DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting you the 28th Directors' Report on the business and operations of your company, for the financial year ended 31st March, 2015. RESULTS OF OPERATIONS: Following are the results of operations for the financial year 2014-15 BUSINESS PERFORMANCE Revenues: The total income of the Company for the FY 2014-15 is Rs. 1873.60 Lakhs as against Rs. 1,700.84 Lakhs in FY 2013-14 Profits: Profit before Tax (PBT) stood at Rs19.27 Lakhs as against Rs.67.70 Lakhs for the previous year. Profit after Tax (PAT) stood at Rs. 46.28 Lakhs as against Rs. 29.36 Lakhs for the previous year. Reserves and Surplus During the year the Company has transferred Rs. 46.28 lakhs to Reserves and Surplus. Dividend Your directors did not recommend any dividend on shares for this year. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure to the Board's report Material changes and commitments; There are no material changes and commitments occurred between the end of the financial year of the company and the date of the report affecting the financial position of the company Directors None of the directors of the company is disqualified under the provisions of the act or under the Listing agreement with the stock exchanges. Appointments: In accordance with the provisions of the Companies Act, 2013 Mr. Kalyan Ram retires by rotation at the Annual General Meeting and being eligible offers himself for reappointment at the ensuing Annual General Meeting. In terms of Section 149 and Schedule IV Companies Act, 2013 and in compliance with Clause 49 of Listing Agreement Mrs. Sharmsitha Manna is proposed to be appointed as Independent Director of the company for five consecutive years for a term upto 31st March, 2020. Brief resume of the Directors proposed to be reappointed, nature of their expertise in specific functional areas, directorships in other companies as stipulated under clause 49 of the listing agreement with the stock exchanges in India are provided in the report on corporate governance. Cessations: None of the Directors ceased to Director of the company during period under review. Allotment of Shares: The Company has not allotted any shares during the period under review. Particulars of Loans, Guarantees or Investments Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. Internal control systems and their adequacy: The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the Chairman. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board. CODE OF CONDUCT: The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviours of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Company's website www.vivobio.com The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behaviour from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard. VIGIL MECHANISM / WHISTLE BLOWER POLICY: The Company has a vigil mechanism named Fraud and Risk Management Policy to deal with instance of fraud and mismanagement, if any. In staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility. The Company has a Fraud Risk and Management Policy to deal with instances of fraud and mismanagement, if any. The FRM Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern. A high level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board. PREVENTION OF INSIDER TRADING: The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code. Directors' Responsibility Statement: The financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under Section 133 of theCompanies Act, 2013 ('the Act'), read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). There are no material departures from prescribed accounting standards in the adoption of these standards The Directors Confirm that: i) In the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards had been followed and there are no material departures. ii) The Directors have selected appropriate accounting policies and applied them consistently and have 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 financial year and of the profit of the company for that period. iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities iv) We have prepared the annual accounts for the financial year ended 31st March, 2015 on a going concern basis. v) The Directors have laid down internal financial controls, which are adequate an are operating effectively. vi) The Directors have devised proper systems to ensure compliance with the provisions of the applicable laws and such other systems are adequate and are operating effectively. AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE As required by clause 49of Listing Agreement , Auditor's certificate on corporate governance is enclosed as Annexure to Board's Report. AUDITOR'S REPORT/ SECRETARIAL AUDIT REPORT: The observation made in the Auditors' Report read together with relevant notes thereon are self explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013 As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a secretarial audi report. AUDITORS M/s. P. Murali & Co., Chartered Accountants, Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. The company has received consent letter from the Statutory auditors and certificate indicating satisfaction of criteria sated in Section 141 of Companies Act, 2013 . SECRETARIAL AUDIT: Mr.N V S S Suryanarayana Rao, Practicing Company Secretary was appointed to conduct Secretarial Audit of the company for the financial year 2014-15, as required under section 204 of the Companies Act, 2013 and rules framed there under.The Secretarial Audit report for Financial year 2014-15 forms part of board's report as Annexure The Board has appointed Mr.N V S S Suryanarayana Rao, Practicing company Secretary as Sectretarial Auditor of the Company for financial year 2015-16. SIGNIFICANT AND MATERIAL ORDERS There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operation in future. EXTRACT OF ANNUAL RETURN: The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO. The Particulars as required under Sub- section (3)(m)of Section 134 of the Companies Act,2013, read with the Companies(Accounts) Rules 2014 are enclosed in Annexure BUSINESS RISK MANAGEMENT: Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the listing agreement , the company has constituted a business risk management committee. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the Boards report. FIXED DEPOSITS Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 SUBSIDIARY COMPANIES The details pertaining to financials of Subsidiary Companies have been given elsewhere in this report. CONSOLIDATED FINANCIAL STATEMENTS In accordance with the Accounting Standards AS-21 and AS-27 on Consolidated financial Statements read with the Accounting Standard AS-23 on Accounting for investments in Associates, the Audited consolidated financial statements are provided in the annual report. PARTICULARS OF EMPLOYEES: The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary in advance. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexures, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement. ACKNOWLEDGMENTS Your directors would like to place on record their appreciation of support, co-operation and assistance received from the company's clients, Central Government authorities, bankers, shareholders and suppliers. The board wishes to convey its appreciation for hard work, solidarity, cooperation and support put in by the company's employees at all levels in enabling such growth BY ORDER OF THE BOARD For Vivo Bio Tech Limited Kalyan Ram Mangipudi Whole Time Director PLACE : HYDERABAD DATE : 31.08.2015 |