Mar 31, 2023
Your directors are pleased to present the Fortieth Annual Report of your Company together with the audited financial statements for the financial year ended March 31,2023.
1. SUMMARY OF FINANCIAL RESULTS
The performance of the Company for the Finacial year ended March 31,2023 is summarized below:
Particulars |
Year Ended March 31,2023 |
(Rs. in Lakhs) Year Ended March 31,2022 |
Total Operating Income (Continuing Operations) |
266,286.66 |
2,18,037.10 |
EBIDTA |
41,599.84 |
39,136.20 |
Finance Costs |
5,433.85 |
4,215.80 |
Depreciation & Amortization expense |
15,914.28 |
14,450.35 |
Profit Before Tax & Exceptional Items |
20,251.71 |
20,470.05 |
Tax Expense (Continuing Operations) |
3,637.96 |
4,854.83 |
Net Profit After Tax from continuing operations (A) |
16,613.75 |
15,615.22 |
Profit before exceptional items and tax from discontinued operations |
3,363.50 |
519.17 |
Exceptional Items |
18,720.45 |
- |
Tax expense of discontinued operations |
6,377.64 |
123.13 |
Net Profit After Tax from discontinued operations (B) |
15,706.31 |
396.04 |
Profit for the year (A B) |
32,320.06 |
16,011.26 |
Other comprehensive income net of tax |
101.02 |
39.02 |
Total comprehensive income for the year |
32,421.08 |
16,050.28 |
Basic and Diluted earnings per share From continuing operations |
18.80 |
17.68 |
From discontinued operations |
17.78 |
0.44 |
From continuing and discontinued operations |
36.58 |
18.12 |
The Gross turnover of the Company for the year was ''2,92,924.29 lakhs. Out of the same, revenue depicted above as that of the Continuing Operations, i.e. ''2,66,286.66 lakhs relates to Goods Transportation and corresponding revenues for the two discontinued business, i.e. Wind Power Undertaking and Bus Operations Undertaking was ''797.37 lakhs and ''25,840.26 lakhs respectively. Further details are given below.
During the year, the Company hived off two business divisions with an intention to solely focus on its Goods Transportation business, being its core competency.
The Company has, during the year, executed a Business Transfer Agreement for the sale / transfer of its Wind Power Business as a going concern on a slump sale basis for an aggregate sale consideration amounting to ''5,285 lakhs. The profit before tax amounting to '' 1,034 lakhs on this sale (net of expenses incurred amounting to ''6 lakhs), has been accounted as an Exceptional Item in the Financial Results. The said division ceased to be a part of the Company w.e.f. August 2022.
The Company executed a Business Transfer Agreement with a promoter group company for the sale / transfer of its Bus Operations Business as a going concern on a slump sale basis for an aggregate sale consideration amounting to ''23,000 lakhs. The profit before tax amounting to '' 17,687 lakhs on sale / transfer (net of expenses incurred amounting to ''13 lakhs), has been accounted as an Exceptional Item in the Financial Results. The said division ceased to be a part of the Company w.e.f. January 2023.
The Goods Transportation Business, which is the continuing operational division, achieved a gross revenue of ''2,66,286.66 lakhs as against ''2,18,037.10 lakhs for the earlier fiscal depicting a growth of 22.13% driven by robust volume growth. Such growth was possible owing to rapid branch expansion as also the ongoing shift of customers from the unorganized operators to entities like us. The Net profit after tax from continuing operations was '' 16,613.75 lakhs as against the corresponding figure of '' 15,615.22 for the previous year. The net profit after tax from discontinued operations for the year was '' 15,706.31 lakhs. The total profit after tax was '' 32,320.06 lakhs.
The Company''s Goods Transport Division achieved a turnover of ''2,60,877.18 lakhs registering a growth rate of 22.79 % as compared to the previous year.
The paid up Equity Share Capital as at March 31,2023 stood at '' 8,834.35 lakhs. There was no change to the paid up share capital during the fiscal. The company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31,2023, none of the Directors of the company held instruments convertible into equity shares of the Company.
The company had initiated a buy-back of 8,75,000 equity shares during the last quarter of the fiscal and the same was concluded during FY 2023-24. A detailed note on Buy back has been summarized in point no 4 below.
The Board of Directors of the Company at its meeting held on January 30, 2023 approved the proposal of Buyback of up to 8,75,000 (Eight Lakh Seventy Five Thousand Only) Equity Shares, (representing 0.99 % of the total number of Equity Shares in the existing total paid-up equity capital of the Company as on the date of the Board Meeting), from the shareholders/ beneficial owners of Equity Shares of the Company as on the Record Date being Friday, February 10, 2023 on a proportionate basis, through the âtender offerâ process as prescribed under the SEBI Buyback Regulations, at a price of ''700/- (Indian Rupees Seven Hundred Only) per Equity Share, payable in cash, for an aggregate maximum amount of ''61,25,00,000/-(Rupees Sixty One Crores and Twenty Five Lakhs Indian Rupees), excluding transaction costs. The Buyback Size represented 9.44% of the aggregate of the Company''s fully paid-up equity capital and free reserves as per the then last audited financial statements of the Company, as on March 31,2022.
The Buyback Size was within the statutory limit of 10% of the aggregate of the paid-up capital and free reserves of the Company as on March 31,2022 as per Section 68(2) of the Companies Act 2013 and Regulation 5(i)(b) of the SEBI Buyback Regulations. The maximum number of Equity Shares bought back represented 0.99 % of the total number of Equity Shares in the existing total paid-up equity capital of the Company, which is within the permissible limit of 25% of the total paid-up equity capital of the Company in that financial year.
The Board at the said meeting constituted a Buyback committee to execute necessary documentation, papers, announcements and to do other related things which were necessary to give effect to the said buyback of equity shares. The Committee comprised of 5 members viz., Dr. Vijay Sankeshwar, Chairman, Mr. L R Bhat, Dr, Anand Pandurangi, Mr. Gurudas Narekuli and Dr. Raghottam Akamanchi.
Upon closure, the Company has extinguished the shares in accordance with the extant provisions of the applicable Securities Exchange Board of India (Buy Back of Securities) Regulations, 2018, as amended, (âSEBI Buy Back Regulationsâ) and Companies Act, 2013. The Company completed the Buyback of 8,75,000 equity shares of the Company during the month of April 2023 and as such no related accounting entries are effected during FY 2022-23.
Your Company continues to be one of the leading Logistics service providers in the country. The service offerings of the Company during the year in the Logistics space were Goods Transport, Bus Operations, Transportation of Passengers by Air and Wind Power Generation Business. There is no change in nature of business of the Company except as stated hereunder-
Wind Power: During the year, the Company entered into a Business Transfer Agreement (âBTAâ) with Nirani Energy Private Limited for the sale of its Wind Power Generation Business on a going concern basis, by way of Slump Sale for a consideration of ''52.85 Lakhs. The said transaction was concluded during the fiscal and with effect from August 2022 the said division, including its underlying cash flows, vested with the purchaser.
Bus Operations: The Bus Operations Business Undertaking was a significant part of the Company''s business operations till the Financial Year 2019-20. However, the impact of the COVID-19 pandemic and subsequent lockdowns and local travel restrictions have adversely affected the operations of the Bus Operations Business Undertaking. The existing fleet of vehicles was predominantly aged and would require replacement in the near short term resulting in significant capex outgo/ commitments from the Company. Such capex would be in the nature of replacement capex and would not necessarily yield incremental revenues. Given the nature of the business operations, it is imperative that the bus fleet is in accordance with the customer needs, demands and also better than that of the competitors across the routes in which we operate. At the time of its evaluation, i.e. as of 31.08.2022, out of the total fleet of 277 owned buses, a total of 179 buses were over 9 years old.
Going ahead, the Management wishes to position VRL Logistics Limited as an entity focusing solely on its core competency, which is Goods Transportation. The Company had explored options to sell off the Bus Operations Business Undertaking to an independent third party. However no satisfactory response could be seen with regard to this transaction. The Company also tried to dispose off the buses individually however there were no suitable buyers for the same. Promoters, having started this undertaking, have stepped in and proposed to take over the operations on a going concern basis and accordingly, after obtaining the due shareholder approvals in respect thereof, the said transaction was concluded. The said undertaking was
sold on slump sale basis for a lump sum consideration of ''23,000 Lakhs determined on the basis of independent valuation report. The company had engaged the services of M/s Grant Thornton Bharat LLP to arrive at an independent valuation of the said division.
During the FY2022-23, the approval of the shareholders was obtained by way of postal ballot for Transfer of the Bus Operations Business Undertaking of the Company to Vijayanand Travels Private Limited, on slump sale basis.
During the Financial year 2022-23, the company has incurred a capital expenditure of '' 41,398.42 Lakhs. Out of the same, an amount of ''37,862.94 Lakhs was invested on purchase of new fleet i.e., Goods Transport Vehicles. The balance capex of '' 3,535.48 Lakhs was spent on machineries, land & building, furniture and fixtures, plant & equipment, office equipment and leasehold improvements etc.
The adoption of the accounting standard Ind-AS 116- Leases, which has become effective from April 1,2019, has resulted in the Company recognizing a right-of-use (ROU) of assets and related lease liability in connection with all former operating leases except for those identified as low-value or having a remaining lease term of less than 12 months from the date of initial application.
This year, the addition to ROU assets was to the tune of '' 13,287.99 Lakhs attributable entirely to Buildings owing to rapid branch expansion. Also the addition to Lease Liabilities, including both current and Non-current was to the tune of '' 14,750.38 Lakhs.
The impact of adopting IndAS 116 on the financial statements for the year ended March 31,2023 is as follows:
C in Lakhs) |
||||
Particulars |
For the Year Ended March 31,2023 |
For the Year Ended March 31,2022 |
||
Depreciation charge on Right-of-use assets-Buildings |
10,804.33 |
7,148.34 |
||
Continuing Operations |
10,343.79 |
6,600.47 |
||
Discontinued Operations |
460.54 |
547.87 |
||
Interest expense included in finance cost |
4,314.80 |
3,069.18 |
||
Continuing Operations |
4,219.89 |
2,988.83 |
||
Discontinued Operations |
94.91 |
80.35 |
||
Expense relating to short-term leases |
5,143.15 |
3,971.15 |
||
Continuing Operations |
4,968.35 |
3,811.52 |
||
Discontinued Operations |
174.80 |
159.63 |
||
Total cash outflow for leases during current financial year (excluding short term leases) |
13,656.74 |
10,181.63 |
||
Additions to the right of use assets |
27,390.46 |
16,275.92 |
||
8. DIVIDEND: The Board of Directors has proposed a Final Dividend of ''5/- per share for the financial year 2022-23. No Interim dividend was declared during the year. The comparative details of dividend declared are as follows:- |
||||
Dividend Type |
Financial Year 2022-23 |
Financial Year 2021-22 |
||
Dividend Per share (in Rs) |
Dividend Payout (Rs in lakhs) |
Dividend Per share (in Rs) |
Dividend Payout (in Rs lakhs) |
|
Interim Dividend |
- |
- |
8 |
7067.47 |
Final Dividend |
5* |
4373.43* |
- |
- |
Total Dividend |
5* |
4373.43* |
8 |
7067.47 |
Payout ratio |
13.49% |
44.03% |
||
⢠The Dividend payout will be subject to the approval of shareholders in the ensuing AGM of the Company. |
⢠In compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI Listing Regulationsâ), the Dividend policy of the Company is available on the Company''s website at http:// vrlgroup.in/vrljnvestor_desk.aspx?display=policies. A copy of the same is annexed to this Report as Annexure A.
The Ministry of Corporate Affairs under Section 124 and 125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Rulesâ), requires dividends that are not encashed/ claimed by the shareholders for a period of seven consecutive years, to be transferred to the Investor Education and Protection Fund (IEPF).
During the year the company has transferred the IPO Share Application money which was unclaimed for a period of seven years amounting to '' 14,65,750 to the Investor Education and Protection Fund Authority in accordance with the provisions of the Act.
Dividend, pertaining to FY 2015-16 unclaimed for a period of seven years amounting to '' 1,83,920/- has been transferred to the Investor Education and Protection Fund Authority in accordance with the provisions of the Act.
Pursuant to the provisions of the Companies Act 2013, read with the Investor Education and Protection Fund Authority Rules, underlying shares on which dividends have not been claimed for 7 consecutive years have been transferred to the IEPF Authority. In compliance with the above, the Company has transferred 1012 equity shares in favour of IEPF Authority.
The details of the consolidated unclaimed/ unpaid dividend as required by the Act read with IEPF Rules for all the unclaimed/ unpaid dividend accounts outstanding (drawn up to the Thirty Ninth Annual General Meeting held on August 10, 2022) have been uploaded on the Company''s website and can be accessed at http://vrlgroup.in/investor_download/Unclaimed_ Dividend_2020.pdf?a=1
The Members of the Company, who have not yet encashed their dividend warrant(s) or those who have not claimed their dividend amounts as also members whose shares have been transferred to IEPF, may write to the Company/ Company''s Registrar and Share Transfer Agent, Kfin Technologies Limited.
The Company has transferred an amount of '' 3,232.01 lakhs to the General Reserve out of current year''s profits in line with its practice of earlier years.
The Company does not have any subsidiary.
The Company has not accepted any deposits during the year within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under.
The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. Details of investments made by the company are given in the notes to the financial statements.
During the year, ICRA Limited has upgraded its existing long term rating from [ICRA] A (Stable) to [ICRA] A (Positive) (pronounced as ICRA A Plus Positive). The outlook on the long term rating is upgraded from Stable to Positive, indicative of low credit risk.
Management''s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 (2) of SEBI Listing Regulations read with Schedule V thereto, is presented in a separate section forming part of this Annual Report.
The Securities Exchange Board of India vide notification has mandated top 1,000 listed companies based on market capitalization to include a report on business responsibility & sustainability. Your Company stands at 445th position as on March 31,2023. The said report is in compliance with the SEBI Listing Regulations and forms a part of this Annual Report.
The Company is committed to maintain the steady standards of corporate governance and adhere to the corporate governance requirements set out under extant law. The Report on corporate governance as stipulated under Regulation 34 of the SEBI Listing Regulations read with Schedule V thereto forms part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Regulations, as also the related certificate from CEO/CFO are attached to the Report on Corporate Governance.
The auditors'' certificate does not contain any qualification, reservation or adverse remarks.
The composition of the Board is in conformity with Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI Listing Regulations, which stipulates that the Board should have optimum combination of Executive and Non-executive Directors with at least one Independent Woman Director and at least 50% of the Board should consist of Independent directors, as the Chairman of our Board is an Executive Director.
As on March 31,2023, the Board comprised of twelve Directors. Out of these, two are Managing Directors who are also the Promoters of the Company and two are Whole Time Executive Directors, the other eight being Non-Executive Directors.
Of the eight Non-Executive Directors, six are Independent Directors. These include two Independent Woman Directors. All the Directors possess the requisite qualifications, expertise and experience in general corporate management, finance, banking, laws and other allied fields enabling them to contribute effectively in their capacity as Directors of the Company.
None of the Directors of the Company are related to each other except Dr. Vijay Sankeshwar, Chairman & Managing Director (CMD) and Dr. Anand Sankeshwar, Managing Director (MD).
All Independent Directors have given due declarations that they meet the criteria of independence as laid down under section 149 (6) and (7) of the Companies Act, 2013 and under extant provisions of the SEBI Listing Regulations.
During the year, six Board Meetings were held, details of which are provided in the Corporate Governance Report. The intervening gap between the Meetings was in compliance with the requirements of the Companies Act, 2013 and SEBI Listing Regulations.
Details of attendance of meetings of the Board, its Committees and the Annual General Meeting are included in the Report on Corporate Governance, which forms part of this Annual Report.
The Board has the following committees:
a. Audit Committee
b. Nomination and Remuneration Committee
c. Corporate Social Responsibility Committee (CSR)
d. Stakeholders Relationship Committee
e. Risk Management Committee
f. Administration Committee
g. Finance Committee
h. Buy Back Committee
Details such as terms of reference, powers, functions, meetings, membership of committee, attendance of directors etc. are dealt with in Corporate Governance Report forming part of this Annual report.
Board has accepted all recommendations made by the Audit Committee during the year.
a) Inductions
There was no induction of any new Director/KMP during the year under consideration.
Based on the recommendation of the Nomination & Remuneration Committee, the board proposes the induction of CA Shantilal Jain as an independent director on the Board of Directors. A resolution to that effect is proposed for the approval of the members at the ensuing Annual General Meeting of the company. The Board recommends his appointment.
b) Retirement/Re-appointment
Mr. L R Bhat, Whole-time Director and Dr. Ashok Shettar, Non-Executive Director of the Company, retire by rotation at this AGM and being eligible, offer themselves for reappointment. The Board recommends their re-appointment.
c) Resignation
During the year under review, no directors resigned from the Company.
d) Key Managerial Personnel
Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company are Dr. Vijay Sankeshwar, Chairman & Managing Director, Dr. Anand Sankeshwar, Managing Director, Mr. K N Umesh, Whole time Director, Mr. L R Bhat, Whole time Director, Mr. Sunil Nalavadi, Chief Financial Officer and Mr. Aniruddha Phadnavis Company Secretary & Compliance Officer. There was no change in Key Managerial Personnel of the Company during the year.
The remuneration and other details of these Key Managerial Personnel for FY 2022-2023 are provided in the Annual Return (MGT 7) which is available on the website of the Company and can be accessed at https://www.vrlgroup.in/ .
None of the Directors of your Company are disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Companies Act, 2013 and SEBI Listing Regulations. A Certificate to that effect as mandated under Schedule V of the SEBI (LODR) Regulations, 2015 has been obtained from a Company Secretary in practice.
Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, the annual performance of the Board, its Committees, Chairperson and Individual Directors including Independent Directors was evaluated as per the criteria laid down by the Nomination and Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report which forms part of this Annual Report.
A diverse Board enables efficient functioning through differences in perspective and skill and also fosters differentiated thought processes at the back of varied industrial and management expertise, gender and knowledge. The Board recognizes the importance of a diverse composition and has adopted a Board Diversity policy which sets out the approach to diversity.
The said policy can be accessed through the following link : https://www.vrlgroup.in
In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:
i) In the preparation of the annual accounts, the applicable accounting standards (IndAS) have been followed along with proper explanation relating to material departures. The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.
iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv) The directors have prepared the annual accounts on a going concern basis.
v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.
vii) Based on the framework of internal financial controls established and maintained by the Company, work performed by the internal, statutory auditors, reviews performed by the management and the relevant Board Committees, the Board, in concurrence with the Audit Committee, is of the opinion that the Company''s internal financial controls were adequate, operational and effective as on March 31,2023.
All related party transactions that were entered into during the financial year were on arm''s length basis and were in the ordinary course of the business.
During the financial year, the company transferred its Bus Operations Business Undertaking to Vijayanand Travels Private Limited (a company owned and controlled by the promoter(s) of the Company), as a going concern, on slump sale basis for a lump sum consideration of '' 23,000 Lakhs determined on the basis of independent valuation report obtained from M/s Grant Thornton Bharat LLP The said transaction was carried out with prior approval of Audit Committee and Board of Directors and was also approved by the shareholders through postal ballot. The said related party transaction was carried out at the Arms Length Price and is with compliance of Section 188 of the Companies Act 2013 and Regulation 23 of SEBI (LODR) Regulations 2015. Necessary disclosures related to the said transaction have been made to the stock exchanges where the company are listed.
Except for the above said transaction there were no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons.
