VST Tillers Tractors Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting the 52nd Annual Report of the Company and the Audited Statement of accounts for the financial year ended March 31, 2020.


(Rs. in lakhs)

Period Year 2019-20 Year 2018-19
Operating Income 54368 61480
Non-Operating Income 2358 4491
Total Income 56726 65971
Finance Cost 147 225
Depreciation 1635 1579
Total Expenses 54416 58818
Exceptional Item - -
Profit Before Tax 2310 7153
Tax 510 2547
Profit After Tax 1800 4606
Other Comprehensive Income 25 -54
Total Comprehensive Income 1825 4552
Earning Per Share (Basic and Diluted) 20.83 53.32


During the year under review FY 2019-20, your Companys Operating income is RS. 54368 lakhs as against RS. 61480 lakhs in the previous year FY 2018-19 and the Profit Before Tax (PBT) for the FY 2019-20 is RS. 2310 lakhs as against RS. 7153 lakhs in the previous year FY 2018-19. Profit after Tax (PAT) for the FY 2019-20 is RS. 1825 lakhs as against RS. 4552 lakhs in the previous year FY 2018-19. With respect to volumes, your Company has done 19,302 Nos of tillers against the previous year of 22,547 Nos of tillers and on tractors, 7147 Nos against previous year of 8198 Nos of tractors.

Despite challenging market conditions, your Companys Compact Tractor market share stood at 10% and power tiller market share at 46%.

The Year under review was impacted due to various factors such as Monsoon failure in certain areas, non- availability of funds with various State Govts, issues w.r.t subsidy allocation in key states and implementation of direct billing of products from Company to subsidy customers. COVID-19 pandemic had also impacted the performance of the Company in Q4.


The impact of COVID-19 on the economy is no doubt devastating. No sector has escaped its impact. Agriculture being a priority sector, COVID impact will be less compared to other sector. During the lock down the Company had adopted the work from Home policy. After relaxation, Company has started its manufacturing activity as per Government norms by adopting social distancing and proper sanitization. This impact will reverberate across the larger economy and will linger longer than a few months.

However it is anticipated that performance of RS. 1 of FY21 may be affected by COVID-19 situation. The main challenges will be the disruptions of supply chain.


Your Company deals with single segment only i.e. "Manufacturing of Agricultural Machineries".


Your Directors had declared interim dividend of RS. 15/- (150%) per share for the financial year 2019-20 and the same was paid on 31/03/2020 to shareholders who were on the register of members as on 25th March, 2020, being the record date fixed for this purpose. The total outflow was RS. 1562 lakhs including the dividend distribution tax RS. 266 lakhs. The Board did not recommend a final dividend and the interim dividend of RS. 15/- per equity share declared by the Board in March 2020 was considered as the final dividend for the financial year 2019-20. Thus, the total dividend for the financial year 2019-20 remains RS. 15/- per equity share.


"The Board of Directors of your company, has decided not to transfer any amount to the Reserves for the year under review."


The Company continues to sustain its commitment to the highest levels of quality. The year under reference, the Company successfully completed the annual ISO surveillance audit and retained the ISO certification for ISO 9001:2015, ISO14001:2015 & ISO 45001:2018


Ratio 2019-20 2018-19 Explanation
Debtors Turnover Ratio 5.65 6.38 Due to reduction in sales
Inventory Turnover Ratio 5.32 4.97 Due to reduction in sales
Interest Coverage Ratio 27.87 39.87 Due to Decrease in EBDITA
Current Ratio 4.08 4.31 Due to Decrease in Current Assets ( GST)
Gross Profit margin 36% 29% Decrease in COGS and Net Sales
Net Profit margin 3.31% 7.49% Due to reduction in sales and earning


The changes in return on net worth is mainly due to lower profit for the year under reference.


In accordance with the provisions of the Companies Act, 2013 Mr. V.T. Ravindra and Mr. V.S. Arun , Directors will retire at the ensuing AGM and they are eligible for reappointment. No Director has resigned during the year 2019-20.

Mr. Antony Cherukara was appointed as CEO w.e.f 25th April 2019. Mr. P M Keshava retired as CFO on 31st August 2019. Mr. Mahadevan GV was appointed as CFO on 9th August 2019 and resigned on 15th June 2020.


