To the Members
Vipul Organics Limited
(Formerly known as Vipul Dyechem Limited)
Your Directors have great pleasure in presenting Annual Report of your Companycomprising the Audited Financial Statements for the year ended 31st March 2016.
(Rs. in Lacs)
|Sr. No. ||Particulars ||Current Year ended 31st March 2016 ||Previous Year ended 31st March 2015 |
|1. ||Total revenue ||5249.40 ||5248.47 |
|2. ||Less: Expenditure except Finance Cost & Depreciation ||4965.82 ||4998.11 |
|3. ||Profit before Finance Cost Depreciation & Tax ||283.58 ||250.36 |
| ||Less: Finance Cost ||66.21 ||66.70 |
| ||Less: Depreciation ||87.08 ||66.73 |
|4. ||Profit before tax ||130.29 ||116.93 |
| ||Less: Provision for Tax ||40.85 ||37.92 |
|5. ||Profit After Tax ||89.44 ||79.01 |
|6. ||Balance brought forward from previous year ||292.46 ||271.32 |
|7. ||Profit available for appropriation ||381.89 ||350.32 |
|8. ||Less: Tax Adjustments ||1.39 ||5.39 |
|9. ||Less: Proposed Dividend ||43.80 ||43.80 |
|10. ||Less: Tax on Dividend ||8.52 ||7.96 |
|11. ||Surplus carried to Balance Sheet ||330.97 ||292.46 |
RESULTS OF OPERATIONS:
During the year under review the Company has registered a sale of Rs. 5249.40 Lacs(previous year Rs. 5248.47 Lacs) and Net Profit after Tax of Rs. 89.44 Lacs (previousyear Rs. 79.01 Lacs).
CHANGE OF NAME OF THE COMPANY:
Pursuant to the shareholders' approval obtained at the Extra Ordinary General Meetingheld on 13th June 2016 the name of the Company is changed from Vipul DyechemLimited to Vipul Organics Limited w.e.f. 19th July 2016.
There was no change in the share capital of the Company during the year. As on 31stMarch2016 the paid up share capital of the Company stood at Rs. 54745000/- (RupeesFive Crores Forty Seven Lacs Forty Five Thousand Only) divided into 5474500 EquityShares of Rs. 10/- (Rupees Ten) each.
Pursuant to the shareholders' approval obtained at the Extra Ordinary General Meetingheld on 13th June 2016 on 6th July 2016 the Company has issued and allotted 2250000warrants for cash at an issue price of Rs. 40/- (Rupees Forty only) each (includingpremium of Rs. 30/- (Rupees Thirty only) each) on preferential basis to the promoters andothers carrying an option / entitlement to subscribe to equivalent number of EquityShares of Rs. 10/- (Rupees Ten) each within a period of 18 months from the date of theirissue.
The Company's overall performance during the year under review was satisfactory. YourDirectors have pleasure in recommending payment of dividend of Re. 0.80/- (8%) per shareof Rs. 10/- each on the Company's Share Capital (previous year Re. 0.80/- (8%) per share).This will absorb total cash outflow of Rs. 52.32 Lacs (previous year Rs. 51.76 Lacs)including Corporate Dividend Distribution Tax of Rs. 8.52 Lacs (previous year Rs. 7.96Lacs).
DIRECTORS AND KEY MANAGARIAL
In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management & Administration) Rules 2014 and Articles of Association of theCompany Mr. Pravinchandra B. Shah Chairman& Non-Executive Director of the Companyretires by rotation at the ensuing Annual General Meeting and being eligible has offeredhimself for re-appointment.
The Board of Directors of the Company in its meeting held on 12th February2016re-appointed Dr. Shiv Nath Sahai as Whole Time Director of the Company (designated asWhole Time Director & CFO) of the Company for a further period of one year w.e.f. 1stApril 2016 to 31st March 2017subject to the approval of shareholders. However Dr. ShivNath Sahai resigned from the directorship of the Company w.e.f. closing hours of 2nd May2016 due to his personal reasons. Furthermore considering the long association and vastexperience of Dr. Shiv Nath Sahai the Board of Directors of the Company again appointedDr. Shiv Nath Sahai as Whole Time Director of the Company (designated as Whole TimeDirector & CFO) for a period from 1st October 2016 to 30th September 2017 subjectto the approval of shareholders. The Company has received a notice along with requisitedeposit from a member of the Company under Section 160 of the Companies Act 2013proposing his candidature for the office of Director of the Company. Your Board recommendsfor his appointment.
