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Directors Report of Vinati Organics Ltd.

Mar 31, 2017

To the Members,

The Directors have pleasure in presenting their Twenty Eighth Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended March 31, 2017.

1) FINANCIAL RESULTS

The summarized position of these results is given below:

__(Rs in Lacs)

2016-2017

2015-2016

Net sales up by 6%

Net Sales/Income from Operations

66632.99

63094.80

Other Income

956.48

615.80

Total Income

67589.47

63710.60

EBITDA up by 7%

Profit before Finance cost, Depreciation & Taxes

22875.89

21293.44

Finance cost

275.32

785.94

Profit before Depreciation & Taxes

22600.57

20507.50

Depreciation & Amortization Expense

2136.83

1851.79

Profit before Taxation

20463.74

18655.71

Provision for Taxation - Current

4707.39

5298.14

Deferred

1881.39

710.89

Provision for earlier year W/back/Provided

(55.26)

(510.50)

PAT up by 6%

Net Profit

13930.22

13157.18

Balance brought forward

44031.90

34708.47

Less: Adjustment on account of depreciation

-

-

Balance available for appropriations

57962.12

47865.65

Appropriations

Interim dividend on equity shares for the year

-

1805.68

Proposed dividend on equity shares for the year

-

257.96

Dividend distribution tax

-

420.11

Transfer to General Reserve

-

1350.00

Surplus carried to Balance sheet

57962.12

44031.90

2) REVIEW OF OPERATIONS

The net sales/Income from operations during the year has gone up to Rs. 66632.99 Lacs from Rs.63094.80 Lacs.

The Company''s profit before tax has gone up from Rs. 18655.71 Lacs in previous year to Rs.20463.74 Lacs in current year registering growth of 10%.

3) DIVIDEND

Your Directors are pleased to recommend a dividend of 25% i.e. Re.0.50 per equity share.

The total outgo on dividend account will be Rs.310.47 Lacs (inclusive of dividend distribution tax).

The dividend is tax free in the hands of the shareholders

4) SUBSIDIARY COMPANY

The Company does not have subsidiary company.

5) PROSPECTS

To further its growth plans the company is undertaking capital expenditure of around Rs.800 crores towards the below mentioned projects:

- New Plant to produce p-Amino Phenol (PAP) which is starting material for Paracetamol, in a new plot at MIDC Mahad

- New plant to manufacture Isobutyl AcctoPhenone (IBAP) which is the intermediary between IBB & Ibuprofen

- New Plant to produce Isobutylene based Phenol derivatives like p-Tert Butyl Phenol (PTBP), o-Tert Butyl Phenol (OTBP), 2,4-Di-tert Butyl Phenol (2,4 DTBP), 2,6-Di-tert Butyl Phenol (2,6 DTBP) at Lote. The Company has already purchased plot for this project adjacent to existing plot.

6) TURNOVER AND PROFIT (OPERATING RESULTS)

The Company achieved gross turnover of Rs.68820.34 Lacs as compared to Rs.61632.62 Lacs in the previous year. The net profit after tax increased to Rs.13930.22 Lacs as compared to Rs.13157.18 Lacs in the previous year.

7) INSURANCE

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

8) DIRECTORS

As per Section 149(4) of the Companies Act, 2013 every listed company shall have at least one third of the total number of directors as independent directors. They shall hold office for a term up to five consecutive years on the Board of the Company as per section 149(10).

As per Section 152(6)(e) total number of directors shall not include independent directors. 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 the Company, i.e. up to March 31, 2019.

Out of remaining 5 directors 3 are executive directors. Therefore Mr. Sunil Saraf and Mr. Mohit Mutreja retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

9) AUDITORS

M/s. Karnavat & Co., Chartered Accountants (Firm Registration No. 104863W) were first appointed as auditors at Company''s 2nd AGM held on 20th August, 1991. Currently, they are holding office of the auditors up to conclusion of the 28th AGM. As per second provision to Section 139(2) of the Companies Act, 2013, a transition period of three years from the commencement of the Companies Act, 2013 is provided to appoint a new auditor if the existing auditor''s firm has completed two terms of five consecutive years. Accordingly, as per the said requirements of the Companies Act, 2013, M/s. M. M. Nissim & Co., Chartered Accountants (Firm Registration No. ICAI/FRN/107122W) are proposed to be appointed as auditors for a period of five years commencing from the conclusion of 28th AGM till the conclusion of the 33rd AGM, by shareholders, as may be applicable, in place of M/s. Karnavat & Co., Chartered Accountants. M/s. M. M. Nissim & Co., Chartered Accountants, have consented to the said appointment, and confirmed that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Companies Act, 2013. They have further confirmed that they are not disqualified to be appointed as statutory auditor in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Companies Act, 2013 and the provisions of the Companies (Audit and Auditors) Rules, 2014. The Audit Committee and the Board of Directors recommend the appointment of M/s. M. M. Nissim & Co., Chartered Accountants, as statutory auditors of the Company from the conclusion of the 28th AGM till the conclusion of 33rd AGM, to the shareholders.

Members are requested to appoint Auditors for a term of 5 (five) years and to authorize the Board of Directors to fix their remuneration. At previous meeting, M/s. Karnavat & Co., Chartered Accountants, were appointed as Statutory Auditors of your Company from the conclusion of the previous Annual General Meeting. The said statutory auditors retire at the ensuing Annual General Meeting and being eligible under section 139 of the Companies Act, 2013, offer themselves for re-appointment.

10) AUDITORS’ REPORT

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

11) COST AUDITOR

As per Section 139 of the Companies Act, 2013, M/s. N. Ritesh & Associates have been appointed as a Cost Auditor for the year ending on March 31, 2018, subject to the approval of Central Government, if required.

The Audit Committee has received a Certificate from the Cost Auditors certifying their independence and arm''s length relationship with your Company. In accordance with Cost Audit (Report) Rules, 2001, the due date for filing the Cost Audit Report in XBRL for the financial year ended 31.03.2016 was 28.02.2016 and the same was filed on 30.12.2016 vide SRN No.: G31632375 with the Ministry of Corporate Affairs, New Delhi.

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

The Company''s policy on directors'' appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 has been disclosed in the Corporate Governance Report, which forms part of this report. The Remuneration policy is set out in the Annexure ‘A'' to this report and is also available on the Company''s website.

13) FINANCE

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

14) FIXED DEPOSITS

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

15) 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 ‘B'' forming part of this report.

16) HUMAN RESOURCE

The Company believes that Human Resources play a very critical role in its growth. Its management has infused a lot of rigor, intensity in its people Development Processes and in honing skill sets. Various initiatives have been launched to provide growth opportunities to Employees. For the development of the Employees, the Company has created a structured training framework for its employees to ensure their ongoing education.

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

17) QUALITY INITIATIVES

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

18) LISTING

The Company''s equity shares continue to be listed at BSE & NSE. We confirm that the Listing fee for the financial year 2016-2017 has been paid to them. The stock code of the company at BSE is 524200 and NSE is VINATIORGA.

19) DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

ii. they have 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 or loss of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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 and such internal financial controls are adequate and operating effectively;

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

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2016-17.

20) DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from all of its Independent Directors under Section 149(7) of the

Companies Act, 2013 that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.

21) MATERIAL CHANGES AFTER BALANCE SHEET DATE (31ST MARCH, 2017)

No material changes and commitments affecting the financial position of the Company have occurred between the end of the Financial Year (FY17) of the Company to which the Financial Statements relate and the date of this report.

