To,
The Members,
Popular Vehicles and Services Limited
Your Directors are pleased to present the Companys 40th Annual Report together with the report of the statutory auditors and the audited financial statements of the Company for the financial year ended 31st March, 2024.
Business Operational Review
1. FINANCIAL STATEMENTS & RESULTS
Financial Results
a) Standalone Performance
During the year under review, the revenue from operation were at Rs26,438.22 million as against Rs25,135.66 million in the previous year, recording an increase of 5.18 %. The Profit before Tax was recorded at Rs307.79 million in the current year as against Rs390.05 million in the previous year, recording a decrease of 21.09%.
b) Consolidated Performance
During the year under review on a consolidated basis, the revenue from operation were at Rs56,155.28 million as against Rs48,750.02 million in the previous year, recording an increase of 15.19 %. The Profit before Tax was recorded at Rs.977.16 million in the current year as against Rs848.67 million in the previous year, recording an increase of 15.14%.
Standalone | Consolidated | |||
Particulars | For the financial year ended March 31, 2023 | For the financial year ended March 31, 2024 | For the financial year ended March 31, 2023 | For the financial year ended March 31, 2024 |
Revenue from Operations | 25,135.66 | 26,438.22 | 48,750.02 | 56,155.28 |
Other Income | 121.42 | 177.74 | 176.26 | 311.52 |
Total Revenue | 25,257.08 | 26,615.96 | 48,926.28 | 56,466.80 |
Employee Benefits expense | 1,998.99 | 2,246.06 | 3,082.06 | 3,664.59 |
Finance costs | 432.07 | 552.52 | 705.34 | 980.23 |
Depreciation and amortization expense | 455.31 | 484.99 | 794.45 | 919.31 |
All other expenses | 21,980.66 | 23,040.65 | 43,495.76 | 49,941.56 |
Total Expenses | 24,867.03 | 26,324.22 | 48,077.61 | 55,505.69 |
Profit / (Loss) Before Tax and exceptional item | 390.05 | 291.74 | 848.67 | 961.11 |
Exceptional item | 0 | 16.05 | 0 | 16.05 |
Profit / (Loss) Before Tax | 390.05 | 307.79 | 848.67 | 977.16 |
Tax Expense: | ||||
Current Tax | 129.32 | 57.73 | 240.10 | 248.58 |
Deferred Tax | (32.62) | (8.13) | (32.17) | (32.19) |
Profit after tax for the year Earnings per equity share(in Rs) | 293.35 | 258.19 | 640.74 | 760.77 |
Basic | 4.68 | 4.09 | 10.22 | 12.05 |
Diluted | 4.68 | 4.09 | 10.22 | 12.05 |
2. TRANSFER TO RESERVES
The Board of Directors of your company, has decided not to transfer any amount to the Reserves for the year under review.
3. DIVIDEND
Pursuant to the provisions of Regulation 43A of the Listing Regulations, the Board of Directors of the Company has adopted a Dividend Distribution Policy which details the dividend philosophy of the Company, the factors which are considered by the Board while recommending / declaring dividend, suggested band for proposing dividend pay-out, periodicity of dividend, circumstances in which dividend is considered, etc. The said policy is placed on the website of the Company at https:// www.popularmaruti.com/investor-relations/wp- content/uploads/2024/01/Dividend-Distribution- Policy-.pdf
The Board of Directors of your company is pleased to recommend a dividend of Rs 0.50 per equity shares of face value of Rs 2/- each aggregating to Rs 35.6 million, payable to those shareholders whose name appear in the register of members as on the record date i.e., 17th September, 2024.
4. CHANGE IN NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the year under review.
5. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY AFTER THE END OF THE FINANCIAL YEAR.
There have been no material changes and commitments which affect 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 this report.
6. CAPITAL & DEBT STRUCTURE
(i) Authorised Share Capital:
During the year under review, there is no change in the Authorised Share Capital of the Company.
However, the Board of Directors at their meeting held on 31st August, 2023 had considered, approved and recommended for the subdivision of Ordinary (equity) Share of the Company. Accordingly, the shareholders at the Extra Ordinary General Meeting (EGM) held on 08th September, 2023 had approved to sub-divide 1 (One) fully paid-up Ordinary (equity) Share of the Company having face value of Rs 10/- (Rupees Ten) each, into 5 (Five) fully paid-up Ordinary (equity) Shares, having face value of Rs 2/- (Rupees two) each with effect from the record date being 08th September, 2023.
