Your Directors take pleasure in presenting their 25th Annual Report on thebusiness and operations of the Company together with the Audited Financial Statements forthe year ended March 31 2021.
1. FINANCIAL SUMMARY
The summarized standalone and consolidated results of your Company with previous year'sfigure are given in the table below:
(Rs in crores)
|Particulars || |
Financial Year ended
| || |
| ||31.03.2021 ||31.03.2020 ||31.03.2021 ||31.03.2020 |
|Revenue from Operations ||2699.00 ||2481.96 ||2721.24 ||2502.94 |
|Other Income ||2.92 ||10.01 ||2.55 ||11.15 |
|Finance Income ||18.18 ||13.98 ||18.18 ||13.98 |
|Total Income ||2720.10 ||2505.95 ||2741.97 ||2528.07 |
|Operating Expenditure ||2392.51 ||2228.69 ||2409.14 ||2244.95 |
|Operating Profit before Depreciation Interest & Tax ||327.59 ||277.26 ||332.83 ||283.12 |
|Finance Cost ||5.60 ||3.73 ||6.10 ||4.16 |
|Depreciation and Amortization Expense ||37.32 ||28.09 ||38.63 ||29.38 |
|Profit Before Tax ||284.67 ||245.44 ||288.10 ||249.58 |
|Tax Expense: || || || || |
|a) Current Tax ||86.30 ||64.75 ||87.73 ||66.40 |
|b) Deferred Tax ||(0.61) ||(4.47) ||(1.52) ||(5.07) |
|Profit After Tax ||198.98 ||185.16 ||201.89 ||188.25 |
|Basic EPS (Rs) ||4.64 ||4.33 ||4.68 ||4.38 |
|Diluted EPS (Rs) ||4.61 ||4.28 ||4.65 ||4.32 |
2. COMPANY PERFORMANCE
Your Company recorded Net Revenue from Operations of ? 2699.00 crs on standalonebasis for the Financial Year ended March 31 2021. Revenue grew by 8.74% compared to ?2481.96 crs recorded during the previous Financial Year. The Profit After Tax for theyear grew by 7.46% to ? 198.98 crs from ? 185.16 crs recorded in the previous FinancialYear. The segment wise performance of the Company is detailed under the section ManagementDiscussion and Analysis Report which forms part of this Annual Report.
The year started with nation-wide lockdown imposed to combat COVID-19 pandemic and itimpacted the revenue growth of the first quarter. Economic activity was partially resumedby mid of May 2020 with relaxation in lockdown and consumer demand improved towards theend of Second quarter of the fiscal. Your Company was able to recommence the operationspartially in May 2020 and scaled up the activities by end of first quarter by strictlyadhering to COVID-19 protocols. Consumer demand and market environment rebounded sharplyduring second half of the year and broad-based growth was achieved across productcategories and geographical regions during the remaining period of the year. Cash fromoperations remined strong throughout the year. Gross margin was impacted due to materialcost inflation and pricing actions were initiated considering market dynamics.
During the year the Company focused on launching new products enhancing supply chainresilience boosting sales through e-commerce channels greater virtual consumerengagement managing cash flow strengthening distribution network and all theseactivities enabled to combat the uncertain market environment and comeback strongly.
The consolidated net revenue from operations for the Financial Year under review was Rs2721.24 crs with a growth of 8.72% over Rs 2502.94 crs for the previous Financial Year.On consolidated basis the Company earned a Profit After Tax of Rs 201.89 crs for theFinancial Year 2020-21 against Rs 188.25 crs recorded during the previous Financial Year.The consolidated numbers included the financial performance of Guts Electro-Mech Limitedsubsidiary Company.
Economic activity remains uncertain and challenging with the hit of second wave ofCOVID-19 and consequent lockdown declared in many parts of the Country. Your Company willbe closely monitoring the external environment and shall manage the emerging scenarios bybecoming stronger in the consumer electrical space.
3. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
As on March 31 2021 the Company's equity investment in Guts Electro-Mech Ltd. whichis engaged in the business of manufacture and supply of MCB & RCCB continues at 74%.Presently the Company does not have any material subsidiary.
