a
process of continuous dialogue and openness to find mutually acceptable
solutions to issues.
11. Corporate Social Responsibility
Your Company''s CSR policy focuses on social sustainability, healthcare
initiatives, environment sustainability and inclusive growth. The
Company have undertaken various initiatives during the year to sustain
the environment and to improve the quality of life of the people in and
around its manufacturing units at Chavadi (Coimbatore), Kashipur
(Uttarakhand), Perundurai (Tamil Nadu) and Kala Amb (Himachal Pradesh).
Community development activities were also undertaken in areas close to
our Branch offices and warehouses at Bangalore, Hyderabad,
Vijayawada, Angamaly and Kannadi (Palakkad).
Educational assistance was extended to 200 students belonging to the
underprivileged communities through the Rajagiri Outreach Society.
Financial assistance was given to 8 schools and educational societies
near our Head Office and Warehouses. As part of this program, School
Bags, Note Books, umbrellas and writing materials were also distributed
to students belonging to below poverty line. Drinking water facility
was provided to the children of Govt. schools. Quality improvement
programmes were conducted at selected schools for improving the quality
of education. Special programmes were organised for parents of the
children covered under the educational assistance scheme of the
Company. In addition, financial support was extended to the Thomas
Chittilappilly Trust that runs an old age home for destitute women and
a home for girl children.
Medical assistance was given to cancer/kidney patients from the
locality for undergoing treatment at specialist hospitals. To provide
quality primary and preventive health care to the underprivileged, as
part of its Healthcare initiative, the Company had donated an Ambulance
equipped with all essential healthcare equipment, to the Parakkadavu
Grama Panchayath, Angamali. This facility is intended for use by the
Paliative Care Unit under the Grama Panchayath and will benefit the
village community. Financial support was also extended for
electrification of Parakkadavu Grama Panchayath area near to our
Warehouse at Angamaly. To support the victims of natural calamities,
the Company had extended financial help to the disaster relief measures
of the Govt. of Uttarakhand, during the year under review.
12. Corporate Governance
Your Company has complied with the Corporate Governance norms as
stipulated under the provisions of the Listing Agreement entered into
with the Stock Exchanges. A detailed Report on Corporate Governance
forms part of the Annual Report. A certificate of Statutory Auditor
confirming compliance of the Corporate Governance requirements by the
Company is attached to the Report on Corporate Governance.
13. Management Discussion and Analysis Report
A detailed review of the industrial growth vis- Ã -vis the growth of the
Company and the future outlook is given under the head Management
Discussion and Analysis Report, which forms part of this Report.
14. Auditors
M/s. S R Batliboi & Associates LLP, Chartered Accountants, Kochi, with
firm registration number-101049W, who are the Statutory Auditors of the
Company hold office, in accordance with the provisions of the Companies
Act, 1956, upto the conclusion of the ensuing Annual General Meeting.
The Board of Directors upon the recommendation of the Audit Committee
proposes the re-appointment of M/s. S R Batliboi & Associates LLP,
Chartered Accountants, Kochi, as the Statutory Auditors of the Company
to hold office from the conclusion of the ensuing Annual General
Meeting till the conclusion of the next Annual General Meeting as per
the provisions of Section 139 of the Companies Act, 2013.
15. Cost Auditors
Your Directors have, with the approval of the Ministry of Corporate
Affairs, appointed M/s. Ajeesh & Associates, Cost Accountants, as the
Cost Auditors of the Company for the financial year 2013-14 and cost
audit report will be filed.
The Board of Directors in their meeting held on 2nd May, 2014, have
approved the appointment of M/s. Ajeesh & Associates, Cost Accountants,
as the Cost Auditors of the Company for the financial year 2014-15 and
also fixed the audit fee payable to them. As per the provisions of
Section 148 of the Companies Act, 2013, read with Companies (Audit and
Auditors) Rules, 2014, audit fee payable to the Cost Auditors is to be
ratified by the Members of the Company. Your Directors have proposed a
resolution in item no.10 of the Notice for the ensuing Annual General
Meeting.
16. Disclosure of Particulars of employees
Particulars of employees required under Section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended, form part of this report and are annexed
herewith. However, in terms of Section 219(1)(b)(iv) of the Companies
Act, 1956, the report and accounts are being sent to the shareholders
excluding the aforesaid annexure. Any shareholder interested in
obtaining copy of the same may write to the Company at the Registered
Office.
17. Energy conservation, Technology absorption and Foreign exchange
earnings and outgo
The information required under Section 217(1)(e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules 1988, with respect to conservation of
energy, technology absorption and foreign exchange earnings and outgo
is given in Annexure B to the Directors'' Report which forms part of the
Annual Report.
18. Directors'' Responsibility Statement
In accordance with the provisions of Section 217(2AA) of the Companies
Act, 1956, your Directors here by state that:- i) In the preparation of
the annual accounts, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
ii) Accounting policies selected were applied consistently. Reasonable
and prudent judgments and estimates were made so as to give a true and
fair view of the state of affairs of the Company at the end of the
financial year as on 31st March, 2014 and of the profit of the Company
for the year ended on that date;
iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
iv) The annual accounts of the Company have been prepared on a going
concern basis.
19. Response to Auditor''s Observations
The Board gives the following clarifications, on the observations of
the Auditor''s in the Annexure to Auditor''s Report to the Members:
Refer Annexure point (xxi). It was detected by the Company that an
employee together with few dealers have misappropriated the materials
sold by Company and defaulted in related payments. Company has
suspended the employee and has fully provided for these receivables
amounting to Rs. 249.96 lakhs as at 31st March, 2014 in the financial
statements and has initiated legal actions to recover these amounts.
20. Acknowledgement
The Board wishes to place on record its sincere appreciation to the
Company''s customers, vendors, Central and State Government bodies,
auditors, legal advisors, consultants, registrar and bankers for their
continued support to the Company during the year under review. The
Directors also wish to place on record their appreciation for the
dedicated efforts of the employees at all levels. Finally, the Board
expresses its gratitude to the members for their continued trust,
co-operation and support.
For and on behalf of the Board of Directors
Sd/- Sd/-
Kochi Kochouseph Chittilappilly Mithun K Chittilappilly
2nd May, 2014 Chairman Managing Director
Mar 31, 2013
Dear Members,
The Directors have great pleasure in presenting the Seventeenth Annual
Report of the Company on the business and operations together with the
audited financial statements for the year ended 31st March, 2013.
