v guard industries ltd share price Directors report

Your Directors take pleasure in presenting their 26th Annual Report on the business and operations of the Company, together with the Audited Financial Statements for the year ended March 31, 2022.

1. FINANCIAL SUMMARY

The summarized standalone and consolidated results of your Company with previous years figure are given in the table below:

	(Rs in crores)
Particulars	Financial Year ended
	Standalone		Consolidated
	31.03.2022	31.03.2021	31.03.2022	31.03.2021
Revenue from Operations	3474.65	2699.00	3498.17	2721.24
Other Income	5.60	2.92	5.43	2.55
Finance Income	7.34	18.18	7.34	18.18
Total Income	3487.59	2720.10	3510.94	2741.97
Operating Expenditure	3142.52	2392.51	3159.95	2409.14
Operating Profit before Depreciation, Interest & Tax	345.07	327.59	350.99	332.83
Finance Cost	7.52	5.60	7.88	6.10
Depreciation and Amortization Expense	47.50	37.32	49.15	38.63
Profit Before Tax	290.05	284.67	293.96	288.10
Tax Expense:
a) Current Tax	69.01	86.30	70.61	87.73
b) Deferred Tax	(5.76)	(0.61)	(5.08)	(1.52)
Profit After Tax	226.80	198.98	228.43	201.89
Basic EPS (Rs)	5.27	4.64	5.29	4.68
Diluted EPS (Rs)	5.23	4.61	5.25	4.65

2. COMPANY PERFORMANCE

Your Company recorded Net Revenue from Operations of Rs 3474.65 crs on standalone basis, for the Financial Year ended March 31, 2022. Revenue grew by 28.74% compared to Rs 2699.00 crs recorded during the previous Financial Year. The Profit After Tax for the year grew by 13.98% to Rs 226.80 crs from Rs 198.98 crs recorded in the previous Financial Year. 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 net revenue from operations for the Financial Year under review was Rs 3498.17 crs, with a growth of 28.55% over Rs 2721.24 crs for the previous Financial Year. On consolidated basis, the Company earned a Profit After Tax of Rs 228.43 crs for the

Financial Year 2021-22, against Rs201.89 crs recorded during the previous Financial Year. The consolidated numbers included the financial performance of Guts Electro-Mech Limited and V-Guard Consumer Products Limited (VCPL), Subsidiary Companies.

All the segments performed well during the year, despite the transitional impact due to COVID - 19 pandemic on the business. The Company was able to overcome the supply chain challenges faced in the previous financial year due to the pandemic. Elevated commodity prices impacted the margins across segments. Though the inflationary environment is expected to pose challenge on the business, your Directors are confident that economic activities will recover gradually and desired growth will be achieved in the coming financial year.

3. SCHEME OF ARRANGEMENT BETWEEN THE COMPANY AND SIMON ELECTRIC PRIVATE LIMITED (SEPL) AND THEIR SHAREHOLDERS AND CREDITORS

During the year under review, the Board of Directors has approved Scheme of Amalgamation amongst the Company, SEPL (Transferor Company) and their respective Shareholders and Creditors in compliance with sections 230 to 232 and other applicable provisions of the Companies Act, 2013 (the Act) and also as per the Section 2(1B) and other relevant provisions of the Income Tax Act, 1961. Upon effecting the Scheme of Amalgamation, the Simons Indian business will be merged with the business of the Company. The value of the transaction is Rs 27.3 crs and the equity shares of the Company will be issued and allotted to the shareholders of SEPL.

The Scheme of Amalgamation shall be subject to the approval of National Company Law Tribunal (NCLT), Shareholders and Creditors of both the Companies. The Company has received Observation letters vide dated May 13, 2022, from both the Stock Exchanges BSE Limited and National Stock Exchange of India Limited (NSE).

