Vinati Organics CEO, MD, chairman, board of directors and AGM

Mutual fund votes, meeting of 25 Feb 2025, 21 fund houses

• Appointment of Mr. Amit Thanawala (DIN: 10864545) as a Director designated as Whole Time Director of the Company

  21 for0 against
• Revision in remuneration of Ms. Vinati Saraf Mutreja (DIN: 00079184), Managing Director and CEO of the Company for the period effective from April 1, 2025 to March 31, 2028

  ›Against Axis Mutual Fund, Bandhan Mutual Fund, Bank of India Mutual Fund, Edelweiss Mutual Fund, Groww Mutual Fund, HSBC Mutual Fund, Mahindra Manulife Mutual Fund, Nippon India Mutual Fund, PGIM India Mutual Fund

  • Axis Mutual FundMs. Vinati Saraf Mutreja, 40, is the promoter, Managing Director and Chief Executive Officer. She was reappointed as MD and CEO from 27 October 2023 till 31 March 2028. Now, the company proposes to revise her remuneration from 1 April 2025. Her current remuneration terms include basic salary in the range of Rs. 1.8 mn - Rs. 3.6 mn per month and a variable pay component not exceeding 1% of net profits. Ms. Vinati Saraf Mutreja’s FY24 pay aggregated Rs. 24.0 mn and her FY25 pay is estimated to be Rs. 74.4 mn (based on H1FY25 RPT filings). The company now proposes to increase the scale of her basic salary to Rs. 3.6 mn - Rs. 7.2 mn per month. Based on these revised terms, we estimate her FY26 remuneration at Rs. 139.1 mn (including variable pay). We raise concerns that in a span of ~17 months from her reappointment, the company is effectively doubling her fixed pay. Instead of raising the fixed pay, the company must pay the variable pay component in her remuneration, link the variable pay to company performance and disclose performance metrics which determines her variable pay. Further, the overall promoter remuneration could be high for the size of business, since all three promoter executive directors are entitled to performance linked incentive not exceeding 1% of net profits each. Thus, we do not support the resolution.
  • Bandhan Mutual Fund, Edelweiss Mutual Fund, Groww Mutual FundCompliant with law. Governance Concern: No cap on Variable Pay. Director’s Remuneration appears skewed. Significant potential increase in revised remuneration without adequate justification.
  • Bank of India Mutual Fund, Mahindra Manulife Mutual FundMs. Vinati Saraf Mutreja, 40, is the promoter, Managing Director and Chief Executive Officer. She was reappointed as MD and CEO from 27 October 2023 till 31 March 2028. Now, the company proposes to revise her remuneration from 1 April 2025.Her current remuneration terms include basic salary in the range of Rs. 1.8 mn - Rs. 3.6 mn per month and a variable pay component not exceeding 1% of net profits. Ms. Vinati Saraf Mutreja’s FY24 pay aggregated Rs. 24.0 mn and her FY25 pay is estimated to be Rs. 74.4 mn (based on H1FY25 RPT filings). The company now proposes to increase the scale of her basic salary to Rs. 3.6 mn - Rs. 7.2 mn per month. Based on these revised terms, we estimate her FY26 remuneration at Rs. 139.1 mn (including variable pay).We raise concerns that in a span of ~17 months from her reappointment, the company is effectively doubling her fixed pay. Instead of raising the fixed pay, the company must pay the variable pay component in her remuneration, link the variable pay to company performance and disclose performance metrics which determines her variable pay. Further, the overall promoter remuneration could be high for the size of business, since all three promoter executive directors are entitled to performance linked incentive not exceeding 1% of net profits each. Thus, we do not support the resolution.
  • HSBC Mutual FundVinati Saraf Mutreja will be paid the proposed remuneration irrespective of the company's financial performance during his tenure. Her remuneration structure is open-ended, and the board retains significant discretion in determining her variable pay outcomes. There are no disclosures on the threshold and target performance that she needs to achieve to determine the variable pay element. The company has failed to provide a compelling rationale to increase the fixed pay by 100%.
  • Nippon India Mutual FundLack of Clarity
  • PGIM India Mutual FundCompliant with law. Governance Concern: No cap on Variable Pay. Director s Remuneration appears skewed. Significant potential increase in revised remuneration without adequate justification.