The following persons are Key Managerial Personnel (KMP) of the Company under section 203 of the Companies Act, 2013, during the year 2019-20

1. Mr. V.P. Mahendra - Vice Chairman & Managing Director

2. Mr. Antony Cherukara, Chief Executive Officer

3. Mr. Mahadevan GV- Chief Financial Officer*

4. Mr. Chinmaya Khatua - Company Secretary

*Mr. Mahadevan GV resigned as CFO on 15th June 2020


The Company strives to ensure good in Corporate Governance and levels of transparency with all the provisions of SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015. A certificate from the Auditors to this effect forms part of Corporate Governance Report.

Compliance reports in respect of all laws applicable to the Company have been reviewed by the Board of Directors.


Pursuant to Section 134(3) (c) of the Companies Act, 2013, your Directors to the best of their knowledge and belief and according to the information and explanations obtained by them make the following statement:

(a) That in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) That the directors have 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;

(c) That proper and sufficient care has been 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) That the annual accounts have been prepared on a going concern basis;

(e) That the internal financial controls to be followed by the company have been laid down and that such internal financial controls are adequate and were operating effectively.

(f) That proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors including the audit of internal financial controls over financial reporting by the Internal Auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during FY 2020.


M/s. K.S. Rao & Co, Chartered Accountants (Firm Regn No. 003109S) were appointed as Auditors of the Company for five financial years w.e.f FY 2016-17, at the 48th Annual General Meeting of the Company.


Your Directors had, on the recommendation of the Audit Committee, appointed M/s. Rao, Murthy & Associates, Cost Accountants to audit the cost records of the Company for the financial year 2020-21 on a remuneration of RS. 2,50,000/-(Exclusive of applicable taxes) plus out of pocket expenses. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their approval. Accordingly, a Resolution seeking Members approval for the remuneration payable to M/s. Rao, Murthy & Associates., Cost Auditors is included in the Notice of the Annual General Meeting.

The Company has made and maintained cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013.


M/s. Brahmayya & Co, Chartered Accountant were appointed as Internal Auditors under section 138 of the Companies Act, 2013 for the financial year 2019-20.


Pursuant to the provisions of Section 204 of the Companies Act, 2013 and read with Rules made there under, the Board had appointed Thirupal Gorige & Associates LLP, Practising Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2019-20. The Secretarial Audit Report is enclosed herewith as Annexure-4.


As required by provisions of section 197 of the Companies Act, 2013 read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The salary details of designated employees are given in Annexure-1.


Information under Section 134 Companies Act, 2013 read with rule 8 (3) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure-2.


Your Company has not accepted any deposits within the meaning of Chapter- V of the Companies Act, 2013 and rules made thereunder.


Industrial relations have been cordial at the Bengaluru, Mysore, Malur and Hosur plants during the year.

There were 758 Nos. of permanent employees on roll as on 31st March 2020.


V.S.T. TILLERS TRACTORS LIMTED is a safe work place and the Safety & Health of our employees as per the requirement of the Factories Act are ensured. Our motto is "Zero Accident". Our commitment is to protect the environment as per the policy. The Company has been taking adequate safety measures for prevention of COVID 19 at all our locations.


Your Companys operations are supported by a full fledged Data Centre. Your company has a well planned Business Continuity Plan Set-up for all critical applications with near real-time data replication.

The delivery centers meet the Information Security Management System and CIA (Confidentiality, Integrity and Availability) Standards. To cater to the ever-changing customer needs, the IT infrastructure is being constantly upgraded with new / enhanced features to facilitate smooth functioning of operations and deliver customer satisfaction. We are using industry best standard mailing solutions with compliance and availability of mails which controls various spam mails.

The Company has implemented new ERP system (SAP) during the year 2019-20 to further strengthen the internal control system of the Company. Along witRs. 24*7 availability of critical application and standard business analytical tools.


Seven meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance of this Annual Report.

Disclosure of relationships between directors

Mr. V.K. Surendra, V.P. Mahendra, Mr. V.V. Pravindra, Mr. V.T. Ravindra and Mr. V S Arun are promoters. Apart from the promoter directors, none of the other Directors are related to each other.


The Company has received declarations from Independent directors as mentioned in sub-section (6) of section 149 of the Companies Act, 2013, Schedule- IV of the Act and relevant provision of SEBI (LODR) Regulations 2015. The online proficiency self-assessment test conducted by Indian Institute of Corporate Affairs, is yet to be undertaken by the Independent Directors and same will be completed within the prescribed time frame.


The Company has constituted Audit Committee, CSR Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee. The details of the Committees are mentioned in Corporate Governance Report.


The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing. It is to protect employees wishing to raise a concern about serious irregularities within the Company.