22) CORPORATE GOVERNANCE AND MANAGEMENT’S DISCUSSION AND ANALYSIS REPORTS

The Corporate Governance and Management''s Discussion and Analysis Reports, which form an integral part of this report, are set out in separate annexure to this report, along with the certificate from the Auditors of the Company certifying compliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchange. (See Annexures ‘C’, ‘D’ & ‘E’)

23) EMPLOYEES

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

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

1. Mr. Vinod Saraf - Managing Director - 6973550 shares - 13.52%

2. Mrs. Kavita Vinod Saraf - Spouse - 6228000 shares

- 12.07%

24) 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. The Company does not have any Subsidiary Company.

25) DELAY IN COMPLETION OF BUY- BACK

The Company has not proposed to buy- back any shares.

26) COMPOSITION OF AUDIT COMMITTEE

The Audit Committee of the Company as on March 31, 2017 comprised the following 3 Directors 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

27) ESOP/ ESOS

The Company has not issued any ESOP or ESOS.

28) SWEAT EQUITY

The Company has not issued any sweat equity.

29) PREFERENTIAL ALLOTMENT

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

30) REDEMPTION OF SHARES/ DEBENTURES

The Company has not redeemed any Shares or Debentures.

31) SHAREHOLDER’S RESOLUTION

Employee Stock Option Scheme, 2008 for 2,00,000 equity shares face value of Rs.10/- each was approved in annual general meeting held on 27.09.2008. So far same is not implemented. Same is being reconsidered.

32) DISQUALIFICATION OF DIRECTOR

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

33) INSIDER TRADING PROCEEDINGS/ ENQUIRY

Letter was received from SEBI inquiring about of purchase of equity shares by two employees on 29.02.2012 and same was replied on 5th March, 2012. Letter was written to SEBI for purchase of equity shares by one employee on 06.06.2012. And as on date we have not received any further communication.

34) CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility Committee was constituted on May 10, 2014 and reconstituted on February 26, 2015 as per Clause 49 of Listing Agreement for Corporate Governance. 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 Mutreja, Executive Director & Ms. Viral Saraf Mittal, Director

- Corporate Strategy have good knowledge and exposure to utilise the Company''s resources towards its corporate social responsibility. The Corporate Social Responsibility policy is available on Company''s website.

The average profit of the Company for last three years is Rs.16301.01 Lacs. Prescribed CSR expenditure is Rs.326.02 Lacs. Details of CSR spent during the financial year 2016-17 is as per Annexure ‘G’ enclosed. Amount unspent during the year is Rs.110.53 Lacs.

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company is set out in Annexure ‘H’ of this report and is also available on the website of the Company.

35) POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has in place a Policy on Prevention of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Prevention of Sexual Harassment of Women at Workplace Act”) and Rules framed there under and an Internal Complaints Committee consisting of Ms. Vinati Saraf Mutreja, Executive Director, Ms. Viral Saraf Mittal,. Director - Corporate Strategy and Ms. Priyanka Kheruka, Member has also been set up to redress complaints received regarding sexual harassment.

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

During the financial year 2016-17, no complaints were received by the Company. The Company is committed to providing a safe and conducive work environment to all of its employees and associates.

36) MGT - 9

Extract of Annual Return for financial year ended March 31, 2017 (Pursuant to section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014) in Form No. MGT-9 is enclosed (Annexure ‘I’).

37) SECRETARIAL AUDIT REPORT

To comply with the provisions of Section 204 of the Companies Act, 2013 we enclose herewith Secretarial Audit Report received from M/s. VKM & Associates, Practicing Company Secretary for the year ended 31st March, 2017 (Annexure ‘J’).

38) RISK MANAGEMENT

The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The risk management policy is set out in Annexure ‘K’ of this report and is also available on Company''s website.

39) PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company had not given any loans and guarantees. The Company had made investments in mutual fund units amounting to Rs.6178.14 Lacs as given below:

In mutual fund units (Rs in Lacs)

33281603.62 Units (March 31, 2016 - 0) Mutual Fund Units of Kotak Mutual fund

3378.00

2653922.313 Units (March 31, 2016 - 0)

2800.14

Mutual Fund Units of ICICI Prudential

Mutual Fund

Total |

6178.14

40) DEPOSITS FROM PUBLIC

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

41) PARTICULARS OF EMPLOYEES

The 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 are given below:

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

Sr. No.

Whole-time directors

Ratio to median remuneration

1.

Mr. Vinod Banwarilal Saraf, Managing Director & CEO

29.53

2.

Ms. Vinati Saraf Mutreja, Executive Director

20.67

3.

Ms. Viral Saraf Mittal, Director - Corporate Strategy

11.67

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

Sr. No.

Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary

% 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

15.25%

5.

Mr. N. K. Goyal, Chief Financial Officer

13.26%

6.

Mr. G. S. Singhi, Company Secretary cum Finance Controller

12.19%

c. The percentage increase in the median remuneration of employees in the financial year: 10%

d. The number of permanent employees on the roll of Company: 693

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

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

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

(Rs in Lacs)

Aggregate remuneration of key managerial personnel (KMP) in FY17 (Rs. In Lacs)

402.44

Revenue (Rs. In Lacs)

66632.99

Remuneration of (KMP) as a

0.60

percentage of revenue

Profit before tax (PBT) (Rs. In Lacs)

20463.74

Remuneration of (KMP) as % of PBT

1.97

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

Particulars

March 31, 2017

March 31, 2016

% change

Market capitalisation (H In Lacs)

391059.97

200121.59

95%

Price earnings

28.07

15.21

85%

ratio

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

Particulars

March 31, 2017 (Rs)

November 11, 1991 (IPO)1

% change

Market Price (BSE)

754.00

1.33

56592

Market Price (NSE)

758.00

1.33

56892

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

(Rs in Lacs)

Name

Total Remuneration Rs.

% of revenue R 66632.99

% of net profit before tax Rs. 20463.74

Mr. Vinod Banwarilal Saraf, Managing Director & CEO

114.66

0.17

0.56

Ms. Vinati Saraf Mutreja, Executive Director

87.42

0.13

0.43

Ms. Viral Saraf Mittal, Director - Corporate Strategy

49.25

0.07

0.24

Mr. Jayesh Ashar, Chief Operating Officer

68.00

0.10

0.33

Mr. N. K. Goyal, Chief Financial Officer

55.50

0.08

0.27

Mr. G. S. Singhi, Company Secretary cum Finance Controller

27.61

0.04

0.13

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

No variable component is paid.

l. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during 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 Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Annexure ‘L’ Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Companies Act, 2013, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

42) DISCLOSURE REQUIREMENTS

The Corporate Governance Report with Auditors'' Certificate thereon and Management Discussion and Analysis Report are attached, which forms part of this report.

Appointment letters of the Independent Directors are available on the website of the company.

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Companies Act, 2013 and the Listing Agreements with stock exchanges (URL: www.vinatiorganics.com).

43) 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 to Section 134(3)(h) of the Companies Act, 2013 read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure ‘M’ in Form AOC-2 and the same forms part of this report.

44) BOARD EVALUATION

The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI”) under Clause 49 of the Listing Agreements ("Clause 49”).

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

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

The Board and the Nomination and Remuneration Committee ("NRC”) reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

45) INDEPENDENT DIRECTORS'' MEETING

The Independent Directors of the Company met on March 31, 2017, inter-alia to discuss:

(i) Review the performance of Non-Independent Directors and the Board of Directors as a whole;

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

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

In a separate meeting of Independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. (Annexure ''N'')

46) NUMBER OF MEETINGS OF THE BOARD

Five meetings of the board were held during the year. For details of the meetings of the board, please refer to the Corporate Governance Report, which forms part of this report.

47) INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis Report, which forms part of this report.

48) AUDIT COMMITTEE

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.

