Vadivarhe Speciality Chemicals Ltd.
|BSE: 538429||Sector: Industrials|
|NSE: VSCL||ISIN Code: INE551Q01028|
|BSE 05:30 | 01 Jan||Vadivarhe Speciality Chemicals Ltd|
|NSE 05:30 | 01 Jan||Vadivarhe Speciality Chemicals Ltd|
|BSE: 538429||Sector: Industrials|
|NSE: VSCL||ISIN Code: INE551Q01028|
|BSE 05:30 | 01 Jan||Vadivarhe Speciality Chemicals Ltd|
|NSE 05:30 | 01 Jan||Vadivarhe Speciality Chemicals Ltd|
To The Members Vadivarhe Speciality Chemicals Limited
Your Directors have pleasure in presenting the 10th Annual Report of theCompany together with the Audited Statement of Accounts for the year ended 31stMarch 2019.
1. FINANCIAL STATEMENTS & RESULTS:
a. Financial Results
The Company's performance during the year ended 31st March 2019 as comparedto the previous financial year is summarized below:
2. TRANSFER TO RESERVES
The Company has not transferred any amount to General Reserve.
This is the tenth year of operation and your Company has achieved net sales of Rs.328234154 and has earned a profit after tax of Rs. 619991 as compared to previousyear's net sales Rs. 259444871 and profit after tax of Rs. 17659502.
The revenue during the year under review has increased due to sales of newly developedproducts by Company's R&D Department. The raw material cost increased due to lesserthan expected yields. However the fresh orders were procured subsequently at higher rateto accommodate this cost increase.
4. NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the year underreview.
5. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
Your Directors wish to present the details of Business operations done during the yearunder review:
a. Production and Profitability
Company is always taking efforts to increase its productivity and use maximumproduction capacity to increase its profitability.
b. Marketing and Market environment
No significant changes in Market environment in API and Intermediates.
c. Future Prospects including constraints due to Government policies
There are no significant changes in Government policies in API and Intermediates.
Considering the growth prospects and in order to conserve resources your Directors havenot recommended any dividend for the year ended 31st March 2019.
7. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURECOMPANIES:
During the year under review your Company did not have any subsidiary associate andjoint venture company.
The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposit) Rules 2014 during the year under review. Hence therequirement for furnishing of details relating to deposits covered under Chapter V of theAct or the details of deposits which are not in compliance with the Chapter V of the Actis not applicable.
9. PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business as part of itsphilosophy of adhering to highest ethical standards transparency and accountability.
The particulars of contracts or arrangements with related parties as defined underSection 188 of the Companies Act 2013 in the prescribed Form AOC-2 is annexed hereto andmarked as ANNEXURE I and forms part of this Report.
10. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The particulars as required under the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished in ANNEXURE II which forms part of this Report.
11. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 extract ofthe Annual Return for the financial year ended 31st March 2019 made under theprovisions of Section 92(3) of the Act is attached as ANNEXURE III which forms partof this Report. Further the Company has placed its Annual Return (as at 31st March 2018)referred to in Section 92(3) in MGT-7 format on the below mentioned web-address: -www.vscl.in
12. PARTICULARS OF INVESTMENTS LOANS GUARANTEES AND SECURITIES:
The Company has not made loans and provided guarantees covered under the provisions ofSection 186 of the Companies Act 2013. Further the investment made by the Company iswithin the limits of the Section 186 of the said act.
13. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT 2013:
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and date of this report.
14. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been received from the Statutory Auditors of the Company forinefficiency or inadequacy of such controls.
15. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) Board of Directors & Key Managerial Personnel
The Company has not appointed any new Directors or KMP on the Board of the Company andnone of the Directors have resigned from the Company.
Mr. Jayesh Bhagwati Prasad Vaishnav has resigned as the Company Secretary w.e.f. 3rdJune 2019. The Company is on the lookout for a suitable candidate to be appointed as aCompany Secretary.
b) Retirement by rotation
As per the provisions of Section 152 of the Companies Act 2013 Mrs. Meena SunilPophale (DIN- 00834085) Directors of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offer herself for re-appointment.
c) Declaration by Independent Directors:
During the financial year under review declarations were received from all Independent
Directors of the Company that they satisfy the "Criteria of Independence" asdefined under Regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 read with the provisions of Section 149(6) of the Companies Act 2013the Schedules and Rules framed there under.
16. DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES
a) Board meetings:
The Board of Directors met 5 times during the financial year ended 31stMarch 2019 in accordance with the provisions of the Companies Act 2013 and rules madethereunder. The details of the same are as mentioned under:-
The Company has complied with the applicable Secretarial Standards in respect of allthe above Board meetings.
b) Audit Committee:
The Audit Committee of Directors was constituted pursuant to the provisions of Section177 of the Companies Act 2013. The composition of the Audit Committee is in conformitywith the provisions of the said section. The Audit Committee comprises of:
The scope and terms of reference of the Audit Committee have been framed in accordancewith the Act and the Listing Agreement entered into with the Stock Exchanges read with theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Mr. Jayesh Bhagwati Prasad Vaishnav the Company Secretary of the Company acted as theSecretary of the Audit Committee during the financial year 2018-19.
