To The Members
Your directors have pleasure in presenting the Thirtieth Annual Report together withthe Audited Statement of Accounts of the Company for the year ended 31st March2017.
1. FINANCIAL STATEMENTS & RESULTS
a. FINANCIAL SUMMARY :
Financial summary and performance highlights of your Company for the financial yearended 31 March 2017 are as follows:
( Rs. in Lakhs)
|Particulars ||31st March 2017 ||31st March 2016 |
|Income from Operations & Other income excluding Excise & ||3625.89 ||2688.75 |
|Sales Tax || || |
|Profit/(Loss) before Depreciation & Interest ||289.83 ||164.55 |
|Less: Depreciation & Interest ||48.09 ||15.82 |
|Net Profit / (Loss) before Exceptional items and Tax ||241.74 ||148.73 |
|Add/Less: Prior years adjustments Deferred tax etc. ||60.30 ||51.00 |
|Less: Exceptional items/Prior Period Items ||0.66 ||(0.07) |
|Net Profit / (loss) after tax ||180.78 ||97.80 |
|Net Profits after Dividends ||125.03 ||56.53 |
|Add / Less: Profit/(Loss) Brought forward ||(80.26) ||(136.79) |
|Balance carried to Balance Sheet ||44.77 ||(80.26) |
During the year under review the Company has recorded the higher total income of Rs.3625.89 Lakhs as compared to Rs. 2688.75 Lakhs for the previous year and increased netProfits after tax of Rs. 180.78 Lakhs for the year as compared to the profits of Rs. 97.74Lakhs in the previous year.
c. FUTURE PROSPECTS:
The Board of Directors are pleased to announce that the Company was successful inintroducing Tobias Acid for pigment grade whose main application is for Paint Industry.The Company has started getting the export orders of this product from Taiwan HuntsmanEurope and Japanese markets and also is in the process of developing new market potentialin Korea China & USA. The Company expects to increase the Plant capacity from current80 MT to 100 MT per month which would be commissioned by December 2017 beginning leadingto increase in more turnover and profitability for the quarter and year ended 31.03.2018.
Your Directors are pleased to recommend a dividend of Rs. 0.50 per Equity Share of Rs.5/- each (i.e. 10%) for the year ended March 31 2017 (previous year Rs. 0.38 per EquityShare). The dividend if approved by the shareholders will bepaidout profits of theCompany for the year to all those equity shareholders whose the name appears on theRegister of Members of the Company as on the record date.
e. CHANGE IN SHARE CAPITAL:
The Paid-up Share Capital of the Company as on 31st March 2017 was Rs. 4.56Crores comprising of 9128870 Shares of Rs. 5/- each. The Board of Directors of yourcompany during the year under review has dropped the proposal to allot Equity shares onpreferential basis to Mrs. Meena S. Mody one of the promoter of the Company as wasapproved by the shareholders twice in the Annual General Meeting held on 29th September2016 and by Postal Ballot conducted on 31st December 2016.
The company has not issued shares with differential voting rights nor granted stockoptions nor sweat equity.
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.
g. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report as required under the ListingRegulations which form an integral part of this Report is set out as separate"Annexure D".
Cash and cash equivalents as at March 31 2017 was Rs. 26129392/-. The companycontinues to focus on judicious management of its working capital Receivablesinventories and other working capital parameters which were kept under strict checkthrough continuous monitoring.
i. SUBSIDIARY COMPANIES:
The Company does not have any subsidiary.
j. RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were onarms length basis and were in the ordinary course of the business. There are somematerially significant related party transactions made by the company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the company at large. The disclosure of material Related Party Transaction inFORM AOC-2 is given in "Annexure A" to this report.
k. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013. The details of the investments made by company aregiven in the notes to the financial statements.
2. DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per the provisions of the Companies Act 2013 Shri. Sumish S. Mody retire byrotation at the ensuing Annual General Meeting and being eligible has offered himself forre-appointment. The Board recommends his reappointment.
On recommendation of the Nomination & Remuneration Committee in its meeting held on28th July 2017 and approval of the Board of Directors in its meeting held on28th July 2017 revised remuneration payable to Shri. Sumish S. Mody asManaging Director Smt. Asha S. Mody as Executive Director and Shri. Miten S. Mody from 1stApril2017.
