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Directors Report of VIP Industries Ltd.

Mar 31, 2017

The Directors are pleased to present the 50th Annual Report together with the Audited Financial Statements of your Company for the financial year ended 31st March, 2017.

FINANCIAL RESULTS (Standalone) (Rs. in Crores)

Particulars

Year Ended 31.03.2017

Year Ended 31.03.2016

Total Turnover

1305.85

1234.25

Profit before depreciation, Interest and Tax

127.34

105.33

Finance cost

0.57

1.18

Depreciation and Amortization expenses

11.45

12.09

Profit before tax

115.32

92.06

Tax expenses

39.34

28.65

Profit for the year

75.98

63.41

OVERALL PERFORMANCE AND OUTLOOK

During the financial year ended 31st March, 2017, total sales was Rs. 1,305.85 crores as against Rs. 1,234.25 crores during previous year, registering a growth of 5.80%. Profit before tax was at Rs. 115.32 crores as against Rs. 92.06 crores in the previous year. Profit after Tax for the year under review was at Rs. 75.98 crores against Rs. 63.41 crores in the previous year.

A detailed analysis of the operations of your Company during the year under report is included in the Management Discussion and Analysis Report, forming part of this Annual Report.

EXPORTS AND INTERNATIONAL OPERATIONS

Due to subdued market conditions in Middle East, UK, Europe and Asia Pacific, the International Business of the Company declined during the year. While sale of private label business has grown, branded goods sales declined in select geographies in Europe.

ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 in the prescribed Form MGT-9 is annexed herewith as Annexure “A”.

NUMBER OF MEETINGS OF THE BOARD

Your Company’s Board of Directors met seven times during the financial year under review. The details of which are given in the Corporate Governance Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013 with respect to the Directors’ Responsibility Statement, your Directors, based on their knowledge and belief and the information and explanations obtained confirm that:

(a) in the preparation of the annual accounts for the year ended 31st March, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) such accounting policies selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended 31st March, 2017 and of the profit and loss of your Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) annual accounts for the financial year ended 31st March, 2017, have been prepared on a going concern basis;

(e) internal financial controls have been laid down and followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

DECLARATION OF INDEPENDENT DIRECTORS

Pursuant to Section 134(3)(d) of the Act, your Company confirm having received necessary declarations from all the Independent Directors under Section 149(7) of the Companies Act, 2013 declaring that they meet the criteria of independence laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

NOMINATION AND REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel and their remuneration. The Nomination and Remuneration policy is annexed herewith as Annexure “B” to this report.

AUDITORS

Statutory Auditors

At the 49th Annual General Meeting held on 28th July, 2016, M/s. Price Waterhouse Chartered Accountants LLP, Chartered Accountants (Firm Registration No. 012754N/N500016) were appointed as Statutory Auditors of the Company to hold office for a term of 5 years commencing from the conclusion of 49th Annual General Meeting till the conclusion of 54th Annual General Meeting subject to ratification by Members in each Annual General Meeting. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the Statutory Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, appointment of M/s. Price Waterhouse Chartered Accountants LLP, Chartered Accountants (Firm Registration No. 012754N/N500016) as Statutory Auditors of the Company, will be placed for ratification by the Shareholders in the ensuing Annual General Meeting. In this regard, the Company has received a certificate from the Auditors to the effect that if their appointment is ratified, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

The Notes on financial statements referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors of your Company have re-appointed M/s. Ragini Chokshi & Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of your Company for the financial year 2017-18. The Secretarial Audit Report for the financial year 2016-17 forms part of this Annual Report and is appended as Annexure “C” to the Board’s report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Your Company has established a Policy for determining related party transactions. The Audit Committee oversees the related party transactions. Related Party Transaction Policy of the Company has been displayed on the Company’s website at the link - www.vipindustries.co.in

All contracts or arrangements entered into by the Company with Related Parties have been done at arm’s length and are in the ordinary course of business.

Pursuant to Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of such transactions are provided in Form AOC-2 which is annexed herewith as Annexure “D” to this report. Related Party disclosures as per AS-18 have been provided in Note No. 43 of Standalone Financial Statements.

STATE OF COMPANY’S AFFAIRS

Discussion on state of Company’s affairs has been covered as part of the Management Discussion and Analysis. Management Discussion and Analysis for the year under review, as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of this Annual Report.

RESERVES & DIVIDEND

During the year under review, as well as during the previous year, the Company has not transferred any amount to the General Reserves. As on 31st March, 2017, Reserves and Surplus of the Company were at Rs. 370.84 crores. An amount of Rs. 128.25 crores is proposed to be retained as surplus in the statement of Profit & Loss.

Your Directors are pleased to recommend for your consideration, a final dividend of Rs. 1.60 (Rupee One and Paise Sixty only) per equity share of Rs. 2 each (previous year Rs. 1.40 per equity share of Rs. 2 each) for the financial year 2016-17. Your Company had paid in February, 2017, an interim dividend of Rs. 0.80 (Eighty paise only) per equity share of Rs. 2 each for the financial year 2016-17. Accordingly, the total dividend declared/recommended by your Company for the financial year 2016-17 is Rs. 2.40 (Rupees Two and Paise Forty only) per equity share of Rs. 2 each (previous year Rs. 2 per equity share of '' 2 each). Your Company proposes a higher dividend compared to previous year as your Company has earned good profit during the financial year 2016-17.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,top five hundred listed entities based on market capitalization are required to formulate Dividend Distribution Policy. The Board has approved and adopted the Dividend Distribution Policy and the same is annexed herewith as Annexure “E” to this report.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no adverse material changes or commitments occurred after 31st March, 2017 which may affect the financial position of the Company or may require disclosure.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed herewith as Annexure “F” to this report.

RISK MANAGEMENT POLICY

The Company has a robust risk management framework comprising risk governance structure and defined risk management processes. The risk governance structure of the Company is a formal organization structure with defined roles and responsibilities for risk management.

The processes and practices of risk management of the Company encompass risk identification, classification and evaluation. The Company identifies all strategic, operational and financial risks that the Company faces, by assessing and analyzing the latest trends in risk information available internally and externally and using the same to plan for risk management activities.

As a part of the Company’s strategic planning process, the Directors have reviewed the risk management policy and processes and also the risks faced by the Company and the corresponding risk mitigation plans deployed. The Company is on track in respect of its risk mitigation activities.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) expenditure incurred by your Company during the financial year 2016-17 was Rs. 1.50 crores which was higher than the statutory requirement of 2% of the average profit for the last three financial years.

CSR Committee of the Company comprises of Mr. Vijay Kalantari (Chairman of CSR Committee), Mr. Dilip G. Piramal, and Ms. Radhika Piramal.

The Annual Report on CSR activities that includes details about CSR Policy developed and implemented by the Company and CSR initiatives taken during the financial year 2016-17 is in accordance with Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 and is annexed herewith as Annexure “G” to this Report.

BOARD EVALUATION

Pursuant to provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. Performance evaluation has been carried out as per the Nomination & Remuneration Policy of the Company.

DETAILS OF APPOINTMENT AND RESIGNATION OF DIRECTORS

Mr. Dilip G. Piramal has been appointed as the Chairman & Managing Director and Ms. Radhika Piramal has been appointed as the Vice Chairperson & Executive Director. Mr. Ashish Saha, Director - Works of your Company retires by rotation and being eligible offers himself for re-appointment.

DETAILS OF APPOINTMENT AND RESIGNATION OF KEY MANAGERIAL PERSONNEL

Mr. Anand Daga was appointed as Company Secretary & Head - Legal of the Company with effect from 18th July, 2016 due to resignation of Mr. Shreyas Trivedi effective from 29th April, 2016.

NAME OF THE COMPANIES WHICH HAVE BECOME/CEASED TO BE SUBSIDIARIES, JOINT VENTURE OR ASSOCIATE COMPANIES DURING THE YEAR

VIP Industries Bangladesh Private Limited and Blow Plast Retail Limited continued to be the subsidiary companies of the Company.

During the year under review, no companies have become/ceased to be subsidiaries, joint venture or associate companies of the Company.

A statement containing the salient features of the financial of the financial statement of our subsidiaries in the prescribed format AOC-1 is presented in separate section forming part of the financial statement.

The Policy for determining “Material” subsidiaries has been displayed on the Company’s website at the link - www.vipindustries. co.in

PUBLIC DEPOSITS

During the year under review your Company has not accepted any deposits. There are no unclaimed deposit as at 31st March, 2017.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and your Company’s operations in future.

INTERNAL FINANCIAL CONTROLS

Your Company has put in place adequate internal financial controls with reference to the financial statements. The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business including adherence to the Company’s policies, the safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. During the year, such controls were tested and no reportable material weaknesses in design or operation were observed.

REPORT ON CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT

The report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms an integral part of this Report. The requisite certificate from Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandates inclusion of Business Responsibility Report as a part of Annual Report for Top 500 listed entities based on market capitalization of the Company. Business Responsibility Report as stipulated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this Report.