  12 for9 against

Mutual fund votes, meeting of 10 Sep 2024, 14 fund houses

Each resolution counts the houses whose vote was matched to it; the rest are listed last.

• Adoption of Audited Standalone and Consolidated Financial Statements for the financial year ended March 31, 2024.

  13 for0 against
• Declaration of Dividend.

  2 for0 against
• Re-appointment of Ms. Vinati Saraf Mutreja as Director, liable to retire by rotation.

  14 for0 against
• Ratification of the remuneration of the Cost Auditors for the financial year 2024-25.

  14 for0 against
• Re-appointment of Mr. J. C. Laddha (DIN: 00118527) as an Independent Director for the Second Term.

  14 for0 against

Mutual fund votes, meeting of 5 May 2024, 19 fund houses

• Re-appointment of Prof. M. Lakshmi Kantam (DIN: 07831607) as a Non-Executive, Independent Director of the Company

  19 for0 against
• Continuation of the Directorship of Mr. J. C. Laddha (DIN: 00118527), as a Non-Executive, Independent Director of the Company after he attains the 75 years of age

  19 for0 against
• Appointment of Dr. Prashant Barve (DIN: 10455836) as an Independent Director of the Company for a period of 5 (Five) consecutive years w.e.f. April 1, 2024 to March 31, 2029

  19 for0 against

Mutual fund votes, meeting of 8 Sep 2023, 15 fund houses

• Adoption of (a) the audited standalone financial statement of the Company for the financial year ended March 31, 2023, and the reports of the Board of Directors and Auditors thereon; and (b) the audited consolidated financial statement of the Company for the financial year ended March 31, 2023, and the report of Auditors thereon.MoreLess

  15 for0 against
• Declaration of dividend on equity shares at the rate of ₹ 7/- (Rupees Seven only) per equity share of ₹ 1/- (Rupees One only) each fully paid up for the financial year ended March 31, 2023.

  15 for0 against
• Appointment of Ms. Viral Saraf Mittal, a director retiring by rotation.

  15 for0 against
• Ratification of remuneration of Cost Auditors for the financial year ending March 31, 2024.t

  15 for0 against
• Re-appointment of Mr. Vinod Saraf (DIN: 00076708) as a Whole Time Director designated as Executive Chairman of the Company.

  ›Against Motilal Oswal Mutual Fund, PGIM India Mutual Fund

  • Motilal Oswal Mutual Fund, PGIM India Mutual FundCompliant with Law. Governance concern: Proposed appointment as Executive Chairman may lead to concentration of power in the hands of single person. No absolute cap on proposed remuneration. Differential practice in the proposed remuneration

  13 for2 against
• Re-appointment of Ms. Vinati Saraf Mutreja (DIN: 00079184) as the Managing Director & CEO of the Company.

  ›Against Motilal Oswal Mutual Fund, PGIM India Mutual Fund

  • Motilal Oswal Mutual Fund, PGIM India Mutual FundCompliant with Law. Governance concern: No absolute cap on the proposed remuneration. Differential practice in the proposed remuneration

  13 for2 against
• Re-appointment of Ms. Viral Saraf Mittal (DIN: 02666028) as a Whole Time Director designated as Director CSR of the Company.

  ›Against Bank of India Mutual Fund, Invesco Mutual Fund, Motilal Oswal Mutual Fund, Nippon India Mutual Fund, PGIM India Mutual Fund