After the subdivision, the authorized share capital as on 31st March 2024 stood as follows:
PARTICULARS | NO OF EQUITY SHARES AND PER VALUE | AMOUNT |
Authorized Share Capital Prior to Sub division | 1,50,00,000 (One Crores Fifty Lakhs) equity shares of Rs 10 (Rupees Ten Only) each | Rs 150 million |
Authorized Share Capital Post Sub division | 7,50,00,000 (Seven Crores Fifty Lakhs) Equity Shares of Rs 2/- (Rupees Two Only) each | Rs 150 million |
(ii) Issued, Subscribed and Paid up share Capital
Initial Public Offer of Equity shares, Allotment and Listing
In compliance with the applicable provisions of the SEBI Rules and Regulations, Companies Act, 2013 and Rules made thereunder and other applicable laws in this regard, the Company made an Initial Public Offering (IPO) of 20,395,205 Equity Shares of Face Value Rs2/- each ("Equity Shares") for cash at a price of Rs 295/-per equity share (including a share premium of Rs293/- per equity share) aggregating to Rs 6015.54 million comprising of a fresh issue of 8,478,130 Equity Shares aggregating to Rs 2,500.00 million ("Fresh Issue") and an offer for sale of 11,917,075 Equity Shares aggregating to Rs 3515.54 million by M/s Banyan Tree Growth Capital II, LLC (Investor Selling Shareholder) vide prospectus dated 14th March, 2024 pursuant to Section 32 of the Companies Act, 2013. The offer was a 100% Book Built Offer under the SEBI ICDR Regulations. The IPO opened for subscription on 12th March, 2024 and closed on 14th March, 2024 (for Anchor Investors offer was opened and closed on 11th March, 2024). The offer price was fixed at Rs 295/- per equity share of Face Value Rs 2/- each. Pursuant to the offer,
(i) 84,76,753 Equity shares were allotted at the offer price of Rs 295/- per share including share premium of Rs 293/- per Equity Share under the fresh issue portion of the offer. Out of the aforesaid 84,76,753 Equity Shares, 22,950 Equity Shares were allotted to eligible employees at a discount of Rs28 per Equity Share on the offer price and
(ii) 11,917,075 Equity shares offered under the Offer For Sale by M/s Banyan Tree Growth Capital II, LLC (Investor
Selling Shareholder) were transferred at the same offer price of Rs295/- per Equity share including a share premium of Rs293/-per Equity share to the respective applicants in various categories, in terms of the basis of allotment approved in consultation with the authorised representative of National Stock Exchange Limited ("NSE"), the designated stock exchange. The broad details of allotment or transfer and delivery of the aforesaid 20,393,828 Equity Shares under the Offer as per the basis of allotment approved by NSE is as under:
Category | Number of Equity shares Allotted |
Anchor Investors | 61,07,325 |
Qualified Institutional | 49,35,603 |
Bidders (except Anchor Investors) | |
Non-Institutional Investors | 20,18,050 |
Retail Individual Bidders | 73,09,900 |
Eligible Employees | 22,950 |
TOTAL | 20,393,828 |
Therefore, as on 31st March, 2024, the issued subscribed and paid up Share Capital of your Company stood at Rs 142.4 million - consisting of 7,11,98,198 Equity shares of Rs 2 /- each.
The entire Issued, Subscribed & Paid- up capital of the Company consisting of 7,11,98,198 Equity Shares of the Company with distinctive Numbers 1 to 7,11,98,198 [consisting of IPO Fresh Issue 84,76,753 equity shares plus Prelisting 6,27,21,445 equity shares] were duly listed in the National Stock Exchange Limited ("NSE") and Bombay Stock Exchange Limited ("BSE") and admitted to dealings in the said stock exchanges on 19th March, 2024 and also communicated to the Company by NSE (Symbol: PVSL) & BSE (Scrip Code: 544144).
Utilization of issue proceeds
The objects of the offer for fresh issue portion excluding general corporate purposes was repayment/pre-payment of certain borrowings availed by the Company and the subsidiaries namely Popular Auto works Private Limited, Popular Mega Motors (India) Private Limited, Kuttukaran Green Private Limited, Kuttukaran Cars Private Limited and Prabal Motors Private Limited.
The subsidiaries received funds from the Company as Inter Corporate Loan with an option to convert it to equity shares under section 62(3) of the Companies Act, 2013 on the terms as agreed by execution of a Loan Agreement.
Ranking as per Market Capitalization as on 31st March, 2024
As per the market capitalization of listed companies as at the end of 31st March 2024, your Company has been ranked 993rd in the top 1000 category.
Payment of Listing Fee:
Your Company has paid the listing fee for the Financial Year 2023- 24 to both the Stock Exchanges BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).
7. UNPAID DIVIDEND & IEPF
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF; established by the Government of India, after completion of seven years. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority.
However, your Company did not have any funds lying unpaid or unclaimed for a period of seven years in Unpaid Dividend Account. Therefore, there were no funds which were required to be transferred to Investor Education and Protection fund (IEPF) and no amount is lying in Unpaid Dividend Account of the Company.