FAMILIARISATION PROGRAMME

The Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarize with your Company’s procedures and practices. Periodic presentations are made at the Board Meetings and the Board Committee Meetings, on business and performance updates of your Company, global business environment, business strategy and risks involved. The details of programmes for familiarization for Independent Directors are posted on the website of the Company and can be accessed at www.vipindustries.co.in.

Every new Independent Director of the Board attends an orientation program to familiarize the new inductees with the strategy, operations and functions of your Company. The Executive Directors / Senior Management personnel make presentations to the inductees about your Company’s strategy, operations, products, markets, finance, human resources, technology, quality, facilities and risk management.

VIGIL MECHANISM

Your Company has established a Vigil Mechanism Policy for your Directors, employees and stakeholders to safeguard against victimization of persons who use vigil mechanism and report genuine concerns. The Audit Committee oversees the vigil mechanism complaints. The Vigil Mechanism Policy of the Company has been displayed on the Company’s website at the link - www.vipindustries.co.in

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

In terms of provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, your Company has formulated a Policy to prevent Sexual Harassment of Women at workplace and constituted Internal Complaints Committees (ICC). During the year, no cases alleging sexual harassment of Women at workplace has been received by ICC.

SHARE CAPITAL

The paid-up Equity Share Capital of the Company as on 31st March, 2017 stood at Rs. 28.26 crores. During the year under review, the Company has neither issued shares with differential voting rights nor has granted any stock options or sweat equity. As on 31st March, 2017, none of the Directors of the Company holds instruments convertible into equity shares of the Company.

AUDIT COMMITTEE

The Audit Committee comprises of Mr. D. K. Poddar (Chairman of Audit Committee), Mr. Dilip G. Piramal, Mr. G. L. Mirchandani and Mr. Vijay Kalantri. All the recommendations made by the Audit Committee were deliberated and accepted by the Board.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 (the Act) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Annual Report.

Having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to the members of your Company. The said information is available for inspection at the registered office of your Company during working hours and any member desirous of obtaining such information may write to the Secretarial Department of your Company and the same will be furnished on request.

REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of your Company is furnished hereunder:

Sr. No

Name

Designation

Remuneration paid for the Financial Year 2016-17

1

Mr. Dilip G. Piramal

Chairman

Rs. 2,22,01,800/-

2

Ms. Radhika Piramal

Managing Director

Rs. 3,60,24,062/-

3

Mr. Ashish K Saha

Director - Works

Rs. 74,00,136/-

4.

Mr. Jogendra Sethi

Chief Financial Officer

Rs. 1,35,16,397/-

5.

Mr. Anand Daga (w.e.f. 18th July, 2016)

Company Secretary & Head - Legal

Rs. 38,31,541/-

6.

Mr. Shreyas Trivedi (up to 29th April, 2016)

General Manager - Legal & Company Secretary

Rs. 18,13,058/-

1. Your Directors’ Remuneration (including commission and variable pay) to the median remuneration of the employees of your Company for the year 2016-17 was as under:

Director''s Name

Ratio of remuneration of each Director to the median employees’ remuneration

Mr. Dilip G. Piramal

76X

Ms. Radhika Piramal

123X

Mr. Ashish K. Saha

25X

2. The Percentage increase in remuneration of all Executive Directors, Chief Financial Officer and Company Secretary were as under:

Name

Designation

Increase

Mr. Dilip G. Piramal

Chairman

Nil

Ms. Radhika Piramal

Managing Director

20.00%

Mr. Ashish K. Saha

Director - Works

10.00%

Mr. Jogendra Sethi

Chief Financial Officer

12.00%

Mr. Anand Daga

Company Secretary & Head - Legal

Not applicable*

Mr. Shreyas Trivedi

General Manager - Legal & Company Secretary

Not applicable#

* Since joined during the year.

# Since resigned during the year

3. The percentage increase in the median remuneration of employees for the financial year 2016-17 is around 15%. The percentage increase in the median remuneration is calculated for comparable employees and does not include employees who were not eligible.

4. The number of permanent employees on the rolls of the Company - 2087

5. The Percentage increase in salaries of the managerial personnel at 50th percentile is 12.45%. The Percentage increase in salaries of the non-managerial personnel at 50th percentile is 17.79%. The increase/decrease in remuneration is not solely based on the Company’s performance but also includes various other factors like individual performance, experience, skill sets, academic background, industry trends, economic situation and future growth prospects etc. besides the Company performance. There are no exceptional circumstances for increase in the managerial remuneration.

6. The remuneration paid to the Directors is as per the Remuneration Policy of the Company.

INDUSTRIAL RELATIONS

Industrial relations remained cordial throughout the year under review.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the dedicated services of the employees of your Company at all levels.

By Order of the Board of Directors

DILIP G. PIRAMAL

Chairman & Managing Director

(DIN No. 00032012)

Place: Mumbai

Dated: 18th May, 2017


Mar 31, 2015

Dear Members,

The Directors are pleased to present the 48th Annual Report together with the Audited Annual Accounts of your Company for the year ended 31st March 2015.

FINANCIAL RESULTS (Rs. in Crores)

Year ended Year ended 31.3.2015 31.3.2014

Revenue from Operations and 1050.29 975.56 Other Income

Profit Before Depreciation and Amortisation Expenses, Finance 79.00 83.59 Cost,Exceptional Items and Tax Expenses

Finance Cost 1.28 1.80

Depreciation and Amortisation 15.28 17.05 Expenses

Profit before Exceptional Items 62.44 64.74 and Tax

Exceptional Items - Income 4.32 15.76

Profit before Tax after 66.76 80.50 Exceptional items

Tax Expenses 18.90 22.11

Profit for the year 47.86 58.39

Profit brought forward from 36.11 36.11 previous year

Appropriations:

Transferred to General Reserve 22.37 30.28

Interim Dividend 7.07 7.07

Proposed Dividend 14.13 16.96

Tax on Dividend 4.29 4.08

Closing Balance 36.11 36.11

overall performance and outlook

During the financial year ended 31st March 2015, revenue from Operations & Other Income was Rs. 1050.29 crores as against Rs. 975.56 crores last year, representing an increase of 7.66% over the corresponding period of the previous year. Profit before exceptional items and tax amounted to Rs. 62.44 crores as against Rs. 64.74 crores last year whereas Profit after Tax for the year under review amounted to Rs. 47.86 crores.

During the year, your Company has earned an exceptional income of Rs. 4.32 crores as against Rs. 15.76 crores last year. The exceptional income mainly comprises of profit form sale of Jalgaon Plant. As on 31st March 2015, the Reserves and Surplus of your Company were at Rs. 278.74 crores.

Your Directors confirm that there has been no material change and commitments affecting the financial position of your Company occurred between the end of the financial year to which the Financial Statements relate and the date of this Annual Report.

A detailed analysis on the operations of your Company during the year under report is included in the Management Discussion and Analysis Report, forming part of this Annual Report.

dividend

Your Directors are pleased to recommend for your consideration, a final dividend of Rs. 1 (Rupee One only) per equity share of Rs. 2 each (previous year Rs. 1.20 per equity share of Rs. 2 each) for the financial year 2014-15. Your Company had paid in February 2015, an interim dividend of Rs. 0.50 (Fifty paise only) per equity share of Rs. 2 each for the financial year 2014-15. Accordingly, the total dividend declared/recommended by your Company for the financial year 2014-15 is Rs. 1.50 (Rupees One and Fifty Paise only) per equity share of Rs. 2 each (previous year Rs. 1.70 per equity share of Rs. 2 each). Your Company had paid higher dividend last year as it had earned healthy profit on sale of its old investment in securities and property at Bhandup, Mumbai.

EXPORTS AND INTERNATIONAL OPERATIONS

Due to subdued market conditions in UK and Europe, the International Business of your Company declined during the year. While branded goods sales in Asia Pacific and Middle East remained strong, sales of branded goods in UK and Europe along with private label business resulted in de-growth in the overall international business sales performance.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013 (the Act) with respect to the Directors'' Responsibility Statement, your Directors, based on their knowledge and belief and the information and explanations obtained, confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) accounting policies are selected and applied consistently and judgments and estimates are made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company for the financial year ended 31st March 2015 and of the profit and loss of your Company for the financial year ended 31st March 2015;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(d) annual accounts are prepared for the financial year ended 31st March 2015 on a ''Going Concern'' basis;

(e) internal financial controls have been laid down and followed by your company and that such internal financial controls are adequate and were operating effectively;

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

DECLARATION OF INDEPENDENT DIRECTORS

Pursuant to section 134(3)(d) of the Act, your Company confirms having received necessary declarations from all the Independent Directors under section 149(7) of the Companies Act, 2013 declaring that they meet the criteria of independence laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges.

