Virgo Polymers (India) Ltd.
|BSE: 531282||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE464H01015|
|BSE 05:30 | 01 Jan||Virgo Polymers (India) Ltd|
|NSE 05:30 | 01 Jan||Virgo Polymers (India) Ltd|
|BSE: 531282||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE464H01015|
|BSE 05:30 | 01 Jan||Virgo Polymers (India) Ltd|
|NSE 05:30 | 01 Jan||Virgo Polymers (India) Ltd|
Your Directors have pleasure in presenting 31stAnnual Report of your Company togetherwith the Audited Statement of Accounts and the Auditors' Report for the Financial Yearended 31st March 2017. The summarized financial results for the Financial Year are asunder:
PERFORMANCE AND STATE OF COMPANY'S AFFAIRS OF THE COMPANY
During the year under review the Company has earned net profit of Rs.31.07 lakh asagainst profit of Rs 32.84 lakh in the previous year.
The company Manufacture an extensive range of FIBC (Jumbo bags big bags bulk sacks)in various designs and sizes. FIBC is one of the most cost effective and ideal type ofpackaging solutions for transportation and storage of goods. These bags are made ofpolypropylene fabric. The order book position is comfortable since the company was tie uplong term contracts with the customers. The company is working at its market front sincethe supply of the companies product has increased compared to the previous year.
Considering the current insufficient profits the Board of Directors is notrecommending any dividend for the year 2016-2017.
TRANSFER OF PROFIT TO RESERVES
During the year your company has transferred the profit of Rs 31.07 lakhs to thereserve account.
MATERIAL CHANGES AND COMMITMENTS OF THE COMPANY
There were no material changes and commitments affecting the financial position of theCompany between the end of financial year (March 312017) and the date of the Report andthere is no significant and material orders passed by the regulators or courts or tributeimpacting the going concern status and company's operations in future.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS U/S186:
The Company has not given any loan guarantee and investment under section 186 of theact during the year 2016-17 to any person / body corporate
SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES
The Company doesn't have any subsidiaries associates and joint venture companies
THE CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The details of conservation of energy technology absorption foreign exchange earningsand outgo as required under section 134 (3) (m) of the Companies Act 2013 are attached asAnnexure -1:
DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL (KMPs)
Board Composition and Independent Directors
The Board consists of three Executive Director and three Independent Directors.
Independent Directors are appointed for a term of five years and are not liable toretire by rotation.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(b) of the SEBI Listing Regulations.
Retirement by Rotation
Pursuant to Section 152 of the Companies Act 2013 Mr. VivekRamsisaria who retire byrotation at the forthcoming AGM and is eligible for re-appointment.
Key Managerial Personnel
The Company is in the process of appointing Key Managerial Personnel as required by theprovisions of Section 203 of the Companies Act 2013.
DECLARATION OF INDEPENDENT DIRECTORS
As per the Companies Act 2013 your company had appointed three independent directorsand they have declared that they meet the criteria of independence in terms of Section149(6) of the Companies Act 2013 and that there is no change in their status ofIndependence.
POLICY OF DIRECTORS APPOINTMENT AND REMUNERATION
Directors' appointment and remuneration including criteria for determiningqualifications positive attributes independence of a director and other matters providedunder section 178 of the Act are covered under the Board's policy formulated by theCompany.
INFORMATION U/s 197(12) OF THE COMPANIES ACT 2013
The information required under section 197 (12) of the Act read with rule 5(1) of theCompanies ( Appointment and Remuneration of Managerial Personnel ) Rules 2014 is attachedherewith as Annexure-2.
The Companies Act 2013 ('the Act') was notified effective April 12014.Section 139 ofthe Act lays down the criteria for appointment and mandatory rotation of statutoryauditors. Pursuant to section 139 of the Act and rules made thereunder it is mandatory torotate the statutory auditors on completion of two terms of five consecutive years. Therules also lay down the transitional period that can be served by the existing
auditors depending on the number of consecutive years for which an audit firm has beenfunctioning as auditor in the same company. The incumbent auditors Venkat & RangaaChartered Accountants (Firm registration number:4597s) have served the company for over 10years before the Act was notified and will be completing the maximum number oftransitional period (three years) at the ensuing 32nd AGM.
The Audit committee of the company has proposed and The Board has recommended theappointment of M/s.Parthasarathy Sankaran & Associates Chartered Accountants ( Firmregistration number:09258s) as statutory auditors of the company. Necessary resolution isbeing placed before the shareholder for their approval.
COMMENT ON STATUTORY AUDITOR REPORT
Statutory Auditor of the company has given an unmodified report without anyqualification or observation.
Pursuant to the requirements of Section 204(1) of the Companies Act 2013 and Rule 9 ofthe Companies ( Appointment and Remuneration of Managerial Personnel ) Rule 2014 thecompany has appointed Mrs Lakshmmi Subramanain & Associates Practicing CompanySecretaries to conduct the secretarial audit for the financial year2016-17.The SecretarialAudit report as received from the secretarial auditor is annexed to this report as Annexure-3
COMMENT ON SECRETARIAL AUDIRTOR REPORT
With reference to the remarks made by the secretarial auditor Mr. P.S.SrinivasanPracticing Company Secretary in his secretarial audit report the company has taken thecorrective measures during the currentfinancial year.
