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Vinati Organics Ltd.

BSE: 524200 Sector: Industrials
NSE: VINATIORGA ISIN Code: INE410B01037
BSE 00:00 | 24 Apr Vinati Organics Ltd
NSE 05:30 | 01 Jan Vinati Organics Ltd
OPEN 883.00
PREVIOUS CLOSE 883.65
VOLUME 1918
52-Week high 1255.50
52-Week low 651.00
P/E 26.17
Mkt Cap.(Rs cr) 8,945
Buy Price 870.15
Buy Qty 5.00
Sell Price 886.00
Sell Qty 10.00
OPEN 883.00
CLOSE 883.65
VOLUME 1918
52-Week high 1255.50
52-Week low 651.00
P/E 26.17
Mkt Cap.(Rs cr) 8,945
Buy Price 870.15
Buy Qty 5.00
Sell Price 886.00
Sell Qty 10.00

Vinati Organics Ltd. (VINATIORGA) - Director Report


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Company director report

To the Members

Your Directors have pleasure in presenting their Twenty ninth Annual Report on thebusiness and operations of your Company together with the Audited Financial Statements forthe year ended 31st March 2018.

1) FINANCIAL RESULTS

The summarised position of these results is given below:

(Rs. in Lacs)
2017-2018 2016-2017
Net Sales/Income from Operations 75587.44 68133.32
Other Income 1702.15 1248.34
Total Income 77289.59 69381.66
Profit before Finance cost Depreciation & Taxes 22794.70 22943.34
Finance cost 121.09 186.25
Profit before Depreciation & Taxes 22673.61 22757.09
Depreciation & Amortisation Expense 2336.26 2160.56
Profit before Taxation 20337.35 20596.53
Provision for Taxation - Current 5555.71 4784.38
Deferred 1130.63 2010.99
Earlier year adjustment (737.11) (226.35)
Profit for the year 14388.12 14027.51
Other Comprehensive Income
Items that will not be reclassified to Profit or Loss
Remeasurements of Defined benefit plans (18.37) (222.47)
Income Tax relating to items that will not be reclassified to profit or loss 6.36 76.99
Total other comprehensive income for the year net of tax (12.01) (145.48)
Net Profit for the year 14376.11 13882.03

2) REVIEW OF OPERATIONS

The net sales/Income from operations during the year has gone up to Rs.75587.44 Lacsfrom Rs. 68133.32 Lacs.

3) DIVIDEND

Your Directors are pleased to recommend a dividend of 225% i.e. Rs.4.50 per equityshare.

The total outgo on dividend account will be Rs.2787.96 Lacs (inclusive of dividenddistribution tax).

The dividend is tax free in the hands of the shareholders.

4) SUBSIDIARY COMPANY

The Company does not have any subsidiary company.

5) PROSPECTS

To further its growth plans the company is undertaking capital expenditure of aroundRs.300 crores towards the below mentioned projects.

• Butyl Phenols (Isobutylene Based Downstream Products): Work related to ButylPhenol Project is in full swing at Lote site.

• The debottlenecking of ATBS capacity from 26000 TPA to 30000 TPA expected to beready by 1st September 2018.

6) TURNOVER AND PROFIT (OPERATING RESULTS)

The Company achieved gross turnover of Rs.77322.53 Lacs as compared to Rs. 68820.34Lacs in the previous year. The net profit after tax increased to Rs.14388.12 Lacs ascompared to Rs. 14027.51 Lacs in the previous year.

7) INSURANCE

The properties and insurable interest of your company like Building Plant andMachinery Inventories etc. are properly insured.

8) DIRECTORS

As per Section 149(4) of the Companies Act 2013 every listed company shall haveatleast one third of the total number of directors as independent directors. They shallhold office for a term upto five consecutive years on the Board of the Company as persection 149(10).

As per Section 152 (6) (e) total number of directors shall not include independentdirectors. Mr. Girish M. Dave Mr. R. K. Saraswat Mr. A. A. Krishnan and Mr. C. B.Gokhale as they shall hold a term upto five consecutive years on the Board of theCompany i.e. upto 31.03.2019.