MANAGEMENT DISCUSSION & ANALYSIS REPORT, SECRETARIAL AUDIT REPORT AND REPORT ON CORPORATE GOVERNANCE

As provided under section 134 of the Companies Act, 2013 and the Rules framed thereunder and pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, alongwith the Management Discussion and Analysis Report, the Report on Corporate Governance and the Certificate in respect of compliance of requirements of Corporate Governance, Secretarial Audit Report and other reports and information are annexed to this Report and forms part of this Annual Report.

SUBSIDIARIES

The Consolidated Financial Statements of your Company include the financial results of VIP Industries Bangladesh Private Limited and of Blow Plast Retail Limited for the financial year 2014-15. The annual accounts of VIP Industries Bangladesh Private Limited and Blow Plast Retail Limited are available for inspection by any Member at the Registered Office of your Company, during normal business hours (9.00 a.m. to 5.00 p.m.) on all working days except Saturdays, up to the date of the Annual General Meeting of the Company, a copy of which can also be sought by any Member on making a written request to the Secretarial Department of your Company in this regard.

INSURANCE

All the assets of your Company, including Plant & Machinery, Buildings, Equipment etc. have been adequately insured.

FIRE

During the year, there was fire at Haridwar Plant of your Company and Properties & Inventories of your Company were damaged. In respect of losses which are being identified and quantified, the management expects that the losses are fully recoverable from the insurance Company.

DEPOSITORY

Your Company''s shares are tradable compulsorily in electronic form and your Company has established connectivity with both the depositories, i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

ELECTRONIC VOTING

Your Company has entered into an agreement with NSDL and CDSL for providing facility of e-voting to its shareholders. For the year 2014-15, your Company has availed services of CDSL for providing facility of remote e-voting to its shareholders for casting their vote electronically.

PUBLIC DEPOSITS

Your Company had not received instructions from 1 depositor for repayment of deposits amounting to Rs. 10,000 (Rupees Ten Thousand Only) as at 31st March 2015. Since then, no deposit has been repaid.

DIRECTORS

Pursuant to the provisions of the section 161 of the Companies Act, 2013 read with Article 159 of the Articles of Association of your Company, Mr. Amit Jaita is appointed as an Additional Director and he shall hold office only up to the date of this Annual General Meeting and being eligible offer himself for appointment as Director. Mr. Amit Jatia is proposed to be appointed as an Independent Director of your Company for a period of 5 years with effect from 24th July 2015.

Mr. Dilip G. Piramal, Chairman of your Company retires by rotation and being eligible offers himself for re-appointment.

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, information on the Directors seeking appointment/ re-appointment is provided as a part of the Notice convening the ensuing Annual General Meeting.

BOARD EVALUATION

Pursuant to section 134(3) of the Act read with Schedule IV thereto and in terms of clause 49 of the Listing Agreement with the Stock Exchanges, your Company has set up a policy for the performance evaluation of all Directors.

Performance of each of your Directors is evaluated basis several factors by the entire Board excluding the Director being evaluated. Your Company has also set up Performance Evaluation Policy for its Independent Directors and Executive Directors interalia which include independent view on Key appointments and strategy formulation, safeguard of stakeholders interest, raising concerns, if any to the Board, update of skills and knowledge, strategic planning for finance and business related, operational performance level of the Company, qualification and leadership skills etc. The Board of Directors of your Company discusses and analyses its own performance on an annual basis, together with suggestion for improvements thereon based on the performance objectives set for the Board as a whole. The evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results. Your Company has formulated a separate Evaluation Policy for its Board members, which is available on the website of your Company.

None of the independent directors are due for re-appointment.

TRAINING OF INDEPENDENT DIRECTORS

The Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarise with your Company''s procedures and practices. Periodic presentations are made at the Board Meetings and the Board Committee Meetings on business and performance updates of your Company, global business environment, business strategy and risks involved.

Quarterly updates on relevant statutory changes and landmark judicial pronouncements encompassing important laws are regularly circulated to your Directors.

Every new Independent Director of the Board attends an orientation program to familiarize the new inductees with the strategy, operations and functions of your Company. The Executive Directors / Senior Management Personnel make presentations to the inductees about your Company''s strategy, operations, products, markets, finance, human resources, technology, quality, facilities and risk management.

Further at the time of appointment of an Independent Director, your Company issues a formal letter of appointment outlining his/her role, function, duties and responsibilities as a Director. The format of letter of appointment is available on the website of your Company. Your Company has set up a separate Familiarisation program for newly appointed Independent Directors and the same is available on the website of your Company.

CODE OF BUSINESS CONDUCT AND ETHICS FOR DIRECTORS/ MANAGEMENT PERSONNEL

The Code of Business Conduct and Ethics for Directors/Management Personnel (''the Code''), as adopted by the Board, is a comprehensive Code applicable to Directors and Senior Management Personnel of your Company. The Code, while laying down in detail, the standards of business conduct and ethics also deals with governance aspects. A copy of the Code has been uploaded on your Company''s website www.vipindustries.co.in The Code has been circulated to Directors and Management Personnel and its compliance is affirmed by them regularly on an annual basis.

A declaration signed by your Company''s Managing Director is published in this Report.

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

Your Company''s Board of Directors met four times during the financial year under review. A calendar of Meetings is prepared and circulated in advance to your Directors. During the year under report, four Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the two Meetings was within the period prescribed under the Companies Act, 2013.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel of your Company are Ms. Radhika Piramal, Managing Director, Mr. Jogendra Sethi, Chief Financial Officer and Mr. Shreyas Trivedi, General Manager-Legal & Company Secretary. All the three Key Managerial Personnel prescribed under the said Act were in the employment of your Company even prior to the Companies Act, 2013 became applicable.

AUDITORS

Statutory Auditors

M/s. M. L. Bhuwania & Co., Chartered Accountants, Statutory Auditors hold office till the ensuing Annual General Meeting and being eligible, have expressed their willingness to continue, if so appointed. As required under the provisions of Section 139 and Section 141 of the Companies Act, 2013, your Company has received a written certificate from the Statutory Auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said Section.

The Report does not contain any qualifications, reservations or adverse remarks.

A proposal seeking their re-appointment is provided as a part of the Notice convening the ensuing Annual General Meeting.

Internal Auditors

M/s. Suresh Surana & Associates LLP were the Internal Auditors of your Company for the financial year 2014-15. Based on the recommendation of the Audit Committee of your Company, the Board of Directors of your Company has appointed M/s. Suresh Surana & Associates LLP as the Internal Auditors of your Company for the financial year 2015-16.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed M/s. Ragini Chokshi & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of your Company. The Secretarial Audit Report for the financial year 2014-15 forms part of the Annual Report as Annexure B to the Board''s report.

The Report does not contain any qualifications, reservations or adverse remarks.

The Board has appointed M/s. Ragini Chokshi & Associates, a firm of Company Secretaries in Practice, as the Secretarial Auditors of your Company for the financial year 2015-16.

corporate social responsibility committee

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company at its meeting held on 20th May 2014 had constituted Corporate Social Responsibility Committee comprising of Mr. Dilip G. Piramal, Ms. Radhika Piramal and Mr. Vijay Kalantri as members of the Committee.

The Committee''s prime responsibility is to assist the Board in discharging its social responsibilities by way of formulating and monitoring implementation of the framework of ''Corporate Social Responsibility Policy'', observe practices of Corporate Governance at all levels, and to suggest remedial measures wherever necessary.

The Committee''s constitution and terms of reference meet with the requirements of the Companies Act, 2013.

The annual report on CSR activities is appended as Annexure C to the Board''s Report.

vigil mechanism

Your Company has established a Vigil Mechanism Policy for your Directors and employees to safeguard against victimisation of persons who use vigil mechanism and report genuine concerns. The Audit Committee shall oversee the vigil mechanism.

INTERNAL FINANCIAL CONTROL

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

MATERIAL SUBSIDIARIES

Your Company has established a Policy for determining Material Subsidiaries and the same is available on the website of your Company viz. www.vipindustries.co.in

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

Your Company has established a Policy for determining related party transactions. The Audit Committee oversees the related party transactions. The Related Party Transaction Policy is available on the website of your Company.

None of the transactions with any of related parties were in conflict with your Company''s interest. Attention of members is drawn to the disclosure of transactions with related parties set out in Note No.32 of the Standalone Financial Statements, forming part of the Annual Report.

Your Company''s major related party transactions are generally with its subsidiaries and associates. The related party transactions are entered into based on considerations of various business exigencies, such as synergy in operations, sectoral specialisation and your Company''s long-term strategy and capital resources of subsidiaries and associates.

All related party transactions are negotiated on arm''s length basis and are intended to further your Company''s interests.

PARTICULARS OF EMPLOYEES & EMPLOYEE STOCK OPTION SCHEME

In terms of the provisions of Section 197(12) of the Companies Act, 2013 (the Act) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Annual Report.

Having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to the members of your Company. The said information is available for inspection at the registered office of your Company during working hours and any member desirous of obtaining such information may write to the Secretarial Department of your Company and the same will be furnished on request.