8. 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 Companys 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.popularmaruti.com/investor-relations/wp- content/uploads/2024/01/Code-of-practices-and- procedures-for-fair-disclosure-of-UPSI.pdf
9. 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 noncompliances. The same is available on the website of the Company at https://www.popularmaruti.com/investor- relations/wp-content/uploads/2024/01/lnsider-Trading-Policy.pdf
10. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) Board of Directors
As on 31st March, 2024, the Board of your Company comprised of Seven Directors with Three Executive Directors, one Nominee Director and Three Non- Executive 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.
The Board of Directors of the Company as on 31st March, 2024 are as follows:
Name of the director | Designation | DIN |
Mr. Naveen Philip | Managing Director | 00018827 |
Mr. John K. Paul | Whole Time Director | 00016513 |
Mr. Francis K. Paul | Whole Time Director | 00018825 |
Mr. Jacob Kurian | Independent Director | 00213259 |
Mr. George Joseph | Independent Director | 00253754 |
Ms. Preeti Reddy | Independent Director | 07248280 |
Mr.Rakesh Kumar Bhutoria | Nominee Director | 08449728 |
None of the Directors of the Company are disqualified under the provisions of the Act.
During the year under review, there was no changes on the Board of Directors (Board) except as mentioned below;
i) Appointment:
a. Mr. Rakesh Kumar Bhutoria has been appointed as the Nominee Director of the company with effect from 14th August, 2023 and the appointment was regularized as Director in the Extra Ordinary General Meeting (EGM) held on 21st August, 2023 to hold office for a period of five years.
b. The Company in the Annual General Meeting held on 18th August, 2023 reappointed Mr. Francis K. Paul (DIN: 00018825), by a Special Resolution, as Whole time Director of the Company, for a period from 01st April, 2024 to 31st March, 2026.
c. Mr. Francis K. Paul (DIN:00018825), Director, who retired by rotation in terms of Section 152 of the Companies Act, 2013 was re-appointed as Director of the Company at the 39th Annual General Meeting held on 18th August, 2023.
d. The Shareholders at the 39th Annual General Meeting held on 18th August,
2023 re-appointed Mr. John K. Paul as the Whole Time Director of the Company for a period commencing from 01st April,
2024 till 31st March, 2026.
e. The Nomination and Remuneration Committee and the Board of Directors at their meeting held on 11th January, 2024 considered, approved and recommended for the re-appointment of Mr. Jacob Kurian and Ms. Preeti Reddy, as Independent Directors of the Company. The Company in the Extra Ordinary General Meeting held on 07th February, 2024, had reappointed Mr. Jacob Kurian (DIN: 00213259) and Ms. Preeti Reddy (DIN: 07248280) as Independent Directors of the Company, not liable to retire by rotation, to hold office for a second term of 5 (five) years on the Board of the Company commencing from 16th January, 2024 upto 15th January, 2029 (both days inclusive).
ii) Resignation:
Mr. Abhishek G Poddar (DIN: 07143528) the representative/ nominee of M/s BanyanTree Growth Capital II LLC, the private equity investor, had resigned from the Board with effect from 19th June, 2023.
iii) Retirement by rotation:
In accordance with the Articles of Association, Mr. Naveen Philip, Managing Director (DIN: 00018827) retires by rotation at the ensuing Annual General Meeting. Mr. Naveen Philip, being eligible seeks re-appointment at the ensuing Annual General Meeting. A brief profile and the details as per Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation is produced below:
DETAILS OF DIRECTORS RECOMMENDED FOR RE-APPOINTMENT AS REQUIRED UNDER THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 AND SECRETARIAL STANDARD-2 ISSUED BY THE INSTITUTE OF COMPANY SECRETARIES OF INDIA.