Further the Board of Directors of the Company re-appointed Mr. Vipul P. Shah asManaging Director of the Company for a further period of three year w.e.f. 15th June 2016to 14th June2019 subject to the approval of shareholders. Your Board recommends for hisre-appointment.
As stipulated under the Regulation 36(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 brief resume of the Directors proposed to beappointed/re-appointed are given in the Notice convening Annual General Meeting.
Mr. Nilesh Dubey was appointed as Company Secretary and Compliance Officer of theCompany w.e.f. 16th December 2015 and he resigned w.e.f. 24th December 2015.
Ms. Mitali Shah was appointed as Company Secretary and Compliance Officer of theCompany w.e.f. 12th February 2016.
DECLARATION FROM INDEPENDENT DIRECTORS:
The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under Section149(6) of the Companies Act 2013 and Regulation 16 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateon the date of this report except issue and allotment of 2250000 warrants for cash atan issue price of Rs. 40/- (Rupees Forty only) each (including premium of Rs. 30/- (RupeesThirty only) each) on preferential basis to the promoters and others carrying an option /entitlement to subscribe to equivalent number of Equity Shares of Rs. 10/- (Rupees Ten)each within a period of 18 months from the date of their issue.
During the year under review the Company has not accepted any deposits within themeaning of Section 73 and 76 of the Companies Act 2013 read with Companies (Acceptance ofDeposits) Rules 2014.
EXTRACT OF ANNUAL RETURN:
An extract of Annual Return in Form MGT 9 is appended to this Report as Annexure I.
MEETINGS OF THE BOARD:
The Board meets at regular intervals to discuss and decide on Company's businesspolicies and strategies. A tentative annual calendar of the Board and Committee Meetingsis informed to the Directors in advance to facilitate them to plan their schedule and toensure meaningful participation in the meetings.
The notice of Board meeting is given well in advance to all the Directors of theCompany. Meetings of the Board are held in Mumbai Maharashtra. The agenda of the Board /Committee meetings is circulated 7 days prior to the date of the meeting. The agenda forthe Board and Committee meetings includes detailed notes on the items to be discussed atthe meeting to enable the Directors to take an informed decision.
The Board met six times during year as per details given in the Report on CorporateGovernance. The intervening gap between the two consecutive meetings was within the periodprescribed under the Companies Act 2013.
AUDIT COMMITTEE AND ITS COMPOSITION:
The Audit Committee of the Company reviews the reports to be submitted with the Boardof Directors with respect to auditing and accounting matters. It also supervises theCompany's internal control and financial reporting process.
As on 31st March 2016 the Audit Committee comprised of Mr. Prasannakumar B. GawdeMr. Jagdeep Y. Mehta Independent Directors and Mr. Vipul P. Shah Managing Director ofthe Company.
Mr. Prasannakumar B. Gawde is the Chairman of Audit Committee of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT:
Your Directors to the best of their knowledge and belief and according to theinformation and explanations obtained by them and as required under Section 134(3)(c) ofthe Companies Act 2013 state that:
a. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
b. the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year 31stMarch2016 and of the profit of the Company for that period;
c. the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. the directors have prepared the annual accounts on a going concern basis;
e. the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management anddetermination of salary of Directors Senior Management Personnel and any other employeesof the Company. The Remuneration Policy is stated in the Report on Corporate Governance.
RISKS AND AREAS OF CONCERN:
The Company has laid down a well-defined Risk Management Policy covering the riskmapping trend analysis risk exposure potential impact and risk mitigation process. Adetailed exercise is being carried out to identify evaluate manage and monitoring ofboth business and non-business risk. The Board periodically reviews the risks and suggestssteps to be taken to control and mitigate the same through a properly defined framework.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION188(1) OF THE COMPANIES ACT 2013:
All related party transactions entered during the year were in ordinary course of thebusiness and on arm's length basis. No Material Related Party Transaction were enteredduring the year by your Company. Accordingly the disclosure of Related Party Transactionsas required under Section 134(3) of the Companies Act 2013 in Form AOC-2 is notapplicable.
particulars OF loans GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The details of loans guarantee or investment made by your Company under Section 186 ofthe Companies Act 2013 during the financial year 2015-16 are given under Notes toAccounts on Financial Statements.
