Your Directors take pleasure in presenting their 28th Annual Report on the business and operations of V-Guard Industries Ltd. ('the Company'), together with the Audited Financial Statements for the Financial Year ended March 31, 2024.
1. FINANCIAL SUMMARY AND HIGHLIGHTS
The summarized standalone and consolidated results of your Company with previous year's figures are given in the table below:
2. COMPANY PERFORMANCE
The key highlights of the Company's financial performance during the Financial Year 2023-24 are given below:
- The standalone revenue from operations increased by 12.6% from Rs 4,050.75 Cr. to Rs 4,559.43 Cr. in the Financial Year 202324. Whereas the consolidated revenue from operations increased by 17.7% from Rs 4,127.19 Cr. to Rs 4,856.67 Cr. in the Financial Year 202324.
- The consolidated EBITDA grew by 33.3% from Rs 320.12 Cr. to Rs 426.71 Cr. in the Financial Year 2023-24 and standalone EBITDA grew by 17.5% from Rs 300.97 Cr. to Rs 353.62 Cr. in Financial Year 2023-24.
- The consolidated Net Profit grew by 36.2% from Rs 189.05 Cr. to Rs 257.58 Cr. in the Financial Year 2023-24 and standalone Net Profit grew by 28.8% from Rs 179.32 Cr. to Rs 230.91 Cr. in Financial Year 2023-24.
- The segment wise performance of the Company is detailed under the section Management Discussion and Analysis Report which forms part of this Annual Report. The consolidated financial results comprise of full year financial performance of GUTS Electro-Mech Ltd., V-Guard Consumer Products Ltd., Sunflame Enterprises Pvt. Ltd., wholly-owned subsidiaries and Gegadyne Energy Labs Pvt. Ltd., Associate Company of your Company.
3. TRANSFER TO RESERVES
During the year under review, no amount was transferred to any of the reserves by the Company.
4. SCHEME OF AMALGAMATION BETWEEN THE COMPANY AND SIMON ELECTRIC PVT. LTD. AND THEIR RESPECTIVE SHAREHOLDERS AND CREDITORS
The Hon'ble National Company Law Tribunal, Kochi (NCLT Kochi) vide its Order dated March 31, 2023 had approved the Scheme of Amalgamation between Simon Electric Pvt. Ltd. ("Transferor Company") and V-Guard Industries Ltd. ("Transferee Company") and their respective shareholders and creditors. Further, the Board of Directors in their meeting held on May 03, 2023, had issued and allotted 10,83,008 Equity shares of Rs1/- each to the shareholders of Transferor Company in the share swap ratio of 0.0076646:1. The Company also obtained listing and trading approval for the said shares.
5. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
As on March 31, 2024, your Company has three wholly-owned Subsidiaries.:
1. GUTS Electro-Mech Ltd. (GUTS): GUTS continues to be a wholly-owned subsidiary of V-Guard Industries Ltd.
2. V-Guard Consumer Products Ltd. (VCPL): VCPL continues to be a wholly-owned subsidiary of V-Guard Industries Ltd.
3. Sunflame Enterprises Pvt. Ltd. (SEPL): SEPL continues to be a wholly-owned subsidiary of V-Guard Industries Ltd.
In the Financial Year 2020-21, your Company had entered into a share subscription and shareholder's agreement with Gegadyne Energy Labs Pvt. Ltd. (GEL), a Mumbai based alternate battery technology start-up developing energy storage (battery) solutions and acquired 18.77% stake on a fully diluted basis in GEL. During the year under review, the Board of Directors in their Meeting held on October 31, 2023, on the recommendation of Audit Committee, accorded approval for further investment in GEL and pursuant to which total shareholding of the Company in GEL has increased to 24.32% on a fully diluted basis, as per the terms and conditions specified in the Investment Agreement and consequently, GEL
has become an Associate Company of your Company as per provisions of Companies Act, 2013 (the Act) w.e.f. October 31, 2023.
Presently, the Company does not have any material subsidiary.
The Policy for determining Material Subsidiaries, adopted by your Board, in conformity with Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), can be accessed on the Company's website at https://www. vguard.in/uploads/investor relations/Policy-on- Material-subsidiary.pdf
6. CHANGES TO THE SHARE CAPITAL Authorised Share Capital:
During the year under review, there was no change in the authorised share capital of the Company. As on March 31, 2024 it stood at Rs 1,91,50,00,000 (Rupees One Hundred and Ninety One Crore and Fifty Lakhs Only) divided into 1,91,50,00,000 (One Hundred and Ninety One Crore and Fifty Lakhs) Equity Shares of Rs 1/- (Rupee One Only) each.