The necessary resolutions for the appointment/revision in remuneration are also beingplaced before the members for their consideration at the forthcoming Annual GeneralMeeting.
DECLARATION BY INDEPENDENT DIRECTORS :
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and SEBI Listing Regulations and the relevant rules. In theopinion of the Board they fulfill the conditions of independence as specified in the Actand Rules made thereunder and are independent of the Management.
BOARD EFFECTIVENESS :
i. Familiarization Programme For Independent Directors
Pursuant to requirements of the Listing Regulations the Company has a familiarizationprogramme for Independent Directors with regard to their role rights responsibilities inthe Company nature of the industry in which the Company operates business model of theCompany etc. The Board Members are provided with all necessary documents/ reports andinternal policies to enable them to familiarize with the Companys procedures andpractices. Periodic presentations are made at the Board and Board constituted CommitteeMeetings pertaining to business and performance updates of the Company global businessenvironment business strategies and risks involved. Directors attend training programmes/conferences on relevant subject matters and keep themselves abreast of the latestcorporate regulatory and industry developments.
The same has been posted on website of the Company viz; www.vividglobalinds.com
ii. Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations 2015the evaluation of the performance of the Board as well as of the Audit CommitteeNomination and Remuneration Committee and Stakeholders Relationship Committee has beencarried out. The performance evaluation of the Independent Directors was carried out bythe entire Board and the performance evaluation of the Chairman and Non-IndependentDirectors was carried out by the Independent Directors.
3. DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES
a. BOARD MEETINGS:
During the year 5 (five) Board Meetings and 4 (four) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.
b. DIRECTORS RESPONSIBILITY STATEMENT:
In terms of Section 134(3)(c) and 134 (5) of the Companies Act 2013 the directorswould like to state that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 and ofthe profit
iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
iv) The directors have prepared the annual accounts on a going concern basis.
v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
vi) The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.
c. NOMINATION AND REMUNERATION COMMITTEE:
The details pertaining to the composition of the Nomination and Remuneration Committeeare included in the Report on Corporate Governance which forms part of this Report.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.
The Committee at its meeting held on 28th July 2017 recommended revisionin remuneration payable to Shri. Sumish S. Mody as Managing Director of the Company andthe necessary resolutions for the said revision in remuneration is also being placedbefore the members for their consideration at the forthcoming Annual General Meeting.
d. AUDIT COMMITTEE:
The details pertaining to the composition of the Audit Committee are included in theReport on Corporate Governance which forms part of this Report.
During the year under review there was no instance wherein the Board had not acceptedany recommendation of the Audit Committee.
e. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:
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.
f. 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 of the Company. The Internal Auditor appointed by the Company viz. Smt.Amisha Mody monitors and evaluates the efficacy and adequacy of internal control systemin the Company its compliance with operating systems accounting procedures and policiesat all locations of the Company. The Audit Committee of the Board addresses significantissues raised by both the Internal Auditors and Statutory Auditors.
g. BUSINESS RISK MANAGEMENT :
Integrated enterprise risk management framework is in existence under which the commonprevailing risks in the the risks so identified are reviewed on periodic basis by theAudit Committee and the Companyareidentified managements actions to mitigate therisk exposure in a timely manner are assessed.
A risk management policy under the above said enterprise risk management framework asapproved by the Board has been adopted by the Company and being reviewed on yearly basis.
At present the company has not identifiedany element of risk which may threaten theexistence of the company.