All Related Party Transactions are placed before the Audit Committee as also to the Board for prior approval. Omnibus approval was obtained for transactions which are repetitive in nature. A statement containing details of all transactions entered into pursuant to omnibus approval are placed before the Audit Committee and the Board for review and approval on a quarterly basis.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors of the Company can be viewed on the website of the Company through the following link.
http://vrlgroup.in/investor_download/RPT%20Policy.pdf
Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 forms a part of this report and is covered in Annexure H.
In adherence to Section 178(1) of the Companies Act, 2013, the Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes and other matters provided under sub section (1) (3) of section 178 of the Companies Act 2013. The Remuneration Policy is annexed to this report as Annexure B. The said policy alternatively can also be accessed on the website of the Company at the following link:
http://vrlgroup.in/investor_download/Nomination_Remuneration%20Policy.pdf
The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and specified employees in the course of day to day business operations of the company. The Company believes in âZero Toleranceâ against bribery, corruption and unethical dealings / behavior in any form and the Board has laid down certain directives to counter such acts. Such code of conduct has also been placed on the Company''s website. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance on the expected behavior from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. Pursuant to SEBI (LODR) Regulations, 2015, a confirmation from the Managing Director regarding compliance with the Code by all the Directors and senior management of the Company is given as a part of the Annual Report.
The Company has a Vigil Mechanism Policy in line with the provisions of Section 177(9) and Section 177(10) of the Companies Act, 2013 to deal with instances of fraud and mismanagement, if any. Staying true to our core values being committed to high standards of Corporate Governance and stakeholder responsibility, the said policy ensures that strict confidentiality is maintained in respect of whistle blowers whilst dealing with concerns and also specified that no discrimination will be meted out to any person for a genuinely raised concern and also provides a direct access to the Chairman of the Audit Committee. During the year under review none of the personnel have been denied access to the Chairman of Audit Committee.
The Vigil Mechanism policy is available on the website of the Company and can be accessed at the following link.
http://vrlgroup.in/investor_download/vigil_Mechanism.pdf.
In terms of the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended (PIT Regulations), the Company has adopted a Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders with a view to regulate trading in securities by the Directors and certain designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.
The said code is available on the website of the Company and can be accessed at the following link. http://vrlgroup.in/vrl_investor_desk.aspx?display=policies
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Board of the Company had laid down policies, guidelines, procedures and structure to enable implementation of appropriate internal financial controls across the Company. These control processes enable and ensure the orderly and efficient conduct of Company''s business, including safeguarding of assets, prevention and detection of frauds and errors, the accuracy and
completeness of the Accounting records and timely preparation & disclosure of financial statements. These controls also identify the risks and provides for means to minimize / mitigate the risks affecting the business of the Company as a whole. Auditors, as required under the Companies Act 2013, have also reported the existence and operations of these controls in an effective manner.
The Company''s internal audit department enables the Management to mitigate the risks and prevent non-compliance with laws which would affect the financial position of the Company. The scope and authority of the Internal Audit function is well defined and to maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board as well as directly to the Chairman & Managing Director. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the internal audit report from time to time, the management undertakes corrective actions in the relevant areas and thereby strengthens the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee.
Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has in place a risk management architecture that provides a holistic approach to the best of its capabilities. The Company identifies, assesses and mitigates risks that could materially impact its performance in achieving the stated objectives.
The Risk Management Committee and Audit Committee, on a regular basis, reviews the Company''s portfolio of risks and examines it under the light of the Company''s Risk Appetite.
The material risks affecting Company are identified along with related mitigation measures and elaborated in the Risk Management Policy of the Company which has also been hosted on the website of the Company and can be accessed at the following link.
http://vrlgroup.in/investor_download/Risk%20Management%20Policy.pdf
The Company''s Equity Shares are listed on the BSE Ltd and National Stock Exchange of India Limited and the Company has paid the applicable Annual listing fees to these stock exchanges. The Company has also formulated the following Policies as required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015:
âPolicy for Preservation of Documents'' under Regulation 9 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The said policy can be accessed at the following link: http://vrlgroup.in/vrl_investor_desk.aspx?display=policies
âPolicy on Criteria for determining Materiality of Events/Information'' under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
The said policy can be accessed through the following link: http://vrlgroup.in/vrl_investor_desk.aspx?display=policies
a) Statutory Auditors and Audit Report:
In accordance with Section 139 of the Companies Act, 2013 and Rules made thereunder, Members at the 37th Annual General Meeting of the Company had approved the appointment of Statutory Auditors, M/S. Kalyaniwalla & Mistry LLR Chartered Accountants, Mumbai (Firm Registration No. 104607W / W100166) for a period of 5 years from the date of the said Annual General Meeting.
There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report for the financial year ended March 31, 2023. Pursuant to provisions of section 143 (12) of the Companies Act 2013, the Statutory Auditors have not reported any incident of fraud to the Audit Committee during the year under review.
b) Cost Auditors & Cost Audit Report
Section 148 (1) of the Companies Act 2013 read with Rules made thereunder mandates every Company belonging to category prescribed in the Rules to undertake a Cost Audit. In compliance with said provision, Company had appointed M/s S.K. Tikare & Co., Cost Accountants, Belagavi, to audit the cost records for FY 2022-23 pertaining to its Wind Rower division. The Cost Auditor has submitted the Cost Audit report for FY 2022-23 and the same is annexed as Annexure C herewith.
There are no qualifications, reservations or adverse remarks made by the Cost Auditors in their report for the financial year ended March 31,2023.
Upon the hiving off the Company''s Wind Power Division during the year, the requirement of maintenance of cost records does not arise from the succeeding fiscal. However, the company has written to the concerned office in the Ministry of Corporate Affairs for suitable exemption from maintenance of cost records and cost audit.
Pursuant to provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Mr. R Parthasarathy, Company Secretary in practice to undertake the Secretarial Audit of the Company for FY 2022-23. The Secretarial Audit report in Form MR-3 is annexed herewith as Annexure D.
Pursuant to the recommendation of the Audit Committee, the Board of Directors have re-appointed Mr. R Parthasarathy, Company Secretary to conduct the Secretarial Audit for FY 2023-24 at its meeting held on May 20, 2023 as also to issue the applicable Secretarial Compliance Report to be submitted to the Stock Exchanges.
With reference to the observation made by the Secretarial Auditor in his report relating to delay of Nine days (from August 1, 2022 to August 09, 2022) in obtaining consent of Members by passing Special Resolution, for continuation of Dr. Prabhakar Kore as an Independent Director, having attained the age of 75 years, it is submitted as under-
As indicated in the report of the Secretarial Auditor, the board took cognizance of the nine days'' delay in getting the special resolution passed for continuation of Dr. Prabhakar Kore as an Independent Director, having attained the age of 75 years at its meeting held on January 30, 2023. The board also took note of the penalty of ''21,240/-, inclusive of GST paid to each of the stock exchanges and also advised the Management to take care of non-recurrence of such delays and ensure proper compliance henceforth. The outcome of the said meeting was filed with the stock exchanges.
As required under the provisions of the section 135 of the Companies Act 2013, the Board has constituted the Corporate Social Responsibility Committee which monitors and oversees various CSR initiatives and activities of the Company. The CSR Committee comprises of five directors out of which two are Independent Directors. The CSR Committee met three times during the year. Further details such as composition, terms, functions, meetings and attendance of directors of the said committee are provided in the Corporate Governance report forming part of this Annual Report.
The Company has undertaken and contributed to various projects identified by the other Trusts/Educational Institutions for CSR related activities as approved by the CSR Committee during the year mainly towards Education, Healthcare, Disaster Management (Flood relief Activities) and Sports, etc.
A detailed Annual Report as required to be given under Section 135 of the Companies Act, 2013 and Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 containing details of CSR activities & contents of CSR policy is annexed as Annexure E.
CSR policy of the Company is available on the Company''s website and can be accessed through the following link http:// vrlgroup.in/investor_download/CSR%20POUCYpdf
A copy of the Annual Return of the Company containing the particulars prescribed u/s 92 of the Companies Act, 2013, in Form MGT-7, as of the end of the financial year i.e. March 31, 2023 is uploaded on the website of the Company in the Investor Relations Section under the tab âAnnual Return'' and can be accessed at https://www.vrlgroup.in/vrl_investors_desk. aspx?display=annual_return
The particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and expenditure are annexed hereto as Annexure G and forms part of this Report.
The information required pursuant to Section 197 (12) read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, forms part of this report and annexed herewith as Annexure G.
A statement containing top ten employees in terms of remuneration and the names of every employee who was in employment of the Company throughout the year and was in receipt of the specified remuneration is also included therein.
The Company is in compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
There were no material changes and commitments that occurred subsequent to the end of the financial year till the date of this report, which affects the financial position of the Company.
During the year under review, your Company experienced cordial relationship with workers and employees at all levels, throughout the year.
There are no significant and material orders passed by the regulators or courts or tribunals impacting going concern status and company''s operations for a foreseeable future.
The Company has in place a Policy for Prevention Prohibition and Punishment of Sexual Harassment of Women at Work place in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Directors take this opportunity to thank the Company''s customers, shareholders, Investors, suppliers, bankers, financial institutions and Central & State Governments for their consistent support and cooperation extended to the Company. The Directors also wish to place on record their appreciation towards employees at all levels for their hard work, dedication and commitment.
For and on behalf of the BoardDr. Vijay Sankeshwar Chairman & Managing Director
DIN:00217714
Place: Hubballi Date: May 20, 2023
Mar 31, 2022
Your directors are pleased to present the thirty ninth annual report of your Company together with the audited financial statements for the financial year ended March 31,2022.
1. SUMMARY OF FINANCIAL RESULTS
The performance of the Company for the Finacial year ended 31st March 2022 is summarized below:
Particulars |
Year Ended |
(? in lakhs) Year Ended |
March 31,2022 |
March 31,2021 |
|
Total Income |
241,046.54 |
177,578.73 |
EBIDTA |
42,098.16 |
26,035.04 |
Finance Costs |
4,309.18 |
3,681.96 |
Depreciation & Amortization expense |
16,799.76 |
15979.01 |
Profit Before Tax |
20,989.22 |
6374.07 |
Tax Expense |
4,977.96 |
1867.28 |
Net Profit After Tax |
16,011.26 |
4506.79 |
Other comprehensive income |
39.02 |
(158.38) |
Total Comprehensive income |
16,050.28 |
4,348.41 |
Basic & diluted Earnings per Share (Rs.) |
18.12 |
4.99 |
During the year under consideration, your Company achieved a gross revenue of Rs. 241,046.54 lakhs as against Rs. 177,578.73 lakhs for the earlier fiscal depicting a growth of 35.74%.The Profit before tax (PBT) was Rs. 20,989.22 lakhs as against the Profit before tax of Rs. 6,374.07 lakhs in the previous year depicting a growth of 229.29%. The profit after tax was Rs.16011.26 which represents the highest ever profitability in the company''s history.
While the Company''s Goods Transport Division achieved a turnover of Rs 213,738.24 lakhs registering a growth rate of 34.19 % as compared to the previous year, Bus Operations division achieved a turnover of Rs. 20,483.75 lakhs registering a growth of 57.16%. A detailed financial performance analysis is provided in the Management Discussion & Analysis Report, which is a part of this Annual Report.
The paid up Equity Share Capital as at March 31,2022 stood at Rs. 8,834.35 lakhs. There was no change to the paid up share capital during the fiscal.
The company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31,2022, none of the Directors of the company held instruments convertible into equity shares of the Company.
Your Company continues to be one of the leading Logistics service providers in the country. The service offerings of the Company in the Logistics space are Goods transport and Bus Operations apart from Transportation of Passengers by Air and Wind Power Generation Business. There is no change in nature of business of the Company.
The Company has entered into a âMOU (Memorandum of Understanding)â with Ratna Cements (Yadwad) Limited for the sale of its Wind Power Generation Business on a going concern basis, by way of Slump Sale for a consideration of Rs. 4,800 Lakhs (Four Thousand Eight Hundred Lakhs only). The Buyer has placed a token advance prior to signing of the MoU and has been provided a time upto 31st July 2022 to achieve the completion of transaction with all required approvals along with the remittance of balance sale consideration. The Wind Power Undertaking of the Company initially comprised of 34 wind turbine generators with capacity of 42.5 MW. As of date, the said project comprises of 32 wind turbine generators with a capacity of 40 MW. These WTG''s are installed at Kappatgudda, District Gadag, Karnataka State. The board in its meeting held on 27.05.2022 has ratified and approved the sale of the said division of the company.
During the Financial year 2021-22, the company has incurred a capital expenditure of Rs.16,003.90 Lakhs. Out of the same, an amount of Rs.12,550.21 Lakhs was invested on purchase of new fleet. The balance capex of Rs.3453.69 Lakhs was spent on Machineries, Land & Building, Plant & equipment, office equipment etc.
The Company had adopted the accounting standard Ind-AS 116- "Leases", which has become effective from 1st April 2019 (transition date). The adoption of this Standard has resulted in the Company recognizing a right-of-use (ROU) of assets and related lease liability in connection with all former operating leases except for those identified as low-value or having a remaining lease term of less than 12 months.
This year, the addition to ROU assets was to the tune of Rs. 8,428.64 Lakhs attributable entirely to Buildings. Also the addition to Lease Liabilities, including both current and Non-current was to the tune of Rs. 9,092.75 Lakhs.
The impact of adopting IndAS 116 on the financial statements for the year ended 31st March 2022 is as follows:
Particulars |
Year Ended March 31,2022 |
Year Ended March 31,2021 |
Depreciation charge on Right-of-use assets-Buildings |
7,696.21 |
6,542.61 |
Interest expense included in finance cost |
3,149.53 |
2,353.77 |
Expense relating to short-term leases |
4,130.78 |
2,915.39 |
Total cash outflow for leases during current financial year (excluding short term leases) |
10,181.63 |
8,778.65 |
Additions to the right of use assets during the current financial year |
16,275.92 |
12,197.92 |
During the financial year 2021-22, the Board declared an interim dividend of Rs.8/- per share in the month of February 2022 and recommends that the same be considered as the final dividend for the current fiscal.
The comparative details of dividend declared are as follows:-
Dividend Type |
Financial Year 2021-22 |
Financial Year 2020-21 |
||
Dividend Per share (in Rs) |
Dividend Payout (Rs in lakhs) |
Dividend Per share (in Rs) |
Dividend Payout (in Rs lakhs) |
|
Interim Dividend |
8 |
7067.47 |
- |
- |
Final Dividend |
- |
- |
4 |
3533.74 |
Total Dividend |
8 |
7067.47 |
4 |
3533.74 |
Payout ratio |
44.03% |
78.41% |
In compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI Listing Regulationsâ), the Dividend policy of the Company is available on the Company''s website at http:// vrlgroup.in/vrl_investor_desk.aspx?display=policies. A copy of the same is annexed to this Report as Annexure A.
The Ministry of Corporate Affairs under Section 124 and 125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (âIEPF Rulesâ), requires dividends that are not encashed/ claimed by the shareholders for a period of seven consecutive years, to be transferred to the Investor Education and Protection Fund (IEPF).
Also, IPO share application money which is unclaimed for a period of seven years amounting to Rs.14,65,750/- is proposed to be transferred to the Investor Education and Protection Fund Authority in accordance with the provisions of the Act within the due date therefor. The details of the IPO share Application money and unclaimed/unpaid dividend is detailed in the corporate governance report which forms the part of this annual report and also can be accessed at
http://vrlgroup.in/investor_download/Unclaimed_Dividend_2020.pdf?a = 1
The Company has transferred an amount of Rs.1,601.13 lakhs to the General Reserve out of current year''s profits in line with its practice of earlier years.
The Company does not have any subsidiary.
The Company has not accepted any deposits during the year within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under.
The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. Details of investments made by the company are given in the notes to the financial statements.
During the year, ICRA Limited has reaffirmed its existing long term rating of [ICRA] A (pronounced as ICRA A Plus). The outlook on the long term rating is Stable.
Management''s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 (2) of SEBI Listing Regulations read with Schedule V thereto, is presented in a separate section forming part of this Annual Report.
The Securities Exchange Board of India vide notification has mandated top 1,000 listed companies based on market capitalization to include a report on business responsibility. The said report is in compliance with the SEBI Listing Regulations and forms a part of this Annual Report.
The Company is committed to maintain the steady standards of corporate governance and adhere to the corporate governance requirements set out under extant law. The Report on corporate governance as stipulated under Regulation 34 of the SEBI Listing Regulations read with Schedule V thereto forms part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Regulations, as also the related certificate from CEO/CFO are attached to the Report on Corporate Governance.
The auditors'' certificate does not contain any qualification, reservation or adverse remarks.
The composition of the Board is in conformity with Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI Listing Regulations, which stipulates that the Board should have optimum combination of Executive and Non-executive Directors with at least one Independent Woman Director and at least 50% of the Board should consist of Independent directors, as the Chairman of our Board is an Executive Director.
As on 31st March 2022, the Board comprised of twelve Directors. Out of these, two are Managing Directors who are also the Promoters of the Company and two are Whole Time Executive Directors, the other eight being Non-Executive Directors.
Of the eight Non-Executive Directors, six are Independent Directors. These include two Independent Woman Directors. All the Directors possess the requisite qualifications, expertise and experience in general corporate management, finance, banking, laws and other allied fields enabling them to contribute effectively in their capacity as Directors of the Company.
None of the Directors of the Company are related to each other except Dr. Vijay Sankeshwar, Chairman & Managing Director (CMD) and Dr. Anand Sankeshwar, Managing Director (MD).
All Independent Directors have given due declarations that they meet the criteria of independence as laid down under section 149 (6) and (7) of the Companies Act, 2013 and under extant provisions of the SEBI Listing Regulations.
During the year, five Board Meetings were held, details of which are provided in the Corporate Governance Report. The intervening gap between the meetings was in compliance with the requirements of the Companies Act, 2013 and SEBI Listing Regulations. Due to the then ongoing pandemic situation, lockdown imposing the restriction on movement of individuals, etc., the board meeting for approval of financial results for the year ended 31st March 2021 was held on 12th June, 2021, with a gap of 125 days earlier from the Board Meeting date, which was permissible vide relevant circulars issued by the related regulatory authorities.
Details of attendance of meetings of the Board, its Committees and the Annual General Meeting are included in the Report on Corporate Governance, which forms part of this Annual Report.
The Board has the following committees:
a. Audit Committee
b. Nomination and Remuneration Committee
c. Corporate Social Responsibility Committee (CSR)
d. Stakeholders Relationship Committee
e. Risk Management Committee
f. Administration Committee
g. Finance Committee
Details such as terms of reference, powers, functions, meetings, membership of committee, attendance of directors etc. are dealt with in Corporate Governance Report forming part of this Annual report.
Board has accepted all recommendations made by the Audit Committee during the year.
a) Inductions
There was no induction of any new Director/KMP during the year under consideration.
b) Retirement/Re-appointment
Mr. K. N. Umesh, Whole-time Director and Dr. Raghottam Akamanchi, Non-Executive Director of the Company, retire by rotation owing to their tenure being the longest amongst retiring directors and being eligible, offer themselves for reappointment. The Board recommends their re-appointment.
The Board recommends the continuation of Mr. Prabhakar Kore as a Non Executive Independent Director owing to his attaining the age of 75 years subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company as mandated under Regulation 17 (1A) of SEBI (LODR) Regulations, 2015.
Pursuant to the completion of their respective five year tenure, your Board recommends the re-appointment of Mr. L R Bhat and Mr. K. N. Umesh as Whole-time Directors of the Company at the ensuing Annual General Meeting of the Company.
c) Resignation
During the year under review, no directors resigned in the Company.
d) Key Managerial Personnel
Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company are Dr. Vijay Sankeshwar, Chairman & Managing Director, Dr. Anand Sankeshwar, Managing Director, Mr. K. N. Umesh, Whole time Director, Mr. L R Bhat, Whole time Director, Mr. Sunil Nalavadi, Chief Financial Officer and Mr. Aniruddha Phadnavis Company Secretary & Compliance Officer. There was no change in Key Managerial Personnel of the Company during the year.