The Policy for determining Material Subsidiaries adopted by your Board in conformitywith Regulation 16 of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations") can beaccessed on the Company's website at www.vguard.in.
4. CHANGES TO THE SHARE CAPITAL
During the year under review the Company has allotted 586815 1310458 and 3650number of equity shares of Rs 1/- Rs 34.64 and Rs 71.36 respectively under ESOS 2013. ThePaid-up Capital of the Company as at March 31 2021 was Rs 430188458/-
Your Directors are pleased to recommend a Dividend of Rs 1.20 (One Rupee twenty Paise)per equity share of Rs 1/- each (120% per equity share of Rs 1/- each) for the financialyear 2020-21. The dividend if declared as recommended in the ensuing Annual
General Meeting of the Company would involve an outflow of Rs 51.62 crs. Dividendwould be payable to all the shareholders/ Beneficial Owners whose names appear in theRegister of Members / Register of Beneficial Owners respectively as on July 29 2021.
The Registers of Members and Beneficial Owners will remain closed from July 30 2021 toAugust 5 2021 (both days inclusive).
6. INVESTOR EDUCATION AND PROTECTION FUND
Transfer of Unpaid/ Unclaimed Dividend & Share Application Money to InvestorEducation and Protection Fund (IEPF)
Pursuant to the provisions of Section 124(5) of the Companies Act 2013 ("theAct") unclaimed/ unpaid dividend of Rs 382557 which was lying in the UnpaidDividend Account for the Financial Year 2012-13 was transferred during the year underreview to IEPF.
Reminders are sent regularly to the Shareholders who have not claimed the dividendamount to claim the same from the Company failing which the unclaimed dividend lying inthe unpaid account for seven years shall be transferred to IEPF within thirty days fromthe due date for transfer of unpaid dividend. Unclaimed dividend in respect of thefinancial year 2013-14 is due for transfer to IEPF on August 28 2021.
Transfer of Equity Shares to Investor Education Protection Fund Authority (IEPFA)
In terms of Section 124(6) of the Act read with Rule 6 of the IEPFA (Accounting AuditTransfer and Refund) Rules 2016 (as amended from time to time) shares on which dividendhas not been paid or claimed by a shareholder for a period of seven consecutive years ormore shall be transferred to the Demat Account of IEPFA within a period of thirty days ofsuch shares become due for transfer. Upon transfer of such shares all benefits (likedividend bonus split consolidation etc.) if any accruing on such shares shall also betransferred to the demat / bank Account of IEPF and the voting rights on such shares shallremain frozen till the rightful owner claims the shares. The Shares transferred to theDemat Account of IEPFA can be claimed back by the shareholder by following the procedureprescribed under the aforesaid rules. The procedure to be followed by the shareholders aredetailed on the website of the Company www.vguard.in. under 'Investor Relations'.
During the year under review the Company was required to transfer 18748 equityshares which were held by 33 shareholders to IEPFA as dividend had not been encashed orclaimed on the above shares during the seven consecutive years from the Financial Year2012-13. The Company was able to transfer only 15468 equity shares to IEPFA as 3280equity shares were pledged by one of the shareholders in favour of a financial institutionand lien was marked on the said shares. The Company filed form IEPF - 3 for furnishingdetails of shares which could not be transferred to IEPFA.
Details of Nodal Officer
The details of the nodal officer appointed by the Company under the provisions of IEPFis given below and the same is disseminated on the website of the Company www.vguard.in
|Name of the Company Secretary designated as Nodal Officer ||Jayasree K |
|Direct Phone No. ||+91 484 - 433 5000 |
|Email ID ||firstname.lastname@example.org |
|Address ||V-Guard Industries Ltd. |
| ||42/962 Vennala High School Road Vennala Ernakulam - 682028 |
7. FIXED DEPOSIT
The Company has not accepted any deposit within the meaning of Chapter V of the Act andthe Rules framed thereunder during the year under review.
8. 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 REPORT
There are no material changes and commitments 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 Report.
9. CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during the Financial Year2020-21.
10. POSTAL BALLOT
During the year under review the Board of Directors sought approval of theshareholders of the Company through Postal Ballot process pursuant to the provisions ofSections 108 & 110 of the Act read with Rule 20 & 22 of the Companies (Managementand Administration) Rules 2014 (as amended) and Regulation 44 of the Listing Regulationsvide Postal Ballot notice dated September 5 2020 for appointment of Mr. George MuthootJacob as an Independent Director. The resolution was passed with requisite majority ofthe members. Details of voting results are given under the head 'Postal Ballot' in 'Reporton Corporate Governance' Section which forms part of this Annual Report.
11. SIGNIFICANT AND 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.
12. CREDIT RATING
The Company's credit facilities are rated by Investment Information and Credit RatingAgency of India Limited (ICRA Ltd.). The Company continues to have long-term rating of[ICRA] AA (pronounced ICRA double A) and short-term rating of [ICRA] A1+ (pronounced ICRAA one plus). The outlook on the long-term rating remains stable.
13. BUSINESS RESPONSIBILITY REPORT
The Ministry of Corporate Affairs Government of India in July 2011 came out with the'National Voluntary Guidelines on Social Environmental and Economic Responsibilities ofBusiness'. These guidelines contain certain principles which are to be adopted bycompanies as part of its business practices and disclosures regarding the steps taken
to implement these principles through a structured reporting format viz. BusinessResponsibility Report. Pursuant to Regulation 34(2)(f) of the Listing Regulations theCompany has prepared the Business Responsibility Report which forms part of this AnnualReport.
14. BOARD OF DIRECTORS AND ITS COMMITTEES
A. Composition of the Board of Directors
As on March 31 2021 the Board of Directors of the Company comprised of nineDirectors with two Executive and seven Non-Executive Directors which included fiveIndependent Directors. The composition of the Board of Directors is in compliance with theprovisions of Regulation 17 of the Listing Regulations and Section 149 of the Act.
B. Change in office of Directors and Key Managerial Personnel of the Company during theyear under review and details of Directors seeking Re-appointment at the 25thAnnual General Meeting
The members of the Company in their 24th Annual General Meeting held onAugust 12 2020 re-appointed Mr. Mithun K Chittilappilly Managing Director who retiredby rotation. The members also re-appointed Mr. Ramachandran V as Whole-time Director ofthe Company under the designation Director and Chief Operating Officer for a period offour years with effective from June 1 2020 and appointed Mr. B Jayaraj as a Directorliable to retire by rotation.
Ms. Joshna Johnson Thomas Non-Executive Director resigned from the Board effectivefrom April 1 2021.
As per the provisions of Section 152 of the Act Mr. Ramachandran V Director and ChiefOperating Officer will retire by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment.
The Board of Directors in their meeting held on March 19 2021 re-appointed
Mr. Mithun K Chittilappilly Managing Director of the Company for a period of fiveyears effective from April 1 2021 and proposed re-appointment of Ms. Radha UnniIndependent Director for a second term of five consecutive years effective fromSeptember 27 2021.
Further the Board of Directors appointed Prof. Biju Varkkey as an AdditionalDirector under Independent category effective from May 26 2021 for a tenure of 5years. These appointment and re-appointments are subject to the approval of the members inthe ensuing Annual General Meeting.
In terms of provisions of Section 160 of the Act and the rules made thereunder theCompany has received notice from members of the Company proposing the candidature of Mr.Mithun K Chittilappilly Ms. Radha Unni and Prof. Biju Varkkey to the office of ManagingDirector and Independent Directors respectively.
The Notice of the ensuing Annual General Meeting include the proposals for appointmentand / or re-appointment of Directors and their brief resume specific information aboutthe nature of expertise the names of the Companies in which they hold directorship andmembership/ chairmanship of the Board Committees as stipulated in the Act and the ListingRegulations.
C. Criteria for Determining Qualifications Positive Attributes and Independence of aDirector
The Nomination and Remuneration Committee has formulated Nomination Remuneration andEvaluation Policy which details the criteria for determining qualifications positiveattributes and independence of Directors in terms of provisions of Section 178(3) of theAct and the Listing Regulations. The policy forms part of this report.
