V I P Industries Ltd
Directors Reports
(a) in the preparation of the annual accounts for the year ended 31st
March, 2020, the applicable accounting standards have been followed along with proper
explanation relating to material departures;
(b) such accounting policies selected and applied consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company for the financial year ended 31st March,
2020 and of the profit and loss of your Company for that period;
(c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
(d) annual accounts for the financial year ended 31st March,
2020, have been prepared on a going concern basis;
(e) internal financial controls have been laid down and followed by the
Company and that such internal financial controls are adequate and are operating
effectively; and
(f) proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
DECLARATION OF INDEPENDENT DIRECTORS
Pursuant to section 134(3)(d) of the Act, your Company confirm having
received necessary declarations from all the Independent Directors under section 149(7) of
the Companies Act, 2013 declaring that they meet the criteria of independence laid down
under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
NOMINATION AND REMUNERATION POLICY
The Board has, on the recommendation of the Nomination and Remuneration
Committee, framed a policy for selection and appointment of Directors, Key Managerial
Personnel and Senior Management Personnel and their remuneration. This policy formulates
the criteria for determining qualifications, competencies, positive attributes and
independence for the appointment of a Director (executive/non-executive) and also the
criteria for determining the remuneration of the Directors, KMP and other employees.
Nomination and Remuneration Policy of the Company has been displayed on the Company's
website at the link - http://www.vipindustries.co.in/policies.php
AUDITORS Statutory Auditors
In the Annual General Meeting (AGM) held on 28th July, 2016,
M/s. Price Waterhouse 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
of 54th 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,
the requirement for ratification of appointment of Statutory Auditors by members at every
AGM has been removed. In view of the same at 51st AGM of the Company, members
of the Company have partially modified the previous resolution passed at the 49th
AGM for the appointment of Statutory Auditors and approved their appointment till the
balance tenure of their appointment i.e. upto 54th AGM of the Company without
seeking ratification of their appointment.
The Notes on financial statements referred to in the Auditors' Report
are self explanatory and do not call for any further comments. The Auditors' Report does
not contain any qualification, reservation or adverse remark.
None of the Auditors of the Company have reported any fraud as
specified under the second proviso of Section 143 (12) of the Companies Act, 2013
(including any statutory modification(s) or re-enactments(s) thereof for the time being in
force.
Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act, 2013,
the Board of Directors of your Company have reappointed M/s. Ragini Chokshi & Co.,
Company Secretaries in Practice to undertake the Secretarial Audit of your Company for the
financial year 2020-21. The Secretarial Audit Report for the financial year 2019-20 forms
part of this Annual Report and is annexed as Annexure "B" to the Board's
report. The Secretarial Audit Report does not contain any qualifications, reservations or
adverse remarks.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186
OF THE COMPANIES ACT, 2013
There were no loans or guarantees made by the Company under Section 186
of the Companies Act, 2013 (the Act) during the year under review. Details of investments
made under the provisions of Section 186 of the Act as on 31st March, 2020 are
set out 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. The Audit Committee oversees the related party transactions. Related Party
Transaction Policy of the Company has been displayed on the Company's website at the link
- http://www.vipindustries.co.in/policies.php.
All contracts or arrangements entered into by the Company with Related
Parties have been done at arm's length and are in the ordinary course of business.
Pursuant to Section 134 of the Companies Act, 2013 read with Rule 8(2)
of the Companies (Accounts) Rules, 2014, the particulars of such transactions are provided
in Form AOC-2 which is annexed herewith as Annexure "C" to this report.
Related Party disclosures as per IndAS have been provided in Note No. 45 of Standalone
Financial Statements.
STATE OF COMPANY'S AFFAIRS
Discussion on state of Company's affairs has been covered as part of
the Management Discussion and Analysis. Management Discussion and Analysis for the year
under review, as stipulated under the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (LODR), is presented in a separate section forming part of
this Annual Report.
COST RECORDS
The Company is not required to maintain cost records under Section
148(1) of the Companies Act, 2013.
RESERVES & DIVIDEND
During the year under review as well as during the previous year, the
Company has not transferred any amount to the General Reserves. As on 31st
March, 2020, Reserves and Surplus of the Company were at Rs. 518.76 crores. An amount of
Rs. 272.94 crores is proposed to be retained as surplus in the statement of Profit &
Loss.