During the year under review, no fresh stock options have been granted by your Company. Accordingly, no new equity shares have been allotted under the Employee Stock Option Scheme of your Company. Hence, no disclosure under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 have been made during the year under review.

significant AND MATERIAL ORDERS

There are no significant and material Orders passed by the Regulators or Courts or Tribunals impacting the going concern status and your Company''s operations in future.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 125 of the Companies Act, 2013, any unclaimed or unpaid Dividend relating to the financial year 2007-08 is due for remittance to the Investor Education and Protection Fund established by the Central Government on 3rd September 2015.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There were no loans, guarantees or investments made by your Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 in the prescribed Form MGT-9 is annexed herewith as Annexure D.

REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of your Company is furnished hereunder:

S. Name Designation Remuneration paid for the No. financial year 2014-15 (in Rs. )

1. Mr.Dilip G. Piramal Chairman 1,70,06,555

2. Ms. Radhika Piramal Managing Director 2,00,74,343

3. Mr. Ashish K. Saha Director - Works 60,82,245

4. Mr. Jogendra Sethi Chief Financial 1,09,85,628 Officer

5. Mr. Shreyas Trivedi General Manager- 41,27,832 Legal & Company Secretary

1. A brief write up on the Human Resource Department and initiatives taken during the year 2014-15

During the year under review, Human Resources department of your Company focused on effective execution of plans through its qualified workforce. Through a structured recruitment and training process, your Company identified the need of training and trained the workforce to improve capabilities. A structured recruitment process has helped your Company attract the right talent at all levels.

Your Company has commenced the journey to become a Great Place to Work® where employees trust the company they work for, take pride in what they do and enjoy the company of the people they work with. Your Company strongly believe that an engaged workforce is critical in achieving its business goals and building a sustainable organization.

In spite of a written agreement with respect to the retirement age in your Company being 56 years, which has been in place since 2004 onwards and re-affirmed in 2009, some workers have disputed this retirement age and the matter has been referred to the Industrial Tribunal, Nashik. The relationship with the Union at plant locations continues to be cordial, professional and productive.

The employee strength as on 31st March 2015 was 1938.

2. Your Directors'' Remuneration (without variable pay / commission) to the median remuneration of the employees of your Company for the year 2014-15 was as under:

Director''s Name Ratio of remuneration of each Director to the median employees'' remuneration

Mr. Dilip G. Piramal 39x

Ms. Radhika Piramal 51x

Mr. Ashish K. Saha 20x

3. The Percentage increase in remuneration of all Executive Directors, Chief Financial Officer and Company Secretary were as under:

Name Designation increase

Mr. Dilip G. Piramal Chairman 0.00%

Ms. Radhika Piramal Managing Director 12.00%

Mr. Ashish K. Saha Director - Works 19.00%

Mr. Jogendra Sethi Chief Financial Officer 15.00%

Mr. Shreyas Trivedi General Manager - Legal 16.00% & Company Secretary

4. The percentage increase in the median remuneration of employees for the financial year 2014-15 is at 14%. The percentage increase in the median remuneration is calculated for comparable employees and does not include employees who were not eligible.

5. Your Company considered the following factors while recommending the increase in compensations.

1. Financial performance of your Company

2. Sales growth of your Company during the year under review

3. Salary Benchmarking against peer companies

4. Industry benchmarks

6. Your Company provided an average increase in remuneration of 14.33% to Key Managerial Personnel against an overall average increase in median salaries of 14%.

7. The comparison of remuneration of each of the Key Managerial personnel against the performance of your Company is as below:

Managing Director: 4.27% of net profits for the year 2014-15 Chief Financial Officer: 2.43% of net profits for the year 2014-15

General Manager - Legal & Company Secretary: 0.88% of net profits for the year 2014-15

8. The variable payout for Directors is linked with your Company performance as well as individual performance. In the year 2013-14, your Company had met the profitability targets, hence the individual linked variable pay as well as Company linked variable pay was paid.

9. There are no employees of your Company who received remuneration in excess of the highest paid Director of your Company.

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 Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure A as attached to this report.

INDUSTRIAL RELATIONS

Industrial relations remained cordial throughout the year under review.

acknowledgement

Your Directors wish to place on record their appreciation for the dedicated services of the employees of your Company at all levels.

By Order of the Board of Directors

dilip g. piramal chairman

Place: Mumbai Dated: 14th May 2015


Mar 31, 2013

The Directors are pleased to present the 46th Annual Report together with the Audited Accounts of your Company for the year ended 31st March 2013.

FINANCIAL RESULTS (Rs. in Crores)

Year ended Year ended 31.3.2013 31.3.2012

Revenue from Operations and Other Income 876.86 861.68

Profit Before Depreciation and Amortisation Expenses, Finance Cost and 70.30 120.19 Tax Expenses

Finance Cost 5.14 6.94

Depreciation and Amortisation Expenses 19.80 17.29

Profit Before Tax 45.36 95.96

Tax Expenses 13.84 28.27

Profit for the year 31.52 67.69

Profit brought forward from previous year 36.11 36.11

Appropriations:

Transferred to General Reserve 14.99 41.41

Interim Dividend - 8.48

Proposed Dividend 14.13 14.13

Tax on Dividend 2.40 3.67

Closing Balance 36.11 36.11

OVERALL PERFORMANCE AND OUTLOOK

During the financial year ended 31st March 2013, revenue from Operations & Other Income was Rs. 876.86 crores as against Rs. 861.68 crores last year, representing an increase of 1.76% over the corresponding period of the previous year. Profit after Tax for the year under review amounted to Rs. 31.52 crores representing a decline of 53% over the previous year. During the year under review, there was continued pressure on gross margins due to the weak Rupee against US Dollar on imported soft luggage, which constitutes majority of your Company''s sales. Your Company was able to pass on only part of the cost increases to its customers due to weak macroeconomic demand. The outlook for the current year is challenging across traditional trade and modern retail sales channels mainly due to a sluggish economy. However, your Company expects to grow despite the adverse environment due to its strong brands, innovative products, extensive distribution network and attractive advertising campaigns.

As on 31st March, 2013, the Reserves and Surplus of your Company stood at Rs. 229.26 crores.

A detailed analysis of the operations of your Company during the year under report is included in the Management Discussion and Analysis Report, forming part of this Annual Report.

DIVIDEND

Your Directors are pleased to recommend for your consideration, a dividend of Rs. 1 (Rupee One only) per equity share of Rs. 2 each (previous year Rs. 1.60 per equity share of Rs. 2 each) for the financial year 2012-13.

EXPORTS AND INTERNATIONAL OPERATIONS

International Sales for the year ended 31st March 2013 were at Rs. 75.15 crores as against Rs. 82.87 crores in the previous year, a decline of 9.33% over the previous year. Highly uncertain market conditions and weak economic scenario in European and Asia Pacific Countries led to decline in business and is the prime reason for overall decline in exports. However, your Company is working on strengthening its distribution network to increase international sales. Your Company expects better results from the introduction of its new ranges which will further strengthen the market share in the coming years.

SUBSIDIARY IN BANGLADESH

Your Company invested till 31st March 2013, approximately. Rs. 3.50 crores (Rupees Three Crores Fifty Lacs) in its wholly owned subsidiary, VIP Industries Bangladesh Private Limited for setting up a manufacturing unit for luggage in Bangladesh. The civil and construction activities will be completed by September 2013 and manufacturing operations is expected to start by December 2013.

NEW AREA OF OPERATIONS - LADIES HAND BAGS SEGMENT

In October 2012, your Company entered a new product segment by launching ladies handbags under the brand "CAPRESE". For the six months of business operations since its introduction, Caprese has shown encouraging results. Your Company expects this segment to grow higher in the coming years. With a strong advertisement campaign and wide presence through various distribution channels, Caprese has already attracted lot of attention in the market.

RESEARCH & DEVELOPMENT

The Research and Development (R&D) centre of your Company is actively engaged in upgradation of technologies, processes and development of quality products ensuring technological leadership for your Company in the years to come.

The R&D centre continues to be recognized by the Department of Scientific & Industrial Research, of the Government of India.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956 with respect to the Directors'' Responsibility Statement, your Directors confirm that:

(i) in the preparation of the annual accounts for the financial year ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) such accounting policies are selected and applied consistently and judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profits of your Company for the year under review;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts for the financial year ended 31st March, 2013 have been prepared on a ''Going Concern'' basis.

MANAGEMENT DISCUSSION & ANALYSIS REPORT AND REPORT ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis Report, the Report on Corporate Governance and the Certificate in respect of compliance of requirements of Corporate Governance, are annexed to this Report and forms part of this Annual Report.

SUBSIDIARIES

The Ministry of Corporate Affairs (MCA), vide its circular No. 2/2011 dated 8th February 2011, has granted general exemption under section 212(8) of the Companies Act, 1956, subject to certain conditions being fulfilled by the Company. Accordingly, the copies of the Balance Sheet, the Profit and Loss Account, the Report of the Board of Directors and Auditors of VIP Industries Bangladesh Private Limited and Blow Plast Retail Limited have not been attached with the Balance Sheet of your Company.