SEPL is a private limited company incorporated on August 02, 2006 and is a wholly owned subsidiary of Simon Holding SL and Simon SA, Spain. The Registered office of SEPL is located at XIII/300 E-27(XXXV/565), 5th Floor, KCF Tower, Kakkanad Desom, Thrikkakara P.O, Kanayannur Taluk, Vazhakkala, Ernakulam-682021. SEPL is engaged in the business of manufacturing and trading of electrical wiring accessories, such as electrical switches, sockets, fan regulators and home automation products. The net revenue from operations for the period ended September 30, 2021 is Rs5.78 crs.

Simon Group, founded in the year 1916 in Olot, Spain, is over 100 years old with more than € 330 Mn in global turnover. Headquartered in Barcelona, Spain and currently led by the fourth generation of the founding family, it has presence in more than 100 countries worldwide. The Groups business focus includes switches, sockets, small electrical equipment, connectivity solutions, indoor/outdoor & architectural lighting, automation & control systems and electric vehicle chargers. Simon Group has a direct presence in more than 18 countries, with 4,000+ employees, 180+ patents and 60+ design awards, making it a leading global player in its chosen business areas.

Simon Group is also a winner of several prestigious global design awards like Red Dot Award, IF Design Gold Award, Plus X Award and Delta Award in various categories.

4. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

As on March 31, 2022, the Companys investment in Guts Electro-Mech Ltd., which is engaged in the business of manufacture and supply of MCB & RCCB, continues at 74%.

During the year under review, the Company formed V-Guard Consumer Products Limited (VCPL), as Wholly Owned Subsidiary, for focusing more on manufacturing and development activities and achieve manufacturing excellence. VCPL is engaged in the business of manufacturing and selling of various electronics, electricals and consumer durables. All manufacturing units planned by the Company in respect of various product categories will be set up under VCPL. Wholly Owned Subsidiary set up its first manufacturing facility for production of Stabilizer and Digital UPS in Pantnagar, Uttarakhand, and commercialized the unit in March 2022.

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 Companys website at www.vguard.in.

5. CHANGES TO THE SHARE CAPITAL

During the year under review, the Company has allotted 4,21,380, 5,54,848, 3,50,000 and 27,248 number of equity shares of Rs 1/-, Rs 34.64, Rs 68.75 and Rs 71.36 respectively under ESOS 2013. The Paid- up Capital of the Company, as at March 31, 2022 was Rs 43,15,41,934.

6. DIVIDEND

Your Directors are pleased to recommend a Dividend of Rs 1.30 (One Rupee Thirty Paise) per equity share of Rs 1/- each (130% on the equity share capital) for

the financial year 2021-22. The dividend, if declared as recommended, at the ensuing Annual General Meeting of the Company, would involve an outflow of Rs 56.10 crs. Dividend would be payable to all the shareholders/ Beneficial Owners whose names appear in the Register of Members / Register of Beneficial Owners respectively as on July 21, 2022.

The Registers of Members and Beneficial Owners will remain closed from July 22, 2022 to July 28, 2022(both days inclusive).

7. INVESTOR EDUCATION AND PROTECTION FUND

Transfer of Unpaid/ Unclaimed Dividend & Share Application Money to Investor Education and Protection Fund (IEPF)

Pursuant to the provisions of Section 124(5) of the Companies Act, 2013 (the Act) unclaimed/ unpaid dividend of Rs 3,71,322 which was lying in the Unpaid Dividend Account for the Financial Year 2013-14 was transferred during the year under review to IEPF.

Reminders are sent regularly to the Shareholders who have not claimed the dividend amount, to claim the same from the Company failing which, the unclaimed dividend lying in the unpaid account for seven years shall be transferred to IEPF within thirty days from the due date for transfer of unpaid dividend. Unclaimed dividend in respect of the financial year 2014-15 is due for transfer to IEPF on September 2, 2022.