D. Declaration by Independent Directors
Mr. Cherian N Punnoose Mr. C J George Mr. Ullas K Kamath Ms. Radha Unni and Mr.George Muthoot Jacob Independent Directors have furnished a declaration stating thatthey meet the criteria of independence as envisaged in Regulation 16 of the ListingRegulations and Section 149(6) of the Act.
E. Certificate from Practicing Company Secretary
Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the ListingRegulations M/s. Keyul M Dedhia & Associates Company Secretary in Practice Mumbaihas certified that none of the Directors on the Board of the
Company has been debarred or disqualified from being appointed or continuing asDirectors of companies by the Securities and Exchange Board of India/Ministry of CorporateAffairs or any such statutory authority and the certificate forms part of the Report ofCorporate Governance forming part of this Annual Report.
F. Number of Meetings of the Board of Directors
The Board meets at regular intervals to consider and approve financial resultsbusiness policies and strategic proposals apart from other items of business. The Boardand Committee meetings are pre-scheduled and a tentative annual calendar of meetings iscirculated to the Directors in advance to ensure participation of all Directors.
During the year under review eight Board meetings were held and meetings ofSubcommittees were also held. The intervening gap between the meetings was within theperiod prescribed under the Act and the Listing Regulations. The details of the meetingsare given in the Report on Corporate Governance which forms part of this Report. TheCompany provides all the Board members the facility to participate the meetings of Boardand Subcommittees through Video Conferencing / Other Audio Visual Means.
Pursuant to the requirements of Schedule IV to the Act and the Listing Regulations aseparate Meeting of the Independent Directors of the Company was held on March 19 2021and the Directors reviewed and assessed the matters enumerated under Schedule IV(VII)(3)to the Act and Regulation 25(4) of the Listing Regulations. All the Independent Directorsattended the meeting.
G. Statutory Committees of the Board
Pursuant to the requirements under the Act and the Listing Regulations the Board ofDirectors has constituted various Committees of Board such as Audit Committee Nominationand Remuneration Committee Stakeholders' Relationship Committee Corporate SocialResponsibility ("CSR") Committee.
The composition and terms of reference of Audit Committee Nomination and Remuneration
Committee and Stakeholders' Relationship Committee and number of meetings held duringthe year under review are given in the section Report on Corporate Governance formingpart of this Annual Report.
The CSR Committee of the Company as of March 31 2021 comprised of three members Mr. BJayaraj Mr. Cherian N Punnoose and Mr. Mithun K Chittilappilly. Mr. B Jayaraj Directoris the Chairman of the CSR Committee.
The Committee met three times during the year under review on June 1 2020 July 272020 and February 3 2021. The Committee recommended the amount of CSR spent for thefinancial year and the various CSR programs/activities to be carried out by the Company tothe Board for its consideration and approval.
The Board has constituted a Risk Management Committee in line with the requirements ofRegulation 21 of the Listing Regulations. The Committee consists of four members Mr.Ullas K Kamath Independent Director Mr. Mithun K Chittilappilly Managing Director Mr.Ramachandran V Whole-time Director and Mr. Sudarshan Kasturi Chief Financial Officer.During the year under review the committee met once to discuss the various risksidentified and the mitigation process.
H. Performance Evaluation
Pursuant to the provisions of the Act and the Listing Regulations annual evaluation ofthe performance of the Board the Directors and Sub-committees of the Board was evaluated.
The Nomination and Remuneration Committee of the Company has carried out evaluation ofperformance of each individual Director. Performance evaluation was carried out based on astructured questionnaire formulated taking into consideration the indicative criteriaprescribed in the Nomination Remuneration and Evaluation Policy of the Company read withSEBI Guidance Note on Board Evaluation.
Evaluation of the Board was made based on the role played by the Board in decisionmaking evaluating strategic proposals discussing annual budgets assessing adequacy ofinternal controls review of risk management procedures etc. The evaluation of individualDirector was
carried out based on various parameters such as participation in the Board and itsCommittee meetings contribution towards strategic proposals suggesting risk mitigationmeasures putting in place internal controls governance leadership and talentdevelopment and managing external stakeholders. Performance evaluation of various Sub-committees of the Board was carried out based on the 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.