1. Financial Results
(Rs. in lakhs)
Year ended Year ended
31-03-2013 31-03-2012
Revenue from operations (Gross) 138,371.92 97,778.26
Less : Excise Duty 2,350.47 1,315.25
Revenue from operations (Net) 136,021.45 96,463.01
Operating expenditure 125,027.91 87,109.22
Operating profit before Depreciation,
Interest, Tax & Exceptional Item 10,993.54 9,353.79
Finance Cost 1,997.06 1,702.53
Depreciation and amortization expense 1,141.12 969.36
Other Income 362.21 235.22
Profit Before Tax & Exceptional Item 8,217.57 6,917.12
Exceptional Item - -
Profit Before Tax 8,217.57 6,917.12
Tax Expense:
a) Current Tax 1,562.29 2,023.00
b) Deferred Tax 363.77 (185.98)
Profit After Tax 6,291.51 5,080.10
Balance in Profit & Loss account
brought forward 9,645.53 6,479.56
Profit available for appropriation 15,937.04 11,559.66
Appropriations
a) Transfer to General Reserve 700.00 700.00
b) Dividend proposed 1,044.66 1,044.66
Tax on Dividend proposed 177.54 169.47
c) Balance carried to Balance Sheet 14,014.84 9,645.53
2. Company''s Performance
During the financial year 2012-13, the Company achieved net revenue
from operations of Rs. 1,36,021.45 lakhs, registering a growth of 41%
over the net revenue from operations of Rs. 96,463.01 lakhs achieved
during the previous year. The Profit After Tax for the year increased
to Rs. 6,291.51 lakhs from Rs. 5,080.10 lakhs achieved during the
previous year. Growth of each product vertical is detailed under the
section Management Discussion and Analysis, which forms part of the
Annual Report.
3. Changes to the Share Capital
There was no change in the share capital of the Company, during the
year under review.
4. Appropriations made from the profits
a) Transfer to Reserves
Your Directors transferred an amount of Rs. 700.00 lakhs to the General
Reserve account, out of the profits available for appropriation during
the year, which is in accordance with the Companies (Transfer of
Profits to Reserves) Rules 1975.
b) Final Dividend
Your Directors are pleased to recommend a final dividend of Rs. 3.50
per share (35% on par value of Rs. 10/- per share). The final dividend,
if declared as recommended, would involve an outflow of Rs. 1,044.66
lakhs and Rs. 177.54 lakhs towards dividend tax, resulting in a total
outflow of Rs. 1,222.20 lakhs. If approved by the shareholders at the
ensuing Annual General Meeting, the dividend will be paid as per the
applicable regulations.
The Register of Members and Share Transfer Books will remain closed
from 13th July, 2013 to 23rdJuly, 2013, both days inclusive.
5. New Projects
Considering the strong demand for wires, Your Directors decided to
double the capacity at the Kashipur plant in Uttaranchal from 3.3
million coils per annum to 6.6 million coils per annum in two phases.
The total cost estimated for the capacity expansion is Rs. 18 Cr. In
the first phase, the capacity will be expanded to the tune of 1.8
million coils and production is expected to commence by July, 2013. The
second phase of the expansion for the remaining 1.5 million coils is
expected to complete by January, 2014. Construction of warehouse at
Angamali was commenced during the year and the same is expected to
complete by January, 2014. The other projects for the current financial
year include construction of another central warehouse at Palakkad and
a warehouse for solar water heater at Perundurai.
6. Fixed Deposit
The Company has not accepted any fixed deposits during the year.
7. Change in Directors
During the year under review, Mr. P G R Prasad, Chairman and
Independent Director resigned from the Board and its sub committees
with effect from 01st November, 2012. Consequent to the resignation of
Mr. P G R Prasad, Mr. Kochouseph Chittilappilly was re-designated as
Chairman of the Board with effect from 01st November, 2012. The Board
appointed Mr. Cherian N Punnoose as an Additional Director with effect
from 01st November, 2012 in the independent category and he has been
designated as Vice Chairman of the Board.
Dr. George Sleeba, Joint Managing Director, whose term of office
expires on 31st May, 2013 has not offered for re-appointment and he
will be relived from the Board with effect from 01st June, 2013. The
Board has appointed Mr. Ramachandran V as an Additional Director of the
Company and also as a Whole-time Director to hold office with effect
from 01st June, 2013.
In terms of the provisions of Section 260 of the Companies Act, 1956,
Mr. Cherian N Punnoose and Mr. Ramachandran V, Directors will hold
office only up to the date of the ensuing Annual General Meeting of the
Company. The Company has received notices from members under Section
257 of the Act, in respect of the above Directors proposing their
appointment as Directors of the Company, along with the requisite
deposit of Rs. 500/- each. Keeping in view the experience and
expertise of these persons, their appointment as Directors of the
Company is recommended by the Board of Directors. Resolutions seeking
approval of the Members for the appointment of Mr. Cherian N Punnoose
and Mr. Ramachandran V as Directors liable to retire by rotation have
been incorporated in the Notice of the 17th Annual General Meeting. The
Board of Directors appointed Mr. Ramachandran V as Whole-time Director
of the Company with effect from 01st June, 2013 and the said
appointment will be subject to the approval of the members in the
ensuing Annual General Meeting.
In terms of Section 256 of the Companies Act, 1956 and Articles 137 and
139 of the Articles of Association of the Company, Mr. C J George,
Director, is liable to retire by rotation and being eligible has
offered himself for re-appointment.
Brief resume of the Directors seeking appointment and re-appointment,
nature of their expertise in specific functional areas and names of
Companies in which they hold Directorship / Membership / Chairmanship
of the Board Committees, as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchanges has been provided as an Annexure to
the Notice convening the Annual General Meeting.
8. Employee Stock Option Scheme 2013
With a view to reward the employees of the Company in line with the
growth of the Company, Your Directors with the approval of the
shareholders by way of a special resolution under Section 81(1)(A) of
the Companies Act, 1956 passed on 14th May, 2013 through postal ballot
procedure, have implemented ESOS 2013 in accordance with SEBI (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999 for issue of shares to the employees. The Board of Directors in
their meeting held on 25th March, 2013 had appointed Mr. M D Selvaraj,
Practicing Company Secretary to act as the scrutinizer for conducting
the Postal Ballot. Details of the votes cast are given in the section
"Report on Corporate Governance" which forms part of this Annual
Report.
9. Human Resources
Company recognizes people as its primary source of competitiveness, and
continues to focus on their development by leveraging technology and
creating a continuously learning human resource base to unleash their
potential and fulfill their aspirations. The year saw the HR activities
directed towards this end through initiatives in areas of talent
management, training & employee compensation.
In view of the increasing need for the right type of personnel for the
Company''s growth plans and current requirements, the primary emphasis
during the year was on the quality of talent which could only be
achieved by institutionalization of a robust talent acquisition
process. With this objective, the Company introduced a Talent
Management System, a fully hosted and an integrated online solution
that will enable the Company to simplify & automate talent management
lifecycle, from pre-hiring to post hiring. The selection process has
been further strengthened by the inclusion of a psychometric test
(People Profile Analysis) and a vigorous interview process. A new
scheme for Management Trainee selection for attracting freshers and a
loyalty scheme for retaining key employees in the organization were
also introduced during the year. These measures are intended to help in
meeting the talent requirements as per the needs of the business.
The identification of training needs continues to be a major focus area
that enables the Company to organise need-based Training & Development
programs. Nominations of employees for external programs are also made
based on the training need analysis. During the year, the Company
launched a Leadership Development Program for Senior Management
personnel to identify employees with potential who could be groomed for
taking up positions of responsibility in future. The senior/middle
Management employees were also put through a three day outbound
training program as part of experiential learning. All these programs
were aimed at building effective teams with shared vision and values
that can equip the Company to meet the emerging challenges.