The remuneration and other details of these Key Managerial Personnel for FY 2021-2022 are provided in the Annual Return (MGT 7) which is available on the website of the Company and can be accessed at https://www.vrlgroup.in/vrl_investors_ desk.aspx?display=annual_return
None of the Directors of your Company are disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Companies Act, 2013 and SEBI Listing Regulations. A Certificate to that effect as mandated under Schedule V of the SEBI (LODR) Regulations, 2015 has been obtained from a Company Secretary in practice.
Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, the annual performance of the Board, its Committees, Chairperson and Individual Directors including Independent Directors was evaluated as per the criteria laid down by the Nomination and Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report which forms part of this Annual Report.
A diverse Board enables efficient functioning through differences in perspective and skill and also fosters differentiated thought processes at the back of varied industrial and management expertise, gender and knowledge. The Board recognizes the importance of a diverse composition and has adopted a Board Diversity policy which sets out the approach to diversity.
The said policy can be accessed through the following link : https://www.vrlgroup.in/investor_download/Board%20 diversity%20policy. docx
In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:
i) In the preparation of the annual accounts, the applicable accounting standards (IndAS) have been followed along with proper explanation relating to material departures. The Ind AS are prescribed under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.
iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv) The directors have prepared the annual accounts on a going concern basis.
v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
vii) Based on the framework of internal financial controls established and maintained by the Company, work performed by the internal auditors , statutory auditors, reviews performed by the management and the relevant Board Committees, the Board, in concurrence with the Audit Committee, is of the opinion that the Company''s internal financial controls were adequate, operational and effective as on March 31,2022.
All related party transactions that were entered into during the financial year were on arm''s length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict of interest with the company at large.
All Related Party Transactions are placed before the Audit Committee as also to the Board for prior approval. Omnibus approval was obtained every Quarter for transactions which are repetitive in nature. A statement containing details of all transactions entered into pursuant to omnibus approval are placed before the Audit Committee and the Board for review and approval on a quarterly basis.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors of the Company can be viewed on the website of the Company through the following link.
http://vrlgroup.in/investor_download/RPT%20Policy.pdf
There were no material related party transactions entered between the Company, Directors, management, or their relatives. All the contracts/arrangements/ transactions entered into by the Company with the related parties during the financial year 202122 were in the ordinary course of business and on an arm''s length basis. In our opinion there were no âmaterialâ transactions that warrant a disclosure in this report.
Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 does not form a part of this report.
In adherence to Section 178(1) of the Companies Act, 2013, the Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes and other matters provided under sub section (1) (3) of section 178 of the Companies Act, 2013. The Remuneration Policy is annexed to this report as Annexure B. The said policy alternatively can also be accessed on the website of the Company at the following link:
http://vrlgroup.in/investor_download/Nomination_Remuneration%20Policy.pdf
The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and specified employees in the course of day to day business operations of the company. The Company believes in âZero Toleranceâ against bribery, corruption and unethical dealings / behavior in any form and the Board has laid down certain directives to counter such acts. Such code of conduct has also been placed on the Company''s website. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance on the expected behavior from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. Pursuant
to SEBI (LODR) Regulations, 2015, a confirmation from the Chairman and Managing Director regarding compliance with the Code by all the Directors and senior management of the Company is given as a part of the Annual Report.
The Company has a Vigil Mechanism Policy in line with the provisions of Section 177(9) and Section 177(10) of the Companies Act, 2013 to deal with instances of fraud and mismanagement, if any. Staying true to our core values being committed to high standards of Corporate Governance and stakeholder responsibility, the said policy ensures that strict confidentiality is maintained in respect of whistle blowers whilst dealing with concerns and also specified that no discrimination will be meted out to any person for a genuinely raised concern and also provides a direct access to the Chairman of the Audit Committee. During the year under review none of the personnel have been denied access to the Chairman of Audit Committee.
The Vigil Mechanism policy is available on the website of the Company and can be accessed at the following link.
http://vrlgroup.in/investor_download/vigil_Mechanism.pdf.
In terms of the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended (PIT Regulations), the Company has adopted a Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders with a view to regulate trading in securities by the Directors and certain designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.
The said code is available on the website of the Company and can be accessed at the following link. http://vrlgroup.in/vrl_investor_desk.aspx?display=policies
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Board of the Company had laid down policies, guidelines, procedures and structure to enable implementation of appropriate internal financial controls across the Company. These control processes enable and ensure the orderly and efficient conduct of Company''s business, including safeguarding of assets, prevention and detection of frauds and errors, the accuracy and completeness of the Accounting records and timely preparation & disclosure of financial statements. These controls also identify the risks and provides for means to minimize / mitigate the risks affecting the business of the Company as a whole. Auditors, as required under the Companies Act 2013, have also reported the existence and operations of these controls in an effective manner.
The Company''s internal audit department enables the Management to mitigate the risks and prevent non-compliance with laws which would affect the financial position of the Company. The scope and authority of the Internal Audit function is well defined and to maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board as well as directly to the Chairman & Managing Director. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the internal audit report from time to time, the management undertakes corrective actions in the relevant areas and thereby strengthens the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee.
Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has in place a risk management architecture that provides a holistic approach to the best of its capabilities. The Company identifies, assesses and mitigates risks that could materially impact its performance in achieving the stated objectives.
The Risk Management Committee and Audit Committee, on a regular basis, reviews the Company''s portfolio of risks and examines it under the light of the Company''s Risk Appetite.
The material risks affecting Company are identified along with related mitigation measures and elaborated in the Risk Management Policy of the Company which has also been hosted on the website of the Company and can be accessed at the following link.
http://vrlgroup.in/investor_download/Risk%20Management%20Policy.pdf
The Company''s Equity Shares are listed on the BSE Ltd and National Stock Exchange of India Limited and the Company has paid the applicable Annual listing fees to these stock exchanges. The Company has also formulated the following Policies as required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015:
âPolicy for Preservation of Documents'' under Regulation 9 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The said policy can be accessed at the following link: http://vrlgroup.in/vrljnvestor_desk.aspx?display=policies
âPolicy on Criteria for determining Materiality of Events/Information'' under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
The said policy can be accessed thru the following link: http://vrlgroup.in/vrljnvestor_desk.aspx?display=policies
a) Statutory Auditors and Audit Report:
In accordance with Section 139 of the Companies Act, 2013 and Rules made thereunder, Members at the 37th Annual General Meeting of the Company had approved the appointment of Statutory Auditors, M/S. Kalyaniwalla & Mistry LLP Chartered Accountants, Mumbai (Firm Registration No. 104607W / W100166) for a period of 5 years from the date of the said Annual General Meeting.
There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report for the financial year ended March 31,2022. Pursuant to provisions of section 143(12) of the Companies Act 2013, the Statutory Auditors have not reported any incident of fraud to the Audit Committee during the year under review.
b) Cost Auditors & Cost Audit Report
Section 148 (1) of the Companies Act 2013 read with Rules made thereunder mandates every Company belonging to category prescribed in the related Rules to undertake a Cost Audit. In compliance with said provision, Company had appointed M/s S.K. Tikare & Co., Cost Accountants, Belagavi, to audit the cost records for FY 2021-22 pertaining to its Wind Power division. The Cost Auditor has submitted the Cost Audit report for FY 2021-22 and the same is annexed as Annexure C herewith.
There are no qualifications, reservations or adverse remarks made by the Cost Auditors in their report for the financial year ended 31st March, 2022.
Pursuant to the recommendation of the Audit Committee, the Board of Directors have re-appointed M/s S K Tikare & Co., Cost Accountants, Belagavi, as the Cost Auditors for FY 2022-23 at a remuneration of Rs.70,000/-, excluding applicable taxes and out-of-pocket expenses subject to approval by the members at the ensuing Annual General Meeting of the Company.
c) Secretarial Auditor & Secretarial Audit Report
Pursuant to provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company had appointed Mr. R. Parthasarathy, Company Secretary in practice to undertake the Secretarial Audit of the Company for FY 2021-22. The Secretarial Audit report in Form MR-3 is annexed herewith as Annexure D.
Pursuant to the recommendation of the Audit Committee, the Board of Directors have re-appointed Mr. R Parthasarathy, Company Secretary to conduct the Secretarial Audit for FY 2022-23 at its meeting held on 27th May 2022 as also to issue the applicable Secretarial Compliance Report to be submitted to the Stock Exchanges.
With reference to the observation made by the Secretarial Auditor in his report relating to the gap of 125 days between two board meetings w.r.t. the meeting held on 12th June 2021, it is submitted that due to the then extra-ordinary situation caused by Covid-19/Lock down/ restrictions on movement of persons/Auditors and SEBI granting time for filing Financial results for the year/quarter ending 31.03.2021 up to 30.06.2021 and MCA also granting permission to hold Board Meeting beyond gap of 120 days during the said period, the Company held its Meeting after a gap of 125 days taking into account the feasibility and convenience of all concerned which was the earliest possible schedule for holding the said Meeting.
As required under the provisions of the section 135 of the Companies Act 2013, the Board has constituted the Corporate Social Responsibility Committee (CSR Committee) which monitors and oversees various CSR initiatives and activities of the Company. The CSR Committee comprises of five directors out of which two are Independent Directors. The CSR Committee met three times during the year. Further details such as composition, terms, functions, meetings and attendance of directors of the said committee are provided in the Corporate Governance report forming part of this Annual Report.
The Company has undertaken and contributed to various projects identified by other eligible Trusts/Educational Institutions for CSR related activities as approved by the CSR Committee during the year mainly towards Education, Healthcare, and Sports, etc.
A detailed Annual Report as required to be given under Section 135 of the Companies Act, 2013 and Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 containing details of CSR activities & contents of CSR policy is annexed as Annexure E.
CSR policy of the Company is available on the Company''s website and can be accessed through the following link. http:// vrlgroup.in/investor_download/CSR%20POLICYpdf
A copy of the Annual Return of the Company containing the particulars prescribed u/s 92 of the Companies Act, 2013, in Form MGT-7, as of the end of the financial year i.e. 31st March, 2022 is uploaded on the website of the Company in the Investor Relations Section under the tab âAnnual Return'' and can be accessed at https://www.vrlgroup.in/vrl_investors_desk. aspx?display=annual_return
The particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and expenditure are annexed hereto as Annexure F and forms part of this Report.
The information required pursuant to Section 197 (12) read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, forms of this report and annexed herewith as Annexure G.
A statement containing top ten employees in terms of remuneration and the names of every employee who was in employment of the Company throughout the year and was in receipt of the specified remuneration is also included therein.
The Company is in compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
There were no material changes and commitments that occurred subsequent to the end of the financial year till the date of this report, which affects the financial position of the Company.
During the year under review, your Company experienced cordial relationship with workers and employees at all levels, throughout the year.
There are no significant and material orders passed by the regulators or courts or tribunals impacting going concern status and company''s operations for a foreseeable future.
The Company has in place a Policy for Prevention Prohibition and Punishment of Sexual Harassment of Women at Work place in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The Directors take this opportunity to thank the Company''s customers, shareholders, investors, suppliers, bankers, financial institutions and Central & State Governments for their consistent support and cooperation extended to the Company. The Directors also wish to place on record their appreciation towards employees at all levels for their hard work, dedication and commitment.
Mar 31, 2018
DIRECTORSâ REPORT
Dear Members,
The directors are pleased to present the thirty fifth annual report of your Company together with the audited financial statements for the financial year ended March 31, 2018.
SUMMARY OF FINANCIAL RESULTS (Rs, in lakhs)
Particulars |
Year Ended |
Year Ended |
31st March, 2018 |
31st March, 2017 |
|
Total Income |
1,93,655.07 |
1,81,238.33 |
Profit before Finance cost and Depreciation |
24,846.44 |
22,748.13 |
Finance Costs |
1,144.09 |
2,400.21 |
Depreciation & Amortization expense |
9,763.42 |
9,817.85 |
Profit Before Tax |
13,938.93 |
10,530.07 |
Tax Expense |
4,682.51 |
3,482.81 |
Net Profit After Tax |
9,256.42 |
7,047.26 |
Other comprehensive income |
(186.01) |
75.98 |
Total Comprehensive income |
9070.41 |
7123.24 |
Basic& diluted Earnings per Share (Rs.) |
10.17 |
7.72 |
OPERATING HIGHLIGHTS / STATE OF COMPANYâS AFFAIRS
During the year under consideration, your Company had gross revenues of Rs, 1,93.655.07 lakhs as against Rs, 1,81,238.33 lakhs in previous year depicting a growth of 6.85% resulting in Profit before tax (PBT) of Rs, 13,938.93 lakhs as against the Profit before tax of Rs, 10,530.07 lakhs in the previous year depicting a growth rate of 32.37%.
While the Company''s Goods Transport Division achieved a turnover of Rs, 1,51,722.15 lakhs registering a growth rate of 6.39% as compared to the previous year, Bus Operations division achieved a turnover of 35,870.88 lakhs registering a growth rate of 9.96%. A detailed financial performance analysis is provided in the Management Discussion & Analysis Report, which is part of this Annual Report.
SHARE CAPITAL
During the year under consideration, the paid up Capital has decreased from Rs, 9124.35 Lakhs to Rs,9034.35 Lakhs due to buy-back of 9,00,000 Equity shares of Rs, 10 each (fully paidup) at an average price of Rs, 419.39/- per share from non-promoter shareholders.
The company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2018, none of the Directors of the company hold instruments convertible into equity shares of the Company.
BUYBACK OF SHARES
The Board of Directors of the Company at their meeting held on November 3, 2017 approved the buyback of its fully paid up Equity Shares for an aggregate amount not exceeding Rs,4,140 Lakhs, (âMaximum Buy-back Sizeâ), being 7.65% of the total paid up share capital and free reserves of the Company based on the audited financial statements of the Company as at March 31, 2017 (being the date of last audited financial statements of the Company), for a price not exceeding Rs,460/- per Equity Share (âMaximum Buy-back Priceâ) from the shareholders of the Company excluding promoters, promoter group, persons acting in concert and persons who are in control of the Company, payable in cash via the open market route through the stock exchanges, in accordance with the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998, as amended (âSEBI Buyback Regulationsâ) and the Companies Act, 2013 and rules made thereunder, as amended (the process hereinafter referred to as the âBuy-backâ).
The Company completed the Buyback of 9,00,000 equity shares at an average price of Rs,419.39/- per share on January 30, 2018. The outlay on account of buy-back was Rs,3774.60/- Lakhs, which represented 91.17% of the amount earmarked for Maximum Buyback Size.
Accordingly, the Company also extinguished all 9,00,000 equity shares bought back within the stipulated timeframe under the governing regulations and also filed with Securities and Exchange Board of India (SEBI) and Stock Exchanges, a report of auditors confirming the extinguishment of shares as required under the extant provisions of the governing laws.
Category of Shareholder |
Pre Buy-back |
Post Buy-back |
||
Number of Shares |
% to the existing Equity Share capital |
Number of Shares |
% to post Buyback Equity Share capital |
|
Promoters and promoter group |
6,14,80,000 |
67.38 |
6,14,80,000 |
68.05 |
Foreign Investors (Including Non-Resident Indians, |
1,06,85,863 |
11.71 |
||
FIIs, FPIs, Foreign Mutual Funds, Foreign Nationals) |
||||
Financial Institutions/Banks, Mutual Funds promoted |
1,05,95,633 |
11.62 |
( 2,88,63,495 |
( 31.95 |
by Banks/ Institutions |
||||
Others (Public, Bodies Corporate, etc.) |
84,81,999 |
9.30 |
||
Total |
9,12,43,495 |
100 |
9,03,43,495 |
100 |
CHANGE IN THE NATURE OF BUSINESS
There is no change in nature of business of the Company. Your Company continues to be one of the leading Logistics service providers in the country. The service offering of the Company in the Logistics space are Goods transport, Passenger transport and Courier services apart from transport of passenger by Air and Wind Power Generation business. However, the company has passed necessary regulation for amendment of objects clause to facilitate undertaking allied business activities as mentioned herein after.
AMENDMENT TO THE MAIN OBJECTS OF MEMORANDUM OF ASSOCIATION
Your Board had approved the amendments to objects clause of Memorandum of Association of the Company, to facilitate the Company encash opportunities coming its way, at its Board meeting held on December 2, 2017 which was subject to approval of shareholders by special resolution. Amendment of main objects inter alia include the following:
- Distribution / dealership / transacting of vehicle spares and components and other products;
- Designing / Manufacturing truck / bus and other vehicle bodies and other works; and
- Providing logistics business solutions.
Shareholders have approved the said amendment by special resolution by postal ballot and details of voting pattern are provided in the Corporate Governance report which forms part of this Annual Report.
The company has also received approval from the Registrars of Companies for the amendment of objects clause.
CAPITAL EXPENDITURE:
During the Financial year 2017-18, the company has incurred a capital expenditure of Rs,4733.65 lakhs. Out of the same, an amount of Rs, 1759.11 lakhs was invested on fleet addition and comprised of 50 long route Ashok Leyland vehicles as also other smaller vehicles for short haul apart from cars. Other capex components include the cost incurred on additions to Buildings, Plant & Equipment, Office Equipment, Leasehold Improvements and Furniture & Fittings. Apart from the same the Company has also extended substantial advances for purchase of properties at Mangaluru and Surat.
DIVIDEND:
During the Financial year 2017-18, no dividend was declared. The Board does not recommend any dividend for the year.
In compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 (âSEBI Listing Regulationsâ), the Dividend policy of the Company is available on the Company''s website at http:// vrlgroup.in/vrl_ investor desk. aspires ,display=policies. A copy of the same is annexed to this Report as Annexure A.
TRANSFER OF UNPAID AND UNCLAIMED AMOUNT TO IEPF:
The Ministry of Corporate Affairs under Section 124 and 125 of the Companies Act, 2013 requires dividends that are not encashed/claimed by the shareholders for a period of seven consecutive years, to be transferred to the Investor Education and Protection Fund (IEPF).
During the year under consideration, no amount was due for transfer to IEPF in accordance with Section 125 of the Companies Act, 2013.
The details of unclaimed dividend and IPO share application money along with their due dates for transfer to IEPF is provided in the Corporate Governance Report which forms part of this Annual Report.
TRANSFER TO RESERVES:
The Company has transferred an amount of '' 925.64 lakhs to the General Reserve out of current year''s profits in line with earlier years.
SUBSIDIARY COMPANIES:
The Company does not have any subsidiary.
FIXED DEPOSITS
The Company has not accepted any deposits during the year within the meaning of Section 73 of the Companies Act,2013 and the rules made thereunder.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. Details of investments made by the company are given in the notes to the financial statements.
CREDIT RATING
ICRA Limited has upgraded the Long term rating of the Company from [ICRA] A- (pronounced as ICRA A Minus) to [ICRA] A (pronounced as ICRA A). The outlook on the long term rating has been revised from Stable to Positive.
MANAGEMENTâS DISCUSSION AND ANALYSIS REPORT
Management''s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI Listing Regulations read with Schedule V thereto, is presented in a separate section forming part of this Annual Report.
BUSINESS RESPONSIBILITY REPORT
Securities Exchange Board of India vide its notification no. SEBI/LAD-NRO/GN/2015-16/27 dated December 22, 2015 has amended the SEBI Listing Regulations whereby mandating top five hundred listed companies to include a report on business responsibility. The said report forms part of this Annual Report.
CORPORATE GOVERNANCE
The Company is committed to maintain the steady standards of corporate governance and adhere to the corporate governance requirements set out under extant law. The Report on corporate governance as stipulated under Regulation 34 of the SEBI Listing Regulations read with Schedule V thereto forms part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Regulations, as also the related certificate from CEO/ CFO are attached to the Report on Corporate Governance.
