Your Directors have great pleasure in presenting Twenty Second Annual Report on thebusiness and operations of the Company along with the Audited Standalone and ConsolidatedStatements of Accounts for the Financial Year ended March 31 2018.
1. FINANCIAL HIGHLIGHTS
The summarized standalone and consolidated results of your Company and its subsidiaryare given in the table below:
(Rs in crores)
| || |
Financial Year ended
|Particulars || |
| ||31.03.2018 ||31.03.2017 ||31.03.2018 |
|Revenue from operations (Gross) ||2321.27 ||2114.20 ||2335.26 |
|Other Income ||7.45 ||8.59 ||7.38 |
|Finance Income ||3.66 ||4.87 ||3.66 |
|Total Income ||2332.38 ||2127.66 ||2346.30 |
|Operating expenditure ||2134.34 ||1905.60 ||2144.90 |
|Operating profit before Depreciation Interest Tax & Exceptional Item ||198.04 ||222.06 ||201.40 |
|Finance Cost ||1.66 ||2.10 ||2.04 |
|Depreciation and amortization expense ||19.11 ||16.24 ||19.68 |
|Profit Before Tax and Exceptional Item ||177.27 ||203.72 ||179.68 |
|Profit Before Tax ||177.27 ||203.72 ||179.68 |
|Tax Expense: || || || |
|a) Current Tax ||45.23 ||61.15 ||45.55 |
|b) Deferred Tax ||-1.04 ||-2.03 ||-0.92 |
|Profit After Tax ||133.08 ||144.60 ||135.06 |
|Basic EPS (Rs) ||3.13 ||3.42 ||3.16 |
|Diluted EPS (Rs) ||3.08 ||3.37 ||3.10 |
2. COMPANY'S PERFORMANCE
During the Financial Year 2017-18 on a standalone basis your Company achieved a netrevenue from operations of Rs 2321.27 crores as against Rs 2114.20 crores for theprevious financial year an increase of 10% year-on-year. Profit Before Tax for the yearunder review was '177.28 crores which is lower by 13% as compared to Rs 203.74 crores inthe previous financial year. The Profit After Tax for the year under review was Rs 133.09crores lower by 8% as against Rs 144.62 crores in the previous financial year. There wasa significant increase in advertising expenses related to the launch of a new brandidentity which had a temporary impact on profits.
The consolidated net revenue from operations for the Financial Year under review was Rs2335.26 crores. Consolidated Profit Before Tax for the year was Rs 179.69 crores. Onconsolidated basis the Company earned a Profit After Tax of Rs 135.05 crores for theFinancial Year 2017-18.
The segment wise performance of products of the Company is detailed under the SectionManagement Discussion and Analysis Report which forms part of this Annual Report.
3. NEW BRAND IDENTITY
After forty glorious years of existence the Company unveiled its new identity andannounced its new vision for the brand. The new identity marks the evolution of the40-year-old Company into a new generation technology-driven smart organization. As partof the brand evolution the Company unveiled a new logo featuring sleek black and royalgold colours representing modernity and premium values. The brand unveiled a new tag lineBring Home A Better Tomorrow' with the promise of delivering thoughtful products andexperiences to its consumers.
4. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
During the year under review the Company acquired 74% equity shares of GutsElectro-Mech Ltd. an unlisted public company situated at 163/C 164/E IDA Phase IICherlappally Hyderabad by way of direct purchase from the existing shareholders andthrough subscription of equity shares by private placement. The subsidiary Company isengaged in manufacturing and selling of switchgears circuit breakers relays currenttransformers and similar electromechanical products. Its plants are located at Hyderabadand Haridwar.
5. LAUNCH OF NEW PRODUCTS
In order to widen the kitchen appliances portfolio the Company during the year underreview launched Rice cooker in the markets of Andhra Pradesh and Telangana. The Companyalso launched Modular Switches in Kerala as an extension to the Wires and Switchgearcategory. The Company also launched Air Coolers in the markets of Delhi and Hyderabad.These products have been well accepted by the trade and consumers. In addition tolaunching new products the Company has also introduced new and innovative products inexisting categories viz. Digital UPS Fans and Stabilizers.