49) CORPORATE POLICIES AND PROCEDURES ON INTERNAL FINANCIAL CONTROLS:

The Corporate Policies and Procedures on Internal Financial Controls policy is set out in Annexure ‘O'' of this report and is also available on Company''s website.

50) BUSINESS RESPONSIBILITY REPORT:

The Business Responsibility Report is set out in Annexure ‘P'' of this report and is also available on Company''s website

51) APPRECIATION & ACKNOWLEDGEMENTS

Your Directors take this opportunity to place on record their sincere gratitude for assistance and co-operation received from Central & State Governments, banks, financial institutions, shareholders, business associates and esteemed customers for their continued support and assistance during the year.

Your Directors also place on record their appreciation for the excellent contribution made by all employees of Vinati Organics Limited through their commitment, competence, co-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

13th May 2017 Non-Executive Chairman


Mar 31, 2016

The Directors have pleasure in presenting their Twenty Seventh Annual Report on the business and operations of your Company together with Audited Financial Statements for the year ended 31st March 2016.

1) FINANCIAL RESULTS

The summarized position of these results is given below:

(Rs. in Lacs)

2015-2016 2014-2015

Net sales down by 18% Net Sales/Income from Operations 63094.80 77172.56

Other Income 615.80 914.47

Total Income 63710.60 78087.03

Profit before Finance cost, Depreciation & Taxes 21293.44 20091.05

Finance cost 785.94 975.51

Profit before Depreciation & Taxes 20507.50 19115.54

EBITDA up by 6% Depreciation & Amortisation Expense 1851.79 1765.86

Profit before Taxation 18655.71 17349.68

Provision for Taxation - Current 5298.14 5144.95

Deferred 710.89 611.19

Provision for earlier year W/back/Provided (510.50) 14.14

PAT up by 14% Net Profit 13157.18 11579.40

Balance brought forward 34708.47 26547.52

Less: Adjustment on account of depreciation - (55.17)

Balance available for appropriations 47865.65 38071.75

Appropriations

Interim dividend on equity shares for the year 1805.68 -

Proposed dividend on equity shares for the year 257.96 1805.68

Dividend distribution tax 420.11 367.60

Transfer to General Reserve 1350.00 1190.00

Surplus carried to Balance sheet 44031.90 34708.47

2) REVIEW OF OPERATIONS

The net sales/Income from operations during the year have gone down to Rs.63710.60 Lacs from Rs.78087.03 Lacs.

It is mainly due to all round reduction in prices of all organic chemicals because of steep fall in global price of crude oil.

The Company''s Profit before tax has gone up from Rs.17349.68 Lacs in previous year to Rs.18655.71 Lacs in current year registering growth of 6%.

3) DIVIDEND

An Interim Dividend of Rs.3.50/- per equity share of face value of Rs.2/- each was declared on March 14, 2016 and paid on March 18, 2016.

The Board of Directors recommended further dividend on equity shares @ 25% on the share capital of the Company i.e. Rs.0.50 per Equity Share of face value of Rs.2/- each for the year ended 31st March 2016,

The total outgo on dividend account will be Rs.2483.75 Lacs (inclusive of tax on dividend).

4) TRANSFER TO RESERVES

Your Company proposes to transfer Rs.1350 Lacs to the General Reserve, out of the amount available for appropriation and an amount of Rs.44031.90 Lacs is proposed to be retained in the Profit & Loss Account.

5) SUBSIDIARY COMPANY

The Company does not have subsidiary company.

6) PROSPECTS

To further its growth plans the company is undertaking capital expenditure of Rs.200 Crores towards the below mentioned projects:

- New plant for producing para Tertiary Butyl Toluene / para Tertiary Butyl Benzoic Acid (PTBT/PTBBA); These products are IB based derivatives and find application in perfumery, personal care and as polymer additives.

- New plant for producing Tertiary Butyl Amine (TB Amine) which is used in the rubber and pharmaceutical industry.

- Couple of export oriented custom synthesis products.

- Setting up of 8 MW Co-generation plant at the company''s Lote facility.

7) TURNOVER AND PROFIT (OPERATING RESULTS)

The Company achieved gross turnover of Rs.61632.62 Lacs as compared to Rs.81558.24 Lacs in the previous year. The net Profit after tax increased to Rs.13157.18 Lacs as compared to Rs.11579.40 Lacs in the previous year.

8) INSURANCE

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

9) DIRECTORS

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

As per Section 152 (6) (e) total number of directors shall not include independent directors. 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 the Company, i.e. upto 31.03.2019.

Out of remaining 5 directors 3 are executive directors. Therefore Mr. Mohit Mutreja and Mr. Sunil Saraf retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

10) AUDITORS

Members are requested to appoint Auditors for the current year and to authorize the Board of Directors to fix their remuneration. At previous meeting, M/s. Karnavat & Co., Chartered Accountants, were appointed as Statutory Auditors of your Company from the conclusion of the previous Annual General Meeting. The said statutory auditors retire at the ensuing Annual General Meeting and being eligible under section 139 of the Companies Act, 2013, offer themselves for re-appointment.

11) AUDITORS'' REPORT

The observations of Auditors as referred to in the Auditors'' Report are suitably explained in the Notes to the Accounts.

12) COST AUDITOR

As per Section 139 of the Companies Act, 2013, M/s. N. Ritesh & Associates have been appointed as a Cost Auditor for the year ending on 31.03.2017, subject to the approval of Central Government, if required.

The Audit Committee has received a Certificate from the Cost Auditors certifying their independence and arm''s length relationship with your Company. In accordance with Cost Audit (Report) Rules, 2001, the due date for fling the Cost Audit Report in XBRL for the financial year ended 31.03.2015 was 28.02.2016 and the same was fled on 29.09.2015 vide SRN No.: S39646849 with the Ministry of Corporate Affairs, New Delhi.

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

The Company''s policy on directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors'' report. The Remuneration policy is set out in the Annexure ''A'' to the Director''s Report and is also available on the Company''s website.

14) FINANCE

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

15) FIXED DEPOSITS

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

16) 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 ''B'' forming part of this report.

17) HUMAN RESOURCE

The Company believes that Human Resources play a very critical role in its growth. Its management has infused a lot of rigor, intensity in its people Development Processes and in honing skill sets. Various initiatives have been launched to provide growth opportunities to Employees. For the development of the Employees, the Company has created a structured training framework for its employees to ensure their ongoing education.

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

18) QUALITY INITIATIVES

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

19) LISTING

The Company''s equity shares continue to be listed at BSE & NSE. We confirm that the Listing fee for the financial year 2015-2016 has been paid to them. The stock code of the company at BSE is 524200 and NSE is VINATIORGA.

20) DIRECTORS'' RESPONSIBILITY STATEMENT

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

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. they have 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;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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 and such internal financial controls are adequate and operating effectively;

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

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2015-16.

21) DECLARATION BY INDEPENDENT DIRECTORS

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

22) MATERIAL CHANGES AFTER BALANCE SHEET DATE (31ST MARCH, 2016)

No material changes and commitments affecting the financial position of the Company have occurred between the end of the Financial Year (FY16) of the Company to which the Financial Statements relate and the date of this Board''s Report.

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

The Corporate Governance and Management''s Discussion and Analysis Reports, which form an integral part of this report, are set out in separate annexures to this report, along with the certificate from the Auditors of the Company certifying compliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchange. (See annexure ''C'' ''D'' & ''e'')

24) EMPLOYEES

The Company is required to make disclosure under section 134 of the Companies Act, 2013 for its employee drawing remuneration in excess of Rs.60 Lacs per annum or Rs.5 Lacs per month. (See annexure ''f'') Employee holding 2% or more of the equity shares by himself/herself or along with his/her spouse:

1. Mr. Vinod Saraf – Managing Director – 6973550 shares - 13.52%

2. Mrs. Kavita Vinod Saraf – Spouse – 6228000 shares - 12.07%

25) 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. The Company does not have Subsidiary Company.

