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Directors Report of Vibrant Global Capital Ltd.

Mar 31, 2015

DEAR MEMBERS,

The Directors of the Company take great pleasure in presenting the Twentieth Annual Report on the business and operations of your Company and the Audited standalone and consolidated financial statements for the financial year ended March 31, 2015.

FINANCIAL HIGHLIGHTS

Our Company's financial performance for the year under review has been encouraging and is summarized below:

Particulars Consolidated (Rs. in Lacs)

2014-15 2013-14

Total Income 29,625.73 20,990.39

Less: Expenditure & Depreciation 28,951.02 20,969.05

Profit/ (Loss) before Tax (PBT) 674.71 165.92

Less: Tax 200.29 (11.39)

Profit/ (Loss) After Tax (PAT) 474.42 177.31

Profit/ Loss (After Minority Interest) 289.55 113.52

Paid-up Equity Share capital 1,720.71 1,116.51

Reserves and Surplus 2,481.94 1,628.36

Earning Per Share (in Rs.) 3.41 1.59

Particulars Standalone (Rs. in Lacs)

2014-15 2013-14

Total Income 3,143.50 189.57

Less: Expenditure & Depreciation 2,812.29 293.33

Profit/ (Loss) before Tax (PBT) 331.21 (103.76)

Less: Tax 26.31 (78.05)

Profit/ (Loss) After Tax (PAT) 304.90 (25.71)

Profit/ Loss (After Minority Interest) - -

Paid-up Equity Share capital 2,290.74 1,990.74

Reserves and Surplus 443.33 (89.39)

Earning Per Share (in Rs.) 1.43 (0.13)

REVIEW OF OPERATIONS

The consolidated total income increased from Rs. 20,990.39 Lacs to Rs. 29,625.73 Lacs, an increase of 41.14% over the previous financial year. The consolidated Net Profit after Tax increased from Rs. 177.31 Lacs to Rs. 474.42 Lacs, a growth of 166.57% over the previous financial year. The Consolidate earning per share increases to Rs. 3.41 from Rs. 1.59, a return of 114.47% over the previous financial year.

The standalone total income increased from Rs. 189.57 Lacs to Rs. 3,143.50 Lacs, an increase of 1,558.23% over the previous financial year. The standalone Profit after Tax increased from Rs. (25.71) Lacs to Rs. 304.90 Lacs. Earning per share increases from Rs. (0.13) to Rs. 1.43.

The Company has transferred Rs. 610.00 Lacs to Statutory Reserve created under Section 45-IC of the Reserve Bank of India Act, 1934 during Financial Year 2014-15.

PERFORMANCE OF SUBSIDIARIES AND ASSOCIATE COMPANIES

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with section 129(3) of the Act and Accounting Standard (AS) - 21 on Consolidated Financial Statements, the Company has prepared consolidated financial statements of the Company and all its Subsidiary Companies as well as Associate Companies, which forms part of this Annual Report.

SUBSIDIARY COMPANIES AND ASSOCIATE COMPANIES As on March 31, 2015, your Company had 2 subsidiaries:

1. Vibrant Global Infraproject Private Limited

2. Vibrant Global Trading Private Limited

As on March 31, 2015, your Company had 2 Associate Companies:

1. Vibrant Global Vidyut Private Limited

2. Vibrant Global Salt Private Limited%

The Company had acquired 30.30% stake of Vibrant Global Salt Private Limited during FY 2014-15.

Names of the companies which have ceased to be Associate Company of the Company during the year:

1. Tapadia Polyester Private Limited#

#The Company has sold its partial stake in Tapadia Polyester Private Limited, due to which the shareholding of the Company reduced below the shareholding as required for being Associate Company under Section 2(6) of the Companies Act, 2013.

Financial Performance of the Subsidiaries and Associate Companies:

Vibrant Global Trading Private Limited (Subsidiary Company)

Total revenue for the financial year 2014-15 is Rs. 26,758.48 Lacs as compared to Rs. 20,802.31 for the financial year 2013-14. There was an increase of 28.63% over previous financial year. Profit after tax increased from Rs. 95.96 Lacs in 2014 to Rs. 537.75 Lacs in 2015, an increase of 460.39% over the previous financial year. The Profits earned is majorly attributed to sale of 30,42,000 Equity Shares of Vibrant Global Capital Limited, through Offer for Sale in Initial Public Offering at aggregate price of Rs. 577.98 Lacs.