The Company firmly believes that in the quest for maintaining a high
performance culture, an effective system for performance management is
essential. Action has been initiated during the year to design a system
for objective assessment of performance and for a reward system based
on performance contribution of employees. Steps are also being taken to
align the compensation structure of the Company to the market so as to
attract and retain the best talent. The Performance Appraisal &
Development System is being made more effective by introducing Key
Result Areas and Key Performance Indicators (KPI) also, against which
the employees can make a self-assessment and plan for improving their
performance.
The employee strength as on 31st March, 2013 has increased from 1599
during last year to 1872 during the year under review. The major
increase has been in Marketing and Customer Service, to take care of
the expanding market for the Company''s products in non-South.
10. Corporate Social Responsibility
The CSR activities of the Company mainly focus on areas like Health,
Education, Environment, Women empowerment and Youth and Community
Development with the objective of bringing about improvements in the
quality of life of people, especially those living in and around the
operating Divisions and various establishments of the Company such as
Warehouses and Branch Offices.
Some of the on-going CSR activities are:
- Providing free medicines to the ailing cancer patients of District
Hospital Ernakulam from a Social Welfare Fund created by voluntary
contribution from Employees.
- Supporting the Charitable units engaged in the manufacture of
electronic products for V-Guard.
- Extending educational assistance to poor students in Ernakulam
District through the Rajagiri Outreach Programme.
- Caring for the aged women and differently abled children through
the Thomas Chittilappilly Trust (TCT).
- Adopting the Govt Higher Secondary School, Vennala with the
objective of improving its physical infrastructure and quality of
education.
- Educational Sponsorship and Community Development projects at
Kannadi (Palakkad) and Ettimadai (Coimbatore).
- Associating with the Heart Care Foundation, in its activities for
saving lives of Heart patients through installation of AED (Automatic
External Defibrillator) in Public places.
- Associating with the Voluntary Agencies and Institutions that
promote Blood Donation and Organ Donation for saving lives.
- Distribution of reusable / recyclable carry bags to households in
association with Grama Panchayathu to promote green environment.
11. Corporate Governance
Your Company has complied with the Corporate Governance norms as
stipulated under the provisions of the Listing Agreement entered into
with the Stock Exchanges. A detailed Report on Corporate Governance
forms part of the Annual Report. A certificate of Statutory Auditor
confirming compliance of the Corporate Governance requirements by the
Company is attached to the Report on Corporate Governance.
12. Management Discussion and Analysis Report
A detailed review of the industrial growth vis-a-vis the growth of the
Company and the future outlook is given under the head Management
Discussion and Analysis Report, which forms part of this Report.
13. Auditors
M/s S R Batliboi & Associates LLP, Chartered Accountants, Kochi with
firm registration number 101049W, who are the Statutory Auditors of the
Company hold office, in accordance with the provisions of the Companies
Act, 1956, upto the conclusion of the ensuing Annual General Meeting
and being eligible, offer themselves for re-appointment. The Board of
Directors upon the recommendation of the Audit Committee proposes the
re-appointment of M/s S R Batliboi & Associates LLP, Chartered
Accountants, as the Statutory Auditors of the Company.
14. Cost Auditors
Your Directors have, with the approval of the Ministry of Corporate
Affairs, appointed M/s Ajeesh & Associates, Cost Accountants, as the
Cost Auditors of the Company for the financial year 2012-13 and Cost
Audit Report will be filed. Compliance Report in respect of the
financial year 2011-12 was filed by the Cost Auditor with the Ministry
of Corporate Affairs.
15. Disclosure of Particulars of Employees
Particulars of Employees required under Section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended, form part of this report and are annexed
herewith. However, in terms of Section 219(1)(b)(iv) of the Companies
Act, 1956 the report and accounts are being sent to the shareholders
excluding the aforesaid annexure. Any shareholder interested in
obtaining copy of the same may write to the Company at the registered
office.
16. Energy conservation, Technology absorption and Foreign exchange
earnings and outgo
The information required under Section 217(1)(e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules 1988, with respect to conservation of
energy, technology absorption and foreign exchange earnings and outgo
is given in Annexure I to the Directors'' Report which forms part of
the Annual Report.
17. Directors'' Responsibility Statement
In accordance with the provisions of Section 217(2AA) of the Companies
Act 1956, your Directors hereby state that:-
i) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) Accounting policies selected were applied consistently. Reasonable
and prudent judgments and estimates were made so as to give a true and
fair view of the state of affairs of the Company at the end of the
financial year as on 31st March, 2013 and of the profit of the Company
for the year ended on that date;
iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
iv) The annual accounts of the Company have been prepared on a going
concern basis.
18. Acknowledgement
The Board wishes to place on record its sincere appreciation to the
Company''s Customers, Vendors, Central and State Government Bodies,
Auditors, Legal Advisors, Consultants, Registrar and Bankers for their
continued support to the Company during the year under review. The
Directors also wish to place on record their appreciation for the
dedicated efforts of the employees at all levels. Finally, the Board
expresses its gratitude to the members for their continued trust,
co-operation and support.
For and on behalf of the Board of Directors
Sd/- Sd/-
Kochouseph Chittilappilly Mithun K Chittilappilly
Chairman Managing Director
Kochi
15th May, 2013
Mar 31, 2012
The Directors have great pleasure in presenting the Sixteenth Annual
Report of the Company on the business and operations together with the
audited financial statements for the year ended 31st March, 2012.
1. Financial Results
(Rs.in lakhs)
Year ended Year ended
Particulars 31-3-2012 31-3-2011
Revenue from operations (gross) 100,677.92 73,774.66
Less:Excise duty 1,315.25 1,112.44
Revenue from operations (net) 99,362.67 72,662.22
Operating expenditure 90,008.88 65,358.69
Operating profit before
Depreciation, Interest, 9,353.79 7,303.53
Tax &
Exceptional Item
Finance costs 1,702.53 1,133.38
Depreciation and amortization
expense 969.36 793.67
Other income 235.22 170.83
Profit Before Tax & Exceptional Item 6,917.12 5,547.31
Exceptional Items - 363.61
Profit Before Tax 6,917.12 5,910.92
Tax expense:
a) Current Tax 2,023.00 1,607.80
b) Deferred tax (185.98) 39.45
1,837.02 1,647.25
Net Profit 5,080.10 4,263.67
Balance brought forward 6,479.56 3,930.02
Profit available for appropriation 11,559.66 8,193.69
Appropriations
Transfer to General Reserve 700.00 500.00
Dividend proposed:-
Final dividend proposed 1,044.66 1,044.66
Tax on final dividend proposed 169.47 169.47
1,914.13 1,714.13
Balance carried to Balance Sheet 9,645.53 6,479.56
2. Company's Performance
After a promising start to the decade in 2010-11, with achievements
like maintaining GDP growth rate around 8%, bringing down fiscal
deficit to 4.8% of GDP as well as containing current account deficit to
2.6%, the fiscal year 2011-12 has been challenging for the Indian
Economy. The year started on a note of optimism through impressive
growth in exports and high levels of foreign exchange inflows, only to
moderate as the year progressed through continued monetary tightening
in response to the untamed inflationary pressures. High levels of
inflation and higher interest rates gradually gave way to a slow-down
in the growth of economy. Despite the consumer durables, electrical,
electronic industries witnessing one of its worst performances last
year, Your Company was able to secure double digit growth with its
strong distribution net work and delivery of quality products to its
consumers.
