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Company Information

Home » Market » Company Information

Vikas Ecotech Ltd.

Aug 21
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Aug 21
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Market Cap. ( ₹ ) 109.16 Cr. P/BV 0.76 Book Value ( ₹ ) 5.12
52 Week High/Low ( ₹ ) 21/4 FV/ML 1/1 P/E(X) 6.67
Bookclosure 28/09/2018 TTM EPS ( ₹ ) 0.44 Div Yield (%) 1.28
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2018-03 

The Members,

Vikas EcoTech Limited

The Directors have pleasure in presenting the 33rd Annual Report on the business and operations of the Company and Audited Statement of Accounts for the year ended 31st March, 2018.

1. 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) The Financial Statements of the Company - comprising of the Balance Sheet as at 31st March, 2018 and the Statement of Profit & Loss for the year ended on that date, have been prepared on a going concern basis;

b) i n the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

c) t he 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;

d) 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;

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.

2. FINANCIAL PERFORMANCE

The standalone financial statements for the financial year ended 31st March, 2018, forming part of this Annual Report, have been prepared in accordance with the Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs. On a consolidated basis, our sales declined to Rs. 367.33 Crores for the current year as against Rs. 387.64 crores in the previous year.

Our net profits increased to Rs. 28.60 Crores for the current year as against Rs. 23.19 Crores in the previous year.

Key highlights of financial performance of your Company for the financial year 2017-18 are provided below:

(Rs. in Lac)

Particulars

2017-2018

2016-2017

Net Sales /Income from Business Operations Other Income

36,733.59

496.13

38,764.57

166.93

Total Income

37,229.72

38,931.50

Gross Expenditure

31,041.13

31,999.99

Less Interest

1,443.04

1,300.17

Profit before Depreciation

4,745.55

5,631.34

Less Depreciation

383.91

426.67

Profit after depreciation and Interest/Net Profit Before Tax

4,361.64

5,204.67

Less: Extra-ordinary Item

---

163.11

Less Current Tax

1,453.03

1,450.00

Less Previous year adjustment of Income Tax

13.29

0.00

Less Deferred Tax

34.72

(196.32)

Mat Credit Availed

0.00

0.00

Net Profit after Tax

2,860.60

2,319.90

Profit for the Period

2,860.60

2,319.90

Less Proposed Dividend

139.95

139.95

Less Provision for Dividend Distribution Tax

29.28

29.28

Net Profit after dividend and Tax Earnings per Share (Basic) Earnings per Share (Diluted)

2,691.37

2,147.80

1.02

0.91

1.02

0.91

There have been no material changes and commitments that have occurred after close of the financial year till the date of this report, which affect the financial position of the Company. Based on the internal financial control framework and compliance systems established in the Company, the work performed by Statutory, Internal, Secretarial Auditors and reviews performed by the management and/or the Audit Committee of the Board, your Board is of the opinion that the Company’s internal financial controls were adequate and working effectively during financial year 2017-18.

DIVIDEND

Your Directors recommend payment of Equity Dividend of Rs. 0.05 per equity share of Rs. 1/- each and such Equity Dividend, upon approval by the Members of the Company at the ensuing Annual General Meeting, shall be payable on the outstanding equity capital as at the Record Date i.e. 21st September, 2018. The outflow on account of equity dividend and the tax on such dividend distribution, based on current paid-up capital of the Company would aggregate to Rs. 1,69,23,411/-.

Transfer to Investor Education and Protection Fund Authority

During the period under review, the company has not required to transfer any amount or shares in IEPF authority.

3. STATE OF AFFAIRS OF THE COMPANY

During fiscal 2018, your Company witnessed yet another strong year of performance despite the uncertain macro environment, reflecting the inherent strength of our business portfolio and continued to perform well in domestic markets while expanding our international reach.

During the year under review:

- The company got Food grade approval for its product TINMATE (Organotin Stabiliser) from FICCI Research and Analysis Centre.

- The company bagged a prestigious order from Petrochemical Giant “MEXICHEM” and tries to expand itself to the Latin American Countries.