Vibrant Global Infraproject Private Limited (Subsidiary Company)

Total revenue for the financial year 2014-15 is Rs. 4.00 Lacs as compared to Rs. 0.60 for the financial year 2013-14. There was an increase of Rs. 3.40 over the previous financial year. Profit after tax decreased from Rs. 108.56 Lacs in 2014 to Rs. 1.29 Lacs in 2015.

Vibrant Global Salt Private Limited (Associate Company)

Total revenue for the financial year 2014-15 is Rs. 4980.90 Lacs as compared to Rs. 4497.13 Lacs for the financial year 2013-14. There was an increase of 10.76% over the previous financial year. Profit after tax decreased from Rs. 92.26 Lacs in 2014 to Rs. 65.67 Lacs in 2015.

Vibrant Global Vidyut Private Limited (Associate Company)

There are no revenues for the financial year 2014-15 and 2013-14. Due to no revenue there are losses by virtue of operational expenses amounting to Rs. 10.21 Lacs in the financial year 2014-15 2015 and Rs. 17.36 Lacs in financial year 2013-14.

DIVIDEND

The Board thinks that the profits should be retained for the expansion of the Company, which is in pipeline for more growth and value addition to the company and forming a strong business base so that revenue flows from many channels and hence the Directors of your Company do not recommend any dividend for FY 2014-15.

MATERIAL EVENTS DURING YEAR UNDER REVIEW

LISTING OF THE COMPANY

During the year, your Company made its landmark move by entering into capital market. The shares of your Company were listed on SME Platform of BSE Limited on October 21, 2014, through Initial Public Offering of 60,42,000 Equity Shares of Rs. 10.00 each at an Cash Price of Rs. 19.00, at a Share Premium of Rs. 9.00 per Equity share, aggregating to Rs. 1147.98 lacs, comprising of an Offer for Sale of 30,42,000 Equity Shares by Vibrant Global Trading Private Limited and 30,00,000 fresh issue of Equity Shares. The Company had received overwhelming response from the Investors and the issue was over-subscribed by 1.04 times.

INCREASE IN SHARE CAPITAL

During the year, your Company issued 30,00,000 equity shares of Rs. 10.00 each. The outstanding, issued, subscribed and paid up capital of the Company has increased from 1,99,07,380 shares to 2,29,07,380 shares of Rs. 10.00 each aggregating to Rs. 2290.74 Lacs as on March 31, 2015.

DEPOSITS

The Company being Non-Deposit accepting NBFC registered with the Reserve Bank of India under Section 45-IA of the Reserve Bank of India Act, 1934, has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF THE EMPLOYEES AND RELATED DISCLOSURES:

Information required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 1 of the Directors' Report.

PARTICULARS OF LOANS, INVESTMENTS, GUARANTEES AND SECURITIES

Particulars of loans given, investments made, guarantees given and securities provided are provided in the notes to the standalone financial statement. (Please refer to Note No. 10, 11, 13, 16, 17) to the standalone financial statement.

RISK MANAGEMENT

The Company has implemented a Risk Management framework in order to anticipate, identify, measure, manage, mitigate, monitor and report the principal risks and uncertainties that can impact its ability to achieve its strategic business objectives. The Company has introduced several improvements to Risk Management and processes to drive a common integrated view of risks and optimal risk mitigation responses. This integration is enabled by alignment of Risk Management, Internal Audit, Legal and compliance methodologies and processes in order to maximize enterprise value of the Company and ensure high value creation for our stakeholder over a time. The details of the Risk Management with details of the principal risks and the plans to mitigate the same are given in the Risk Management section of the Management Discussion and Analysis Report which forms part of this Annual Report.

INTERNAL FINANCIAL CONTROLS

The Company has proper and adequate system of internal control to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that transaction are authorized, recorded and reported correctly. The Company has appointed M/s. S. A. Buchha & Co. as an Internal Auditors of the Company. The Company has in place adequate internal financial controls with reference to financial statements. Such controls were tested during the financial year and no material weaknesses in the design or operation were observed.

Applicability of appointment of Internal Auditors was made after the Company became listed entity under provisions of Companies Act, 2013 and rules made thereunder. However, as permitted by the Act, the Company had transition period of 6 months to appoint Internal Auditors and hence Company appointed Internal Auditors in May, 2015. As on date, the Company has complied with the requirements of the Act.