Issued, Subscribed and Paid-up Share Capital:
Details of allotment made during the year under review is given below:
a) Pursuant to Order dated March 31, 2023 by Hon'ble NCLT, Kochi Bench sanctioning the Scheme of Amalgamation, between Simon Electric Pvt. Ltd. (Transferor Company) and V-Guard Industries Ltd. (Transferee Company) and their respective shareholders and Creditors, the Board of Directors in their meeting held on May 03, 2023, issued and allotted 10,83,008 equity shares at face value of Rs 1/- each to the shareholders of Transferor Company.
b) 11,28,540 equity shares of face value of Rs 1/- each to the employees who exercised options under the ESOP scheme of the Company 'ESOS 2013. The details are mentioned under Annexure-IV forming part of this report.
The Paid-up Capital of the Company as at March 31, 2024 was Rs43,43,85,980/-.
During the year under review, your Company had not issued any preference shares, debentures, bonds, warrants, equity shares with differential rights and sweat equity shares.
7. DIVIDEND
I n line with the Dividend Distribution Policy of the Company, the Board of your Company in its meeting held on May 16, 2024 has recommended a final dividend of Rs1.40/- (One Rupee and Forty Paisa Only) @ 140% per equity share of Rs 1/- (Rupee One Only) for the Financial Year 2023-24 payable to those members whose name/s appear in the Register of members/ list of beneficiaries as on July 25, 2024 i.e. the cut-off date/record date. The total final dividend payout will amount to Rs 60.81 Cr. (approx.). The payment of final dividend is subject to the approval of members in the 28th Annual General Meeting ("AGM") of the Company to be held on August 01, 2024.
The Register of Members and Share Transfer Books will remain closed from July 26, 2024 (Friday) to August 01, 2024 (Thursday) (both days inclusive) for the purpose of payment of final dividend for the Financial Year 2023-24, if declared at the ensuing AGM.
Pursuant to the Finance Act, 2020 read with the Income-tax Act, 1961, the dividend paid or distributed by a company shall be taxable in the hands of the shareholders w.e.f. April 1, 2020. Accordingly, in compliance with the said provisions, your Company shall make the payment of dividend after deduction of tax at source at the prescribed rates. For the prescribed rates for various categories, the shareholders are requested to refer to Notice of 28th Annual General Meeting and the Finance Act, 2020 and amendments thereto.
8. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
The details of unpaid or unclaimed dividend(s) & shares transferred to IEPF during the year, pursuant to the applicable provisions of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and the dividend(s) which are due for transfer to IEPF in the forthcoming years, are provided in the Report of Corporate Governance forming part of this Annual Report. The Company transferred 27,793 equity shares to IEPF during the Financial Year 2023-24.
Details of Nodal Officer
The details of the nodal officer appointed by the Company under the provisions of IEPF is available on
the website of the Company at https://www.vguard. in/uploads/downloads/Nodal-officer-communication- details.pdf
9. PUBLIC DEPOSITS
Your Company has not invited or accepted any deposits within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), from public during the year under review. Therefore, no amount of principal or interest was outstanding, as on the balance sheet closure date.
10. MATERIAL CHANGES AND COMMITMENTS IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year to which the financial statements relate and the date of the report.
11. CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business of the Company during the Financial Year 2023-24.
12. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS/ COURTS/ TRIBUNALS
There were no significant material orders passed by the Regulators/ Courts/ Tribunals which would impact the going concern status of the Company and its future operations.
13. CREDIT RATING
The Company's credit facilities are rated by M/s. ICRA Ltd. During the year under review, M/s. ICRA Ltd. had re-affirmed long term and short-term credit rating of your Company as (ICRA) AA (pronounced as ICRA double A) and (ICRA) A1+ (pronounced as ICRA A one plus) respectively w.e.f. January 29, 2024. The outlook on the long-term rating was also re-affirmed as ‘Stable'.
14. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to provisions of Listing Regulations, the Company has provided Business Responsibility and Sustainability Report (BRSR) which forms part of this Annual Report. The BRSR indicates the Company's performance against the principles of the 'National Guidelines on Responsible Business Conduct'.