6. CHANGES TO THE SHARE CAPITAL
During the year under review the Company has allotted 418664 435744 and 166762number of equity shares of Rs 1/- Rs 34.64 and Rs 71.36 respectively under ESOS2013. ThePaid-up Capital of the Company as on March 31 2018 has increased to '425675631/-due to allotment of shares under ESOS2013.
The Board of Directors is pleased to recommend a final Dividend of ' 0.70 per equityshare (70 paise per equity share of Rs 1/- each). The final Dividend if declared asrecommended would involve an outflow of Rs 35.86 crores including Dividend DistributionTax if approved by the Shareholders at the ensuing Annual General Meeting. Dividend wouldbe payable to all the Shareholders/Beneficial Owners whose names appear in the Register ofMembers as on July 24 2018.
The Register of Members and Share Transfer Books will remain closed from July 25 2018to July 31 2018 (both days inclusive).
In accordance with Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated a Dividend DistributionPolicy. The Policy is available at the following weblink:- https://www.vguard.in/investor-relations/corporate-governance.
8. TRANSFER OF UNPAiD DiViDEND AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND(iEPF)
As per Section 124(5) of the Companies Act 2013 read with Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 ('theRules') the Company is required to transfer the dividend amount which remains unpaid or
unclaimed for a period of seven years from the date of transfer to the unpaid dividendaccount to the IEPF. Further as per the provisions of Section 124(6) of the CompaniesAct 2013 read with the Rules all the shares in respect of which dividend has not beenpaid or claimed for seven consecutive years or more shall be transferred by the Company toIEPF Authority.
Accordingly the Company has transferred an amount of Rs 453405/- which was lying inthe Unpaid Dividend Account for the Financial Year 2009-10 to the IEPF. The correspondingshares whose dividend has unclaimed for seven consecutive years were transferred to theIEPF. During the year under review the Company has transferred 71602 equity shares toIEPF as dividend had not been encashed or claimed on above shares during the sevenconsecutive years from the financial Year 2009-10 to 2016-17. The shares which were lyingin the IPO escrow Account also have been transferred to IEPF.
Pursuant to the provisions of the Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with Companies) Rules 2012 theCompany has filed the necessary form and uploaded the details of unclaimed amounts lyingwith the Company as on July 31 2017 with the Ministry of Corporate Affairs.
Unclaimed dividend in respect of the Financial year 2010-11 will be due for transfer toIEPF on August 24 2018.
9. FIXED DEPOSIT
The Company has not accepted any deposit within the meaning of Chapter V of theCompanies Act 2013 and the Rules framed thereunder.
10. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFEcTING The FINANcIAL position of thecompany which have occurred between the end of the financial year oF THE coMpANY To wHIcHTHE FINANcIAL STATEMENTS RELATE AND THE DATE OF THE
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the Financial Year to which this financial statements relateand the date of this Report.
11. change in the nature of business if any
There was no change in the nature of business of the Company during the Financial Year2017-18.
12. postal BALLOT
During the year under review the Board of Directors had sought approval of theShareholders of the Company by Postal Ballot process pursuant to the provisions ofSections 108 & 110 of the Companies Act 2013 read with Rule 20 & 22 of theCompanies (Management and Administration) Rules 2014 (as amended) and Regulation 44 ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (Listing Regulations) in respect of the Ordinary andSpecial Resolutions set out in the Postal Ballot Notices dated March 27 2017 November09 2017 and February 19 2018. The detailed voting results are given in the section'Report on Corporate Governance' forming part of this Annual Report.
13. significant or material orders passed by
REGULATORS / COURTS / TRIBUNALS
There were no significant material orders passed by the Regulators/Courts/Tribunalswhich would impact the going concern status of the Company and its future operations.
14. CREDIT RATING
During the year under review ICRA Limited has upgraded the long-term rating of theCompany from [ICRA]AA- to [ICRA]AA. The outlook on the long-term rating has been revisedto "Stable" from positive.