INTERNAL CONTROL AND ITS ADEQUACY
The Company has in all material respects an adequate internal financial controlsystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control. The internal auditors of the Company regularly conductaudit and submit his quarterly reports which are reviewed by the Audit Committee. TheCompany has an adequate Internal Control system commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAuditor reports to the Chairman of the Audit Committee of the Board. During the year suchcontrols were tested and no reportable material weaknesses in the design or operation wereobserved.
RELATED PARTY TRANSACTIONS U/S188 (1)
During the year 2016-17 the Company had not entered into any material transaction withrelated parties as per section 188 of the Companies Act 2013. Hence the question ofreporting underthe requirementof said section does notarise.
EXTRACT OF THE ANNUAL RETURN:
The details forming part of the extracts of Annual Return in form MGT-9 as providedunder sub-section (3) of section 92 of the Companies Act is annexed herewith as Annexure-4tothis report.
RISK MANAGEMENT POLICY
Your Company has an established Enterprise Risk Management function that engages withall the business verticals for risk assessment ensures that the risk mitigation plans arein place and validates the risk mitigation status regularly. Action plans are incorporatedinto the corporate plans of your company. The steering committee consisting of coreBusiness vertical Heads overseas the Risk Management process including riskidentification impact assessment effective implementation of the mitigation plans andrisk reporting The Committee reviews on a quarterly basis the enterprise risks to theachievement of the business objectives. The steering Committee updates the Risk Managementcommittee comprising of independent directors and non-executive director on the enterpriserisks and the action taken thereon
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
Your Company has always believed in providing a safe and harassment free workplace forevery individual working in the Company through various interventions and practices. TheCompany always endeavors to create and provide an environment that is free fromdiscrimination and harassment including sexual harassment.
The Company aims at prevention of harassment of employees and lays down the guidelinesfor identification reporting and prevention of undesired behavior. The Board of Directorsare responsible for redressal of complaints related to sexual harassment During the yearended 31 March 2017 the Board did not receive any complaints pertaining to sexualharassment.
DEPOSIT FROM PUBLIC
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on date of the balancesheet.
CORPORATE GOVERNANCE REPORT
Since your company's paid up equity capital and Net worth is less than Rs.10 Crores andRs.25 Corers respectively the provisions of clause 27 of the SEBI LODR.2015 relating toCorporate Governance vide SEBI circular dated CIR/CFD/POLICY CELL/7 is not applicable tothe Company.
BOARD MEETINGS HELD DURING THE YEAR
The Board met 4 (Four) times during the financial year and the intervening gap betweenthe Meetings was within the period prescribed underthe Companies Act 2013.
ANNUAL BOARD EVALUATION
Pursuant to the provisions ofthe Companies Act 2013 and in terms of Regulation 17(10)of the SEBI Listing Regulations the Board has carried out an annual performanceevaluation of its own performance the directors individually as well as the evaluation ofthe working of the Audit and the Nomination and Remuneration Committees.
PERFORMANCE EVALUATION OF BOARD COMMITTEE AND DIRECTORS
Pursuant to the provisions ofthe Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation ofthe working ofthe Audit and Nomination & Remuneration Committeesand the same was based on questionnaire and feedback from all the Directors on the Boardas a whole Committees and self-evaluation.
Astructured questionnaire was prepared after taking into consideration ofthe inputsreceived from the Directors covering various aspects of the Board's functioning such asadequacy of the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance. A separate exercise wascarried out to evaluate the performance of individual Directors including the Chairmanofthe Board who were evaluated on parameters such as level of engagement andcontribution independence of judgment safeguarding the interests ofthe Company and itsminority shareholders etc.
The performance evaluation of the Independent Directors was carried out by the entireBoard. The performance evaluation of the Chairman of the Board and the Executive Directorswas carried out by the Independent Directors.
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT
The Board of Directors had adopted a Code of Conduct for the Board Members andemployees ofthe company. This code helps the Company to maintain the standard of businessethics and ensure compliance with the legal requirements of the company
The code is aimed at preventing any wrongdoing and promoting ethical conduct at theBoard and employees. The Compliance officer is responsible to ensure adherence to the Codeby all concerned
The code lays down the standard of conduct which is expected to be followed by theDirectors and the designated employees in their business dealings and in particular onmatters relating to integrity in the work place in business practices and in dealing withstakeholders
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code
WHISTLE BLOWER POLICY/VIGIL MECHANISM
Pursuant to section 177(9) of the Companies Act 2013 read with Rule 7 of the Companies( Meetings of Board and its Powers ) Rules2014 and clause 49 ofthe Listing Agreement theBoard of Directors had approved the policy on vigil mechanism / whistle blower and thesame was hosted on the website of the Company. The policy inter-alia provides a directaccess to the Chairman of the Audit Committee.