The auditors'' certificate does not contain any qualification, reservation or adverse remarks.
BOARDS COMPOSITION AND INDEPENDENCE
The composition of the Board is in conformity with Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI Listing Regulations, which stipulates that the Board should have optimum combination of Executive and Non-executive Directors with at least one Woman Director and at least 50% of the Board should consist of Independent directors, as the Chairman of our Board is an Executive Director.
As on March 31, 2018, the Board comprised of twelve Directors. Out of these, two are Managing Directors who are also the Promoters of the Company and two are Whole Time Directors.
Of the eight Non-Executive Directors, six are Independent Directors. The Company has also appointed one Woman Director, who also is an independent Director. All the Directors possess the requisite qualifications, expertise and experience in general corporate management, finance, banking, laws and other allied fields enabling them to contribute effectively in their capacity as Directors of the Company.
None of the Directors of the Company are related to each other except Dr. Vijay Sankeshwar, Chairman & Managing Director (CMD) and Mr. Anand Sankeshwar, Managing Director (MD) who are related.
All Independent Directors have given due declarations that they meet the criteria of independence as laid down under section 149(7) of the Companies Act, 2013 and under extant provisions of the SEBI Listing Regulations.
NUMBER OF MEETINGS OF THE BOARD
During the year, five Board Meetings were held, details of which are provided in the Corporate Governance Report. The intervening gap between the Meetings was in compliance with the requirements stipulated under the provisions of the Companies Act, 2013.
COMMITTEES OF THE BOARD
The Board has the following committees:
a. Audit and Risk Management Committee
b. Nomination and Remuneration Committee
c. CSR Committee
d. Stakeholders Relationship Committee
Details such as terms of reference, powers, functions, meetings, membership of committee, attendance of directors etc. are dealt with in Corporate Governance Report forming part of this Annual report.
Board has accepted all recommendations made by the Audit and Risk Management Committee during the year.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) Inductions
During the year under consideration, Mr. K N Umesh was appointed as a Whole Time Director, w.e.f May 19, 2017 and his appointment was subsequently confirmed by the members at the 34th Annual General Meeting of the Company. Mr. L R Bhat was appointed as a whole time director of the Company, at the AGM held on August 4, 2017.
b) Retirement/Re-appointment
Mr. K N Umesh, Whole time director and Dr. Raghottam Akamanchi, Non-Executive Director, retire by rotation and being eligible, offer themselves for reappointment. The Board recommends their appointment.
During the year under review Mr. Ramesh Shetty, Non-Executive Director, retired from the office of director at the 34th Annual General Meeting of the Company held on August 4, 2017. The Board wishes to place on record his valuable contribution to the company during his tenure as a Director.
None of Independent Directors will retire at the ensuing Annual General Meeting.
c) Resignation
During the year under review, Mr. S R Prabhu, Non-Executive Director of the Company resigned as a Director on May 19, 2017 on personal grounds. The Board wishes to place on record his valuable contribution to the company during his tenure as a Director.
KEY MANAGERIAL PERSONNEL
Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company are Dr. Vijay Sankeshwar, Chairman and Managing Director, Mr. Anand Sankeshwar, Managing Director, Mr. K N Umesh, Whole time Director, Mr. L R Bhat, Whole time Director, Mr. Sunil Nalavadi, Chief Financial Officer and Mr. Aniruddha Phadnavis, Company Secretary & Compliance Officer.
STATUTORY DISCLOSURES
None of the Directors of your Company are disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Companies Act, 2013 and SEBI Listing Regulations.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, the annual performance of the Board, its Committees, Chairperson and Individual Directors including Independent Directors was evaluated as per the criteria laid down by the Nomination and Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report which forms part of this Annual Report.
BOARD DIVERSITY
A diverse Board enables efficient functioning through differences in perspective and skill and also fosters differentiated thought processes at the back of varied industrial and management expertise, gender and knowledge. The Board recognizes the importance of a diverse composition and has adopted a Board Diversity policy which sets out the approach to diversity. The said policy can be accessed thru the following link.
http://vrlgroup.in/vrl_investor_desk.aspxRs,display=policies
DIRECTORâS RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:
i) In the preparation of the annual accounts, the applicable accounting standards (IndAS) have been followed along with proper explanation relating to material departures.
ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period.
iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv) The directors have prepared the annual accounts on a going concern basis.
v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.
Based on the framework of internal financial controls established and maintained by the Company, work performed by the internal, statutory and secretarial auditors, reviews performed by the management and the relevant Board Committees, the Board, in concurrence with the Audit and Risk Management Committee, is of the opinion that the Company''s internal financial controls were adequate and effective as on March 31, 2018.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were on arm''s length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.
All Related Party Transactions are placed before the Audit and Risk Management Committee as also to the Board for prior approval. Omnibus approval was obtained semi-annually for transactions which are of repetitive in nature. A statement containing details of all transactions entered into pursuant to omnibus approval are placed before the Audit and Risk Management Committee and the Board for review and approval on a quarterly basis.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors of the Company can be viewed on the website of the Company thru the following link.
http://vrlgroup.in/investor_download/RPT%20Policy.pdf
There were no material significant related party transactions entered between the Company, Directors, management, or their relatives. All the contracts/arrangements/transactions entered into by the Company with the related parties during the financial year 2017-18 were in the ordinary course of business and on an arm''s length basis. In our opinion there were no âmaterialâ transactions that warrant a disclosure in this report.
Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 does not form a part of this report.
NOMINATION AND REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes and other matters provided under sub section (3) of section 178 of the Companies Act 2013. The Remuneration Policy is annexed to this report as Annexure B. The said policy alternatively can also be accessed on the website of the Company at the following link:
http://vrlgroup.in/investor_download/Nomination_Remuneration%20Policy.pdf CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and specified employees in the course of day to day business operations of the company. The Company believes in âZero Toleranceâ against bribery, corruption and unethical dealings / behaviour in any form and the Board has laid down certain directives to counter such acts. Such code of conduct has also been placed on the Company''s website. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance on the expected behaviour from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism Policy to deal with instances of fraud and mismanagement, if any. Staying true to our core values being committed to high standards of Corporate Governance and stakeholder responsibility, the said policy ensures that strict confidentiality is maintained in respect of whistle blowers whilst dealing with concerns and also specified that no discrimination will be meted out to any person for a genuinely raised concern and also provides a direct access to the Chairman of the Audit and Risk Management Committee. During the year under review none of the personnel has been denied access to the Chairman of Audit and Risk Management Committee.
http://vrlgroup.in/investor_download/vigil_Mechanism.pdf
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders with a view to regulate trading in securities by the Directors and certain designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.
The said code is available on the website of the Company and can be accessed at the following link.
http://vrlgroup.in/vrl_investor_desk.aspxRs,display=policies
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Board of the Company had laid down policies, guidelines, procedures and structure to enable implementation of appropriate internal financial controls across the Company. These control processes enable and ensure the orderly and efficient conduct of Company''s business, including safeguarding of assets, prevention and detection of frauds and errors, the accuracy and completeness of the Accounting records and timely preparation & disclosure of financial statements. These controls also identify the risks and provides for means to minimize / mitigate the risks affecting the business of the Company as a whole. Auditors, as required under the Companies Act 2013, have also certified that these internal financial controls are in order and efficient in mitigating the risks.
The Company''s internal audit department enables the Management to mitigate the risks and prevent non-compliance of laws which would affect the financial posi
position of the Company. The scope and authority of the Internal Audit function is well defined and to maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit and Risk Management Committee of the Board as well as directly to the Chairman & Managing Director. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the internal audit report from time to time, the management undertakes corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit and Risk Management Committee.
BUSINESS RISK MANAGEMENT:
The Company has in place a risk management architecture that provides a holistic approach to the best of its capabilities. The Company identifies, assesses and mitigates risks that could materially impact its performance in achieving the stated objectives.
The Audit and Risk Management Committee, on a regular basis, reviews the Company''s portfolio of risks and examines it under the light of the Company''s Risk Appetite.
The material risks affecting Company are identified along with related mitigation measures and elaborated in the Risk Management Policy of the Company which has also been hosted on the website of the Company and can be accessed at the following link.
http://vrlgroup.in/investor_download/Risk%20Management%20Policy.pdf
OTHER POLICIES UNDER SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
The Company''s Equity Shares are listed on the BSE and NSE and has paid its Annual listing fees to these stock exchanges for the Financial Year 2018-19. The Company has also formulated the following Policies as required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015:
1. âPolicy for Preservation of Documents'' under Regulation 9 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The said policy can be accessed at the following link:
http://vrlgroup.in/vrl_investor_desk.aspxRs,display=policies
2. âPolicy on Criteria for determining Materiality of Events/Information'' under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
The said policy can be accessed thru the following link:
http://vrlgroup.in/vrl_investor_desk.aspxRs,display=policies
AUDITORS & AUDIT REPORTS
a) Statutory Auditors & Audit Report:
In accordance with Section 139 of the Companies Act, 2013 and Rules made thereunder, Members at the 32nd Annual General Meeting of the Company approved the appointment of Statutory Auditors, M/s Walker Chandiok and Co., Chartered Accountants, LLP Mumbai for a period of 5 years. The said appointment was subject to ratification by members every year.
However, the requirement of ratification of appointment of Statutory Auditors under proviso to Section 139 of the Companies Act, 2013 is done away with under the Companies (Amendment) Act, 2017. As such, your Board does not seek members'' ratification for their re-appointment.
There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report for the financial year ended March 31, 2018. Pursuant to provisions of section 143 (12) of the Companies Act 2013, the Statutory Auditors have not reported any incident of fraud to the Audit and Risk Management Committee during the year under review.
b) Cost Auditors & Cost Audit Report:
Section 148 of the Companies Act 2013 read with Rules made thereunder mandates every Company belonging to category prescribed in the Rules to undertake a Cost Audit. In compliance with said provision, Company had appointed M/s S.K. Tikare & Co., Cost Accountants, Belgaum to audit the cost records for FY 2017-18. The Cost Auditor has submitted the Cost Audit report for FY 2017-18 and the same is annexed as Annexure C herewith.
There are no qualifications, reservations or adverse remarks made by the Cost Auditors in their report for the financial year ended March 31, 2018.
Pursuant to the recommendation of the Audit and Risk Management Committee, the Board of Directors have re-appointed M/s S K Tikare & Co., Cost Accountants, Belgaum as the Cost Auditors for FY 2018-19 at a fixed remuneration of '' 60,000/-, excluding applicable taxes, subject to approval by the members at the ensuing Annual General Meeting of the Company.
Board recommends the approval of the said remuneration payable to the Cost Auditor in accordance with Section 148 of the Companies Act 2013 and the Rules made thereunder.
c) Secretarial Auditor & Secretarial Audit Report:
Pursuant to provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Mr. R Parthasarathi, Company Secretary in practice to undertake the Secretarial Audit of the Company for FY 2017-18. The Secretarial Audit report is annexed herewith as Annexure D.
There are no qualifications made by the Secretarial Auditor in his report for the financial year ended March 31, 2018. Response to the comment made by the Secretarial Auditor in respect of the Company not fully expending the requisite quantum of CSR spend during the year as required under Section 135 of the Companies Act 2013 is given in Annual Report on CSR activities
- Annexure E.
Pursuant to the recommendation of the Audit and Risk Management Committee, the Board of Directors have re-appointed Mr. R Parthasarathi, Company Secretary in Practice to conduct the Secretarial Audit for FY 2018-19 at its meeting held on May 26, 2018.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As required under the provisions of the section 135 of the Companies Act 2013, the Board has constituted the Corporate Social Responsibility Committee which monitors and oversees various CSR initiatives and activities of the Company. The CSR Committee comprises of four directors and three of whom are Independent Directors. The CSR Committee met once during the year. Further details such as composition, terms, functions, meetings and attendance of directors of the said committee are provided in the Corporate Governance report forming part of this Annual Report.
The Company has set up a trust - VRL Foundation for implementing CSR activities which are mainly related to Healthcare, Sports and Education. A detailed report containing details of CSR activities & contents of CSR policy is annexed as Annexure E.
CSR policy of the Company is available on the Company''s website and can be accessed through the following link.
http://vrlgroup.in/investor_download/CSR%20POLICYpdf
EXTRACT OF ANNUAL RETURN:
Extract of the Annual Return in form MGT-9 is annexed herewith as Annexure F.
DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and expenditure are annexed hereto as Annexure G and forms part of this Report.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, forms part of this report and annexed herewith as Annexure H.
A statement containing top ten employees in terms of remuneration and the names of every employee who is in employment of the Company throughout the year and is in receipt of annual remuneration of ''102 Lakhs or more or employed for a part of year and in receipt of '' 8.50 lakhs or more per month needs to be disclosed in the Board''s report. As such the information is annexed as Annexure H to this report.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company is in compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India. MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments that occurred subsequent to the end of the financial year till the date of this report, which affects the financial position of the Company.
INDUSTRIAL RELATIONS
During the year under review, your Company experienced cordial relationship with workers and employees at all levels, throughout the year.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts or tribunals impacting going concern status and company''s operations for a foreseeable future.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013
The Company has in place a Policy for Prevention Prohibition and Punishment of Sexual Harassment of Women at Work place in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGMENTS AND APPRECIATION
The Directors take this opportunity to thank the Company''s customers, shareholders, investors, suppliers, bankers, financial institutions and Central & State Governments for their consistent support to the Company. The Directors also wish to place on record their appreciation to employees at all levels for their hard work, dedication and commitment..
For and on behalf of the Board
Dr. Vijay Sankeshwar
Chairman & Managing Director
DIN: 00217714
Place: Hubballi
Date: 26th May 2018
Mar 31, 2017
Dear Members,
The Directors are pleased to present the Thirty Fourth Annual Report of your Company together with the Audited Financial Statements for the financial year ended 31st March 2017.
1. SUMMARY OF FINANCIAL RESULTS
(Rs. in lakhs)
Particulars |
Year Ended 31st March, 2017 |
Year Ended 31st March, 2016 |
Total Income |
1,81,238.33 |
1,73,120.09 |
Profit Before Finance Charges and Depreciation |
22,748.13 |
27,932.10 |
Finance Charges |
2,400.21 |
3,162.79 |
Provision for Depreciation |
9,817.85 |
8,969.54 |
Net Profit Before Tax (incl. exceptional income ) |
10,530.07 |
15,799.77 |
Tax Expense |
3,482.81 |
5,375.68 |
Net Profit After Tax |
7,047.26 |
10,424.09 |
Other comprehensive income |
75.98 |
(301.58) |
Interim Dividend on Equity Shares |
(3,649.74) |
(4,562.17) |
Tax on Interim Dividend |
(743.00) |
(928.75) |
Transfer to General Reserve |
(704.73) |
(1,023.13) |
Surplus carried to Balance Sheet |
2,025.77 |
3,608.46 |
2. OPERATING HIGHLIGHTS / STATE OF COMPANYâS AFFAIRS
The Company has prepared the Financial Statements under Indian Accounting Standards (Ind AS) for the first time. The details of various adjustments to the Financial Statement necessitated from such implementation have been covered in the Notes to the Financial Statements.
During the year under consideration, your Company had a gross income of Rs.1,81,238.33 lakhs as against previous year''s gross income Rs.1,73,120.09 lakhs depicting a growth rate of 4.69%. The Company has earned a Profit Before Tax (PBT) of Rs.10,530.07 lakhs as against the Profit Before Tax of Rs.15,799.77 lakhs in the previous year.
The Company''s Goods Transport Division achieved a turnover of Rs.1,42,615.26 lakhs thereby registering a growth rate of 5% as compared to the previous year. The growth in other verticals including bus operations was marginal. However, the dip in Net profits as compared to the previous year was mainly due to unhealthy competition in passenger transport, marked increase in diesel cost and non availability of bio diesel which resulted in erosion of margins. During the year the Company earned a net profit of Rs.7,047.26 lakhs. The Company has initiated cost cutting and other remedial measures to arrest this decline.
3. SHARE CAPITAL
The Paid Up Equity Share Capital as at 31st March 2017 stood at Rs.9,124.35 Lakhs. During the year under review, the Company has not 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 hold instruments convertible into equity shares of the Company.
4. CHANGE IN THE NATURE OF BUSINESS
There is no change in nature of business of the Company. Your Company continues to be one of the leading Logistics service providers in the country. The service offering of the Company in the Logistics space are Goods transport, Passenger transport and Courier services apart from Transport of passengers by air and Wind Power Generation verticals.
5. CAPITAL EXPENDITURE
During the Financial Year 2016-17, the company has incurred a capital expenditure of Rs.7,856.14 lakhs. Out of the same, an amount of Rs.6,157.01 lakhs was invested on fleet addition. Other capex components included the cost incurred on additions to Buildings, Plant & Equipment, Office Equipment, Leasehold Improvements and Furniture & Fittings.
6. DIVIDEND
During the Financial year 2016-17, your directors declared Interim Dividend at the rate of 40% translating to Rs.4.00 per equity share. The Board recommends no further dividend and proposes that the interim dividend so declared and paid be treated as the final dividend for the financial year 2016-17.
7. TRANSFER OF UNPAID AND UNCLAIMED AMOUNT TO IEPF
During the year under consideration, no amount was due for transfer to IEPF as per section 125 of the Companies Act, 2013.
The details of unclaimed dividend and IPO share application money along with their due dates for transfer to IEPF is provided in the Corporate Governance Report which forms part of this Annual Report.
8.TRANSFER TO RESERVES
The Company has transferred an amount of Rs.704.73 lakhs to the General Reserve out of current year''s profits.
9. SUBSIDIARY COMPANIES
The Company does not have any subsidiary.
10. FIXED DEPOSITS
The Company has not accepted any deposits during the year within the meaning of Section 73 of the Companies Act, 2013 and the Rules made there under.
11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013.
Details of investments made by the Company are given in the notes to the Financial Statements.
12. MANAGEMENTâS DISCUSSION AND ANALYSIS REPORT
Management''s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter called as SEBI Listing Regulations) read with Schedule V thereto, is presented in a separate section forming part of this Annual Report.
13. BUSINESS RESPONSIBILITY REPORT
Securities Exchange Board of India vide its notification no. SEBI/LAD-NRO/GN/2015-16/27 dated 22nd December 2015 has amended the SEBI Listing Regulations mandating the top five hundred listed companies to include a report on business responsibility. The same forms part of this Annual Report.
14. CORPORATE GOVERNANCE
The Company is committed to maintain the steady standards of corporate governance and adhere to the corporate governance requirements set out under extant law. The report on corporate governance as stipulated under Regulation 34 of the SEBI Listing Regulations read with Schedule V thereto forms part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Regulations, as also the related certificate from CEO/ CFO are attached to the report on corporate governance.
15. BOARDâS COMPOSITION AND INDEPENDENCE
The composition of the Board is in conformity with Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI Listing Regulations, which stipulates that the Board should have optimum combination of executive and non-executive directors with at least one woman director and at least 50% of the Board should consist of independent directors, as the Chairman of our Board is an executive director.
As on 31st March 2017, the Board comprised of twelve Directors. Out of these, two are Executive Directors - Chairman & Managing Director and Managing Director, who are also the Promoters of the Company.
Of the ten Non-Executive Directors, six are Independent Directors including one Woman Director who is an Independent Director. All the Directors possess the requisite qualifications, expertise and experience in general corporate management, finance, banking, laws and other allied fields enabling them to contribute effectively in their capacity as Directors of the Company.
None of the Directors of the Company are related to each other except Dr. Vijay Sankeshwar, Chairman & Managing Director (CMD) and Mr. Anand Sankeshwar, Managing Director (MD).