15. BUSINESS RESPONSIBILITY REPORT
Regulation 34(2)(f) of Listing Regulations mandates inclusion of BusinessResponsibility Report ("BRR") as part of Annual Report for top 500 listedcompanies based on market capitalization. In Compliance with the regulation the Companyhas prepared a BRR which describes the initiatives taken by the Company from anenvironmental social and governance perspective for the financial year 2017-18 and thesame forms part of this Annual Report.
16. BOARD OF DIRECTORS AND ITS COMMITTEES
A. composition of the Board of Directors
The Board of Directors of the Company comprises of eight Directors of which two areExecutive and six are Non-Executive Directors which includes four Independent Directors.The composition of the Board of Directors is in compliance with the provisions ofRegulation 17 of the Listing Regulations and Section 149 of the Act.
B. Change in office of Directors and Key Managerial Personnel of the Company during theyear under review and details of Directors seeking appointment/re-appointment at the 22ndAnnual General Meeting
The members of the Company in their 21st Annual General Meeting held on July 31 2017approved the re-appointment of Mr. Mithun K Chittilappilly Managing Director as aDirector liable to retire by rotation.
During the year under review Mr. Kochouseph Chittilappilly Chairman of the Boardstepped into Non-Executive Category effective from August 01 2017.
In accordance with the provisions of Section 152 of the Act and the Articles ofAssociation of the Company Mr. Ramachandran V Wholetime Director is liable to retire byrotation in the ensuing Annual General Meeting and being eligible offers himself forre-appointment.
The Board of Directors in their meeting held on March 23 2018 re-appointed
Mr. Mithun K Chittilappily (DIN:00027610) as Managing Director of the Company for aperiod of three years effective from April 01 2018 subject to the approval of themembers in the ensuing Annual General Meeting.
The Notice dated July 03 2018 of the ensuing Annual General Meeting includes theproposal for appointment / re-appointment of Directors and their brief resume specificinformation about the nature of expertise the names of the Companies in which they holddirectorship and membership/ chairmanship of the Board Committees as stipulated in ListingRegulations.
The Board of Directors of the Company at their meeting held on May 19 2017 appointedMr. Sudarshan Kasturi Senior Vice President - Finance of the Company as Chief FinancialOfficer and Key Managerial Personnel effective from June 01 2017 on superannuation ofMr. A Jacob Kuruvilla on May 31 2017.
c. Declaration by independent Directors
Mr. C J George Mr. Cherian N Punnoose Mr. Ullas K Kamath and Mr. A K NairIndependent Directors have furnished a declaration that they meet the criteria ofindependence as laid down under Section 149(6) of the Act and Regulation 16(b) of ListingRegulations.
D. Number of meetings of the Board of Directors
The Board meets regularly to discuss and decide on various matters as required and dueto business exigencies certain decisions are taken by the Board through circulation fromtime to time. During the Financial Year 2017-18 the Board of Directors of the Company metfive times on May 19 2017 July 31 2017 October 25 2017 January 22 2018 and March23 2018. Additionally several committee meetings were also held.
Pursuant to the requirements of Schedule IV to the Act and Listing Regulations aseparate Meeting of the Independent Directors of the Company was also held on March 232018 and the Directors reviewed and assessed the matters enumerated under ScheduleIV(VII)(3) to the Act and Regulation 25(4) of the Listing Regulations.
All the Independent Directors except Mr. Ullas K Kamath attended the said meeting.
The details of the Meetings are given in the Corporate Governance Report which formspart of this Report. The intervening gap between the Meetings was within the periodprescribed under the Act.
E. committees of the Board
Pursuant to the requirement under the Act and Listing Regulations the Board ofDirectors has constituted various Committees of Board such as Audit Committee Nomination& Remuneration Committee Stakeholders' Relationship and Share Transfer Committee andCorporate Social Responsibility ("CSR").
The composition and terms of reference of Audit Committee Nomination and RemunerationCommittee and Stakeholders' Relationship and Share Transfer Committee and number ofmeetings held during the year under review are given in the section Report on CorporateGovernance forming part of this Annual Report.