Name of the Director | Mr. Naveen Philip |
Brief Profile | Mr. Naveen Philip, Managing Director of the Company has over 27 years of experience in the automobile industry. He is the member of the Federation of Automobile Dealers Associations Governing Council. Previously he held the position of a manager at Godrej Telecom Limited. |
Age | 54 |
Date of First Appointment on the Board | 01st April, 2018 |
Qualifications | Post Graduate Diploma in Management from the Xavier Institute of Management, Bhubaneswar and Bachelors Degree in Mechanical Engineering from the University of Calicut. |
Nature of expertise, experience in specific functional areas. | Over 27 years of experience in Automobile Industry. |
Past Remuneration | Details have been provided in the Corporate Governance Report which forms part of the Annual Report 2023-24. |
Terms and conditions of appointment/ reappointment including Remuneration to be paid. | Re-appointment as a Director, liable to retire by rotation. |
Number of shares held in the Company including shares held as a Beneficial Owner as on March 31, 2024. | 1,45,19,362 |
Relationship with other Directors / KMPs. | Relative (Nephew) of Mr. Francis K. Paul, Whole Time Director and Mr. John K. Paul Whole Time Director. |
Directorships / Committee Membership and Chairmanship held in other | Managing Director at Popular Mega Motors (India) Private Limited. |
Companies. | Director at Vision Motors Private Limited, Popular Auto Dealers Private Limited, Popular Autoworks Private Limited, Kuttukaran Cars Private Limited, Kuttukaran Green Private Limited, Memorytrain Creatives Private Limited, Bluetimbre Music Private Limited, Keracon Equipments Private Limited, Regiis Insurance Brokers Private Limited and Haeal Enterprises Private Limited. |
iv) Appointments post the close of financial year:
a. Re-appointment of Mr. George Joseph:
Mr. George Joseph (DIN: 00253754) was initially appointed as Independent Director for a term of five consecutive years from 01st July, 2021 till 30th June, 2026 under the provisions of Sections 149(4), 150, 152 read with Schedule IV of the Companies Act, 2013 ("the Act") and Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014. The initial appointment happened when the Company was an Unlisted Public Company. Subsequent to listing, as the term of Mr. George Joseph was continuing, it was noticed that Mr. George Joseph would attain the age
of 75 years on 26th April, 2024 and in order to comply with the provisions of Regulation 17(1A) of SEBI (LODR), 2015, Mr. George Joseph vacated the office of Independent Director w.e.f., 26th April, 2024.
Considering the contributions of Mr. George Joseph during his first term, the Nomination and Remuneration Committee and the Board of Directors in its meeting held on 28th May, 2024 recommended for appointment for a term of 5 consecutive years from the date of approval of the resolution by members of the Company. The approval of the shareholders was obtained via postal ballot on 11th July, 2024.
b. Re-appointment of Mr. John K. Paul:
Our Whole Time Director, Mr. John K. Paul was also one of the Directors of Kerala Chamber of Commerce and Industries (KCCI) during the financial years 2012-13, 2013-14 and 2014-15 when KCCI was found in violation of Sections 209(1) and 217(3) of the Companies Act, 1956. He remitted a fine of Rs 0.01 million in ST 43/19 and Rs 0.005 million in ST 42/19 before the Chief Judicial Magistrate (Economic Offences) Court at Ernakulam for the said violations. However, in terms of Part I of Schedule V to the Companies Act, 2013, the Company had sought the approval of the Central Government for his re-appointment.
However, the applications for his previous appointments were not considered and disposed-off by the Ministry of Corporate Affairs (MCA) vide Letter No E-File No.1/2/2022- DS(CL-VII) MCA dated 29thApril, 2024.
Consequent to the above, the Board in its meeting held on 28th May, 2024, based on the recommendation of the Nomination and Remuneration Committee, proposed reappointment of Mr. John K. Paul as Whole-time Director for a further term commencing from 29th April, 2024 to 31st March, 2026. Accordingly, the shareholders approval by passing special resolution via postal ballot was sought and the same was approved on 11th July, 2024.
Fresh application for approval in form MR-2 is filed via SRN: AA9448579 dated 25th July, 2024 which is under the consideration of the Ministry of Corporate Affairs.
b) Key Managerial Personnel
The Key Managerial Personnel of the Company in accordance with Regulation 2(1)(bb) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations and Section 2(51) of the Companies Act, 2013 are as follows:
Name | Designation |
1. Mr. Naveen Philip | Managing Director |
2. Mr. John K. Paul | Whole Time Director |
3. Mr. Francis K. Paul | Whole Time Director |
4. Mr. Raj Narayan | Chief Executive Officer |
5. Mr. John Verghese | Group Chief Financial Officer |
6. Mr. Varun T.V. | Company Secretary and Compliance Officer |
Mr. John Verghese has been designated as Group CFO with effect from 1stApril, 2022, in the meeting of the Board of Directors held on 31st August, 2023.
There is no change in the Key Managerial Personnel (KMP) during the year under review.
In addition, our following Key Managerial Personnels of the Company also holds position of Key Managerial Personnel in the Wholly Owned Subsidiary Companies as under:
Name | Designation in Subsidiary | Name of Subsidiary |
1. Mr. Naveen Philip | Managing Director | Popular Mega Motors (India) Private Limited |
2. Mr. Raj Narayan* | Chief Executive Officer | Vision Motors Private Limited |
3. Mr. John Verghese | Chief Financial Officer | Popular Autoworks Private Limited |
4. Mr. Varun T.V. | Company Secretary | Popular Autoworks Private Limited |
* Mr. Raj Narayan has resigned from the post of Chief Executive Officer of Vision Motors Private Limited on 01st May, 2024.