However, the Consolidated Financial Statements of your Company, which include the financial results of VIP Industries Bangladesh Private Limited for the period from 5th April, 2012 to 31st March, 2013 and of Blow Plast Retail Limited for the full financial year 2012-13 are included in this Annual Report. Further, a statement containing the particulars prescribed under the terms of the said exemption for VIP Industries Bangladesh Private Ltd and Blow Plast Retail Limited is also enclosed. Copies of the relevant audited accounts of VIP Industries Bangladesh Private Ltd and Blow Plast Retail Limited can also be sought by any Member on making a written request to the Secretarial Department of your Company in this regard. The annual accounts of VIP Industries Bangladesh Private Limited and Blow Plast Retail Limited are also available for inspection by any Member at the Registered Office of your Company.

INSURANCE

All the assets of your Company, including Plant & Machinery, Buildings, Equipments etc. have been adequately insured.

DEPOSITORY

Your Company''s shares are tradable compulsorily in electronic form and your Company has established connectivity with both the depositories, i.e. National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL).

PUBLIC DEPOSITS

Your Company had not received instructions from 17 depositors for repayment of deposits amounting to Rs. 3,06,000 (Rupees Three Lakh Six Thousand Only) as at 31st March, 2013. Since then, no deposit has been repaid.

DIRECTORS

Mr. Rajeev Gupta was appointed as an Additional Director of your Company with effect from 7th February, 2013. The necessary approval of Members is being sought in the ensuing Annual General Meeting for the appointment of Mr. Rajeev Gupta as a Director of your Company.

Mr. Dilip G. Piramal, Chairman was appointed as a Whole-time Director of your Company for a period of 5 years with effect from 15th May 2013 subject to the approval of Members. He will continue to be designated as Chairman of your Company. The necessary approval of Members is being sought in the ensuing Annual General Meeting for the appointment and payment of remuneration to Mr. Diiip G. Piramal as Whole-time Director of your Company.

Mr. Vijay Kalantri and Mr. Nabankur Gupta, Directors retire by rotation and being eligible, offer themselves for re-appointment.

Mr. Nirmal Gangwal ceased to be a Director of your Company with effect from 15th May 2013. Your Directors wish to place on record their appreciation for the guidance and inputs provided by Mr. Nirmal Gangwal during his tenure as a Director of your Company.

Pursuant to Clause 49 of the Listing Agreement, information on Directors retiring by rotation is provided as a part of the Notice convening the ensuing Annual General Meeting.

AUDITORS

M/s. M. L. Bhuwania & Co., Chartered Accountants, Statutory Auditors retire at the ensuing Annual General Meeting and being eligible, have expressed their willingness to continue, if so appointed. As required under the provisions of Section 224 of the Companies Act, 1956, your Company has obtained a written certificate from the Statutory Auditors proposed to be re- appointed to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said Section. A proposal seeking their re-appointment is provided as a part of the Notice convening the ensuing Annual General Meeting.

RSM Astute Consulting Private Limited were the Internal Auditors of your Company for the financial year 2012-13.

In terms of the amended Companies (Cost Accounting Records) Rules, 2011 notified by the Ministry of Corporate Affairs (MCA) vide Notification GSR 429(E) dated 03.06.2011 read with the Order dated 6th November 2012 issued by the Cost Audit Branch of MCA, your Company is required to file with MCA, the Compliance Report certified by the Practicing Cost Accountants every year from the financial year 2011-12 onwards. To comply with the said Rules, M/s. Suraj Lahoti & Associates were appointed as the Cost Accountants for the financial year 2011-12.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required in terms of the provisions of 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, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed herewith and forms part of this Report as Annexure (A).

PARTICULARS OF EMPLOYEES & EMPLOYEE STOCK OPTION SCHEME

Information as per Section 217(2A) of the Companies Act, 1956 (the Act) read with the Companies (Particulars of Employees) Rules, 1975 forms part of this Report. As per the provisions of Section 219(1 )(b)(iv) of the Act, the Report and Accounts are being sent to the Members of your Company excluding the statement on particulars of employees under Section 217(2A) of the Act. Any Member interested in obtaining a copy of the said statement may write to the Secretarial Department at the Registered Office of your Company.

During the year under review, no fresh stock options have been granted by your Company. Accordingly, no new equity shares have been allotted under the Employee Stock Option Scheme of your Company. Hence, no disclosure under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 have been made during the year under review.

INDUSTRIAL RELATIONS

Industrial relations remained cordial throughout the year under review.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation for the dedicated services of the employees of your Company at all levels.

By Order of the Board of Directors

DILIP G. PIRAMAL

Chairman

Place: Mumbai

Dated: 15th May, 2013


Mar 31, 2012

The Directors are pleased to present the 45th Annual Report together with the Audited Accounts of your Company for the year ended 31st March 2012.

FINANCIAL RESULTS

(Rs. in Crores)

Year ended Year ended 31.3.2012 31.3.2011

Revenue from Operations and Other Income 861.68 744.00

Profit Before Depreciation and Amortisation Expenses, Finance Cost and 120.19 95.79 Tax Expenses

Finance Cost 6.94 4.45

Depreciation and Amortisation Expenses 17.29 14.82

Profit Before Tax 95.96 76.52

Tax Expenses 28.27 14.50

Profit for the year 67.69 62.02

Profit brought forward from previous year 36.11 36.11

Appropriations:

Transferred to General Reserve 41.41 29.10

Interim and Proposed Dividend 22.61 28.26

Tax on Dividend 3.67 4.66

Closing Balance 36.11 36.11

OVERALL PERFORMANCE AND OUTLOOK

Revenue from Operations & Other Income during the financial year ended 31st March 2012 was at Rs. 861.68 crores as against Rs. 744.00 crores last year, representing an increase of approximately 15% over the corresponding period of the previous year. Profit after Tax for the year under review amounted to Rs. 67.69 crores representing an increase of approximately 9% over the previous year. Despite continuous pressure of rising input costs in the previous year, your Company was able to pass on most of the cost increases to its customers due to the strength of our brands. Sales value and volume growth was in line with industry growth.

As on 31st March, 2012, the Reserves and Surplus of your Company stood atRs. 214.32 crores.

The outlook for the current year is challenging across traditional trade and modern retail sales channels due to decline in Indian macro-economic conditions and a poor marriage season. However, your Company expects to grow despite the adverse environment due to its strong brands, products and advertising campaigns.

A detailed analysis of the operations of your Company during the year under report is included in the Management Discussion and Analysis Report, forming part of this Annual Report.

DIVIDEND

Your Directors are pleased to recommend for your consideration, a final dividend of Rs. 1 (Rupee One only) per equity share of Rs. 2 each (previous year Rs. 7 per equity share of Rs. 10 each) for the financial year 2011-12. Your Company had paid in February 2012, an interim dividend of 60 paise per equity share of Rs. 2 each (previous year Rs. 3 per equity share of Rs. 10 each) for the financial year 2011-12.

Accordingly, the total dividend declared by your Company for the financial year 2011-12 is Rs. 1.60 (Rupee One and Paise Sixty only) per equity share of Rs. 2 each (previous year Rs. 10 per equity share of Rs. 10 each).

SUB DIVISION OF EQUITY SHARES

At the 44th Annual General Meeting of your Company held on 29th September, 2011, the Members had approved the sub-division of each equity share of Rs. 10 each into five equity shares of Rs. 2 each. Your Company had taken necessary steps for the sub-division of shares and accordingly 1st November, 2011 was fixed as the 'Record Date' for this purpose and the sub-divided shares were traded on the Stock Exchanges i.e. the Bombay Stock Exchange Ltd. and the National Stock Exchange of India Ltd. w.e.f. 2nd November, 2011.

EXPORTS AND INTERNATIONAL OPERATIONS

Exports for the year ended 31st March 2012 were at Rs. 82.87 crores as against Rs. 73.07 crores in the previous year, an increase of approximately 13% over the previous year. Global economic condition continued to remain weak especially in Europe, however your Company consolidated its market share in the Middle East and Asia Pacific. Your Company is expecting that with the introduction of its new ranges, it will be able to further strengthen the market share in the coming years.

CARLTON TRAVEL GOODS LIMITED

As you are aware, Carlton Travel Goods Limited (CTGL), the wholly owned subsidiary of your Company in UK incurred heavy losses over the past several years even after taking all measures to improve sales and reduce losses. In the circumstances, CTGL decided to dissolve the Company. Accordingly, the Registrar of Companies for England and Wales had dissolved CTGL on 6th December, 2011.

SUBSIDIARY IN BANGLADESH

Your Company set up a wholly owned subsidiary in Bangladesh under the name and style of V.I.P. Industries Bangladesh Private Limited with an Authorised Share Capital of BDT 250 million (Two Hundred and Fifty Million Bangladesh Taka) to carry out manufacturing operations of luggage in Bangladesh.