Net revenue from operations for the year under review was Rs 993.63
crores representing a growth of 36.75% over the net revenue from
operations of Rs 726.62 crores for the previous year. The Profit After
Tax increased from Rs 39.70 crores in 2010-11 to Rs 50.80 crores in
2011-12, an increase of 28%. Growth of each product vertical is
detailed under the section Management Discussion and Analysis, which
forms part of the Annual Report.
3. Changes to the Share Capital
There was no change in the share capital of the Company, during the
year under review.
4. Appropriations made from the profits
a) Transfer to Reserves
Your Directors transferred an amount of Rs 700.00 lakhs to the General
Reserve account, out of the profits available for appropriation during
the year, which is in accordance with the Companies (Transfer of
Profits to Reserves) Rules 1975.
b) Final Dividend
Your Directors are pleased to recommend a final dividend of Rs 3.50 per
share (35% on par value of Rs 10/- per share) considering the improved
profit. The final dividend if declared as recommended, would involve an
outflow of Rs 1044.66 lakhs and Rs 169.47 lakhs towards dividend tax,
resulting in a total outflow of Rs 1214.13 lakhs. If approved by the
shareholders at the ensuing Annual General Meeting, the dividend will
be paid as per the applicable regulations.
The Register of Members and Share Transfer Books will remain closed
from 14thJuly, 2012 to 25th July, 2012, both days inclusive.
5. Projects of the Initial Public Offer
Your Company has successfully completed all the projects of the Initial
Public Offer i.e. construction of LT Cable and Building Wire factories
at Coimbatore and Kashipur respectively, Pilot Production Unit for
Pumps and Water Heater and Fan at Coimbatore and Kala Amb, Himachal
Pradesh respectively and Service and Distribution Centre at Bangalore,
Hubli and Vijayawada.
6. New Projects
Considering the growth potential, Your Directors had decided to
strengthen the manufacturing base of Solar Water Heater and
construction of a state of art facility for the manufacture of Solar
Water Heater of different capacities at the industrial land acquired in
Perundurai has been completed during the year under review. Commercial
production is expected to commence during the Financial Year 2012-13.
Also the expansion of storage space available at Palakkad, Kochi and
Bangalore was also successfully completed and work relating to
strengthening of the existing production unit of Electric Water Heater
and Fan at Kala Amb, Himachal Pradesh is progressing. The projects of
expansion for the current fiscal include construction of new ware house
at Kochi and Hyderabad and increasing the production capacity of
Kashipur.
7. Fixed Deposit
The Company has not accepted any fixed deposit during the year under
review.
8. Change in Directors
Your Company's Board consists of total six Directors- three Executive
and three Non-Executive Independent Directors. During the year under
review, there was no change in the Board of Directors.
In terms of Section 256 of the Companies Act, 1956 and Articles 137 and
139 of the Articles of Association of the Company, Mr. P G R Prasad,
Chairman and Independent Director is liable to retire by rotation and
being eligible has offered himself for re-appointment.
Your Directors in their meeting held on 26th March, 2012 appointed Mr.
Mithun K Chittilappilly and Mr. Kochouseph Chittilappilly, as Managing
Director and Executive Vice-Chairman of the Company respectively for a
period of three years effective from 1st April, 2012. The said
appointments will be subject to the approval of the members, in the
ensuing Annual General Meeting. Resolutions seeking approval of the
members for the said appointments have been incorporated in the Notice
of the 16th Annual General Meeting.
Brief resume of the Directors seeking appointment and re-appointment,
nature of their expertise in specific functional areas and names of
Companies in which they hold Directorship / Membership/ Chairmanship of
the Board Committees, as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchanges has been provided as an annexure to
the Notice convening the Annual General Meeting.
9. Human Resources
The HR Team at your Company ensures the core function of Human Resource
Management in meeting the organizational requirements. The HR Team is
fully backed and guided by a professional Management Team and work
closely to ensure that the Company Vision is perpetuated down the line
to meet the Company's targeted results and goals.
To strengthen the Management Team, your Company has inducted competent
professionals at various levels which includes Director (Marketing &
Strategy), Sr. General Manager (HR) and General Manager (R & D). In
addition, the Company has also recruited a Vice President (R&D) who
will be joining shortly.
To supplement the business growth, extensive training programmes have
been planned for employees across verticals for knowledge and skill
development. The training programmes include a week long orientation
programme for new joinees, Leadership Development Programme including
Out Bound Training for Top Management employees and skill development
programme for middle level. In order to develop a talent pool to take
up responsibilities at higher levels in future, the Company has
introduced a Management Trainee (MT) Scheme from the year 2012. The
first batch of MTs have joined the service. Your Company is also
working on implementing Balance Score Card for aligning business
activities to the Vision and Strategy of the Company and for effective
Performance Management System.
Total Employee strength was 1363 as on 1st April, 2011 and as on 31st
March 2012, the number has increased to 1599. The increase has been
mainly due to the business growth and expansion activities undertaken
during the Financial Year 2011-12.
10. Corporate Social Responsibility
Your Company has been making meaningful contributions to the society in
different areas, for decades now. CSR activities at V-Guard Industries
Ltd. extend well beyond its business objectives, and the Company's
concerns for the society are evident from the various initiatives it
has taken in different fields. V-Guard aims at bringing about a radical
transformation in the quality of life of people living in and around
the operating divisions of the Company through positive intervention in
social upliftment programs. Its key areas of focus are Health,
Education, Environment, Women Empowerment and Youth Development.
Some of the CSR activities undertaken are:
A. Social Welfare Fund for Ailing Cancer Patients
B. Employment Opportunities to Women & Underprivileged
C. Extending Educational assistance to poor students through Rajagiri
Outreach Program
D. Caring for the aged women and differently abled children through
the Thomas Chittilappilly Trust
E. Children Education Sponsorship Project (CESP)
F. Adoption of Government Vennala Higher Secondary School, Ernakulam
with the objective of improving its physical infrastructure and quality
of education.
11. Adequacy of Internal Control Systems
The Company has formulated comprehensive Internal Control Manual for
the entire operations of the Company to ensure that all transactions
are carried out adhering to the laid down procedures. The Company has
appointed M/s. Varma &Varma, Chartered Accountants to conduct the
internal audit of the Company. It has also an in-house Internal Audit
Cell that regularly does the audit of branch offices and factories.
Internal Audit is conducted on a quarterly basis. The report and
findings of Internal Auditors are placed before the Audit Committee and
are reviewed in detail by the members. All significant observations and
comments are placed before the Board of Directors and appropriate
actions are taken and improvements made in the systems wherever
required.