I n the meeting of Independent Directors held during the year the members evaluatedthe performance of the Chairman based on criteria such as giving guidance to the Board andensuring the independence of the Board etc. The performance of the Non-IndependentDirectors was also evaluated based on their contribution made to the growth of theCompany strategic initiatives and Board deliberations.
I. Directors' Responsibility Statement
Pursuant to the provisions under Section 134(5) of the Act with respect to Directors'Responsibility Statement the Directors confirm:
I. That in the preparation of the annual accounts the applicable accounting standardshave been followed and no material departures have been made from the same;
II. That they had selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
III. That they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
IV. That they had prepared the annual accounts on a going concern basis;
V. That they had laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively; and
VI. That they had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
15. AUDIT RELATED MATTERS
A. Statutory Auditors
M/s. S R Batliboi & Associates LLP Chartered Accountants with Firm RegistrationNumber - 101049W / E300004 were re-appointed as Statutory Auditors of the Company for aperiod of five consecutive years at the Annual General Meeting (AGM) of the Company heldon July 31 2017 to hold office from the conclusion of 21st AGM till theconclusion of 26th AGM to be held in the year 2022 on a remuneration to befixed by the Board of Directors.
Re-appointment was made subject to ratification by the members at every subsequent AGMheld during the tenure of re-appointment. Pursuant to the amendment made to Section 139 ofthe Act by the Companies (Amendment) Act 2017 effective from May 7 2018 therequirement of seeking ratification of the members for the appointment of the StatutoryAuditors has been withdrawn from the Statute. Hence the approval for ratification of themembers for reappointment at the ensuing AGM is not being sought.
B. Cost Auditors
As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules2014 the Board of Directors has re-appointed M/s. BBS & Associates Cost Accountantsas Cost Auditors for financial year 2021-22 to conduct audit of cost records maintained bythe Company. The appointment and remuneration payable to the Cost Auditors were approvedby the Board based on the recommendation of Audit Committee. The requisite resolution forratification of remuneration payable to Cost Auditors by the members of the Company is setout in the Notice of the ensuing AGM. The Cost
Auditors have certified that their appointment is within the limits of Section141(3)(g) of the Act and that they are not disqualified from appointment within themeaning of the said Act.
The Cost Audit Report for the financial year
2019- 20 issued by M/s. RA & Co. Cost Auditors was filed with the Ministry ofCorporate Affairs on August 14 2020. The Cost Audit Report does not contain anyqualifications reservations or adverse remarks.
The Cost Audit Report for the Financial Year
2020- 21 which will be issued by M/s. BBS & Associates Cost Accountants will beconsidered by the Board of Directors.
C. Secretarial Auditors
M/s. Keyul M Dedhia & Associates Company Secretaries Mumbai were appointed asSecretarial Auditors of the Company for the financial year 2020-21 pursuant to Section 204of the Act. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 isattached as Annexure-I to this report.
16. REPORTING OF FRAUDS
During the year under review neither the Statutory Auditors nor the SecretarialAuditors or the Cost Auditors has reported to the Audit Committee under Section 143(12)of the Act any instances of fraud committed against the Company by its officers oremployees.
17. 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. NominationRemuneration and Evaluation Policy approved by the Board forms part of this Report asAnnexure-II.
B. Vigil Mechanism / Whistle Blower Policy
The Company has adopted a Whistle Blower Policy which enables the Directors andEmployees to report instances of unethical behavior fraud or violation of Company's Codeof Conduct. The policy provides for direct access to the Chairperson of the AuditCommittee and safeguarding the employees and Directors who raises grievances againstvictimization. The policy has been circulated amongst the employees of the Company workingat various locations divisions/units. The Company had taken action for the grievancereceived during the year under review.
The policy formulated in line with the provisions of the Act and the ListingRegulations is available on the website of the Company www.vguard.in.
C. Corporate Social Responsibility Policy
In terms of the provisions of Section 135 of the Act read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 the Board of Directors of your Company hasconstituted a Corporate Social Responsibility (CSR) Committee and framed a CSR policywhich details the programs / activities that can be carried out under various programheads and the same is available on the website of the Company www.vguard.in.