RESEARCH & DEVELOPMENT

The Research and Development (R&D) centre of your Company is actively engaged in upgradation of technologies, processes and development of quality products towards ensuring technological leadership for your Company in the years to come.

The R&D centre continues to be recognized by the Department of Scientific & Industrial Research, of the Government of India.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956 with respect to the Directors' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) that your Directors have 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 your Company at the end of the financial year and of the profits of your Company for the year under review;

(iii) that your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(iv) that your Directors have prepared the accounts for the financial year ended 31st March, 2012 on a 'Going Concern' basis.

MANAGEMENT DISCUSSION & ANALYSIS REPORT AND REPORT ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis Report, the Report on Corporate Governance and the Certificate in respect of compliance of requirements of Corporate Governance, are annexed to this Report and forms part of this Annual Report.

SUBSIDIARIES

The Ministry of Corporate Affairs (MCA), vide its circular No. 2/2011 dated 8th February 2011, has granted general exemption under section 212(8) of the Companies Act, 1956, subject to certain conditions being fulfilled by the Company. Accordingly, the copies of the Balance Sheet, the Profit and Loss Account, the Report of the Board of Directors and Auditors of Carlton Travel Goods Limited and Blow Plast Retail Limited have not been attached with the Balance Sheet of your Company.

However, the Consolidated Financial Statements of your Company, which include the financial results of Carlton Travel Goods Limited upto 6th December 2011 and of Blow Plast Retail Limited for the full financial year 2011 -12 are included in this Annual Report. Further, a statement containing the particulars prescribed under the terms of the said exemption for Carlton Travel Goods Limited and Blow Plast Retail Limited is also enclosed. Copies of the relevant audited annual accounts of Carlton Travel Goods Limited and Blow Plast Retail Limited can also be sought by any Member on making a written request to the Secretarial Department at the Registered Office of your Company in this regard. The annual accounts of Carlton Travel Goods Limited and Blow Plast Retail Limited are also available for inspection by any Member at the Registered Office of your Company.

INSURANCE

All the assets of your Company, including Plant & Machinery, Buildings, Equipments etc. have been adequately insured.

DEPOSITORY

Your Company's shares are tradable compulsorily in electronic form and your Company has established connectivity with both the depositories, i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

PUBLIC DEPOSITS

Your Company had not received instructions from 30 depositors for repayment of deposits amounting to Rs. 4,81,000 (Rupees Four Lakhs Eighty One Thousand Only) as at 31st March, 2012. Since then, 1 deposit amounting toRs. 10,000 (Rupees Ten Thousand Only) has been repaid.

DIRECTORS

Mr. Ashish K. Saha was appointed as a Whole-time Director of your Company designated as Director - Works, for a period of 3 years with effect from 1st February, 2012. The necessary approval of Members is being sought in the ensuing Annual General Meeting for the appointment and payment of remuneration to Mr. Ashish K. Saha as Director - Works of your Company.

Mr. T. Premanand ceased to be the Director - Works, with effect from closing hours of 31st January, 2012. The Directors place on record their appreciation of the guidance and inputs provided by Mr. T. Premanand during his tenure as the Director of your Company.

Mr. D K. Poddar and Mr. G. L. Mirchandani, Directors retire by rotation and being eligible, offer themselves for re-appointment.

Pursuant to Clause 49 of the Listing Agreement, information on Directors retiring by rotation is provided as a part of the Notice convening the ensuing Annual General Meeting.

AUDITORS

M/s. M. L. Bhuwania & Co., Chartered Accountants, Statutory Auditors retire at the ensuing Annual General Meeting and being eligible, have expressed their willingness to continue, if so appointed. As required under the provisions of Section 224 of the Companies Act, 1956, your Company has obtained a written certificate from the Statutory Auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said Section.

A proposal seeking their re-appointment is provided as a part of the Notice convening the ensuing Annual General Meeting.

Ernst & Young Private Limited were the Internal Auditors of your Company for the financial year 2011-12. For the financial year 2012-13, RSM Astute Consulting Private Limited has been appointed as the Internal Auditors of your Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required in terms of the provisions of 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, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed herewith and forms part of this Report as Annexure (A).

PARTICULARS OF EMPLOYEES & EMPLOYEE STOCK OPTION SCHEME

Information as per Section 217(2A) of the Companies Act, 1956 (the Act) read with the Companies (Particulars of Employees) Rules, 1975 forms part of this Report. As per the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Members of your Company excluding the statement on particulars of employees under Section 217(2A) of the Act. Any Member interested in obtaining a copy of the said statement may write to the Secretarial Department at the Registered Office of your Company.

During the year under review, no fresh stock options have been granted by your Company. Accordingly, no new equity shares have been allotted under the Employee Stock Option Scheme of your Company. Hence, no disclosure under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 have been made during the year under review.

INDUSTRIAL RELATIONS

Industrial relations remained cordial throughout the year under review.

ACKNOWLEDGEMENT

Your Directors record their gratitude to the Financial Institutions, Banks and other Government departments for their continued assistance and co-operation extended to your Company during the year under report.

Your Directors also wish to place on record, their appreciation for the dedicated services of the employees of your Company at all levels.

By Order of the Board of Directors

DILIP G. PIRAMAL

Place : Mumbai Chairman

Dated : 7th August, 2012


Mar 31, 2011

Dear Members,

The Directors are pleased to present the 44th Annual Report together with the Audited Accounts of your Company for the year ended 31st March 2011.

FINANCIAL RESULTS

(Rs. in Crores)

Year Ended Year Ended 31.03.2011 31.03.2010

Sales, Income from Operations & Other Income 743.43 611.52

Gross Profit 94.47 95.68

Interest 3.07 7.96

Depreciation 14.82 17.28

Profit Before Tax & Extra-ordinary Items 76.58 70.44

Extra-ordinary Items - 9.39

Tax Provision (Net of Deferred Tax) including Fringe Benefit Tax and Income Tax for 14.57 11.00 prior years

Profit After Tax 62.01 50.05

Profit brought forward from Previous Year 36.11 32.51

Profit available for Appropriation 98.12 82.56

Appropriations:

Interim and Proposed Dividend 28.26 14.13

Corporate Tax on Dividend 4.65 2.40

General Reserve 29.10 29.92

Balance carried to Balance Sheet 36.11 36.11

98.12 82.56

OVERALL PERFORMANCE AND OUTLOOK

Income from Operations & Other Income during the financial year ended 31st March 2011 was at Rs. 743.43 crores as against Rs. 611.52 crores last year, representing an increase of approximately 22% over the corresponding period of previous year. Profit after Tax for the year under review amounted to Rs. 62.01 crores after considering the Extra-ordinary Items of Rs. Nil (previous year Rs. 9.39 crores) as against Rs. 50.05 crores in the previous year representing an increase of approximately 24% over the previous year. Despite continuous pressure in rising input costs in the previous year, your Company was able to pass on most of the cost increases to its customers due to the strength of our brands. Sales value and volume growth was robust and the outlook for the current year remains strong across traditional trade and modern retail sales channels.

As on 31st March 2011, the Reserves and Surplus of your Company stood at Rs. 172.95 crores.

The outlook for the current year is encouraging.

A detailed analysis of the operations of your Company during the year under report is included in the Management Discussion and Analysis Report, forming part of the Annual Report.

DIVIDEND

Your Directors are pleased to recommend for your consideration, a final dividend of Rs. 7 (Rupees Seven) per equity share (previous year Rs. 3 per equity share) for the financial year 2010-11. Your Company had paid in February 2011, an interim dividend of Rs. 3 (Rupees Three) per equity share (previous year Rs. 2) for the financial year 2010-11.

Accordingly, the total dividend declared by your Company for the financial year 2010-11 is Rs. 10 (Rupees Ten) per equity share (previous year Rs. 5 per equity share).

SUB DIVISION OF EQUITY SHARES

The Board of Directors of your Company proposed the sub-division of each existing equity share of the nominal value of Rs. 10 into 5 (Five) equity shares of the nominal value of Rs. 2 each fully paid up. The Record Date for the same shall be determined subsequently. The sub-dividion of equity shares is subject to your approval and also any other statutory and regulatory authorities, as applicable. The sub-division of equity shares has been recomended with a view to encourage greater participation from retail investors.

EXPORTS AND INTERNATIONAL OPERATIONS

Exports for the year ended 31st March 2011 was at Rs. 73.07 Crores as against Rs. 47.02 Crores in the previous year, an increase of approximately 56 % over the previous year. Whereas the global economy has not shown much signs of recovery, your Company has gained some share in certain countries including European markets. Your Company is expecting that with the introduction of its new ranges, it will be able to further strengthen the market share in the coming years.