During the year under review the Board of Directors of the Company had accepted allthe recommendations of the Committee.
c) Nomination and Remuneration Committee:
The Nomination and Remuneration Committee of Directors as constituted by the Board ofDirectors of the Company in accordance with the requirements of Section 178 of theCompanies Act 2013.
The composition of the committee is as under:
The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremuneration for Directors Key Managerial Personnel and other employees.
Mr. Jayesh Bhagwati Prasad Vaishnav the Company Secretary of the Company acted as theSecretary of the Nomination and Remuneration Committee during the financial year 2018-19.
The Remuneration Policy is attached as ANNEXURE IV.
d) Stakeholders Relationship Committee:
During the year under review pursuant to Section 178 of the Companies Act 2013 the
Board of Directors of the Company has constituted the Stakeholder's RelationshipCommittee comprising of the following members:
Mr. Jayesh Bhagwati Prasad Vaishnav the Company Secretary of the Company acted as theSecretary of the d) Stakeholders Relationship Committee during the financial year 2018-19.
e) Vigil Mechanism:
Pursuant to the provisions of Section 177(9) of the Companies Act 2013 read with Rule7 of the Companies (Meetings of Board and its Powers) Rules 2014 a listed Company andevery such class of companies as prescribed thereunder are required to frame a VigilMechanism to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on raising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc.
The Company has framed an appropriate Vigil mechanism policy and further re-affirmsthat the Company is committed to adhere to the highest standards of ethical moral andlegal conduct of business operations.
f) Risk Management Policy:
The Board of Directors of the Company has designed Risk Management Policy andGuidelines to avoid events situations or circumstances which may lead to negativeconsequences on the Company's businesses and defined a structured approach to manageuncertainty and to make use of these in their decision making pertaining to all businessdivisions and corporate functions. Key business risks and their mitigation are consideredin the annual/strategic business plans and in periodic management reviews.
g) Annual Evaluation of Directors Committee and Board:
The Board has carried out an annual performance evaluation of its own performance andof the Directors individually as well as the evaluation of all the committees i.e. AuditNomination and Remuneration Stakeholders Relationship and other Committees of Directors.
The Board adopted a formal evaluation mechanism for evaluating its performance and aswell as that of its Committees and individual directors including the Chairman of theBoard. The exercise was carried out by feedback survey from each Directors covering Boardfunctioning such as composition of Board and its Committees experience and competenciesgovernance issues etc. Separate exercise was carried out to evaluate the performance ofindividual directors including the Chairman of the Board who were evaluated on parameterssuch as attendance contribution at the meeting etc.
h) Management Discussion & Analysis:
A separate report on Management Discussion & Analysis is appended to this AnnualReport as an ANNEXURE V and forms part of this Directors' Report.
17. CORPORATE SOCIAL RESPONSIBILITY POLICY:
As per the provisions of Section 135 of the Act read with Companies (Corporate SocialResponsibility Policy) Rules 2014 the Board of Directors has constituted a CorporateSocial Responsibility (CSR) Committee consisting of following members:
The Board of Directors of the Company has approved CSR Policy based on therecommendation of the CSR Committee and the Company spent 1127317/- (Eleven Lakh TwentySeven Thousand Three Hundred and Seventeen) towards CSR activities in Financial Year2018-19. The contents of the CSR policy and initiatives taken by the Company on CorporateSocial Responsibility expenditure during the year 2018-19 is attached as ANNEXURE VIto this Report.
The CSR Policy of the Company is available on the Company's web-site and can beaccessed in the link www.vscl.in
18. AUDITORS AND REPORTS
The matters related to Auditors and their Reports are as under:
a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR
ENDED 31ST MARCH 2019:
M/s. S. R. Rahalkar & Associates Chartered Accountants hold office till theconclusion of this Annual General Meeting to be held for the Financial Year 31stMarch 2019. The Statutory Auditors have completed their tenure under section 139(2) asthe Statutory Auditors of the Company. The Company further intends to appoint M/s.Bhalchandra D Karve & Associates (FRN: 135281W) as the Statutory Auditor of theCompany for a period of 5 years from the conclusion of this AGM till the conclusion of theAGM to be held in the year 2024 for the Financial year 2023-2024.