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. popularmaruti.com/investor-relations/wp-content/uploads/2024/01/Nomination-and-Remuneration- Policy.pdf
d) Declaration by Independent Directors.
In terms of Section 149 of the Act and other applicable regulations if any (i) Mr. Jacob Kurian (ii) Ms. Preeti Reddy (ii) Mr. George Joseph are the Independent Directors of the Company as on date of this report. As required under Section 149(7) of the Companies Act, 2013, read with SEBI (Listing Obligations and Disclosure Requirements), (Amendment) Regulations, 2018, the Independent Directors have given the necessary declaration that they meet the criteria of independence laid down under Section 149(6) of the Companies Act, 2013 and do not suffer from any disqualifications specified under the Act. Such declarations include the confirmation to the effect that the Independent Directors have included their names in the Database maintained by the Indian Institute of Corporate Affairs, the status of the online proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs and a confirmation regarding the payment of fees for the said registration and the timely renewal of registration.
Also, the Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013 and the Code of Conduct for Directors and Senior Management Personnel formulated by the Company.
e) Women Director
In terms of the provisions of Section 149 of the Companies Act, 2013 and Regulation 17(1) (a) of Listing Regulations, the Company has appointed Ms. Preeti Reddy (DIN: 07248280) as Independent Woman Director of the Company.
f) Certificate from Practicing Company Secretary
Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the Listing Regulations, Mr. M. C. Sajumon, Practicing Company Secretary, Cochin, 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.
g) Performance Evaluation
As per Part D of Schedule II SEBI (LODR) Regulations, 2015 read with Regulation 16 of
SEBI (LODR) and as prescribed u/s 149(6) of the Companies Act, 2013, annual evaluation of the performance of the Board, the Directors and its committees was evaluated through an external agency.
The Nomination and Remuneration Committee of the Company had 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.
h) Familiarization Programme
In terms of Regulation 25(7) of the Listing Regulations, the Company familiarizes its Independent Directors about their roles and responsibilities at the time of their appointment through a formal letter of appointment. The draft letter of appointment / re-appointment is available on the website of the Company at www.popularmaruti.com.
11. NUMBER OF MEETINGS OF THE BOARD & ITS
COMMITEES
a) Board meetings
During the financial year ended 31st March, 2024, the Board of Directors met 9(nine) times on 20th June, 2023, 14th August, 2023, 31st August, 2023, 28th September, 2023, 11th January, 2024, 05th February, 2024, 04th March, 2024, 14th March, 2024 and 15th March, 2024. Requisite quorum was present in all the meetings and the intervening gap between the meetings is within the period as prescribed under Section 173 (1) of the Companies Act, 2013 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 AudioVisual Means.
Pursuant to the requirements of Schedule IV to the Act and the Listing Regulations, a separate Meeting of the Independent Directors of the Company was held on 27th March, 2024, and the Directors reviewed the matters enumerated under Schedule IV(VII)(3) to the Act and Regulation 25(4) of the SEBI (LODR) Regulations, 2015. All the Independent Directors attended the said meeting.
b) Board Committees
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 Committee and Risk Management Committee. The composition and terms of reference of the Committees, number of meetings held during the year under review and attendance of Directors at the Committee meetings 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.
12. 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 A.
In terms of the provisions of Section 197(12) of the
Act read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing names of the employees drawing remuneration and other particulars, as prescribed in the said Rules is provided in a separate annexure forming part of this report.
Further, the report and the accounts are being sent to the Members excluding the aforesaid Annexure G. In terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary at cs@popularv. com.
Remuneration received by Managing Director/ Whole Time Director from the holding or Subsidiary Company.
Mr. Naveen Philip, Managing Director (DIN: 00018827) of the company is receiving remuneration including performance incentive from Popular Mega Motors (India) Private Limited, the wholly owned subsidiary of the company.
Wavier of Performance Incentives
The remuneration of the Executive Directors includes payment of performance incentive apart from Salary and Perquisites. The payment of performance incentive to Mr. Naveen Philip, 5 Managing Director, is paid by the wholly owned subsidiary Popular Mega Motors (India) Private Limited. However, the performance incentive for the Financial Year 2023-24 was voluntarily waived by Mr. Naveen Philip, Mr. John K. Paul and Mr. Francis K. Paul vide their letters dated 01st April, 2024.
Refund made by Executive Directors
The provisions of Regulation 17(6)(e) of SEBI (LODR) Regulations, 2015, relating to the fees or compensation payable to Executive Directors who are Promoters or members of the Promoter Group, if the aggregate annual remuneration to such Directors exceeds 5 per cent of the net profits of the listed entity (in case of more than 1 Executive Director) triggered, post listing of the shares of the Company at stock exchange on 19th March, 2024.