15. BOARD OF DIRECTORS AND ITS COMMITTEES
a) Composition of the Board of Directors
As on March 31, 2024, the Board of Directors of the Company comprised of Ten Directors, with three Executive and seven Independent Directors. The composition of the Board of Directors meets the requirement of provisions of Regulation 17 of the Listing Regulations and Section 149 of the Act.
b) Change in office of Directors, Key Managerial Personnel and Senior Management Personnel of the Company during the year under review and details of Directors seeking Appointment/Re- appointment at the 28th Annual General Meeting
The members of the Company in their 27th Annual General Meeting held on August 24, 2023, re-appointed Mr. Ramachandran V (DIN:06576300), Whole-time Director and Chief Operating Officer, who retired by rotation as per the provisions of the Act.
The Board of Directors in their meeting held on May 30, 2023 appointed Mr. Ishwar Subramanian (DIN: 01473535) as Additional Director in the capacity of Non- Executive Independent Director for a period of five (5) years. The Company has received declaration from him confirming that he meets independence criteria laid down in Section 149(6) of the Act and Regulation 16 of Listing Regulations.
The Board of Directors in their meeting held on May 30, 2023 also appointed Mr. Antony Sebastian K (DIN: 01628332) as Additional Director in the capacity of Executive Director for a period of four (4) years. Subsequently, the members of the Company approved the appointment of Mr. Ishwar Subramanian (DIN:01473535) as Independent Director and
Mr. Antony Sebastian K (DIN: 01628332) as Executive Director in the 27th Annual General Meeting of the Company held on August 24, 2023.
In compliance with the provisions of Section 152 of the Act, Mr. Antony Sebastian K (DIN: 01628332) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors recommends his re-appointment as Executive Director of the Company, liable to retire by rotation. The present term of the office of Mr. Ramachandran V (DIN: 06576300), Wholetime Director, who was appointed for a period of 4 (four) years from June 01, 2020 expires on May 31, 2024. Pursuant to the provisions of the Act and based on the recommendation of Nomination and Remuneration Committee, the Board proposes re-appointment of Mr. Ramachandran V (DIN: 06576300), Whole-time Director, for a further period of 4 years from June 01, 2024 to May 31, 2028. Mr. Ramchandran V is not debarred from holding of office of a Director pursuant to any order issued by Securities and Exchange Board of India, Ministry of Corporate Affairs, Reserve Bank of India or any other such authority.
The above proposal of appointment/ reappointment forms part of the Notice of the Annual General Meeting of the Company and the relevant resolutions are recommended for members approval thereon.
A brief resume of the Director proposed to be reappointed, his expertise in specific functional areas, name of companies in which he holds directorships, Committee membership/s / Chairmanship/s, shareholding, wherever applicable, etc. as stipulated under Secretarial Standard-2 issued by ICSI and Regulation 36(3) of the Listing Regulations, is appended as an Annexure to the Notice of the ensuing AGM.
The particulars of senior management along with changes made during the Financial Year as per the Listing Regulations, are given in the Report on Corporate Governance which forms part of this Report.
As on March 31, 2024, Mr. Mithun K Chittilappilly (DIN: 00027610), Managing Director, Mr.
Ramachandran V (DIN: 06576300), Whole-time Director & COO, Mr. Antony Sebastian K (DIN: 01628332), Whole-time Director, Mr. Sudarshan Kasturi, Chief Financial Officer and Mr. Vikas Kumar Tak, Company Secretary are the Key Managerial Personnel (KMP) of your Company.
c) Criteria for Determining Qualifications, Positive Attributes and Independence of a Director
The Nomination and Remuneration Committee has formulated Nomination, Remuneration and Evaluation Policy, which details the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178(3) of the Act and the Listing Regulations. The Nomination, Remuneration and Evaluation Policy is available on the website of the Company at the link https:// www.vguard.in/uploads/investor relations/ Nomination-Remuneration-Evaluation-Policy. pdf
d) Declaration by Independent Directors
The Company has received necessary declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed under Section 149(6) of the Act and Regulation 25 (8) read with Regulation 16 of Listing Regulations (as per the amendment in SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2021). The Independent Directors have also confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties. The Company has also received from them declaration of compliance of Rule 6 (1) & (2) of the Companies (Appointment and Qualifications of Directors) Rules, 2014, regarding online registration with the Indian Institute of Corporate Affairs ("MCA") at Manesar, for inclusion/ renewal of name in the databank of Independent Directors. The Independent Directors have also confirmed that they have complied with the Company's Code of Conduct for Independent Directors prescribed in Schedule IV of the Act. Accordingly, all the Independent Directors of the Company had registered their names with data bank of
IICA. The Board of Directors of the Company have taken on record the declarations and confirmation submitted by the Independent Directors after undertaking due assessment of the veracity of the same and confirmed that the Independent Directors fulfill the conditions of independence specified in Listing Regulations and the Companies Act, 2013, as amended and are independent of the management.
