Vippy Industries Ltd Directors Report

Dear Members,

Your Directors have pleasure in presenting to you the 44^th Annual Report including the Audited Financial Statements for the year ended 31^st March, 2018.

FINANCIAL RESULTS

The summary of the financial results for the financial year ended 31^st March ,2018 and previous year are as follows:

( in Lacs)

Particulars	March 31, 2018	March 31, 2017
Income
Revenue from Operations	108202.44	109304.27
Other Income	1087.20	870.62
Total Revenue	109289.64	110174.89
Profit before finance cost, depreciation and amortization & tax	7046.02	5219.73
Less: Finance Costs	525.79	280.58
Less: Depreciation and amortization expenses	782.07	766.85
Profit before Tax	5738.16	4172.30
Less: Tax Expenses
Current Tax	2070.00	1527.00
Deferred Tax Liabilities	86.46	146.60
Income Tax Earlier years	0.00	36.07
Profit after Tax for the period	3581.70	2462.63
Earning per equity share	2.23	1.53
Basic & Diluted

OPERATIONAL PERFORMANCE & STATE OF COMPANY S AFFAIRS

During the year ended 31^st March,2018 , total revenue of your Company was 109289.64 Lacs as compared to110174.89 Lacs in the previous year .The year under review profit after tax was 3581.70 Lacs as against profit after tax 2462.63 Lacs in the previous year. The Company is engaged in the Manufacturing of De-oiled Cake and Edible Refined Oil from soyabean seed through solvent extraction process. The Company is also engaged in generation of power through Solar Power Plants for captive consumption.

RESERVES

There is no amount proposed to be carried to any Reserve.

DIVIDEND

With a view of conserving resources, your Directors do not recommended any dividend for the year under review.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of section 134(3) (c) read with Section 134(5) of the Companies Act, 2013, your Directors state that: a) in the preparation of the annual accounts for the year ended 31^st March ,2018, the applicable accounting standards have been followed and there are no material departures from the same; b) the Directors 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 31^st March,2018 and of the profit of the Company for the year ended on that date ; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d) the Directors have prepared the annual accounts on a going concern basis; e) the Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS & KEY MANAGERIAL PERSONNEL

During the year under review, the members of the Company have approved the re-appointment of Shri Rahul Mutha (DIN:00424128) as Managing Director at the Annual General Meeting of the Company held during the year .The Board of Directors in its meeting held on 31.03.2018 , revised the remuneration payable to Shri Rahul Mutha for the remaining period 01.04.2018 to 31.03.2019, subject to approval of members.

The Board of Directors in its meeting held on 31.03.2018 has re-appointed Shri Praneet Mutha (DIN: 00424250), as Whole Time Director designated as Joint Managing Director of the Company for the period of 1(one ) Year w.e.f. 01.04.2018, subject to approval of members.

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Shri Rahul Mutha, Managing Director, will retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for his re-appointment as Director .The Board of Directors recommends his re-appointment. The Company has received declaration from all the Independent Directors of the Company confirming that they meet criteria of independence as prescribed under section 149(6) of the Companies Act, 2013. Pursuant to the provisions of section 203 of the Act, the Key Managerial Personnel of the Company as on date are Shri Rahul Mutha ,Managing Director, Shri Praneet Mutha ,Joint Managing Director, Shri Joher Ali Zakir,Chief Financial Officer and Shri Prakash Chakrawarti, Sr. Manager (Legal) & Company Secretary.

PROGRESS ON REHABILITATION SCHEME SANCTIONED BY HON BLE BIFR

The accumulated losses of the Company at the year ended 31.12.2000 exceeded the net worth of the Company.