The CSR Committee of the Company comprises of three members Mr. KochousephChittilappilly Mr. Cherian N Punnoose and Mr. Mithun K Chittilappilly. Mr. KochousephChittilappilly is the Chairman of the Committee and the members of the Committee metthree times during the year under review on May 19 2017 October 25 2017 and January22 2018. The Committee recommended to the Board the amount of CSR to be spent for thefinancial year and the various
CSR programs/activities to be carried out by the Company for its consideration andapproval.
F. Performance Evaluation
Pursuant to the provisions of the the Act and Listing Regulations the Board hascarried out the annual performance evaluation of its own performance the Directors(excluding the Director being evaluated) as well as the Sub-Committees of the Board.Further the Nomination & Remuneration Committee of the Company has carried outevaluation of performance of each individual Director. Performance evaluation was made onbasis of structured questionnaire taking into account the indicative criteria prescribedin the Nomination Remuneration and Evaluation Policy of the Company read with SEBIGuidance Note on Board Evaluation. Evaluation of the Board was made based on role playedby the Board in decision making evaluating strategic proposals discussing annualbudgets assessing adequacy of internal controls review of risk management proceduresetc. The evaluation of individual Director was carried out based on various parameterssuch as participation in the Board and its Committee meetings contribution towardsstrategic guidance risk mitigation internal controls governance leadership and talentdevelopment and managing external stakeholders. Performance evaluation of variousSub-Committees of the Board was carried out on the basis of criteria such as constitutioneffective functioning of the Sub-Committees as per the terms of reference periodicalsuggestions and recommendations given by the Sub-Committees to the Board etc.
A separate meeting of Independent Directors of the Company was held during the yearunder review in which the members evaluated the performance of the Chairman based oncriteria such as giving guidance to the Board and ensuring the independence of the Boardetc. The performance of the non-independent directors was also evaluated based on theircontribution made to the growth of the Company strategic initiatives and Boarddeliberations.
G. Directors Responsibility Statement
In terms of the requirements of Section 134(3) (c) read with Section 134(5) of the Actthe Board of Directors of the Company hereby state and confirm that:
i. in the preparation of the annual accounts the applicable accounting standards hadbeen followed. Proper explanation relating to material departures if any is providedwherever applicable;
ii. such accounting policies were selected and applied consistently and had madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the Financial Year and of the profitof the Company for the period;
iii. proper and sufficient care were taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
iv. the annual accounts were prepared on a going concern basis;
v. the internal financial controls to be followed by the Company were laid down andsuch internal financial controls were adequate and were operating effectively; and
vi. proper systems to ensure compliance with the provisions of all applicable laws weredevised and such systems were adequate and operating effectively.
17. AUDIT RELATED MATTERS
A. Statutory Auditors
M/s. S R Batliboi & Associates LLP Chartered Accountants Kochi with FirmRegistration Number - 101049W/E300004 were appointed as the Statutory Auditors of theCompany to hold office from the conclusion of 21st Annual General Meeting until theconclusion of 26th Annual General Meeting of the Company to be held in the financial year2022.
The requirement relating to ratification of Auditors by the members of the Company atevery AGM has been dispensed with by the Companies Amendment Act 2017 vide NotificationNo. S.O. 1833(E) dated May 07 2018. Pursuant to the said amendment during the five-yearterm of appointment / re-appointment of Statutory Auditors ratification of theappointment / re-appointment by the members in the Annual General Meeting is not required.Accordingly
business item of ratification of re-appointment of Statutory Auditors is not includedin the Notice dated July 03 2018 calling 22nd Annual General Meeting of the Company.
The Auditors' Report for the Financial Year 2017-18 does not contain anyqualification reservation or adverse remarks.
B. Cost Auditors
M/s. Ajeesh & Associates Cost Accountants Ernakualm were appointed as the CostAuditors of the Company for the Financial Year 2016-17 and the Report was considered bythe Board in its meeting held on July 31 2017. There were no qualifications reservationsor adverse remarks made by Cost Auditors.
M/s. RA & Co. Cost Accountants Mumbai were appointed as the Cost Auditors of theCompany for the Financial Year 2017-18 and the Audit Report will be considered by theBoard of Directors.