- The company commenced trial runs for added capacity of 10,000 MT of speciality chemicals in plant at Rajasthan.

- The Company introduced new range of Eco-friendly Calcium Zinc heat stabilizer for PVC Compounds.

In the fourth quarter of FY18, the Directorate of Revenue Intelligence conducted a detailed survey of the company’s international trade operations including import and export consignments. These surveys were carried out at the ports as well as office and factory premises. Almost 70-80 per cent of the company’s raw materials are imported while exports constitute nearly 50 per cent of the total revenue. As a result, the company experienced a significant disruption of its day-to-day operations.

The Manufacturing plants of the Company are located in the state of J&K, Rajasthan and Noida SEZ. This has been done keeping in mind the strategic and locational advantages with regard to availability of raw material and potential for finished goods.

FUTURE OUTLOOK

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 manufacturing unit for its key raw material 2-EHTG at Gujarat Industrial Development Corporation (A Government of Gujarat undertaking) at Dehej, Gujarat to cater the market of Western and Southern India and also for exports its products like Methyle Tin Mercaptile and Epoxidised Soya Bean Oil.

CORPORATE RESTRUCTURING

During the period under review:-

To unlock the true value of the business and to achieve prosperity in each segment of the business, the company had decided to demerge its business into 2 separate entities: High Value Groups and High Volume Groups. Consequently, Vikas Ecotech would house the High Value Group i.e. the specialty chemicals and compounds business while the resultant company Vikas Multicorp Ltd. would contain the recycled compounds and trading businesses, which traditionally have lower margins but higher revenues.

The final hearing for the above scheme of arrangement at the NCLT is scheduled for 6th September, 2018. Once the NCLT approval is granted, shareholders of Vikas Ecotech shall receive additional shares of Vikas Multicorp in the ratio of 1:1 at no extra cost and Vikas Multicorp would be listed as an independent entity.

Management Discussion and Analysis Report

In terms of regulation 34 of the Listing Regulations Management Discussion and Analysis report (“MD&A Report”). The MD&A Report, capturing your Company’s performance, industry trends and other material changes with respect to your Companies and its subsidiaries, wherever applicable, are presented in this Annual Report. The MD&A Report provides a consolidated perspective of economic, social and environmental aspects material to your Company’s strategy and its ability to create and sustain value to your Company’s key stakeholders and includes aspects of reporting as required.

SUBSIDIARY COMPANIES, JOINT VENTURE AND CONSOLIDATED FINANCIAL STATEMENTS

During the period under review the Company does not have any Subsidiary.

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.)” amounting to Rs. 21,00,000 & St. Kabir Educational society Rs. 35,00,000/- 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 attached to this report.

4. GOVERNANCE AND ETHICS

Corporate Governance

Your Company believes in adopting best practices of corporate governance. Corporate governance principles are enshrined in the Spirit of VEL, which form the core values of VEL. These guiding principles are also articulated through the Company’s code of conduct, Corporate Governance guidelines, charter of various sub-committees and disclosure policy.

Your Company has been constantly reassessing and benchmarking itself with well-established Corporate Governance practices besides strictly complying with the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’), applicable provisions of Companies Act, 2013 and applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

As per regulation 34 of the Listing Regulations, a separate section on corporate governance practices followed by your Company, together with a certificate from Shri. Anil Kumar Popli, Practising Company Secretaries, on compliance with corporate governance norms under the Listing Regulations, is provided in this Annual Report.

BOARD OF DIRECTORS

Board’s Composition and Independence

Your Company’s Board consists of leaders and visionaries who provide strategic direction and guidance to the organization. As on 31st March, 2018, the Board comprised Four Executive Directors and Three Non-Executive Independent Directors.

Definition of ‘Independence’ of Directors is derived from regulation 16 of the Listing Regulations and Section 149(6) of the Companies Act, 2013. The Company has received necessary declarations from the Independent Directors stating that they meet the prescribed criteria for independence.

Based on the confirmations/disclosures received from the Directors under Section 149(7) of the Companies Act 2013 and on evaluation of the relationships disclosed.