ANNUAL PERFORMANCE EVALUATION BY THE BOARD:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has adopted a Policy for evaluationof the performance of the Directors Key Managerial Personnel and Senior ManagementPersonnel. Based on the consideration of various parameters gathered from all Directorsthe performance of the Board and individual Directors is evaluated. Besides the Board hasalso developed a system to evaluate the performances of each of executive non-executiveand Independent Directors. Such questions are prepared considering the business of theCompany and the expectations that the Board have from each of the Directors and the valueaddition provided by them.
The Policy inter alia provides the criteria for performance evaluation ofDirectors consisting of:
i. Attendance of the directors at the Meetings and the quality of contribution at Boardand it's Committee/s meetings;
ii. Participation of such director in the company's business and attribution to thestrategic plans of the Management;
iii. Relationship with other Board members and other officials of the SeniorManagement;
iv. Sharing of knowledge and experience for the benefit of the Company.
During the year under review a separate meeting of the Independent Directors was heldfor evaluation of performance of nonindependent directors performance of the Board as awhole and performance of the Chairman.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
There was no order passed by any regulator or court or tribunal which impacts thegoing concern status of the Company or will have bearing on company's operations infuture.
WHISTLE BLOWER POLICY:
The Company has a Vigil Mechanism / Whistle Blower Policy to deal with instance offraud and mismanagement if any. The mechanism also provides for adequate safeguardsagainst victimization of directors and employees who avail of the mechanism and alsoprovide for direct access to the Chairman of the Audit Committee in the exceptional cases.The details of the Vigil Mechanism Policy is explained in the Report on CorporateGovernance and also posted on the website of the Company. We affirm that during thefinancial year 2015-16 no employee or director was denied access to the Audit Committee.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has in place proper and adequate internal control systems commensurate withthe nature of its business size and complexity of its business operations. Internalcontrol systems comprising of policies and procedures are designed to ensure reliabilityof financial reporting compliance with policies procedures applicable laws andregulations and that all assets and resources are acquired economically used efficientlyand adequately protected.
Pursuant to the provisions of Section 204 of the Companies Act 2013 the SecretarialAudit Report received from M/s. Manish Ghia & Associates Practising CompanySecretaries Mumbai is appended as Annexure - II and forms part of this report.
In respect to the Secretarial Auditors' remarks in their report the Company would liketo state as under:
(a) As required under Section 203 of the Companies Act 2013 the Company was lookingfor a suitable candidate for appointment as Company Secretary & Compliance Officer andhas appointed the same on 16th December 2015.
(b) Mr. Arvind Patel did not intimate his Director Identification Number to theCompany due to which the company was not able to file the form DIR-12 in respect of hiscessation from the directorship of the Company effective from 1st April 2015 underSection 167(1)(b) of the Company Act 2013.
(c) Disclosures as required under Clause 32 of the Listing Agreement in the AnnualReport for the financial year 2014-15 was inadvertently missed out by the Company.
The Company has appointed M/s. Amit Desai & Associates Chartered AccountantsMumbai as its Internal Auditor. The internal Auditor monitors and evaluates theeffectiveness and adequacy of internal control system in the Company its compliances withoperating systems accounting procedure and policies at all locations of the Company andreports the same on quarterly basis to the Audit Committee.
INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has zero tolerance for sexual harassment at workplace and adopted a Policyon Prevention Prohibition and Redressal of sexual harassment at workplace in line withthe provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules thereunder. There was no complaint on sexual harassmentduring the year under review.
Shree Ambika Naturals Private Limited is a subsidiary of the Company.
Pursuant to the provision of Section 129(3) of the Companies Act 2013 a statementcontaining the salient features of the financial statements of subsidiary in Form AOC 1 isannexed as Annexure III.
The statement also provides the details of performance financial position of thesubsidiary.
The Company does not have any joint venture and associate company.
CONSOLIDATED FINANCIAL STATEMENTS:
As required under Section 129(3) of the Companies Act 2013 the Company has preparedconsolidated financial statements of the Company and its subsidiary which form part ofthe Annual Report.