CARLTON TRAVEL GOODS LIMITED

Carlton Travel Goods Limited (CTGL), the wholly owned subsidiary of your Company which sells and distributes brand "Carlton" in U.K. and European markets incurred heavy losses, both operationally as well as on currency translated losses in the year 2008-09. Since then, CTGL had undertaken several initiatives with a view to improve sales of the brand "Carlton" including that of launching new products for mid-to-premium customers and successfully gaining entry into key luggage stores and retail chains.'In spite of all these measures, there were no signs of recovery. Your Company instead of selling directly through its work force in U.K. appointed Distributors to reduce fixed cost overheads. Your Company also started direct billing in USD rather than GBP to most customers. These initiatives will not only grow sales and ensure strong presence of brand "Carlton" in UK and European markets but also stem any further losses and minimize cross currency exposures.

RESEARCH & DEVELOPMENT

The Research and Development (R&D) centre of your Company is actively engaged in upgradation of technologies, processes and development of quality products towards ensuring technological leadership for your Company in the years to come.

The R&D centre continues to be recognized by the Department of Scientific & Industrial Research, of the Government of India.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956 with respect to the Directors' Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) that your Directors have 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 your Company at the end of the financial year and of the profits of your Company for the year under review;

(iii) that your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(iv) that your Directors have prepared the accounts for the financial year ended 31st March, 2011 on a 'Going Concern' basis.

MANAGEMENT DISCUSSION & ANALYSIS REPORT AND REPORT ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis Report, the Report on Corporate Governance and the Certificate in respect of compliance of requirements of Corporate Governance, are annexed to this Report and forms part of this Annual Report.

SUBSIDIARIES

In terms of the approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors of Carlton Travel Goods Limited and Blow Plast Retail Limited have not been attached with the Balance Sheet of your Company.

However, the Consolidated Financial Statements of your Company, which include the financial results of Carlton Travel Goods Limited and Blow Plast Retail Limited are included in this Annual Report. Further, a statement containing the particulars prescribed under the terms of the said exemption for Carlton Travel Goods Limited and Blow Plast Retail Limited is also enclosed. Copies of the relevant audited annual accounts of Carlton Travel Goods Limited and Blow Plast Retail Limited can also be sought by any Shareholder on making a written request to the Secretarial Department at the Registered Office of your Company in this regard. The annual accounts of Carlton Travel Goods Limited and Blow Plast Retail Limited are also available for inspection by any Shareholder at the Registered Office of your Company and at the respective Head Offices of Carlton Travel Goods Limited and Blow Plast Retail Limited.

INSURANCE

All the assets of your Company, including Plant & Machinery, Buildings, Equipments etc. have been adequately insured.

DEPOSITORY

Your Company's shares are tradable compulsorily in electronic form and your Company has established connectivity with both the depositories, i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

PUBLIC DEPOSITS

Your Company had not received instructions from 43 depositors for repayment of deposits amounting to Rs. 6,36,000 (Rupees Six Lakhs Thirty Six Thousand) as at 31s1 March, 2011. None of these deposits have been repaid since then.

CENTRAL GOVERNMENT APPROVAL UNDER SECTION 211 AND 212 OF THE COMPANIES ACT, 1956

On an application made by your Company under Section 211 of the Companies Act, 1956, the Central Government vide its letter No. 46/29/2011-CL-l 11 dated 18th January, 2011 exempted your Company from giving disclosure of quantitative details in compliance of Schedule VI to the Companies Act, 1956 in this Annual Report.

On an application made by your Company under Section 212(8) of the Companies Act, 1956, the Central Government vide its letter No. 47/16/2011-CL-l 11 dated 9th February, 2011, exempted your Company from attaching a copy of the Balance Sheet and the Profit and Loss Account of the Subsidiary Companies and other documents to be attached under Section 212(1) of the Annual Report of your Company. Accordingly, the said documents are not being attached with the Balance Sheet of your Company. A gist of the financial performance of the Subsidiary Companies is contained in this Report. The annual accounts of the Subsidiary Companies are open for inspection by any shareholder and your Company will make available these documents/details upon request by any shareholder of your Company or to any investor of its Subsidiary Companies who may be interested in obtaining the same. Further, the annual accounts of the Subsidiary Companies will also be kept for inspection by any Shareholder at the Registered Office of your Company and at the respective Head Offices of the subsidiary companies.

DIRECTORS

Mr. T Premanand was appointed as a Whole-time Director of your Company designated as Director - Works, for a period of 5 years with effect from 27th July, 2010. The necessary approval of shareholders is being sought in the ensuing Annual General Meeting for the appointment and payment of remuneration to Mr. T Premanand as Director - Works of your Company.

Mr. Nabankur Gupta was appointed as an Additional Director of your Company with effect from 13th May, 2011 and holds office till the conclusion of the ensuing Annual General Meeting. The necessary approval of shareholders is being sought in the ensuing Annual General Meeting for the appointment of Mr. Nabankur Gupta as Director of your Company.

Mr. Sudhir Jatia ceased to be the Managing Director of your Company with effect from 30th April 2010. Mr. Jatia continued as a non-executive Director of your Company with effect from 1st May 2010. Subsequently, Mr. Jatia has resigned as a Director of your Company w.e.f. 31st March, 2011.

Mr. Dilip G. Piramal and Mr. Vivek Nair, Directors retire by rotation and being eligible, offer themselves for re-appointment. Pursuant to Clause 49 of the Listing Agreement, information on Directors retiring by rotation is provided as a part of the Notice convening the ensuing Annual General Meeting.

AUDITORS

M/s. M. L. Bhuwania & Co., Chartered Accountants, Statutory Auditors retire at the ensuing Annual General Meeting and being eligible, have expressed their willingness to continue, if so appointed. As required under the provisions of Section 224 of the Companies Act, 1956, your Company has obtained a written certificate from the Statutory Auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said Section.

A proposal seeking their re-appointment is provided as a part of the Notice convening the ensuing Annual General Meeting.

During the year, Ernst & Young Private Limited, were appointed as one of the Internal Auditors of your Company to evaluate the current state, identification of performance gaps, prioritize improvement opportunities and future state vision across all functions of your Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required in terms of the provisions of 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, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed herewith and forms part of this Report as Annexure (A).

PARTICULARS OF EMPLOYEES & EMPLOYEE STOCK OPTION SCHEME

Information as per Section 217(2A) of the Companies Act, 1956 ("the Act") read with the Companies (Particulars of Employees) Rules, 1975 forms part of this Report. As per the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders of your Company excluding the statement on particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the said statement may write to the Secretarial Department at the Registered Office of your Company.

During the year under review, no fresh stock options have been granted by your Company. Accordingly, no new equity shares have been allotted under the Employee Stock Option Scheme of your Company. Hence, no disclosure under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 have been made during the year under review.

INDUSTRIAL RELATIONS

Industrial relations remained cordial throughout the year under review.

ACKNOWLEDGEMENT

Your Directors record their gratitude to the Financial Institutions, Banks and other Government departments for their continued assistance and co-operation extended to your Company during the year under report.

Your Directors also wish to place on record, their appreciation for the dedicated services of the employees of your Company at all levels.

On behalf of the Board of Directors

DILIP G. PIRAMAL

Chairman

Place : Mumbai

Date : 10th August, 2011


Mar 31, 2010

The Directors are pleased to present the 43rd Annual Report together with the Audited Accounts of your Company for the financial year ended 31st March 2010.

FINANCIAL RESULTS

(Rs. in Lacs)

Year Ended Year Ended 31.03.2010 31.03.2009

Sales, Income from Operations & Other Income 636,78 532,25

Gross Profit 95,68 46,77

Interest 7,96 12,82

Depreciation 17,28 14,07

Profit Before Tax & Extra-ordinary Items 70,44 19,88

Extra-ordinary Items 9,39 10,44

Tax Provision (Net of Deferred Tax) including Fringe Benefit Tax and 11,00 53

Income Tax for prior years

Profit After Tax 50.05 8,91

Profit brought forward from Previous Year 32,51 27,90

Profit available for Appropriation 82,56 36,81

Appropriations:

Interim and Proposed Dividend 14,13 2,82

Corporate Tax on Dividend 2,40 48

General Reserve 29,92 1,00

Balance carried to Balance Sheet 36,11 32,51 82,56 36,81

OVERALL PERFORMANCE AND OUTLOOK

Income from Operations & Other Income during the financial year ended 31st March 2010 was at Rs. 636,78 Lacs as against Rs.532,25 Lacs representing an increase of approximately 20% over the corresponding period of previous year. Profit after Tax for the year under review amounted to Rs. 50,05 Lacs after considering the Extra-ordinary Items of Rs. 9,39 Lacs (previous year Rs. 10,44 Lacs) as against Rs. 8,91 Lacs in the previous year representing an increase of more than 461% over the previous year. The increase in profits during the year under review was on account of increased sales, better margins, reduction in input costs, interest costs and overall efficiency in operations at all levels. With the surge in demand coupled with better marriage season, softening of key raw material prices and the stimulus package offered by the Government helped your Company in improving the margins significantly during the year under review.

