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Vinati Organics

BSE: 524200|NSE: VINATIORGA|ISIN: INE410B01029|SECTOR: Chemicals
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Directors Report Year End : Mar '19    Mar 17

To the Members,

The Directors have pleasure in presenting their Thirtieth Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended 31st March 2019.

1) FINANCIAL RESULTS:

The summarized position of these results is given below: (Rs. In Lakhs)

2018-2019

2017-2018

Net Sales/Income from Operations

110814.01

74220.02

Other Income

4995.45

3069.57

Total Income

115809.46

77289.59

Profit before Finance cost, Depreciation &Taxes

45357.04

22794.70

Finance cost

94.40

121.09

Profit before Depreciation & Taxes

45262.64

22673.61

Depreciation & Amortisation Expense

2738.56

2336.26

Profit before Taxation

42524.08

20337.35

Provision for Taxation- Current

13861.73

5555.71

Deferred

371.30

1130.63

Earlier year adjustment

42.21

(737.11)

Profit for the year

28248.84

14388.12

Items that will be reclassified to profit or loss re-measurements of defined benefit plans

1.00

(18.37)

Income Tax relating to items that will not be reclassified to profit or loss

(0.35)

6.36

Total other comprehensive income for the year, net of tax

0.65

(12.01)

Net Profit for the year

28249.49

14376.11

2) REVIEW OF OPERATIONS:

The Net Sales/Income from operations during the year has gone up by 49.30% to RS.110814.01 Lakhs from RS.74220.02 Lakhs.

3) STATE OF AFFAIRS:

The Company is engaged in the business of manufacturing of specialty organic intermediaries and monomers.

There has been no change in the business of the Company during the financial year ended 31st March, 2019.

4) DIVIDEND:

Your Directors are pleased to recommend a dividend of 350% i.e. RS.7.00 per equity share.

The total outgo on dividend account will be RS.4336.82 Lakhs (inclusive of dividend distribution tax).

The Dividend is based upon the parameters mentioned in the Dividend Distribution Policy approved by the Board of Directors of the Company which is in line with regulation 43 A of the SEBI (Listing Obligations& Disclosure Requirements) Regulations, 2015. The Policy is annexed as Annexure ‘A’ forming part of this Board Report and also uploaded on the Company’s Website at http://vinatiorganics.com

5) SUBSIDIARY COMPANY:

The Company does not have any subsidiary company.

6) PROSPECTS:

The site work related to increase in ATBS manufacturing capacity as well as augmenting downstream processing (TBA/ Polymer) capacity at Lote is in full swing. The Company plans to increase the production capacity of ATBS from existing 26000 TPA to 40000 TPA.

The total expenditure expected for this expansion is about RS.110 Crores. The expansion is likely to be completed in Q2 FY 20.

Butyl Phenols (Isobutylene Based Downstream Products): Work related to Butyl Phenol Project is in full swing at Lote site and is also expected to be commissioned in Q2 FY 20.

7) TURNOVER AND PROFIT (OPERATING RESULTS):

The Company achieved gross turnover of RS.110814.01 Lakhs as compared to RS.74220.02 Lakhs in the previous year up by 49.30%. The net profit after tax increased to RS.28248.84 Lakhs as compared to RS.14388.12 Lakhs in the previous year up by 96.33%

8) INSURANCE:

The properties and insurable interest of your company like Building, Plant and Machinery, Inventories etc. Are properly insured.

9) DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Sunil Saraf Director of the Company retire by rotation at the ensuing Annual General Meeting and being eligible have offered himself for re-appointment.

During the year, Mr. Girish M. Dave relinquished the position of Independent Director & Chairman with effect from October 27, 2018 due to completion of 80 years of age. The Board appreciated his valuable advice and guidance to the Company from time to time during the tenure of his terms of office as director of the Company.

During the financial year 2018 - 19, Mr. Vinod Saraf has resigned from the positon of Managing Director of the Company with effect from 27th October, 2018. Further he has been appointed as Whole-time Director and the Chairman of the Board, designated as -Chairman & Executive Director- for the period of 5 years with effect from 27th October, 2018, by the Board of directors of the Company in its meeting held on 27th October, 2018 on the recommendation of the Nomination & Remuneration Committee, which is subject to approval of the Shareholders of the Company in their Annual General Meeting.