12. Implementation of Information Systems
In order to strengthen the internal control systems and improve the
management information system, the Company has implemented SAP based
ERP system during the year under review which went live with effect
from 13th February, 2012. The Board is pleased to state that the new
system has been successfully implemented and is getting stabilized.
13. Corporate Governance
Your Company has complied with the Corporate Governance norms as
stipulated under the provisions of the Listing Agreement entered into
with the Stock Exchanges. A detailed Report on Corporate Governance is
attached to this Report. A certificate of Statutory Auditor confirming
compliance of the Corporate Governance requirements by the Company is
attached to the Report on Corporate Governance.
14. Management Discussion and Analysis Report
A detailed review of the industrial growth vis-a-vis the growth of the
Company and the future outlook is given under the head Management
Discussion and Analysis Report, which forms part of this Report.
15. Auditors
M/s. Deloitte Haskins & Sells, Chartered Accountants, with firm
registration number-008072S, who are the Statutory Auditors of the
Company, hold office, in accordance with the provisions of the
Companies Act, 1956, up to the conclusion of the ensuing Annual General
Meeting.
Your Company has received a Special Notice from a member, in terms of
the provisions of Section 190 of Companies Act, 1956, signifying his
intention to propose the appointment of M/s. S R Batliboi & Associates,
Chartered Accountants, with firm registration no. 101049W as Statutory
Auditors of the Company in the place of retiring Auditors, in the
ensuing Annual General Meeting of the Company. The Company has
forthwith communicated to the retiring Auditors of the Special Notice
received and they have not made any representation against the said
Special Notice. A written certificate has been obtained from M/s. S R
Batliboi & Associates to the effect that in case of their appointment
as Statutory Auditors of the Company, the appointment will be in
accordance with the limits prescribed under Section 224(1B) of the
Companies Act, 1956.
The Board of Directors upon the recommendation of the Audit Committee
proposes the appointment of M/s. S R Batliboi & Associates, as the
Statutory Auditors of the Company to hold office from the conclusion of
the ensuing Annual General Meeting until the conclusion of the next
Annual General Meeting.
16. Disclosure of Particulars of employees
The details of employees who are in receipt of salary in excess of the
limits prescribed under Section 217(2A) of the Companies Act, 1956,
read with Companies (Particulars of Employees) Rules, 1975 and
Companies (Particulars of Employees) Amendment Rules, 2011 are given in
Annexure I, which forms part of this report.
17. Energy Conservation, Technology absorption and Foreign exchange
earnings and outgo
The information required under Section 217(1)(e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules 1988, with respect to conservation of
energy, technology absorption and foreign exchange earnings and outgo
is given in Annexure II which forms part of this report.
18. Directors' Responsibility Statement
In accordance with the provisions of Section 217 (2AA) of the Companies
Act 1956, Your Directors hereby state that:-
i) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) Accounting policies selected were applied consistently. Reasonable
and prudent judgment and estimates were made so as to give a true and
fair view of the state of affairs of the Company at the end of the
Financial Year as on 31st March, 2012 and of the profit of the Company
for the year ended on that date;
iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) The annual accounts of the Company have been prepared on a going
concern basis.
19. Acknowledgement
Your Directors would like to place on record their sincere appreciation
to the Company's customers, vendors, registrar and bankers for their
continued support to the Company during the year under review. The
Directors also wish to place on record their appreciation of the
contribution made by employees at all levels for achieving the
outstanding performance and growth in the turnover and the Central
Government and various State Governments and other Government agencies
for their assistance and co-operation and look forward to their
continued support in future. Finally, the Board expresses its gratitude
to the members for their continued trust, co-operation and support.
For and on behalf of the Board of Directors
Sd/- Sd/-
Kochouseph
Chittilappilly Mithun K Chittilappilly
Vice Chairman Managing Director
Kochi
30th May, 2012
Mar 31, 2011
Dear Members,
The Directors have great pleasure in presenting the Fifteenth Annual
Report of the Company on the business and operations together with the
audited financial statements for the year ended 31st March, 2011.
1. Financial Results
(Rs. in lakhs)
Year ended Year ended
31st March, 2011 31st March,
2010
Gross Sales 73,746.63 46,229.03
Less : Excise Duty 1,112.44 820.12
Net Sales 72,634.19 45,408.91
Other income 198.86 142.44
Total Income 72,833.05 45,551.35
Operating Profit before Depreciation,
Interest, 7,474.36 5,179.48
Tax & Exceptional Item
Less: Depreciation 793.66 714.96
Profit Before Interest, Tax &
Exceptional Item 6,680.70 4,464.52
Less : Financial charges 1,133.38 513.25
Profit Before Tax & Exceptional Item 5,547.32 3,951.27
Add: Exceptional profit 363.61 -
Profit Before Tax 5910.93 3951.27
Provision for tax:
Current Tax 1,607.80 1,270.26
Deferred Tax 39.46 130.22
For earlier years - 3.53
Net Profit 4,263.67 2,547.26
Balance in P & L account brought forward 3,930.02 2,926.91
Profit available for appropriation 8,193.69 5,474.17
Appropriations
a) Transfer to General Reserve 500.00 500.00
b) Dividend proposed: -
Final dividend proposed 1,044.66 895.43
Tax on Final Dividend proposed 169.47 148.72
1,714.13 1,544.15
c) Balance carried to Balance Sheet 6,479.56 3,930.02
8,193.69 5,474.17
2. Company's Performance
The Indian economy resurged after the global recession and showed a
robust and steady growth in all spheres and it was very impressive in
the core sectors like manufacturing, agriculture, construction and
services. The country's GDP has grown by 8.5% during the year under
review. Rural prosperity in the country has also contributed
significantly to the industrial growth. Your Company was favourably
positioned with a wide range of products with different models and
excellent distribution network to take advantage of the opportunities
that emanated from the economic growth and could perform exceptionally
well in terms of growth in revenue and profit.
Net Sales for the year under review was significantly higher at Rs.
726.34 crores representing a growth of 59.96%, over the Net Sales of Rs.
454.09 crores for the previous year. Following the robust growth
achieved in sales, the Company recorded a Net Profit of Rs. 39.70 crores,
without considering exceptional profit of Rs. 3.63 crores during the year
under review, which is 55.84 % up over the previous year. The
contribution from Non-South Indian markets to the turnover is more than
Rs. 160.00 crores in the fiscal 2010-11. The significant improvement in
the revenue and profit was attained mainly due to increase in market
share, growth in sales volume across all product lines and higher
capacity utilization. Growth of each product vertical is detailed under
the section Management Discussion and Analysis, which forms part of the
Annual Report.
3. Changes to the Share Capital
There was no change in the share capital of the Company, during the
year under review.
4. Appropriations made from the profits
a) Transfer to Reserves
Your Directors transferred an amount of Rs. 500.00 lakhs to the General
Reserve account, out of the profits available for appropriation during
the year, which is in accordance with the Companies (Transfer of
Profits to Reserves) Rules 1975.
b) Final Dividend
Your Directors are pleased to recommend a final dividend of Rs. 3.50 per
share (35% on par value of Rs. 10/- per share) considering the improved
profit. The final dividend, if declared as recommended, would involve
an outflow of Rs. 1,044.66 lakhs and Rs. 169.47 lakhs towards dividend tax,
resulting in a total outflow of Rs. 1,214.13 lakhs. If approved by the
shareholders at the ensuing Annual General Meeting, the dividend will
be paid as per the applicable regulations.