BOARD EVALUATION

The Independent Directors of your Company, in a separate meeting held without presence of other Directors and management evaluated performance of the Chairman, Managing Director and other Non-Independent Directors along with performance of the Board / Board Committees based on various criteria recommended by Nomination & Remuneration Committee. A report on such evaluation done by Independent Directors was taken on record by the Board and further your Board, in compliance with requirements of Companies Act, 2013, evaluated performance of all Independent Directors based on various parameters including attendance, contribution etc.

BOARD COMMITTEES

In compliance with the requirements of Companies Act, 2013 and Listing Regulations your Board had constituted various Board Committees including Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee. Details of the constitution of these Committees, which are in accordance with regulatory requirements, have been uploaded on the website of the Company viz. www.vikasecotech.com. Details of scope, constitution, terms of reference, number of meetings held during the year under review along with attendance of Committee Members therein form part of the Corporate Governance Report annexed to this report.

VIGIL MECHANISM

Your Company has adopted an process as a channel for receiving and redressing complaints from employees and Directors, as per the provisions of Section 177(9) and (10) of the Companies Act, 2013 and regulation 22 of the Listing Regulations. Under this policy, your Company encourages its employees to report any reporting of fraudulent financial or other information to the stakeholders, and any conduct that results in violation of the Company’s code of business conduct, to the management. Further, your Company has prohibited discrimination, retaliation or harassment of any kind against any employees who, based on the employee’s reasonable belief that such conduct or practice have occurred or are occurring, reports that information or participates in the investigation. Mechanism followed is appropriately communicated within the Company across all levels and has been displayed on the Company’s website at https://www.vikasecotech.com.

INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

Your Company has a policy and framework for employees to report sexual harassment cases at workplace and its process ensures complete anonymity and confidentiality of information.

RELATED PARTY TRANSACTIONS

Your Company has historically adopted the practice of undertaking related party transactions only in the ordinary and normal course of business and at arm’s length as part of its philosophy of adhering to highest ethical standards, transparency and accountability. In line with the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has approved a policy on related party transactions. An abridged policy on related party transactions has been placed on the Company’s website https://www.vikasecotech.com.

All Related Party Transactions are placed on a quarterly basis before the Audit Committee and before the Board for approval. Prior omnibus approval of the Audit Committee and the Board is obtained for the transactions which are of a foreseeable and repetitive nature.

The particulars of contracts or arrangements with related parties referred to in Section 188(1) and applicable rules of the Companies Act, 2013 in Form AOC-2 is provided as Annexure I to this Report.

5. INTERNAL FINANCIAL CONTROLS AND AUDIT INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Board of your Company has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

Statutory Audit

As per Section 139 of the Companies Act, 2013 and based on the recommendations of the Audit Committee and upon review of confirmations of satisfaction of criteria as specified in Section 141 of the Companies Act, 2013 read with Rule 4 of Companies (Audit & Auditors) Rules, 2014 and in accordance with the approval accorded by the Members at the 31st Annual General Meeting held on September 30, 2016, M/s KSMC & Associates, Chartered Accountants, New Delhi, having Firm Registration No. 003565N, appointed as Statutory auditor for a period of five years.

There are no qualifications, reservations or adverse remarks made by KSMC & ASSOCIATES, Statutory Auditors, in their report for the financial year ended March 31, 2018. Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud to the Audit Committee during the year under review.

Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Anil Kumar Popli, AAA & Associates, a firm of Company Secretaries in Practice, to conduct Secretarial Audit of the Company. The Report of the Secretarial Audit in Form MR-3 for the financial year ended March 31, 2018 is enclosed as Annexure III to this Report. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in his report.

Cost Audit:

Additionally, in compliance with the requirements of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, as amended, M/s JSN & Co. Cost Accountants, was engaged to carry out Audit of Cost Records of the Company during Financial Year 2017-18. Requisite proposal seeking ratification of remuneration payable to the Cost Auditor for FY 2017-18 by the Members as per Rule 14 of Companies (Audit and Auditors) Rules, 2014, forms part of the Notice of ensuing Annual General Meeting.