26) DELAY IN COMPLETION OF BUY- BACK

The Company has not proposed to buy- back any shares.

27) COMPOSITION OF AUDIT COMMITTEE

The Audit Committee of the Company as on 31st March, 2016 comprised the following 3 Directors 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

28) ESOP/ ESOS

The Company has not issued any ESOP or ESOS.

29) SWEAT EQUITY

The Company has not issued any sweat equity.

30) PREFERENTIAL ALLOTMENT

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

31) REDEMPTION OF SHARES/ DEBENTURES

The Company has not redeemed any Shares or Debentures.

32) SHAREHOLDER''S RESOLUTION

Employee stock option scheme 2008 for 2,00,000 equity shares face value of Rs.10/- each was approved in annual general meeting held on 27.09.2008. So far same is not implemented. Same is being reconsidered.

33) DISQUALIFICATION OF DIRECTOR

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

34) INSIDER TRADING PROCEEDINGS/ ENQUIRY

Letter was received from SEBI inquiring about of purchase of equity shares by two employees on 29.02.2012 and same was replied on 5th March 2012. Letter was written to SEBI for purchase of equity shares by one employee on 06.06.2012. And as on date we have not received any further communication.

35) CORPORATE SOCIAL RESPONSIBILITY

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

All the members of Corporate Social Responsibility Committee mentioned above have good knowledge and exposure to utilize the Company''s resources towards its corporate social responsibility. The Corporate Social Responsibility policy is available on Company''s website.

The average Profit of the Company for last three year is Rs.13489.85 Lacs. Prescribed CSR expenditure is Rs.269.80 Lacs Details of CSR spent during the financial year 2015- 16 is as per annexure ''G'' enclosed. Amount unspent during the year is Rs.4.03 Lacs.

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company is set out in annexure ''H'' of this report and is also available on the website of the Company.

36) MGT - 9

Extract of Annual Return for financial year ended 31.03.2016 (Pursuant to section 92(3) of the Companies Act, 2013 read with the companies (Management and Administration) Rules, 2014 Form No. MGT-9 is enclosed (annexure ''I'').

37) SECRETARIAL AUDIT REPORT

To comply with the provisions of Section 204 of the Companies Act, 2013 we enclose herewith secretarial audit report received from M/s. VKM & Associates, Practicing Company Secretary for the year ended 31st March 2016 (annexure ''J'').

38) RISK MANAGEMENT

The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The risk management policy is set out in annexure ''K'' of the Directors Report and is also available on Company''s website.

39) PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company had not given any loans and guarantees. The Company had made investments in mutual fund units amounting to Rs.273.86 Lacs as given below:

(Rs. in Lacs)

In mutual fund units

804527.011 Units (31st March, 2015 – 98.86 804527.011) Mutual Fund Units of L&T Triple Ace Bond Fund-Bonus

1690674.241 Units (31st March, 2015 175.00 – 1690674.241) Mutual Fund Units of Sundaram select Debt ST Asset Plan Bonus

Total 273.86

40) DEPOSITS FROM PUBLIC

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

41) PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

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

Sr. Executive director’s Ratio to median No. Remuneration 1. Mr. Vinod Banwarilal Saraf, 29.64 Managing Director & CEO

2. Mrs. Vinati Saraf Mutreja, 20.75 Executive Director

3. Mrs. Viral Saraf Mittal, 11.86 Director – Corporate Strategy

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

Sr. Directors, Chief Executive % increase in No. officer, Chief financial officer remuneration in and Company Secretary the financial year

1. Mr. Vinod Banwarilal Saraf, 10% Managing Director & CEO

2. Mrs. Vinati Saraf Mutreja, 10% Executive Director

3. Mrs. Viral Saraf Mittal, 10% Director – Corporate Strategy

4. Mr. Jayesh Ashar, Chief 18.00% Operating Officer

5. Mr. N. K. Goyal, Chief 15.29% Financial Officer

6. Mr. G. S. Singhi, Company 13.87% Secretary cum Finance Controller

c. the percentage increase in the median remuneration of employees in the financial year: 13%

d. the number of permanent employees on the roll of Company: 636

e. the explanation on the relationship between average increase in remuneration and Company performance:

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

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

(Rs. in Lacs)

Aggregate remuneration of key 362.40 managerial personnel (KMP) in FY16

Revenue 63094.80

Remuneration of (KMP) as a 0.57 percentage of revenue

Profit before tax (PBT) 18656.71

Remuneration of (KMP) as % of PBT 1.94

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

Particulars March 31, 2016 March 31, 2015 % change

Market capitalization (Rs. In Lacs) 200121.59 271239.81 -26%

Price earnings ratio 15.21 23.01 -34%

h. percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

Particulars March 31, 2016 November 11, % change (Rs.) 1991 (IPO)*

Market Price (BSE) 387.90 1.33 28993

Market Price (NSE) 389.05 1.33 29079

* 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 the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are 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 the performance of the Company:

(Rs. in Lacs)

Name Total % of revenue % of net Profit remuner ation Rs. 63094.80 before tax Rs. 18616.71

Mr. Vinod Banwarilal Saraf, Managing Director & CEO 104.60 0.17 0.56

Mrs. Vinati Saraf Mutreja, Executive Director 79.51 0.13 0.43

Mrs. Viral Saraf Mittal, Director – Corporate Strategy 44.72 0.07 0.24

Mr. Jayesh Ashar, Chief Operating Officer 59.32 0.09 0.32

Mr. N. K. Goyal, Chief Financial Officer 49.32 0.08 0.26

Mr. G. S. Singhi, Company Secretary cum Finance Controller 24.93 0.04 0.13

k. the key parameters for any variable component of remuneration availed by the directors:

No variable component is paid.

l. the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during 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 Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

42) DISCLOSURE REQUIREMENTS

The corporate governance report with auditors'' certificate thereon and management discussion and analysis are attached, which form part of this report.

Appointment letters of the Independent Directors are available on the website of the company.

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of the Section 177(9) of the Act and the Listing Agreements with stock exchanges (URL: www. vinatiorganics.com).

43) TRANSACTION WITH RELATED PARTIES

None of the transactions with related parties falls under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in ''Annexure L'' in Form AOC-2 and the same forms part of this report.

44) BOARD EVALUATION

The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49").

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

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

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

45) INDEPENDENT DIRECTORS'' MEETING

The Independent Directors of the Company met on 21st May, 2015 & 7th March, 2016, inter-alia to discuss:

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

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

(iii) Asses the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. (Annexure ''M'')

46) NUMBER OF MEETINGS OF THE BOARD

Five meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.

47) INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

48) AUDIT COMMITTEE

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report

49) CORPORATE POLICIES AND PROCEDURES ON INTERNAL FINANCIAL CONTROLS:

The Corporate Policies and Procedures on Internal Financial Controls policy is set out in Annexure ''N'' of the Directors Report and is also available on Company''s website.

50) BUSINESS RESPONSIBILITY REPORT:

The Business Responsibility Report is set out in Annexure ''O'' of the Directors Report and is also available on Company''s website.

51) APPRECIATION & ACKNOWLEDGEMENTS

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

Your Directors also place on record their appreciation for the excellent contribution made by all employees of Vinati Organics Limited through their commitment, competence, co-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

14th May 2016 Non-Executive Chairman


Mar 31, 2013

Dear Shareholder''s

THE DIRECTORS HAVE PLEASURE IN PRESENTING THEIR TWENTY FOURTH ANNUAL REPORT ON THE BUSINESS AND OPERATIONS OF YOUR COMPANY TOGETHER WITH AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 3IST MARCH 2013.