The excess remuneration paid to the said Directors during the remaining days in the Financial Year 2023-24 (i.e., from 19th March, 2024-31st March, 2024) after the Companys shares were listed on Stock Exchange has been refunded by the Directors as mentioned below:
Executive Directors | Refunded To | Amount (f in Millions) |
Mr. John K. Paul | Company | 0.065 |
Mr. Francis K. Paul | Company | 0.065 |
Mr. Naveen Philip | Popular Mega Motors (India) Private Limited (Wholly Owned Subsidiary) | 0.065 |
The Board in its meeting held on 13th August, 2024 has recommended for approval of members in the ensuing 40th Annual General Meeting of the Company for payment of remuneration to Executive Directors (who are also Promoters of the company) in excess of the limits specified in Regulation 17 (6) (e) (ii) of SEBI (LODR), 2015 for each of the financial years during their respective tenure of service.
13. DIRECTORS RESPONSIBILITY STATEMENT
In terms of clause (c) of sub-section (3) of Section 134 read with sub-section (5) of Section 134 of the Companies Act, 2013, the Directors hereby state and confirm that
a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
b) Such accounting policies have been selected and applied consistently and the Directors 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 as at 31st March, 2024 and of the profit of the company for that year;
c) Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
d) The Annual Accounts of the Company have been prepared on a going concern basis.
e) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
f) Internal financial controls were followed by the company and such internal financial controls are adequate and operating effectively.
14. ADEQUACY OF INTERNAL FINANCIAL CONTROLS (IFC)
The Companys Internal Control Systems are commensurate with the nature of its business and the size and complexity of its operations. The Audit Committee reviews the adequacy and effectiveness of the internal control system and monitors the implementation of audit recommendations. These are routinely tested by Internal Auditors. 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 31st March, 2024, and issued their report which forms part of the Independent Auditors report.
15. REPORTING OF FRAUD BY AUDITORS
During the year under review, the Statutory Auditors has not reported to the Board under Section 143(12) of the Companies Act, 2013 any instances of fraud committed against the Company by its Officers or employees.
16. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
During the financial year under report the Company has not entered into or invested in any new Subsidiaries, Joint Ventures and Associates. The details of the Holding and Subsidiary Companies are given below:-
Name of the Company | Holding/ Subsidiary/ Associate | Applicable Section |
1 Popular Mega Motors( India) Private Limited | Wholly owned Subsidiary | 2 (87) |
2 Popular Autoworks Private Limited | Wholly owned Subsidiary | 2 (87) |
3 *Vision Motors Private Limited | Wholly owned Subsidiary | 2 (87) |
4 Popular Auto Dealers Private limited | Wholly owned Subsidiary | 2 (87) |
5 Kuttukaran Cars Private Limited | Wholly owned Subsidiary | 2 (87) |
6 Kuttukaran Green Private Limited | Wholly owned Subsidiary | 2 (87) |
7 Keracon Equipments Private Limited | Wholly owned Subsidiary | 2 (87) |
8 *Prabal Motors Private Limited | Wholly owned Subsidiary | 2 (87) |
*Step Down Wholly Owned Subsidiaries of the Company
Material subsidiaries: | (i) Popular Mega Motors (India) Private Limited |
(ii) Vision Motors Private Limited |
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, for the Financial Year 2023-24 is given in Form AOC-1 which forms an integral part of this Annual Report as Annexure F. 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 Companys website at https://www.popularmaruti. com/investor-relations/financials/annual-reports/ annual-returns/annual-reports/
Further, the financial statements of the Subsidiaries are also placed on the Companys website at https:// www.popularmaruti.com/investor-relations/ financials/annual-reports/annual-returns/annual- reports/. 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 cs@popularv.com.
ANY REVISION MADE IN FINANCIAL STATEMENTS OR BOARDS REPORT
The Company has not revised the Financial Statements or Boards Report in respect of any of the three preceding Financial Years.
17. MAINTENANCE OF COST RECORDS
Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Company is not required to maintain Cost Records under said Rules.
18. DEPOSITS
Your Company has not accepted any public deposits and, as such no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet. Thus, no particulars are reported as required under Rule 8(5)(v) of Companies (Accounts) Rules, 2014.
19. PARTICULARS OF INVESTMENTS, LOANS, GUARANTEES AND SECURITIES
During the reporting period, the Company had granted Intercorporate Loan to its wholly owned subsidiary Companies Popular Mega Motors (India) Private Limited (Rs 500 million), Popular Autoworks Private Limited (Rs 60 million), Kuttukaran Green
Private Limited (Rs 30 million), Kuttukaran Cars Private Limited (Rs 70 million) and Prabal Motors Private Limited (Rs 500 million). The Board of Directors at its meeting held on 15th March, 2024 agreed to grant inter-corporate loan to the subsidiaries and the Board and Shareholders of the subsidiary Companies at their meeting held on 16th March, 2024 considered and approved the proposal to avail Intercorporate Loan as aforesaid.
