To the Members
Vipul Organics Limited
(Formerly known as Vipul Dyechem Limited)
Your Directors are pleased to present herewith 45th Annual Report of yourCompany along with the Audited Standalone and Consolidated Financial Statements for theyear ended 31st March 2017.
1. FINANCIAL HIGHLIGHTS
(Rs. in Lakhs)
|Particulars || |
| ||Current Year ended 31st March 2017 ||Previous Year ended 31st March 2016 ||Current Year ended 31st March 2017 ||Previous Year ended 31st March 2016 |
|1. Total Revenue ||5718.26 ||5249.40 ||5733.51 ||5262.05 |
|2. Less: Expenditure except Finance Cost and Depreciation and Tax ||5357.94 ||4965.82 ||5366.79 ||4967.02 |
|3. Profit before Finance Cost Depreciation and Tax ||360.32 ||283.58 ||366.72 ||295.03 |
|Less: Finance Cost ||61.20 ||66.21 ||61.34 ||66.23 |
|Less: Depreciation and Amortization ||75.52 ||87.08 ||78.80 ||91.11 |
|4. Profit Before Tax ||223.60 ||130.29 ||226.58 ||137.69 |
|Less: Provision for Tax ||78.09 ||40.85 ||77.86 ||45.15 |
|5. Profit After Tax ||145.51 ||89.44 ||148.72 ||92.54 |
|6. Balance brought forward from previous year ||330.97 ||292.46 ||306.63 ||266.55 |
|7. Profit available for appropriation ||476.48 ||381.89 ||455.35 ||359.09 |
|8. Tax Adjustments ||(11.58) ||1.39 ||(11.58) ||1.22 |
|9. Proposed Dividend ||50.11 ||43.80 ||50.11 ||43.80 |
|10. Tax on Dividend ||10.20 ||8.52 ||10.20 ||8.51 |
|11. Minority Interest || || ||(0.21) ||(1.37) |
|12. Surplus carried to Balance Sheet ||404.59 ||330.97 ||383.67 ||306.63 |
2. RESULTS OF OPERATIONS
During the year under review the Company has registered a sale of Rs. 5718.26 Lakhs(previous year Rs. 5249.40 Lakhs) and Net Profit after Tax of Rs. 145.51 Lakhs (previousyear Rs. 89.44 Lakhs).
The Company has earned consolidated revenue of Rs. 5733.50 Lakhs (previous year Rs.5257.49 Lakhs) and consolidated Net Profit After Tax of Rs. 148.71 Lakhs (previous yearRs. 70.21 Lakhs) during the year under review.
The Company has also acquired an additional industrial land of 5000 sq meter beingPlot No. 93 just adjacent to the existing land of 5000 sq meter being Plot No. 94 atGujarat Industrial Development Corporation. With this total 10000 sq meter of land hasbeen made available. The Company intends to setup a plant at this site to manufacture Dyesand Pigments intermediaries. Necessary approvals from Pollution Control Board shall beobtained for the same.
3. 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 was changed from "VipulDyechem Limited" to "Vipul Organics Limited" w.e.f. 19th July2016.
4. SHARE CAPITAL
Pursuant to the shareholders' approval obtained at the Extra Ordinary General Meetingheld on 13th June 2016 the Company on 6th July 2016 issued andallotted 2250000 warrants for cash at an issue price of Rs. 40/- (Rupees Forty only)each (including premium of Rs. 30/- (Rupees Thirty only) each) on preferential basis tothe promoters and others carrying an option / entitlement to subscribe to equivalentnumber of Equity Shares of Rs. 10/- (Rupees Ten) each within a period of 18 months fromthe date of their issue.
On 30th March 2017 the Company issued and allotted 790000 Equity Sharesof Rs. 10/- each fully paid-up upon conversion of equal number of warrants issued onpreferential basis at an Issue Price of Rs. 40/- per share (including premium of Rs. 30/-per share).
As on 31st March 2017 the issued subscribed and paid-up Equity Sharecapital of the Company stood at Rs. 62645000/- comprising of 6264500 Equity Shares ofRs. 10/- each.
The Board of Directors of the your Company in its meeting held on 2nd May2017 on recommendation of the Audit Committee and subject to the necessary approval ofthe Shareholders Creditors Securities and Exchange Board of India Stock Exchange theNational Company Law Tribunal and other competent authorities considered and approved theScheme of Amalgamation of Efferchem Private Limited (Transferor Company) with the Company.The appointed date is 1st April 2017. The proposed amalgamation will resultinto the following benefits:
(i) The consolidation of operations of both the companies by way of amalgamation wouldlead to a more efficient utilization of capital and will result in administrative andoperational rationalization and promote organizational efficiencies;
(ii) The amalgamation would result in greater integration and greater financialstrength and flexibility for the amalgamated entity which would result in maximizingoverall shareholders value and will improve the competitive position of the combinedentity;
(iii) The amalgamation would result in greater efficiency in cash management of theamalgamated entity and unfettered access to cash flow generated by the combined businesswhich can be deployed more efficiently to fund growth opportunities to maximizeshareholders value;
(iv) For the purpose of better efficient and economical management control andrunning of the business of the undertaking concerned and/or administrative convenience andto obtain advantages of economies of scale and to pool the resources for growth anddevelopment of the businesses of the companies; and
(v) With the amalgamation of two Companies the Transferee Company would have thecomplete access on the Industrial Land as well as readily available utilities liasoningetc. and this will help the Transferee Company to initiate expansion promptly without anygestation period.
