Vikas EcoTech Limited
The Directors have pleasure in presenting the 31st Annual Report on the business and operations of the Company and Audited Statement of Accounts for the year ended March 31, 2016.
1. FINANCIAL SUMMARY OR HIGHLIGHTS
The Company’s financial performance, for the year ended March 31, 2016 is summarized below:-
(Rs, in lacs)
Net Sales /Income from Business Operations
Profit before Depreciation
Profit after depreciation and Interest/Net Profit Before Tax
Less Current Tax
Less Previous year adjustment of Income Tax
Less Deferred Tax
Mat Credit Availed
Net Profit after Tax
Add Share of Profit from Partnership firm/Minority Interest
Profit for the Period
Less Proposed Dividend
Less Provision for Dividend Distribution Tax
Net Profit after dividend and Tax
Amount transferred to General Reserve
Profits carried to Balance Sheet
Earnings per Share (Basic)
Earnings per Share (Diluted)
Vikas EcoTech Limited achieved 46% growth in its gross revenue to Rs,323 Crores in 2015-16 as against Rs,221 crores in 2014-15 The financial year 2015-16 embarked upon visible improvement in operating profit margins due to focused cost efficiency measures, price discipline and low commodity prices. Vikas EcoTech sustained its investment in brand and manpower to prepare for next growth phase. The operating profit before tax grew by 530% to Rs,39.25 crores in financial year 2015-16 as compared to Rs,6.22 crores in financial year 2014-15. Your Company is financially strong and self reliant in terms of funds generation, debt servicing and has been able to generate sufficient profits for dividend payouts. A constant rise in turnover and profits of the Company is apparent and your Directors are expecting better results both in terms of operations of the Company and its financial position.
2. STATE OF AFFAIRS OF THE COMPANY
The Company has been expanding its operations both in terms of product base and customer base. We have been trying to capture new markets for our products. The operations of the Company are growing steadily and constant raise in performance of the Company is evident from its promising financial prospects.
The Manufacturing plants of the Company are located in the state of J&K and Rajasthan. This has been done keeping in mind the strategic and vocational advantages with regard to availability of raw material and potential for finished goods.
As a move forward and with the help of information technology, your Company is planning to introduce new products in market. The Company is scheduling another manufacturing unit at land allotted by Gujarat Industrial Development Corporation (A Government of Gujarat undertaking) at Dehej-II, Industrial Estate, District- Bharuch (Gujarat) to cater the market of Western and Southern India and also for exports its products like Methyle Tin Mercaptile and Deoxidized Soya Bean Oil.
Subsidiary Companies, Joint Venture and Consolidated Financial Statements
During the period under review the Company does not have any Subsidiary.
Your Company proposes to carry Rs,1.78 crores to the general reserve and retain Rs,22.22 crores in the profit and loss account.
Your Directors are pleased to recommend a dividend @ 5% i.e. of Rs,0.05/- (Five Paisa) per share on 25,42,39,675 (Twenty Five Crore Forty Two Lac Thirty Nine Thousand Six Hundred Seventy Five) Equity Shares for the current financial year. The dividend if approved and declared in the ensuing Annual General meeting would result in a payout of Rs,1,27,11,983.75/- (Rupees One Crore Twenty Seven Lac Eleven Thousand Nine Hundred Eighty Three and Paisa Seventy Five) and Dividend Distribution Tax of Rs,25,87,906/- aggregating a total outflow of Rs,1,52,99,889/-.
The dividend would be payable to all Shareholders whose names appear in the Register of Members as on the Book Closure Date. The Register of Members and Share Transfer books shall remain closed from Saturday, September 24, 2016 to Friday, September 30, 2016 (both days inclusive).
5. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this Report.
6. CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business of the Company during the financial year ended March 31, 2016.
7. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL INCLUDING THOSE WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR
Pursuant to the provisions of Section 152 of the Companies Act, 2013, Shri Vivek Garg, Whole-time Director, is due to retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment.
The details of Director being recommended for re-appointment as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are contained in the accompanying Notice convening the ensuing Annual General Meeting of the Company.
Mrs. Vibha Mahajan was appointed as Additional Director (Women Director) of the Company on August 12, 2015 and regularize in the meeting of shareholders held at September 30, 2015.
Mr. Narender Kumar Garg, Non Executive Independent Director resigned on April 29, 2016 and Ms. Deepika Bhardwaj, Executive Director resigned on May 18, 2015
Ms. Gayatri Chawla working as Company Secretary of the Company w.e.f. 14.02.2015 resigned on 29.02.2016. Thereafter Mr. Siddharth Agrawal was appointed as Company Secretary of the Company on 23.05.2016
Appropriate Resolution(s) seeking your approval to the appointment/ re-appointment of Directors are also included in the Notice.
8. NUMBER OF MEETINGS OF BOARD OF DIRECTORS
During the financial year 2015-2016, the Board of Directors of the Company, met 4 (Four) times on, May 30, 2015, August 12, 2015, October 26, 2015, February 4, 2016.
9. DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) of the Companies Act, 2013, the Directors to the best of their knowledge hereby state and confirm that:
a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
b) the directors had 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 of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e) the internal financial controls to be followed by the company were laid down and such internal financial controls were adequate and were operating effectively; and
f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
10. DECLARATION BY INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT, IF ANY
All the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.
11. NOMINATION AND REMUNERATION POLICY OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
In adherence of section 178(1) of the Companies Act, 2013, the Board of Directors of the Company in its Meeting held on 14th February 2014, approved a policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided u/s 178(3), based on the recommendations of the Nomination and Remuneration Committee. The broad parameters covered under the Policy are - Company Philosophy, Guiding Principles, Nomination of Directors, Remuneration of Directors, Nomination and Remuneration of the Key Managerial Personnel (Other than Managing/ Whole-time Directors), Key-Executives and Senior Management and the Remuneration of Other Employees. The Company’s Policy relating to appointment of Directors, payment of Managerial remuneration, Directors’ qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in ANNEXURE - D and forms part of this Report.
12. FORMAL ANNUAL EVALUATION
In line with the statutory requirements enshrined under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board carried out a performance evaluation of itself, its Committees, the Chairman and each of the other Directors. As in previous year, this was carried out on the basis of framework approved by the Nomination and Remuneration Committee. The Committee had unanimously consented for an ‘in-house’ review built on suggestive parameters. Based on the suggestive parameters approved by the Nomination and Remuneration Committee, the following evaluations were carried out:
- Review of Board as a whole by all the Members of the Board
- Review of all Board Committees by all the Members of the Board
- Review of Individual Directors by rest of the Board Members except the Director being evaluated
13. EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return in Form No. MGT - 9 forms part of the Board’s Report and is annexed herewith as ANNEXURE - A.
1. Statutory Auditors
The Statutory Auditors, M/s RSPH & Associates, Chartered Accountants, (Registration No.) hold office till the conclusion of the ensuing Annual General Meeting.
2. Cost Auditors
Pursuant to the provisions of Section 141 read with Section 148 of the Companies Act, 2013 and Rules made there under, M/s Niraj Kumar Vishwakarma & Associates, Cost Accountants, New Delhi were appointed as the cost auditors of the Company for the year ending March 31, 2016.
In terms of the Cost Audit Order notified by the Ministry of Corporate Affairs dated December 31, 2014, the Company is covered under the purview of Cost Audit.
3. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with corresponding Rules framed there under, M/s AAA & Associates were appointed as the Secretarial Auditors of the Company to carry out the secretarial audit for the year ending March 31, 2016.
A Secretarial Audit Report given by the Secretarial Auditors in Form No. MR-3 is annexed with this Report as ANNEXURE -G. There are no qualifications, reservations or adverse remarks made by Secretarial Auditors in their Report.
15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
During the financial year ended March 31, 2016, no Loans, Investment or guarantee u/s 186 of the Companies Act, 2013 was made by the Company.
16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of every contract and arrangement entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto are disclosed in Form No. AOC-2 in ANNEXURE - B and form part of this Report.
17. DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE ACT
The Company has not accepted any deposits during the year under review.
18. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has duly constituted a Committee under the nomenclature of Corporate Social Responsibility Committee consisting of majority of non-executive independent Directors. The Committee has developed Corporate Social Responsibility Policy of the Company and is monitoring implementation of the same. The CSR Committee reports to the Board. The said CSR policy of the Company is also posted on the Website of the Company at www.vikasecotech.com.
During the year under review, the Company undertook CSR initiative for cause of Education through the “Maharaja Agrasen Technical Education Society (Regd.)” and Rs,15,00,000/- (Rupees Fifteen Lacs) were allocated and spent for the said cause of promoting education being one of the areas Company is presently focusing.
The Annual Report on Company’s CSR activities is furnished in “Annexure E” and attached to this report.
19. AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Company, comprises 3 (Three) Members, namely Shri Sumer Chand Tayal, Shri. Manoj Singhal, Shri. Purushottam Dass Bhoot all of them being Independent Directors. Shri Sumer Chand Tayal, an independent Director, is the Chairperson of the Audit Committee. The Board accepted the recommendations of the Audit Committee whenever made by the Committee during the year.
20. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY
The risk management includes identifying types of risks and its assessment, risk handling and monitoring and reporting. The Company has developed a risk management policy and has also constituted Risk Management Committee consisting majority of non-executive independent Directors for timely recognition and cure of the business, financial and other risks associated with the working of the Company. The composition and other details of the Risk Management Committee of the Company are detailed in Corporate Governance Report. The Committee meets at regular intervals and monitors implementation of Risk Management Policy of the Company.
21. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Risk Management and Governance Department of the Company have assured the existence of various risk-based controls in the Company and also tested the key controls towards assurance for compliance for the present fiscal.
Further, the testing of such controls was also carried out independently by the Statutory Auditors of the Company as mandated under the provisions of the Companies Act, 2013.
In the opinion of the Board, the existing internal control framework is adequate and commensurate to the size and nature of the business of the Company.
22. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
The Company has also established a vigil mechanism and overseas it through the Audit Committee to resolve the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of co-employees and the Company.
23. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE
There was no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.
24. DETAILS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013
Details pursuant to section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Report and are annexed herewith as ANNEXURE- C.
25. EMPLOYEES STOCK OPTION PLANS
The Company pursuant to the Special Resolution passed at the Annual General Meeting held on September 28, 2011 for issue and allotment of Equity shares under Employee Stock Option Scheme (ESOS), has constituted a Compensation Committee. An Employee Stock Option Scheme 2011 (ESOS 2011) to reward the Employees of the Company for their performance and association with the Company and to motivate them to contribute to the growth and profitability of the Company was accordingly formulated and implemented.
During the previous financial year no exercise of options has taken place during the financial year under reporting and thus no shares has been allotted under Employee Stock Option Scheme 2011 of the Company.
During the previous financial year the said scheme has been lapsed as on December 1, 2015 and no shares can now be allotted against the same. The Board of Directors had passed a resolution in their meeting held on February 4, 2016 to rescind the said scheme of the Company
Disclosures under Regulation 14 of Securities Exchange Board of India (Share Based Employment Benefits) Regulations, 2014 are available at website of the Company www.vikasecotech.com at we blink : http://vikasecotech.com/announcement/ DisclosureunderSEBI.pdf.
26. CREDIT RATINGS
During the year under review Brickwork Ratings India Private Limited, A SEBI, RBI & NSIC registered credit rating agency in India, has assigned Bank rating BWR BBB- (BWR Triple B minus) for Long-term bank facilities and the Outlook of which is Stable regarding timely servicing of financial obligations and BWR A3 (BWR A Three) for Short-term bank facilities.
27. CORPORATE GOVERNANCE
Your Company upholds the standards of governance and is compliant with the Corporate Governance provisions as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in both letter and spirit. The Company’s core values of honesty and transparency have since its inception been followed in every line of decision making. Setting the tone at the top, your Directors cumulatively at the Board level, advocate good governance standards. Vikas EcoTech has been built on a strong foundation of good corporate governance which is now a standard for all operations across your Company.
Parameters of Statutory compliances evidencing the standards expected from a listed entity have been duly observed and a Report on Corporate Governance as well as the Certificate from Statutory Auditors confirming compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.
Further, the Management Discussion and Analysis Report and CEO / CFO Certificate as prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are also presented in separate sections forming part of the Annual Report.
28. ENVIRONMENT, HEALTH AND SAFETY
Your Company is continuously working towards laying a strong foundation and creating a sustainable future for our organization, our people and the society as a whole. Here, Environment Health and Safety (EHS) management is a key pillar of our sustainable growth agenda. We are committed to lead and excel in all aspects of environmental stewardship, safety, health and social responsibility, always striving to provide safe and healthy work environment to our employees and efficient, safe and environmentally responsible products to our customers. Your Company’s primary focus in this regard is on product innovation, developing safe and efficient products which are environmentally friendly, i.e. energy-efficient, safer to use, using non-toxic / eco-friendly raw-materials, having long use life and those can be safely disposed and dismantled at the end of their use life. Further, we are actively working towards improving the EHS systems and practices within our operations. From environment aspect, our efforts are directed towards resource conservation and efficiency within our operations. We have initiated an energy conservation drive within our plants with the objective of monitoring our energy consumption at micro-level, benchmarking our performance and implementing solutions for continuous improvements.
29. RESEARCH & DEVELOPMENT
With the objective of enhancing in-house R&D capability, the Company is investing in world class infrastructure and test laboratories at all plant locations. The company has strong focus on in-house research & development and promotes culture for innovation. Company’s CRI (Centre for Research and Innovation) team focuses on continuous and sustainable product innovations, working across the product lifecycle aspects including design, development, manufacturing and use phases. During the year, the R&D activities continued to focus on developing intelligent, eco-friendly and energy efficient products, as well as, extending the range of existing products.
30. LISTING OF SECURITIES
The shares of the Company are listed on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). Subsequent to the notification of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) during the year, the Company has entered into “Uniform Listing Agreement” with both the Stock Exchanges where its securities are listed, namely, National Stock Exchange of India Limited and BSE Limited in order to carry out a novation of the erstwhile Listing Agreement. The listing fee for the year 2016-17 has already been paid to the credit of both the Stock Exchanges.
31. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
During the year under review, the Company has not transferred any amount in Investor Education and Protection Fund.
32. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE, EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in ANNEXURE - F and forms part of this Report.
The Board places on record its appreciation for the continued co-operation and support extended to the Company by customers, vendors, regulators, banks, financial institutions, rating agencies, stock exchanges and depositories, auditors, legal advisors, consultants, business associates and all the employees with whose help, cooperation and hard work the Company is able to achieve the results. The Board deeply acknowledges the trust and confidence placed by the consumers of the Company and all its shareholders.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Vikas EcoTech Limited
(Purushottam Dass Bhoot) (Vikas Garg)
Chairman & Director Managing Director