The Board of Directors in their meeting held on May 30 2018 re-appointed M/s. R A& Co. Cost Accountants Mumbai (Firm Registration No. 000242) as the Cost Auditorsof the Company for the Financial Year 2018-19 and fixed the audit fee payable to them. Asper the provisions of the Section 148 of the Act read with Companies (Audit and Auditors)Rules 2014 audit fee payable to the Cost Auditors is to be ratified by the members ofthe Company. Your Directors have proposed a resolution in item no. 4 of the Notice datedJuly 03 2018 for the ensuing Annual General Meeting for approval of the audit fee.
C. Secretarial Auditors
The Board of Directors pursuant to the provisions of Section 204 of the Act appointedM/s. Keyul M Dedhia & Associates Company Secretaries Mumbai as the SecretarialAuditors of the Company to carry out the Secretarial Audit for the Financial Year2017-18. Secretarial Audit Report issued by M/s. Keyul M Dedhia & AssociatesSecretarial Auditors in Form No. MR -3 forms part of this Report and is annexed herewithas Annexure I.
The Secretarial Audit Report for the Financial Year 2017-18 does not contain anyqualification reservation or adverse remarks.
18. POLICY MATTERS
A. Nomination Remuneration and Evaluation Policy
In terms of provisions of Section 178(3) of the Act the Nomination and RemunerationCommittee of the Company has formulated and recommended to the Board a policy containingthe criteria for determining qualifications competencies positive attributes andindependence for appointment of a Director (Executive/Non- Executive) and it highlightsthe remuneration for the Directors Key Managerial Personnel and other employees ensuringthat it covers the matters mentioned in Section 178(4) of the Act. Nomination Remunerationand Evaluation Policy approved by the Board is given in Annexure II to this Report.
B. vigil Mechanism/whistle Blower policy
Your Company had before coming into force of the Act voluntarily adopted a WhistleBlower Policy for Vigil Mechanism for Directors and Employees to report to the Managementabout the unethical behaviour fraud or violation of Company's code of conduct. Themechanism provides for adequate safeguards against victimisation of employees andDirectors who use such mechanism and makes provision for direct access to the Chairpersonof the Audit Committee in exceptional cases. None of the person has been denied access tothe Audit Committee. The policy has been circulated amongst the employees of the Companyworking at various locations divisions/units. During the year under review the Companyhas not received any instances of genuine concerns from Directors or employees.
The said policy has been amended in line with the provisions of the Act and ListingRegulations and it provides for adequate protection to the whistle blower againstvictimization or discriminatory practices. The Policy is available on the website of theCompany at www.vguard.in in the page 'Investor Relations'.
c. corporate Social Responsibility policy
In terms of provisions of Section 135 of the Act read with The Companies (CorporateSocial Responsibility Policy) Rules 2014 the Board of Directors of the Company hasadopted a policy on Corporate Social Responsibility ("CSR"). The
Company's CSR policy allows carrying on activities under all the programs listed in theSchedule VII to the Act. During the year Company carried out several initiatives underthe CSR program directly as well as through agencies. The said policy is posted on thewebsite of the Company www. vguard.in.
Pursuant to the provisions of Section 135 of the Act read with the Companies(Corporate Social Responsibility Policy) Rules 2014 Corporate Social Responsibilityactivities undertaken during the year is annexed to this report as Annexure III.
During the year under review the Company has formed a Section 8 Company in the formof a Company limited by guarantee V-Guard Foundation in accordance with the provisions ofSection 135 of the Act read with the Companies (Corporate Social Responsibility Policy)Rules 2014 to carry out CSR activities of the Company.
D. Risk Management Policy
The Company has developed and implemented a risk management framework detailing variousrisks associated with the business of the Company the process of identification of risksmonitoring and mitigation of identified risks. Risk Management Committee constituted byBoard identifies Corporate Risks at the beginning of financial year which are cascadeddown to the product/functional risk groups for inclusion in their risk matrices andmonitoring progress in every quarter. Corporate risks are strategic risks impacting theCompany in the areas of new products information security digitization etc. Product riskgroups also identifies and monitors product specific risks and the key product specificrisks are included in the Corporate Risks. Quarterly updates on the Corporate Risks andthe mitigation plans are presented to Risk Management Committee and Board.
