Your Directors have pleasure in presenting you the 29th Directors Report on thebusiness and operations of your company for the financial year ended 31st March 2016.
(Rs in Lakhs)
|Particulars ||2015-16 ||2014-15 |
|TotalIncome ||2947.58 ||1873.60 |
|Profit before interest Depreciation and Tax ||460.01 ||375.31 |
|Interest ||46.57 ||51.40 |
|Depreciation ||335.40 ||304.64 |
|Provision forTaxation ||14.87 ||3.67 |
|Profit after interest Tax and depreciation ||63.17 ||15.59 |
|Deferred Tax provision ||(27.83) ||(30.68) |
|Balance brought for ward ||(479.02) ||(543.46) |
|Balance Carried to Balance Sheet ||(388.03) ||(479.02) |
RESULTS OF OPERATIONS:
Following are the results of operations for the financial year 2015-16
Consolidated Revenues: The total income of the Company for the FY 2015-16 comprisesoperating revenues of Rs. 2947.58 as against Rs.1873.60 Lakhs in FY 2014-15 Profits:Profit before Tax (PBT) stood at Rs. 78.04 lacs as against Rs. 19.27 Lacs for the previousyear. Profit after Tax (PAT) stood at Rs. 91.00 lacs as against Rs. 46.28 Lacs for theprevious year.
RESERVES AND SURPLUS
During the year the Company has transferred an amount of Rs. 91.00 Lakhs to Reservesand Surplus.
Your directors did not recommend any dividend on shares for this year.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is appended as Annexureto the Boards report
Material changes and commitments;
There are no material changes and commitments occurred between the end of the financialyear of the company and the date of the report affecting the financial position of thecompany
In accordance with the provisions of the Companies Act 2013 the Board has re-appointedMr. M Kalyan Ram as Whole Time Director and appionted Mr. A. Sankaranarayanan as WholeTime
Director of the company subject to approval of the shareholders in general meeting ofthe company. Brief resume of the Directors proposed to be reappointed nature of theirexpertise in specific functional areas directorships in other companies as stipulatedunder SEBI (Listing Obligatiosn and Disclosure Requirements ) Regulations 2015 areprovided in the report on corporate governance.
None of the Directors ceased to Director of the company during period under review.
Share Capital :
The paid up Equity Share capital of the company as on 31st March 2016 was 935.05 lacs.During the year the company had issued shares as detailed below.
|Particulars ||As at 31st March 2016 ||As at March 31 2015 |
|Equity Shares ||Number of Shares ||Rs. ||Number of Shares ||Rs |
|Share capital || || || || |
|(a) Authorised Equity ||15000000 ||150000000 ||15000000 ||150000000 |
|Shares of Rs.10/-each || || || || |
|b) issued Subscribed and fully paid up: ||9350520 ||93505200 ||9350520 ||93505200 |
|Equity Shares of Rs. 10/-each ||9350520 ||93505200 ||9350520 ||93505200 |
Reconciliation of Shares outstanding at the beginning and at the end of the reportingperiod:
|Particulars ||As at 31st March 2016 ||As at March 31 2015 |
|Equity Shares ||Number of Shares ||Rs. ||Number of Shares ||Rs |
|Shares outstanding at the beginning of the year ||9350520 ||93505200 ||9350520 ||93505200 |
|Add: issued and allotted during the year ||- ||- ||- ||- |
|Less: Shares bought back during the year ||- ||- ||- ||- |
|Shares outstanding at the end of the year ||9350520 ||93505200 ||9350520 ||93505200 |
ii) Terms/Rights and restrictions attached to the Equity Shares:
The Company has only one class of Equity Shares having a face value of Rs.10/-. EachShareholder is eligible for one vote per every share held.
iii) Details of Shareholders hodling more than 5% shares in the Company.
|Name of the Shareholder ||As on 31.03.2016 ||As on 31.03.2015 |
| ||No. of Shares ||No. of Shares |
|Northern Union Ltd ||1035000 ||1035000 |
|Max Cell Phone Communications India Pvt Ltd ||800000 ||800000 |
|Vira Systems Pvt Ltd ||1345000 ||1345000 |
|Iron Age India Limited ||600000 ||600000 |
|Iragavarapu Constructions Pvt Ltd ||600000 ||600000 |
|P.K.I Solutions Pvt Ltd ||600000 ||600000 |
|Every Wear Import and Export Pvt Ltd ||1350000 ||1350000 |
|Elite Class Asset Holdings Ltd ||1300000 ||1300000 |
Particulars of loans guarantees or investments
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
Internal control systems and their adequacy:
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Audit function reports to the Chairman of the Audit Committee of the Board &to the Chairman.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function process owners undertake corrective action in their respective areas andthereby strengthen the controls. Significant audit observations and recommendations alongwith corrective actions thereon are presented to the Audit Committee of the Board.
CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings / behaviours of any form and the Board has laid down thedirectives to counter such acts. The code laid down by the Board is known as "code ofbusiness conduct" which forms an Appendix to the Code. The Code has been posted onthe Company's website www.vivobio.com.
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. The Code gives guidance through examples on the expectedbehaviour from an employee in a given situation and the reporting structure.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code. All Management Staff were given appropriate training in this regard.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a vigil mechanism named Fraud and Risk Management Policy to deal withinstance of fraud and mismanagement if any.
In staying true to our values of Strength Performance and Passion and in line with ourvision of being one of the most respected companies in India the Company is committed tothe high standards of Corporate Governance and stakeholder responsibility.
The Company has a Fraud Risk and Management Policy to deal with instances of fraud andmismanagement if any. The FRM Policy ensures that strict confidentiality is maintainedwhilst dealing with concerns and also that no discrimination will be meted out to anyperson for a genuinely raised concern.
A high level Committee has been constituted which looks into the complaints raised. TheCommittee reports to the Audit Committee and the Board.
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.
All Board Directors and the designated employees have confirmed compliance with theCode.
DECLARATION BY INDEPENDENT DIRECTORS :
The company has received declarations from all the independent directors of the companyconfirming that they continue to meet the criteria of independence as prescribed undersubsection (6) of section 149 of the companies act 2013 and under Regulation 25 of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015
Mr. M. Kalyan Ram Whole Time Director Mr. Srinivasu Padala Chief Financial Officerand Challapalli Varun Kumar Company Secretary are the Key Managerial Personnel (KMP) ofthe Company in terms of the provisions of the Act.
FamiliarisationProgramme for Independent Directors
On their appointment Independent directors are familiarized about the Company'soperations and business. Interaction with the Business Heads and key executives of thecompany is also facilitated. Detailed Presentations on the business of each of theProcesses are made to the directors. Direct Meetings with the Chairperson are furtherfacilitated for the new appointee to familiarize about the company/its businesses and thegroup practices.
Pursuant to the provisions of the Companies Act 2013 and SEBI ( Listing obligationsand Disclosure Requirements) Regulations 2015 the board has carried out evaluation of itsown performance the performance of committees of the Board namely Audit CommitteeStakeholders Relationship committee and Nomination and Remuneration Committee and also theDirectors individually. The manager in which the evaluation was carried out and theprocess adopted has been mentioned out in the report on corporate Governance
Material Subsidiary Policy
The company has adopted a policy for determining a material subsidiary in line withthe requirements of the Act and SEBI( LODR) Regulations 2015. The policy on MaterialSubsidiary is available on the website of the company. www.vivobio.com
Sexual Harassment Policy
The company as required under the provisions of "The Sexual Harassment of women atWorkplace ( Prohibition prevention and Redressal)Act 2013 has framed a policy onProhibition Prevention and Redressal of Sexual Harassment of women at workplace andmatters connected therewith or incidental thereto. Internal complaints Committee (ICC) hasbeen set up to redress complaints received regarding sexual harassment. All employees(Permanent Contractual temporary trainees) are covered under this policy In the yearunder review the company has not received any complaint under this policy.
At Vivo we strive to conduct our business and strengthen our relationships in a mannerthat is dignified distinctive and responsible. We adhere to ethical standards to ensureintegrity transparency independence and accountability in dealing with all stakeholders.Therefore we have adopted various codes and policies to carry out our duties in anethical manner. Some of these codes and policies are:
Code of Conduct
Code of Conduct for Prohibition of Insider Trading
Whistle Blower Policy
Code of Conduct for Board of Directors and Officers of Senior Management
Policy for determining materiality for disclosure
Document Retention and Archival Policy
Sexual Harassment Policy
The link accessing the above policies is available at www.vivobio.com /corporateprofile.php
i. Risk Management
Currently the Companys risk management approach comprises of the following:
Governance of Risk
Identification of Risk
Assessment and control of Risk
The risks are being identified by a detailed study. Senior Management are analysing andworking in mitigating them through co-ordination among the various departments. Insurancecoverage and personal accident coverage for lives of all employees are also being taken.Your company puts in place the risk management framework which helps to identify variousrisks cutting across its business lines. The risks are identified and are discussed by therepresentatives from various functions.
Presentation to the Board of Directors and the Audit Committee is made on riskmanagement. The Board and the Audit Committee provides oversight and review the riskmanagement policy periodically.
