V I P Industries Ltd
Directors Reports
Your Directors are pleased to present the 52nd Annual Report together with
Audited Financial Statements and Auditor's Report for the financial year ended 31st
March, 2019.
FINANCIAL RESULTS
| Particulars |
Standalone |
Consolidated |
|
Year Ended 31.03.2019 |
Year Ended 31.03.2018 |
Year Ended 31.03.2019 |
Year Ended 31.03.2018 |
| Revenue from Operations |
1,784.44 |
1,416.34 |
1,784.66 |
1,416.34 |
| 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
Standalone
During the financial year ended 31st March, 2019, revenue from Operations
was र 1,784.44 crores as against र 1,416.34 crores during previous year, registering a
growth of 25.99%. Profit before exceptional items and tax was at र 196.60 crores as
against र 179.49 crores in the previous year. Profit after Tax for the year under review
was at र 128.81 crores against र 118.57 crores in the previous year.
Consolidated
During the financial year ended 31st March, 2019, revenue from Operations
was र 1,784.66 crores as against र 1,416.34 crores during previous year, registering a
growth of 26.01%. Profit before exceptional items and tax was at र 214.94 crores as
against र 189.53 crores in the previous year. Profit after Tax for the year under review
was 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 is
included 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 has
started focusing on international business and the same is expected to start showing
results in international business in next few years.
ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92(3) of the
Companies 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" and
copy of the Annual return is available on the Company's website at
http://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 relating
to ‘Meetings of the Board of Directors' and ‘General Meetings' respectively have
been duly followed by the Company.
NUMBER OF MEETINGS OF THE BOARD
During the financial year ended 31st March, 2019, Four (4) Board meetings
were held with a minimum of one meeting in each quarter and the gap between two
consecutive Board meetings was less than one hundred and twenty days. For details of the
meetings of the Board, please refer to the Corporate Governance Report, which forms part
of this report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013 with
respect to the Directors' Responsibility Statement, based on their knowledge and belief
and the information and explanations obtained, your Directors confirm that:
(a) in the preparation of the annual accounts for the year ended 31st March,
2019, 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, 2019 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, 2019, 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 Companies Act 2013 ('the Act'), your Company
confirm having received necessary declarations from all the Independent Directors under
Section 149(7) of the Act declaring that they meet the criteria of independence laid down
under Section 149(6) of the Act 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 re- appointed M/s. Ragini Chokshi & Co., Company
Secretaries in Practice to undertake the Secretarial Audit of your Company for the
financial year 2019-20. The Secretarial Audit Report for the financial year 2018-19 in the
prescribed 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 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, 2019 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 during the financial year
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, 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, 2019,
Reserves and Surplus of the Company were at र 518.33 crores. An amount of र 273.86 crores
is 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, an
interim 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/recommended
by your Company for the financial year 2018-19 is र 3.20/- (Rupees Three & Twenty
Paise 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 is
annexed herewith as Annexure "D" to this report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE
COMPANY
There was a fire incident at Company's Ghaziabad warehouse on 3rd April,
2019. There was loss of stocks and fixed assets. The assets damaged by the fire are
adequately insured. The damaged assets are being impaired during the period of loss
occurred. The insurance claim will be recognized around the time of admission of claim by
the insurance company.
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 2018-19 was र 2.72 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 2018-19
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 / KEY MANAGERIAL PERSONNEL
Demise of Mr. Nabankur Gupta:
Mr. Nabankur Gupta passed away on 7th December, 2018 at the age of 70 years
and hence ceased to be the Director of the Company. The Board places on record its
appreciation for the great contributions made by Mr. Nabankur Gupta in the progress of the
Company.
Appointment / Re-appointment
(i) Mr. Dilip G. Piramal was appointed as Chairman and Managing Director till 24th
March, 2019. The Board of Directors at its meeting held on 8th February, 2019
has appointed Mr. Dilip G. Piramal as Chairman (Non Executive) of the Company with effect
from 25th March, 2019.
(ii) The Board of Directors at its meeting held on 7th May, 2019 has
appointed Mr. Tushar Jani and Mr. Ramesh S. Damani as Additional Directors (Non-executive,
Independent) of the Company for a period of 5 years w.e.f. 7th May, 2019 to 6th
May, 2024, subject to the approval of the shareholders at the ensuing Annual General
Meeting. Mr. Tushar Jani and Mr. Ramesh S. Damani fulfill the criteria and conditions
specified in the Companies Act, 2013 for such appointment.
(iii) Members of the Company by passing Ordinary / Special resolution(s) through Postal
Ballot on 25th March, 2019 -
a) Appointed Ms. Nisaba Godrej as Director (Non-executive, Independent) of the Company
for 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 and
Managing Director and Key Managerial Personnel for a period of 3 (three) years w.e.f. 1st
April, 2019.
Retirement by rotation
Ms. Radhika Piramal, Executive Vice Chairperson of your Company retires by rotation and
being eligible offers herself for re-appointment.
NAME OF THE COMPANIES WHICH HAVE BECOME/CEASED TO BE SUBSIDIARIES, JOINT VENTURE OR
ASSOCIATE COMPANIES DURING THE YEAR
Blow Plast Retail Limited, V.I.P Industries Bangladesh Private Limited, V.I.P
Industries BD Manufacturing Private Limited and V.I.P Luggage BD Private Limited continued
to be the wholly owned subsidiary companies of the Company. During the year under review,
V.I.P Accessories BD Private Limited has been incorporated as wholly owned subsidiary of
the Company at Bangladesh.
Accordingly, as on 31st March, 2019, the Company has 1 Indian and 4 overseas
wholly owned Subsidiaries.
During the year under review, no company has 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 Section 129(3) Companies Act, 2013 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 to the
shareholders at the Registered Office of the Company during the working hours.
The Policy for determining "Material" subsidiaries has been displayed on the
Company's website at - http://www.vipindustries . co.in/policies.php
PUBLIC DEPOSITS
During the year under review, your Company has not accepted any public deposits. Your
Company 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 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
www.vipindustries.co.in .
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 -
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 of the 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, two complaints were received by the Company and the same were investigated and
resolved as per the provisions of the Act. 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,
2018.
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 websites of
the company at http://vipindustries.co.in/esar.php
During the year under review, 4 employees were awarded 2,20,000 ESARs at the rate of
Rs. 400/- per ESAR.
SHARE CAPITAL
The paid-up Equity Share Capital of the Company as on 31st March, 2019 stood
at र 28.26 crores. During the year under review, the Company has not issued shares with
differential voting rights.
As on 31st March, 2019, 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, Mr. G. L. Mirchandani and Mr. Rajeev Gupta. 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 at the registered office of your Company during
working hours 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 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 Executive
Officer, 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 financial
year 2018-19 is around 16.39%. The percentage increase in the median remuneration is
calculated 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 the
employees of the Subsidiary companies).
5. The Percentage increase in salaries of the managerial personnel at 50th
percentile is 13.69%. The Percentage increase in salaries of the non-managerial personnel
at 50th percentile is 11.54%. 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.
6. The remuneration paid to the Directors is as per the Remuneration Policy of the
Company.
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: 7th May, 2019 |
(DIN: 00032012) |
  Â