The Company was declared by the Hon‘ble Board For Industrial and Financial Reconstruction (BIFR) vide its order dated 18^th Octobe,2002 as a sick industrial company within the meaning of Sick Industrial

Companies(Special Provisions) Act,1985( SICA‘), and the Hon‘ble BIFR sanctioned the Rehabilitation

Scheme/Plan of the Company vide order dated 04.10.2007. Certain provisions of Company‘s Rehabilitation Scheme/Plan sanctioned under SICA are yet to be implemented by Government Agencies as specified therein ,which is considered material to success of Rehabilitation Scheme/Plan. Pursuant to repeal of SICA and introduction of Insolvency and Bankruptcy Code,2016( IBC‘) ,the aforesaid Rehabilitation Scheme/Plan is deemed an approved Resolution Plan passed under IBC and required to be dealt with accordingly .

The Company had filed various Writ Petitions before Hon‘ble High Court of Madhya Pradesh, Indore Bench, under Article 226 of Constitution of India seeking direction to the Commercial Tax Department of M.P./State Govt. to comply and implement the relief and concessions as contained in the Rehabilitation scheme/plan towards exemption from Commercial Tax, Central Sales Tax, Value Added Tax and Entry Tax and the Hon‘ble High

Court vide its separate two orders given a directions(in first order) to the State Government of Madhya Pradesh for taking appropriate decision in the matter at the earliest, on the basis of the scheme sanctioned by the Hon‘ble

BIFR & also given directions (in second order) to the State Government of Madhya Pradesh to take appropriate steps and decide the matter expeditiously ,and the said matter is pending with the State Govt. of Madhya Pradesh for their consideration. However the other petitions are pending with Hon‘ble High Court.

INSURANCE

Assets of the Company are adequately insured.

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company had adopted Risk Management Policy to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. The common risks inter alia are: Company Assets and Property,

Employees, Foreign Currency Risks, Operational Risks, Non-compliance of statutory enactments, Competition Risks, Contractual Risks, and Volatility in prices of Raw Material. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, no reportable material weakness in the design or operation were observed.

SUBSIDIARIES, ASSOCIATE & JOINT VENTURE COMPANIES

The Company does not have any subsidiaries, associates companies and joint venture companies.

DISCLOSURES

Particulars of Loans, Guarantees or Investments under section 186 of Companies Act, 2013

There are no loans given or guarantees given or security provided by the Company under Section 186 of the Companies Act, 2013.The details of the investments covered under the provisions of Section 186 of the Companies Act,2013 are provided in the note no.9 of the Financial Statements for the year under review.

Conservation of Energy, Technical Absorption and Foreign Exchange Earning & Outgo

The Particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under section 134 (3) (m) of the Companies Act 2013 read with Rule 8(3) of the Companies(Accounts) Rules,2014, are provided in Annexure -I to this Report.

Committees of the Board Audit Committee

Due to unwillingness expressed by Dr. K.Savagaon ,Independent Director of the Company to continue as a member of the Audit Committee, the constitution of the Audit Committee have been changed by nominating Dr. Pradeep Pandurang Mahajan , Independent Director as a member of the committee in place of Dr. K.Savagaon . The Audit Committee comprises Shri Sajeve Deora, Independent Director (Chairman) Dr. Pradeep Pandurang Mahajan , Independent Director and Shri Rahul Mutha , Managing Director as other members. During the year, there are no instances where the Board has not accepted the recommendations of the Audit Committee.

Stakeholders Relationship Committee

Due to unwillingness expressed by Dr. K.Savagaon ,Independent Director of the Company to continue as a chairman of the Stakeholders Relationship Committee, the constitution of the Stakeholders Relationship Committee have been changed by nominating Dr. Pradeep Pandurang Mahajan , Independent Director as a chairman of the committee in place of Dr. K.Savagaon . The Stakeholders Relationship Committee comprises Dr. Pradeep Pandurang Mahajan, Independent Director (Chairman), Dr. Shailendra Karnawat , Independent Director and Shri Rahul Mutha , Managing Director as other members.

Nomination & Remuneration Committee

Due to unwillingness expressed by Dr. K.Savagaon ,Independent Director of the Company to continue as a chairman of the Nomination & Remuneration Committee, the constitution of Nomination & Remuneration Committee have been changed by nominating Dr. Pradeep Pandurang Mahajan , Independent Director as a chairman of the committee in place of Dr. K.Savagaon . The Nomination & Remuneration Committee comprises Dr. Pradeep Pandurang Mahajan, Independent Director (Chairman) , Shri Sajeve Deora , Independent Director,Dr. Shailendra Karnawat , Independent Director and Shri Praneet Mutha , Joint Managing Director as other members.