In the opinion of the Board, all the Independent Directors are persons possessing attributes of integrity, expertise and experience (including proficiency) as required under the applicable laws, rules and regulations.
The Company has issued letters of appointment/ reappointment to Independent Directors in the manner as provided under Companies Act, 2013. The terms and conditions of the said appointment are hosted on website of the Company.
e) Certificate from Practicing Company Secretary
Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the Listing Regulations, M/s. Keyul M Dedhia & Associates, Company Secretaries, Mumbai, has certified that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as Director of the Company by the Securities and Exchange Board of India/ Ministry of Corporate Affairs or any such statutory authority and the certificate forms part of the Report of Corporate 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 results, business policies and strategic proposals apart from other items of business. The Board and Committee meetings are pre-scheduled, and a tentative annual calendar of meetings is circulated to the Directors in advance to ensure participation of all Directors.
During the year under review, eight Board meetings were held on April 17, 2023, & adjourned meeting on April 18, 2023, May 03, 2023, May 30, 2023, August 09, 2023, August 30,
2023, October 31, 2023, February 01, 2024 and March 21, 2024. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations. The details of the Board meetings are given in the Report on Corporate Governance which forms part of this Report. The Company provides all the Board members the facility to participate in the meetings of Board and its committees through Video Conferencing/ Other Audio-Visual Means.
Pursuant to the requirements of Schedule IV to the Act and the Listing Regulations, separate meetings of the Independent Directors of the Company were held on April 17, 2023 and May 29, 2023, and the Independent Directors reviewed the matters enumerated under Schedule IV(VII) (3) to the Act and Regulation 25(4) of the Listing Regulations. All the Independent Directors attended the said meetings.
g) Statutory Committees of the Board
Pursuant to the requirements under the Act and the Listing Regulations, the Board of Directors have constituted various committees such as Audit Committee, Nomination and Remuneration Committee, Stakeholders' Relationship Committee, Corporate Social Responsibility ("CSR") Committee and Risk & ESG Committee. During the year under review, the Board of Directors had amended terms of reference of Risk Management Committee by including ESG related matters under the ambit of the Committee and the name of the Risk Management Committee was changed to Risk and ESG Committee. During the year under review, charter of Stakeholders Relationship Committee was amended.
The composition and terms of reference of the committees including changes and number of meetings held during the year under review are given in the Report on Corporate Governance forming part of this Annual Report. All the recommendations made by the committees of the Board including the Audit Committee were accepted by the Board.
h) Performance Evaluation
Pursuant to the provisions of the Act and the Listing Regulations, annual evaluation of the performance of the Board, the Directors and its committees of the Board was evaluated through an external agency.
The Nomination and Remuneration Committee of the Company has engaged an external agency to carry out the performance evaluation of each individual Director, Committee and Board as a whole. Performance evaluation was carried out through a digital platform, based on a structured questionnaire, formulated taking into consideration the criteria approved by the Nomination and Remuneration Committee.
Evaluation criteria of the Board was made based on the role played by the Board in the governance, overall functioning, evaluating strategic proposals, financial reporting process, internal controls and its effectiveness and review of risk management process. The evaluation of individual Director was carried out based on various parameters such as participation in the Board and its Committee meetings, contribution towards strategic proposals, suggesting risk mitigation measures, putting in place internal controls, governance, leadership, and talent development, and managing external stakeholders. Performance evaluation of various committees of the Board was carried out based on the criteria such as constitution, effective functioning of the committees as per the terms of reference, periodical suggestions and recommendations given by the committees to the Board, etc.
