Your Directors are pleased to present the 52nd Annual Report together withAudited Financial Statements and Auditor's Report for the financial year ended 31stMarch 2019.
|Particulars || |
| ||Year Ended 31.03.2019 ||Year Ended 31.03.2018 ||Year Ended 31.03.2019 ||Year Ended 31.03.2018 |
|Revenue from Operations ||1784.44 ||1416.34 ||1784.66 ||1416.34 |
|Profit before depreciation Interest and Tax ||210.83 ||190.64 ||233.04 ||202.68 |
|Finance cost ||1.49 ||0.30 ||1.49 ||0.30 |
|Depreciation and Amortisation expenses ||12.74 ||10.85 ||16.61 ||12.85 |
|Profit before tax ||196.60 ||179.49 ||214.94 ||189.53 |
|Tax expenses ||67.79 ||60.92 ||69.67 ||62.78 |
|Profit for the year ||128.81 ||118.57 ||145.27 ||126.75 |
OVERALL PERFORMANCE AND OUTLOOK
During the financial year ended 31st March 2019 revenue from Operationswas र 1784.44 crores as against र 1416.34 crores during previous year registering agrowth of 25.99%. Profit before exceptional items and tax was at र 196.60 crores asagainst र 179.49 crores in the previous year. Profit after Tax for the year under reviewwas at र 128.81 crores against र 118.57 crores in the previous year.
During the financial year ended 31st March 2019 revenue from Operationswas र 1784.66 crores as against र 1416.34 crores during previous year registering agrowth of 26.01%. Profit before exceptional items and tax was at र 214.94 crores asagainst र 189.53 crores in the previous year. Profit after Tax for the year under reviewwas at र 145.27 crores against र 126.75 crores in the previous year.
A detailed analysis of the operations of your Company during the year under review isincluded in the Management Discussion and Analysis forming part of this Annual Report.
EXPORTS AND INTERNATIONAL OPERATIONS
International business remains a small part of the Company's turnover. The Company hasstarted focusing on international business and the same is expected to start showingresults in international business in next few years.
The extracts of Annual Return pursuant to the provisions of Section 92(3) of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 in the prescribed Form MGT-9 is annexed herewith as Annexure "A" andcopy of the Annual return is available on the Company's website athttp://www.vipindustries.co.in/investor- information.php#u
COMPLIANCE WITH SECRETARIAL STANDARDS
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectively havebeen duly followed by the Company.
NUMBER OF MEETINGS OF THE BOARD
During the financial year ended 31st March 2019 Four (4) Board meetingswere held with a minimum of one meeting in each quarter and the gap between twoconsecutive Board meetings was less than one hundred and twenty days. For details of themeetings of the Board please refer to the Corporate Governance Report which forms partof this report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the Companies Act 2013 withrespect to the Directors' Responsibility Statement based on their knowledge and beliefand the information and explanations obtained your Directors confirm that:
(a) in the preparation of the annual accounts for the year ended 31st March2019 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
(b) such accounting policies selected and applied consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company for the financial year ended 31st March 2019 and ofthe profit and loss of your Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) annual accounts for the financial year ended 31st March 2019 have beenprepared on a going concern basis;
(e) internal financial controls have been laid down and followed by the Company andthat such internal financial controls are adequate and are operating effectively; and
(f) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
DECLARATION OF INDEPENDENT DIRECTORS
Pursuant to Section 134(3)(d) of the Companies Act 2013 ('the Act') your Companyconfirm having received necessary declarations from all the Independent Directors underSection 149(7) of the Act declaring that they meet the criteria of independence laid downunder Section 149(6) of the Act and Regulation 16(b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
NOMINATION AND REMUNERATION POLICY
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial Personnel andSenior Management Personnel and their remuneration. This policy formulates the criteriafor determining qualifications competencies positive attributes and independence for theappointment of a Director (executive/non-executive) and also the criteria for determiningthe remuneration of the Directors KMP and other employees. Nomination and RemunerationPolicy of the Company has been displayed on the Company's website at the link -http://www.vipindustries.co.in/policies.php
In the Annual General Meeting (AGM) held on 28th July 2016 M/s. PriceWaterhouse Chartered Accountants LLP Chartered Accountants (Firm Registration No.012754N/N500016) have been appointed Statutory Auditors of the Company for a period of 5(five) years commencing from the conclusion of 49th AGM till the conclusion of54th AGM of the Company (subject to ratification by the members at every AGM).Pursuant to the amendment of first proviso to Section 139(1) of Companies Act 2013 therequirement for ratification of appointment of Statutory Auditors by members at every AGMhas been removed. In view of the same at 51st AGM of the Company members ofthe Company have partially modified the previous resolution passed at the 49thAGM for the appointment of Statutory Auditors and approved their appointment till thebalance tenure of their appointment i.e. upto 54th AGM of the Company withoutseeking ratification of their appointment.