Your Company hereby affirms that no Director/employee has been denied access to theChairman of the Audit Committee and that no complaints were received during the year
The Board had constituted the following committees Viz Audit Committee Nomination andRemuneration Committee and Stakeholders' Relationship Committee
CORPORATE SOCIAL RESPONSIBILITY(CSR)
Your company is not having profits more than Rs. 5 crores in the year 2016-17 andtherefore Constituting of a CSR Committee and its compliance in accordance with theprovisions of Section 135 of the Act does notarise.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/ TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
During the year there were no such instances of significant and material orders passedby the regulators courts ortribunals.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT Industry structure and Developments
Presently the company is manufactureing an extensive range of FIBC ( Jumbo bags bigbags bulk sacks ) in various designs and sizes. FIBC is one of the most cost effectiveand ideal type of packaging solutions for transportation and storage of goods. These bagsare made of polypropylene fabric.
Opportunities and Threats
Our company project has resulted in high quality output which has resulted to tie uplong term contracts with the customers. Our main concern is continuous competition fromother manufacturers in the same line of production
Segment wise performance
The performance ofthe products ofthe company namely FIBC ( Jumbo bags big bags bulksacks) in various designs and sizes which are made up of polypropylene fabric aresatisfactory and the only problem faced by the company is power interruption andpowerfailure which are beyond control.
Risks and Concerns:
Our main concern is continuous competition from other manufacturers in the same lienof production by reducing the price in the market due to which the company has to reducethe price to retain its share in the market.
Internal control system and their adequacy
The company maintains its adequate internal controls to have efficient operations. Alsothe company maintains all statutory rules regulations laws as applicable from time totime and protection of resources and assets.
Financial performance with respect to operational performance
Summary of statement of profit and loss account is given below
Your company net revenue increased by 11.08% due to increase of sales while comparingthe previous year and other income has decreased by 55.9%
Raw Material consumption decreased by 14.57% due to reduction of inventory. Purchase ofstock in trade increased by 22.20%
Change in inventories decreased by 111.92% due to change in the production cycle
Manufacturing expenses increased by 35.96% due to cost increase of inputs
Employees benefit expenses increased by 36.74% due to salary increase to existingemployees and new recruitment of staffs.
Depreciation cost increased by 13.75% due to Change of Accounting policy as per theCompanies Act 2013.
Finance cost reduced by 20.88%.
Other expenses increased by 21.42% due to cost increase of other overheads.
Total expenses increased by 6.20%.which is reasonable while comparing the productionand cost escalation of variable inputs.
Material developments in human resources / Industrial relations front:
Training on all sectors are given to its employees periodically and motivated to workinline with the development of the Industry. The willingness and commitment of theemployees help the company to stand tall among its customer in quality and service. Thecompany has the total employee strength of 151.
Listing with Stock Exchange
The shares of the company are listed in the Bombay Stock Exchange. The trading of theshares of the company had been suspended w.e.f. 31.05.1999 due to non compliance ofcertain clauses of the erstwhile listing agreement. At present the company has compliedwith all the clauses of SEBI (LODR) Regulation2015. Further the company has filedrevocation application before the Bombay Stock Exchange which is pending. Your directorsare hopeful of revocation the suspension.
DIRECTORS' RESPONSIBILITY STATEMENT:
As required under Section 134 (5) of the Companies Act 2013 the Board of Directorshereby confirm:-
(i) That in the preparation of the Annual Accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
(ii) That the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of the affairs of the Company at the end of theFinancial Year and of the profit of the Company for that period;
(iii) That the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) That the Directors had prepared the Annual Accounts on a going-concern basis;
(v) That proper internal financial controls were followed by the Company and that suchinternal financial controls are adequate and were operating effectively.
(vi) That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Your Directors would like to express their sincere appreciation of the co-operation andassistance received from the business constituents during the year under review.
Details relating to Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo:
(A) Conservation of energy
(i) Introduction of efficient lighting system and special capacitor banks forimprovement of power factor
(ii) Improvements in operating efficiency and reduction of losses at workers level
(iv) Capital investment on energy conservation equipments: NIL
(B) Technology absorption
(i) The efforts made towards technology absorption: NIL
(II) Benefits derived Production improvement: NIL Cost Reduction: NIL
(III) Imported Technology; NIL
(iv) Expenditure Incurred on Research and Development; NIL
(C) Foreign exchange earnings and outgo:
The information undersection 197 of the Companies Act 2013 read with Rule 5(1)of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
a) The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year
b) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year
e) Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the Managerial remuneration:
There is no significant change in the average percentile increase in the remunerationpayable to Employees and Managerial Personnel
f) Affirmation that the remuneration is as per the remuneration policy of the Company:
The company affirms the remuneration is as per the remuneration policy of the company
g) None ofthe other employee is in receipt of remuneration exceeding 500000/- p.m or6000000 /- p.a as prescribed under sub rule 2 of the Rule 5 of Companies (Appointment& Remuneration) Rules 2014