I n the meeting of Independent Directors held during the year, the members considered evaluation of the performance of the Chairman based on criteria such as giving guidance to the Board and ensuring the independence of the Board, etc. The performance of the NonIndependent Directors was also evaluated based on their contribution made to the growth of the Company, strategic initiatives and Board deliberations.
i) Familiarization Programme
In terms of Regulation 25(7) of the Listing Regulations, the Company familiarizes its Directors about their roles and responsibilities at the time of their appointment through a formal letter of appointment. The letter of appointment / re-appointment is available on the website of the Company at the link https://www.vguard.in/ investor-relations/appointment-letter
Sessions are conducted at the meetings of the Board and its various committees on the relevant subjects such as overall performance of Company, strategic initiatives, status of manufacturing plants, policy updates, financial analysis, further investment proposals, ESOP presentations and regulatory updates. All efforts are made to keep Independent Directors aware of major developments taking place in the industry, the Company's business model and relevant changes in the law governing the Company's business. The details of the programs/sessions conducted for familiarization of Independent Directors can be accessed on the website of the Company at the link https://www. vguard.in/uploads/downloads/Familiarisation- Program.pdf
j) Directors' Responsibility Statement
Pursuant to Section 134(3)(c) and 134(5) of the Act, the Directors to the best of their knowledge and belief, confirm:
i. That in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;
ii. That they had selected such accounting policies and applied them consistently, and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2023-24 and of the profit and loss of the Company for that period;
iii. That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets 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 Company and 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 of all applicable laws and that such systems were adequate and operating effectively.
16. AUDIT RELATED MATTERS
a) Statutory Auditors
The members in the 26th Annual General Meeting of the Company had approved the appointment of M/s. Price Waterhouse Chartered Accountants LLP (Registration No. 012754N/ N500016) as the Statutory Auditors of the Company for a term of 5 (five) years to hold office from the conclusion of the 26th Annual General Meeting until the conclusion of the 31st Annual General Meeting of the Company to be held in the calendar year 2027.
The Board has duly examined the Statutory Auditors' Report on the financial statements of the Company for the Financial Year 2023-24, which is self-explanatory. The Auditor's Report for the Financial Year ended March 31, 2024 does not contain any qualification, reservation or adverse remarks.
b) Cost Auditors
As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, on recommendation of the Audit Committee, the Board of Directors has re-appointed M/s. BBS & Associates, Cost Accountants, as Cost Auditor for the Financial Year 2024-25 to conduct audit of cost records maintained by the Company. The appointment and remuneration payable to the Cost Auditor was approved by the Board, based on the recommendation of the Audit Committee. The requisite resolution for ratification of remuneration payable to the Cost Auditor, by the members of the Company is set out in the Notice of the ensuing AGM. The Cost Auditor has certified that their appointment is within the limits of Section 141(3)(g) of the Act and that they are not disqualified from appointment within the meaning of the said Act.
The Cost Audit Report for the Financial Year 2022-23, issued by M/s. BBS & Associates, Cost Accountants, was duly filed with the Ministry of Corporate Affairs within the timeline. The Cost Audit Report does not contain any qualifications, reservations, or adverse remarks.
M/s. BBS & Associates, Cost Accountants are in the process of carrying out the cost audit for applicable products for the Financial Year 2023-24. The Report to be issued by M/s. BBS & Associates, Cost Accountants will be considered by the Board of Directors and the same will be filed with the Ministry of Corporate Affairs within stipulated time as prescribed in the Companies Act, 2013 and rules made thereunder.
c) Secretarial Auditors
Pursuant to the provisions of Section 204(1) of the Act read with Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and Regulation 24A of the Listing Regulations, the Board had re-appointed M/s. Keyul M Dedhia & Associates, Company Secretaries, Mumbai, as Secretarial Auditors of the Company for the Financial Year 2023-24 as recommended by the Audit committee.
The Secretarial Auditors have submitted their report, confirming compliance by the Company of all the provisions of applicable corporate laws. The Secretarial Audit Report for the Financial Year 2023-24 is annexed as Annexure-I which forms part of this report.
d) Internal Auditors
Pursuant to the provisions of Section 138 of the Act, the Board of Directors, on recommendation of the Audit Committee appointed M/s Mahajan & Aibara Advisers LLP, Mumbai, as the Internal Auditors of the Company for the Financial Year 2023-24.
17. REPORTING OF FRAUDS
During the year under review, neither the Statutory Auditors nor the Secretarial Auditors 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 or employees.