CSR Committee

The CSR Committee comprises Shri Sajeve Deora, Independent Director (Chairman), Dr. Shailendra Karnawat, Independent Director and Shri Rahul Mutha, Managing Director as other members.

Remuneration Policy

The Company has a Remuneration policy for Directors, Key Managerial Personnel & other employee‘s. The

Remuneration Policy is annexed herewith as Annexure- II to this Report.

Vigil Mechanism / Whistle Blower Policy

The Company has a Vigil Mechanism/Whistle Blower Policy to report genuine concerns or grievances. The vigil mechanism provides for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. This policy may be accessed on the Company‘s website at the www.vippysoya.com.

Meeting of Directors

Board met eight (8) times during the year under review on 01.06.2017, 17.06.2017, 01.08.2017, 18.09.2017, 25.11.2017, 25.12.2017, 03.01.2018 and 31.03.2018. During the year under review One (1) meeting of Independent Directors was held on 03.01.2018.

Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith as Annexure III to this Report.

AUDITORS & AUDITORS REPORT

a. Statutory Auditors

M/s.N.K. Ajmera & Associates, Chartered Accountants (Firm Registration No.015260C) were appointed as Statutory Auditors of your Company at the Annual General Meeting held on 29^th September,2017, for a term of five(5) consecutive years, subject to ratification by the members at every Annual General Meeting. They have confirmed that they are not disqualified from continuing as auditors of the Company. The Report given by the Auditors on the financial statement of the Company is part of this Report. There has been no qualification, reservation or adverse remark or disclaimer given by the Auditors in their Report, and no explanation on part of the Board of Directors is called for.

b. Secretarial Auditors

The Secretarial Audit Report for the financial year ended 31^st March, 2018 issued by M/s. Shilpesh Dalal & Co., Practicing Company Secretary is annexed herewith as Annexure-IV to this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer, and no explanation on part of the Board of Directors is called for. The Board appointed M/s. Shilpesh Dalal & Co., Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2018-19.

c. Disclosure of frauds against the Company

In terms of the provisions of section 134(3)(ca) of the Companies Act,2013, there were no fraud committed against the Company by any person under section 143(12) during the year 2017-18. Further that there were no frauds which needs to be reported by the Auditors of the Company to the Central Government.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company had framed its CSR Policy to carry out its CSR activities in accordance with Section 135 of the Companies Act,2013(Act) and rules made there under read with schedule VII of the Act . The Company had undertaken CSR activities in the areas of promoting education including provide trainings and building skills of farmers on sustainable farm practices, promote to ensuring environmental sustainability through educating farmers to use of bio pesticides/fertilizers, promoting conservation of natural resources through educating to maintain quality of soil health and water use efficiency, and also undertaken promoting Health Care including Preventive Health Care. During the year , the Company was required to be spent 57.24 Lacs as CSR expenditure as prescribed under section 135 of the Companies Act,2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014

However during the year, the Company had spent directly or indirectly amounting to 26.64 Lacs on CSR activities out of 57.24 Lacs. The Company is working on identified projects for carrying out CSR activities and expenditure on these projects shall be accounted for as and when incurred. However, during the year the Company did not spend fully amount as required due to inability to expand the existing CSR projects. The Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure-V and forms an integral part of this Report. The CSR Policy is annexed herewith as

Annexure- VI to this Report.CSR Policy may be accessed on the Company‘s website at the www.vippysoya.com.