All Independent Directors have given due declarations that they meet the criteria of independence as laid down under Section 149(7) of the Companies Act, 2013 and under extant provisions of the SEBI Listing Regulations.
16. NUMBER OF MEETINGS OF THE BOARD
During the year four board meetings were held, details of which are provided in the Corporate Governance Report. The intervening gap between the meetings was in compliance with the related provisions of the Companies Act, 2013.
17. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) Inductions
There was no change in Directors during the year under consideration. During the current year Mr. K N Umesh was appointed as an Additional Director who holds office upto the date of Annual General Meeting (AGM). He was also appointed as a Whole Time Director subject to the approval of members. A Notice has been received from a member for his appointment as a Director at the AGM. The Board recommends his appointment as a Whole Time Director at the AGM. The said appointment was made in compliance with Regulation 17 of SEBI Listing Regulations with respect to composition of Board as Mr. S R Prabhu has resigned from his office as a Director w.e.f. 19th May 2017.
b) Retirement/Re-appointment
The tenure of Dr. Vijay Sankeshwar, Chairman & Managing Director concluded on 31st December 2016 and pursuant to recommendation by Nomination and Remuneration committee, the Board of Directors at their meeting held on 27th October
2016 re-appointed him as the Chairman and Managing Director of the Company w.e.f. 1st January 2017 for a period of 5 years. The said re-appointment needs approval of Shareholders at the 34th AGM of the Company. Accordingly a resolution along with explanatory statement as required under the extant provisions of the Companies Act, 2013 is provided in Notice of the 34th AGM. Board recommends the re-appointment of Dr. Vijay Sankeshwar as the Chairman and Managing Director of the Company.
Dr. Ashok Shettar, Non-Executive Director, retires by rotation owing to his tenure being the longest amongst retiring directors and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.
Mr. Ramesh Shetty, Non-Executive Director, though being eligible has expressed unwillingness to continue as Director of the Company. Board is in receipt of a notice under Section 160 of the Companies Act, 2013 along with the requisite deposit from a member of the Company proposing the candidature of Mr. L R Bhat for the office of Director. Board recommends the appointment of Mr. L R Bhat as a Whole Time Director, liable to retire by rotation.
None of the Independent Directors will retire at the ensuing AGM.
c) Resignation
The Company was in receipt of resignation letter dated 04th May 2015 wherein Mr. S R Prabhu, Non-Executive Director of the Company had requested the Board to relieve him from duties as Director of the Company w.e.f. 19th May 2017. The Board at the meeting held on 19th May 2017 accepted the resignation and placed on record its appreciation for his support as well as his valuable contribution for the functioning of the Board.
18. STATUTORY DISCLOSURES
None of the Directors of your Company are disqualified as per provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Companies Act, 2013 and SEBI Listing Regulations.
19. COMMITTEES OF THE BOARD
The Board has the following committees:
a. Audit Committee
b. Nomination and Remuneration Committee
c. Corporate Social Responsibility Committee
d. Stakeholders Relationship Committee
e. Risk Management Committee
f. Administration Committee
g. Share Transfer Committee
h. Finance Committee
Details such as terms of reference, powers, functions, meetings, membership of committee, attendance of Directors etc. are dealt with in Corporate Governance Report forming part of this Annual Report.
Board has accepted all the recommendations made by the Audit Committee during the year.
20. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, the Board has carried out an evaluation of its own performance, the Directors (including Independent Non Executive and Executive Directors) individually, the performance of its Chairman as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report which forms part of this Annual Report.
21. BOARD DIVERSITY
A diverse Board enables efficient functioning through differences in perspective and skill and also fosters differentiated thought processes at the back of varied industrial and management expertise, gender and knowledge. The Board recognizes the importance of a diverse composition and has adopted a Board Diversity policy which sets out the approach to diversity.
The said policy can be accessed thru the following link.
http://vrlgroup.in/vrljnvestor_desk.aspxRs.display=policies
22. DIRECTORâS RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:
i) In the preparation of the annual accounts, the applicable accounting standards (IndAS) have been followed along with proper explanation relating to material departures.
ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit or loss of the Company for that period.
iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv) The directors have prepared the annual accounts on a going concern basis.
v) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
vi) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.
Based on the framework of internal financial controls established and maintained by the Company, reviews performed by the Management in concurrence with the Audit Committee, your Board is of the opinion that the Company''s internal controls were adequate and effective as on 31st March 2017.
23. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the Financial Year were on arm''s length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.
All related party transactions pre-cleared by the Audit Committee and these are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained semi annually for transactions which are of recurring nature. A statement containing details of all transactions entered into pursuant to omnibus approval are placed before the Audit Committee and the Board for review and approval on a quarterly basis.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors of the Company can be viewed on the website of the Company thru the following link.
http://vrlgroup.in/investor_download/RPT%20Policy.pdf
There were no material significant related party transactions entered between the Company, Directors, Key Managerial Personnel or their relatives. All the contracts/arrangements/transactions entered into by the Company with the related parties during the Financial Year 2016-17 were in the ordinary course of business and on an arm''s length basis. In our opinion there were no âmaterialâ transactions that warrant a disclosure in this report.
Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 does not form a part of this report.
24. NOMINATION AND REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes and other matters provided under sub section (3) of section 178 of the Companies Act, 2013. The Remuneration Policy is stated in the Corporate Governance Report and also annexed to this report as Annexure A. The said policy alternatively can also be accessed on the website of the Company at the following link:
http://vrlgroup.in/investor_download/Nomination_Remuneration%20Policy.pdf
25. CODE OF CONDUCT
The Board of Directors have approved a Code of Conduct which is applicable to the members of the Board and specified employees in the course of day to day business operations of the Company. The Company believes in âZero Toleranceâ against bribery, corruption and unethical dealings / behavior in any form and the Board has laid down directives to counter such acts. The code of conduct has also been placed on the Company''s website. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance on the expected behaviour from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code.
26. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism Policy to deal with instances of fraud and mismanagement, if any. Staying true to our core values being committed to high standards of Corporate Governance and stakeholder responsibility, the said policy ensures that strict confidentiality is maintained in respect of whistle blowers whilst dealing with concerns and also specified that no discrimination will be meted out to any person for a genuinely raised concern and also provides a direct access to the Chairman of the Audit Committee. During the year under review none of the personnel have been denied access to the Chairman of Audit Committee.
The Vigil Mechanism policy is available on the website of the Company and can be accessed at the following link. http://vrlgroup.in/investor_download/vigil_Mechanism.pdf
27. PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders with a view to regulate trading in securities by the Directors and certain designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the trading window is closed. The Board is responsible for implementation of the Code.
The said code is available on the website of the Company and can be accessed at the following link.
http://vrlgroup.in/vrl_investor_desk.aspxRs.display=policies
28. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an internal control system, commensurate with the size, scale and complexity of its operations. The Board of the Company had laid down policies, guidelines, procedures and structure to enable implementation of appropriate internal financial controls across the Company. These control processes enable and ensure the orderly and efficient conduct of Company''s business, including safeguarding of assets, prevention and detection of frauds and errors, the accuracy and completeness of the Accounting records and timely preparation & disclosure of financial statements. These controls also identify the risks and provides for means to minimize / mitigate the risks affecting the business of the Company as a whole. Auditors, as required under the Companies Act, 2013, have also certified that these internal financial controls are in order and effective in mitigating the risks.
The Company''s internal audit department enables the management to mitigate the risks and prevent non-compliance of laws which would affect the financial position of the Company. The scope and authority of the Internal Audit function is well defined and to maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board as well as directly to the Chairman & Managing Director. The internal audit department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the internal audit report from time to time, the management undertakes corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee.
29. BUSINESS RISK MANAGEMENT:
Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Regulation 21 of the SEBI Listing Regulations, the Company has constituted a risk management committee. The details of the committee and its terms of reference are set out in the corporate governance report forming part of this Annual Report. The material risks affecting Company are identified along with related mitigation measures and elaborated in the risk management policy of the Company which has also been hosted on the website of the Company and can be accessed at the following link.
http://vrlgroup.in/investor_download/Risk%20Management%20Policy.pdf
30. SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
The Company''s Equity Shares are listed on the BSE and NSE and has paid its annual listing fees to these stock exchanges for the Financial Year 2017-2018. The Company has formulated the following policies as required under SEBI Listing Regulations:
1. âPolicy for Preservation of Documents'' under Regulation 9 of SEBI Listing Regulations. The said policy can be accessed at the following link:
http://vrlg roup. in/vrl_investor_desk.aspxRs.display=policies
2. âPolicy on Criteria for determining Materiality of Events/Information'' under Regulation 30 of SEBI Listing Regulations. The said policy can be accessed thru the following link:
http://vrlg roup. in/vrl_investor_desk.aspxRs.display=policies
3. Dividend distribution policy under Regulation 43A of SEBI Listing Regulations. The said policy can be accessed at the following link:
http://vrlg roup. in/vrl_investor_desk.aspxRs.display=policies
31. AUDITORS & AUDIT REPORTS
a) Statutory Auditors & Audit Report:
In accordance with Section 139 of the Companies Act, 2013 and Rules made there under, members at the 32nd AGM of the Company approved the appointment of Statutory Auditors, M/s Walker Chandiok and Co., Chartered Accountants, LLP Mumbai for a period of 5 years. The said appointment was subject to ratification by members every year.
M/s Walker Chandiok and Co, Chartered Accountants, LLP have expressed their eligibility and willingness to continue as the Statutory Auditors of the Company. Board recommends the ratification of their appointment as required under Section 139 of the Companies Act, 2013.
M/s. H. K. Veerbhaddrappa & Co, Chartered Accountants, Hubballi, one of the joint statutory auditors of the Company resigned during the year and subsequently were appointed as the Internal Auditors of the Company.
There are no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report for the financial year ended 31st March 2017. Pursuant to provisions of section 143 (12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud to the Audit Committee during the year under review.
b) Cost Auditors & Cost Audit Report:
Section 148 of the Companies Act, 2013 read with Rules made thereunder mandates every Company belonging to the category prescribed in the Rules to undertake a Cost Audit. In our opinion Cost Records of Wind Power Division of the Company need to be audited as it is covered in the category prescribed. In compliance with said provision, Company had appointed M/s S.K. Tikare & Co., Cost Accountants, Dharwad to audit the cost records for FY 2016-17. The Cost Auditor has submitted the Cost Audit report for FY 2016-17 and the same is annexed as Annexure B to this report.
There are no qualifications, reservations or adverse remarks made by the Cost Auditors in their report for the financial year ended 31st March 2017.
Pursuant to the recommendation of the Audit Committee, the Board of Directors have re-appointed M/s S K Tikare & Co., Cost Accountants, Dharwad as the Cost Auditors for FY 2017-18 at a fixed remuneration of Rs.60,000/- subject to ratification by the members at the ensuing AGM of the Company.
Board recommends the ratification of the said remuneration payable to the Cost Auditor in accordance with Section 148 of the Companies Act, 2013 and the Rules made there under.
c) Secretarial Auditor & Secretarial Audit Report:
Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Mr. R Parthasarathi, Company Secretary in Practice to undertake the Secretarial Audit of the Company for FY 2016-17. The Secretarial Audit report is annexed herewith as Annexure C.
There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in his report for the financial year ended 31st March 2017. Response to the comment made by the Secretarial Auditor in respect of the Company not fully expending the requisite quantum of CSR spend during the year as required under Section 135 of the Companies Act, 2013 is given in Annual Report on CSR activities - Annexure D
Pursuant to the recommendation of the Audit Committee, the Board of Directors have re-appointed Mr. R Parthasarathi, Company Secretary in Practice to conduct the Secretarial Audit for FY 2017-18 at its meeting held on 19th May 2017.
32. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As required under the provisions of the Section 135 of the Companies Act, 2013, the Board has constituted the Corporate Social Responsibility Committee which monitors and oversees various CSR initiatives and activities of the Company. The CSR Committee comprises of four Directors, three of whom are Independent Directors. The CSR Committee met two times during the year. Further details such as composition, terms, functions, meetings and attendance of directors of the said committee are provided in the Corporate Governance report forming part of this Annual Report.
The Company has set up a trust - VRL Foundation for implementing CSR activities with a focus on Healthcare and Education. A detailed report containing details of CSR activities & contents of CSR policy is annexed as Annexure D.
CSR policy of the Company is available on the Company''s website and can be accessed through the following link.
http://vrlgroup.in/investor_download/CSR%20POLICYpdf
33. EXTRACT OF ANNUAL RETURN:
Extract of the Annual Return in form MGT-9 is annexed herewith as Annexure E.
34. DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and expenditure are annexed hereto as Annexure F and forms part of this Report.
35. PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, forms part of this report and is annexed herewith as Annexure G.
A statement containing remuneration details of the top ten employees and the names of every employee who is in employment of the Company throughout the year and is in receipt of annual remuneration of Rs.102 Lakhs or more or employed for a part of year and in receipt of Rs.8.5 lakhs or more per month needs to be disclosed in the Board''s report. As such, the information is included as a part of Annexure G to this report.
36. MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments that occurred subsequent to the end of the financial year till the date of this report, which affects the financial position of the Company.
37. INDUSTRIAL RELATIONS
During the year under review, your Company experienced cordial relationship with workers and employees at all levels, throughout the year.
38. SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts or tribunals impacting going concern status and company''s operations for a foreseeable future.
39. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT 2013
The Company has in place a Policy for Prevention, Prohibition and Punishment of Sexual Harassment of Women at Work place in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
40. ACKNOWLEDGMENTS AND APPRECIATION
Your Directors take this opportunity to thank the Company''s Customers, Shareholders, Investors, Suppliers, Bankers, Financial Institutions and Central & State Governments for their consistent support to the Company. The Directors also wish to place on record their appreciation to the employees at all levels for their hard work, dedication and commitment.
For and on behalf of the Board
Dr. Vijay Sankeshwar
Chairman & Managing Director
DIN: 00217714
Place: Hubballi
Date: 19th May 2017
Mar 31, 2016
Dear Members,
The Directors are pleased to present the thirty third annual report of
your Company together with the audited financial statements for the
financial year ended 31st March 2016.
SUMMARY FINANCIAL RESULTS
(Rs. in Lakhs)
Year Ended Year Ended
Particulars 31st March, 2016 31st March, 2015
Total Income 172942.98 167886.10
EBITDA 27462.91 28044.59
Finance Costs 3069.32 5859.98
Depreciation and amortisation
expense 8995.04 8766.03
Net Profit Before Tax (incl.
exceptional income item) 15398.55 13790.21
Tax Expense 5167.20 4667.87
Net Profit After Tax 10231.35 9122.34
Balance of Profit brought
forward 11484.12 7416.58
Balance available
for appropriation
Interim Dividend on Equity
Shares 4562.17 3421.45
Tax on Interim Dividend 928.75 614.82
Transfer to General Reserve 1023.13 912.23
Transitional Adjustment on account
of change in Depreciation method - 106.30
Surplus carried to Balance Sheet 15201.42 11484.12
OPERATING HIGHLIGHTS:
During the last year your Company earned revenues of Rs. 172942.98
lakhs as against previous year''s revenues of Rs. 167886.10 lakhs
depicting a growth rate of 3.01 ACU- and earned Profit before tax (PBT) of
Rs. 15398.55 lakhs. The corresponding PBT for the earlier year was Rs.
13790.21 Lakhs. Profit after Tax (PAT) for the year was Rs.10231.35
lakhs as against Rs.9122.34 of the previous year.
The Company''s Goods Transport Division achieved revenues of
Rs.135626.19 lakhs registering a growth rate of 5.08 ACU- as compared to
previous year. The Company earned revenues of Rs.31760.97 lakhs from
bus division and Rs. 2139.42 lakhs from the sale of power generated
through the windmills owned by the Company.
CHANGE IN NATURE OF BUSINESS OF THE COMPANY:
There is no change in nature of business of the Company. Your Company
continues to be one of the leading Logistics service providers in the
country. The service offering of the Company in the Logistics space are
Goods transport, Passenger transport and Courier services apart from
Air Chartering and Wind Power Generation business.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments that occurred subsequent
to the end of the financial year till the date of this report, which
affects the financial position of the Company.
CAPITAL EXPENDITURE:
During the Financial year 2015-16, the company has undertaken a capital
expenditure of Rs.10,127.75 lakhs. Out of the same, a sum of Rs.7754.75
lakhs was invested for fleet addition. Other capex components included
a sum of Rs.1382.38 lakhs towards Plant ACY- Office Equipments and
Furniture / Fittings, Rs.524 lakhs towards freehold land and Rs.202.26
lakhs towards Building improvement costs,. The said capex also included
a sum of Rs.264.36 lakhs expended on leasehold improvements.
DIVIDEND:
During the Financial year 2015-16, your directors declared an Interim
Dividend at the rate of 50 ACU- amounting to Rs. 5.00 per equity share. The
Board recommends no further dividend and proposes that the interim
dividend so declared and paid be treated and declared as the final
dividend for the financial year 2015-16.
FIXED DEPOSITS
The Company has not accepted any deposits during the year, within the
meaning of Section 73 of the Companies Act 2013 and the rules made
thereunder.
SUCCESSFUL INITIAL PUBLIC ISSUE
The Company has successfully completed initial public offering (IPO)
during the year 2015-16 pursuant to applicable SEBI rules and
Regulations. The IPO of the Company received an overwhelming response
from the investors and was oversubscribed by more than 74 times thereby
making this IPO a historical one. Shares of the Company have been
listed with both BSE and NSE w.e.f 30th April 2015.
Consequently, the Company''s paid up capital increased from
Rs.85,53,61,620/- to Rs.91,24,34,950/- and Share premium increased from
Rs.10,889.32 lakhs to Rs.21313.09 lakhs. Fresh 5,707,333 equity shares
of Rs.10/- each were issued at a premium of Rs. 195/- per share.
Apart from the aforementioned fresh issue of shares, NSR PE Mauritius
LLC, a private equity investor offloaded 1.45.50.000 equity shares and
the promoters offered 25.66.000 equity shares held by them as a part of
the said public offering.
The company has utilised the issue proceeds as per the objects stated
in the prospectus and as of March 31, 2016 a sum of Rs. 2922.19 lakhs
remain unutilised which is expected to be fully utilised in the coming
year.
CLOSURE OF NEPAL BRANCH:
Company had extended its business operations to Kathmandu, Nepal by
incorporating a branch under the extant provisions of the Laws
prevailing in Nepal with a view to provide quality logistics services
to the customers. However, owing to the disturbances and uncertain
conditions prevalent in Nepal, Management has decided to close its
operations in the said country. Requisite legal formalities to close
the branch office have been initiated and are expected to be completed
soon.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The company has not given any loans or guarantees covered under the
provisions of section 186 of the Companies Act, 2013.
Details of investments made by the company are given in the notes to
the financial statements.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations. The Board of the Company had
laid down policies, guidelines, procedures and structure to enable
implementation of appropriate internal financial controls across the
Company. These control processes enable and ensure the orderly and
efficient conduct of Company''s business, including safeguarding of
assets, prevention and detection of frauds and errors, the accuracy and
completeness of the Accounting records and timely preparation ACY-
disclosure of financial statements. These controls also identify the
risks and provides for means to minimize / mitigate the risks affecting
the business of the Company as a whole. Auditors, as required under the
Companies Act 2013, have also certified that these internal financial
controls are in order and efficient in mitigating the risks.
The Company''s internal audit department enables the Management to
mitigate the risks or prevent the non compliances of laws which would
affect the financial position of the Company. The scope and authority
of the Internal Audit function is well defined and to maintain its
objectivity and independence, the Internal Audit function reports to
the Chairman of the Audit Committee of the Board as well as directly to
the Chairman ACY- Managing Director. The Internal Audit Department
monitors and evaluates the efficacy and adequacy of internal control
system in the Company, its compliance with operating systems,
accounting procedures and policies at all locations of the Company.