6. SOCIAL RESPONSIBILITY AND SUSTAINABILITY Corporate Social Responsibility

Your Company is at the forefront of Corporate Social Responsibility (CSR) and sustainability initiatives and practices. Your Company believes in making lasting impact towards creating a just, equitable, humane and sustainable society.

As per the provisions of the Companies Act, 2013, companies having net worth of Rs. 500 crore or more, or turnover of Rs. 1,000 crore or more or net profit of Rs. 5 Crores or more during the immediately preceding financial year are required to constitute a Corporate Social Responsibility (CSR) committee of the Board comprising three or more directors, at least one of whom should be an independent director and such company shall spend at least 2% of the average net profits of the company’s three immediately preceding financial years towards CSR activities. Accordingly, your Company has spent Rs. 56,00,000 towards CSR activities during the financial year 2017-18. The contents of the CSR policy and CSR Report for the year 2017-18 is attached as Annexure IV to this Report. Contents of the CSR policy is also available on the Company’s website at https://www.vikasecotech.com. The terms of reference of CSR committee, framed in accordance with Section 135 of the Companies Act, 2013.

Particulars Regarding Conservation of Energy and Research and Development and Technology Absorption

Details of steps taken by your Company to conserve energy through its “Sustainability” initiatives, Research and Development and Technology Absorption have been disclosed as part of the MD&A Report.

7. OTHER DISCLOSURES

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

There have been no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this report.

Details of Significant and Material Orders Passed by the regulators/Courts/Tribunals Impacting the Going Concern Status and the Company’s Operations in Future

There are no significant and material orders passed by the Regulators/Courts/Tribunals which would impact the going concern status of the Company and its future operations.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL INCLUDING THOSE WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

Your Board currently comprises of 8 Directors including 4 Independent Directors, 4 Executive Director. Independent Directors provide their declarations both at the time of appointment and annually, confirming that they meet the criteria of independence as prescribed under Companies Act, 2013 and Listing Regulations. During FY 2017-18 your Board met 5 (Five) times details of which are available in Corporate Governance Report annexed to this report.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Shri. Vikas Garg, Managing Director, is due to retire by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment. Your Board recommends his 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.

During the period under review, Mrs. Anjavi pandya has resigned as CFO and Mr. Sumit Garg was appointed as Chief Finance Officer of the Company w.e.f. 11th August, 2017.

During the period under review Mr. Purushottam Dass Bhoot, Mr. Jagdish Capoor, Mr. Pradip Kumar Banerji has resigned from Board and Mr. Kapil Gupta and Mr. Devender Kumar Garg was appointed on Board. Further, on 14.02.2018, Mr. Kapil Gupta has resigned as Independent Director of the Company

After close of the financial year Mr. Madan Mohan Mandal was appointed as Independent Director w.e.f 14.05.2018 and Mr. Amit Dhuria as CFO w.e.f. 30.05.2018.

In compliance with the requirements of Section 203 of the Companies Act, 2013, Mr. Vikas Garg, Managing Director, Mr. Vivek Garg, Whole-time Director, Mr. Ashutosh Kumar Verma, Whole-time Director & CEO, Mr. Amit Dhuria, Chief Finance Officer and Mr Siddharth Agrawal Compliance Officer & Company Secretary of the Company continue as Key Managerial Personnel of the Company.

CREDIT RATINGS

During the year under review Brickwork Ratings India Private Limited, A SEBI, RBI & NSIC registered credit rating agency in India, has upgraded the company’s rating to BBB from BBB- for Long-term bank facilities The upgraded ratings showcase the company’s improved and strong fundamentals across finance, operations and governance parameters. The company has been continuously working to ensure better performance in terms of financial parameters as also garnering higher market share.

Dun & Bradstreet, a US based information and business rating MNC has upgraded the company’s rating to 5A2 from the previous 4A3, due to improved performance and business metrics.