h. REMUNERATION DETAILS PURSUANT TO COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014 AND OTHER APPLICABLE PROVISIONS :
Information pursuant to Rule 5(1) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014:-
i. The percentage of increase in remuneration of each Director Chief Financial Officerand Company during the financial year 2016-17 ratio of the remuneration of each directorto the median remuneration of the employees of the company for the financial year 2016-17and the comparison of remuneration of each KMP against the performance of the company areas under:
|Sr. No. Name of the Director/ KMP and designation ||Remuneration of the Director/ KMP for the financial year 2016-17 ||% increase in remuneration in the financial year 2016-17 ||Ratio of remuneration of each Director/ to median remuneration of employees ||Comparison of the remuneration of the KMP against the performance of employees |
|1. Shri. Sumish S. Mody Managing Director ||780000 ||- ||4.36:1 ||The remuneration of the Directors & KMPs is well within the industry limits and in tandem with the performance of the company |
|2. Smt. Asha S. Mody - Director ||208320 ||0.90% ||1.17 : 1 || |
|3. Shri. Miten S Mody - Wholetime Director ||722400 ||19.92% ||4.04 : 1 || |
|4. Shri. Sudhir M.Mody CFO ||134000 ||- ||0.75 : 1 || |
|5. Smt. Nilam P. Bajoria - Company Secretary ||112320 ||- ||0.63 : 1 || |
ii. The median remuneration of employees of the Company during the financial year wasRs. 1.79 Lakhs; iii. In the financial year there was no change in the median remunerationof employees; iv. There were 48 permanent employees on the rolls of Company as on 31stMarch 2017; v. Relationship between average increase/ decrease in remuneration andcompany performance:
The Profit before Tax for the financial year ended 31 st March 2017 stoodat Rs. 2.41 crores from the profit of Rs. 1.48 crores posted in the same period last year.There was no change in the median remuneration. The average increase in medianremuneration was in line with the performance of the Company.
vi. Comparison of Remuneration of the Key Managerial Personnel(s) against theperformance of the Company:
The total remuneration of Key Managerial Personnel was not increased in FY 2016-17whereas profit before tax stood at Rs. 2.41 crores in FY 2016-17 from profit Rs. 1.48crores posted in the same periodof last year.
vii. a) Variations in the market capitalization of the Company: The marketcapitalization as on 31st March 2017 was Rs. 3581.23 Lakhs ( Rs. 739.43 Lakhsas on 31st March 2016).
b) Earnings ratio of the Company was 19.81 as at 31st March 2017 and was 15as at 31st March 2016.
viii. No Increase made in the salaries of employees other than the managerial personnelin the last financial year i.e. 2016-17.
ix. The key parameters for the variable component of remuneration availed by theDirectors are considered by the Board of Directors based on the recommendations of theNomination and Remuneration Committee as per the Remuneration Policy of the Company.
x. During the year ended 31st March 2017 there was no employee who is nota Director of the Company and received remuneration in excess of highest paid Director ofthe Company.
xi. It is hereby affirmed that the remuneration paid is as per the Remuneration Policyof the Company.
Information pursuant to Rule 5(2) and (3) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014:- There was no employee who is paid in excess of thelimit as specified in the rule.
4. 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 31STMARCH 2017:
There are no qualifications reservation or adverse remark or disclaimer made bystatutory auditor in his report. The observations made by the Statutory Auditors in theirreport for the financial year ended 31st March 2017 read with the explanatorynotes therein are self-explanatory and therefore do not call for any further explanationor comments from the Board under Section 134(3) of the Companies Act 2013.
b. SECRETARIAL AUDIT REPORT FOR THE YEAR ENDED 31ST MARCH 2017:
Pursuant to provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed Pankaj & Associates a firm of company Secretaries in practice to undertakethe Secretarial Audit of the Company. The Secretarial Audit report of the Company for thefinancial year ended 31st March 2017 in the prescribed form MR-3 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed herewith as"Annexure B".
c. STATUTORY AUDITORS:
The term of office of M/s. K.M. KAPADIA & ASSOCIATES Chartered Accountants (FirmReg. No. 104777W) who were appointed as the Statutory Auditors of the Company expiresupon conclusion of the ensuing Annual General Meeting of the Company.
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Companies(Audit and Auditors) Rules 2014 M/s. Saumil J. Kapadia & Co. Mumbai (Firm Reg. No.135970W) are proposed to be appointed as Statutory Auditors of the Company. They havesignified their assent and confirmed their eligibility to be appointed as Auditors interms of the provisions of Section 141 of the Companies Act 2013 and Rule 4 of theCompanies (Audit and Auditors) Rules 2014.
The Board on the recommendations of the Audit Committee have resolved to place theproposal of Appointment of M/s. Saumil J. Kapadia & Co. Chartered Accountants asStatutory Auditors for a term of five consecutive years i.e. from the conclusion ofensuing AGM until the conclusion of AGM of the Company to be held in the year 2022 subjectto the ratification of their appointment by the shareholders at each AGM held after thisAGM.
d. INTERNAL AUDIT:
Smt. Amisha Mody Internal Auditors of the Company have carried out audit on variousexpense heads of the Company and site and inventory management. The findings of theInternal Auditors are discussed on an ongoing basis in the meetings of the Audit Committeeand corrective actions are taken as per the directions of the Audit Committee.
