Your Directors have great pleasure in presenting the report of the Business andOperations of your Company (the Company' or Vivo' ) along with the auditedfinancial statements for the financial year ended March 31 2017. The ConsolidatedPerformance of your Company and its subsidiaries has been referred to wherever required
|Financial Highlights: || ||(Rs in Lakhs) |
|Particulars ||2016-17 ||2015-16 |
|Total Income ||3452.36 ||2947.58 |
|Profit before finance Cost Depreciation & Amortization Taxation || || |
|& Exceptional Item ||802.55 ||460.01 |
|Less: Finance Cost ||128.88 ||46.57 |
|Depreciation and Amortization Expenses ||390.13 ||335.40 |
|Profit Before Tax & Exceptional items ||283.54 ||78.04 |
|Less: Exceptional items ||- ||- |
|Profit before Tax ||283.54 ||78.04 |
|Less: Tax Expenses ||33.15 ||(12.96) |
|Profit After Tax ||250.39 ||91.00 |
State of Affairs/Company's Performance.
Revenues: The total income of the Company for the FY 2016-17 comprises operatingrevenues of Rs.3452.36 lakhs as against Rs. 2947.58 Lakhs in FY 2015-16
Profits: Profit before Tax (PBT) stood at Rs. 283.54 Lakhs as against Rs 78.04 Lakhsfor the previous year. Profit after Tax (PAT) stood at Rs. 250.39 Lakhs as against Rs.91.00 Lakhs for the previous year.
RESERVES AND SURPLUS
During the year the Company has transferred an amount of Rs.250.39 Lakhs to Reservesand Surplus.
Your directors did not recommend any dividend on shares for this year.
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 Mrs. M Vijaya Lakshmi isappointed as an additional Director of the company at the board meeting held on 26thApril 2017. The company has received notice from the one of the shareholder proposing heras an independent Director of the Company.
Brief resume of the Directors proposed to be reappointed nature of their expertise inspecific functional areas directorships in other companies as stipulated under SEBI(Listing Obligatiosn and Disclosure Requirements) Regulations 2015 are provided in thereport on corporate governance.
Mrs. Sharmistha Manna Director of the Company has resigned from the office ofDirectorship on 26th April 2017
Change in Capital Structure and Listing at Stock Exchanges
The equity shares of your Company continue to be listed and traded on the BSE Ltd.(BSE) During the financial year under review there is no change in share capital of thecompany.
The paid up Equity Share capital of the company as on 31st March 2017 was Rs.93505200. During the year the company has issued any shares the details of capitalstructure is detailed below.
|Particulars ||As at 31st March 2017 ||As at March 31 2016 |
|Equity Shares ||Number of Shares ||Rs. ||Number of Shares ||Rs |
|Share capital || || || || |
|(a) Authorised Equity Shares of Rs.10/-each ||9350520 ||93505200 ||9350520 ||93505200 |
|b) issued Subscribed and fully paid up: Equity Shares of Rs. 10/-each ||9350520 ||93505200 ||9350520 ||93505200 |
| ||9350520 ||93505200 ||9350520 ||93505200 |
Reconciliation of Shares outstanding at the beginning and at the end of the reportingperiod:
|Particulars ||As at 31st March 2017 ||As at March 31 2016 |
|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.
i) Details of Shareholders hodling more than 5% shares in the Company.
|Name of the Shareholder ||As on 31.03.2017 ||As on 31.03.2016 |
| ||No. of Shares ||% ||No. of Shares ||% |
|Iron Age India Limited ||600000 ||6.42 ||600000 ||6.42 |
|Vira Systems Private Limited ||1345000 ||14.38 ||1345000 ||14.38 |
|Maxcell Phones Communications || || || || |
|India Private Limited ||800000 ||8.56 ||800000 ||8.56 |
|Iragavarapu Constructions Private Limited ||600000 ||6.42 ||600000 ||6.42 |
|PKI Solutions Private Limited ||600000 ||6.42 ||600000 ||6.42 |
|Every Wear Import and Export Pvt. Limited ||1325787 ||14.18 ||1350000 ||14.44 |
|Elite Class Asset Holdings Ltd ||1300000 ||13.90 ||1300000 ||13.90 |
|Northern Union Limited ||1035000 ||11.07 ||1035000 ||11.07 |
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 is available on company's website under following link:http://www.vivobio.com/pdf/codeOfConduct.pdf
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 to deal with instance of fraud and mismanagement ifany. In staying true to our values of Strength Performance and Passion and in line withour vision the Company is committed to the high standards of Corporate Governance andstakeholder responsibility. The FRM Policy ensures that strict confidentiality ismaintained whilst dealing with concerns and also that no discrimination will be meted outto any person 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. Whistle Blower Policy is posted oncompany's website under following link:http://www.vivobio.com/pdf/whistleBlowersPolicy.pdf
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.