VIGIL MECHANISM

The Company has a Vigil Mechanism Policy with a view to provide vigil mechanism to Directors, employees and other stakeholders to disclose instances of wrongdoing in the workplace and report instances of unethical behavior, actual or suspected fraud or violation of the Company's code of conduct. The Vigil Mechanism Policy also states that this mechanism should also provide for adequate safeguards against victimization of Director(s)/ Employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The Vigil Mechanism Policy has been posted on the website of the Company and may be accessed at the link: http://vibrantglobalgroup.com/vigil-mechanism-policy.html

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has no permanent or contractual female employees. Therefore, constitution of Internal Complaints Committee was not possible.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

Cessation:

1. Mr. Lokesh Jain (w.e.f. September 5, 2014)

2. Mr. Kartik Jain (w.e.f. September 5, 2014)

3. Mr. Nitin Shrivas (w.e.f. September 10, 2014)

The Board places on record its appreciation for the contribution made by them during their tenure as Directors of the Company.

Appointment of Non Executive Independent Directors (w.e.f. September 10, 2014):

1. Mrs. Dipti Sharma

2. Mr. Rahul Bagdia

3. Mr. Harsh Mehadia

The above appointment is made for 2 (Two) Years (upto September 9, 2016).

The Company has obtained declarations from Independent Directors stating that they meet the criteria of Independence as laid down under Section 149(6) of the Act and Clause 52 of the BSE SME Listing Agreement.

Retirement of Rotation:

Mr. Vinod Garg retires by rotation and being eligible, has offered himself for re-appointment at the forthcoming AGM.

Appointment/ Designation of Key Managerial Personnel:

1. Mr. Vinod Garg, Managing Director has been designated as Key Managerial Personnel w.e.f. April 1, 2014.

2. Mr. Vaibhav Garg has been appointed and designated as Whole Time Director and CFO w.e.f. July 1, 2014.

3. Mr. Jalpesh Darji has been appointed as Company Secretary of the Company effective from June 1, 2014.

There was delay in Appointment of Company Secretary because the Company was looking for a perfect candidate for the job of Secretarial department and hence the Company had appointed Company Secretary w.e.f. June 1, 2014. As on March 31, 2015, the Company has complied with the requirements of the Act.

REMUNERATION TO MANAGING DIRECTOR AND WHOLE TIME DIRECTOR FROM SUBSIDIARY COMPANIES

During the Financial Year 2014-15, Mr. Vinod Garg, Managing Director and Mr. Vaibhav Garg, Whole Time Director and Chief Financial Officer drew following remuneration from Subsidiaries:

Remuneration from Vibrant Global Trading Private Limited (VGTPL) and Vibrant Global Infraproject Private Limited (VGIPPL):

Name of Director Remuneration from Remuneration from VGTPL (in Rs.) VGIPPL (in Rs.)

Mr. Vinod Garg 24,00,000.00 Nil

Mr. Vaibhav Garg Nil Nil

This disclosure is made under Section 197(14) of the Act and rules made thereunder.

BOARD MEETINGS

During the year, 18 (Eighteen) Board Meetings were held on various dates. Complete details of the said meetings are given in the Report on Corporate Governance forming part of this Annual Report. Gap between two meetings was within the period prescribed under the Act and rules made thereunder.

The Company re-constituted Board on September 10, 2014 keeping in view compliance of constitution requirements as per BSE SME Listing Agreement. The Independent Directors were appointed effective from September 10, 2014 and hence due to non completion of even a year, there could not be a separate meeting of Independent Directors. However, informal discussion took place during regular Board Meetings.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 52 of the BSE SME Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration/ Compensation Committee and Stakeholders Relation Committee.

COMMITTEES OF THE BOARD

A detailed note on the Board and its Committees is provided in the Report on Corporate Governance forming part of this Annual Report. Compositions of all Committees are as follows:

Audit Committee

Audit Committee comprised of 3 Members of the Board, Mr. Harsh Mehadia (Chairman), Mrs. Dipti Sharma (Member) and Mr. Vinod Garg (Member). Further details relating to Audit Committee are given in the Report on Corporate Governance forming part of this Annual Report.

Nomination and Remuneration/ Compensation Committee ("NRC")

Nomination and Remuneration/ Compensation Committee comprised of 3 Members of the Board, Mr. Harsh Mehadia (Chairman), Mrs. Dipti Sharma (Member) and Mr. Rahul Bagdia (Member). Further details relating to NRC are given in the Report on Corporate Governance forming part of this Annual Report.