18. POLICY MATTERS
a) Nomination, Remuneration and Evaluation Policy
In terms of provisions of Section 178(3) of the Act, the Nomination and Remuneration
Committee of the Company has formulated and recommended to the Board a policy, containing the criteria for determining qualifications, competencies, positive attributes and independence for appointment of a Director (Executive/Non- Executive) and it highlights the remuneration for the Directors, Key Managerial Personnel and other employees, ensuring that it covers the matters mentioned in Section 178(4) of the Act. Nomination, Remuneration and Evaluation Policy was amended during the Financial Year under review to bring in line the policy with the amended SEBI regulations. The Nomination, Remuneration and Evaluation Policy is available on the website of the Company at the link https://www.vguard.in/uploads/ investor relations/Nomination-Remuneration- Evaluation-Policy.pdf
b) Vigil Mechanism / Whistle Blower Policy
Your Company, as required under Section 177 (9) of the Act and Regulation 22 of the Listing Regulations, has established a Whistle Blower Policy, which enables the Directors and Employees to report instances of unethical behaviour, fraud or violation of Company's Code of Conduct. The policy provides for direct access to the Chairperson of the Audit Committee and for safeguarding the employees and Directors who raises grievances, against victimization. The policy has been circulated amongst the employees of the Company working at various locations, divisions/units.
During the period under review, one complaint was received, and the same was resolved as on March 31, 2024.
The policy formulated in line with the provisions of the Act and the Listing Regulations is available on the website of the Company https:// www.vguard.in/uploads/investor relations/ WHISTLEBLOWER-POLICY.pdf
c) Corporate Social Responsibility Policy
In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (CSR) Committee and framed a CSR policy which details the programmes / activities that can be carried out
under various programmes heads and the same is available on the website of the Company https:// www.vguard.in/uploads/investor relations/CSR- Policy.pdf
The Company's CSR Programmes are focused on three broad programme areas, viz. Edu-care and Skill Development Programs, Health Care Programs, Build India & Relief. During the year, the Company carried out several initiatives under the CSR programme heads, through V-Guard Foundation, a Section 8 Company formed by the Company. A report on CSR activities is attached as Annexure-II forming part of this report.
d) Risk Management Policy
The Company has formulated Enterprise Risk Management policy in accordance with the guidelines provided under the Charter of the Risk and ESG Committee of the Board of Directors, and pursuant to Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Risk Management Charter and Policy institutionalize a formal risk management function and framework consisting of risk management process, risk governance and communication structure.
The Risk Management policy provides a structured, consistent, and continuous process across the whole organization for identifying and assessing risks, deciding on mitigations and reporting on the opportunities and threats that may affect the achievement of its strategic objectives.
During the period under review, the Risk Management Policy was placed before the board and no changes were made/suggested in this policy.
e) Dividend Policy
Pursuant to the provisions of Regulation 43A of the Listing Regulations, the Board of Directors of the Company has adopted a Dividend Policy which details the dividend philosophy of the Company. As per the policy the Board of Directors shall consider internal and external factors while recommending / declaring interim or final dividend. The said policy is given in Annexure- III to this report and placed on the website of the Company at https://www.vguard.in/uploads/ investor relations/Dividend-policy.pdf
19. OTHER MATTERS
a) Internal Financial Controls
The Company has Internal Control Systems commensurate with the nature of its business, size and complexities. The Audit Committee reviews the adequacy and effectiveness of the internal control system and monitors the implementation of audit recommendations. During the year under review, the Internal Audit division of the Company conducted detailed review of control processes in key control areas. No significant deficiencies were reported during the test of IFC.
Further, the Statutory Auditors of the Company also reviewed Internal Controls over Financial Reporting of the Company as on March 31, 2024 and issued their report which forms part of the Independent Auditor's report.
b) Particulars of Loans, Guarantees and Investments
Particulars of Loans, Guarantees and
Investments pursuant to Section 186 of the Act is given hereunder:
During the period under review, your Board of Directors had provided working capital loan of Rs 2.3 Cr. to GEL which was repaid in due time.
During the period under review, your Board of Directors made further investment of Rs 20 Cr. in GEL for scaling up pilot plant operations, Product specifications improvement and groundwork & 'runway' for Series B Investment. With this total shareholding of the Company in GEL is 24.32% on fully diluted basis.
During the period under review, your Board of Directors had withdrawn Corporate Guarantee extended to VCPL for a limit not exceeding Rs 50 Cr. as the Company became self-sustained and does not require support from its Holding Company in securing bank facilities. There is no change in the investment in Wholly-Owned Subsidiaries.
Further, details of loans and investments as on March 31, 2024, are set out in the Note 6 & 7 to the standalone financial statements of the Company.
c) Financial Position and Performance of Subsidiaries, Joint Ventures and Associates
The consolidated financial statements of the Companies are prepared in accordance with Indian Accounting Standards (IND AS) notified under Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Act, (Ind AS compliant Schedule III), as applicable to the consolidated 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 of Subsidiaries and an Associate Company, for the Financial Year 2023-24 is given in Form AOC-1 which forms an integral part of this Annual Report.