The Notes on financial statements referred to in the Auditors' Report are selfexplanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.
None of the Auditors of the Company have reported any fraud as specified under thesecond proviso of Section 143 (12) of the Companies Act 2013 (including any statutorymodification(s) or re-enactments(s) thereof for the time being in force.
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors of your Company have re- appointed M/s. Ragini Chokshi & Co. CompanySecretaries in Practice to undertake the Secretarial Audit of your Company for thefinancial year 2019-20. The Secretarial Audit Report for the financial year 2018-19 in theprescribed Form MR-3 forms part of this Annual Report and is annexed as Annexure"B" to the Board's report. The Secretarial Audit Report does not contain anyqualifications reservations or adverse remarks.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
There were no loans or guarantees made by the Company under Section 186 of theCompanies Act 2013 (the Act) during the year under review. Details of investments madeunder the provisions of Section 186 of the Act as on 31st March 2019 are setout in Note 7 and 8 to the Standalone Financial Statement of the Company.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Your Company has established a Policy for determining related party transactions. TheAudit Committee oversees the related party transactions. Related Party Transaction Policyof the Company has been displayed on the Company's website at the link -http://www.vipindustries.co.in/policies.php .
All contracts or arrangements entered into by the Company during the financial yearwith Related Parties have been done at arm's length and are in the ordinary course ofbusiness.
Pursuant to Section 134 of the Companies Act 2013 read with Rule 8(2) of the Companies(Accounts) Rules 2014 the particulars of such transactions are provided in Form AOC-2which is annexed herewith as Annexure "C" to this report. Related Partydisclosures as per IndAS have been provided in Note No. 45 of Standalone FinancialStatements.
STATE OF COMPANY'S AFFAIRS
Discussion on state of Company's affairs has been covered as part of the ManagementDiscussion and Analysis. Management Discussion and Analysis for the year under review asstipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is presented in a separate section forming part of this Annual Report.
The Company is not required to maintain cost records under Section 148(1) of theCompanies Act 2013.
RESERVES & DIVIDEND
During the year under review as well as during the previous year the Company has nottransferred any amount to the General Reserves. As on 31st March 2019Reserves and Surplus of the Company were at र 518.33 crores. An amount of र 273.86 croresis proposed to be retained as surplus in the statement of Profit & Loss.
Your Directors are pleased to recommend for your consideration a final dividend of '2/- (Rupee Two only) per equity share of र 2 each (previous year र 2 per equity share of '2 each) for the financial year 2018-19. Your Company had paid in February 2019 aninterim dividend of र 1.20 (Rupee One and Twenty Paise only) per equity share of र 2/-each for the financial year 2018-19. Accordingly the total dividend declared/recommendedby your Company for the financial year 2018-19 is र 3.20/- (Rupees Three & TwentyPaise only) per equity share of र 2 each (previous year र 3 per equity share of र 2 each).