Based on the report of internal audit function, process owners
undertake corrective action in their respective areas and thereby
strengthen the controls. Significant audit observations and
recommendations along with corrective actions thereon are presented to
the Audit Committee of the Board.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As required under the provisions of the section 135 of the Companies
Act 2013, the Company has constituted the Corporate Social
Responsibility Committee which monitors and oversees various CSR
initiatives and activities of the Company. Composition, terms and
functions of the said committee are provided in the Corporate
Governance report forming part of this Annual Report.
The Company has set up a trust - VRL Foundation under the aegis of
which the Company conducts its CSR activities. Amongst others Health
and Education are the focus areas for the trust. A detailed report of
CSR activities including the amount spent / unspent for CSR activities
is annexed to this report as Annexure A to this report.
CSR policy of the Company is available on the Company''s website and can
be accessed thru the following link.
http://vrlgroup.in/investor AF8-download/CSR ACU-20POLICY.pdf TRANSFER TO
RESERVES:
The Company has transferred an amount of Rs.1023.13 lakhs to the
General Reserve out of current year''s profits.
TRANSFER OF UNPAID AND UNCLAIMED AMOUNT TO IEPF:
Pursuant to section 125 of the Companies Act 2013, dividend and refund
of Share Application Money due for refund which remains unpaid for
seven years from the date of its transfer to unpaid dividend /
unclaimed account is required to be transferred by the Company to
Investor Education and Protection Fund (IEPF) established by the
Government. During the year, no amount was due for transfer to IEPF.
INDUSTRIAL RELATIONS:
During the year under review, your Company experienced cordial
relationship with employees at all levels, throughout the year.
SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
During the year, your Company executed the Uniform Listing Agreement in
accordance with the requirements of SEBI Circular DCS/ COMP/12/2015-16
dated October 13, 2015, with BSE Limited and National Stock Exchange of
India Limited (NSE). The Company''s Equity Shares are listed on the BSE
and NSE and it has paid its Annual listing fee to these stock exchanges
for the Financial Year 2016- 2017. The Company has formulated the
following Policies as required under Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations,
2015:
1. ''Policy for Preservation of Documents'' under Regulation 9 of
Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
The said policy can be accessed at the following link:
http://vrlgroup.in/vrl AF8-investor AF8-desk.aspx7display policies
2. ''Policy on Criteria for determining Materiality of
Events/Information'' under Regulation 30 of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015
The said policy can be accessed thru the following link:
http://vrlgroup.in/vrl AF8-investor AF8-desk.aspx?display AD0- policies
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Number of Meetings of the Board:
During the year five Board Meetings were convened and held, details of
which are provided in the Corporate Governance Report. The intervening
gap between the Meetings was in compliance with the provisions
contained in the Companies Act, 2013.
Nomination and Remuneration Policy
The Board has, on the recommendation of the Nomination ACY- Remuneration
Committee, framed a policy for selection and appointment of Directors,
Senior Management and their remuneration including criteria for
determining qualifications, positive attributes and other matters
provided under sub section (3) of section 178 of the Companies Act
2013. The Remuneration Policy is stated in the Corporate Governance
Report and also annexed to this report as Annexure B. The said policy
alternatively can be accessed on the website of the Company at the
following link:
http://vrlgroup.in/investor AF8-download/Nomination AF8-
Remuneration ACU-20Policy.pdf
Declaration by Independent Directors
All independent directors have given due declarations that they meet
the criteria of independence as laid down under section 149(7) of the
Companies Act, 2013 and under extant provisions of the SEBI (Listing
Obligations and Disclosure) Requirements) Regulations 2015.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure) Requirements) Regulations 2015, the Board
has carried out an evaluation of its own performance, the directors
individually as well as the evaluation of the working of its
Committees. The manner in which the evaluation has been carried out has
been explained in the Corporate Governance Report.
Board Diversity
A diverse Board enables efficient functioning through differences in
perspective and skill and also fosters differentiated thought processes
at the back of varied industrial and management expertise, gender and
knowledge. The Board recognizes the importance of a diverse composition
and has adopted a Board Diversity policy which sets out the approach to
diversity. The said policy can be accessed thru the following link.
http://vrlgroup.in/vrl AF8-investor AF8-desk.aspx?display AD0-policies
Inductions
Dr. Ashok Shettar, was appointed as Non-Executive Director in the AGM
held on 8th August, 2015, in the place of Retiring Director, Mr. Darius
Pandole (the representive of NSR) who had not sought reappointment from
the Board. The Board wishes to place on record, the immense
contribution made by Mr. Darius Pandole in his capacity as a Director.
Retirement/Re-appointment
Mr. S R Prabhu, Non-Executive Director and Mr. Raghottam Akamanchi,
Non-Executive Director, retire by rotation and being eligible, offer
themselves for reappointment.
DIRECTOR''S RESPONSIBILITY STATEMENT:
In terms of Section 134 (5) of the Companies Act, 2013, the directors
would like to state that:
i) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
ii) The directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit or
loss of the Company for that period.
iii) The directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
iv) The directors have prepared the annual accounts on a going concern
basis.
v) The directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
vi) The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such system were
adequate and operating effectively.
Based on the framework of internal financial controls established and
maintained by the Company, reviews performed by the Management in
concurrence with the Audit Committee, your Board is of the opinion that
the Company''s internal controls were adequate and effective as on March
31, 2016.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the
financial year were on arm''s length basis and were in the ordinary
course of the business. There are no materially significant related
party transactions made by the company with Promoters, Key Managerial
Personnel or other designated persons which may have potential conflict
with interest of the company at large.
The Policy on materiality of related party transactions and dealing
with related party transactions as approved by the Board of Directors
of the Company can be viewed on the website of the Company thru the
following link.
http://vrlgroup.in/investor AF8-download/RPT ACU-20Policy.pdf
There were no material significan trelated party transactions entered between the Company, Directors, management, or their relatives except for those disclosed in the financial statements. All the contracts/arrangements/transactions entered into by the Company with the related parties during the financial year 2015-16 were in the ordinary course of business and on an arm''s length basis. In our opinion there were no ACI-material ACI- transactions that warrant a disclosure in this report.
Accordingly, particulars of contracts or arrangements with related
parties referred to in Section 188(1) along with the justification for
entering into such contract or arrangement in Form AOC-2 does not form
a part of this report.
SUBSIDIARY COMPANIES:
The Company does not have any subsidiary.
CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is
applicable to the Members of the Board and specified employees in the
course of day to day business operations of the company. The Company
believes in ACI-Zero Tolerance ACI- against bribery, corruption and unethical
dealings / behaviour in any form and the Board has laid down certain
directives to counter such acts. Such code of conduct has also been
placed on the Company''s website. The Code lays down the standard
procedure of business conduct which is expected to be followed by the
Directors and the designated employees in their business dealings and
in particular on matters relating to integrity in the work place, in
business practices and in dealing with stakeholders. The Code gives
guidance on the expected behaviour from an employee in a given
situation and the reporting structure. All the Board Members and the
Senior Management personnel have confirmed compliance with the Code.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a Vigil Mechanism Policy to deal with instances of
fraud and mismanagement, if any. Staying true to our core values being
committed to high standards of Corporate Governance and stakeholder
responsibility, the said policy ensures that strict confidentiality is
maintained in respect of whistle blowers whilst dealing with concerns
and also specified that no discrimination will be meted out to any
person for a genuinely raised concern and also provides a direct access
to the Chairman of the Audit Committee. During the year under review
none of the personnel has been denied access to the Chairman of Audit
Committee.
The Vigil Mechanism policy is available on the website of the Company
and can be accessed at the following link.
http://vrlgroup.in/investor AF8-download/vigil AF8-Mechanism.
pdf
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Internal Procedures and Conduct for
Regulating, Monitoring and Reporting of Trading by Insiders with a view
to regulate trading in securities by the Directors and certain
designated employees of the Company. The Code requires pre- clearance
for dealing in the Company''s shares and prohibits the purchase or sale
of Company shares by the Directors and designated employees while in
possession of unpublished price sensitive information in relation to
the Company and during the period when the Trading Window is closed.
The Board is responsible for implementation of the Code. All Board
Directors and the designated employees have confirmed compliance with
the Code.
The said code is available on the website of the Company and can be
accessed at the following link.
http://vrlgroup.in/vrl AF8-investor AF8-desk.aspx?display AD0-policies
BUSINESS RISK MANAGEMENT:
Pursuant to section 134 (3) (n) of the Companies Act, 2013 ACY- Regulation
21 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015, the company has constituted a risk management
committee. The details of the committee and its terms of reference are
set out in the corporate governance report forming part of the Boards
report. The identification of material risks affecting Company along
with related mitigation measures are elaborated in the Risk Management
Policy of the Company which has been hosted on the website of the
Company and can be accessed at the following link.
http://vrlgroup.in/investor AF8-download/Risk ACU-20 Management ACU-20Policy.pdf
AUDIT COMMITTEE:
The Audit Committee comprises of 4 directors and all of them are
Independent Directors. The Audit Committee met five times during the
year. Further details such as terms of reference, powers, functions,
meetings, attendance of directors etc are dealt with in Corporate
Governance Report forming part of this Annual report.
Board has accepted all recommendations made by the Audit Committee
during the year.
AUDITORS
Statutory Auditors:
In accordance with Section 139 of the Companies Act, 2013 and Rules
made thereunder, Members at the 32nd Annual General Meeting of the
Company approved the appointment of Joint Statutory Auditors, M/s
Walker Chandiok ACY- Co LLP, Chartered Accountants, Mumbai and M/s H K
Veerbhaddrappa ACY- Co., Chartered Accountants, Hubballi for a period of 5
years and 2 years respectively. The said appointment was subject to
ratification by members every year.
The Company has received a resignation letter from M/s H K
Veerbhaddrappa ACY- Co, Chartered Accountants, Hubballi, one of the Joint
Statutory Auditors of the Company. The Board at the meeting held on
August 01, 2016, on the recommendation of the Audit Committee, approved
the same. As the said firm is associated with your Company as Statutory
Auditors since inception and considering their long association as also
their in-depth knowledge and expertise w.r.t. the business operations
of your Company, the Board is considering their appointment as Internal
Auditors of the Company to strengthen the Internal Audit functions of
the Company in the days to come.
As such, M/s Walker Chandiok ACY- Co LLP, Chartered Accountants, Mumbai,
the other Joint Statutory Auditor of the Company would continue as the
sole Statutory Auditor till the conclusion of their tenure. Board
recommends the ratification of their appointment as required under
Section 139 of the Companies Act 2013, for approval by the members.
Cost Auditors:
Section 148 of the Companies Act 2013 read with Rules made thereunder
mandates every Company belonging to category prescribed in the Rules to
undertake a Cost Audit. Cost Records of Wind Power Division of the
Company need to be audited as it is covered in the category prescribed.
In compliance with said provision, Company had appointed M/s S.K.
Tikare ACY- Co., Cost Accountants, Dharwad to audit the cost records for
FY 2015-16. The Cost Auditor has submitted the Cost Audit report for FY
2015-16 and the same is annexed as Annexure C to this report.
Pursuant to the recommendation of the Audit Committee, the Board of
Directors have re-appointed M/s S K Tikare ACY- Co., Cost Accountants,
Dharwad as the Cost Auditors for FY 2016-17 at a fixed remuneration of
Rs.50,000/-, the latter subject to approval by the members at the
ensuing Annual General Meeting of the Company.
Board recommends the approval of the said remuneration payable to the
Cost Auditor in accordance with Section 148 of the Companies Act 2013
and the Rules made thereunder.
Secretarial Auditor:
Pursuant to provisions of section 204 of the Companies Act, 2013 and
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 the company has appointed Mr. R Parthasarathi, Company
Secretary in practice to undertake the Secretarial Audit of the Company
for FY 2015-16. The Secretarial Audit report is annexed herewith as
Annexure D. Pursuant to the recommendation of the Audit Committee, the
Board of Directors have re-appointed Mr. R Parthasarathi, Company
Secretary in Practice to conduct the Secretarial Audit for FY 2016-17
at its meeting held on May 23, 2016.
BOARD''S RESPONSE ON THE REMARKS MADE BY STATUTORY AUDITORS, COST
AUDITORS AND SECRETARIAL AUDITORS
There were no qualifications, reservations and adverse remarks made by
the statutory auditors in their Audit Report and by the Cost Auditors
in their Cost Audit Report. Response to the comment made by the
secretarial auditor that the company has not fully spent the CSR
expenditure as per section 135 of the Companies Act 2013 is given in
Annual Report on CSR activities - Annexure A.
EXTRACT OF ANNUAL RETURN:
Extract of the Annual Return in form MGT-9 is annexed herewith as
Annexure E.
DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO
The particulars regarding Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Expenditure are annexed hereto as
Annexure F and forms part of this Report.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with rule 5 (1)
of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 in respect of employees of the Company, forms of this
report and annexed herewith as Annexure G.
A statement containing the names of every employee who is in employment
of the Company throughout the year and is in receipt of annual
remuneration of Rs. 60 lakhs or more or employed for a part of year and
in receipt of Rs.5 lakh or more per month needs to be disclosed in the
Board''s report. As such the information is annexed as Annexure G to
this report.
CORPORATE GOVERNANCE
The Company is committed to maintain high standards of corporate
governance and adhere to the corporate governance requirements set out
under extant law. The Report on corporate governance as stipulated
under Regulation 34 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations 2015 read with Schedule V thereto forms part
of this Report. The requisite certificate from the Auditors of the
Company confirming compliance with the conditions of corporate
governance as stipulated under the aforesaid Regulations, as also the
related certificate from CEO/ CFO are attached to the Report on
corporate governance.
MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT
Management''s Discussion and Analysis Report for the year under review,
as stipulated under Regulation 34 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations 2015 read with Schedule V thereto,
is presented in a separate section forming part of the Annual Report.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators
or courts or tribunals impacting going concern status and company''s
operations for a foreseeable future.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT 2013
During the year under review, there were no cases reported pursuant to
the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013.
STATUTORY DISCLOSURES
None of the Directors of your Company are disqualified as per
provisions of Section 164(2) of the Companies Act, 2013. Your Directors
have made necessary disclosures, as required under various provisions
of the Companies Act, 2013 and Listing Regulations.
FRAUDS REPORTED BY AUDITORS
There were no frauds reported by the auditors under Section.143(12) of
the Companies Act, 2013
ACKNOWLEDGMENTS AND APPRECIATION
The Directors take this opportunity to thank the Company''s customers,
shareholders, Investors, suppliers, bankers, financial institutions and
Central ACY- State Governments for their consistent support to the
Company. The Directors also wish to place on record their appreciation
to employees at all levels for their hard work, dedication and
commitment.
For and on behalf of the Board
Dr. Vijay Sankeshwar
Chairman ACY- Managing Director
DIN:00217714
Place: Hubballi
Date: August 01, 2016
Mar 31, 2015
Dear Members,
The Directors are pleased to present the Thirty Second Annual Report
of your Company together with the audited financial statements for the
financial year 2014-15
FINANCIAL RESULTS (Rs. in lakhs)
PARTICULARS Year Ended Year Ended
31st March, 2015 31st March, 2014
Total Revenue 167886.10 150377.85
EBIDTA 28044.59 21658.66
Finance Charges 5859.98 5984.00
Provision for Depreciation 8766.03 8661.60
Profit Before Tax (including 13790.21 7676.78
exceptional income of Rs. 371.63 lakhs)
Provision for Tax 4667.87 975.54
Net Profit After Tax 9122.34 5701.24
Balance of Profit brought forward 7416.58 6288.43
Balance available for appropriation
Interim Dividend on Equity Shares
including DDT 3421.45 3421.49
Tax on proposed Dividend 614.82 581.48
Transfer to General Reserve 912.23 570.12
Transitional Adjustment on account of 106.30 Nil
change in Depreciation method
Surplus carried to Balance Sheet 11484.12 7416.58
OPERATING HIGHLIGHTS:
During the last year your Company recorded revenues of Rs.1678.86
crores as against previous year's revenues of Rs.1503.77 Crores
depicting a growth rate of 11.64% and earned Profit before tax (PBT) of
Rs.137.90 crores inclusive of an exceptional item of Rs.3.72 crores
which represents the profit earned on the sale of land held by the
Company at Bangalore, Karnataka. The corresponding PBT for the earlier
year was Rs. 76.76 Crores.
The company's Goods Transport Division has achieved a growth rate of
13.88% as compared to previous year and the Bus Operations division
witnessed an increase in the divisional revenues by 7.26%.
CAPITAL EXPENDITURE:
During the Financial year 2014-15, the company has incurred a capital
expenditure of Rs.8964.28 lakhs. Out of the same, a sum of Rs.7517.59
lakhs was invested for fleet addition. Other capex components included
a sum of Rs.469.30 lakhs towards Office Equipments, Rs.429.33 lakhs
towards Plant and equipment, Rs.344.50 towards Building costs and a sum
of Rs.83.07 lakhs towards Furniture and Fittings. The said capex also
included a sum of Rs.120.49 expended on leasehold improvements.
DIVIDEND:
During the Financial year 2014-15, your directors declared total
Interim Dividend at the rate of 40% translating to Rs. 4.00 per Equity
share. The Board recommends no further dividend and proposes that the
interim dividend so declared and paid be treated as the final dividend
for the financial year 2014-15.
FIXED DEPOSITS
The Company has not accepted any deposits during the year, within the
meaning of Section 73 of the Companies Act 2013 and the rules made
thereunder.
SUCCESSFUL INITIAL PUBLIC ISSUE
The Company has successfully completed initial public offering (IPO) in
the current year pursuant to applicable SEBI rules and Regulations. The
IPO of the Company received an overwhelming response from the investors
and the public issue was oversubscribed by more than 74 times thereby
making this IPO a historical one. Shares have been listed with both BSE
and NSE w.e.f 30th April 2015.
Consequently, the Company's paid up capital increased from
Rs.85,53,61,620/- to Rs.91,24,34,950/-. The equity shares of Rs.10/-
each were issued at a premium of Rs.195/- per share.
a) NSR PE Mauritius LLC, investor has divested its equity from 22.51%
to 5.16% of paid up capital and
b) The promoters have divested their equity from 76.71% to 69.11.%.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The company has not given any loans or guarantees covered under the
provisions of section 1 86 of the Companies Act, 2013.
Details of investments made by the company are given in the notes to
the financial statements.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an Internal Control System, commensurate with the size,
scale and nature of its operations. The scope and authority of the
Internal Audit function is well defined and to maintain its objectivity
and independence, the Internal Audit function reports to the Chairman
of the Audit Committee of the Board as well as directly to the Chairman
& Managing Director. The Internal Audit Department monitors and
evaluates the efficacy and adequacy of internal control system in the
Company, its compliance with operating systems, accounting procedures
and policies at all locations of the Company.
Based on the report of internal audit function, process owners
undertake corrective action in their respective areas and thereby
strengthen the controls. Significant audit observations and
recommendations along with corrective actions thereon are presented to
the Audit Committee of the Board.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company has not incurred any expenditure on Corporate Social
Responsibility during 2014-15 as required under Section 135 of the
Companies Act 2013. The total 15000 employee strength of the Company,
predominantly comprising of Drivers, maintenance workers and other
unskilled workers cannot exclusively benefit from the CSR spend under
the extant rules which your management finds unfortunate. Given the
nature of the road transport industry and the constituent workforce
engaged therein, there are several areas where such fund could be
utilized for the encouragement, upliftment and skill development of
needy employees.