Your Company had paid in February, 2020, an interim dividend of Rs.
3.20 (Rupee Three only) per equity share of Rs. 2 each for the financial year 2019-20.
Your Directors do not recommended any final dividend for the year 2019-20.
The Board has approved and adopted the Dividend Distribution Policy and
the same is annexed herewith as Annexure "D" to this report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY
There are no adverse material changes or commitments occurred after 31st
March, 2020 which may affect the financial position of the Company or may require
disclosure.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The particulars relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to be disclosed under Section
134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules,
2014 are annexed herewith as Annexure "E" as attached to this report.
RISK MANAGEMENT POLICY
The Company has a robust risk management framework comprising risk
governance structure and defined risk management processes. The risk governance structure
of the Company is a formal organisation structure with defined roles and responsibilities
for risk management.
The processes and practices of risk management of the Company encompass
risk identification, classification and evaluation. The Company identifies all strategic,
operational and financial risks that the Company faces, by assessing and analysing the
latest trends in risk information available internally and externally and using the same
to plan for risk management activities.
As a part of the Company's strategic planning process, the Directors
have reviewed the risk management policy and processes and also the risks faced by the
Company and the corresponding risk mitigation plans deployed. The Company is on track in
respect of its risk mitigation activities. The Risk Management Committee overseas the risk
management process.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) expenditure incurred by your
Company during the financial year 2019-20 was Rs. 3.31 Crores which was slightly more than
the statutory requirement 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 developed and implemented by the Company and CSR initiatives taken during the
financial year 2019-20 is in accordance with Section 135 of the Companies Act, 2013 and
Companies (Corporate Social Responsibility Policy) Rules, 2014 and is annexed herewith as Annexure
"F" to this Report. The CSR policy is placed on the Company's website at
http://www.vipindustries.co.in/policies.php.
BOARD EVALUATION
Pursuant to provisions of the Companies Act, 2013 and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an
annual evaluation of the performance of the Board, its Committees and of individual
Directors. Performance evaluation has been carried out as per the Nomination &
Remuneration Policy of the Company.
DIRECTORS
Appointment / Re-appointment
Mr. Amit Jatia was appointed as an Independent Director at the 48th
Annual General Meeting (AGM) held on 24th July, 2015 for a period of five years
w.e.f. 24th July, 2015. Based on the recommendation of the Nomination and
Remuneration Committee, his re-appointment for a second term of five years is proposed at
the ensuing AGM for the approval of the Members by way of special resolution.
Retiring by rotation
Mr. Dilip G. Piramal (DIN-00032012), Chairman of your Company retires
by rotation and being eligible offers himself for reappointment.
Independent Director
During the Financial Year 2019-20, the Company has appointed Ms. Nisaba
Godrej, Mr. Ramesh Damani and Mr. Tushar Jani as Independent Directors of the Company. In
the opinion of the Board, the said Independent Directors are persons of high repute,
integrity and have rich and varied experience in the field of business and corporate
management.
All the Independent Directors are registered in the data bank
maintained by the Indian Institute of Corporate Affairs (Institute) and are exempted from
the requirement of passing online proficiency self-assessment test conducted by the
Institute.
Resignation / Cessation
• Mr. Ashish Saha resigned from the post of Director (works)
with effect from 30th June, 2019.
• Mr. G. L. Mirchandani ceased to be Non-Executive,
Independent Director of the Company with effect from 9th July, 2019, due to
completion of the tenure for which he was appointed by the members at the 47th
Annual General Meeting of the Company.
• Mr. Rajeev Gupta ceased to be Non-Executive, Independent
Director of the company with effect from 9th July, 2019, due to completion of
the tenure for which he was appointed by the members at the 47th Annual General
Meeting of the Company.
Your Directors place on record deep appreciations for the valuable
services rendered by the aforesaid Directors during their respective tenure with the
Company.
KEY MANAGERIAL PERSONNEL
Mr. Jogendra Sethi resigned from the position of Chief Financial
Officer w.e.f. 9th January, 2020 and Ms. Neetu Kashiramka has joined as Chief
Financial Officer of the Company w.e.f. 8th April, 2020.