The Company's CSR Programmes are focused on Health Care and Education InfrastructureDevelopment Sustainable Livelihood and Social Empowerment & Welfare and Sports Artsand Culture. During the year Company carried out several initiatives under the CSR theprogramme heads directly as well as through agencies. A report on CSR activities isattached as Annexure-III forming part of this report.
D. Risk Management Policy
The Company has developed and implemented risk management framework detailing risksassociated with the business the process of identification of risks and monitoring andmitigation of these risks. Risk Management Committee constituted by the Board identifiesentity level risks during the beginning of financial year which are cascaded down toproduct/ functional risk groups for inclusion in their risk matrices. Product risk groupidentifies and
monitors product specific risks and mitigation measures. The key product risks arediscussed by the Risk Management Committee as part of entity level risks.
Entity level risks consist of risks related to information security digitizationmargin erosion geographical expansion channel network new product development mergersand acquisition new market development etc. Entity level risks are updated on annualbasis and the details of risks along with mitigation plans are presented to RiskManagement Committee and the Board of Directors.
E. Dividend Policy
Pursuant to the provisions of Regulation 43A of the Listing Regulations the Board ofDirectors of the Company has adopted a Dividend Policy which details the dividendphilosophy of the Company the factors which are considered by the Board whilerecommending / declaring dividend suggested band for proposing dividend payoutperiodicity of dividend circumstances in which special dividend are considered etc. Thesaid policy is given in Annexure-IV to this report and posted on the website of theCompany www.vguard.in.
18. OTHER MATTERS
A. Internal Financial Controls
The Company has Internal Control Systems commensurate with the nature of its businesssize and complexities. Audit Committee reviews the adequacy and effectiveness of internalcontrol system and monitors the implementation of audit recommendations. During the yearunder review the Internal Audit division of the Company conducted detailed review ofcontrol processes in key control areas and identified design gaps improvementopportunities and management check points which helps in strengthening the processes andmonitoring mechanisms.
Key controls in operational financial and IT processes were tested to provideassurance regarding compliance with the existing policies and significant operatingprocedures and no significant weaknesses/deviations were observed in operational controls.Further the Statutory Auditors of the Company also reviewed
Internal Financial Controls over Financial Reporting of the Company as on March 312021 and issued their report which forms part of the Independent Auditor's report.
B. Particulars of Loans Guarantees and Investments
During the year under review the Company has not given any loan or provided anyguarantee falling under the provisions of Section 186 of the Act.
The Company has acquired securities of Gegadyne Energy Labs Private Limited (GEL)having its registered office at Pushpanjali R H 32 Ovala Naka Opp. Puranik City Thane-400615 constituting 18.77% of equity share capital of GEL on a fully diluted basis. TheCompany has made investment in equity and convertible preference shares of GEL for a cashconsideration of Rs 33.4 crs.
GEL is an alternate battery technology start up developing innovative energy storage(battery) solutions which deliver better battery performance on key parameters like totalcost of ownership (TCO) life cycle recharge time safety profile and maintenance costscompared to the prevalent battery Technologies.
C. Financial Position and Performance of Subsidiaries Joint Ventures and Associates
Guts Electro-Mech Ltd. Subsidiary Company reported Revenue from Operations of Rs5528.18 lakhs for the FY 2021. The financial summary of Subsidiary company is as under:
(? in lakhs)
|Particulars ||2020-21 ||2019-20 |
|Revenue from Operations ||5528.18 ||5265.05 |
|Profit Before Tax ||529.78 ||612.41 |
|Profit After Tax ||413.01 ||438.39 |
Consolidated Financial Statements of the Company are prepared in accordance with IndianAccounting Standards (IND AS) notified under Companies (Indian Accounting Standards)Rules 2015 (as amended from time to time) and presentation requirements of Division II ofSchedule III to the Act (Ind AS compliant Schedule III) as applicable to theconsolidated financial statements and the same forms an integral part of this Report.
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts)Rules 2014 a statement containing salient features of the financial statements ofSubsidiary for the Financial Year 2020-21 is given in Form AOC-1 which forms an integralpart of this Annual Report.
In accordance with Section 136(1) of the Act the Annual Report of your Companycontaining inter alia financial statements including consolidated financial statementshas been placed on the Company's website www.vguard.in. Further the financial statementsof the Subsidiary are also placed on the Company's website.