Your management is however committed to the CSR initiative and expects
to incur CSR expenditure as applicable for 2014-15 during the ensuing
year through the trust which has already been set up for the purpose.
The Company has constituted a Corporate Social Responsibility Committee
and has identified the twin areas of "Education" and
"Healthcare" for utilizing the CSR spends applicable. Recently, the
Company has set up a trust - VRL Foundation under the aegis of which
the Company would conduct its CSR activities. Your management wants to
ensure that the fund so earmarked reaches out to the needy and is in
the process of outlining a program to benefit the needy local populace.
Annual report on CSR activities is enclosed as Annexure "A" to this
report.
TRANSFER TO RESERVES:
The Company has transferred an amount of Rs.9.12 crores to the General
Reserve put of current year's profits and the same is in compliance
with the applicable provisions prescribed under the Companies Act,
2013.
INDUSTRIAL RELATIONS:
During the year under review, your Company enjoyed cordial relationship
with workers and employees at all levels.
DIRECTORS
Number of Meetings of the Board:
During the year Seven Board Meetings were convened and held, details of
which are provided in the Corporate Governance Report. The intervening
gap between the Meetings was in compliance with the Companies Act,
2013.
Nomination and Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration including criteria for
determining qualifications, positive attributes and other matters
provided under sub section (3) of section 178 of the Companies Act
2013. The Remuneration Policy is stated in the Corporate Governance
Report and can be accessed on the website of the Company as well.
Declaration by Independent Directors
All independent directors have given declarations that they meet the
criteria of independence as laid down under section 149(7) of the
Companies Act, 2013 and clause 49 of the Listing Agreement.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an evaluation of its
own performance, the directors individually as well as the evaluation
of the working of its Audit, Nomination & Remuneration Committees. The
manner in which the evaluation has been carried out has been explained
in the Corporate Governance Report.
Inductions
In compliance with section 149 of the Companies Act 2013 which mandates
the appointment of woman director on the Board, your Company has
appointed Mrs. Medha Pawar, Practicing Advocate as an independent
director in the Company and such appointment was confirmed by the
shareholders of your Company at the extraordinary General Meeting held
on 12th December 2014.
To comply with the composition of Board as provided in clause 49 of the
Listing agreement as also under Section 152 of the Companies Act, 2013,
the following new Directors were appointed:-
1. Dr. Anand Pandurangi - Independent Director
2. Mr. Shankarasa Ladwa - Independent Director
3. Dr. Raghottam Akamanchi - Non-Executive Non-independent Director
4. Mr. Ramesh Shetty - Non-Executive Non-independent Director
5. Mr. S R Prabhu - Non-Executive Non-independent Director
The appointment of said directors was confirmed by the shareholders of
the Company at the extra-ordinary General Meeting held on 19th February
2015.
Retirement/Re-appointment
Mr. Darius Pandole, nominee Director of NSR PE Mauritius LLC, investor,
retires by rotation and in view of dilution of shareholdings by NSR PE
Mauritius LLC as a part of IPO,he is not seeking re-appointment though
being eligible. The Board wishes to place on record its appreciation
for his valuable contribution for the growth of the Company and the
support extended by NSR PE Mauritius.
The Board recommends the appointment of Dr. Ashok Shettar, in the place
of the retiring Director referred above, in respect of whom a notice
has received from member as required under the Companies Act 2013.
None of Independent Directors will retire at the ensuing Annual General
Meeting.
Resignation
Mr. Sudhir Ghate, director resigned from the Board on June 26, 2014 due
to personal reasons.
The Board hereby places on record his valuable contribution towards the
growth and development of the company during his tenure as director of
the Company.
DIRECTOR'S RESPONSIBILITY STATEMENT:
In terms of Section 134 (5) of the Companies Act, 2013, the directors
would like to state that:
i) In the preparation of the annual accounts, the applicable accounting
standards have been followed.
ii) The directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit or
loss of the Company for the year under review.
iii) The directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
iv) The directors have prepared the annual accounts on a going concern
basis.
v) The directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
vi) The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such system were
adequate and operating effectively.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the
financial year were on arm's length basis and were in the ordinary
course of the business. There are no materially significant related
party transactions made by the company with Promoters, Key Managerial
Personnel or other designated persons which may have potential conflict
with interest of the company at large. The Policy on materiality of
related party transactions and dealing with related party transactions
as approved by the Board of Directors of the Company can be viewed on
the website of the Company.
SUBSIDIARY COMPANIES:
The Company does not have any subsidiary.
CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is
applicable to the Members of the Board and specified employees in the
course of day to day business operations of the company. The Company
believes in "Zero Tolerance" against bribery, corruption and
unethical dealings / behaviour in any form and the Board has laid down
certain directives to counter such acts. Such code of conduct has also
been placed on the Company's website. The Code lays down the standard
procedure of business conduct which is expected to be followed by the
Directors and the designated employees in their business dealings and
in particular on matters relating to integrity in the work place, in
business practices and in dealing with stakeholders. The Code gives
guidance through examples on the expected behaviour from an employee in
a given situation and the reporting structure. All the Board Members
and the Senior Management personnel have confirmed compliance with the
Code.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a Vigil Mechanism Policy to deal with instances of
fraud and mismanagement, if any. Staying true to our core values of
Strength, Performance and Passion and in line with our vision of being
one of the most respected companies in India, the Company is committed
to the high standards of Corporate Governance and stakeholder
responsibility. The said Policy ensures that strict confidentiality is
maintained in respect of whistle blowers whilst dealing with concerns
and also specified that no discrimination will be meted out to any
person for a genuinely raised concern.
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider
Trading with a view to regulate trading in securities by the Directors
and certain designated employees of the Company. The Code requires
pre-clearance for dealing in the Company's shares and prohibits the
purchase or sale of Company shares by the Directors and designated
employees while in possession of unpublished price sensitive
information in relation to the Company and during the period when the
trading window is closed. The Board is responsible for implementation
of the Code. All Board Directors and the designated employees have
confirmed compliance with the Code.
AUDIT COMMITTEE:
The Audit Committee comprises of 2 Independent Directors and a Non
Executive Director. The Audit Committee met five times during the year
on 25th May, 2014, 26th June, 2014, 10th October, 2014,
8th January, 2015 and 9th February, 2015. Further details relating to
Audit Committee are dealt with in Corporate Governance Report forming
part of this report.
AUDITORS
Statutory Auditors:
In terms of section 139 of the Companies Act, 2013 and rules framed
thereunder, appointment of Statutory Auditors of the Company is subject
to approval of Members, after considering the previous service, if any,
in accordance with the provisions contained in the said enactment as
well as rules made thereunder. The provisions further provide that firm
of auditors shall be appointed for a maximum 2 terms of 5 years each,
including the earlier service, if any. M/s Walker Chandiok & Co., LLP
, Chartered Accountants, Mumbai and M/s H. K. Veerbhaddrappa & Co.,
Chartered Accountants, Hubballi, are the Joint Statutory Auditors of
the Company.
M/s. H. K. Veerbhaddrappa & Company, Chartered Accountants, Hubballi,
would retire at the conclusion of the forthcoming Annual General
Meeting and can continue in such capacity for a maximum period of two
more years subject to ratification at subsequent annual general
meetings. The Company has received a letter from them to the effect
that their appointment, if made, would be within the limits prescribed
under the provisions and that they are not disqualified for
re-appointment under Section 139 of the Companies Act, 2013.
Similarly, M/s. Walker, Chandiok & Co. LLP Chartered Accountants,
Mumbai, hold office until the conclusion of the ensuing Annual General
Meeting and are eligible for re-appointment for a period of further
five years subject to ratification at every annual general meeting. The
Company has received a letter from them to the effect that their
appointment, if made, would be within the limits prescribed under the
provisions and that they are not disqualified for re-appointment under
Section 139 of the Companies Act, 2013.
Pursuant to the recommendations of the Audit Committee, the Board of
Directors have, at their meeting held on 25th May 2015, recommended the
re-appointment of Joint
Statutory Auditors for the respective tenure as stated above and the
same would be subject to the approval of the shareholders of the
Company, at the ensuing Annual General Meeting.
Cost Auditors:
In conformity with the rules prescribed by the Central Government, the
Company has appointed M/s Sanjay Tikare & Co, Cost Accountants,
Dharwad, as the Cost Auditors for audit of cost accounting records for
Wind Power Division for the year ended 31.03.2015. The Cost Audit
Report would need to be submitted to the Central Government before the
due date i.e. 30th September, 2015. In accordance with the rules
prescribed by Central Government, remuneration of cost auditor shall be
ratified by members at the general meeting. Pursuant to the
recommendation of the Audit Committee, the Board of Directors have
re-appointed M/s Sanjay Tikare & Co, Cost Accountants, Dharwad as the
Cost Auditors for FY 2015-16 at a fixed remuneration of Rs.50,000/-
subject to approval by the members at the ensuing Annual General
Meeting of the Company.
Secretarial Auditor:
Pursuant to provisions of section 204 of the Companies Act, 2013 and
The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 the company has appointed Mr. R Parthasarathi, Company
Secretary in practice to undertake the Secretarial Audit of the Company
for FY 2014-15. The Secretarial Audit report is annexed herewith as
"Annexure B". The Board of Directors has re-appointed Mr. R
Parthasarathi, Company Secretary in Practice to conduct Secretarial
Audit for FY 2015-16 at its meeting held on 25th May 2015.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form
MGT-9 is annexed herewith as "Annexure C".
BUSINESS RISK MANAGEMENT:
Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49
of the listing agreement, the company has constituted a risk management
committee. The details of the committee and its terms of reference are
set out in the corporate governance report forming part of the Annual
report. The material risks affecting Company are identified along with
related mitigation measures and elaborated in the Risk Management
Policy of the Company which has also been hosted on the website of the
Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The particulars regarding Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and expenditure are annexed hereto as
Annexure "D" and forms part of this Report.
PARTICULARS OF 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 employees of the Company, forms part of this
report and annexed herewith as Annexure "E". In terms of Section
136 of the Act, the reports and accounts are being sent to the members
and others entitled thereto, including the information on employees'
particulars which is available for inspection by the members at the
Registered office of the company during business hours on working days
of the company up to the date of ensuing Annual General Meeting. If any
member is interested in inspecting the same, such member may write to
the company secretary in advance.
CORPORATE GOVERNANCE
The Company is committed to maintain the steady standards of corporate
governance and adhere to the corporate governance requirements set out
by SEBI. The Company has also voluntarily implemented several good
corporate governance practices even before becoming listed Company. The
Report on corporate governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report. The requisite
certificate from the Auditors of the Company confirming compliance with
the conditions of corporate governance as stipulated under the
aforesaid Clause 49, as also certificate from CEO/ CFO are attached to
the Report on corporate governance.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under
review, as stipulated under Clause 49 of the Listing Agreement with the
Stock Exchanges, is presented in a separate section forming part of the
Annual Report.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators
or courts or tribunals impacting going concern status and company's
operations in future.
SEXUAL HARASSMENT
During the year under review, there were no cases filed pursuant to the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013. The Company has complied with the requirement of
formation of a suitable committee as required under the said act.
ACKNOWLEDGMENTS AND APPRECIATION
The Directors take this opportunity to thank the Company's customers,
shareholders, investors, suppliers, bankers, financial institutions and
Central & State Governments for their consistent support to the
Company. The Directors also wish to place on record their appreciation
to employees at all levels for their hard work, dedication and
commitment.
Dr. Vijay Sankeshwar
Chairman & Managing Director
(DIN: 00217714)
Place: HUBBALLI
Date: 25th May 2015
Mar 31, 2014
Dear Members,
The Board of Directors is pleased to present the Thirty First Annual
Report of your Company together with the audited financial statements
for the financial year ended 31 March 2014.
FINANCIAL RESULTS (Rs. in crores)
Year ended Year ended
31 March 2014 31 March 2013
INCOME
Income from Services 1462.69 1292.35
Sale of Power 25.01 27.10
Sale of Certified Emission 6.08 6.04
Reduction units
Other Income 9.99 9.83
TOTAL 1503.77 1335.32
EXPENDITURE
Employee Costs 174.45 148.26
Operating Costs and 1091.17 962.65
Administration Cost
Finance Cost 59.84 59.12
Depreciation / Amortization 86.62 82.34
Other Expenses 21.56 19.37
TOTAL 1433.64 1271.74
Profit before Tax before 70.13 63.59
Exceptional Item & Tax
Exceptional Item 6.63 -
Profit before Tax 76.76 63.59
Taxation 19.75 (16.70)
Net Profit 57.01 80.29
OPERATING HIGHLIGHTS
During the last year your Company achieved record revenues of
Rs.1,503.77 crores during the year as against previous yearÂs turnover
of Rs.1,335 crores depicting a growth rate of 12.61% and earned Profit
before tax (PBT) of Rs.76.76 crores inclusive of an exceptional item of
Rs.6.63 crores which represents the profit earned on the sale of land
held by the Company at Manesar, Haryana. The corresponding PBT for the
earlier year was Rs.63.59 crores. The profitability margin during the
year was under pressure owing to the adverse economic scenario as well
as considering the sporadic rise in input costs which could not be
passed on to the customers in entirety.
The company''s Goods Transport Division has achieved marginal growth
rate of 14.22% as compared to previous year and the revenues for this
division were Rs.1133.43 crores. The Bus Operations however witnessed
a significant drop in margins despite 8.53% increase in the division
revenues. The Company also earned revenues of Rs.31.35 crores from the
sale of power generated through the windmills owned by the Company and
out of the sale of certified emission reduction units.
During the year, the company has entered into the hotel business by
acquiring an existing restaurant at Tumkur to provide food facility to
its Bus passengers and earned revenue of Rs.1.02 crore during the year
from the said operation. The said facility is intended to complement
its Bus Operations division by providing good quality food to
passengers at reasonable rates.
CAPITAL EXPENDITURE
During the Financial year 2013-14, the company has made significant
investment in fixed assets. The summary of the same is as under:
* Purchase of vehicles for sum of Rs.88.14 crores for expansion of
Vehicle fleet comprising of Lorries and buses as also cost incurred for
refurbishment of existing vehicles.
* The Company incurred a sum of Rs.12.09 crores for expansion of
aviation business by purchase of a second hand aircraft from M/s Force
Motors Ltd, Pune.
* Purchase of land at Bellary worth Rs.2.51 crores for construction of
transshipment hub.
* Acquisition of an existing restaurant at Tumkur at a cost of Rs.2.54
crores for providing food facilities to passengers of Travels business.
The said cost also includes additional work done subsequent to such
acquisition for setting up critical passenger facilities.
DIVIDEND
During the Financial year 2013-14, Your Directors declared first
Interim Dividend on 08 November 2013 at the rate of 20% translating to
Rs.2/- per Equity share as well as proportionate dividend on the 0.001%
Compulsory Convertible Participatory Preference Shares (CCPPS) based on
the provisional financial statements for the half year ended 30
September 2013. The company also made the payment of the applicable
preference dividend on CCPPS upto the date of conversion thereof.
The Company also declared second Interim Dividend on 30 March 2014 at
the rate of 20% translating to Rs.2/- per Equity share based on the
Provisional Financial Statements dated 28 February 2014.
The directors recommend that the interim dividend so declared and paid
be the final dividend for the financial year 2013-14.
TRANSFER TO RESERVES
The Company has transferred an amount of Rs.5.71 crores to the General
Reserve put of current year''s profits and the same is in compliance
with the provisions prescribed under the Companies (Transfer of Profits
to Reserves) Rules, 1975.
FIXED DEPOSITS
Your Company has not accepted any deposits from the Public during the
current year. During the current year, the Company has refunded entire
deposits of Rs.2.59 Crores, which were outstanding as at the end of the
financial year 2012-13.
Your Company has complied with the provisions stipulated under the
Companies Act, 1956, as applicable to public deposits.
DIRECTORS
In accordance with the provisions of new Companies Act, 2013, and the
Articles of Association of the Company, Mr. J.S. Korlahalli and Dr.
Prabhakar Kore retire by rotation owing to their present tenure as
directors being the longest and being eligible, they offer themselves
for re- appointment at the ensuing Annual General Meeting. The Board
recommends their reappointment for consideration of the shareholders.
As per the provision of section 149(4) of the Companies Act, 2013, the
company needs to appoint at least two directors as independent
directors on Board of the Company. In compliance with the said
provision, the Board proposes to re appoint Mr. J.S. Korlahalli,
Dr. Prabhakar Kore as an Independent Directors of the Company who have
submitted the declaration of Independence as required under the Act.
Considering the imminent IPO plans of the Company in the medium term
and in order to comply with the provisions of listing agreement as
applicable to listed companies, the Board recommends to the
shareholders the appointment of Mr. C. Karunakara Shetty, existing
independent director, as an Independent Director of the Company as per
Companies Act 2013, who has submitted a declaration of independence as
required under the Act. As required under the said act, the Company is
also in the process of appointing a woman director on the Board and has
initiated work towards obtaining the Security Clearance in her respect
from the Ministry of Civil Aviation, which is mandatory for a Board
appointment owing to the Company owning aircrafts.
AUDIT COMMITTEE
The Audit Committee comprises of four numbers of NonExecutive
Directors. Mr. Sudhir Ghate, is the Chairman of the Committee and Mr.
J.S. Korlahalli, Mr. C. Karunakara Shetty and Mr. Darius Pandole are
other members of the Committee. The Audit Committee met five times
during the year on 27 May 2013, 10 July 2013, 07 August 2013, 08
November 2013 and 03 February 2013.
STATUTORY AUDITORS
In terms of section 139 of the Companies Act, 2013 and rules framed
thereunder, appointment of Statutory Auditors of the Company is subject
to rotation as determined considering the previous service, if any, in
accordance with the provisions contained in the Act as well as rules
made thereunder. The provisions further provide that firm of auditors
shall be appointed for a maximum period of 10 years including the
earlier service, if any.
Accordingly M/s H.K. Veerbhaddrappa & Company, Chartered Accountants,
Hubballi, the Joint Statutory Auditors of the Company would retire at
the conclusion of the forthcoming Annual General Meeting and can
continue in such capacity for a maximum period of three more years
subject to ratification at every annual general meeting. The Company
has received a letter from them to the effect that their appointment,
if made, would be within the provision prescribed limit and that they
are not disqualified for re-appointment under Section 139 of the
Companies Act, 2013.
Similarly, M/s Walker Chandiok & Co. LLP, Chartered Accountants,
Mumbai, Joint Statutory Auditors of the Company, hold office until the
conclusion of the ensuing Annual General Meeting and are eligible for
re-appointment as such for a period of another six years subject to
ratification at every annual general meeting. The Company has received
a letter from them to the effect that their appointment, if made, would
be within the provision prescribed and that they are not disqualified
for re-appointment under Section 139 of the Companies Act, 2013.
Pursuant to the recommendations of the Audit Committee, the Board of
Directors have, at their meeting held on 26 June 2014, recommended the
reappointment of Joint Statutory Auditors and the same is subject to
the approval of the shareholders of the Company, at the ensuing Annual
General Meeting. The Company would propose the appointment of the two
Joint Statutory Auditors for a period of one year at a time.
COST AUDITORS
In conformity with the Circulars issued by the Central Government, the
Company has appointed M/s S.K. Tikare & Co., Cost Accountants, Dharwad,
as the Cost Auditors for audit of cost accounting records for Wind
Power Division for the year ended 31 March 2014. The Cost Audit Report
would need to be submitted to the Central Government before the due
date i.e. 30 September 2014.
DETAILS PURSUANT TO COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT
OF BOARD OF DIRECTORS) RULES, 1988
The particulars regarding Conservation of Energy, Technology Absorption
and Foreign Exchange. Earnings and Expenditure are annexed hereto as
Annexure "A" and forms part of this Report.