REPORT ON CORPORATE GOVERNANCE:
Pursuant to Regulation 34(3) and Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the following have been made a part of theAnnual Report and are attached to this report:
Management Discussion and Analysis
Report on Corporate Governance
Auditors' Certificate regarding compliance with conditions of CorporateGovernance
PARTICULARS OF REMUNERATION:
Details as required under Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial personnel) Rules 2014are appended to this report as Annexure IV.
M/s. J. A. Rajani & Co. Chartered Accountants (FRN: 108331W) Mumbai theStatutory Auditors of your Company hold office as such upto the conclusion of the ensuingAnnual General Meeting and are eligible for re-appointment. The Company has received aletter from them to the effect that they are willing to continue as Statutory Auditors andif re-appointed their re-appointment would be within the limits prescribed under Section139 of the Companies Act 2013 and they are not disqualified from being appointed asAuditor.
Your Directors recommend the re-appointment of M/s. J. A. Rajani & Co. CharteredAccountants Mumbai as Statutory Auditors of the Company to hold office from theconclusion of the ensuing Annual General Meeting upto the conclusion of next AnnualGeneral Meeting of the Company and to audit financial statements for the financial year2016-17.
The observation made by the Auditors' in their Report on the Standalone FinancialStatement is self-explanatory and need not any further comments. There is no observationqualification or adverse remark in Auditors' Report on Consolidated Financial Statements.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
Details regarding Conservation of energy technology absorption foreign exchangeearnings and outgo is given as in Annexure V.
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the Financial Institution Banks Government AuthoritiesVendors and Shareholders and all organizations connected with its business during the yearunder review. Your Directors also wish to place on record their deep sense of appreciationfor the committed services of executives staff and workers of the Company.
| ||For and on behalf of the Board of Directors |
|Place: Mumbai ||Pravinchandra B. Shah |
|Date: 25th July 2016 ||Chairman |
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014)
Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures
Part A: Subsidiaries
(Information in respect of each subsidiary to be presented with amounts in Rs.)
|Sl. No. ||Particulars ||Details |
|1. ||Name of the subsidiary ||Shree Ambika Naturals Private Limited |
|2. ||Reporting period for the subsidiary concerned if different from the holding company's reporting period. ||31st March 2016 |
|3. ||Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries ||Indian Rupees |
|4. ||Share capital ||10455000 |
|5. ||Reserves & surplus ||(2546148) |
|6. ||Total assets ||10010215 |
|7. ||Total Liabilities ||2101363 |
|8. ||Investments ||0 |
|9. ||Turnover ||9141400 |
|10. ||Profit before taxation ||741195 |
|11. ||Provision for taxation ||429597 |
|12. ||Profit after taxation ||311598 |
|13. ||Proposed Dividend ||Nil |
|14. ||% of shareholding ||56.04% of Equity Shares and 100% of 1.5% Non-cumulative Optionally Convertible Preference Shares |
1. Names of subsidiaries which are yet to commence operations: N.A.
2. Names of subsidiaries which have been liquidated or sold during the year: N.A.
Part B: Associates and Joint Ventures
Not Applicable as the Company does not have any Associate and Joint Venture
Details of the ratio of remuneration of each Director to the median employee'sremuneration.