Transfer of Equity Shares to Investor Education Protection Fund Authority (IEPFA)

In terms of Section 124(6) of the Act read with Rule 6 of the IEPFA (Accounting, Audit, Transfer and Refund) Rules, 2016 (as amended from time to time), shares on which dividend has not been paid or claimed by a shareholder for a period of seven consecutive years or more shall be transferred to the Demat Account of IEPFA within a period of thirty days of such shares become due for transfer. Upon transfer of such shares, all benefits (like dividend, bonus, split, consolidation etc.), if any, accruing on such shares shall also be transferred to the demat / bank Account of IEPF(A) and the voting rights on such shares shall remain frozen till the rightful owner claims the shares. The Shares transferred to the Demat Account of IEPFA can be claimed back by the shareholder by following the procedure prescribed under the aforesaid rules.

The procedure to be followed by the shareholders are detailed on the website of the Company, www.vguard.in, under Investor Relations.

During the year under review, the Company was required to transfer 9,102 equity shares, which were held by 16 shareholders to IEPFA, as dividend had not been encashed or claimed on the above shares during the seven consecutive years from the Financial Year 2013-14. The Company was able to transfer only 8,302 equity shares to IEPFA, as demat account of one shareholder holding 800 equity shares is under suspension since October 2009. The Company filed form IEPF - 3 for furnishing details of shares which could not be transferred to IEPFA.

Details of Nodal Officer

The details of the nodal officer appointed by the Company under the provisions of IEPF is given below and the same is disseminated on the website of the Company www.vguard.in

Name of the Company Secretary designated as Nodal Officer	Jayasree K
Direct Phone No.	+91- 484 433 5000 +91 - 7356956793
Email ID	jayasree@vguard.in
Address	V-Guard Industries Ltd. 42/962, Vennala High School Road, Vennala, Ernakulam - 682028

8. FIXED DEPOSIT

The Company has not accepted any deposit within the meaning of Chapter V of the Act and the Rules framed thereunder during the year under review.

9. MATERIAL CHANGES AND COMMITMENTS IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY 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 of the Company to which the financial statements relate and the date of the Report.

10. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in the nature of business of the Company during the Financial Year 2021-22.

11. POSTAL BALLOT

During the year under review, the Board of Directors has not sought any approval of the shareholders of the Company through Postal Ballot process pursuant to the provisions of Sections 108 & 110 of the Act read with Rule 20 & 22 of the Companies (Management and Administration) Rules, 2014 (as amended) and Regulation 44 of the Listing Regulations.

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 Companys credit facilities are rated by Investment Information and Credit Rating Agency of India Limited (ICRA Ltd.). The Company continues to have long-term rating of [ICRA] AA (pronounced as ICRA double A) and short-term rating of [ICRA] A1+ (pronounced as ICRA A one plus). The outlook on the long-term rating remains stable.

14. BUSINESS RESPONSIBILITY REPORT

The Ministry of Corporate Affairs, Government of India, in July 2011, came out with the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business. These guidelines contain certain principles which are to be adopted by companies as part of its business practices and disclosures regarding the steps taken to implement these principles through a structured reporting format, viz., Business Responsibility Report. Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Company has prepared the Business Responsibility Report which forms part of this Annual Report.

15. BOARD OF DIRECTORS AND ITS COMMITTEES

a) Composition of the Board of Directors

As on March 31, 2022, the Board of Directors

of the Company comprised of nine Directors, with two Executive and seven Non-Executive Directors, which includes six Independent Directors. The composition of the Board of Directors meets the requirements of provisions of Regulation 17 of the Listing Regulations and Section 149 of the Act.

b) Change in office of Directors and Key Managerial Personnel of the Company during the year under review and details of Directors seeking Re-appointment at 26th Annual General Meeting

The members of the Company in their 25th Annual General Meeting held on August 5, 2021, re-appointed Mr. Ramachandran V, Director and Chief Operating Officer, who retired by rotation. The members also re-appointed Mr. Mithun K Chittilappilly, Managing Director, for a period of five years with effective from April 1, 2021 and re-appointed Ms. Radha Unni, Independent Director, for a second term of five consecutive years, effective from September 27, 2021. Further the members appointed Prof. Biju Varkkey as Independent Director for a term of five consecutive years effective from May 26, 2021.