PARTICULARS OF EMPLOYEES
The particulars of employees of the company, in terms of Section
217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, are given in Annexure "B" to
this report.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, the
Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been
made from the same;
b) They have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give true and fair view of the state of affairs of the
Company at the end of the financial year and of the profits of the
Company for that period;
c) They 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 the Company and for
preventing and detecting fraud and other irregularities; and
d) They have prepared the annual accounts on a going concern basis.
ACKNOWLEDGMENTS AND APPRECIATION
The Directors take this opportunity to thank the Company''s customers,
shareholders, Investors, suppliers, bankers, financial institutions and
Central & State Governments for their consistent support to the
Company. The Directors also wish to place on record their appreciation
to employees at all levels for their hard work, dedication and
commitment.
For and on behalf of the Board
Dr. Vijay Sankeshwar
Chairman & Managing Director
Place: Hubballi
Date: 26 June 2014
Mar 31, 2013
Dear Members,
We take pleasure in presenting the Thirtieth Annual Report of the
Company together with the Audited Accounts for the year ended 31st
March 2013
(Rs. in lakhs)
PARTICULARS Year Ended Year Ended
31.03.2013 31.03.2012
INCOME
Income from Services 128134.25 108558.95
Sale of Power 2710.65 2538.90
Sale of Certified Emission Reduction units 603.65 1014.49
Other Income 2083.78 1415.49
Total 133532.33 113527.83
EXPENDITURE
Employee Costs 14825.51 12891.87
Operating Costs 96264.71 79111.86
Finance Cost 5912.30 6514.17
Depreciation / Amortisation 8233.59 6959.86
Other Expenses 1937.47 1843.58
Total 127173.58 107321.34
Profit before Tax 6358.75 6206.49
Taxation (1670.48) 2100.61
Net Profit 8029.23 4105.88
1. DIVIDEND
During the financial year 2012-13, your Directors declared an interim
dividend at the rate of 26% translating to Rs.2.60 per equity share as
well as proportionate dividend to the Compulsorily Convertible
Participating Preference Shareholders (CCPPS) based on the provisional
unaudited financial statements for the nine month period ended 31st
December 2012. Based on the Company''s performance, the directors are
pleased to recommend, for the approval of the members, a further
Dividend at the rate of 38% to Equity Shareholders as well as a
proportionate dividend on the Compulsorily Convertible Participatory
Preference Shares (CCPPS) for the financial year 2012-13 as a final
dividend for the year. Record date for the dividend would be 10th July
2013.
2. TRANSFER TO RESERVES
The Company has transferred an amount of Rs.802.92 lakhs to the General
Reserve out of the current year''s profits in compliance with the
provisions prescribed under the Companies (Transfer of Profits to
Reserves) Rules, 1975.
3. COMPANY PERFORMANCE
During the year under review, company has achieved turnover of
Rs.133532.33 lakhs as against Rs.113527.83 lakhs in the previous year
depicting a growth rate of 17.62% and earned a net profit of
Rs.8029.23 lakhs during the financial year 2012-13 as against
Rs.4105.88 lakhs in the previous year.
The goods transport division witnessed growth compared to the earlier
year at a rate of 15 %. The margins however was under pressure owing to
the inflationary trend in cost variables such as fuel price, toll
charges, driver costs, etc. which could not be passed on to the
customers in entirety, to remain competitive.
Propelled by the substantial recent capex in the Bus fleet, a
significant revenue growth was seen in the Passenger transportation
division with the Company recording revenues of Rs.28483.77 lakhs
vis-a-vis a revenue of Rs.21781.19 lakhs for the corresponding previous
fiscal. Company invested in the purchase of Volvo, Multi Axle buses for
meeting the needs of the customers. Company expanded its services in
several new routes including the service of Bangalore to Jodhpur which
is one of the longest route in India introduced by a private sector
industry player.
4. CAPITAL EXPENDITURE
Financial year 2012-13 witnessed significant capital expenditure in
your Company. A summary of the same is as under:
* Purchase of 25 goods transport vehicles for a sum of Rs.525.80 lakhs
* Purchase of 21 Multi-axle Volvo buses at a cost of Rs.2093.12 lakhs
* Purchase of 38 Non-Volvo Sleeper / Seater buses at a cost of
Rs.1054.01 lakhs.
Apart from the above, the Company has purchased a new Godown at
Bhiwandi, Mumbai at a cost of Rs.3683.86 lakhs as well as invested
certain amounts in the improvement of properties situated at Varur,
Hubballi, Mysore, Chitradurga and Bijapur.
5. FIXED DEPOSITS
Your Company has not accepted any deposits from the Public during the
current year. Deposits accepted which have matured and are unclaimed
are being reflected under the head "Unclaimed Matured Deposits" in Note
9, Other Current Liabilities. Interest due on these deposits is also
disclosed separately. Fixed Deposits of the Company stood at Rs.259.62
lakhs as at the end of the financial year 2012-13, out of which Rs.8.45
lakhs have matured and are unclaimed. There were no overdue deposits.
Your Company has complied with the provisions stipulated under the
Companies Act, 1956, as applicable to such deposits.
6. DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. Sudhir Ghate and Mr. C.
Karunakara Shetty retire by rotation owing to their present tenure as
directors being the longest and being eligible, they offer themselves
for re-appointment at the ensuing Annual General Meeting. The Board
recommends their reappointment for consideration of the shareholders.
7. JOINT STATUTORY AUDITORS
M/S H.K. Veerbhaddrappa & Co., Chartered Accountants, Hubballi and M/s
Walker, Chandiok & Co., Chartered Accountants, Mumbai, Joint Statutory
Auditors of the company, hold office until the conclusion of the
ensuing Annual General Meeting and are eligible for reappointment. The
company has received letters from them to the effect that their
reappointment, if made, would be within the prescribed limits u/s
224(1B) of the Companies Act, 1956 and that they are not disqualified
for reappointment u/s 226 of the Companies Act, 1956. Pursuant to the
recommendations of the Audit Committee, the Board of Directors have, at
their meeting held on 10 July 2013, recommended the reappointment of
the Joint Statutory Auditors and the same is subject to the approval of
the shareholders of the Company, at the ensuing Annual General Meeting.
8. COST AUDITOR
In conformity with the circulars issued by the Central Government, the
Company has appointed S.K. Tikare & Co., Cost Accountants, Dharwad, as
the Cost Auditors for our Wind Power business for the year ending 31
March 2013. Pursuant to the recommendation of the Audit Committee, the
Board at its meeting held on 10 July 2013 has retained their services
for the financial year 2013-14.
9. DETAILS PURSUANT TO COMPANIES (DISCLOSURE OF PARTICULARS IN THE
REPORT OF BOARD OF DIRECTORS) RULES, 1988
The particulars regarding Conservation of Energy, Technology Absorption
and Foreign Exchange earnings and expenditure are annexed hereto as
Annexure "A" and form part of this Report.
10. PARTICULARS OF EMPLOYEES
The particulars of employees of the company, in terms of Section
217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, are given in Annexure "B" to
this report.
11. DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, the
Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been
made from the same;
b) They have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give true and fair view of the state of affairs of the
Company at the end of the financial year and of the profits of the
Company for that period;
c) They 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 the Company and for
preventing and detecting fraud and other irregularities; and
d) They have prepared the annual accounts on a going concern basis.
12. ACKNOWLEDGMENTS AND APPRECIATION
The Directors take this opportunity to thank the Company''s customers,
fixed deposit holders, shareholders, suppliers, bankers, financial
institutions and Central & State Governments for their consistent
support to the Company. The Directors also wish to place on record
their appreciation to employees at all levels for their hard work,
dedication and commitment. The enthusiasm and unstinting efforts of the
employees have enabled the Company to maintain its position in the
industry in the face of a difficult economic scenario.
For and on behalf of the Board
Vijay Sankeshwar
Chairman & Managing Director
Place: Hubballi
Date: 10 July 2013
Mar 31, 2012
Dear Members,
The Directors have pleasure in presenting the Twenty Ninth Annual
Report together with the Audited Accounts of the Company for the year
ended 31 March 2012.
(Rs. in lacs)
PARTICULARS Year Ended Year Ended
31.03.2012 31.03.2011
INCOME
Income from Services 108558.95 85849.65
Sale of Power 2538.90 2346.73
Sale of Certified Emission 1014.49 -
Reduction units
Other Income 1415.49 1095.16
Total 113527.83 89291.54
EXPENDITURE
Costs of Materials Consumed 6654.30 5228.13
Employee Costs 12891.87 10448.23
Other Operating Costs 74189.33 56602.42
Finance Cost 6625.98 4874.64
Depreciation / Amortisation 6959.86 5093.32
Total 107321.34 82246.74
Profit before Tax 6206.49 7044.80
Taxation 2100.60 1947.11
Net Profit 4105.88 5097.68
1. DIVIDEND
During the financial year 2011-12, your Directors declared an interim
dividend at the rate of 21% translating to Rs.2.10 per equity share of
Rs.10/- each based on the provisional unaudited financial statement
states for the half year ended 30 September 2011. You directors
recommend a further Final Dividend at the rate of 6% to Equity
Shareholders as well as proportionate dividend on the Compulsorily
Convertible Participatory Preference Share holders (CCPPS) for the
financial year 2011-12. Record date for the dividend would be 10 July
2012.
2 TRANSFER TO RESERVES
The Company has transferred an amount of Rs.410.59 lakhs to the General
Reserve out of the current year''s profits in compliance with the
provisions prescribed under the Companies (Transfer of Profits to
Reserves) Rules 1975.
3. REVIEW OF OPERATIONS
Your Company has achieved a very healthy growth rate in terms of
revenues. Your Company has achieved a turnover of Rs. 113527.83 lacs
depicting an increase of over 27% and earned a net profit of
Rs.4105.88 lacs during the financial year 2011-12.
The profitability margins were however under pressure owing to
significant increase in operating and employee costs as also
increase finance costs owing to significant capital expenditure incurred
during the year. The aggressive fleet increase in the passenger travel
division also resulted in pressure on the margins as deployment of new
vehicles and the stabilization of new routes involves an element of
gestation till profitable operations can be sustained.
The Goods Transportation division clocked revenues of Rs.85850.63 lacs
as against a corresponding revenue of Rs.71541.07 lacs for the previous
year at a growth rate of 20%. The margins in this division were fairly
stable. The Courier and Air Chartering divisions of the Company
recorded revenues of Rs.449.80 lacs and Rs.477.33 lacs respectively.
The Passenger travel segment contributed Rs.21871.19 lacs as revenues
during the year as against corresponding revenues of Rs.13441.68 lacs
for the previous year at a growth rate of over 62%. The same
was enabled by a significant addition to the vehicle fleet. However,
the operating costs for this division were significantly higher and
these could not be entirely passed on the customers owing to the
initial focus on setting up new routes and optimal deployment of buses,
which would be critical for stabilization of operations at such
increased level. Barring the addition of a few buses, the envisaged
capital expenditure for this division is nearly complete and these are
expected to boost the revenues and profits in the upcoming months.
Considerable capital expenditure has been incurred during the year
which has enabled the growth in revenues and the Company expects to
further post a healthy growth year on year on the strength of such
fleet increase and infrastructure growth.
4. PRIVATE EQUITY INVESTMENT
The asset ownership business model of your Company is capital intensive
requiring significant financial resources from time to time. Over a
period, these requirements were being met through a combination of
internal accruals and borrowings from Banks / Financial Institutions.
In order to supplement the funding needs of the company and to maintain
a prudent capital structure, your Company raised a sizeable quantum of
funds for, inter alia, acquisition of additional fleet (Goods vehicles
and Passenger Vehicles), purchase of land for construction of
transshipment yards & godowns, repayment of high cost debts as also
general corporate purposes from NSR PE Mauritius LLC, (NSR), a Private
Equity Fund of repute.
Your Company, on 15 December 2011, had entered into a binding Share
Subscription & Purchase Agreement as also a binding Shareholders
Agreement to raise the funds through private Equity Investment from
NSR.
The said transaction involves an investment of Rs.12500 lacs, by way of
11046875 nos. of 0.001% Compulsory Convertible Participatory Preference
Shares (CCPPS) having face value of Rs.100/- each being issued at a
price of Rs.113.15/- per share. Further, 4418750 existing Equity Shares
held by Mr. Anand Sankeshwar, were also purchased by NSR as a part of
the said PE transaction. The CCPPS issued by the Company would be
converted into equity shares by way of an agreed upon conversion
mechanism which would be based upon the financial statements of the
Company as of 31 March 2013.
The said Private Equity transaction has been given effect to during the
month of April 2012.
The Company would have a balanced capital structure pursuant to the
said transaction. Also, the PE partner is expected to add significant
value to the business processes of the Company and your directors
expect the Company to benefit from the experience and expertise of the
NSR team. Your Company aims to achieve new heights in business by
working hand in hand with NSR in the years to come.
5. CHANGES TO SHARE CAPITAL
To accommodate the issuance of CCPPS to the PE Investor, it was
necessary to effect a change in the authorized capital of the Company.
The change in Authorised Share Capital was effected at the
Extraordinary General Meeting of the Company during April 2012.
CHANGES TO AUTHORIZED SHARE CAPITAL The Authorised Share Capital of the
Company has been increased from Rs.125 crores to Rs.237 crores
comprising of 125000000 (Twelve Crores Fifty Lakhs) Equity Shares of
Rs.10/- (Rupees Ten) each and 11200000 (One Crore Twelve Lakhs)
compulsorily and mandatorily convertible participatory preference
shares of Rs.100/- each.
CHANGES IN PAID-UP SHARE CAPITAL
In terms of the Shareholders'' Agreement & Share Purchase & Subscription
Agreement inter alia entered into between the Company and New Silk
Route, the Company allotted 11046875 Compulsorily Convertible
Participatory Preference Shares (CCPPS) of Rs.100/-each to NSR PE
Mauritius LLC on 18 April 2012 at a premium of Rs.13.15/- per share.
6. CAPITAL EXPENDITURE
Financial year 2011-12 witnessed significant capital expenditure in
your Company. A summary of the same is as under:
* Purchase of 343 goods transport vehicles
* Purchase of 102 Car Carrying vehicles
* Purchase of 20 Tankers for liquid / chemical transportation.
* Purchase of 60 Multi-axle Volvo buses
* Purchase of 74 Sleeper / Seater buses
* Purchase of properties for Goods transportation business at
Bangalore, Belgaum and Raichur in the State of Karnataka
* Expansion of Vehicle Maintenance facility at Varur, Hubli
7. FIXED DEPOSITS
Your Company has not accepted any deposits from the Public during the
current year. Deposits accepted which have matured and are unclaimed
are being reflected under the head "Unclaimed Matured Deposits" in Note
9, Other Current Liabilities. Interest due on these deposits is also
disclosed separately. Fixed Deposits of the Company stood at Rs.866.95
lacs as at the end of the financial year 2011-12, out of which Rs.15.55
lacs have matured and are unclaimed.
There were no overdue deposits. Your Company has complied with the
provisions stipulated under the Companies Act, 1956, as applicable to
such deposits.
8. DIRECTORS
a. Re-appointment
* Mr. Vijay Sankeshwar, Chairman & Managing Director of the Company was
reappointed by the members at the Extraordinary General Meeting held on
31 January 2012 for further period of 5 years w.e.f. 01 January 2012.
* In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. J.S. Korlahalli and Dr.
Prabhakar Kore retire by rotation owing to their tenure as directors
being the longest and being eligible, they have offered themselves for
re-appointment at the ensuing Annual General Meeting. The Board
recommends their reappointment for consideration of the shareholders.
b. Appointment
Mr. Darius Pandole was inducted by the Board of Directors with the
prior security clearance from Director General Civil Aviation on 21st
April 2012. Pursuant to the provisions of the Section 260 of the
Companies Act, 1956, Mr. Darius Pandole will hold office as such only
upto conclusion of this ensuing Annual General Meeting. Mr. Darius
Pandole is eligible for re-appointment as a Nominee Director of the
Company liable to retire by rotation.. The company has received a
notice along requisite fee from a member under Section 257 of the
Companies Act, 1956, proposing the candidature of Mr. Darius Pandole as
Director of the company.
9. JOINT STATUTORY AUDITORS
M/S H.K. Veerbhaddrappa & Co., Chartered Accountants, Hubli & M/s
Walker, Chandiok & Co., Chartered Accountants, Mumbai, Joint Statutory
Auditors of the company, hold office until the conclusion of the
ensuing Annual General Meeting and are eligible for reappointment.
The company has received letters from them to the effect that their
reappointment, if made, would be within the prescribed limits u/s 224(1
B) of the Companies Act, 1956 and that they are not disqualified for
reappointment u/s 226 of the Companies Act, 1956.
Pursuant to the recommendations of the Audit Committee, the Board of
Directors have, at their meeting held on 10 July 2012, recommended the
re-appointment of the Joint Statutory Auditors and the same is subject
to the approval of the shareholders of the Company, at the ensuing
Annual General Meeting.
10. COST AUDITOR
In conformity with the circulars issued by the Central Government, the
Company has appointed S.K. Tikare & Co., Cost Accountants, Dharwad, as
the Cost Auditors for our Wind Power business for the year ending 31
March 2012. Pursuant to the recommendation of the Audit Committee, the
Board at its meeting held on 10 July 2012 has retained his services for
the financial year 2012-13.
11. RECONSTITUTION OF COMMITTEES
Pursuant to NSR''s right to appoint a Director on the Board and
Sub-Committees of the Board, the Audit Committee and Remuneration
Committee was reconstituted by inducting therein Mr. Darius Pandole,
NSR''s nominee as a member and similarly other committees of the Board
also have been suitably reconstituted to include therein Mr. Darius
Pandole. The details of these two committees are as under:
a. Audit Committee
The following Directors are the members of the Audit Committee.
1. Mr. Sudhir Ghate - Chairman
2. Mr. C. Karunakara Shetty - Member
3. Mr. J.S. Korlahalli - Member
4. Mr. Darius Pandole - Member
In compliance with the provisions of Section 292A of the Companies Act,
1956, the members of the Audit possess significant knowledge,
experience and expertise in Finance.
b. Remuneration Committee:
The following Directors are the members of the Remuneration Committees:
1. Mr. J.S. Korlahalli - Chairman
2. Mr. Sudhir Ghate - Member
3. Mr. Karunakara Shetty - Member
4. Mr. Darius Pandole - Member
12. DETAILS PURSUANT TO COMPANIES (DISCLOSURE OF PARTICULARS IN THE
REPORT OF BOARD OF DIRECTORS) RULES, 1988
The particulars regarding Conservation of Energy, Technology Absorption
and Foreign Exchange earnings and expenditure are annexed hereto as
Annexure "A" and forms part of this Report.
13. PARTICULARS OF EMPLOYEES
The particulars of employees of the company, in terms of Section
217(2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, are given in Annexure "B" to
this report.
14. DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, the
Directors confirm that:
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been
made from the same;
b) They have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give true and fair view of the state of affairs of the
Company at the end of the financial year and of the profits of the
Company for that period;
c) They 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 the Company and for
preventing and detecting fraud and other irregularities; and
d) They have prepared the annual accounts on a going concern basis.
15. ACKNOWLEDGMENTS AND APPRECIATION
The Directors take this opportunity to thank the Company''s customers,
fixed deposit holders, shareholders, suppliers, bankers, financial
institutions and Central & State Governments for their consistent
support to the Company. The Directors also wish to place on record
their appreciation to employees at all levels for their hard work,
dedication and commitment. The enthusiasm and unstinting efforts of the
employees have enabled the Company to maintain its position in the
industry in spite of increased competition.
For and on behalf of the Board
Vjay Sankeshwar
Chairman & Managing Director
Place: HUBLI
Date: 10 July 2012