The Board has approved and adopted the Dividend Distribution Policy and the same isannexed herewith as Annexure "D" to this report.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There was a fire incident at Company's Ghaziabad warehouse on 3rd April2019. There was loss of stocks and fixed assets. The assets damaged by the fire areadequately insured. The damaged assets are being impaired during the period of lossoccurred. The insurance claim will be recognized around the time of admission of claim bythe insurance company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134(3)(m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are annexedherewith as Annexure "E" as attached to this report.
RISK MANAGEMENT POLICY
The Company has a robust risk management framework comprising risk governance structureand defined risk management processes. The risk governance structure of the Company is aformal organisation structure with defined roles and responsibilities for risk management.
The processes and practices of risk management of the Company encompass riskidentification classification and evaluation. The Company identifies all strategicoperational and financial risks that the Company faces by assessing and analysing thelatest trends in risk information available internally and externally and using the sameto plan for risk management activities.
As a part of the Company's strategic planning process the Directors have reviewed therisk management policy and processes and also the risks faced by the Company and thecorresponding risk mitigation plans deployed. The Company is on track in respect of itsrisk mitigation activities. The Risk Management Committee overseas the risk managementprocess.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) expenditure incurred by your Company during thefinancial year 2018-19 was र 2.72 Crores which was slightly more than the statutoryrequirement of 2% of the average profit for the last three financial years.
CSR Committee of the Company comprises of Mr. D. K. Poddar (Chairman of CSR Committee)Mr. Dilip G. Piramal and Ms. Radhika Piramal.
The Annual Report on CSR activities that includes details about CSR Policy developedand implemented by the Company and CSR initiatives taken during the financial year 2018-19is in accordance with Section 135 of the Companies Act 2013 and Companies (CorporateSocial Responsibility Policy) Rules 2014 and is annexed herewith as Annexure"F" to this Report. The CSR policy is placed on the Company's website athttp://www.vipindustries.co.in/policies.php .
Pursuant to provisions of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annual evaluationof the performance of the Board its Committees and of individual Directors. Performanceevaluation has been carried out as per the Nomination & Remuneration Policy of theCompany.
DIRECTORS / KEY MANAGERIAL PERSONNEL
Demise of Mr. Nabankur Gupta:
Mr. Nabankur Gupta passed away on 7th December 2018 at the age of 70 yearsand hence ceased to be the Director of the Company. The Board places on record itsappreciation for the great contributions made by Mr. Nabankur Gupta in the progress of theCompany.
Appointment / Re-appointment
(i) Mr. Dilip G. Piramal was appointed as Chairman and Managing Director till 24thMarch 2019. The Board of Directors at its meeting held on 8th February 2019has appointed Mr. Dilip G. Piramal as Chairman (Non Executive) of the Company with effectfrom 25th March 2019.
(ii) The Board of Directors at its meeting held on 7th May 2019 hasappointed Mr. Tushar Jani and Mr. Ramesh S. Damani as Additional Directors (Non-executiveIndependent) of the Company for a period of 5 years w.e.f. 7th May 2019 to 6thMay 2024 subject to the approval of the shareholders at the ensuing Annual GeneralMeeting. Mr. Tushar Jani and Mr. Ramesh S. Damani fulfill the criteria and conditionsspecified in the Companies Act 2013 for such appointment.
(iii) Members of the Company by passing Ordinary / Special resolution(s) through PostalBallot on 25th March 2019 -
a) Appointed Ms. Nisaba Godrej as Director (Non-executive Independent) of the Companyfor a period of two (2) years with effect from 1st April 2019.
b) Re-appointed Mr. Poddar as Director (Non-Executive Independent) for a period of two(2) years w.e.f. 10th July 2019.
c) Re-appointed Ms. Radhika Piramal as Executive Vice Chairperson for a period of 5(five) years w.e.f. 7th April 2019.
d) Appointed Mr. Sudip Ghose as Director w.e.f from 8th February 2019 andManaging Director and Key Managerial Personnel for a period of 3 (three) years w.e.f. 1stApril 2019.