5. OTHER DISCLOSURES
Other disclosures as per provisions of Section 134 of the Act read with Companies(Accounts) Rules 2014 are furnished as under:
a. 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 2017 made under the provisionsof Section 92(3) of the Act is attached as "Annexure C" which forms part of thisReport.
b. CONSERVATION OF ENERGY:
i. Though the Companys manufacturing operations do not involve substantial energyconsumption the Company has taken adequate steps to improve energy utilization whereverpossible.
ii. Additional investments and proposals for reduction of consumption of energy- Noadditional investments made during the year.
iii. Impact of the above measures: Nil iv. Total energy consumption and energyconsumption per unit of production: "FORM A" Not Applicable.
c. TECHNICAL ABSORPTION ADAPTION AND INNOVATION:
i. The Company is having in-house R&D facilities for all its products and doingcontinuous research for its improvement.
ii. The Company is examining possibilities of new technology to improve the quality andyield of the products development by in-house technical personnel.
iii. Imported Technology: No technology was imported by the Company during the yearunder review.
d. INDUSTRIAL RELATIONS:
During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.
e. FOREIGN EXCHANGE EARNINGS AND OUTGO:
i. Activities relating to export initiative taken to increase exports development ofnew export markets for products and services. During the current year the Company hasexported its products to Far East Countries. Efforts are being made to develop new marketsand the Company expects substantial increase in exports during the current year.
ii. Total Foreign Exchange.
Outgo- Rs. 134958515/-
Earned- Rs. 152685338/-
e. CHANGE IN THE NATURE OF BUSINESS:
There is no change in the nature of business of the Company.
f. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:
There are no significant material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
g. MATERIAL CHANGES AND COMMITMENTS:
There are no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year 31 March 2017 towhichthefinancialstatements relates and the date of signing of this report.
h. CORPORATE GOVERNANCE:
The Corporate Governance which form an integral part of this Report are set out asseparate Annexure E from the auditors of the Company regarding compliance with therequirements of together with the Certificate Corporate Governance as stipulated inListing Regulations.
i. PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE:
As per the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (Act) and Rules made thereunder yourCompany has adopted a policy for prevention of sexual harassment at work place and hasconstituted an Internal Complaints Committee. During the year the Company has notreceived any complaints on sexual harassment under the said Act.
j. REPORTING OF FRAUD:
The Auditors of the Company have not reported any fraud as specified under the secondprovision of Section 143(12) of the Act.
k. HUMAN RESOURCES (HR):
The Companys HR policies and procedures are designed to recruit and retain thebest talent to support the operations of your Company and to align the interests of allemployees with the long term organizational goals.
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:
a. Details relating to deposits covered under Chapter V of the Act. b. Issue of equityshares with differential rights as to dividend voting or otherwise. c. Issue of sweatequity shares to employees of the Company under any scheme.
d. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.
e. No significant concern material orders were passed by the Regulators or Courts orTribunals which impact the going status and Companys operations in future.
f. No revision of Financial Statements has been done during the year under review.
7. LISTING OF SHARES
Your Companys shares are listed on the Bombay Stock Exchange Limited. Listingfees of BSE Limited has been paid within the stipulated time period.
8. ACKNOWLEDGEMENTS AND APPRECIATION:
The Board of Directors wishes to express its gratitude and record its sincereappreciation for the commitment and dedicated efforts put in by all the employees. YourDirector take this opportunity to express their grateful appreciation for theencouragement co-operation and support received by the Company from the localauthorities bankers customers suppliers and business associates. The Directors arethankful to the esteemed shareholders for their continued support and the confidencereposed in the Company and its management.
|Place: MUMBAI || || |
|Date: 28.07.2017 ||For and on behalf of the Board of Directors || |
| ||Sd/- ||Sd/- |
| ||ASHA S. MODY ||SUMISH S. MODY |
| ||DIRECTOR ||MANAGING DIRECTOR |
| ||DIN: 00221440 ||DIN: 00318652 |