6. DIVIDEND AND RESERVES
Your Directors have pleasure in recommending payment of dividend Re. 0.80 being 8% pershare on Equity Share of Rs. 10/- for the year ended 31st March 2017. Thiswill absorb total cash outflow of Rs. 60.31 Lakhs (previous year Rs. 52.32 Lakhs)including Corporate Dividend Distribution Tax of Rs. 10.20 Lakhs (previous year Rs. 8.52Lakhs). During the year the Company has not transferred any amount to the GeneralReserve.
7. PUBLIC DEPOSITS
During the year under review the Company has not accepted any deposits within themeaning of Sections 73 and 76 of the Companies Act 2013 read with Companies (Acceptanceof Deposits) Rules 2014.
8. EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 an extract of Annual Return in Form MGT-9 isappended to this Report as Annexure I.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 and Articles of Association of theCompany Dr. Shiv Nath Sahai (DIN: 00332652) Director of the Company retires by rotationat the ensuing Annual General Meeting and being eligible has offered himself forre-appointment and your Board recommends his re-appointment.
Dr. Shiv Nath Sahai (DIN: 00332652) has been re-appointed as Whole-Time Director of theCompany (designated as Whole-Time Director and CFO) for a further period of one yearw.e.f. 151 October 2017 to 30th September 2018 subject to theapproval of shareholders and your board recommends his re-appointment.
There was no cessation from the Board of the Company during the period under review.
Ms. Mitali Shah Company Secretary and Compliance Officer of the Company resigned fromthe services of the Company w.e.f. 22nd May 2017.
The Board of Directors in its meeting held on 22nd May 2017 has appointedMs. Rishika Puri (Membership No. A49818) as the Company Secretary and Compliance Officerof the Company with effect from that date.
10. DECLARATION FROM INDEPENDNT DIRECTORS
The Company has received declarations 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 SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
11. ANNUAL PERFORMANCE EVALUATION BY THE BOARD
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board has carried out an evaluation ofits own performance the directors individually as well as the evaluation of the workingof its Audit and Nomination and Remuneration Committee. The Board has devisedquestionnaire to evaluate the performances of each of executive and non-executive andIndependent Directors. Such questions are prepared considering the business of the Companyand the expectations that the Board has from each of the Directors. The evaluationframework for assessing the performance of Directors comprises of the following key areas:
i. Attendance at Board Meetings and Committee Meetings;
ii. Quality of contribution to Board deliberations;
iii. Strategic perspectives or inputs regarding future growth of Company and itsperformance;
iv. Providing perspectives and feedback going beyond information provided by themanagement.
The details of the programs for familiarization of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are put upon the website of the Company at the link: http://vipulorganics.com/policies.htm .
During the year under review a separate meeting of the Independent Directors of theCompany was held on 10th February 2017 for evaluation of performance ofnon-independent Directors the Board as a whole and the Chairman.
12. 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. However in case of a special and urgentbusiness need the Board's approval is taken by passing resolutions through circulationas permitted by law which is confirmed in the subsequent Board meeting.
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 9 times during year as per details given in the Report on CorporateGovernance which forms a part of this Annual Report. The intervening gap between the twoconsecutive meetings was within the period prescribed under the Companies Act 2013.
13. 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 and vigil mechanism.
As on 31st March 2017 the Audit Committee comprised of Mr. PrasannakumarB. Gawde Mr. Jagdeep Mehta Independent Directors and Mr. Vipul P Shah Managing Directorof the Company.
Mr. Prasannakumar B. Gawde is the Chairman of Audit Committee of the Company.
Other details with respect to Audit Committee are given in Corporate Governance Report.
14. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) of the Companies Act 2013 the Boardof Directors of the Company to the best of their knowledge and ability confirm that:
a. In the preparation of the annual accounts the applicable accounting standards havebeen followed except AS -15 along with proper explanation relating to materialdepartures 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 on 31stMarch 2017 and of the profit of the Company for the year under review;
c. The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities;
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.
15. POLICY ON CRITERIA FOR APPOINTMENT OF DIRECTORS KMP AND SENIOR MANAGEMENT
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection appointment and determination of remuneration of DirectorsSenior Management Personnel and other employees of the Company. The said policy is statedin the Report on Corporate Governance and can be accessed on the Company's website athttp://vipulorganics.com/policies.htm .
16. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism / Whistle Blower Policy to deal with instances offraud and mismanagement if any in the Company. The mechanism also provides for adequatesafeguards against victimization of Directors and employees who avail of the mechanism andalso provides for direct access to the Chairman of the Audit Committee in the exceptionalcases. The said policy has been elaborated in the Report on Corporate Governance and canbe accessed on the Company's website at http://vipulorganics.com/policies.htm .
We affirm that during the financial year 2016-17 no employee or Director was deniedaccess to the Audit Committee.
17. 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 carried out to identify evaluate manage and monitor both businessand non-business risks. The Board periodically reviews the risks and suggests the steps tobe taken to control and mitigate the same through a properly defined framework.
18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSECTION 188(1) OF THE COMPANIES ACT 2013
All Related Party Transactions entered into during the year were in ordinary course ofbusiness and on arm's length basis. No Material Related Party Transactions were enteredinto during the year by the Company. Accordingly the disclosure on Related PartyTransactions as required under Section 134(3) of the Companies Act 2013 in Form AOC-2is not applicable.
19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The details of loans guarantee or investments made by the Company under Section 186 ofthe Companies Act 2013 during the financial year 2016-17 are given under Notes toAccounts of financial statements.
20. 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 in thefuture.
21. STATUTORY AUDITORS
M/s. J. A. Rajani & Co. Chartered Accountants Mumbai (having FRN: 108331W) theStatutory Auditors of the Company hold office upto the conclusion of the ensuing AnnualGeneral Meeting. The Company has proposed to appoint M/s. R. A. Kuvadia & Co.Chartered Accountants Mumbai (having FRN: 105487W) as Statutory Auditors of the Companyin place of retiring auditors for a period of 5 consecutive years i.e. from theconclusion of the ensuing 45th Annual General Meeting upto the conclusion of 50thAnnual General Meeting of the Company subject to ratification at every Annual GeneralMeeting.
The Company has received a letter from them to the effect that they are willing to actas Statutory Auditors of the Company and if appointed their appointment would be withinthe limits prescribed under Section 139 of the Companies Act 2013 and they are notdisqualified from being appointed as Auditors.
Your Directors recommend the appointment of M/s. R. A. Kuvadia & Co. CharteredAccountants Mumbai as Statutory Auditors of the Company to hold office from theconclusion of the ensuing 45th Annual General Meeting upto the conclusion of 50thAnnual General Meeting of the Company subject to ratification by the members of theCompany every year.
22. SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. M Baldeva Associates Company Secretaries Thane to undertake SecretarialAudit of the Company for the year 2016-17. The Secretarial Audit Report is appended asAnnexure - II and forms part of this Annual Report.
23. INTERNAL AUDIT
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 systems in the Company its complianceswith the operating systems accounting procedure and polices at all locations of theCompany and reports the same on quarterly basis to the Audit Committee.
24. REMARKS ON QUALIFICATION BY STATUTORY AUDITORS AND SECRETARIAL AUDITORS
The observations made by the Auditors in their Reports on the Audited FinancialStatements are self explanatory and need not any further comments.
With respect to observations made by the Secretarial Auditors in their report we wouldlike to state that:
1. Delay in filing of some forms with Registrar of Companies (ROC) was inadvertent; and
2. Delay in delivery of share certificates received for transfer of shares was byoversight in one case.
25. 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 operations. Internal controlsystems comprising of policies and procedures are designed to ensure reliability offinancial reporting compliance with policies procedures applicable laws and regulationsand that all assets and resources are acquired economically used efficiently andadequately protected.
26. INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on prevention prohibition and redressal of sexual harassment issues 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 harassment during the year under review.
27. SUBSIDIARY COMPANY
Shree Ambika Naturals Private Limited is a subsidiary of the Company. The Company doesnot have any Joint Venture and Associate Company.
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 a statementcontaining the salient features of the financial statements of Shree Ambika NaturalsPrivate Limited in Form AOC 1 is annexed as Annexure III.
28. 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 forms part ofthis Annual Report.
29. 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 andattached to this Annual Report:
a. Management Discussion and Analysis Report
b. Report on Corporate Governance
c. Auditors' Certificate regarding compliance with conditions of Corporate Governance
30. PARTICULARS OF REMUNERATION
Details as required under Section 197(12) of the Companies Act 2013 read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 areappended to this Annual Report as Annexure IV.
31. CORPORATE SOCIAL RESPONSIBILITY
The provision of Section 135 of the Companies Act 2013 with respect to the CorporateSocial Responsibility are not applicable to the Company.
32. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Details regarding conservation of energy technology absorption foreign exchangeearnings and outgo is given in Annexure V.
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the Financial Institutions 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: 29th May 2017 ||Chairman |