1) Financial results

The summarised position of these results is given below:

(Rs. in Lacs)

2012-2013 2011-2012

Net Sales/Income from Operations 55291.54 44746.06

Other Income 376.37 283.19

Total Income 55667.91 45029.25

Profit before Interest, Depreciation & Taxes 11939.23 9446.75

Interest 683.69 582.82

Profit before Depreciation & Taxes 11255.54 8863.93

Depreciation & Amortisation Expense 994.95 703.71

Profit before Taxation 10260.59 8160.22

Provision for Taxation - Current 2317.96 2329.10

- Deferred 1120.14 316.37

Provision for earlier year W/back/Provided (43.79) 34.21

Net Profit 6866.28 5480.54

Balance brought forward 15842.77 12059.87

Balance available for appropriations 22709.05 17540.41

Appropriations

Final Proposed Dividend 1234.31 987.45

Tax on above 209.77 160.19

Transfer to General Reserve 700.00 550.00

Surplus carried to Balance sheet 20564.97 15842.77

2) Review of operations

The Company''s operations have shown impressive growth during the year under review. The net sales/Income from operations during the year have gone up to Rs.55291.54 Lacs from Rs.44746.06 Lacs, registering a growth of 2 3% over the previous year.

The robust growth in sales can be attributed to the phenomenal growth in IBB sales which grew by more than 3 3% as compared to previous year.

The Company''s profit before tax has also gone up from Rs.8l60.22 Lacs in previous year to Rs.10260.59 Lacs in current year registering a robust growth of 26%.

3) Dividend

Your Directors are pleased to recommend a dividend of 125% i.e. Rs.2.50 per equity share.

The total outgo on dividend account will be Rs.1444.08 Lacs (inclusive of corporate tax on dividend).

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

4) Capital expenditure

During the year the Company capitalised Rs.105 Crores towards successful commissioning of the new plant of DAAM and also the expansion of ATBS, TBA/Polymer.

5) Corporate development

The corporate office of the Company has been shifted from Shiv-Ashish, 2nd Floor, Andheri-Kurla Road, Sakinaka, Mumbai — 400 072 to Parinee Crescenzo, 1102, 11th Floor, "G" Block, Plot No. C38 & C39, Behind MCA, Bandra Kurla Complex, Bandra (E), Mumbai — 400 051. The same is owned by Company.

6) Subsidiary company

The Company does not have subsidiary company.

7) Prospects

As we go into the next year, we expect to keep growing furthermore in ATBS and accordingly have the ATBS capacity with a further expansion to 26000 MT and this expansion is commissioned as on 31.03.2013.

Expansion of TBA to 1,000 MT as on 3 1.03.2013 and ATFE Bottom Polymers is completed and this has helped to reduce the effluent load and contribute to the revenue of the Company.

The Company is optimistic about the future demand and foresees a strong and robust growth in the coming year across all markets driven by existing and new products.

8) Turnover and profit (operating results)

The Company achieved gross turnover of Rs.58521.73 Lacs as compared to Rs.46848.94 Lacs in the previous year. The net profit after tax increased to Rs.6866.28 Lacs as compared to Rs.5480.54 Lacs in the previous year.

9) Insurance

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

10) Directors

As per the statute, two-third of the Directors'' should be retiring Directors. One-third of these retiring Directors are required to retire every year and if eligible, these Directors qualify for re-appointment.

Since minimum 1/3 directors are retiring by rotation as per the Companies Act, 1956 at this Meeting, Mr. R. K. Saraswat and Mr. Mohit Mutreja, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

11) Auditors

Members are requested to appoint Auditors for the current year and to authorise the Board of Directors to fix their remuneration. At previous meeting, M/s. Karnavat & Co., Chartered Accountants, were appointed as Statutory Auditors of your Company from the conclusion of the previous Annual General Meeting. The said Statutory auditors retire at the ensuing Annual General Meeting and being eligible under section 224 (IB) of the Companies Act, 1956, offer themselves for re-appointment.

12) Auditors'' report

The observations of Auditors as referred to in the Auditors'' Report are suitably explained in the Notes to the Accounts.

13) Cost auditor

As per the order of Central Government within the meaning of Section 23 3 B of the Companies Act, 1956, M/s. N. Ritesh & Associates has been appointed as a Cost Auditor subject to the approval of Central Government for the year ending on 31.03.2014.

The Audit Committee has received a Certificate from the Cost Auditors certifying their independence and arm''s length relationship with your Company. In accordance with Cost Audit (Report) Rules, 2001, the due date for fling the Cost Audit Report in XBRL for the financial year ended 31.03.2012 was 28.02.2013 and the same was filed on 26.01.2013 vide SRN No. S2002II43 with the Ministry of Corporate Affairs, New Delhi.

14) Finance

The long term borrowings are raised through External Commercial Borrowings (ECBs), Foreign Currency Convertible Bonds (FCCBs) and Foreign Currency Term Loan (FCTL) from Banks and Financial Institutions.

15) Fixed deposits

During the year under review the Company did not invite or accept any Fixed Deposits within the meaning of Section 58A of the Companies Act, 1956 and as such, no amount of principal or interest was outstanding as on the date of balance sheet from public.

16) Conservation of energy, technology absorption & foreign exchange earnings & outgo

Information as per Section 2I7(l)(e) of the Companies Act, 1956, read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, relating to the above head are given in Annexure ''A'' forming part of this report.

17) Human resource

The Company believes that Human Resources play a very critical role in its growth. Its management has infused a lot of rigor, intensity in its people Development Processes and in honing skill sets. Various initiatives have been launched to provide growth opportunities to Employees. For the development of the Employees, the Company has created a structured training framework for its employees to ensure their ongoing education.

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

18) Listing

The Company''s equity shares continue to be listed at BSE & NSE. We confirm that the Listing fee for the financial year 2012-2013 has been paid to them. The stock code of the Company at BSE is 524200 and NSE is VINATIORGA.

19) Directors'' responsibility statement

The Audited Accounts for the year under review are in conformity with the requirements of the Act and the Accounting Standards. The financial statements reflect fairly the form and substances of transactions carried out during the year under review and reasonably present your Company''s financial condition and results of operations. Pursuant to the requirement of Section 217 (2AA) of the Companies Act, 1956 and based on the representations received from the operating management, the Directors hereby confirm that:

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

ii) they have 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 31st March 2013 and the profit or loss of the Company for the year ended on 31st March 2013;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared annual accounts on a going concern basis.

20) Corporate governance and management''s discussion and analysis reports

The Corporate Governance and Management''s Discussion and Analysis Reports, which form an integral part of this report, are set out in a separate annexure to this report, along with the certificate from the Auditors of the Company certifying compliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchange. (See Annexure ''B'' & ''C'')

21) Employees

The Company is not required to make any disclosure under section 2I7(2A) of the Companies Act, 1956 as none of its employee is drawing remuneration in excess of Rs.60 Lacs per annum or Rs.5 Lacs per month.

Employee holding 2% or more of the equity shares by himself or along with his spouse:

1. Mr. Vinod Saraf — Managing Director — 7937250 shares - 16.08%

2. Mrs. Kavita Vinod Saraf — Spouse — 6228000 shares - 12.61%

22) 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. The Company does not have Subsidiary Company.

23) Delay in completion of buy- back

The Company has not proposed to buy- back any shares.

24) Composition of audit committee

The Audit Committee of the Company as on 31st March, 2013 comprised the following 3 Directors 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

25) ESOP / ESOS

The Company has not issued any ESOP or ESOS.