In accordance with Section 136(1) of the Act, the Annual Report of your Company containing inter alia, financial statements including consolidated financial statements, has been placed on the Company's website at https://www.vguard.in/ investor-relations/annual-reports. Further, the financial statements of the Subsidiaries are also placed on the Company's website at https:// www.vguard.in/investor-relations/subsidiaries
Any member desirous of inspecting or obtaining copies of the audited financial statements, including the consolidated financial statements of the Company, audited financial statements in respect of the Subsidiary companies may write to the Company Secretary at investors@vguard. in.
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 of any of the three preceding Financial Years.
e) Employee Stock Option Scheme 2013
During the year under review, the members of the Company in their meeting held on August 24, 2023 amended the existing Employee Stock Option Scheme 2013 ("ESOS 2013") by creating
additional number of options for making further grant to the extent of 57,00,000 options convertible into equity shares of Rs 1/- each under ESOS 2013. The members also approved granting of options under ESOS 2013 to the permanent eligible employees of subsidiary company (ies) working in India or outside India. Further, your Company also aligned the existing Scheme 'ESOS 2013' with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB Regulations").
During the year under review, the Nomination and Remuneration Committee granted the following options to eligible employees at Rs 1/- each under ESOS 2013:
a) 27,657 options on May 29, 2023,
b) 1,40,326 options on July 27, 2023
c) 65,415 options on October 30, 2023, and
d) 36,915 options on January 31, 2024
The above options will vest over a period of four years from the date of grant on time and performance basis.
During the year under review, the Board of Directors issued and allotted the following shares of face value of Rs1/- to eligible employees who exercised options granted to them as per ESOS 2013.
a) 3,73,952 equity shares at face value.
b) 5,67,000 equity shares at a premium of Rs 67.75/-
c) 19,588 equity shares at a premium of Rs 70.36/- and
d) 1,68,000 equity shares at a premium Rs 120.8/-
During the year, 26,181 no. of options granted at Rs 1/- each were cancelled due to separation of employees. As per ESOS 2013, the cancelled options are added back to the ESOP pool and shall be available for making any future grants.
The disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and Section 62(1)(b) of the Act, read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 is
provided in Annexure-IV 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 for Directors and Senior Management (the Code), which provides guidance on ethical conduct of business and compliance with laws and regulations.
All members of the Board and Senior Management personnel have affirmed their compliance with the Code as on March 31, 2024. A declaration to this effect, signed by the Managing Director in terms of the Listing Regulations is given in the Report of Corporate Governance forming part of this Annual Report. The Code is made available on the Company's website at https:// www.vguard.in/uploads/downloads/CODE OF CONDUCT.pdf
g) Extract of Annual Return
Pursuant to Section 134 and Section 92(3) of the Act read with Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the details forming part of the Annual Return of the Company containing the particulars prescribed, in Form MGT-7, as on March 31, 2023, is made available on the Company's website at https:// www.vguard.in/uploads/investor relations/ Annual-Return-2023-1.pdf
The draft of Form MGT-7, as on March 31, 2024, is made available on the Company's website at https://www.vguard.in/uploads/investor relations/ Annual Return 2024.pdf
h) Management Discussion and Analysis Report
Pursuant to Regulation 34(2)(e) of the Listing Regulations, a detailed Management Discussion and Analysis Report for the Financial Year under review is presented in a separate section, forming part of the Annual Report.
The state of the affairs of the business along with the financial and operational developments has been discussed in detail in the Management Discussion and Analysis Report.
i) Related Party Transactions
All related party transactions which were entered during the Financial Year were in the ordinary course of business and on arm's length basis. During the year under review, there were no materially significant related party transactions entered by the Company with the Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interests of the Company.
A statement with respect to all related party transactions is presented before the Audit Committee on quarterly basis, specifying the nature, value and terms and conditions of transactions. All the related party transactions entered during the Financial Year were on arm's length basis and in the ordinary course of business. The details are provided in Form AOC-2, as an Annexure-V, as prescribed under Section 134(3)(h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014. Disclosures as per Ind-AS 24 have been made in note 46 of the financial statements for the year ended March 31, 2024.
In accordance with the requirements of the Listing Regulations, the Company has also adopted a Policy on Materiality and dealing with Related Party Transactions and the same has been placed on the website of the Company at https://www. vguard.in/uploads/investor relations/POLICY- MATERIALITY-DEALING-RELATED-PARTY- TRANSACTIONS.pdf
j) Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Report on Corporate Governance as required under Regulation 34(3) read with Schedule V of the Listing Regulations forms part of this Annual Report. Further as required under Regulation 17(8) of the Listing Regulations, a certificate from the Managing Director and Chief Financial Officer is annexed with this Report.