Directors' Responsibility Statement:
The financial statements are prepared in accordance with the Generally AcceptedAccounting Principles (GAAP) under the historical cost convention on accrual basis exceptfor certain financial instruments which are measured at fair values. GAAP comprisesmandatory accounting standards as prescribed under Section 133 of the Companies Act 2013('the Act') read with Rule 7 of the Companies (Accounts) Rules 2014 the provisions ofthe Act (to the extent notified) and guidelines issued by the Securities and ExchangeBoard of India (SEBI). There are no material departures from prescribed accountingstandards in the adoption of these standards The Directors Confirm that:
I) In the preparation of the annual accounts for the year ended 31st March 2016 theapplicable accounting standards had been followed and there are no material departures.
ii) The directors have selected appropriate accounting policies and applied themconsistently and have made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end offinancial year and of the profit of the company for that period.
iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of Companies Act 2013 forsafe guarding the assets of the Company and for preventing and detecting fraud and otherirregularities iv) We have prepared the annual accounts for the financial year ended 31stMarch 2016 on a going concern basis.
v) The Directors have laid down internal financial controls which are adequate and areoperating effectively.
vi) The directors have devised proper systems to ensure compliance with the provisionsof the applicable laws and such other systems are adequate and are operating effectively.
Auditor's certificate on corporate governance
As required under Regulation 34 (3) read with Schedule V (E) of the SEBI (LODR)Regulations 2015. Auditor's certificate on corporate governance is enclosed as Annexureto Board's Report.
AUDITOR'S REPORT/ SECRETARIAL AUDIT REPORT:
The observation made in the Auditors' Report read together with relevant notes thereonare self-explanatory and hence do not call for any further comments under Section 134 ofthe Companies Act 2013.
As required under section 204 (1) of the Companies Act 2013 the Company has obtained asecretarial audit report.
Auditors and Audit Report
M/s. P. Murali&Co. Chartered Accountants Statutory Auditors of the Company retireat the conclusion of the ensuing Annual General Meeting and being eligible offerthemselves for reappointment. The company has received consent letter from the Statutoryauditors and certificate indicating satisfaction of criteria sated in Section 141 ofCompanies Act 2013 .
Mr. N V S S Suryanarayanarao Practicing Company Secretary was appointed to conductSecretarial
Audit of the company for the financial year 2015-16 as required under section 204 ofthe Companies Act 2013 and rules framed there under. The Secretarial Audit report forfinancial year 2015-16 forms part of board's report as Annexure The Board has appointedMr. V Chandra Sekhar Patnaik Practicing Company Secretary as Secretarial Auditor of theCompany for financial year 2016-17.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operation in future.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as " Annexure to Directors Report
CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO.
The Particulars as required under Sub- section (3)(m)of Section 134 of the CompaniesAct2013 read with the Companies(Accounts) Rules 2014 are enclosed as Annexure toDirectors Report
BUSINESS RISK MANAGEMENT:
Pursuant to section 134 (3) (n) of the Companies Act 2013 & Clause 49 of thelisting agreement the company has constituted a business risk management committee. Thedetails of the committee and its terms of reference are set out in the corporategovernance report forming part of the Boards report.
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014
The details pertaining to financials of Subsidiary Companies have been given elsewherein this report.
Consolidated Financial Statements
Pursuant to Regulation 33 of SEBI( LODR) Regulations 2015 and the Companies Act 2013the consolidated financial statements prepared as per companies Act 2013 and applicableAccounting Standards duly audited forms part of the Annual Report.
Consolidated financial statements incorporating the operations of the company itssubsidiaries is appended. As required under the provisions of the Act a statement showingthe sailent features of the financial Statements of the subsidiaries is enclosed to thisreport. The financial statements of the subsidiary companies will be made available to themembers of the company and its subsidiary companies on request and will also be kept forinspection in the registered office of the company.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is as follows:
The percentage of increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2015-16 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2015-16 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:
|Sl. No. ||Name of Director/ KMP and Designation ||Remuneration of Director/KMP for financial year 2015-16 (Rs. in lakhs) ||% increase in Remuneration in the Financial Year 2015-16 ||Ratio of remuneration of each Director / to median remuneration of employees ||Comparison of the Remuneration of the KMP against the performance of the company |
|1 ||M Kalyan Ram Whole Time Director ||3.21 ||Nil ||1.41 ||Profit before Tax increased by 405% and Profit After Tax |
|2 ||ChallapalliVarun Kumar Company Secretary ||5.00 ||38.88% ||2.20 ||increased by 96.63%in financial Year 2015-16 |
During the period under review no employee of the Company is employed throughout thefinancial year and in receipt of Rs.60 lakhs or more or employed for part of the year andin receipt of Rs.5 lakhs or more a month under Rule 5(2) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
ii) The median remuneration of employees of the Company during the financial year wasRs. 2.27 lakhs;
iii) In the financial year there was an increase of 32.93% in the median remunerationof employees;
iv) There were 92 employees on the rolls of Company as on March 31 2016 v)Relationship between average increase in remuneration and Company performance: The profitbefore tax increased by 405% and where as the increase in median remuneration was 32.93%.