The Register of Members and Share Transfer Books will remain closed
from 15th July, 2011 to 25th July, 2011, both days inclusive.
5. Projects of the Initial Public Offer
Your Company has successfully completed four of the projects mentioned
in the Offer Document dated 29th February, 2008, i.e. construction of
LT Cable and Building Wire factories at Coimbatore and Kashipur
respectively, Pilot Production Unit for Pumps and Water Heater and Fan
at Coimbatore and Kala Amb, respectively and Service and Distribution
Center at Bangalore.
Construction work relating to setting up of Service and Distribution
Centers at Hubli and Vijayawada has commenced and it is expected to be
completed by the end of the third quarter of the fiscal 2011-12.
6. New Projects
Considering the growth potential, Your Directors have decided to
strengthen the manufacturing base of Solar Water Heater and it has been
decided to set up a state of art facility for the manufacture of Solar
Water Heater of different capacities with improved technology at the
industrial land acquired in Perundurai. It has also been decided to
strengthen the existing pilot production units of Electric Water Heater
and Fan at Kala Amb and Pumps at Coimbatore. The other projects for
expansion during the current fiscal include expanding the storage space
available at Palakkad, Bangalore and Kochi. All the projects are
expected to be implemented during the financial year 2011-12.
7. Fixed Deposit
The Company has not accepted any fixed deposits during the year.
8. Change in Directors
During the year under review, Dr. George Sleeba, was co-opted as an
Additional Director of the Board of the Company with effect from 27th
May, 2010. He was appointed as the Joint Managing Director of the
Company for a period of three years with effect from 1st June, 2010
with the approval of the members in the 14th Annual General Meeting
held on 26th July, 2010.
In terms of Section 256 of the Companies Act, 1956 and Articles 137 and
139 of the Articles of Association of the Company, Mr. A K Nair,
Independent Director is liable to retire by rotation and being eligible
has offered himself for re-appointment.
Brief resume of the Director proposed to be re-appointed, nature of his
expertise in specific functional areas and names of companies in which
he hold directorship and membership / chairmanship of the Board
Committees, as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchanges has been provided as an annexure to the Notice
convening the Annual General Meeting.
9. Human Resources
The function of Human Resource Department is to ensure availability of
the right type of skills at the right time at the right place and at
the right cost to meet the organizational requirements. The HR Dept of
your Company is making all-out effort in accomplishing this objective
by selecting and developing quality Human resources to meet the
challenges of a competitive business environment. The recruitment
process for attracting the right talents in the identified areas is
initiated through job portals, Newspaper advertisements and through
outside consultants. Marketing being one of the most significant areas
of your Company's activity, timely action is to be initiated to appoint
efficient and skilled manpower at various locations and for timely
replacement of people who leave the organization. To meet this need,
the HR Dept closely associates with the top management in planning,
developing and retaining talent. It also shares responsibility as a
strategic partner in business for achieving the organizational goals
and targets through a system of continuous performance monitoring
and appraisal of critical human resources of the Company.
Considering the need for upgrading the knowledge and skills of the
employees, your Company continues to invest in its human resources
through various Learning & Development initiatives. Programmes for
In-house training are conducted on an ongoing basis and your Company
has invested 6000 man hours in training during the year under review,
which is almost double that of the previous financial year. In addition
to the in-house programmes, employees are nominated for External
training programs conducted by professional bodies, Academic
Institutions and Training agencies. New Employees from all Branches
across India are provided a week's Induction Training and Orientation
Program at Corporate Office, Cochin, covering all aspects of the
organization. These induction programmes and opportunity provided for
visiting the various units and departments of the Company as part of
the orientation programme have helped to develop a positive feeling
among the new comers and their continuity in the organization.
Besides training and development activities, your Company has also been
conducting various Employee engagement programs for involving the
employees and for keeping them motivated.
Total Employee strength was 955 as on 1st April, 2010 and as on 31st
March, 2011, the number has increased to 1220. The increase has been
mainly due to the growth and expansion activities undertaken during the
year.
10. Corporate Social Responsibility
Your Company believes in nurturing positive relationships across the
entire range of stakeholders and the public which helps the Company
understand pertinent issues, develop businesses, enhance stakeholder
value and manage risks better. It is this relationship, trust and
commitment to stakeholder interest and the warm reciprocity of the same
by the stakeholders that make V-Guard robust, resilient and
sustainable.
A "Social welfare fund" was started during the year as an Employees'
initiative with the objective of helping the ailing cancer patients in
General Hospital, Cochin. Every month, Employees voluntarily contribute
to this fund from their salary. The fund so collected is utilized for
providing medicines to the cancer patients. With this amount, medicines
worth Rs. 3,00,000/- has been purchased and supplied during the financial
year.
Education of children, especially those belonging to the lower strata
of society continues to be one of the major thrust areas of your
Company's CSR interventions. During the year, the Company has adopted a
Government school near our Corporate Office at Vennala and has
associated with them in improving the welfare of students and basic
amenities of the school. It has benefitted many students who belong to
the under privileged section of the society. Your Company plans to
undertake more activities in the coming financial year to reaffirm its
commitment to the societal development.
11. Adequacy of Internal Control Systems
The Company has formulated comprehensive Internal Control Manual for
the entire operations of the Company. All the transactions of the
Company are routed through the laid down procedures. The Company has
also appointed M/s. Varma & Varma, Chartered Accountants to conduct the
internal audit of the Company. It has also formed an in-house Internal
Audit Department, which regularly does the audit of branch offices and
factories. Internal audit is conducted on a quarterly basis and the
report and findings of Internal Auditors are placed before the Audit
Committee and are reviewed in detail by the members. All significant
observations and comments are placed before the Board of Directors and
appropriate actions are taken based on the observations made by the
Auditors.
The Company has an Enterprise Wide Risk Management System in place and
has laid down procedures for risk assessment and mitigation procedures.
As part of risk management process, the Company has formed committees
at two levels, one being the apex body, known as Risk Management Team,
headed by the Executive Director and comprising of Sr. Vice President
and Vice Presidents, who are heading various Product Risk Groups and
Chief Risk Officer and Assistant Risk Officer as members. The other
committee, known as Product Risk Team for various products is headed by
the Vice President concerned and comprising of product heads and
representatives from other functions like Finance, Systems, Customer
Service, Human Resource, Legal etc. The consolidated quarterly risk
report is placed before the Audit Committee for its review and
recommendation to the Board.
12. Corporate Governance
Your Company has complied with the Corporate Governance norms as
stipulated under the provisions of the Listing Agreement entered into
with the Stock Exchanges. A detailed Report on Corporate Governance
forms part of the Annual Report. A certificate of Statutory Auditor
confirming compliance of the Corporate Governance requirements by the
Company is attached to the Report on Corporate Governance.