ENVIRONMENT & SOCIAL CONCERN

Your Company is committed to build business with save energy and save environment. In line of this, the Company had set up three (3) solar power plants having 3MW generation of electricity and contributed to displace emissions from the nation‘s coal-fired power plants and eliminates the nation‘s major source of acid rain, reduce total emissions of CO2. In memory of founder Late Shri Prakash Mutha, during the year, Company is involved in inspirable activities in the area around the plant situated at Dewas such as giving awards to meritorious students in education and distributing bicycle, School Dress, School Bags, School Books ,Education Material and also giving school fees and college fees to the students . Total 91Students got such benefit during the year.

RELATED PARTY TRANSACTIONS

All contracts / arrangements / transactions entered by the Company during the financial year with Related Parties were in its Ordinary Course of Business and on arms‘ length basis. During the year under review the Company has not entered into any contracts or arrangements with the related parties referred to in section 188 of the Companies Act, 2013 which needs to disclose in the prescribed formAOC-2 and may be treated as not applicable. However, the particulars of contracts or arrangement with related parties have been disclosed in the note no. 28 of the financial statements for the year ended under review.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year of the Company i.e. 31^st March, 2018 and the date of the Directors‘ report i.e.27^th April, 2018.

GENERAL

Yours Directors state that no disclosures or reporting is required in respect of the following items as there were no transactions on these items during the year under review: -details relating to deposits covered under chapter V of the companies Act, 2013 -Issue of shares during the year -details of significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company‘s operations in future.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENTS

Your Directors would like to gratefully acknowledge all stakeholders of the Company viz. customers, members dealers, vendors, suppliers, banks and other business associates for the excellent support received from them during the year .The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company‘s well-being.

For on behalf of the Board of Directors

Dewas Rahul Mutha

Managing Director

(DIN:00424128)

Praneet Mutha

Joint Managing Director

(DIN:00424250)

27^th April, 2018

Annexure-I

Details of conservation of energy, technology absorption, foreign exchange earnings and outgo (1) Conservation of energy

(a) the steps taken or impact on conservation of energy	i. Replaced 75Nos tube fitting2*36 Watt to LED30 Watt in DOC godown Section. Saved power 35 Units/day
(b) the steps taken by the company for utilizing alternate sources of energy	i.Installation of 1MW Solar Plant for captive use.
(c) the capital investment on energy conservation equipments	NIL

(2) Technology absorption
(a) the efforts made towards technology absorption	i. Installation of refracto meter in Lab Section.
	ii.Closed down the natural oil and lecithin dryer vaccum system and connected to bleacher vaccum system
(b) the benefits derived like product improvement, cost reduction, product development or import substitution	i.Improved the refined oil quality
	ii. saved steam saving steam 400kg/hr.and saved power 15HP/hr.
(c) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)	Nil
(i) the details of technology imported	Nil
(ii) the year of import	Nil
(iii) whether the technology been fully absorbed	Nil
(iv) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof	Nil
(d) the expenditure incurred on Research and Development	Nil

(3) Foreign exchange earnings and Outgo	Year ended 31.03.2018
Particulars	( In Lacs)
a.Foreign Exchange earned in terms of Actual Inflows (FOB basis)	39281.75
b. Foreign Exchange outgo in terms of Actual Outflows	220.45

For on behalf of the Board of Directors

Dewas Rahul Mutha

Managing Director

(DIN:00424128)

Praneet Mutha

Joint Managing Director

27^th April, 2018

(DIN:00424250)

Annexure-II

Remuneration Policy

INTRODUCTION

The Nomination and Remuneration Policy adopted by the Board of Directors based on the recommendation of the Nomination and Remuneration Committee in compliance of Section 178 of the Companies Act, 2013 .

BRIEF OVERVIEW UNDER COMPANIES ACT 2013

{Section 178 & Companies [Meetings of Board and its Powers] Rules 2014}

Constitution of the Nomination and Remuneration Committee consisting of three or more non-executive directors out of which not less than one-half shall be independent directors . The Nomination and Remuneration Committee shall identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the

Board their appointment and removal and shall carry out evaluation of every director‘s performance.

The Nomination and Remuneration Committee shall formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and senior management personnel i.e. employees at one level below the Board including functional heads. The Nomination and Remuneration Committee shall, while formulating the policy ensure that: -the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully; -relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and -remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals. Such policy shall be disclosed in the Boards report.