26) Sweat equity

The Company has not issued any sweat equity.

27) Preferential allotment

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

28) Redemption of shares/ debentures

The Company has not redeemed any Shares or Debentures.

29) Shareholder''s resolution

Employee stock option scheme 2008 for 2,00,000 equity shares face value of Rs.10/- each was approved in annual general meeting held on 27.09.2008. So far same is not implemented. Same is being reconsidered.

30) Disqualification of director

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

31) Insider trading proceedings/ enquiry

Letter was received from SEBI inquiring about of purchase of equity shares by two employees on 29.02.2012 and same was replied on 5th March 2012. Letter was written to SEBI for purchase of equity shares by one employee on 06.06.2012. And as on date we have not received any further communication.

32) Appreciation & acknowledgements

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

Your Directors also place on record their appreciation for the excellent contribution made by all employees of Vinati Organics Limited through their commitment, competence, co-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

7th May 2013 Non-Executive Chairman


Mar 31, 2012

The Directors have pleasure in presenting their Twenty Third Annual Report on the business and operations of your Company together with Audited Financial Statements for the year ended 31st March, 2012.

1) FINANCIAL RESULTS

The summarised position of these results is given below:

(Rs. In Lacs)

2011-2012 2010-2011

Net Sales/Income from Operations 44746.06 32264.88

Net sales up by Other Income 283.19 635.21

39% Total Income 45029.25 32900.09

Profit before Interest, Depreciation & Taxes 9446.75 7281.33

Interest 582.82 385.75

Profit before Depreciation & Taxes 8863.93 6895.58

Depreciation & Non-cash Charges 703.71 644.93

Profit before Taxation 8160.22 6250.65

EBITDA up by Provision for Taxation - Current 2329.10 1242.26 30% - Deferred 316.37 301.96

- MAT credit entitlement - (490.67)

Provision for earlier year W/back/Provided 34.21 0.18

Net Profit 5480.54 5196.92

Balance brought forward 12059.87 8128.91

Balance available for appropriations 17540.41 13325.83

PAT up by Appropriations 5% Final Proposed Dividend 987.45 641.84

Tax on above 160.19 104.12

Transfer to General Reserve 550.00 520.00

Surplus carried to Balance sheet 15842.77 12059.87

2) REVIEW OF OPERATIONS

The Company's operations have shown impressive growth during the year under review. The net sales during the year have gone up to Rs. 44,746.06 Lacs from Rs. 32,264.88 Lacs, registering a growth of 39% over the previous year.

The robust growth in sales can be attributed to the phenomenal growth in ATBS sales which grew by more than 22% as compared to previous year. During FY'12 we have crossed sales of 12,000 MT of ATBS.

The Company's profit before tax has also gone up from Rs. 6,250.65 Lacs in previous year to Rs. 8,160.22 Lacs in current year registering a robust growth of 33%.

3) DIVIDEND

Your Directors are pleased to recommend a dividend of 100% i.e. Rs. 2/- per equity share.

The total outgo on dividend account will be Rs. 1,147.64 Lacs (inclusive of corporate tax on dividend).

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

4) PROSPECTS

As we go into the next year, we expect to keep growing furthermore in ATBS and accordingly have decided to augment the ATBS capacity with a further expansion to 26,000 MT and this expansion is expected to be commissioned by September 2012.

Di-Acetone Acrylamide (1000 MT) is expected to be commissioned by August 2012. This acrylonitrile based product, synergic with ATBS, is used in manufacture of coatings, adhesives, laminates and sealers.

Expansion of TBA to 1,000 MT and ATFE Bottom Polymers (1,500 MT to 4,500 MT) is expected to be completed by September 2012. This will reduce the effluent load and contribute to the revenue of the Company.

The Company is optimistic about the future demand and foresees a strong and robust growth in the coming year across all markets driven by existing and new products.

5) TURNOVER AND PROFIT (OPERATING RESULTS)

The Company achieved gross turnover of Rs. 46,848.94 Lacs as compared to Rs. 32,931.06 Lacs in the previous year. The net profit after tax increased to Rs. 5,480.54 Lacs as compared to Rs. 5,196.92 Lacs in the previous year.

6) INSURANCE

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

7) DIRECTORS

Mr. Mohit Mutreja had resigned from the post of whole time Director - Business Development. He continues to be Director w. e. f. 01.05.2012.

As per the statute, two-third of the Directors' should be retiring Directors. One-third of these retiring Directors are required to retire every year and if eligible, these Directors qualify for re-appointment.

Since minimum 1/3 directors are retiring by rotation as per the Companies Act, 1956 at this Meeting, Mr. A. A. Krishnan and Mr. Girish M. Dave, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

8) AUDITORS

Members are requested to appoint Auditors for the current year and to authorise the Board of Directors to fix their remuneration. The Statutory auditors M/s. Karnavat & Co., Chartered Accountants retire at the ensuing Annual General Meeting and being eligible under section 224 (1B) of the Companies Act, 1956, offer themselves for re-appointment.

9) AUDITORS' REPORT

The observations of Auditors as referred to in the Auditors' Report are suitably explained in the Notes to the Accounts.

10) COST AUDITOR

As per the order of Central Government within the meaning of Section 233 A of the Companies Act, 1956, M/s. N. Ritesh & Associates has been appointed as a Cost Auditor subject to the approval of Central Government for the year ending on 31.03.2013.

11) FIXED DEPOSITS

During the year under review the Company did not invite or accept any Fixed Deposits within the meaning of Section 58A of the Companies Act, 1956 and as such, no amount of principal or interest was outstanding as on the date of balance sheet from public.

12) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO

Information as per Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, relating to the above head are given in Annexure 'A' forming part of this report.

13) LISTING

The Company's Equity shares continue to be listed at BSE & NSE. We confirm that the Listing fee for the financial year 2011-2012 has been paid to them. The stock code of the Company at BSE is 524200 and NSE is VINATIORGA.

14) DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217 (2AA) of the Companies Act, 1956 and based on the representations received from the operating management, the Directors hereby confirm that:

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

ii) they have 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 31st March, 2012 and the profit or loss of the Company for the year ended on 31st March, 2012;

ii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) they have prepared annual accounts on a going concern basis.

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

The Corporate Governance and Management's Discussion and Analysis Reports, which form an integral part of this report, are set out in a separate annexure to this report, along with the certificate from the Auditors of the Company certifying compliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchange. (See Annexure 'B' & 'C')

16) EMPLOYEES

The Company is not required to make any disclosure under section 217(2A) of the Companies Act, 1956 as none of its employee is drawing remuneration in excess of Rs. 60 Lacs per annum or Rs. 5 Lacs per month.

Employee holding 2% or more of the equity shares by himself or along with his spouse:

1. Mr. Vinod Saraf - Managing Director - 7937250 shares - 16.08%

2. Mrs. Kavita Vinod Saraf - Spouse - 6228000 shares - 12.61%

17) 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 or its subsidiaries.

18) DELAY IN COMPLETION OF BUY- BACK

The Company has not proposed to buy- back any shares.

19) COMPOSITION OF AUDIT COMMITTEE

The Audit Committee of the Company as on 31st March, 2012 comprised the following 3 Directors 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

20) ESOP/ ESOS

The Company has not issued any ESOP or ESOS.

21) SWEAT EQUITY

The Company has not issued any sweat equity.

22) PREFERENTIAL ALLOTMENT

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

23) REDEMPTION OF SHARES/ DEBENTURES

The Company has not redeemed any Shares or Debentures.