A detailed note on Risk Management is given under the section Management Discussion andAnalysis Report which forms part of this Annual Report.
E. Dividend Policy
As per Regulation 43A of Listing Regulations top 500 listed Companies shall formulatea Dividend policy. Accordingly the Board of Directors of the Company has adopted aDividend Policy for determining circumstances and parameters under which Dividend pay-outcould be made on
periodical basis. The policy highlighted the factors to be considered by the Board ofDirectors at the time of recommending/declaring of Dividend. The said policy is given inAnnexure IV to this report and posted on the website of the Company www.vguard.in.
19. OTHER MATTERS
A. internal Financial controls
The Company has Internal Control Systems commensurate with the nature of its businesssize and complexities. Every quarter Audit committee reviews the adequacy andeffectiveness of internal control system and monitors the implementation of the auditrecommendations. During the year under review the Internal Audit Division of the Companyhas tested key controls in operational financial and IT processes to provide assuranceregarding compliance with the existing policies and standard operating procedures etc. andno significant weaknesses/deviations were identified in design or operation of thecontrols.
Further the Statutory Auditors of the Company also carried out audit of the InternalFinancial Controls over Financial Reporting of the Company as on March 31 2018 and issuedtheir report which forms part of the Independent Auditor's report.
B. particulars of Loans Guarantees and investment
The Company had provided financial assistance to the extent of '5.40 Crores to Mr.Gopal Singh Cintury vide agreement dated May 24 2016 for construction of factorybuilding at Plot No.2200 West - Pandam Block Duga Ilaka Gangtok East Sikkim. The Boardof Directors in their meeting held on July 31 2017 has increased the loan amount to'6.40 crores vide an addendum dated August 21 2017 to the agreement dated May 24 2016considering revision in the scope of construction activities.
During the year under review the Company has extended a Corporate Guarantee in favourof ICICI Bank Ltd Kadavanthra Branch Kochi in respect of the overall credit facility of'8.00 crores consisting of '5.00 crores of working capital facility with inter-changeablesub-limits for non-fund-based limits and '3.00 crores working capital term loan facilityavailed by GUTS Electro- Mech Ltd Subsidiary Company.
During the year under review the Company acquired majority stake in equity shares ofGUTS Electro-mech Ltd. a Company having its registered office at Hyderabad and is engagedin manufacturing and selling of switchgears circuit breakers relays currenttransformers and similar electromechanical products. The total shareholding of the Companyin GUTS Electro- mech Limited is 1454223 equity shares of Rs10 each and the sameconstitutes 74 per cent of the paid- up share capital. To satisfy the requirement ofminimum number of members as per the first proviso of section 187 of the Act equityshares to the extent of 500 nos. has been transferred to the nominees of the Company whowill act as registered owners on behalf of the Company. The equity investment is mademainly to secure supply for switchgear business vertical of the Company.
C. Financial Position and Performance of Subsidiaries Joint Ventures and Associates
Your Company's subsidiary GUTS Electro-mech Ltd. registered a turnover of Rs 4710lakhs during the FY 17-18 (Rs 4175 lakhs during FY 2016-17). The financial summary of GutsElectro- mech Ltd. is as under:-
| || |
(Amount in lakhs)
|Particulars ||2017-18 ||2016-17 |
|Total Revenue ||4760.79 ||4274.08 |
|Profit/(Loss) Before Tax ||70.74 ||19.30 |
|Profit/(Loss) After Tax ||(28.55) ||53.68 |
The Board has reviewed the financial statements of the subsidiary. The ConsolidatedFinancial Statements of the Company and its subsidiary prepared in accordance with theAct and applicable Accounting Standards along with all relevant documents and theAuditors' Report thereon form part of this Annual Report.
Pursuant to the provisions of Section 129(3) of the Act a statement containing salientfeatures of the financial statements of the Company's subsidiary as on March 31 2018 inthe prescribed Form AOC-1 is attached to the financial statements of the Company whichforms part of this Annual Report.