The audited financial statements including the consolidated financial statements of theCompany audited financial statements in respect of the Subsidiary company shall beavailable for inspection for members. Any member desirous of inspecting the abovedocuments may write to the Company and the facility to inspect the documentselectronically shall be provided.
D. Any Revision Made in Financial Statements or Board's Report
The Company has not revised the Financial Statements or Board's Report in respect ofany of the three preceding Financial Years.
E. Employee Stock Option Scheme 2013
During the year under review 63000 no. of options of Rs 1/- each and 567000 no. ofoptions of Rs 68.75 each being the options for time based vesting for the fourth yearwere vested in respect of the grant made on May 4 2016. Options to the extent of 48655of Rs 1/- each were vested on time basis due for the fourth year of vesting in respect ofgrant made on June 16 2016. 229054 no. of options of Rs 1/- each were vested on timebasis pertaining to the fourth year in respect of grant made on August 8 2016.
Further 42000 no. of options of Rs 1/- each and 168000 no. of options of Rs 121.80each were also vested during the year under review on time basis for the fourth year inrespect of the grant made on August 8 2016. Options to the extent of 22036 of Rs 1/-each were vested on time basis for the fourth year in respect of grant made on October21 2016.
In respect of grant made on January 30 2017 options to the extent of 15462 of Rs 1/-each were vested on time basis for the fourth year. Options to the extent of 37706 and17688 of Rs 1/- each were vested on time basis towards the third year in respect ofgrants made on May 19 2017 and July 31 2017 respectively.
Options to the extent of 47023 of Rs 1/- each were vested on time basis for the thirdyear in respect of grant made on January 22 2018. In respect of grant made on May 302018 options to the extent of 8691 were vested for the second year of vesting. Further18648 no. of options were vested during the year in respect of the grant made on July 312018 for the second year. 14286 no. of options were vested during the year in respect ofgrant made on January 31 2019 being the options for the second year of vesting. Also5895 no. of options were vested on time basis being the options for the first year ofvesting during the year in respect of grant made on November 5 2019.
The Nomination and Remuneration Committee granted 260000 no. of options at Rs 1/-each and 1259200 no. of options at Rs 172.05 each under ESOS 2013 on May 22 2020 andmade a further grant of 1062635 316325 and 24907 no. of options at Rs 1/- each underESOS 2013 on August 27 2020 February 3 2021 and March 19 2021 respectively and it willbe vested over a period of four years from the date of grant based on time andperformance basis.
During the year 188014 no. of options granted at Rs 1/- each were cancelled due toseparation of some of the option grantees and nonachievement of performance parameters.The options cancelled were made available in the Scheme for considering future grant.
The disclosure pursuant to the provisions of Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014 and Section 62(1)(b) of the Act readwith Rule 12(9) of the Companies (Share Capital and Debentures) Rules 2014 is provided inAnnexure-V which forms part of this Report.
F. Code of Conduct
In compliance with Regulation 26(3) of the Listing Regulations and the Act the Company
has framed and adopted Code of Conduct ("the Code") for Directors and SeniorManagement which provides guidance on ethical conduct of business and compliance of law.
All members of the Board and Senior Management personnel have affirmed the compliancewith the Code as on March 31 2021. A declaration to this effect signed by the ManagingDirector in terms of the Listing Regulations is given in the Report of CorporateGovernance forming part of this Annual Report. The Code is made available on the Company'swebsite www.vguard.in.
G. Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 is enclosedas Annexure-VI.
Further a copy of the Annual Return of the Company containing the particularsprescribed under section 92 of the Act in Form MGT-7 as on March 31 2020 is madeavailable on the Company's website www.vguard.in.
H. Management Discussion and Analysis Report
As per the terms of Regulation 34(2)(e) of the Listing Regulations the ManagementDiscussion and Analysis Report forms part of this Annual Report.
I. Related Party Transactions
All related party transactions which were entered during the Financial Year were in theordinary course of business and on an arm's length basis. There were no materiallysignificant related party transactions entered by the Company with the PromotersDirectors Key Managerial Personnel or other persons which may have a potential conflictwith the interests of the Company.