The Statutory Audit report does not contain any observations / qualifications /disclaimers /adverse remark from the auditors for the financial year ended 31stMarch 2019.
b. SECRETARIAL AUDITOR:
The Board has appointed M/s Makarand M. Joshi and Co. Practicing Company Secretariesto conduct the Secretarial Audit of the Company for the financial year 2018-19 asrequired under Section 204 of the Companies Act 2013 and rules thereunder. Thesecretarial audit report for financial year 2018-19 forms part of the Directors Report as
The Secretarial Audit Report does not contain any qualification reservation adverseremark or disclaimer except the following:
1. Company had submitted delayed outcome for the Board meeting held on August 01 2018.
2. Report for reconciliation of Share Capital Audit for the quarter ended June 2018 wassubmitted with Stock Exchange with delay of one day.
3. The disclosures under Regulation 7(2) of SEBI (Prohibition of Insider Trading)Regulations 2015 was filed in delay with the stock exchange for three instances and fortwo instances disclosures were not filed.
The Company to its best extent strives to stay in compliance of all the laws rules andregulations encompassing and applicable to it. However even the most perfect of itsstakeholders may err at times. The management of the company has taken note of theobservations made by the secretarial auditor and replies to the same as follows:
1. The aforementioned delay in submission of outcome of Board Meeting was merely of 10minutes due to technical problems faced on the day of submission. The said delay wasbeyond reasonable control.
2. Delay in filing of Report for reconciliation of Share Capital Audit for the quarterended June 30 2018 was due to inadvertence.
3. A few inadvertent miscalculations led to certain flubs on multiple levels. TheCompany has taken note of the audit observation and shall stay alert to avoid any suchinstances in future. Further the Company will file the missing disclosures at theearliest.
c. INTERNAL AUDITOR:
M/s. Bhalchandra D Karve & Associates were appointed as the Internal Auditor of theCompany for the financial year 2018-19 based on the recommendation of the Audit Committeeof the Company.
All the insurable interests of your Company including properties equipment stocksetc. are adequately insured.
20. OTHER DISCLOSURES
Other disclosures as per provisions of Section 134 of the Act read with Companies(Accounts) Rules 2014 are furnished as under:
a. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL
No orders have been passed by any Regulator or Court or Tribunal which can have impacton the going concern status and the Company's operations in future.
b. DIRECTOR'S RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended 31st March 2019 theBoard of Directors hereby confirms that:
a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; b. suchaccounting policies have been selected and applied consistently and the
Directors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31st March2019 and of the profit/loss of the Company for that year; c. proper and sufficient carewas taken for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d. the annual accounts of the Company have beenprepared on a going concern basis; e. internal financial controls were followed by theCompany and such internal financial controls are adequate and are operating effectively;and f. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively;
c. DISCLOSURE UNDER SECTION 43(a)(ii) OF THE COMPANIES ACT 2013:
The Company has not issued any shares with differential rights and hence no informationas per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies(Share Capital and Debenture) Rules 2014 is furnished.
d. DISCLOSURE UNDER SECTION 54(1)(d) OF THE COMPANIES ACT 2013:
The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13)of the Companies (Share Capital and Debenture) Rules 2014 is furnished.
e. DISCLOSURE UNDER SECTION 62(1)(b) OF THE COMPANIES ACT 2013:
The Company has not issued any equity shares under Employees Stock Option Scheme duringthe year under review and hence no information as per provisions of Section 62(1)(b) ofthe Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules 2014 isfurnished.
f. DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT 2013:
During the year under review there were no instances of non-exercising of votingrights in respect of shares purchased directly by employees under a scheme pursuant toSection 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures)Rules 2014 is furnished.
g. POLICY ON SEXUAL HARASSMENT AT WORKPLACE:
The Company has established an Internal Complaints Committee as per the provisions ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. Company is committed to create and maintain an atmosphere in which employees canwork together without fear of sexual harassment and exploitation. Every employee is madeaware that the Company is strongly opposed to sexual harassment and that such behavior isprohibited both by law and the Company. During the year under review there was nocomplaint of any sexual harassment at work place. h. DISCLOSURE UNDER SECTION 197(12)OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT& REMUNERATION) RULES 2014:
The disclosures as per Rule 5 of Companies (Appointment & Remuneration) Rules 2014have been marked as ANNEXURE VIII
i. LOANS FROM DIRECTORS OR DIRECTORS' RELATIVES:
During the financial year under review the Company has borrowed the followingamount(s) from Directors and the respective director has given a declaration in writing tothe Company to the effect that the amount is being given by him out of his own funds.Accordingly the following amount is excluded from the definition of Deposit as per Rule2(1)(c)(viii) of the Companies (Acceptance of Deposits) Rules 2014:-
j. REPORTING OF FRAUDS BY STATUTORY AUDITORS UNDER SECTION 143(12):
There were no incidences of frauds reported by Statutory Auditors of the Company underSection 143(12) of the Act read with Companies (Accounts) Rules 2014.
21. ACKNOWLEDGEMENTS AND APPRECIATION:
Your Directors take this opportunity to thank the customers shareholders suppliersbankers business partners/associates financial institutions and Central and StateGovernments for their consistent support and encouragement to the Company.