NAME OF THE COMPANIES WHICH HAVE BECOME/CEASED TO BE SUBSIDIARIES,
JOINT VENTURE OR ASSOCIATE COMPANIES DURING THE YEAR
Blow Plast Retail Limited (BPRL), VIP Industries Bangladesh Private
Limited, VIP Industries BD Manufacturing Private Limited, VIP Luggage BD Private Limited
and VIP Accessories BD Private Limited continued to be the wholly owned subsidiary
companies of the Company. BPRL is a non-material, non listed subsidiary of the Company
pursuant to LODR.
Accordingly, as on 31st March, 2020, the Company has 1
Indian and 4 overseas wholly owned Subsidiaries.
During the year under review, no companies have become/ceased to be
joint venture or associate companies of the Company.
A statement containing the salient features of financial statements of
subsidiaries as per 129(3) of the Act, is also included in this Annual Report in form
AOC-1, presented in separate section forming part of the financial statement. The
financial statements of the subsidiary companies are available for inspection on the
Company's website - http://www.vipindustries.co.in/policies.php .
The Policy for determining "Material" subsidiaries has been
displayed on the Company's website - http://www.vipindustries.co.in/policies.php
PUBLIC DEPOSITS
During the year under review, your Company has not accepted any
deposits. Your Company does not have any unclaimed deposit as at 31st March,
2020.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and your Company's operations in
future.
INTERNAL FINANCIAL CONTROLS
Your Company has put in place adequate internal financial controls with
reference to the financial statements. The Board has adopted the policies and procedures
for ensuring the orderly and efficient conduct of its business including adherence to the
Company's policies, the safeguarding of its assets, prevention and detection of frauds and
errors, accuracy and completeness of the accounting records and timely preparation of
reliable financial disclosures. During the year, such controls were tested and no
reportable material weaknesses in design or operation were observed.
REPORT ON CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT
The report on Corporate Governance as stipulated under the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, forms an integral
part of this Report. The requisite certificate from Practicing Company Secretary
confirming compliance with the conditions of Corporate Governance is attached to the
report on Corporate Governance.
Business Responsibility Report as stipulated in the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this
Report.
FAMILIARISATION PROGRAMME
The Board members are provided with necessary documents/brochures,
reports and internal policies to enable them to familiarize with your Company's procedures
and practices. Periodic presentations are made at the Board Meetings and the Board
Committee Meetings, on business and performance updates of your Company, global business
environment, business strategy and risks involved. The details of programmes for
familiarisation for Independent Directors are posted on the website of the Company and can
be accessed at http://www.vipindustries.co.in/corporate-governance.php.
Every new Independent Director of the Board is required to attend an
orientation program to familiarize the new inductees with the strategy, operations and
functions of your Company. The Executive Directors / Senior Management personnel make
presentations to the inductees about your Company's strategy, operations, products,
markets, finance, human resources, technology, quality, facilities and risk management.
VIGIL MECHANISM
Your Company has established a Vigil Mechanism Policy for your
Directors, employees and stakeholders to safeguard against victimization of persons who
use vigil mechanism and report genuine concerns. The Audit Committee oversees the vigil
mechanism complaints. The Vigil Mechanism Policy of the Company has been displayed on the
Company's website at the link - 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
(Prevention, Prohibition & Redressal) Act, 2013 ('the Act') and Rules made thereunder,
your Company has complied with provisions relating to the constitution of the Internal
Complaints Committee under the Sexual Harassment Act. While maintaining the highest
governance norms, the Company has also appointed external independent persons, who have
done work in this area and have requisite experience in handling such matters. During the
year, no sexual harassment complaint was received by the Company. In order to build
awareness in this area, the Company 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 17th July, 2018, the Company adopted V.I.P Employee Stock Appreciation
Rights Plan 2018 ("ESRAP 2018"/ "Plan"). In accordance with ESARP
2018, the employee of the 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 the Company at a future date and in a pre-determined manner, where such
appreciation is settled by way of allotment of shares of the Company. The Company confirms
that the EASRP 2018 complies with the provisions of SEBI (Shares Based Employee Benefit)
Regulation, 2014.
Detail of the ESAR granted under ESARP 2018, as also the disclosures in
compliance with SEBI (Shares Based Employee Benefits) Regulations, 2014 are uploaded on
the website of the Company at http://www.vipindustries.co.in/corporate- governance.php.
During the year under review, 7 employees were awarded 194,000 ESARs at
the rate of Rs. 400/- per ESAR.