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 provisionsof the 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.
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 undersub-section (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 and Mr Ch. Varun Kumar Company Secretary arethe Key Managerial Personnel ( KMP) of the company in terms of the provisions of the Act.
Familiarization Programme 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 Securities and Exchange Board of India (Listing Obligations and DisclosureRequirement) Regulations 2015 the Company shall familiarise the Independent Directorswith the Company their roles rights responsibilities in the Company nature of theindustry in which the Company operates business model of the Company etc. throughvarious programmes.
Accordingly your Company arranged a technical session on March 30 2017 to familiarizethe Independent Directors the details of which are disclosed on the website of thecompany at www.vivobio.com / vivobio - policies.php.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing obligations andDisclosure Requirements) Regulations 2015 the board has carried out evaluation of its ownperformance the performance of committees of the Board namely Audit CommitteeStakeholders Relationship committee and Nomination and Remuneration Committee and also theDirectors individually. The manner in which the evaluation was carried out and the processadopted 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 under following link:
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 year under review the company has not received any complaint under this policy.
Meetings of Independent Directors
The Company's Independent Directors meet at least once in every financial year withoutthe presence of Executive Directors or management personnel. Such meetings are conductedformally to enable Independent Directors to discuss matters pertaining to the Company'saffairs and put forth their views. The Independent Directors takes appropriate steps topresent their views to the Chairperson One such meeting of Independent Directors was heldduring the year on 30th March 2017 without the presence of Executive Directors andmanagement personnel. The details of the attendance of the Independent Directors in themeeting are as below.
|Name ||No. of meetings held during the year 2016-17 |
| ||Held ||Attended |
|Sharmistha M ||1 ||1 |
|Hariharan R ||1 ||1 |
|K.V.Sittampalam ||1 ||1 |
|Sunder Kanaparthy ||1 ||1 |
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
Board Disclosures i. Risk Management
Currently the Company's 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 analyzing 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 identifyvarious risks cutting across its business lines. The risks are identified and arediscussed by the representatives 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. ii. Internal Control System
Your company has in place adequate systems of internal control commensurate with itssize and the nature of its operations. These have been designed to provide reasonableassurance with regard to recording and providing reliable financial and operationalinformation complying with applicable statutes safeguarding assets from unauthorized useor losses executing transactions with proper authorization and ensuring compliance ofinternal policies. The Company has a well-defined delegation of power and defined limitsfor approving revenue as well as capital expenditure. Processes for formulating andreviewing annual and long term business plans have been laid down to ensure adequacy ofthe control system adherence to the management instructions and legal compliances
Directors' Responsibility Statement;
Pursuant to the requirements under Section 134 (3) (c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement Your Directors hereby confirmed that:
In the preparation of the annual accounts for the year ended 31st March 2017 theapplicable accounting standards had been followed and there are no material departures.
? 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.
? The directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities
? We have prepared the annual accounts for the financial year ended 31st March 2017 ona going concern basis.
? The Directors have laid down internal financial controls which are adequate and areoperating effectively.
? The directors have devised proper systems to ensure compliance with the provisions ofthe 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.
M/s. P Murali & Co . Chartered Accountants Statutory Auditors of the Companyretire at the conclusion of the ensuing Annual General Meeting and M/s. Chandra Babu Naidu& Co. Chartered Accountants are appointed as statutory auditors of the company for aperiod of 5 Years from the conclusion of this AGM i.e. from financial year 2017-18 totill the conclusion of AGM to be held in the financial year 2021-22 subject toratification in every AGM.
The company has received consent letter from the statutory auditors and certificateindicating satisfaction of criteria sated in Section 141 of Companies Act 2013.
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.
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 CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 are enclosed in Annexure
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
Meetings of the Board and Committees
Seven Meetings of the Board of Directors were held during the year. For further detailson the meetings and the attendance of directors/members please refer report on CorporateGovernance of this Annual 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 are appended. As required under the provisions of the Act a statementshowing the salient features of the financial Statements of the subsidiaries is enclosedto this report.