Further, Ms. Vinati Saraf Mutreja has resigned from the positon of Whole-time Director, designated as -Executive Director- of the Company with effect from 27th October, 2018 and has been appointed as Managing Director and Chief Executive Officer (-MD & CEO-) for the period of 5 years with effect from 27th October, 2018, by the Board of directors of the Company in its meeting held on 27th October, 2018 on the recommendation of the Nomination & Remuneration Committee, which is subject to approval of the Shareholders of the Company in their Annual General Meeting.

Ms. Viral Saraf Mittal was appointed as Whole Time Director designated as Director - Corporate Strategy of the Company for a period from 19th May 2014 to 18th May 2019. Her term as Whole time director expires on 18th May 2019 and has been re-appointed as Whole Time Director, designated as Director - CSR & Corporate Strategy for further period of 5 years w. E.f. 19th May 2019 by the Board of directors of the Company in its meeting held on 11th May, 2019 on the recommendation of the Nomination & Remuneration Committee, which is subject to approval of the Shareholders of the Company in their Annual General Meeting.

As per Section 152 (6) (e) total number of directors did not include independent directors. Mr. R. K. Saraswat, Mr. A. A. Krishnan and Mr. C. B. Gokhale, as they held term upto five consecutive years on the Board of the Company, i.e. Up to 31.03.2019.

Mr. R. K. Saraswat has been re- appointed as Independent Director for Next Term For the Period of One Year w.e.f. 1st April 2019 to 31st March 2020 and has been approved by the shareholders by passing Special Resolution through Postal Ballot.

The Board of Directors has appointed:

(1) Smt. Mona Bhide as a Non-Executive and woman Independent Director of the Company w. E. F. 27th October 2018.

(2) Mr. Adesh Kumar Gupta as a Non-Executive and Independent Director of the Company w. E. F. 11th May 2019 and

(3) Dr. Prof.Mannepalli Lakshmi Kantam as a Non-Executive and woman Independent Director of the Company w. E. F. 11th May 2019.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (-SEBI Listing Regulations-). There has been no change in the circumstances affecting their status as independent directors of the Company.

During the year under review, the non-executive directors of the Company had no pecuniary Relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

Key Managerial Personnel

Shri Vinod Saraf - Chairman , Ms. Vinati Saraf Mutreja - Chief Executive Officer and Managing Director, Ms. Viral Saraf Mittal - Director-CSR & Corporate Strategy, Mr. NK Goyal - Chief Financial Officer (CFO) , Mr. Jayesh Ashar- Chief Operating Officer (COO) and Mr. Milind Wagh - Company Secretary, are the Key Managerial Personnel of the Company in accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).

Mr. Gunvant S. Singhi - Company Secretary & Compliance officer of the Company has retired from the Company w .e. F. 31st July, 2018. Board places on record its deep appreciation for the excellent contributions made by Mr. Gunvant S. Singhi during his tenure.

Mr. Milind Wagh has been appointed as Company Secretary & Compliance officer of the Company w. E. F. 1st August, 2018.

10) AUDITORS’ REPORT :

There are no qualifications, reservations or adverse remarks or disclaimers made by the Auditors in their report on the Financial Statements of the Company for the Financial Year ended 31st March, 2019.

11) COST AUDITORS:

As per Section 139 of the Companies Act, 2013, M/s. N. Ritesh & Associates have been appointed as a Cost Auditor for the year ending on 31.03.2020, subject to the approval of Central Government, if required.

The Audit Committee has received a Certificate from the Cost Auditors certifying their independence and arm’s length Relationship with your Company. In accordance with Cost Audit (Report) Rules, 2001, the due date for filing the Cost Audit Report in XBRL for the financial year ended 31.03.2018 was 28.02.2019 and the same was filed on 23.11.2018 vide SRN No.: RS.29272747 with the Ministry of Corporate Affairs, New Delhi.

12) POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The Company’s policy on directors’ appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 has been disclosed in the Corporate Governance Report, which forms part of this report. The Remuneration policy has been posted on website of the Company at www.vinatiorganics.com.

13) FIXED DEPOSITS:

During the year under review the Company did not invite or accept any Fixed Deposits within the meaning of Section 73 of the Companies Act, 2013 and as such, no amount of principal or interest was outstanding as on the date of balance sheet from public.