13. Management Discussion and Analysis Report
A detailed review of the industrial growth vis-ÃÂ -vis the growth of the
Company and the future outlook is given under the head Management
Discussion and Analysis Report, which forms part of the Annual Report.
14. Auditors
M/s. Deloitte Haskins & Sells, Chartered Accountants, with firm
registration number-008072S, who are the statutory auditors of the
Company hold office, in accordance with the provisions of the Companies
Act, 1956, upto the conclusion of the ensuing Annual General Meeting
and being eligible, offer themselves for re-appointment. The Board of
Directors upon the recommendation of the Audit Committee proposes the
re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants,
as the statutory auditors of the Company.
15. Disclosure of Particulars of employees
The details of employees who are in receipt of salary in excess of the
limits prescribed under Section 217(2A) of the Companies Act, 1956,
read with Companies (Particulars of Employees) Rules, 1975 and
Companies (Particulars of Employees) Amendment Rules, 2011 are given in
Annexure I to the Directors' Report, which forms part of the Annual
Report.
16. Energy conservation, Technology absorption and Foreign exchange
earnings and outgo
The information required under Section 217(1)(e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules 1988, with respect to conservation of
energy, technology absorption and foreign exchange earnings and outgo
is given in Annexure II to the Directors' Report which forms part of
the Annual Report.
17. Directors' Responsibility Statement
In accordance with the provisions of Section 217 (2AA) of the Companies
Act 1956, your Directors here by state that:- i) In the preparation of
the annual accounts, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
ii) Accounting policies selected were applied consistently. Reasonable
and prudent judgements and estimates were made so as to give a true and
fair view of the state of affairs of the Company at the end of the
financial year as on 31st March, 2011 and of the profit of the Company
for the year ended on that date;
iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
iv) The annual accounts of the Company have been prepared on a going
concern basis.
18. Acknowledgement
The Directors would like to place on record their sincere appreciation
to the Company's customers, vendors, registrar and bankers for their
continued support to the Company during the year under review. The
Directors also wish to place on record their appreciation to the
contribution made by employees at all levels for achieving the
remarkable growth in the turnover and profit and thank the Central
Government and various State Governments and other Government agencies
for their assistance and co-operation and look forward to their
continued support in future also. Finally, the Board expresses its
gratitude to the members for their continued trust, co-operation and
support.
For and on behalf of the Board of Directors
Sd/- Sd/-
Kochi Kochouseph Chittilappilly Dr. George Sleeba
17th May, 2011 Managing Director Joint Managing Director
Mar 31, 2010
The Directors have great pleasure in presenting the Fourteenth Annual
Report of the company on the business and operations together with the
audited financial statements for the year ended 31st March, 2010.
1. Financial Results (Rs. in lakhs)
Year ended Year ended
31st March, 2010 31st March, 2009
Gross Sales 46,229.03 32,604.17
Less : Excise Duty 820.12 926.50
Net Sales 45,408.91 31,677.67
Other income 142.44 364.03
Total Income 45,551.35 32,041.70
Operating profit before Depreciation,
Interest and Tax 5,179.48 3,506.06
Less: Depreciation 714.96 404.89
Profit before Interest & Tax 4,464.52 3,101.17
Less : Financial charges 513.25 473.26
Profit before Tax 3,951.27 2,627.91
Provision for tax:
Current Tax 1,270.26 819.86
Deferred Tax 130.22 23.40
Fringe Benefit Tax - 50.00
For earlier years 3.53 -
Net Profit 2,547.26 1,734.65
Balance in P&L account brought
forward 2,926.91 2,415.26
Profit available for appropriation 5,474.17 4,149.91
Appropriations
a) Transfer to General Reserve 500.00 350.00
b) Dividend proposed:
Final dividend proposed 895.43 746.19
Tax on Final Dividend proposed 148.72 126.81
1,544.15 1,223.00
c) Balance carried to
Balance Sheet 3,930.02 2,926.91
5,474.17 4,149.91
2. Review of Business and Operations
Your Company recorded net revenue of Rs.45,408.91 lakhs, during the
year under review, an increase of 43.35% over the previous year of
Rs.31,677.67 lakhs. The Net Profit after tax increased from Rs.1,734.65
lakhs in 2008-09 to Rs.2,547.26 lakhs in 2009-10, an increase of
46.85%. Indian economy has revived from the slowdown and has shown a
growth of 7-7.25% during the year under review. All the core sectors of
the economy like construction, power, automobiles, consumer durables,
and infrastructure have achieved significant growth. The overall growth
in the different sectors has contributed to achieve the magnificent
growth in the top line of the Company over the last financial year.
Your Company was able to give an impressive performance both in the
South and North Indian markets and increase the market presence across
the country by many fold.
During the year under review, Wires & Cables, A.C. and Digital
Stabilizers, Pumps, Electric Water Heaters and Fans had shown an
excellent performance. With the Commissioning of the new cable factory
set up at Kashipur, production of wires has increased by 75% and this
has helped the Company to meet the increasing demand for the product in
different parts of the north Indian markets. The Company was able to
achieve the growth in the product by concentrating more on retail
segment in different classes of cities and steadily increasing the
project orders. The new product LT Power Cable has also contributed in
a moderate way and the Company was able to make a good entry in South
Indian market. Growth in the white goods segment has given a fillip to
the sale of the CompanyÃs flagship product stabilizers meant for LCD
TV, Air Conditions and refrigerator and the market share of the new
markets was also encouraging. Your Company was able to achieve a 30%
growth in the revenue of pumps by concentrating on domestic and three
phase pumps. The pump division was able to supply good numbers of three
phase pumps for agricultural purposes in different cities in South
India and focus will be given to produce more customized models in the
years to come to meet the increased demand. Electric Water Heaters has
also shown a good growth and the Company was able to introduce Gas
Water Heaters during the year under review, which was well accepted by
the market. Your Company was able to introduce different models of
Electrical Fan and many of the new models have been well accepted by
customers. Other products like UPS, Digital UPS and Solar Water Heaters
have also progressed in terms of quantity and value and our strategy
for these products will be to enter the untapped market in different
parts of the Country.
Your Company was able to add more number of channel partners in many
parts of north India and this has resulted in increase of revenue from
north India significantly. Emphasis was given to the penetration of
markets in different classes of cities and introducing more number of
models of all the products to suit with the local demands. Your
Directors will continue to follow the existing strategies formulated to
penetrate the north Indian markets and will take full advantage of the
progress in different industrial sectors of the Country. To facilitate
better distribution and handling of the products,
Distributors/consignment agents will be appointed, wherever it is
needed. All the pilot units will be geared to come out with better
features for the existing products and thrust will be given to add new
products to folder.
With an intention to increase and strengthen the existing manufacturing
facilities, your company has acquired 34.66 acres of industrial land on
lease basis at Perundurai, near Erode-Dist., allotted by SIPCOT,
Chennai. After analyzing the detailed project report, steps will be
initiated for the execution of the project.
3. Changes to the Share Capital
There was no change in the share capital of the Company, during the
year under review.