Pursuant to the Letter of Offer dated 22nd November, 2023 received from the wholly owned Subsidiary Kuttukaran Green Private Limited and subsequent approval of the Finance and Authorization Committee at their meeting held on 27th November, 2023, the Company had made an investment of Rs 5 million by subscribing on rights basis 4,99,950 Equity shares of Rs 10/- each of Kuttukaran Green Private Limited, in compliance of Section 186 of the Companies Act 2013.
During the reporting period, the company had given Corporate Guarantee to Banks/Financial Institutions against loans taken by its subsidiary companies viz. Popular Auto Dealers Private Limited, Popular Autoworks Private Limited, Kuttukaran Green Private Limited, Popular Mega Motors (India) Private Limited and Kuttukaran Cars Private Limited and complied with applicable provisions of Section 186 of the Act and has disclosed the details thereof in the financial statements as provided under Section 186(4) of the Act.
After the close of the financial year, pursuant to the Letter of Offer dated 18th May, 2024 the Company had made an investment of Rs 5 millions in its wholly owned Subsidiary Kuttukaran Cars Private Limited by subscribing on rights basis 4,99,999 Equity shares of Rs 10/- each in compliance of Section 186 of the Companies Act 2013.
The details of Investments, Loans, Guarantees and Securities have been disclosed in the Financial Statements under Schedule 6 and Schedule 36 of Standalone Financials.
20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The transactions with related parties are in compliance with the provisions contained in Section 188(1) of the Act read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure B in Form AOC-2 and the same forms part of this report.
In accordance with the requirements of the Listing Regulations, the Company has also adopted Policy on Materiality and dealing with Related
Party Transactions and the same has been placed on the website of the Company at https://www. popularmaruti.com/investor-relations/wp-content/ uploads/2024/01/Policy-on-Related-Party- Transactions.pdf
21. CORPORATE SOCIAL RESPONSIBILITY.
As per the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has a Corporate Social Responsibility Committee during the year under review.
The Committee was reconstituted with the following members on 14th August, 2023 by inducting Mr. Rakesh Kumar Bhutoria, Nominee Director due to the resignation of Nominee Director, Mr. Abhishek G. Poddar,
1. Mr. Francis K. Paul, Chairperson
2. Mr. John K. Paul, Member
3. Mr. Jacob Kurian, Member
4. Mr. Rakesh Kumar Bhutoria, Member
The CSR Policy of the Company is available on the Companys web-site and can be accessed in the link https://www.popularmaruti.com/investor- relations/wp-content/uploads/2024/01/Corporate- 60 Social-Responsibilitv-Policy.pdf
The CSR Committee met once on 27th March, 2024 during the financial year under review.
The Company has initiated activities in accordance with the said Policy, the details of which have been mentioned in Annexure C which forms part of this Report.
22. CONSERVATION OF ENERGY/ TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO (As required under section 134(3)(m)of Companies Act 2013, read with Rule 8(3) of Companies (Accounts) Rules, 2014)
The company uses power saving lighting equipments for its office and workshop and saves power wherever there is scope for energy saving.
No technology absorption has taken place during the year under consideration.
There was no foreign exchange inflow or outflow during the year.
23. RISK MANAGEMENT
The Company has formulated Risk Management Policy in accordance with the guidelines provided under the Charter of the Risk Management 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 risk, deciding on mitigations, and reporting on the opportunities and threats that may affect the achievement of its strategic objectives. The Company has in place a mechanism to identify, access, monitor and mitigate various risks to key business objectives. Major risks identified by the business and functions are systematically addressed through mitigating actions on a continuous basis.
24. VIGIL MECHANISM
Your Company, as required under Section 177 (9) & (10) of the Companies Act 2013 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 Companys 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. 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.popularmaruti.com/investor-relations/wp- content/uploads/2024/01/Whistle-Blower-Policy-. pdf
25. 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 Chief Executive Officer and Chief Financial Officer is annexed with the Corporate Governance Report.
A certificate of Corporate Governance as per Schedule V of SEBI (LODR) Regulations 2015 as required under Regulation 15(2) of SEBI (LODR) Regulations 2015 from, Mr. M.C. Sajumon, Practicing Company Secretary, 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.
26. MATERIAL ORDERS OF JUDICIAL BODIES/ REGULATORS
During the year under review, there were no significant or material orders passed by the regulators, courts or tribunals impacting the going concern status and the Companies operations in future.
27. STATUTORY AUDITORS
The members in the 37th Annual General Meeting of the Company had approved the appointment of M/s BSR & Associates LLP, Chartered Accountants (Firm Registration No. 116231W/W-100024) (Peer Review Number: 014196) as the Statutory Auditors of the Company, for a term of 5 (five) years to hold office from the conclusion of the 37th Annual General Meeting until the conclusion of the 42ndAnnual General Meeting of the Company to be held in the calendar year 2026.