Crisil, a S& P Global Company has rated the bank facilities of Company has assigned CRISIL BBB for company’s Long-Term Borrowings & CRISIL A3 for the Short-Term Borrowings with stable outlook.

The ratings indicate company’s comfortable financial risk profile and are in line with Company’s strategy of profitable growth and improvement in quality of its financial parameters through better operational performance. The rating reinforces the company’s practice for financial transparency and reporting.

The new ratings will help all stakeholders especially financial institutions appreciate the bettered credit quality of the company. In turn, the company going forward will be able to access debt and capital at more efficient terms for its various growth initiatives.

LISTING OF SECURITIES

The shares of the Company are listed on the National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION

Energy Conservation measures taken, Steps taken for utilizing alternate source of energy, Capital investment on energy conservation equipment:

The Company has commissioned 300 KW of solar panels at Rajasthan and also installed a centralized power house on a single High Tension line in place of separate connections for individual unit at its manufacturing facility in Rajasthan . Both these measures will improve efficiency and generate cost savings for the company.

The company has commissioned three dry cutting machines. This will help in generation of cost savings and water conservation for the company and the society.

These are specifically designed panels ensuring optimum use of the electricity being consumed at our factories.

The power factor calculations on our electricity consumption calculations show that VEL is nearing perfect results in getting the best output from the electrical energy consumed in the plants.

VEL closely monitors the throughput of all the machines to ensure that every part of the electrical energy consumed is justified with nearly nil wastage of energy.

Proper production planning also contributes positively to avoid wastage of electrical energy & optimum outputs.

Water conservation, Water extraction, storage, desalinization (softening hard water, filtration for further use in process) also involve a considerable consumptions of electrical energy.

VEL plants have the rainwater harvesting systems in place which not only help conserve water but also the electrical energy involved in extraction of the volume of water thus collected.

The Company shall continue its endeavor to improve energy conservation and utilization TECHNOLOGY ABSORPTION

1) Efforts made in technology absorption & Benefits derived:

Major initiatives are being taken to upgrade the various processes by making use of latest and better techniques. Efforts are being made to make best use of available infrastructure and at the same time importing new technology to bring out efficiency and economy. As a step towards it, the Company has procured highly sophisticated machinery for its newly set up plant at Shahjahanpur, Rajasthan, for commencing production of an additional range of Polymer Additives.

Research & Development (R & D)

a) Specific Areas in which R & D carried out by the Company: During the year, the Company has inclined its efforts in the development of its production efficiency by improving its methods and technology.

b) Benefits derived as a result of above R & D: Increased in market share.

c) Future Plan of Action/Expansions Plans: As the relevant industry is gearing up to cater to the growing demand, Vikas EcoTech Limited, is all set to expand their business in a big way in the coming years. The company is also progressive in installation of additional line to increase the production of Polymer and Polyester Compound at its existing plant located at Shahjahanpur, Alwar, Rajasthan.

With a host of expansion plans, the Company is confident of achieving new heights in the coming years.

2) Imported Technology (imported during last 3 years reckoned from beginning of the financial year)

None.

3) Expenditure incurred on Research and Development (R&D)

The Company has incurred a total expenditure of Rs. 4.32 lacs (including capital and revenue expenses) towards Research and Development.

FOREIGN EXCHANGE, EARNINGS AND OUTGO

During the Financial Year 2017-18 the Company had foreign exchange earnings of Rs. 1,86,30,76,248 and outgo of Rs. 59,49,71,924.

Extract of Annual Return

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, extract of the Annual Return as on March 31, 2018 in form MGT-9 is enclosed as Annexure V to this report.

Acknowledgements and Appreciation

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/ associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company. I am sure you will join our Directors in conveying our sincere appreciation to all employees of the Company and its subsidiaries and associates for their hard work and commitment. Their dedication and competence has ensured that the Company continues to be a significant and leading player in the industry.

For and on behalf of Board

For Vikas EcoTech Limited

Sumer Chand Tayal Vikas Garg

(Director) Managing Director

DIN: 00255661 DIN: 00255413

Place: New Delhi

Date: 19.07.2018