TERMS OF REFERENCE OF NOMINATION AND REMUNERATION COMMITTEE

Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal. Formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees. Removal should be strictly in terms of the applicable law/s and in compliance of principles of natural justice. Formulation of criteria for evaluation of Independent Directors and the Board. Recommend to the Board, remuneration including salary, perquisite and commission to be paid to the

Company‘s Executive Directors on an annual basis or as may be permissible by laws applicable.

Recommend to the Board, the Sitting Fees payable for attending the meetings of the Board/Committee thereof, and, any other benefits such as Commission, if any, payable to the Non- Executive Directors. Setting the overall Remuneration Policy and other terms of employment of Directors, wherever required.

CRITERIA FOR DETERMINING THE FOLLOWING:

Qualifications for appointment of Directors (including Independent Directors):

Persons of eminence, standing and knowledge with significant achievements in business, professions and/or public service. Their financial or business literacy/skills. Their industrial experience. Appropriate other qualification/experience to meet the objectives of the Company. As per the applicable provisions of Companies Act 2013, Rules made there under .

The Nomination and Remuneration Committee shall have discretion to consider and fix any other criteria or norms for selection of the most suitable candidate/s.

Positive attributes of Directors (including Independent Directors):

Directors are to demonstrate integrity, credibility, trustworthiness, ability to handle conflict constructively, and the willingness to address issues proactively. Actively update their knowledge and skills with the latest developments in the industry, market conditions and applicable legal provisions.

Willingness to devote sufficient time and attention to the Company‘s business and discharge their responsibilities To assist in bringing independent judgment to bear on the Board‘s deliberations especially on issues of strategy, performance, risk management, resources, key appointments and standards of conduct. Ability to develop a good working relationship with other Board members and contribute to the Boards working relationship with the senior management of the Company. To act within their authority, assist in protecting the legitimate interests of the Company, its shareholders and employees Independent Directors to meet the requirements of the Companies Act, 2013 read with the Rules made there under.

Criteria for appointment of KMP/Senior Management:

To possess the required qualifications, experience, skills & expertise to effectively discharge their duties and responsibilities. To practice and encourage professionalism and transparent working environment. To build teams and carry the team members along for achieving the goals/objectives and corporate mission. To adhere strictly to code of conduct

POLICY RELATING TO APPOINTMENT &REMUNERATION OF DIRECTORS, KMP & SENIOR MANAGEMENT PERSONNEL:

To ensure that the level and components of remuneration is reasonable and sufficient to attract, retain and motivate Directors, KMP and other employees of the quality required to run the Company successfully. No director/KMP/ other employee is involved in deciding his or her own remuneration. The trend prevalent in the similar industry, nature and size of business is kept in view and given due weight age to arrive at a competitive quantum of remuneration & It is to be ensured that relationship of remuneration to the performance is clear & meets appropriate performance benchmarks which are unambiguously laid down and communicated. Improved performance should be rewarded by increase in remuneration and suitable authority for value addition in future. Remuneration packages should strike a balance between fixed and incentive pay, where applicable, reflecting short and long term performance objectives appropriate to the Companys working and goals. Following criteria are also to be considered:- -Responsibilities and duties; -Time & efforts devoted; Value addition; -Profitability of the Company & growth of its business; -Analyzing each and every position and skills for fixing the remuneration yardstick; -Standards for certain functions where there is a scarcity of qualified resources. -Ensuring tax efficient remuneration structures. -Ensuring that remuneration structure is simple and that the cost to the Company (CTC) is not shown inflated and the effective take home remuneration is not low.

-Other criteria as may be applicable.

Consistent application of remuneration parameters across the organization.

Provisions of law with regard making payment of remuneration, as may be applicable, are complied.

Whenever, there is any deviation from the Policy, the justification /reasons should also be indicated / disclosed adequately.

REVIEW

The policy shall be reviewed by the Nomination & Remuneration Committee and the Board, from time to time as may be necessary.