Retirement by rotation
Ms. Radhika Piramal Executive Vice Chairperson of your Company retires by rotation andbeing eligible offers herself for re-appointment.
NAME OF THE COMPANIES WHICH HAVE BECOME/CEASED TO BE SUBSIDIARIES JOINT VENTURE ORASSOCIATE COMPANIES DURING THE YEAR
Blow Plast Retail Limited V.I.P Industries Bangladesh Private Limited V.I.PIndustries BD Manufacturing Private Limited and V.I.P Luggage BD Private Limited continuedto be the wholly owned subsidiary companies of the Company. During the year under reviewV.I.P Accessories BD Private Limited has been incorporated as wholly owned subsidiary ofthe Company at Bangladesh.
Accordingly as on 31st March 2019 the Company has 1 Indian and 4 overseaswholly owned Subsidiaries.
During the year under review no company has become/ceased to be joint venture orassociate companies of the Company.
A statement containing the salient features of financial statements of subsidiaries asper Section 129(3) Companies Act 2013 is also included in this Annual Report in formAOC-1 presented in separate section forming part of the financial statement. Thefinancial statements of the subsidiary companies are available for inspection to theshareholders at the Registered Office of the Company during the working hours.
The Policy for determining "Material" subsidiaries has been displayed on theCompany's website at - http://www.vipindustries . co.in/policies.php
During the year under review your Company has not accepted any public deposits. YourCompany does not have any unclaimed public deposit as at 31st March 2019.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and your Company's operations in future.
INTERNAL FINANCIAL CONTROLS
Your Company has put in place adequate internal financial controls with reference tothe financial statements. The Board has adopted the policies and procedures for ensuringthe orderly and efficient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets prevention and detection of frauds and errorsaccuracy and completeness of the accounting records and timely preparation of reliablefinancial disclosures. During the year such controls were tested and no reportablematerial weaknesses in design or operation were observed.
REPORT ON CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT
The report on Corporate Governance as stipulated under the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 forms an integral part of this Report. Therequisite certificate from Practicing Company Secretary confirming compliance with theconditions of Corporate Governance is attached to the report on Corporate Governance.
Business Responsibility Report as stipulated in the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 forms an integral part of this Report.
The Board members are provided with necessary documents/brochures reports and internalpolicies to enable them to familiarize with your Company's procedures and practices.Periodic presentations are made at the Board Meetings and the Board Committee Meetings onbusiness and performance updates of your Company global business environment businessstrategy and risks involved. The details of programmes for familiarisation for IndependentDirectors are posted on the website of the Company and can be accessed atwww.vipindustries.co.in .
Every new Independent Director of the Board is required to attend an orientationprogram to familiarize the new inductees with the strategy operations and functions ofyour Company. The Executive Directors / Senior Management personnel make presentations tothe inductees about your Company's strategy operations products markets finance humanresources technology quality facilities and risk management.
Your Company has established a Vigil Mechanism Policy for your Directors employees andstakeholders to safeguard against victimization of persons who use vigil mechanism andreport genuine concerns. The Audit Committee oversees the vigil mechanism complaints. TheVigil Mechanism Policy of the Company has been displayed on the Company's website at -http:// www.vipindustries.co.in/policies.php
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (the Act') and Rules made thereunder yourCompany has complied with provisions relating to the constitution of the InternalComplaints Committee under the Sexual Harassment of the Act. While maintaining the highestgovernance norms the Company has also appointed external independent persons who havedone work in this area and have requisite experience in handling such matters. During theyear two complaints were received by the Company and the same were investigated andresolved as per the provisions of the Act. In order to build awareness in this area theCompany has been conducting programmes on a continuous basis.
EMPLOYEE STOCK APPRECIATION RIGHT (ESAR)
Pursuant to the approval of the Members at the Annual General Meeting held on 17thJuly 2018 the Company adopted V.I.P Employee Stock Appreciation Rights Plan 2018("ESRAP 2018"/ "Plan"). In accordance with eSaRP 2018 the employee ofthe Company and its subsidiaries are entitled to receive Employee Stock Appreciation Right(ESAR) which entitle them to receive appreciation in the value of the shares of theCompany at a future date and in a pre-determined manner where such appreciation issettled by way of allotment of shares of the Company. The Company confirms that the EASRP2018 complies with the provisions of SEBI (Shares Based Employee Benefit) Regulation2018.