|(i) ||The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year :- |
|Sr. no. ||Name of the Director ||Ratio of remuneration to the median remuneration of the employees |
|1 ||Mr. Vipul P Shah ||14.75 |
|2 ||Dr. S. N. Sahai ||2.50 |
|3 ||Ms. Mitali Shah (w.e.f. 12th February 2016) ||N.A. |
| || || |
|(ii) ||The percentage increase in remuneration of each director CFO CEO Company Secretary or Manager if any in the financial year |
|Sr. no. ||Name of the Director/CFO/Company Secretary ||% Increase over last F.Y. |
|1 ||Mr. Vipul P Shah ||8.27 |
|2 ||Dr. S. N. Sahai ||13.79 |
| || || |
|(iii) ||The percentage increase in the median remuneration of employees in the financial year ||10.17 |
|(iv) ||The number of permanent employees on the rolls of the company ||33 |
|(viii) ||Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration ||Average percentile increase in remuneration of employees is 7.98% and managerial personnel is 9.03%. |
|We hereby confirmed that the remuneration is as per the remuneration policy recommended by Nomination and Remuneration Committee of the Company and adopted by the company. |
Information as per Rule 5(2) of Chapter XIII the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
(i) Details of top ten employee drawing remuneration pursuant to the provisions ofRule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are as follows:
|Employees Name ||Designation ||Educational Qualifications ||Age(Years) ||Experience (In Years) ||Date of Employment ||Gross Remuneration Paid ||Previous Employment and Designation |
|Mr. Vipul Shah ||Managing Director ||BE.CHEM ||50 ||28 ||21st June 1992 ||3928800 ||- |
|Mr. K.S. Gavle ||Production Manager ||BSC ||65 ||42 ||9th February 1984 ||827500 ||Osnar Chem Pvt. Ltd as Manager |
|Mr.Rajesh Prajapati ||Senior Production Chemist ||BSC ||45 ||20 ||1st June 2014 ||762000 ||Bajaj Organics as Lab Chemist |
|Mr. Narendra Patel ||Production Manager ||BSC CHEM ||58 ||36 ||7th March2015 ||634335 ||Harish Chemicals as Production Chemist |
|Dr. S.N.Sahai ||Whole-Time Director ||Ph. D ||71 ||36 ||1st April 1983 ||660000 ||Amar Dyechem as General Manager |
|Ms. Dipti Mehta ||General Manager Procurement ||Graduate ||54 ||35 ||10th December 2010 ||610000 ||Jayshree Chemicals as Purchase Executive |
|Mr. Bharat Patel ||Production Chemist ||BSC CHEM ||57 ||37 ||25th November2012 ||578000 ||B. B. Chemicals as Chemist |
|Mr. Suresh Raghvan ||Lab Chemist ||BSC ||49 ||28 ||1st February 1995 ||466000 ||Jasani Color Chem Pvt Ltd. as Chemist |
|Ms. Renu Sharma ||Logistics Executive ||M.Com ||33 ||13 ||14th February2011 ||448000 ||Black Rose India Ltd as Senior Logistics Limited |
|Ms. Mita Shah ||Sales Executive ||B.Com ||48 ||7 ||1st July2013 ||430000 ||Ganesh Tiles & Marbles Industires as Executive |
1. All appointments are contractual and terminable by notice on either side.
2. Remuneration includes salary various allowances contribution to Provident Fund andtaxable value of perks.
3. (i) Mrs. Mita Shah is a wife of Mr. Vipul P Shah Managing Director of the Company.
(ii) None of the employees of the Company was drawing remuneration of Rs. 850000/-p.m. or Rs. 10200000/- p.a. or more during the year.
Date: 25th July 2016
STATEMENT OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGAND OUTGO PURSUANT TO THE PROVISIONS OF SECTION 134 OF THE COMPANIES ACT 2013 READ WITHTHE COMPANIES (ACCOUNTS) Rules 2014
As required under Section 134(3)(m) of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 the information relating to the foregoing matters is given asunder:
A. CONSERVATION OF ENERGY:
The Company is conscious about the energy conservation and has kept constantsupervision so as to avoid any leakage stripping etc. The power meters are alsoregularly checked. However the management wherever possible shall try to replacemachinery which is found defective by upto date innovated machinery even generating setsare provided and the Company started using diesel oil since last 10 years.
a) Your Company took many initiatives to reduce the electricity consumption throughproductivity increase. This financial year the electricity consumption when compared tosales/production is down by 8%.This shows the initiatives taken are effective.
b) Your Company has focused on productivity so that unit consumption per piece isreduced.
B. TECHNOLOGY ABSORPTION AND ADAPTATION:
The Company has not acquired any foreign technology so far as the technical know-how isconcerned. The technology for the Company's activities is available easily in India. Thequestion of absorption and adaptation does not arise.
The Company has no separate division as such of carrying out Research and Developmentsince the Company has been using so far the standardized methods of manufacturing Dyes andChemicals. However a small laboratory is in function for quality control. The Company hastherefore not spent any expenditure on Research and Development during the year underreview.
C. FOREIGN EXCHANGE INFLOW / OUTGO:
(Amount in Rs.)
|Particulars ||2015-16 ||2014-15 |
|Foreign Exchange earned ||438235354 ||469139540 |
|Foreign Exchange used ||31372510 ||44902668 |