Out of remaining 5 directors 3 are executive directors. Therefore Mr. Mohit Mutreja andMr. Sunil Saraf retire at the ensuing Annual General Meeting and being eligible forre-appointment. Mr. Sunil Saraf offers himself for reappointment and Mr. Mohit Mutrejadoes not offer for reappointment.

9) AUDITORS' REPORT

The observations of the present Auditors as referred to in the Auditors' Report aresuitably explained in the Notes to the Accounts.

10) COST AUDITORS

As per Section 139 of the Companies Act 2013 M/s. N. Ritesh & Associates havebeen appointed as a Cost Auditor for the year ending on 31.03.2019 subject to theapproval of Central Government if required.

The Audit Committee has received a Certificate from the Cost Auditors certifying theirindependence and arm's length relationship with your Company. In accordance with CostAudit (Report) Rules 2001 the due date for filing the Cost Audit Report in XBRL for thefinancial year ended 31.03.2017 was 28.02.2018 and the same was filed on 19.02.2018 videSRN No.: G77048379 with the Ministry of Corporate Affairs New Delhi.

11) POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Companies Act 2013 has been disclosed in the CorporateGovernance Report which forms part of this report. The Remuneration policy has beenposted on website of the Company at www.vinatiorganics.com.

12) FINANCE

The long term borrowings are raised through External Commercial Borrowings (ECBs) andForeign Currency Term Loan (FCTL) from Banks and Financial Institutions.

13) FIXED DEPOSITS

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

14) CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS &OUTGO

Information as per Section 134 of the Companies Act 2013 read with Companies(Accounts) Rules 2014 relating to the above head are given in Annexure ‘A' formingpart of this report.

15) HUMAN RESOURCE

The Company believes that Human Resources play a very critical role in its growth. Itsmanagement has infused a lot of rigor intensity in its people Development Processes andin honing skill sets. Various initiatives have been launched to provide growthopportunities to Employees. For the development of the Employees the Company has createda atructured training framework for its employees to ensure their ongoing education.

The Group's Corporate Human Recourses function has played and continues to play anintegral role in its Company's talent management process

16) QUALITY INITIATIVES

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

17) LISTING

The Company's equity shares continue to be listed at BSE & NSE. We confirm that theListing fee for the financial year 2017-2018 has been paid to them. The stock code of thecompany at BSE is 524200 and NSE is VINATIORGA.

18) DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm that:

i. in the preparation of the annual accounts the applicable accounting standards havebeen followed material departures in adoption of these standards;

ii. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitor loss of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

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 andsuch internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants and the reviews performed by management andthe relevant board committees including the audit committee the board is of the opinionthat the Company's internal financial controls were adequate and effective during thefinancial year 2017-18.

19) DECLARATION BY INDEPENDENT DIRECTORS

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

20) MATERIAL CHANGES AFTER BALANCE SHEET DATE (31ST MARCH 2018)

No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the Financial Year (FY18) of the Company to which theFinancial Statements relate and the date of this report.

21) CORPORATE GOVERNANCE AND MANAGEMENT'S DISCUSSION AND ANALYSIS REPORTS

The Corporate Governance and Management's Discussion and Analysis Reports which forman integral part of this report are set out in separate annexures to this report alongwith the certificate from the Auditors of the Company certifying compliance of theconditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreementwith the Stock Exchange. (See Annexures ‘B' ‘C' & ‘D')

22) EMPLOYEES

The Company is required to make disclosure under section 134 of the Companies Act 2013for its employee drawing remuneration in excess of Rs.60 Lacs per annum or Rs.5 Lacs permonth. (See Annexure ‘E')

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

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

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

23) 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. TheCompany does not have any Subsidiary Company.