As per the provisions of Section 152 of the Act, Mr. B Jayaraj, Director, is liable to retire by rotation at the ensuing Annual General Meeting, being longest in office. He intimated his desire to retire from the Board of the Company and has not opted for re-appointment at the ensuing Annual General Meeting. In compliance with the provisions of aforesaid Section, the office of Mr. Ramachandran V, is liable for retirement by rotation at the ensuing Annual General Meeting and offers himself for re-appointment.

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 policy forms part of this report.

d) Declaration by Independent Directors

Mr. Cherian N Punnoose, Mr. C J George, Mr. Ullas K Kamath, Ms. Radha Unni, Mr. George Muthoot Jacob and Prof. Biju Varkkey, Independent Directors, have furnished a declaration stating that they meet the criteria of independence as envisaged in Regulation 16 of the Listing Regulations and Section 149(6) of the Act.

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 Secretary in Practice, 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 Directors 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, seven Board meetings were held, and meetings of Subcommittees were also held. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations. The details of the 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 the meetings of Board and Subcommittees through Video Conferencing / Other Audio-Visual 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 March 25, 2022, and the 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 meeting.

g) Statutory Committees of the Board

Pursuant to the requirements under the Act and the Listing Regulations, the Board of Directors has constituted various Committees of Board such as Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility (CSR) Committee.

The composition and terms of reference of Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee and number of meetings held during the year under review are given in the section, Report on Corporate Governance forming part of this Annual Report.

The CSR Committee of the Company as of March 31, 2022 comprised of four members, Mr. B Jayaraj, Mr. Cherian N Punnoose, Mr. Mithun K Chittilappilly and Mr. George Muthoot Jacob. Mr. B Jayaraj, Director is the Chairman of the CSR Committee.

The Committee met twice during the year under review, on May 26, 2021 and February 1, 2022. The Committee recommended the amount of CSR spent for the financial year and the various CSR programs/activities to be carried out by the Company to the Board, for its consideration and approval.

The Board constituted a Risk Management Committee in line with the requirements of Regulation 21 of the Listing Regulations. The Committee consists of four members, Mr. Ullas K Kamath, Independent Director, Mr. Mithun K Chittilappilly, Managing Director, Mr. Ramachandran V, Whole-time Director and Mr. Sudarshan Kasturi, Chief Financial Officer. During the year under review, the committee met twice to discuss the various risks identified and the mitigation processes.

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 Sub-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 evaluation of performance of each individual Director, Sub- committee and Board as a whole. Performance evaluation was carried out through an external 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 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 Sub- committees of the Board was carried out based on the criteria such as constitution, effective functioning of the Sub-committees as per the terms of reference, periodical suggestions and recommendations given by the Sub-committees to the Board etc.

In 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) Directors Responsibility Statement

Pursuant to the provisions under Section 134(5) of the Act, with respect to Directors

Responsibility Statement, the Directors 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 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

M/s. S R Batliboi & Associates LLP, Chartered Accountants with Firm Registration Number - 101049W / E300004 will hold office, up to the conclusion of the ensuing Annual General Meeting, completing their second term of five years as Statutory Auditors as per the provisions of Section 139(1) of the Companies Act, 2013.

The Board of Directors upon the recommendation of the Audit Committee proposes to the shareholders the appointment of M/s. Price Waterhouse Chartered Accountants LLP

(Registration No. 012754N / N500016) as Statutory Auditors of the Company, for a term of 5 (five) years to hold office from the conclusion of 26th Annual General Meeting until the conclusion of 31st Annual General Meeting of the Company to be held in the calendar year 2027.

b) Cost Auditors

As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors has re-appointed M/s. BBS & Associates, Cost Accountants, as Cost Auditors for financial year 2022-23 to conduct audit of cost records maintained by the Company. The appointment and remuneration payable to the Cost Auditors were approved by the Board, based on the recommendation of the Audit Committee. The requisite resolution for ratification of remuneration payable to Cost Auditors, by the members of the Company is set out in the Notice of the ensuing AGM. The Cost Auditors have 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 2020- 21, issued by M/s. BBS & Associates, Cost Accountants, was filed with the Ministry of Corporate Affairs on August 25, 2021. The Cost Audit Report does not contain any qualifications, reservations, or adverse remarks.