A statement of all related party transactions is presented before the Audit Committeeon quarterly basis specifying the nature value and terms and conditions of transactions.Since all the related party transactions entered during the financial year were on anarm's length basis and in the ordinary course of business no details are required to beprovided in Form AOC-2 as prescribed under Section 134(3)(h) of the
Act and Rule 8(2) of the Companies (Accounts) Rules 2014.
In accordance with the requirements of the Listing Regulations the Company has alsoadopted Policy on Materiality and dealing with Related Party Transactions and the same hasbeen placed on the website of the Company www.vguard.in.
J. Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements. The Report on Corporate Governance asrequired under Regulation 34(3) read with Schedule V of the Listing Regulations forms partof this Annual Report. Further as required under Regulation 17(8) of the ListingRegulations a certificate from the Managing Director and Chief Financial Officer isannexed with this Report.
K. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
The information pertaining to conservation of energy technology absorption and foreignexchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8of the Companies (Accounts) Rules 2014 is furnished in Annexure-VII and forms part ofthis Report.
L. Particulars of Remuneration details of Directors Key Managerial Personnel andEmployees
The remuneration details of Directors and Key Managerial Personnel and ratio ofremuneration of each Director to the median of employees' remuneration as per Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is enclosed as Annexure-VIII. In accordance with theprovisions of Section 197(12) of the Act and Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the names and particulars ofremuneration of top ten employees who have drawn remuneration not less than the limitsspecified in the Rules are available with the Company and in terms of provisions ofSection 136(1) of the Act this report is being sent to the members without this detailand any member desirous of obtaining information may write to the Company and the sameshall be provided through electronic mode till the date of the ensuing Annual GeneralMeeting and the details are made available on the website of the Company www.vguard.in.
M. Disclosure Under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
The Company has in place a policy on prevention of sexual harassment at workplace. Thepolicy aims at prevention of harassment of employees and lays down the guidelines foridentification reporting and prevention of sexual harassment. There is an InternalComplaints Committee (ICC) which is responsible for redressal of complaints related tosexual harassment as per the guidelines provided in the policy. All women employees(permanent temporary contractual and
trainees) are covered under this policy and it has been circulated amongst theemployees of the Company and the same is exhibited on the notice board of all the businesslocations/divisions of the Company. During the year under review the Company has notreceived any complaint.
19. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the various Secretarial Standards issued by the Instituteof Company Secretaries of India.
20. LISTING OF SHARES
The equity shares of the Company are listed on National Stock Exchange of India Limited(NSE) and
BSE Ltd. (BSE). The listing fee for the Financial Year
2021-22 was paid to both the Stock Exchanges.
21. CODE OF PRACTICES AND PROCEDURES FOR FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVEINFORMATION
The Board has formulated Code of Practices and Procedures for Fair Disclosure ofUnpublished Price Sensitive Information ("Fair Disclosure Code") for fairdisclosure of events and occurrences that could impact price discovery in the market forthe Company's securities and to maintain the uniformity transparency and fairness indealings with all stakeholders and ensure adherence to applicable laws and regulations.The copy of the same is available on the website of the Company www.vguard.in.
22. PREVENTION OF INSIDER TRADING
The Board has formulated code of conduct for regulating monitoring and reporting oftrading of shares by Insiders. This code lays down guidelines procedures to be followedand disclosures to be made by the insiders while dealing with shares of the Company andcautioning them on consequences of non-compliances. The copy of the same is available onthe website of the Company www.vguard.in.
Your Directors place on record their sincere appreciation for the steadfast commitmentand performance showcased by the employees at all levels during all times especially inthe uncertain environment witnessed during the year under review. The relentlessperformance of the employees over the years has led to excellent growth trajectory. TheDirectors also sincerely thank channel partners shareholders various Government &other Statutory Authorities Banks Financial Institutions and Analysts for theircontinued assistance co-operation and support.
| ||For and on behalf of the Board of Directors |
| ||Sd/- ||Sd/- |
| ||Cherian N Punnoose ||Mithun K Chittilappilly |
|Date : May 26 2021 ||Chairman ||Managing Director |
|Place : Ernakulam ||(DIN : 00061030) ||(DIN :00027610) |