As on 31st March 2010, the Reserves and Surplus of your Company was at Rs. 143,90 Lacs.

The outlook for the current year is encouraging.

A detailed analysis of the operations of your Company during the year under report are included in the Management Discussion and Analysis Report, forming part of this Annual Report.

DIVIDEND

Your Directors are pleased to recommend for your consideration, a final dividend of Rs.3/- (Rupees Three Only) per equity share (previous year Re.1/- per equity share) for the financial year 2009-10. Your Company had paid in February 2010, an interim dividend of Rs. 21- (Rupees Two Only) per equity share (previous year Nil) for the financial year 2009-10.

Accordingly, the total dividend declared by your Company for the financial year 2009-10, is Rs.5/- (Rupees Five Only) per equity share (previous year Re.1/- per equity share).

EXPORTS AND INTERNATIONAL OPERATIONS

Exports for the year ended 31st March 2010 was at Rs.47,02 Lacs as against Rs.64,54 Lacs in the previous year, a drop of approximately 27% over the previous year. The global economy has still not shown a sign of robust recovery and your Company has also felt the pressure in certain countries including European markets. Despite this, exports to Middle East countries were steady. Your Company is expecting that with the introduction of its new range, it will be able to gain market share in the coming years.

CARLTON TRAVEL GOODS LIMITED

Carlton Travel Goods Limited (CTGL), the wholly owned subsidiary of your Company which sells and distributes brand "Carlton" in UK and European markets has not done well and incurred losses, both operationally as well as on currency translated losses in the year 2008-09. Your Company has intensified its focus on the same and has carried out major restructuring and continues to maintain a clear focus on the said business to turnaround the same. In the year 2008- 09, CTGL opened mono brand retail stores in high-end Malls to give the brand its much needed premium visibility. However, due to the global recession setting in, at the same time, these stores started incurring losses. Considering the slow recovery in global economic scenario, your Company decided and was able to close down all these stores during the year under review. Also, looking at the recessionary trend continuing in most parts of Europe, your Company has withdrawn the expansion plans in some small European countries which will significantly cut down the costs. These initiatives will arrest the operational losses for the future. In terms of the currency translation, Great Britain Pound (GBP) had shown signs of recovery against the US dollar during the year under review but then slipped in the last two months to reach almost the year beginning levels. However, CTGL could still recover approximately 4,50,000 GBP on account of realized /unrealized gains during the year under review. The acceptability of the brand "Carlton" is improving both in UK and European markets because of its premium product category and your Company is confident of the brand performing well in future. Your Company also feels that the GBP will show some signs of recovery against the US dollar which will bring down the currency translation losses. However, CTGL is also working out alternative plans to mitigate currency risks going forward.

RESEARCH & DEVELOPMENT

The Research and Development (R&D) centre of your Company is actively engaged in upgradation of technologies, processes and development of quality products towards ensuring technological leadership for your Company in the years to come.

The R&D centre continues to be recognized by the Department of Scientific & Industrial Research of the Government of India.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2010, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

(ii) that your Directors have 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 your Company at the end of the financial year and of the profits of your Company for the year under review;

(iii) that your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(iv) that your Directors have prepared the accounts for the financial year ended 31s1 March, 2010 on a Going Concern basis.

MANAGEMENT DISCUSSION & ANALYSIS REPORT AND REPORT ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis Report, the Report on Corporate Governance and the Certificate in respect of compliance of requirements of Corporate Governance, are annexed to this Report and form part of this Annual Report.

SUBSIDIARIES

In terms of the approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, copies of the Balance Sheet, the Profit and Loss Account, the Report of the Board of Directors and the Auditors of Carlton Travel Goods Limited and Blow Plast Retail Limited, have not been attached with the Balance Sheet of your Company.

However, the Consolidated Financial Statements of your Company, which include the financial results of Carlton Travel Goods Limited and Blow Plast Retail Limited, are included in this Annual Report. Further, a statement containing the particulars prescribed under the terms of the said exemption for Carlton Travel Goods Limited and Blow Plast Retail Limited are also enclosed. Copies of the relevant audited accounts of Carlton Travel Goods Limited and Blow Plast Retail Limited can also be sought by any shareholder on making a written request to the Secretarial Department, at the

Registered Office of your Company in this regard. The annual accounts of Carlton Travel Goods Limited and Blow Plast

Retail Limited are also available for inspection by any shareholder at the Registered Office of your Company and at the respective Head Offices of Carlton Travel Goods Limited and Blow Plast Retail Limited.

INSURANCE

All the assets of your Company, including Plant & Machinery, Buildings, Equipments etc. have been adequately insured.

DEPOSITORIES

Your Companys shares are tradable compulsorily in electronic form and your Company has established connectivity with both the depositories, i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

PUBLIC DEPOSITS

Your Company had not received instructions from 54 depositors for repayment of deposits amounting to Rs.8,36,000/- (Rupees Eight Lacs Thirty Six Thousand Only) as at 31st March, 2010. Since then, no deposits have been repaid.

CENTRAL GOVERNMENT APPROVAL UNDER SECTION 211 AND 212 OF THE COMPANIES ACT, 1956

On an application made by your Company under Section 211 of the Companies Act, 1956, the Central Government vide its letter No. 46/13/2010-CL-III dated 8th February, 2010 exempted your Company from giving disclosure of quantitative details in compliance of Schedule VI to the Companies Act, 1956 in this Annual Report.

On an application made by your Company under Section 212(8) of the Companies Act, 1956, the Central Government vide its letter No. 47/20/2010-CL-III dated 25th March, 2010, exempted your Company from attaching a copy of the Balance Sheet and the Profit and Loss Account of the Subsidiary Companies and other documents to be attached under Section 212(1) to the Annual Report of your Company. Accordingly, the said documents are not being attached with the Balance Sheet of your Company. A gist of the financial performance of the Subsidiary Companies is contained in this Report. The annual accounts of the Subsidiary Companies are open for inspection by any shareholder and your Company will make available these documents/details upon request by any shareholder of your Company or to any investor of its Subsidiary Companies who may be interested in obtaining the same. Further, the annual accounts of the Subsidiary Companies will also be kept open for inspection by any shareholder at the Registered Office of your Company and at the respective Head Offices of the subsidiary Companies.

DIRECTORS

Ms. Radhika Piramal was appointed as an Executive Director of your Company with effect from 13th July 2009. She has been appointed as the Managing Director of your Company for a period from 1st May, 2010 to 12th July 2012 (both days inclusive). The necessary approval of the Shareholders is being sought in the ensuing Annual General Meeting to the appointment and payment of remuneration to Ms. Radhika Piramal as the Managing Director of your Company.

Mr. Nirmal Gangwal was appointed as an Additional Director of your Company with effect from 29th April, 2010 and holds office till the conclusion of the ensuing Annual General Meeting. The approval of Shareholders is being sought to the appointment of Mr. Nirmal Gangwal as a Director of your Company.

Mr. Sudhir Jatia has resigned as the Managing Director of your Company with effect from 30th April, 2010. Mr. Jatia will continue to act as a Non-Executive Director of your Company.

Mr. D. K. Poddar and Mr. Vijay Kalantri, Directors retire by rotation and being eligible, offer themselves for re-appointment. Pursuant to Clause 49 of the Listing Agreement, details of Directors retiring by rotation is provided as a part of the Notice of the ensuing Annual General Meeting.

AUDITORS

M/s. M. L. Bhuwania & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible, have expressed their willingness to continue, if so appointed. As required under the provisions of Section 224 of the Companies Act, 1956, your Company has obtained a written certificate from the Auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said Section.

A proposal seeking their re-appointment is provided as a part of the Notice of the ensuing Annual General Meeting.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as required in terms of the provisions of 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, in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed herewith and forms part of this Report as Annexure (A).

PARTICULARS OF EMPLOYEES & EMPLOYEE STOCK OPTION SCHEME

Information as per Section 217(2A) of the Companies Act, 1956 ("the Act") read with the Companies (Particulars of Employees) Rules, 1975, forms part of this Report. As per the provisions of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders of your Company excluding the statement on particulars of employees under Section 217(2A) of the Act. Any shareholder interested in obtaining a copy of the said statement may write to the Secretarial Department at the Registered Office of your Company.

During the year under review, no fresh stock options have been granted by your Company. Accordingly, no new equity shares have been allotted under the Employees Stock Option Scheme of your Company. Hence, no disclosure under the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 has been made during the year under review.

INDUSTRIAL RELATIONS

Industrial relations remained cordial throughout the year under review.

ACKNOWLEDGEMENT

Your Directors record their gratitude to the Financial Institutions, Banks and other Government departments for their continued assistance and co-operation extended to your Company during the year under report.

Your Directors also wish to place on record, their appreciation for the dedicated services of the employees of your Company at all levels.

On behalf of the Board of Directors

DILIP G. PIRAMAL

Chairman

Place : Mumbai Date : 29th April, 2010

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