Detail of the ESAR granted under ESARP 2018 as also the disclosures in compliance withSEBI (Shares Based Employee Benefits) Regulations 2014 are uploaded on the websites ofthe company at http://vipindustries.co.in/esar.php
During the year under review 4 employees were awarded 220000 ESARs at the rate ofRs. 400/- per ESAR.
The paid-up Equity Share Capital of the Company as on 31st March 2019 stoodat र 28.26 crores. During the year under review the Company has not issued shares withdifferential voting rights.
As on 31st March 2019 none of the Directors of the Company holdsinstruments convertible into equity shares of the Company.
The Audit Committee comprises of Mr. D. K. Poddar (Chairman of Audit Committee) Mr.Dilip G. Piramal Mr. G. L. Mirchandani and Mr. Rajeev Gupta. All the recommendations madeby the Audit Committee were deliberated and accepted by the Board. For details of themeetings of the Committee please refer to the Corporate Governance Report which formspart of this report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act 2013 (the Act) readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said rules forms part of this AnnualReport.
Having regard to the provisions of Section 136 of the Act the Annual Report excludingthe aforesaid information is being sent to the members of your Company. The saidinformation is available for inspection at the registered office of your Company duringworking hours and any member desirous of obtaining such information may write to theSecretarial Department of your Company and the same will be furnished on request.
REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of yourCompany is furnished hereunder:
1. Your Directors' Remuneration (including commission and variable pay) to the medianremuneration of the employees of your Company for the year 2018-19 was as under:
|Director's Name ||Ratio of remuneration of each Director to the median employees' remuneration |
|Mr. Dilip G. Piramal ||159X |
|Ms. Radhika Piramal ||200X |
|Mr. Sudip Ghose ||69X |
|Mr. Ashish K. Saha ||28X |
2. The Percentage increase in remuneration of all Executive Directors Chief ExecutiveOfficer Chief Financial Officer and Company Secretary were as under:
|Name ||Designation ||Increase (%) |
|Mr. Dilip G. Piramal ||Chairman and Managing Director ||63 |
|Ms. Radhika Piramal ||Vice Chairperson and Executive Director ||97 |
|Mr. Ashish K. Saha ||Director - Works ||21 |
|Mr. Sudip Ghose ||Chief Executive Officer ||66 |
|Mr. Jogendra Sethi ||Chief Financial Officer ||9 |
|Mr. Anand Daga ||Company Secretary & Head - Legal ||21 |
3. The percentage increase in the median remuneration of employees for the financialyear 2018-19 is around 16.39%. The percentage increase in the median remuneration iscalculated for comparable employees and does not include employees who were not eligible.
4. The number of permanent employees on the rolls of the Company 2167 (excluding theemployees of the Subsidiary companies).
5. The Percentage increase in salaries of the managerial personnel at 50thpercentile is 13.69%. The Percentage increase in salaries of the non-managerial personnelat 50th percentile is 11.54%. The increase/decrease in remuneration is notsolely based on the Company's performance but also includes various other factors likeindividual performance experience skill sets academic background industry trendseconomic situation and future growth prospects etc. besides the Company performance. Thereare no exceptional circumstances for increase in the managerial remuneration.
6. The remuneration paid to the Directors is as per the Remuneration Policy of theCompany.
Industrial relations remained cordial throughout the year under review.
Your Directors wish to place on record their appreciation for the dedicated services ofthe employees of your Company at all levels.
| ||By Order of the Board of Directors |
| ||DILIP G. PIRAMAL |
|Place: Mumbai ||Chairman |
|Dated: 7th May 2019 ||(DIN: 00032012) |