The Company has vigil mechanism cum whistle blower policy to deal with instance of fraud and mismanagement, if any. The details of the vigil mechanism are explained in the Corporate Governance Report and also posted on the website http:// www.vsttractors.com/investors/policies of the Company. The Company has not received any complaint during the year 2019-20.


There was no qualification, reservation or adverse remark or disclaimer from Statutory & Secretarial Auditors.

There was no fraud reported by the auditors under section 143(12) of the Companies Act, 2013.


The Company has made investment during the year 2019-20. The investments details forms part of the notes to the financial statements provided in this Annual Report. The company has not given any Loan or Guarantee during the year 2019-20.


All related party transactions that are entered into during the financial year were on an arms length basis. There are no materially significant related party transactions made by the company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee and also before the Board for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their information and approval. The policy on dealing with Related Party Transactions as approved by the Board can be accessed at http://www.vsttractors.com/investors/policies.

The Related Party Transaction details including the transaction(s) of the Company with a person/entity belonging to the promoter/promoter group which hold(s) more than 10% shareholding in the Company as required pursuant to para A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the notes to the financial statements provided in this Annual Report. Please refer the details in Annexure -6 for AOC-2 Form.


There are no material changes and commitments affecting the financial position of the company which have occurred between end of the financial year of the company to which the financial statements relate and the date of the report;


The Company has risk management policy. The risk pertaining to business of the Company is discussed at the Risk Management Committee, Audit Committee and at the Board Meetings on regular basis.

There are no risks which in the opinion of the Board threaten the existence of the Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms a part of this report.


Mr. M.K. Bannerjee, Chairman, Mr. V. K. Surendra, Member, Mr. K.M. Pai, Member, Mr. V.P. Mahendra, Member. Mr. V S Arun, Member (appointed on 17th March 2020)

The Risk Management Policy as approved by the Board is uploaded on the Companys website http://www.vsttractors.

com/investors/policies During the year under review the committee met on 27/09/2019, 18/12/2019 & 17/03/2020 attended by all the members.


The Company has formed CSR policy and Committee details as required by the Act are available in Company website i.e. http://www.vsttractors.com/ investors/policies. The Company has spent RS. 4.58 Crores out of the previous years unspent amount, in CSR activities during the financial year 2019-20.


The Board works with the nomination and remuneration committee to lay down the evaluation criteria for the performance of executive/non-executive/independent directors through a peer-evaluation excluding the director being evaluated. The evaluation of Board, Committees and Individual Directors was conducted on June 2019. Further evaluation was not conducted due to COVID -19 situation and same will be completed during this financial year.

There is no change in nature of the business during the year. Details of subsidiary, Associate or joint Venture Company.

The company has no subsidiary company.


There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

The ratio of the remuneration of each Director and KMP to the median remuneration of the employees of the company for the financial year as follows:

Name Designation Remuneration 2019-20 (in Rs.) Remuneration 2018-19 (in Rs.) Increase / Decrease in Remuneration (in Rs.) Increase / Decrease in Remuneration (%) Ratio/Times per Median of employee remuneration
1 Mr. V.P Mahendra Vice Chairman & Managing Director 88,50,000 1,04,33,291.00 (15,83,291) -15% 21.06
2 Mr. V.T. Ravindra Executive Director 63,00,000 58,23,643.00 4,76,357 8% 15.00
3 * Mr. Antony Cherukara CEO 1,13,12,000 - - - 26.92
4 *Mr. P M Keshava CFO 15,87,941 53,23,555.00 (37,35,614) -70% 3.78
5 **Mr. Mahadevan GV CFO 37,54,952 - - - 8.93
6 Mr. Chinmaya Khatua Company Secretary 19,28,450 19,25,808.00 2,642 0.13% 4.59
7 Mr. V K Surendra Chairman 8,00,000 5,10,000 2,90,000 56% 1.90
8 Mr. R. Subramanian Director 5,50,000 5,80,000 (30,000) -5% 1.30
9 Mr. M.K. Bannerjee Director 11,50,000 8,50,000 3,00,000 35% 2.73
10 Mr. K M Pai Director 10,50,000 14,10,000 (3,60,000) -25% 2.49
11 Ms. Siva Kameswari Vissa Director 4,00,000 4,80,000 (80,000) -16% 0.95
12 Mr. B. Jagannath Director 2,50,000 1,00,000 1,50,000 150% 0.59
13 Mr. V V Pravindra Director 3,50,000 1,80,000 1,70,000 94% 0.83
14 Mr. V S Arun Director 2,00,000 1,50,000 50,000 33% 0.47


* Mr. Antony Cherukara was appointed as CEO w.e.f. 25th April 2019 *Mr. P M Keshava retired as CFO w.e.f. 31st August 2019

**Mr. Mahadevan GV was appointed as CFO w.e.f. 9th August 2019 and resigned on 15th June 2020. Non-Executive directors get sitting fees only and same has been shown for comparison.