vi) Comparision of remuneration of the key managerial personnel (s) against theperformance of the Company: The total remuneration of key managerial personnel was Rs.8.21 lakhs where as profit before tax was Rs. 78.04 lakhs in 2015-16.
vii) a) Variations in the market capitalisation of the Company: The marketcapitalisation as on March 31 2016 at BSE was Rs.3833.71 lakhs (Rs.1547.51 lakhs as onMarch 31 2015) b) Price Earnings ratio of the Company at BSE was 42 as at March 31 2016and was 33 as at March 31 2015;
viii) Average percentage increase made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2014-15 was 31.97% whereas theincrease in the managerial remuneration for the same current financial year was 38.88%.
ix) The key parameters for any variable component of remuneration availed by thedirectors: Not applicable
x) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but received remuneration in excess of the highest paid directorduring the year - Not Applicable; and
xi) It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employees
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS
The Corporate Governance and Management Discussion & Analysis Report which form anintegral part of this Report are set out as separate Annexures together with theCertificate from the auditors of the Company regarding compliance with the requirements ofCorporate Governance as stipulated Under SEBI (LODR) Regulations 2015.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Companies Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOP referred to in this Report.
4. Neither of the Whole-time Directors of the Company receive any remuneration orcommission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future
Your directors would like to place on record their appreciation of supportco-operation and assistance received from the company's clients Central Governmentauthorities bankers shareholders and suppliers. The board wishes to convey itsappreciation for hard work solidarity cooperation and support put in by the company'semployees at all levels in enabling such growth.
| ||BY ORDER OF THE BOARD |
| ||For Vivo Bio Tech Limited |
|Place : Hyderabad ||M. Kalyan Ram ||Dr A. Sankaranarayanan |
|Date : 31.08.2016 ||Whole Time Director ||Whole Time Director |
| ||DIN : 02012580 ||DIN : 02703392 |
Annexure to the Directors Report
a) Conservation of Energy:
During the year the company has taken significant measures to reduce the energyconsumption by using energy efficient machines and equipment.
b) Consumption per unit of Production
|Particulars ||For Year ended 31st March 2016 ||For Year ended 31st March 2015 |
|A. Power and Fuel Consumption Electricity || || |
|a. Electricity Purchase Units ||2690753 ||1764016 |
|Total Amount ||19500489 ||14805846 |
|Rate per unit (Average) ||7.25 ||8.39 |
|b. Own Generation from Diesel ||95500 ||108000 |
|Generator Unit Rate per Unit ||10.50 ||9.75 |
A. Specific Areas in which R&D work has been carried out by the company
Molecular Biology: Cloning of desired gene in the appropriate vector and alsooptimization of the expression of desired protein in appropriate host.
Fermentation: Optimizing the fermentation process of E.Coli harboring theplasmid containing the gene of interest.
Protein Purification: Development of purification techniques for variousproteins. This include wide range of chromatographic techniques like ion exchange reversephase hydrophobic interaction column gel filtration affinity chromatography etc.
Bioassay: in vivo and in vitro activity assay standardization of variousproteins
Quality Control : We do the physico-chemical and biochemical/immunologicalcharacterization of various proteins
B. Benefits derived as a result of R&D (Wet Lab) Activities
Cloning of gene of interest for getting maximum expression of the desiredprotein from desired host such as E.Coli or yeast
Solving complicated projects such as purification of untagged and low-expressingproteins.
Purification of enzymes.
Purification of antibody required in R&D and Quality control lab.
Bioassay development of different proteins.
C. Future plan of action
Research and Development activity for further improvement of quality and yieldof desired protein to get cost effective technology that can minimize the cost incurredto customers
Establishment of radioactive lab for providing services in the area of bioassaydevelopment and also for different laboratory experiment.
Establishment of Mammalian and Pichia cell culture lab for providing specificservices
Foreign Exchange Earnings and Outgo:
Details of foreign exchange earnings and outgo during the year as follows :
(Rs. in Lakhs)
|Particulars ||FY 2015-16 ||FY 2014-15 |
|Foreign Exchange Earnings ||483.39 ||113.74 |
|Foreign Exchange Outgo ||95.91 ||54.80 |