14) FOREIGN EXCHANGE EARNINGS AND OUTGO:

The company had a total foreign exchange earnings and outgo as provided below during the year ended 31st, March 2019:

Foreign Exchange Earnings - RS.81255.76 Lakhs Foreign Exchange Outgo - RS.18112.03 Lakhs

15) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO:

Information as per Section 134 (3) (m) of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014, relating to the above head are given in Annexure ‘B’ forming part of this report.

16) HUMAN RESOURCE:

The Company believes that Human Resources play a very critical role in its growth. Its management has infused a lot of rigor, intensity in its people Development Processes and in honing skill sets. Various initiatives have been launched to provide growth opportunities to Employees. For the development of the Employees, the Company has created a structured training framework for the employees to ensure their ongoing education.

The Group’s Corporate Human Recourses function has played and continues to play an integral role in the Company’s talent management process.

17) QUALITY INITIATIVES:

Sustained commitment to highest levels of quality, best-in-class service management, robust information security practices and mature business continuity processes helped the Company attain significant milestones during the year.

18) LISTING:

The Company’s equity shares continue to be listed at BSE & NSE. We confirm that the Listing fee for the financial year 2019-2020 has been paid to them. The stock code of the company at BSE is 524200 and NSE is VINATIORGA.

19) SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS, COURTS AND TRIBUNALS:

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company’s operations in future.

20) DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

I. In the preparation of the annual accounts, the applicable accounting standards have been followed.

Ii. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

Iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

Iv. They have prepared the annual accounts on a going concern basis;

V. They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

Vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2018-19.

21) DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declaration from all of its Independent Directors under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.

22) MATERIAL CHANGES AFTER BALANCE SHEET DATE (31ST MARCH, 2019):

No material changes and commitments affecting the financial position of the Company have occurred between the end of the Financial Year (FY19) of the Company to which the Financial Statements relate and the date of this report.

23) CORPORATE GOVERNANCE AND MANAGEMENT’S DISCUSSION AND ANALYSIS REPORTS :

The Corporate Governance and Management’s Discussion and Analysis Reports, which form an integral part of this report, are set out in separate annexures to this report, along with the certificate from the Auditors of the Company certifying compliance of the conditions of the Corporate Governance as required under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015,. (See Annexures ‘C’, ‘D’ & ’E’)

24) EMPLOYEES:

The Company is required to make disclosure under section 134 of the Companies Act, 2013 for its employee drawing remuneration in excess of RS.1.02 Cr P. A. Or RS.8.50 Lakhs Per month. (See Annexure ‘F’)

Employee holding 2% or more of the equity shares by himself/ herself or along with his/her spouse:

1. Mr. Vinod Saraf - Managing Director - 6950291 shares - 13.52%

2. Mrs. Kavita Vinod Saraf - Spouse - 6207228 shares - 12.08%

25) NO CHANGE IN THE CLASS AND NATURE OF THE BUSINESS OF COMPANY OR ITS SUBSIDIARIES:

There has been no change in the class and nature of the business of the Company. The Company does not have any Subsidiary Company.

26) CORPORATE DEVELOPMENT:

The Company had sought the approval of the shareholders by way of a Special Resolution through notice of postal ballot dated January 30, 2019 for Reappointment of Mr. R.K. Saraswat as Independent Director of the Company for the period of one year w .e. F. 1st April 2019, which was duly passed and the results of which were announced on March 14, 2019. Mr. Vijay Mishra (Membership No. FCS 5023) of VKM and Associates, Practicing Company Secretaries, was appointed as the Scrutinizer to scrutinize the postal ballot and remote e-voting process in a fair and transparent manner.

27) COMPOSITION OF AUDIT COMMITTEE:

The Audit Committee of the Company as on 31st March, 2019 comprised the following 3 Directors of the Company:

1. Mr. R. K. Saraswat: Independent Director - Chairman

2. Ms. Mona Bhide : Independent Director - Member

3. Mr. C.B. Gokhale: Independent Director - Member

28) ESOP/ ESOS:

The Company has not issued any ESOP or ESOS.

29) SWEAT EQUITY:

The Company has not issued any sweat equity.

30) PREFERENTIAL ALLOTMENT:

The Company has not issued any shares as a preferential allotment.

31) REDEMPTION OF SHARES/ DEBENTURES:

The Company has not redeemed any Shares or Debentures.