The Companys PAT has decreased from RS. 4,552 lakhs to RS. 1825 lakhs. The marginal increase in KMP remuneration is in line with the current market scenario and with Companys policy. However, salaries of Vice Chairman & Managing Director and Executive Director were approved by the shareholders.

The Company has given about 6.5% average increase in salaries to the employees keeping in view the overall industry standard and interest of the employees. The unionized employees of the Company are eligible for salary increment as per the terms and conditions of their wage settlement. There is no exceptional circumstances of increase in the managerial remuneration.

The Company has 758 Nos permanent employees on roll as on 31st March 2020. The Company fixes salary of the employees on the basis of Remuneration Policy of the Company. The average increase in median remuneration of employees during the year 2019-20 is 7%.

Payment of Commission to Managing Director and Whole time Director - The Managing Director and whole time director are being paid commission on net profit of the Company as approved by the shareholders.

Name Designation Commission
V.P. Mahendra Vice Chairman & Managing Director One percent on the net profit of the Company subject to a maximum of one and half times of annual basic salary drawn
V T Ravindra Executive Director One percent on the net profit of the Company subject to a maximum of one and half times of annual basic salary drawn

Mr Antony Cherukara, CEO received remuneration in excess of the highest paid director during the year considering his salary for the full year, the details are given in Page No.31.


Date Paid up Capital (in Rs.) Closing Market Price per share EPS PE Ratio Market Capitalisation (Rs. in crore)
31.03.2019 86395280 1314.20 53.32 24.70 1135
31.03.2020 86395280 672.05 20.83 32.26 580
Increase/Decrease NIL -642.15 -32.49 7.56 555
% Increase/Decrease NIL -48.86 -60.93 30.60 49
No of issue of shares during the year - - - - -

Internal Complaint Committee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has formed Internal Complaint Committee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and no complaint was received during the year 2019-20.


No disclosure or reporting is required with respect to the following items, as there were no transactions during the year under review:

• The issue of equity shares with differential rights as to dividend,voting or otherwise.

• The issue of shares to the employees of the company under any scheme (sweat equity or stock options). There is no change in the Share Capital Structure during the year under review.

• The company does not have any scheme or provision of money for the purchase of its own shares by employees or by trustees for the benefits of employees.

Extract of Annual Return

Annual Return of the Company is available in Company website i.e. www.vsttractors.com, extract of Annual Return is annexed herewith as Annexure 5 to this report.

Secretarial Standards:

The Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) have been duly complied by the Company.

Investor Education And Protection Fund

Company has transferred RS. 5,64,444/- unpaid and unclaimed dividend to Investor Education and Protection Fund and 3812 Nos of shares to IEPF Authority as per IEPF Rules. As per said rule, any benefits such as dividend shall be transferred to IEPF with respect to shares transferred to IEPF and accordingly dividend of the corresponding shares transferred to IEPF, has also been transferred to IEPF. The details of such Dividends and shares are available in Company website at www. vsttractors.com. Mr. Chinmaya Khatua has been appointed as nodal officer under IEPF Rule.

The details of unclaimed dividends as on 31/03/2020 is given below:

S.No Financial Year Unclaimed Dividend Amount (in Rs.) No of corresponding Shares Due date of Transfer to IEPF
1 2012-13 764703.00 85502.00 14/09/2020
2 2013-14 1,139,340.00 75956.00 14/09/2021
3 2014-15 1,038,510.00 69234.00 11/09/2022
4 2015-16 1,016,295.00 67753.00 28/04/2023
5 2016-17 1,124,835.00 74989.00 11/09/2024
6 2017-18 2,374,550.00 47491.00 11/09/2025
7 2018-19 772,665.00 51511.00 12/09/2026

Details of Nodal officer:

Name- Mr. Chinmaya Khatua, Company Secretary Email- investors@vsttractors.com Phone No- 080-67141111

The above details are available in Company website: www.vsttractors.com


The Directors wish to convey their gratitude for the faith reposed in your Company by employees, dealers, vendors, Bankers and the customers at large.

Place: Bengaluru V. K.Surendra
Date : 11th August 2020 Chairman