In accordance with the provisions of Section 136(1) of the Act the Annual Report ofthe Company contain the standalone and the consolidated financial statements of theCompany and the
audited financial statements of the subsidiary company have been placed on the websiteof the Company www.vguard.in. The audited financial statements in respect of thesubsidiary company shall also be kept open for inspection at the Registered Office of theCompany from 11.00 A.M. to 1.00 P.M. for a period of 21 days upto the date of ensuingAnnual General Meeting. The aforesaid documents relating to subsidiary Company can be madeavailable to any Member interested in obtaining the same upon a request made to theCompany.
D. any revision made in the financial Statements or Board's Report
The Company has not revised the Financial Statements or Board's Report in respect ofany of the three preceding financial years.
E. Employee Stock Option Scheme 2013
During the Financial Year 2015-16 the Company had granted 906280 options to theeligible employees to be vested over a period of three years in accordance with theEmployee Stock Option Scheme (ESOS) 2013. Vesting of options for the first year had beencompleted and during the year under review considering the parameters for vesting ofoptions 384808 number of options were vested to eligible employees being the vestingfor the second year of the grant. During the year under review 5936 no. of options werecancelled due to non-achievement of parameters for performance vesting.
Further 63000 no. of options of '1/- each and
5.67.000 no. of options of '68.75 each being the time based vesting for the firstyear were vested for the grant made on May 04 2016. Options to the extent of 48651numbers were vested on time basis for the first year in respect of grant made on June 162016. In respect of grant made on August 08 2016 options to the extent of 248808 werevested on time basis for the first year of vesting. During the year under review 26992no. of options were cancelled out of the grant made on August 08 2016.
Further 42000 no. of options of '1/- each and
1.68.000 no. of options of '121.80 each were vested during the year under review ontime basis towards the first year in respect of the grant made on August 08 2016. Inrespect of grant made on October 21 2016 options to the extent of 28994 were vested ontime basis towards the first year. Further options to the extent of 15460 numbers werevested on time basis in respect of grant made on January 30 2017.
The Nomination and Remuneration Committee made several grants under ESOS 2013 duringthe year under review to various eligible employees and the options granted will be vestedover a period of four years from the date of grant. 201100 no. of options were grantedon May 19 2017 at face value of Rs 1/-. Further 125776 nos. of options were granted onJuly 31 2017 and 250768 no. of options were granted on January 22 2018 at face valueof Rs 1/- respectively.
The Nomination and Remuneration Committee in its meeting held on July 31 2017 granted29078 nos. of options on variable basis and the same would be vested at the end of thirdyear.
The Company had obtained the approval of members for grant of options to the extent of11200000 under ESOS 2013 by way of a special resolution passed through Postal Ballotprocess in May 2013. With a view to attract new talents and retain existing talents andto provide industry standard compensation the Nomination and Remuneration Committee hasgranted options under ESOS to eligible employees from time to time. The options for whichapproval of members had sought been completely utilized for making various grants fromtime to time.
As equity based compensation schemes are an effective tool to reward the employeesincluding the professional Directors in the growth pace of the Company and helps inretaining the existing key resources and attract new talents who are required for thefuture growth with the approval of the members at their 20th Annual General Meeting heldon July 26 2016 the Board has created further options to the extent of 2250000 formaking grant(s) under ESOS to eligible employees from time to time. Subsequent to theapproval of the members of the Company the Nomination and Remuneration Committee hasgranted 2077830 numbers of options from time to time.
As the Board desired to provide equity based compensation to employees at variouslevels it has been decided to increase the number of options available for further grantunder ESOS and approval of the members was sought through Postal Ballot Process on April30 2017 for creation of options to the extent of 200000 number of options and furthersought the approval of the
members on December 11 2017 through postal ballot for additional options exercisableinto not more than 1000000 equity shares of the Company under ESOS 2013.
The disclosure pursuant to the provisions of Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014 and Section 62(1) (b) of the Act readwith Rule 12(9) of the Companies (Share Capital and Debentures) Rules 2014 is given asAnnexure V to this Report.