Stakeholders Relation Committee

Stakeholders Relation Committee comprised of 3 Members of the Board, Mrs. Dipti Sharma (Chairman), Mr. Harsh Mehadia (Member) and Mr. Vinod Garg (Member). Further details relating to Stakeholders Relation Committee are given in the Report on Corporate Governance forming part of this Annual Report.

REMUNERATION POLICY

The Board, on the recommendation of the Nomination & Remuneration/ Compensation Committee framed a Remuneration Policy for Directors, Key Managerial Personnel and Senior Management. The Remuneration Policy is provided as Annexure 2.

RELATED PARTY TRANSACTIONS

All the contracts/ arrangements/ transactions that were entered into by the Company during the financial year with related parties were on an arm's length basis and in the ordinary course of business. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the provisions of the Act on materiality of related party transaction.

Details of Related Party Transactions are given at Note No. 36 to the Standalone Financial Statements.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review forms part of this Annual Report.

REPORT ON CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under Clause 52 of BSE SME Listing Agreement forms part of this Annual Report. The requisite certificate from a Practicing Company Secretaries confirming compliance of the conditions of Corporate Governance is attached to the Report on Corporate Governance.

EXTRACT OF ANNUAL RETURN

Extract of Annual return in Form MGT - 9 forms part of this Annual Report and attached as Annexure 3.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

CONSERVATION OF ENERGY: Not Applicable

TECHNOLOGY ABSORPTION: Not Applicable

FOREIGN EXCHANGE EARNINGS AND OUTGO: NIL

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. N R & Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the Financial Year 2014-15. The Secretarial Audit Report is annexed to this Report as Annexure 4. Qualifications given in the Secretarial Audit Report have been explained in this Report at appropriate places.

STATUTORY AUDITORS AND AUDITORS' REPORT

M/s. Gupta Sarda & Bagdia, Chartered Accountants, who were appointed as the Statutory Auditors of the Company by the Members at their previous Annual General Meeting (AGM), shall retire on conclusion of the ensuing AGM and are eligible for re-appointment. Members are requested to consider their re-appointment for a period of 2 years from the conclusion of forthcoming AGM until the conclusion of AGM for the financial year 2016-17, at a remuneration to be decided by Audit Committee/ Board of Directors in consultation with Statutory Auditors. The Company has received a letter of confirmation from M/s Gupta Sarda & Bagdia, Chartered Accountants to the effect that their appointment, if made, will be within the limits of Section 141 of the Act.

The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

DECLARATION OF THE DIRECTORS ON THE CODE OF CONDUCT

The Company has adopted a Code of Conduct for its Directors, including employees. For the year under review, Directors and Senior Management of the Company of the Company confirm compliance of the Code of Conduct of the Company.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

Management perceived following material changes which have occurred subsequent to the close of the financial year and before the date of this report dated September 5, 2015 affecting financial, position of the Company in any substantial manner:

1. Further Investment in Vibrant Global Trading Private Limited:

The Company has acquired 4,00,000 Equity Shares of Vibrant Global Trading Private Limited. Consequent to the acquisition, stake of the Company in Vibrant Global Trading Private Limited has increased from 56.01% to 78.42%. This Acquisition will add financial strength in the Company and higher returns.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these matters during the financial year 2014-15:

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

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employees Stock Option Scheme as referred to in this Report.

3. Policy on Corporate Social Responsibility

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company's operations in future.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Act, Directors of your Company state and confirm that:

1. In the preparation of the annual accounts for the financial year 2014-15, the applicable accounting standards have been followed and there are no material departures from the same;

2. 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 as at March 31, 2015 and of the profit and loss of the Company for year ended on that date;

3. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The directors had prepared the annual accounts on a going concern basis; and

5. The directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

6. 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.

ACKNOWLEDGEMENTS

The Directors wish to place on record their sincere appreciation for the support and co-operation extended by all Business Associates, Bankers, Stakeholders and Employees. The Company also expresses its gratitude to the Reserve Bank of India (RBI), BSE Limited and various Governmental departments and organisations for their help and co-operation. The Board appreciates and values the contributions made by every stakeholder associated with the Company and is confident that with their continued support, the Company will achieve its objectives and emerge stronger in the coming years.

For and on behalf of the Board of Directors Vinod Garg

Chairman and Managing Director Mumbai September 5, 2015



 
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