32) DISQUALIFICATION OF DIRECTOR:

No Director of the Company is disqualified under any law to act as a Director.

33) CORPORATE SOCIAL RESPONSIBILITY:

The Corporate Social Responsibility Committee was constituted on 10th May, 2014 and reconstituted on 26th February, 2015 as per Section 135 of the Companies Act, 2013 (-the Act-) read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. This committee comprises of 4 Directors of the Company.

All the members of Corporate Social Responsibility Committee mentioned above i.e. Mr. Vinod Saraf, Chairman, Mr. R. K. Saraswat, Director, Ms. Vinati Saraf Mutreja, Managing Director & CEO & Ms. Viral Saraf Mittal, Director-CSR & Corporate Strategy have good knowledge and exposure to utilize the Company’s resources towards its corporate Social Responsibility. The Corporate Social Responsibility policy is available on Company’s website.

The average profit of the Company for last three years is RS.19821.96 Lakhs. Prescribed CSR expenditure is RS.396.44 Lakhs. Details of CSR spent during the financial year 201819 are as per Annexure ‘G’ enclosed. Amount unspent during the year is RS.116.24 Lakhs as good projects were not found till 31.03.2019. The Corporate Social Responsibility (CSR) policy of the Company has been posted on website of the Company at www.vinatiorganics.com.

34) POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

The Company has in place a Policy on Prevention of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (-Prevention of Sexual Harassment of Women at Workplace Act-) and Rules framed there under and an Internal Complaints Committee consisting of Ms. Vinati Saraf Mutreja, Managing Director & CEO, Ms. Viral Saraf Mittal,. Director - CSR & Corporate Strategy and Ms. Priyanka Kheruka, Member has also been set up to redress complaints received regarding Sexual harassment.

The Company has ensured organization wide dissemination of the Policy and the provisions of Prevention of Sexual Harassment of Women at Workplace Act by conducting sessions throughout the Company.

During the financial year 2018-19, the Company received no complaints. The Company is committed to providing a safe and conducive work environment to all of its employees and associates. The Sexual Harassment policy posted on the website of the Company at www.vinatiorganics.com

35) EXTRACT OF ANNUAL RETURN- MGT - 9:

Extract of Annual Return for financial year ended 31.03.2019 (Pursuant to section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014) in the prescribed Form No. MGT-9 is given in the (Annexure ‘H’) which is a part of this report. The same is available on website of the Company at www.vinatiorganics.com

36) SECRETARIAL AUDIT REPORT:

To comply with the provisions of Section 204 of the Companies Act, 2013 we enclose herewith Secretarial Audit Report received from M/s. VKM & Associates, Practicing Company Secretary for the year ended 31st March, 2019 (Annexure ‘I’). The same does not contain any adverse remarks.

37) RISK MANAGEMENT:

The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The risk management policy has been posted on website of the Company at www.vinatiorganics.com.

38) PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company had not given any loans and guarantees. The Company had made investments amounting to RS.9647.34 Lakhs as given below:

In mutual fund units

Rs. In Lakhs)

1,69,32,057.98 Units

HDFC Arbitrage Wholesale Direct -DM

1771.60

1,09,05,356.18 Units

ICICI Prudential Equity Arbitrage Direct-D

1580.34

99,44,215.02 Units

Kotak Equity Arbitrage Direct-DM

1094.62

15,24,739.51 Units Kotak Saving Direct Growth

465.85

Non Convertible Debenture

200 Units (Face Value RS.10,00,000.00) India Infoline NCD

2097.77

1942 Units (Face Value RS.1,00,000.00) Edelweiss Finvest NCD

2106.84

50 Units (Face Value RS.10,00,000.00) HDB Financial Services NCD

530.32

Total

9647.34

39) DEPOSITS FROM PUBLIC:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

40) PARTICULARS OF EMPLOYEES:

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

A. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Sr.

No.

Whole-time directors

Ratio to median remuneration

1.

Mr. Vinod Banwarilal Saraf, Chairman

30.63

2.

Ms. Vinati Saraf Mutreja, Managing Director & CEO

21.45

3.

Ms. Viral Saraf Mittal, Director - CSR & Corporate Strategy

12.27

B. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:

Sr.

No.

Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary

% increase in remuneration in the financial year

1.

Mr. Vinod Banwarilal Saraf, Chairman

10%

2.