24) CORPORATE DEVELOPMENT:

Pursuant to the Company's Letter of Offer dated 6th October 2017 a buy-back of200000 fully paid equity shares @ Rs. 1200 per share were offered and accepted forbuyback. The buyback process was completed by extinguishment of the surrendered shares andthe Company has complied with all the requirements of the Companies Act 2013 read withCompanies (Share Capital and Debentures) Rules 2014 as in connection with the Company'sbuyback of shares.

25) COMPOSITION OF AUDIT COMMITTEE

The Audit Committee of the Company as on 31st March 2018 comprised the following 3Directors of the Company:

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

2. Mr. Girish M. Dave: Independent Director - Member

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

26) ESOP/ ESOS

The Company has not issued any ESOP or ESOS.

27) SWEAT EQUITY

The Company has not issued any sweat equity.

28) PREFERENTIAL ALLOTMENT

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

29) REDEMPTION OF SHARES/ DEBENTURES

The Company has not redeemed any Shares or Debentures.

30) SHAREHOLDER'S RESOLUTION

Employee Stock Option Scheme 2008 for 200000 equity shares face value of Rs.10/-each was approved in annual general meeting held on 27.09.2008. So far same is notimplemented. Same is being reconsidered.

31) DISQUALIFICATION OF DIRECTOR

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

32) INSIDER TRADING PROCEEDINGS/ ENQUIRY

Letter was received from SEBI inquiring about of purchase of equity shares by twoemployees on 29.02.2012 and same was replied on 5th March 2012. Letter was written toSEBI for purchase of equity shares by one employee on 06.06.2012. And as on date we havenot received any further communication.

33) CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility Committee was constituted on 10th May 2014 andreconstituted on 26th February 2015 as per Clause 49 of Listing Agreement for CorporateGovernance. This committee comprises of 4 directors of the Company.

All the members of Corporate Social Responsibility Committee mentioned above i.e. Mr.Vinod Saraf Managing Director Mr. R. K. Saraswat Director Ms. Vinati Saraf MutrejaExecutive Director & Ms. Viral Saraf Mittal Director - Corporate Strategy have goodknowledge and exposure to utilize the Company's resources towards its corporate socialresponsibility. The Corporate Social Responsibility policy is available on Company'swebsite.

The average profit of the Company for last three years is Rs.18835.60 Lacs. PrescribedCSR expenditure is Rs.376.71 Lacs. Details of CSR spent during the financial year 2017-18are as per Annexure ‘F' enclosed. Amount unspent during the year is Rs.307.53Lacs as good projects were not found till 31.03.2018. The Corporate Social Responsibility(CSR) policy of the Company has been posted on website of the Company atwww.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 inline with the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 ("Prevention of Sexual Harassment of Women atWorkplace Act") and Rules framed there under and an Internal Complaints Committeeconsisting of Ms. Vinati Saraf Mutreja Executive Director Ms. Viral Saraf Mittal.Director – Corporate Strategy and Ms. Priyanka Kheruka Member has also been set upto redress complaints received regarding sexual harassment.

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

During the financial year 2017-18 No complaints were received by the Company. TheCompany is committed to providing a safe and conducive work environment to all of itsemployees and associates. The Sexual Harassment policy of the Company has been posted onwebsite of the Company at www.vinatiorganics.com.

35) MGT - 9

Extract of Annual Return for financial year ended 31.03.2018 (Pursuant to section 92(3)of the Companies Act 2013 read with the Companies (Management and Administration) Rules2014) in Form No. MGT-9 is enclosed (Annexure ‘G').

36) SECRETARIAL AUDIT REPORT

To comply with the provisions of Section 204 of the Companies Act 2013 we encloseherewith Secretarial Audit Report received from M/s. VKM & Associates PracticingCompany Secretary for the year ended 31st March 2018 (Annexure ‘H').

37) RISK MANAGEMENT

The Board of the Company has formed a risk management committee to frame implement andmonitor the risk management plan for the Company. The committee is responsible forreviewing the risk management plan and ensuring its effectiveness. The audit committee hasadditional oversight in the area of financial risks and controls. Major risks identifiedby the businesses and functions are systematically addressed through mitigating actions ona continuing basis. The risk management policy has been posted on website of the Companyat www.vinatiorganics.com.