F. Code of Conduct
As prescribed under Regulation 26(3) of the Listing Regulations a declaration signedby the Managing Director affirming compliance with the Code of Conduct by the Directorsand Senior Management of the Company for the Financial Year 2017-18 is described in'Report on Corporate Governance' forming part of this Annual Report.
G. Extract of Annual Return
Extract of the Annual Return in Form No. MGT-9 forms part of the Board's Report and isannexed herewith as Annexure - VI.
H. Management Discussion and Analysis Report
As per requirements of Listing Regulations a detailed review of the developments inthe industry performance of the Company opportunities and risks internal controlsystems outlook etc. of the Company is given under the head Management Discussion andAnalysis Report which forms part of this Annual Report.
i. Related party Transactions
During the financial year ended March 31 2018 all transactions with the RelatedParties as defined under the Act read with Rules framed thereunder were in the 'ordinarycourse of business' and 'at arm's length' basis. There are no materially significantrelated party transactions made by the Company with Promoters Key Managerial Personnel orother Designated Persons which may have potential conflict with interest of the Company atlarge. A statement of all related party transactions is presented before the AuditCommittee on quarterly basis specifying the nature value and terms and conditions oftransactions.
Your Company does not have a 'Material Unlisted Subsidiary' as defined under Regulation16(1)
(c) of the Listing Regulations. The related party transactions policy is uploaded onthe Company's
website at the web-link https://www.vguard.in/ investor-relations/corporate-governance.
Form AOC-2 containing particulars of contracts or arrangements entered into by theCompany with related parties referred in Section 188(1) of the Act is attached asAnnexure VII.
J. Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance andcontinues to be compliant with the requirements of the Corporate Governance as included inthe Listing Regulations. The Report on Corporate Governance as stipulated underRegulation 27 of the Listing Regulations forms part of the Annual Report. The certificatefrom the Statutory Auditors of the Company confirming compliance with the conditions ofCorporate Governance as stipulated under Regulation 27 of the Listing Regulations hasbeen annexed with the said report.
K. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andoutgo
The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134(3)(m) of the Act read with Rule8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure VIII and forms partof this Report.
L. particulars of Remuneration details of Directors key Managerial personnel andEmployees
A statement containing the details of the Remuneration of Directors KMPs and Employeesas required under Section 197(12) of the Act read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is given as Annexure IXto this Report.
M. Disclosure as per the Sexual Harassment of women at workplace (preventionprohibition and Redressal) act 2013
The Company has in place policy on Prevention Prohibition and Redressal of SexualHarassment for women at workplace in accordance with the requirements of The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. AnInternal Complaints Committee (ICC) has been set up as per the statutory requirements toredress complaints regarding sexual harassment. The policy has set guidelines on theredressal and enquiry process that is to be followed by complainants and the ICC whilstdealing with issues related to sexual harassment at the work place. All women employees(permanent temporary contractual and trainees) are covered under this policy. The policyhas been circulated amongst the employees of the Company and the same is exhibited in thenotice Board of all the business locations/divisions of the Company. During the year underreview the Company has not received any complaint of sexual harassment.
20. REPORTING OF FRAUDS BY AUDITORS
During the year under review neither the Statutory Auditors nor the SecretarialAuditors has reported to the Audit Committee under Section 143 (12) of the Act anyinstances of fraud committed against the Company by its officers or employees.
21. LISTING OF SHARES
The equity shares of the Company are listed on the National Stock Exchange of IndiaLimited (NSE) and BSE Ltd. (BSE). The listing fee for the Financial Year 2018- 19 hasalready been paid to the credit of both the Stock Exchanges.
The Board wishes to place on record its sincere appreciation to the Company'scustomers vendors central and state government bodies auditors legal advisorsconsultants registrar and bankers for their continued support to the Company during theyear under review. The Directors also wish to place on record their appreciation for thededicated efforts of the employees at all levels. Finally the Board expresses itsgratitude to the members for their continued trust co-operation and support.
For and on behalf of the Board of Directors
| ||S/d ||S/d |
| ||Kochouseph Chittilappilly ||Mithun K Chittilappilly |
|Date : May 30 2018 ||Chairman ||Managing Director |
|Place : Kochi ||(DIN: 00020512) ||(DIN:00027610) |