The Cost Audit Report for the Financial Year 2021- 22 to be issued by M/s. BBS & Associates, Cost Accountants will be considered by the Board of Directors.

c) Secretarial Auditors

M/s. Keyul M Dedhia & Associates, Company Secretaries, Mumbai, were appointed as Secretarial Auditors of the Company for the financial year 2021-22 pursuant to Section 204 of the Act. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as Annexure-I to this report.

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 approved by the Board forms part of this Report as Annexure-II.

b) Vigil Mechanism / Whistle Blower Policy

The Company has adopted a Whistle Blower Policy, which enables the Directors and Employees to report instances of unethical behavior, fraud or violation of Companys Code of Conduct. The policy provides for direct access to the Chairperson of the Audit Committee and 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 www.vguard.in.

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 programs / activities that can be carried out under various program heads and the same is available on the website of the Company www.vguard.in.

The Companys CSR Programmes are focused on Health Care and Education, Infrastructure Development, Sustainable Livelihood and Social Empowerment & Welfare, Arts and Culture. 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-III 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 Management Committee of the Board of Directors, and pursuant to Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Risk Management policy provides a structured, consistent, and continuous process across the whole organization for identifying, assessing, deciding on mitigations and reporting on the opportunities and threats that may affect the achievement of its strategic objectives.

The Company has enhanced Enterprise Risk Management Charter and Policy to institutionalize a formal risk management function and framework consisting of Risk Management Process and Risk Governance and Communication Structure. For detailed framework and outcome refer to Enterprise Risk Management section in the Management Discussion and Analysis Report.

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, the factors which are considered by the Board while recommending / declaring dividend, suggested band for proposing dividend payout, periodicity of dividend, circumstances in which special dividend is considered etc. The said policy is given in Annexure-IV to this report and posted on the website of the Company www.vguard.in.

19. OTHER MATTERS

a) Internal Financial Controls

The Company has Internal Control Systems commensurate with the nature of its business, size and complexities. Audit Committee reviews the adequacy and effectiveness of 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 deficiency was reported during the test of IFC.

Further, the Statutory Auditors of the Company also reviewed Internal Financial Controls over Financial Reporting of the Company as on March 31, 2022 and issued their report which forms part of the Independent Auditors report.

b) Particulars of Loans, Guarantees and Investments

During the year under review, the Company has not given any loan falling under the provisions of Section 186 of the Act. The Company extended Corporate Guarantee to V-Guard Consumer Products Ltd. (VCPL), Wholly Owned Subsidiary, for availing of credit facilities for a limit not exceeding Rs 50 crs from financial institutions/ banks.

Investment was made in equity shares of VCPL and the amount invested till the date of this report is Rs 89.69 crs. No other investment is made during the year under review.

c) Financial Position and Performance of Subsidiaries, Joint Ventures and Associates

The financial summary of Subsidiary companies are as follows:

		Rs in crs
Particulars	2021-22	2020-21
Guts Electro-Mech Limited
Revenue from Operations	59.43	55.28
Profit Before Tax	4.48	5.30
Profit After Tax	2.87	4.13
V-Guard Consumer Products Limited
Revenue from Operations	0.40	-
Profit Before Tax	(2.22)	-
Profit After Tax	(2.00)	-

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 2021-22 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 Companys website, www.vguard.in. Further, the financial statements of the Subsidiaries are also placed on the Companys website.

The audited financial statements including the consolidated financial statements of the Company and audited financial statements in respect of the Subsidiary companies shall be available for inspection. Any member desirous of inspecting the above documents may write to the Company and the facility to inspect the documents electronically shall be provided.

d) 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.

e) Employee Stock Option Scheme 2013

During the year under review, 37,706 and 17,688 no. of options of Rs 1/- each, being the options for time based vesting for the fourth year were vested in respect of the grant made on May 19, 2017 and July 31, 2017 respectively. Options to the extent of 47,023 of Rs 1/- each were vested on time basis for the fourth year in respect of grant made on January 22, 2018.