SHARE CAPITAL
The paid-up Equity Share Capital of the Company as on 31st
March, 2020 stood at Rs. 28.26 crores. During the year under review, the Company has not
issued shares with differential voting rights not has granted any stock options or sweat
equity.
As on 31st March, 2020, none of the Directors of the Company
holds instruments convertible into equity shares of the Company.
AUDIT COMMITTEE
The Audit Committee comprises of Mr. D. K. Poddar (Chairman of Audit
Committee), Mr. Dilip G. Piramal and Mr. Amit Jatia. All the recommendations made by the
Audit Committee were deliberated and accepted by the Board. For details of the meetings of
the Committee, please refer to the Corporate Governance Report, which forms part of this
Report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act,
2013 (the Act) read with Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of
the employees drawing remuneration in excess of the limits set out in the said rules forms
part of this Annual Report.
Having regard to the provisions of Section 136 of the Act, the Annual
Report excluding the aforesaid information is being sent to the members of your Company.
The said information is available for inspection on the Company's website - http://www.
vipindustries.co.in and any member desirous of obtaining such information may write to the
Secretarial Department of your Company and the same will be furnished on request.
REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) /
EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in
respect of your Company is furnished hereunder:
1. Your Directors' Remuneration (including commission and variable pay)
to the median remuneration of the employees of your Company for the year 2019-20 was as
under:
| Director's Name |
Ratio of remuneration of
each Director to the median employees' remuneration |
| Mr. Dilip G. Piramal |
10X |
| Ms. Radhika Piramal |
72X |
| Mr. Sudip Ghose |
83X |
| Mr. Ashish K. Saha* |
47X |
*Resigned from directorship w.e.f. 30th June, 2019
2. The Percentage increase in remuneration of all Executive Directors,
Chief Executive Officer, Chief Financial Officer and Company Secretary were as under:
| Name |
Designation |
Increase / Decrease (%) |
| Ms. Radhika Piramal |
Executive Vice Chairperson |
(66%) |
| Mr. Sudip Ghose |
Managing Director |
12% |
| Mr. Ashish K. Saha* |
Director - Works |
56% |
| Mr. Jogendra Sethi# |
Chief Financial Officer |
17% |
| Mr. Anand Daga |
Company Secretary & Head - Legal |
17% |
*Resigned from directorship w.e.f. 30th June, 2019
# Resigned from the position of Chief Financial Officer of the Company
w.e.f. 9th January, 2020
3. The percentage increase in the median remuneration of employees for
the financial year 2019-20 is around -1.44%. The percentage increase in the median
remuneration is calculated for comparable employees and does not include employees who
were not eligible.
Note: The percentage increase in the median remuneration is negative
mainly because of low incentive earned by the employees during the period 2019 - 20
compare to the period 2018 - 19. If the same is look from the fixed CTC basis then there
is an increment of 13.76% in the median remuneration.
4. The number of permanent employees on the rolls of the Company 2095
(excluding the employees of the Subsidiary companies).
5. The Percentage increase in salaries of the managerial personnel at
50th percentile is 4.31%. The Percentage increase in salaries of the
non-managerial personnel at 50th percentile is -2.19%. The increase/decrease in
remuneration is not solely based on the Company's performance but also includes various
other factors like individual performance, experience, skill sets, academic background,
industry trends, economic situation and future growth prospects etc. besides the Company
performance. There are no exceptional circumstances for increase in the managerial
remuneration.
Note: The percentage increase in the salaries of managerial personnel
at 50th percentile is shown at 4.31% and in non managerial personnel it is
shown - 2.19% this is mainly because of low incentive earned by the employees during the
period 2019 - 20 compare to the period 2018 - 19. If the same is look from the fixed CTC
basis then there is an increment of 9.38% in Managerial Personnel at 50th
Percentile and 19.88% at Non Managerial personnel.
6. The remuneration paid to the Directors is as per the Remuneration
Policy of the Company.
During the year under review, no Managing Director / Whole-time
Director of the Company are in receipt of any remuneration or commission from any of its
subsidiaries.
INDUSTRIAL RELATIONS
Industrial relations remained cordial throughout the year under review.
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation for the
dedicated services of the employees of your Company at all levels.
By Order of the Board of Directors
|
Dilip G. Piramal |
| Place: Mumbai |
Chairman |
| Dated: 26th May, 2020 |
(DIN No. 00032012) |
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