38) PARTICULARS OF LOANS GUARANTEES AND INVESTMENT

The Company had not given any loans and guarantees. The Company had made investments inmutual fund units amounting to Rs.11770.23 Lacs as given below:

In mutual fund units
727312 Units (31st March 2017 - 0)
Mutual Fund Units of Kotak Select Focus fund Rs.231.41 Lacs
17063 Units (31st March 2017 - 0)
Mutual Fund Units of ICICI Prudential Flexible Income Rs.18.04 Lacs
95230 Units (31st March 2017 - 0)
Mutual Fund Units of Kotak Treasury Advantage Fund Rs.9.67 Lacs
34557634 Units (31st March 2017 - 0)
Mutual Fund Units of ICICI Prudential Equity Arbitrage Fund Rs.4713.32 Lacs
53679556 Units (31st March 2017 - 0)
Mutual Fund Units of Kotak Equity Arbitrage Fund Rs.5739.31 Lacs
9983316 Units (31st March 2017 - 0)
Mutual Fund Units of Edelweiss Arbitrage Fund Rs.1058.48 Lacs
Total Rs.11770.23 Lacs

39) DEPOSITS FROM PUBLIC

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

40) PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are given below:

a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:

Sr. No. Whole-time directors Ratio to median remuneration
1. Mr. Vinod Banwarilal Saraf Managing Director & CEO 31.10
2. Ms. Vinati Saraf Mutreja Executive Director 21.77
3. Ms. Viral Saraf Mittal Director – Corporate Strategy 12.44

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

Sr. No. Directors Chief Executive Officer Chief Financial Officer and Company Secretary etc. % increase in remuneration in the financial year
1. Mr. Vinod Banwarilal Saraf Managing Director & CEO 10%
2. Ms. Vinati Saraf Mutreja Executive Director 10%
3. Ms. Viral Saraf Mittal Director – Corporate Strategy 10%
4. Mr. Jayesh Ashar Chief Operating Officer 13.2%
5. Mr. N. K. Goyal Chief Financial Officer 11.7%
6. Mr. G. S. Singhi Company Secretary cum Finance Controller 10.9%

c. The percentage increase in the median remuneration of employees in the financialyear: 4%

d. The number of permanent employees on the roll of Company: 710

e. The explanation on the relationship between average increase in remuneration andCompany performance:

The increase in remuneration is in line with the market trends. In order to ensure thatremuneration reflects company performance the performance pay is also linked toorganization performance apart from an individual's performance.

f. Comparison of the remuneration of the key managerial personnel against theperformance of the Company:

Aggregate remuneration of key managerial personnel (KMP) in FY18 (Rs. in Lacs) 433.45
Revenue (Rs. in Lacs) 75587.44
Remuneration of (KMP) as a percentage of revenue 0.57%
Profit before tax (PBT) (Rs. in Lacs) 20337.35
Remuneration of (KMP) as % of PBT 2.13%

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

Particulars March 31 2018 March 31 2017 % change
Market capitalization (Rs. In Lacs) 462519.23 391059.97 18%
Price earnings ratio 27.97 28.07 Nil

h. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last publicoffer:

Particulars March 31 2018 November 11 % change
(J) 1991 (IPO)*
Market Price (BSE) 900 1.33 67569
Market Price (NSE) 903 1.33 67795

* 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 themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

Increase in managerial remuneration was 10% only.

j. Comparison of each remuneration of the key managerial personnel against theperformance of the Company:

(Rs. in Lacs)
Name Total Remuneration % of revenue 75587.44 % of net profit before tax
20337.35
Mr. Vinod Banwarilal Saraf Managing Director & CEO 125.96 0.16 0.62
Ms. Vinati Saraf Mutreja Executive Director 96.28 0.13 0.47
Ms. Viral Saraf Mittal Director – Corporate Strategy 53.92 0.07 0.27
Mr. Jayesh Ashar Chief Operating Officer 73.66 0.10 0.36
Mr. N. K. Goyal Chief Financial Officer 57.46 0.08 0.28
Mr. G. S. Singhi Company Secretary cum Finance Controller 26.17 0.03 0.13

k. The key parameters for any variable component of remuneration availed by thedirectors:

No variable component is paid.

l. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring 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 Section197(12) of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in a separate annexureforming part of this report. [Annexure ‘I']. Further the report and theaccounts are being sent to the members excluding the aforesaid annexure. In terms ofSection 136 of the Companies Act 2013 the said annexure is open for inspection at theRegistered Office of the Company. Any shareholder interested in obtaining a copy of thesame 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 theDirectors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Company's Code of Conduct or Ethics Policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee. Itis affirmed that no personnel of the Company has been denied access to the AuditCommittee. The Whistle Blower Policy has been posted on the website of the Company atwww.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 toSection 134(3)(h) of the Companies Act 2013 read with rule 8(2) of the Companies(Accounts) Rules 2014 are given in Annexure ‘J' in Form AOC-2 and the sameforms part of this report.

43) BOARD EVALUATION

The board of directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Companies Act2013 and the corporate governance requirements as prescribed by Securities and ExchangeBoard of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause49").

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

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

The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.

44) INDEPENDENT DIRECTORS' MEETING

The Independent Directors of the Company met on 31st March 2018 inter-alia todiscuss:

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

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

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

In a separate meeting of Independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual directors was also discussed. (Annexure ‘K')

45) NUMBER OF MEETINGS OF THE BOARD

Four meetings of the board were held during the year. For details of the meetings ofthe board please refer to the Corporate Governance Report which forms part of thisreport.

46) INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included inthe 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 CorporateGovernance Report which forms part of this report.

48) REPORTING OF FRAUDS:

There was no instance of fraud during the year under review which required theStatutory 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 559812 equity shares in respect of whichdividend has not been claimed by the members for seven consecutive years or more havebeen transferred by the Company to the Investor Education and Protection Fund Authority(IEPF) during the financial year 2017-18. Details of shares transferred have been uploadedon 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 2017had 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 yearsi.e. from the conclusion of the said Annual General Meeting until the conclusion of 33rdAnnual General Meeting of the Company to be held in 2022 subject to ratification of theirappointment by the shareholders every year. The Ministry of Corporate Affairs vide itsNotification dated 7th May 2018 has dispensed with the requirement of ratification ofAuditor's appointment by the shareholders every year. Hence the resolution relating toratification of Auditor's appointment is not included in the Notice of the ensuing AnnualGeneral Meeting.

(ii) Cost Auditors:

In terms of the provisions of Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time the Board of Directorsbased 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 Auditfor the financial year 2018-19 on such remuneration as mentioned in the Notice of theensuing Annual General Meeting. A resolution seeking Member's ratification for theremuneration payable to the Cost Auditor forms part of the Notice of 30th Annual GeneralMeeting 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 underthe Company had appointed M/s. VKM & Associates Practicing Company Secretaries toundertake the Secretarial Audit of the Company for the year ended 31st March 2018. TheSecretarial 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 2018 donot 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 beenposted on website of the Company at www.vinatiorganics.com.

52) BUSINESS RESPONSIBILITY REPORT:

The Business Responsibility Report is set out in Annexure ‘L' of thisreport and is also available on Company's website.

53) AWARDS:

Financial Express CFO of the year 2018 awarded in the medium enterprises category toMr. N. K. Goyal. The Company appreciates his efforts and congratulated to Mr. N. K. Goyal.

54) APPRECIATION & ACKNOWLEDGEMENTS

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

Your Directors also place on record their appreciation for the excellent contributionmade by all employees of Vinati Organics Limited through their commitment competenceco-operation and diligence to duty in achieving consistent growth of the Company.

For and on behalf of the Board of
Directors
Mumbai Girish M. Dave
12th May 2018 Non-Executive Chairman