Ms. Vinati Saraf Mutreja, Managing Director & CEO

10%

3.

Ms. Viral Saraf Mittal, Director - CSR & Corporate Strategy

10%

4.

Mr. Jayesh Ashar, Chief Operating Officer

12.3%

5.

Mr. N. K. Goyal, Chief Financial Officer

11.3%

6.

Mr. G. S. Singhi, Company Secretary cum Finance Controller (up to 31.07.2018)

10%

7.

Mr. Milind Wagh, Company Secretary appointed w. E. F. 01.08.2018

NIL

C. The percentage increase in the median remuneration of employees in the financial year: 12%

D. The number of permanent employees on the roll of Company: 817

E. The explanation on the Relationship between average increase in remuneration and Company performance:

The increase in remuneration is in line with the market trends. In order to ensure that remuneration reflects company performance, the performance pay is also linked to organization performance, apart from an individual’s performance.

F. Comparison of the remuneration of the key managerial personnel against the performance of the Company:

Aggregate remuneration of key managerial personnel (KMP) in FY19 (Rs. In Lakhs)

478.55

Revenue (Rs. In Lakhs)

110814.01

Remuneration of (KMP) as a percentage

0.43

Of revenue

Profit before tax (PBT) (Rs. In Lakhs)

42524.08

Remuneration of (KMP) as % of PBT

1.13

G. Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars

March 31, 2019

March 31, 2018

%

Change

Market capitalization

845896.27

462519.23

83%

(Rs. In Lakhs)

Price earnings ratio

29.94

27.97

Nil

H. Percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

March 31,

November

%

Change

Particulars

2019

11, 1991

(Rs.)

(IPO)*

Market Price (BSE)

1646

1.33

123759

Market Price (NSE)

1644

1.33

123609

* Adjusted for 1:2 bonus issue in 2007 and split of Face Value of shares from RS.10/- to RS.2/- face value in 2009.

I. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Increase in managerial remuneration was 10% only.

J. Comparison of a remuneration of the key managerial personnel against the performance of the Company:

(Rs. In Lakhs)

Particulars

Total

Remuneration

% of revenue 110814.01

% of net profit before tax 42524.00

Mr. Vinod Banwarilal Saraf, Chairman

138.60

0.12

0.33

Ms. Vinati Saraf Mutreja, Managing Director & CEO

104.62

0.09

0.25

Ms. Viral Saraf Mittal, Director - CSR & Corporate Strategy

59.00

0.05

0.14

Mr. Jayesh Ashar, Chief Operating Officer

83.04

0.07

0.20

Mr. N. K. Goyal, Chief Financial Officer

64.34

0.06

0.15

Mr. G. S. Singhi, Company Secretary cum Finance Controller (up to 31.07.2018)

10.42

0.01

0.02

Mr. Milind Wagh, Company Secretary (from 01.08.2018)

17.05

0.01

0.04

K. The key parameters for any variable component of remuneration availed by the directors:

No variable component is paid.

L. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year:

None.

M. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.

N. The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. [Annexure ‘J’]. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Companies Act, 2013, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

41) WHISTLE BLOWER POLICY/VIGIL MECHANISM:

The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct or Ethics Policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Whistle Blower Policy has been posted on the website of the Company at www.vinatiorganics.com.

42) TRANSACTION WITH RELATED PARTIES:

None of the transactions with related parties falls under the scope of Section 188(1) of the Companies Act, 2013. Information on transactions with related parties pursuant to Section 134(3)(h) of the Companies Act, 2013 read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure ‘K’ in Form AOC-2 and the same forms part of this report.

43) BOARD EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and SEBI Listing Regu1ations,2015.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board meetings, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The above criteria are based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

The Board and the Nomination and Remuneration Committee (-NRC-) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

44) INDEPENDENT DIRECTORS’ MEETING:

The Independent Directors of the Company met on 28th March, 2019, inter-alia to discuss:

(i) Review the performance of non-Independent Directors and the Board of Directors as a whole;

(ii) Review the performance of the Chairperson of the Company, taking into account the views of the Executive and Non-Executive Directors;

(iii) Assess the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. (Annexure ‘L’)

45) NUMBER OF MEETINGS OF THE BOARD:

Four meetings of the board were held during the year dated 12.05.2018, 06.08.2018, 27.10.2018 & 30.01.2019. For details of the meetings of the board, please refer to the Corporate Governance Report, which forms part of this report.

46) INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis Report, which forms part of this report.

47) AUDIT COMMITTEE:

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.

48) REPORTING OF FRAUDS:

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made there under.

49) TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND:

As required under Section 124 of the Act, 27,344 equity shares, in respect of which dividend has not been claimed by the members for seven consecutive years or more, have been transferred by the Company to the Investor Education and Protection Fund Authority (IEPF) during the financial year 2018-19. Details of shares transferred have been uploaded on the website of IEPF as well as the Company.

50) AUDITORS:

(i) Statutory Auditors:

The Members at the 28th Annual General Meeting of the Company held on 29th July, 2017, had appointed M/s. M. M. Nissim & Co., Chartered Accountants (Firm Registration No. 107122/W) as the Statutory Auditor of the Company to hold office for a term of five years i.e., from the conclusion of the said Annual General Meeting until the conclusion of 33rd Annual General Meeting of the Company to be held in 2022, subject to ratification of their appointment by the shareholders, every year. The Ministry of Corporate Affairs vide its Notification dated 7th May 2018, has dispensed with the requirement of ratification of Auditor’s appointment by the shareholders, every year. Hence, the resolution relating to ratification of Auditor’s appointment is not included in the Notice of the ensuing Annual General Meeting.

(ii) Cost Auditors:

As per the requirements of Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, maintenance of cost records is applicable to the Company and the Audit of the said Cost Records is being carried out every year. The Board of Directors, based on the recommendation of the Audit Committee, has appointed M/s. N. Ritesh & Associates, Cost Accountants, as Cost Auditor of the Company for conducting the Cost Audit for the financial year 2019-20, on such remuneration as mentioned in the Notice of the 30th Annual General Meeting. A resolution seeking Member’s ratification for the remuneration payable to the Cost Auditor forms part of the Notice of 30th Annual General Meeting and the same is recommended for your consideration and ratification.

(iii) Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Act and the rules made there under, the Company had appointed M/s. VKM & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company for the year ended 31st March, 2019. The Secretarial Audit Report issued in this regard is annexed as Annexure - H. The Auditors’ Report and the Secretarial Audit Report for the financial year ended 31st March, 2019 do not contain any qualification or reservation or adverse remark.

51) CORPORATE POLICIES AND PROCEDURES ON INTERNAL FINANCIAL CONTROLS:

The Corporate Policies and Procedures on Internal Financial Controls policy has been posted on website of the Company at www.vinatiorganics.com

52) BUSINESS RESPONSIBILITY REPORT:

As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Business Responsibility Report is attached and is a part of this Annual Report as set out in Annexure ‘M’ of this report and is also available on Company’s website www.vinatiorganics.com

53) STATUTORY DISCLOSURES:

There were no transactions/events with respect to the following items during the financial year under review and accordingly no disclosure or reporting is required with respect to the same:

1. Deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise

3. Receipt of any remuneration or commission by the Managing Director/Whole-time Director of the Company from any of its subsidiaries/ other Companies.

4. Significant or material orders passed by the regulators or courts or tribunals which impact the going concern status and the Company’s operations in future.

5. Buyback of shares

6. Material changes and commitments, affecting the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report unless otherwise stated in the report The details pertaining to the composition of various committees of the Board including the Audit Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee and the details of establishment of Vigil Mechanism are included in the Corporate Governance Report, which is a part of this report.

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

54) AWARDS:

The Award received by Ms. Vinati Saraf Mutreja as Outstanding Women Entrepreneur from The Economic Times family business awards. The Company appreciates her efforts and congratulated to Ms. Vinati Saraf Mutreja.

55) APPRECIATION & ACKNOWLEDGEMENTS:

Your Directors take this opportunity to place on record their sincere gratitude for assistance and cooperation received from Central & State Governments, banks, financial institutions, shareholders, business associates and esteemed customers for their continued support and assistance during the year.

Your Directors also place on record their appreciation for the excellent contribution made by all employees of Vinati Organics Limited through their commitment, competence, cooperation and diligence to duty in achieving consistent growth of the Company.

For and on behalf of the Board of Directors

Vinod Saraf

Chairman

Mumbai, 11th May 2019 (DIN: 00076708)

Source : Dion Global Solutions Limited
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