Further, options to the extent of 8,691 of Rs 1/- each were vested, for the third year of vesting in respect of grant made on May 30, 2018. 11,765 no. of options of Rs 1/- each were vested during the year in respect of the grant made on July 31, 2018, for the third year. 14,286 no. of options of Rs 1/- each were vested during the year in respect of grant made on January 31, 2019 being the options for the third year of vesting.

Also, 5,896 no. of options of Rs 1/- each were vested on time basis being the options for the second year of vesting in respect of grant made on November 5, 2019. Options to the extent of 3,14,800, 2,05,478, 55,822 and 4,396 no. of options of Rs 1/- each, being the options for time based vesting for the first year were vested in respect of the grant made on May 22, 2020, August 27, 2020, February 03, 2021 and March 19, 2021 respectively

The Nomination and Remuneration Committee granted options to the extent of 1,47,685, 1,14,365, 2,51,143 and 59,980 no. of options at Rs 1/- each under ESOS 2013 on July 30, 2021, October 28, 2021, February 02, 2022 and March 25, 2022 respectively and it will be vested over a period of four years from the date of grant, based on time and performance basis.

During the year, 39,476 no. of options granted at Rs 1/- each were cancelled due to separation and nonachievement of performance parameters. The options cancelled were made available in the Scheme for considering future grant.

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-V 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 (the Code) for Directors and Senior Management, which provides guidance on ethical conduct of business and compliance of law.

All members of the Board and Senior Management personnel have affirmed the compliance with the Code as on March 31, 2022. 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 Companys website www.vguard.in.

g) Annual Return

The details forming part of the Annual Return of the Company containing the particulars prescribed under section 92 of the Act, in Form MGT-7, as on March 31, 2021, is made available on the Companys website www.vguard.in.

Also, the draft of Form MGT-7, as on March 31, 2022, is made available on the Companys website www.vguard.in.

h) Management Discussion and Analysis Report

As per the terms of Regulation 34(2)(e) of the Listing Regulations, the Management Discussion and Analysis Report forms part of this Annual 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 an arms length basis. 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 of all related party transactions is presented before the Audit Committee on quarterly basis, specifying the nature, value and terms and conditions of transactions. Since all the related party transactions entered during the financial year were on an arms length basis and in the ordinary course of business, no details are required to be provided in Form AOC-2 as prescribed under Section 134(3) (h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

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 www.vguard.in.

j) Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements. 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.

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 are available with the Company and in terms of provisions of Section 136(1) of the Act, this report is being sent to the members without this detail and any member desirous of obtaining information may write to the Company and

the same shall be provided through electronic mode till the date of the ensuing Annual General Meeting and the details are made available on the website of the Company www.vguard.in.

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, the Company has not received any complaint.

20. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the various Secretarial Standards issued by the Institute of Company Secretaries of India.

21. LISTING OF SHARES

The equity shares of the Company are listed on National Stock Exchange of India Limited (NSE) and BSE Ltd. (BSE). The listing fee for the Financial Year

2022-23 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 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 copy of the same is available on the website of the Company www.vguard.in.

23. PREVENTION OF INSIDER TRADING

The Board has formulated 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 copy of the same is available on the website of the Company www.vguard.in.

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 pending under the Insolvency and Bankruptcy Code 2016.

25. ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for the steadfast commitment and performance showcased by the employees at all levels during all times, especially in the uncertain environment witnessed during the year under review. The relentless performance of the employees over the years has led to excellent growth trajectory. 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.

	For and on behalf of the Board of Directors of
	Sd/-	Sd/-
	Cherian N Punnoose	Mithun K. Chittilappilly
Date : May 19, 2022	Chairman	Managing Director
Place : Ernakulam	DIN: 00061030	DIN: 00027610