24) SHAREHOLDER'S RESOLUTION

Employee stock option scheme 2008 for 2,00,000 equity shares face value of Rs. 10/- each was approved in annual general meeting held on 27.09.2008. So far same is not implemented. Same is being reconsidered.

25) DISQUALIFICATION OF DIRECTOR:

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

26) INSIDER TRADING PROCEEDINGS/ ENQUIRY

Letter was received from SEBI inquiring about purchase of equity shares by two employees on 29.02.2012 and same was replied on 5th March, 2012. And as on date we have not received any further communication.

27) APPRECIATION & ACKNOWLEDGEMENTS

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

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

For and on behalf of the Board of Directors

Girish M. Dave

Mumbai Non-Executive Chairman

Dated: 12th May, 2012


Mar 31, 2011

The Directors have pleasure in presenting their Twenty Second Annual Report on the business and operations of your Company together with Audited Financial Statements for the year ended 31st March 2011.

1) FINANCIAL RESULTS

The summarised position of these results is given below:

IRs. in Lacs]

2010-2011 2009-2010

Net Sales/Income from Operations 31688.87 23210.00

Other Income 965.91 844.92

Net sales up by Total Income 32654.78 24054.92

36% Profit before Interest, Depreciation & Taxes 7281.33 6010.51

Interest 385.75 335.61

Profit before Depreciation & Taxes 6895.58 5674.90

Depreciation & Non-cash Charges 644.93 495.65

Profit before Taxation 6250.65 5179.25

Provision for Taxation

-Current 1242.26 889.00

EBITDA up by 21% -Deferred 301.96 285.67

- Fringe Benefit Tax - -

- MAT credit entitlement (490.67) -

Provision for earlier year W/back/Provided 0.18 0.44

Net Profit 5196.92 4004.14

Balance brought forward 8128.91 5106.07

Balance available for appropriations 13325.83 9110.21

Appropriations

PAT up by Interim Dividend -- 148.12 30%

Final Proposed Dividend 641.84 345.61

Tax on above 104.12 82.57

Transfer to General Reserve 520.00 405.00

Surplus carried to Balance sheet 12059.87 8128.91

2) REVIEW OF OPERATIONS

The Companys operations have shown impressive growth during the year under review. The net sales during the year have gone up to Rs.31,669.73 Lacs from Rs.23,210.00 Lacs, registering a growth of 36% over the previous year.

The robust growth in sales can be attributed to the phenomenal growth in ATBS sales which grew by more than 65% as compared to previous year. During FY11 we have crossed sales of 11,000 MT of ATBS.

The Companys Profit Before Tax has also gone up from Rs.5,179.25 Lacs in previous year to Rs.6,250.65 Lacs in current year registering a robust growth of 21%.

3) DIVIDEND

Your Directors are pleased to recommend a dividend of 65% i.e. Rs.1.30 per equity share.

The total outgo on dividend account will be Rs.745.96 Lacs (inclusive of corporate tax on dividend).

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

4] PROSPECTS

As we go into the next year, we expect to keep growing furthermore in ATBS and accordingly have decided to augment the ATBS capacity with a further expansion to 18,000 MT and this expansion is expected to be commissioned by March 2012.

Di-Acetone Acrylamide 11000 MT) is expected to be commissioned by December 2011. This acrytonitrile based product, synergic with ATBS, is used in manufacture of coatings, adhesives, laminates and sealers.

Expansion of TBA (700 MT to 1,000 MT) and ATFE Bottom Polymers (1,500 MT to 4,500 MT) is expected to be completed by March 2012. This will reduce the effluent load and contribute to the revenue of the Company.

The Company is optimistic about the future demand and foresees a strong and robust growth in the coming year across all markets driven by existing and new products.

5) TURNOVER AND PROFIT {OPERATING RESULTS!

The Company achieved gross turnover of Rs.32,931.06 Lacs as compared to Rs. 23,844.43 Lacs in the previous year. The net profit aftertax increased to Rs.5,196.92 Lacs as compared to Rs.4,004.14 Lacs in the previous year.

6) INSURANCE

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

7) DIRECTORS

Mr. R K Saraswat has been appointed as an Additional Director on the Board with effect from January 24, 2011. He is a Chartered Accountant with over 40 years of extensive domestic & international experience in Accounting, Auditing, Project Financing and Financial

Management. He is presently serving on the Board of Datamatics Global Services Ltd., Datamatics Software Services Ltd., and Priya Ltd. He last served Datamatics Group of companies as their Finance Director and earlier served as President of S. M. Dyechem Limited and Sr. Vice President of Grasim, where he was interalia engaged in setting up the Mangalore Refinery plant. In accordance with the provisions of the Companies Act, 1956, resolution seeking approval of the members for his appointment has been incorporated in the Notice of the ensuing Annual General Meeting and the Explanatory Statement thereto.

Mr. Anandkumar Tibrewala ceased to be a Director with effect from January 24, 2011. The Board wishes to place on record its appreciation for his valuable contribution during his association with the Company.

As per the statute, two-third of the Directors should be retiring Directors. One-third of these retiring Directors are required to retire every year and if eligible, these Directors qualify for re-appointment.

Accordingly, Mr. C. B. Gokhale and Mr. Sunil Saraf, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re- appointment.

8. AUDITORS

Members are requested to appoint Auditors for the current year and to authorise the Board of Directors to fix their remuneration. The Statutory Auditors M/s. Karnavat & Co., Chartered Accountants retire at the ensuing Annual General Meeting and being eligible under section 224 (1B) of the Companies Act, 1956, offer themselves for re-appointment.

9. AUDITORS" REPORT

The observations of Auditors as referred to in the Auditors Report are suitably explained in the Notes to the Accounts.

10. COST AUDITOR

As per the order of Central Government within the meaning of Section 233 A of the Companies Act, 1956, M/s. N. Ritesh & Associates has been appointed as a Cost Auditor subject to the approval of Central Government for the year ending on 31.03.2011. The Company has made necessary application to the Government for approval of the same.

11) FIXED DEPOSITS

During the year under review the Company did not invite or accept any Fixed Deposits within the meaning of Section 58A of the Companies Act, 1956 and as such, no amount of principal or interest was outstanding as on the date of balance sheet from public.

12) AWARDS AND RECOGNITIONS

- Mr. Vinod Saraf was awarded the Business Leader of the Year (Innovation) by CHEMTECH CEW Leadership & Excellence Awards 2011

- Forbes Asia listed VOL amongst 200 Best Under A Billion companies for 2010

- VOL was ranked amongst the Top 10 Fastest Growing Companies in India for the Year 2010 by The Economic Time Intelligence Group January 2011); We were ranked amongst the Top 10 in 2009 as well

- VOL was ranked #7 amongst the Top 100 Fastest Growing Small Companies in India by The Economic Times Intelligence Group (September 2010); We were ranked #14 in 2009

- VOL awarded with special citation for Development of Indigenous Technology by Indian Chemical Council

- Certificate of Merit for achieving Zero Accident Frequency Rate (2007-2009) received from National Safety Council - Maharashtra Chapter (Lote Plant)

- Lote and Mahad Plant certified with ISO 9001:2008

13) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO

Information as perSection 217(1 )(e) of the Companies Act, 1956, read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, relating to the above head are given in Annexure A forming part of this report.

H) LISTING

The Companys Equity shares continue to be listed at BSE & NSE. We confirm that the Listing fee for the financial year 2010-2011 has been paid to them. The stock code of the Company at BSE is 524200 and NSE is VINATIORGA.

15) DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217 (2AA) of the Companies Act, 1956 and based on the representations received from the operating management, the Directors hereby confirm that:

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

(ii) they have 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 31st March 2011 and the profit or loss of the Company for the year ended on 31st March 2011;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared annual accounts on a going concern basis.