28. STATUTORY AUDITORS REPORT
The Statutory Auditors in their Report (Standalone and Consolidated) for the financial year ending 31st March, 2024 does not contain any qualification, reservation or adverse remark.
29. SECRETARIAL AUDIT
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 appointed Mr. M.C. Sajumon, Practising Company Secretary, Kochi as Secretarial Auditor to conduct Secretarial Audit of the Company for the financial year ending 31st March, 2024. The Secretarial Auditors report does not contain any qualifications, reservations or adverse remarks or disclaimer.
The Secretarial Audit Report in form MR-3 is annexed to the Directors Report as Annexure D.
30. INTERNAL AUDIT
Company has established a full-fledged internal audit team headed by Mr. Sojan Chacko, a qualified Chartered Accountant appointed for a period of three years w.e.f., 01st April, 2023 to 31st March, 2026 pursuant to section 138 of the Companies Act, 2013. Audit team conducts regular reviews of the business process, operations and financial transactions to ensure adequacy and existence of effective control systems; investigate probable risks, deviations, fraud or misappropriations.
31. COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD 1 AND SECRETARIAL STANDARD 2
In terms of Section 118(10) of the Act, the Company is complying with the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) with respect to Meetings of Board of Directors and General Meetings and such systems were adequate and operating effectively.
32. 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 31st March, 2023, is made available on the Companys website https://www. popularmaruti.com/investor-relations/wp-content/ uploads/2024/03/Form-MGT_7_2022-23.pdf.
The draft of Form MGT-7, as on 31st March, 2024, is made available on the Companys website at www.popularmaruti.com.
33. 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.
34. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations, the initiatives taken by the Company from an environmental, social and governance perspective for the Financial Year 2023-24 has been given in the Business Responsibility and Sustainability Report (BRSR) as per the format specified by SEBI Circular no. SEBI/HO/CFD/ CMD2/P/CIR/2021/562 dated 10th May, 2021 which forms part of this report as Annexure E.
35. CREDIT RATING
The Company has obtained Credit Ratings for outstanding Debt Instruments / facilities amounting to Rs4364 Millions. The CRISIL Rating on the Bank Facilities of the Company for the financial year ended 31st March, 2024 is provided below:
Long Term Rating CRISIL BBB+/Stable
Short Term Rating CRISIL A2
After the closure of the reporting period, the long term rating awarded to the Company was upgraded to CRISIL A/Stable and the short-term rating was upgraded to CRISIL A1 on Rs 4680 Million bank loan facilities of the company as per the letter dated 01st April, 2024.
36. HUMAN RESOURCES MANAGEMENT
Human Resource Department plays a pivotal role in achieving organizational excellence. Your Company constantly strives to develop quality human resources, to meet the challenges of competitive business environment and to build critical capabilities in achieving the Companys objectives and goals. The Company is continuously renewing and updating the knowledge and skill of its employees at all levels through training and development.
As on 31st March, 2024, the Company had a head count of 6187 employees, a decrease of 220 people over previous year.
37. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 (POSH Act).
The Company has constituted an Internal Committee as required under the said Act to take necessary preventive actions as may be possible and also to carry out redressal of complaints, if any, on sexual harassment and for matters connected therewith or incidental thereto. Summary of sexual harassment complaints received and disposed of during the financial year 2023-24 are as follows:
62 No of complaints received : 1
No of complaints disposed off : 1
The Committee has submitted the Annual Report on POSH to the Company and the Board of Directors took note of the same at their meeting dated 11th January, 2024. The report has also been submitted to the District Officer, pursuant to Section 21 of the POSH Act, 2013.
38. INDUSTRIAL RELATIONS
During the year under review, the company enjoyed cordial relationship with workers and employees at all levels and the Directors thank all the employees for their continued support, co-operation and valuable contributions.
39. DISCLOSURE ABOUT THE APPLICATION AS MADE OR ANY PROCEEDING IS PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE (IBC), 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR.
Not applicable
40. DISCLOSURE ABOUT THE DIFFERENCE BETWEEN THE AMOUNTS OF THE VALUATION EXECUTED AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THERE OF.
Not applicable
41. ACKNOWLEDGEMENTS
Your Directors wish to express their appreciation to the shareholders and other stakeholders for their continued faith in the company and also for their valuable support.
For and on Behalf of Board of Directors of Popular Vehicles and Services Limited | ||
Place: Kochi-25 | Naveen Philip | Francis K. Paul |
Date: 13th August, 2024 | Managing Director | Whole Time Director |
(DIN: 00018827) | (DIN: 00018825) |
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