4. Appropriations made from the profits
a) Final Dividend
Your Directors are pleased to recommend a final dividend of Rs.3/- per
share (30% on par value of Rs.10/- per share) in view of the better
profits. The final dividend if declared as above, would involve an
outflow of Rs.895.43 lakhs and Rs.148.72 lakhs towards dividend tax,
resulting in a total outflow of Rs. 1,044.15 lakhs. If approved by the
shareholders at the ensuing Annual General Meeting, the dividend will
be paid as per the applicable regulations.
The Register of Members and Share Transfer Books will remain closed
from 16th July 2010 to 26th July, 2010, both days inclusive.
b) Transfer to Reserves
Your directors transferred an amount of Rs.500 lakhs to the General
Reserve account, out of the profits available for appropriation during
the year, which is in accordance with the Companies (Transfer of
Profits to Reserves) Rules 1975.
5. Projects of the Initial Public Offer
Your Company has successfully completed four of the projects mentioned
in the Offer Document dt. 29th February, 2008, i.e. construction of LT
Cable factory at Coimbatore, Building Wire factory at Kashipur, Pilot
Production Unit for pumps at Coimbatore and Service and Distribution
Center at Bangalore. Your Company has identified suitable land at Hubli
and purchased the same. Your company has made application to the Local
Town Planning Authority, at Vijayawada and Hubli for construction of
distribution and service center at the respective places. Both the
projects will be completed in the current fiscal 2010-2011.
6. Fixed Deposit
The Company has not accepted any fixed deposits during the year.
7. Change in Directors
During the year under review, Mr. N Sreekumar and Mr. A K Nair, were
co-opted as Additional Directors of the Board of the Company with
effect from 27th May, 2009, of whom, Mr. A K Nair was appointed as an
independent Director. He was also co-opted as a member of the Audit and
Remuneration Committees. He was appointed in the 13th Annual General
Meeting of the Company held on 27th July, 2009 as a Director liable to
retire by rotation.
Mr. N Sreekumar was appointed as Joint Managing Director of the Company
for a period of three years with effect from 1st June, 2009 with
approval of the members in the 13th Annual General Meeting held on 27th
July, 2009. He resigned from the Company with effect from 28th January,
2010.
Your Directors have appointed Dr. George Sleeba, as an Additional
Director with effect from 27th May, 2010. Your Directors also
considered and approved the proposal of appointing Dr. George Sleeba
as Joint Managing Director of the Company for a period of three years
with effect from 1st June, 2010 on the terms and conditions stipulated
in the agreement entered with him. The said appointment will be subject
to the approval of the members, in the ensuing Annual General Meeting.
A copy of the agreement is kept at the Registered Office of the Company
and is available for inspection to the members, during the business
hours on any day, upto the date of the ensuing Annual General Meeting.
Resolutions seeking approval of the Members for appointment of Dr.
George Sleeba as a Director liable to retire by rotation and his
appointment as Joint Managing Director have been incorporated in the
Notice of the 14th Annual General Meeting.
Mr. C J George, Director is liable to retire by rotation and being
eligible has offered himself for re-appointment. Brief details of the
Directors seeking appointment or re-appointment are given in the Annual
Report, in compliance with the provisions of Clause 49 of the listing
agreement.
8. Human Resources
Human Resource Department plays a pivotal role in achieving
organizational excellence. Your company constantly strives to develop
Quality Human Resources, to meet the challenges of competitive business
environment. The strategic HR framework aims to leverage and align HR
practices to build critical capabilities in achieving the CompanyÃs
objectives and goals.
The Human Resources function closely associates with the top management
in the continual process of planning, attracting, recruiting,
developing, motivating and retaining talent with a view of
accomplishing organizational vision. HR functions as a nervous system
enabling proper flow of information and communication down the line
thereby sharing the common vision and mission of the organization.
V-Guard is a company focused on Employee development and continuously
train and retrain the Employees through In House and External training
programmes throughout India. New Employees from all branches across
India are provided a weekÃs Induction training and Orientation
programme at Corporate Office, Cochin, covering all basic aspects of
the organization. During the year under review 3130 man hours of
training has been provided to employees working in various cadres.
Total Employee strength was 955 as on 1st April, 2009, and as on 31st
March, 2010 the number increased to 1220. This increase has been mainly
because of the growth and expansion activities in the organization.
9. Adequacy of Internal Control Systems
The Company has appointed M/s. Varma & Varma, Chartered Accountants to
conduct the internal audit of the Company. The Company has also formed
an in-house Internal Audit Department. Internal audit is conducted on
a quarterly basis and the report and findings of Internal Auditors are
placed before the Audit Committee of the Board and are reviewed in
detail. All significant observations and comments are placed before the
Board of Directors and appropriate actions are taken based on the
observations made by the Auditors.
10. Corporate Governance
Your Company has complied with the Corporate Governance norms as
stipulated under the provisions of the Listing Agreement entered into
with the Stock Exchanges. A detailed Report on Corporate Governance is
attached to this Report. A certificate of Statutory Auditor confirming
compliance of the Corporate Governance requirements by the Company is
attached to the Report on Corporate Governance.
11. Management Discussion and Analysis Report
A detailed review of the industrial growth vis-ÃÂ -vis the growth of the
Company and the future outlook is explained under the Head ÃManagement
Discussion and Analysis ReportÃ, which forms part of this Report.
12. Auditors
M/s. Deloitte Haskins & Sells, Chartered Accountants, with firm
Registration No. 008072S who are the statutory auditors of the Company
hold office, in accordance with the provisions of the Companies Act,
1956, upto the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment.
13. Disclosure of Particulars of employees
The details of employees who are in receipt of salary in excess of the
limits prescribed under Section 217(2A) of the Companies Act, 1956,
read with the Companies (Particulars of Employees) Rules, 1975 as
amended and Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules 1988 are given in Annexure I, which forms
part of this report.
14. Energy conservation, Technology absorption and Foreign exchange
earnings and outgo
The information required under Section 217(1)(e) of the Companies Act,
1956, read with the companies (Disclosure of Particulars in the Report
of the Board of Directors) Rules 1988, with respect to conservation of
energy, technology absorption and foreign exchange earnings and outgo
is given in Annexure II which forms part of this report.
15. Directorsà Responsibility Statement
In accordance with the provisions of section 217 (2AA) of the Companies
Act 1956, your directors here by state that:-
i) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) Accounting policies selected were applied consistently. Reasonable
and prudent judgements and estimates were made so as to give a true and
fair view of the state of affairs of the Company at the end of the
financial year as on 31st March, 2010 and of the profit of the Company
for the year ended on that date;
iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
iv) The annual accounts of the company have been prepared on a going
concern basis.
16. Acknowledgement
We would like to place on record our sincere thanks to our Clients,
Bankers, Vendors, RTA and Investors for the co-operation and support
extended during the year. We also thank the employees of the Company
for their valuable contribution in taking the Company to newer heights.
We thank the Government of India and the State Governments, the
Regulatory Authorities like SEBI, Registrar of Companies, Stock
Exchanges, and Depositories etc. for their valuable support and also
look forward for their continued support in the years to come.
For and on behalf of the Board of Directors
Sd/-
Kochi P G R Prasad
28th May, 2010 Chairman
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