161 CORPORATE GOVERNANCE AND MANAGEMENTS DISCUSSION AND ANALYSIS REPORTS

The Corporate Governance and Managements Discussion and Analysis Reports, which form an integral part of this report, are set out in a separate annexure to this report, along with the certificate from the Auditors of the Company certifying compliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchange. (See Annexure B & C)

17) EMPLOYEES

The Company is not required to make any disclosure under section 217(2A) of the Companies Act, 1956 as none of its employees is drawing remuneration in excess of Rs.60 Lacs per annum or Rs.5 Lacs per month.

18) APPRECIATION & ACKNOWLEDGEMENTS Your Directors take this opportunity to place on record their sincere gratitude for assistance and cooperation received from Central & State Governments, banks, financial institutions, shareholders, business associates and esteemed customers for their continued support and assistance during the year.

Your Directors also place on record their appreciation for the excellent contribution made by all employees of Vinati Organics Limited through theircommitment, competence, co-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

21st May 2011 Non-Executive Chairman


Mar 31, 2010

The Directors have pleasure in presenting their Twenty First Annual Report on the business and operations of your Company together with Audited Financial Statements for the year ended 31st March 2010.

1) FINANCIAL RESULTS

The summarised position of these results is given below:

Rs. in Lacs

2009-2010 2008-2009

Net Sales 23,175.63 19,050.00

Other Income 844.92 532.27 Net

Total Income 24,020.55 19,582.27

Sales up

Profit before Interest, Depreciation &Taxes 6,010.51 3,845.06 by 22%

Interest 335.61 328.86

Profit before Depreciation & Taxes 5,674.90 3,516.20

Depreciation & Non-cash Charges 495.65 327.44

Profit before Taxation 5,179.25 3,188.76

EBITDA

Provision for Taxation - Current 889.00 613.21 up by 49% - Deferred 285.67 59.45

- Fringe Benefit Tax -- 8.00

Provision for earlier year W/back/ Provided 0.44 (4.73)

Net Profit 4,004.14 2,512.83

Balance brought forward 5,106.07 3,134.06

Balance available for appropriations 9,110.21 5,646.89

PAT Appropriations up by Interim Dividend 148.12 --

59% Final Proposed Dividend 345.61 246.86

Tax on above 82.57 41.96

Transfer to General Reserve 405.00 252.00

Surplus carried to Balance sheet 8,128.91 5,106.07

2) REVIEW OF OPERATIONS

The Companys operations have shown impressive growth during the year under review. The net sales during the year have gone up to Rs.23,175.63 Lacs from Rs.19,050.00 Lacs, registering a growth of 22% over the previous year.

The performance was driven mainly due to the growth in export sales across the developed and emerging markets. Continuous efforts on cost optimisation, research and development have resulted in increased operating efficiency. IBB sale of the Company constitutes 60% of the global sales thereby making it a market leader.

The Companys Net profit before tax has also gone up from Rs.3,188.76 Lacs in previous year to Rs.5,179.25 Lacs in current year registering a robust growth of 62%.

3) DIVIDEND

During the year company had paid interim dividend of 15% i.e. Rs.0.30 per equity share of face value of Rs.2/- each.

Your Directors recommend a final dividend of 35% i.e. Rs.0.70 per equity share of face value of Rs.2/- each for the year 2009-10. The total dividend (including interim dividend) for the financial year 2009-2010 is 50% i.e. Rs.1.00 per share of face value of Rs.2/- each. The total outgo on dividend account including interim dividend is Rs.576.30 Lacs (inclusive of corporate tax on dividend).

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

4) PROSPECTS

The Company is backward integrating into manufacture of Isobutylene (IB) - 12000 TPA which is a key raw material for 2-Acrylamido 2 Methyl Propane Sulfonic Acid (ATBS). The project is expected to be commissioned in June 2010.

Di-Acetone Acrylamide (1000 TPA) is expected to be commissioned by December 2010. This acrylonitrile based product, synergic with ATBS, is used in manufacture of coatings, adhesives, laminates and sealers.

Expansion of TBA (300 TPA to 700 TPA) and ATFE Bottom Polymers (1000 TPA to 3000 TPA) is expected to be completed by September 2010. This will reduce the effluent load and contribute to the revenue of the Company. The Company is optimistic about the future demand and foresees a strong and robust growth in the coming year across all markets driven by existing and new products.

5) TURNOVER AND PROFIT (OPERATING RESULTS)

The Company achieved gross turnover of Rs.23,844.43 Lacs as compared to Rs. 20,347.14 Lacs in the previous year. The net profit after tax increased to Rs.4,004.14 Lacs as compared to Rs.2,512.83 Lacs in the previous year.

6) INSURANCE

The properties and insurable interest of your company like Building, Plant and Machinery, stocks etc are properly insured.

7) DIRECTORS

As per the statute, two-third of the Directors should be retiring Directors. One-third of these retiring Directors are required to retire every year and if eligible, these Directors qualify for re-appointment.

Accordingly, Mr. AnandkumarTibrewala and Mr. Mohit Mutreja, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

8) AUDITORS

Members are requested to appoint Auditors for the current year and to authorise the Board of Directors to fix their remuneration. The Statutory auditors M/s. Karnavat & Co., Chartered Accountants retire at the ensuing Annual General Meeting and being eligible under section 224 (IB) of the Companies Act, 1956, offer themselves for re-appointment.

9) AUDITORS REPORT

The observations of Auditors as referred to in the Auditors Report are suitably explained in the Notes to the Accounts.

10) COST AUDITOR

As per the order of Central Government, M/s. N. Ritesh & Associates has been appointed as a Cost Auditor subject to the approval of Central Government for the yearending on 31.03.2010. The Company has made necessary application to the Government for approval of the same.

11) FIXED DEPOSITS

During the year under review the Company did not invite or accept any Fixed Deposits within the meaning of 58A of the Companies Act, 1956 and as such, no amount of principal or interest was outstanding as on date of balance sheet from public.

12) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO

Information as per Section 217(l)(e) of the Companies Act, 1956, read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, relating to the above head are given in Annexure A forming part of this report.

13) LISTING

The Companys Equity shares continue to be listed at BSE & NSE. We confirm that the Listing fee for the financial year 2009-2010 has been paid to them. The stock code of the Company at BSE is 524200 and NSE is VINATIORGA.

14) DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217 (2AA) of the Companies Act, 1956 and based on the representations received from the operating management, the Directors hereby confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) they have 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 31st March 2010 and the profit of the Company for the year ended on 31st March 2010;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared annual accounts on a going concern basis.

15) CORPORATE GOVERNANCE AND MANAGEMENTS DISCUSSION AND ANALYSIS REPORTS

The corporate Governance and Managements discussion and Analysis Reports, which form an integral part of this report, are set out in a separate annexure to this report, along with the certificate from the Auditors of the Company certifying compliance of the conditions of the Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchange. (See Annexure B & C)

16) EMPLOYEES

The particulars of employees as required under Section 217(2A) of the Companies Act, 1956 are given as an Annexure D to this report.

17) APPRECIATION & ACKNOWLEDGEMENTS

Your Directors take this opportunity to place on record their sincere gratitude for assistance and cooperation received from Central & State Governments, banks, financial institutions, shareholders, business associates and esteemed customers for their continued support and assistance during the year. Your Directors also place on record their appreciation for the excellent contribution made by all employees of Vinati Organics Limited through their commitment, competence, co- operation and diligence to duty in achieving consistent growth of the Company.

For and on behalf of the Board of Directors

Vinod Saraf Vinati Saraf Mutreja

Mumbai Managing Executive

19th May, 2010 Director Director

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