A certificate from M/s Keyul M. Dedhia and Associates, Company Secretaries, Mumbai, confirming the compliance of the Company with the conditions of Corporate Governance,
as stipulated under the Listing Regulations, is attached to the Report of Corporate Governance.
k) Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is furnished in Annexure-VI and forms part of this Report.
l) Particulars of Remuneration details of Directors, Key Managerial Personnel and Employees
The remuneration details of Directors and Key Managerial Personnel and ratio of remuneration of each Director to the median of employees' remuneration as per Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure- VII. In accordance with the provisions of Section 197(12) of the Act and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and particulars of remuneration of top ten employees who have drawn remuneration not less than the limits specified in the Rules is available on the website of the Company at https://www.vguard. in/investor-relations/disclosure-others
Mr. Mithun K Chittilappilly, Managing Director, Mr. Ramachandran V, Whole-time Director and COO, and Mr. Antony Sebastian K, Executive Director of the Company has not received any remuneration or commission from any of the subsidiary companies. Further, the Company doesn't have any holding company, hence, there does not arise a circumstance of any remuneration or commission from holding company.
m) Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has in place a policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees and lays down the guidelines for identification,
reporting and prevention of sexual harassment. There is an Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual 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 the employees of the Company and the same is exhibited on the notice board of all the business locations/ divisions of the Company. During the year under review, one complaint was received in March 2024 and the same was pending to be resolved as on March 31, 2024.
n) The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.
o) There is no agreement impacting management or control of the Company or imposing any restriction or create any liability upon the Company. Hence, no disclosure is required under clause 5A of paragraph A of Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
p) Adjudication: During the year under review, your Company has filed adjudication application with the Hon'ble Registrar of Companies, Kerala, for violation of provisions of Section 152(6) of the Companies Act, 2013 and rules made thereunder and awaiting its order as on March 31, 2024.
20. COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review, applicable Secretarial Standards issued by the Institute of Company Secretaries of India ("ICSI"), i.e. Secretarial Standard-1 ("SS-1") and Secretarial Standard-2 ("SS-2"), relating to 'Meetings of the Board of Directors' and 'General Meetings', respectively, have been duly complied by the Company.
21. LISTING OF SHARES
The equity shares of the Company are listed on National Stock Exchange of India Ltd. (NSE) and BSE Ltd. (BSE). The listing fee for the Financial Year 202425 is paid to both the Stock Exchanges.
22. CODE OF PRACTICES AND PROCEDURES FOR FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION
The Board has formulated the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (Fair Disclosure Code) for fair disclosure of events and occurrences that could impact price discovery in the market for the Company's securities and to maintain the uniformity, transparency, and fairness in dealings with all stakeholders and ensure adherence to applicable laws and regulations. The same is available on the website of the company at https://www.vguard.in/uploads/ investor relations/CODE PRACTICES PROCEDURES FAIR DISCLOSURE UPSI.pdf
23. PREVENTION OF INSIDER TRADING
The Board has formulated a code of conduct for regulating, monitoring and reporting of trading of shares by Insiders. This code lays down guidelines, procedures to be followed and disclosures to be made by the insiders while dealing with shares of the Company and cautioning them on consequences of non-compliances. The same is available on the website of the Company at https://www.vguard.in/ uploads/investor relations/Code-Conduct-Insider- Trading.pdf
24. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE 2016
During the year under review, the Company has neither made any application, nor any proceeding is pending under the Insolvency and Bankruptcy Code 2016.
25. IMPLEMENTATION OF CORPORATE ACTION
During the year under review, all the corporate actions were duly implemented/completed within the specified time limit.
26. DETAILS OF NON-COMPLIANCE WITH REGARD TO CAPITAL MARKETS DURING THE LAST THREE YEARS
There have been no instances of non-compliance by the Company with regard to Capital Markets during the last three years.
27. ACKNOWLEDGEMENT
Your Board of Directors place on record their sincere appreciation for the steadfast commitment and performance showcased by the employees at all levels during the year. The relentless performance of the employees over the years has led to consistent growth of the Company. The Directors also sincerely thank channel partners, shareholders, various Government & other Statutory Authorities, Banks, Financial Institutions and Analysts for their continued assistance, co-operation and support.