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 remuneration paid to your Directors is in accordance with the Nomination andRemuneration Policy formulated in accordance with Section 178 of the Companies Act 2013and Regulation 19 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirement) Regulations 2015 (including any statutory modification(s) orre-enactment(s) for the time being in force). The salient aspects covered in theNomination and Remuneration Policy have been outlined in the Corporate Governance Reportwhich forms part of this report.
The information required under Section 197 (12) of the Act read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as Annexure- A.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure-B
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hasappointed Mr. V Chandra Sekhar Patnaik Practising Company Secretary to undertake theSecretarial Audit of your Company. The Report of the Secretarial Audit is annexed as
Annexure - C.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings & Outgo
The above information as required under the Companies Act 2013 is annexed as Annexure- D. Details about Employees Stock Option Scheme
Disclosures pursuant to Regulation 14 of the Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014 is annexed as Annexure-E
Related Party Transactions
Related party transactions that were entered during the financial year were on an arm'slength basis and were in the ordinary course of business. There were no materiallysignificant related party transactions with the Company's Promoters Promoter GroupDirectors Senior Management Personnel or their relatives which could have had apotential conflict with the interests of your Company. Please see the details of the samein form AOC-2 which is annexed as Annexure-G.
Further all Related Party Transactions are placed before the Audit Committee forapproval. Prior omnibus approval for normal company transactions is also obtained from theAudit Committee for the related party transactions which are of repetitive nature as wellas for the normal company transactions which cannot be foreseen and accordingly therequired disclosures are made to the Committee on quarterly basis in terms of the approvalof the Committee.
Your Directors have on the recommendations of the Audit Committee adopted a policy toregulate transactions between your Company and its Related Parties in compliance with theapplicable provisions of the Companies Act 2013 the Rules made thereunder and theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirement)Regulations 2015.
Report on Corporate Governance
Corporate Governance Report is set out as separate Annexure to this Report.
Management Discussion and Analysis Report
Management's Discussion and Analysis report for the year under review as stipulatedunder Regulation 34(2) (e) SEBI (LODR) Regulation 2015 of the Listing Agreement with thestock exchanges is presented in a separate section forming part of the Annual report
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. Issue of equity shares with differential rights as to dividend voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of your Company underany scheme save and except ESOS referred to in this Report.
3. 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.
4. During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
5. During the period under review there were no frauds reported by the auditors underprovisions of the Companies Act 2013.
6. There were no material changes commitments affecting the financial position of yourCompany between the end of financial year (March 31 2017) and the date of the report(August 28 2017).
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
M. Kalyan Ram
Chairperson & Whole Time Director DIN : 02012580
Date : 28.08.2017 Place : Hyderabad.
Particulars of Employees information as per Rule 5(1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
i) The percentage of increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2016-17 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2016-17 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:
|Name of Director/ KMP and Designation ||Remuneration of Director/KMP for financial year 2016-17 (Rs. in lakhs) ||% 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 the company |
|1 M Kalyan Ram || || || || |
|Whole Time Director ||3.36 ||4.67% ||1.04 ||Profit before Tax increased by 363% and Profit After Tax increased by |
|2 Srinivasu Padala Chief Financial Officer ||3.66 ||- ||1.13 || |
|3 Challapalli Varun Kumar || || || ||273%in financial Year 2016-17 |
|Company Secretary ||6.20 ||24% ||1.91 || |
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. 3.24 lakhs;
iii) In the financial year there was increase of 42.39% in the median remuneration ofemployees;
iv) There were 183 employees on the rolls of Company as on March 31 2017
v) Relationship between average increase in remuneration and company performance: - TheProfit before tax for the financial year ended March 31 2017 increased by 273 % whereasthe decrease in median remuneration was 42.39 %
vi) Comparison of Remuneration of the Key Managerial Personnel(s) against theperformance of the Company:
The total remuneration of Key Managerial Personnel was Rs. 13.22 lakhs whereas theProfit before tax was Rs. 283.54 lakhs in 2016-17
vii) a) Variations in the market capitalisation of the Company: The marketcapitalisation as on March 31 2017 at BSE was Rs.9350.52lakhs (Rs. 3833.71 lakhs as onMarch 31 2016) b) Price Earnings ratio of the Company at BSE was 37 as at March 31 2017and was 42 as at March 31 2016;
viii) Average percentage increase made in the salaries of employees other than themanagerial personnel was 42.39% whereas the increase in the managerial remuneration forthe same financial year was 14.34%
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.