  • Bank of India Mutual FundMs. Viral Saraf Mittal, 36, is promoter and Director CSR. We estimate Ms. Viral Saraf Mittal’s remuneration at Rs. 33.4 mn for FY25 compared to Rs. 8.6 mn paid in FY23. Her proposed remuneration terms include performance incentive which will be determined by the board and is capped at 1% of profits. Given that she is Director CSR, her proposed remuneration is high at 41.4% of the actual CSR obligation of Rs. 80.6 mn for FY23. The company has not disclosed her performance metrics that determine her variable pay. Further, her performance incentive has been capped at 1% of the company’s profits, which is high compared to the company’s CSR obligations.
  • Invesco Mutual FundMs. Viral Saraf Mittal, 36, is promoter and Director CSR. We estimate Ms. Viral Saraf Mittal’s remuneration at Rs. 33.4 mn for FY25 compared to Rs. 8.6 mn paid in FY23. Her proposed remuneration terms include performance incentive which will be determined by the board and is capped at 1% of profits. Given that she is Director CSR, her proposed remuneration is high at 41.4% of the actual CSR obligation of Rs. 80.6 mn for FY23. The company has not disclosed her performance metrics that determine her variable pay. Further, her performance incentive has been capped at 1% of the company’s profits, which is high compared to the company’s CSR obligations
  • Motilal Oswal Mutual Fund, PGIM India Mutual FundCompliant with Law. Governance concern: No absolute cap on the proposed remuneration. Differential practice in the proposed remuneration
  • Nippon India Mutual FundNo absolute cap on remuneration

  10 for5 against
• Re-appointment of Mr. Jayesh Ashar (DIN: 00041532) as Whole Time Director of the Company.

  15 for0 against
• Re-appointment of Ms. Mona Bhide (DIN: 05203026) as an Independent Director for the Second Term.

  ›Against Motilal Oswal Mutual Fund, PGIM India Mutual Fund

  • Motilal Oswal Mutual Fund, PGIM India Mutual FundCompliant with Law. Governance concern: Ex-officio ID position

  13 for2 against

Mutual fund votes, meeting of 28 Feb 2023, 14 fund houses

• To consider and approve the Scheme of Amalgamation of Veeral Additives Private Limited with Vinati Organics Limited and their respective shareholders pursuant to the provisions of Sections 230 to 232 of the Companies Act, 2013.MoreLess

  ›Against Bandhan Mutual Fund

  • Bandhan Mutual FundCompliant with Law. Governance and transparency concern regarding the inadequate disclosure in valuation report

  13 for1 against

Mutual fund votes, meeting of 14 Sep 2022, 15 fund houses

Each resolution counts the houses whose vote was matched to it; the rest are listed last.

• Adoption of Audited Standalone and Consolidated Financial Statements for the financial year ended March 31, 2022.

  15 for0 against
• Declaration of Dividend

  15 for0 against
• Appointment of Mr. Jayesh Ashar as Director, liable to retire by rotation

  15 for0 against
• Re-appointment of M M Nissim & Co. LLP, Chartered Accountants as the statutory auditor of the Company and fix their remuneration

  ›Against ITI Mutual Fund, Nippon India Mutual Fund

  • ITI Mutual FundNot legally compliant
  • Nippon India Mutual FundInadequate disclosure

  13 for2 against
• Ratification of the remuneration of the Cost Auditors for the financial year 2022-23

  ›Against ITI Mutual Fund

  • ITI Mutual FundGovernance issues

  14 for1 against
• Approval for loan given / to be given to Veeral Additives Private Limited (VAPL) under section 185 of the Company’s Act, 2013

  ›Against Bank of India Mutual Fund, Edelweiss Mutual Fund, HSBC Mutual Fund

  • Bank of India Mutual FundVAPL is a promoter-owned company and has set up a plant which will manufacture products which will constitute forward integration for Vinati Organics Limited (VOL’s) existing products. VOL and VAPL are proposed to be amalgamated and the scheme has been approved by the boards of VOL and VAPL, and is pending regulatory/shareholder approvals. Due to delay in receiving regulatory approval for the amalgamation, VAPL has sought additional funding of Rs. 1.0 bn in FY23. The loans will be extended at a simple interest of 6.25% per annum and will be repayable on demand. The borrowing rate of 6.25% p.a. does not reflect the credit risk associated with the borrower and the unsecured nature of the loan. It is unclear how the loans are at arm’s length price given that VAPL has borrowed at higher interest rates from banks. The company must clarify the process followed by the audit committee in determining arm’s length pricing for these loans.
  • Edelweiss Mutual FundRelated party transaction involving conflict of interest
  • HSBC Mutual FundA vote AGAINST this resolution is warranted since there are material conflicts of interest and the company will be taking in a disproportionate amount of risk without a compelling justification.

  12 for3 against
• Approval of Material Related Party Transaction(s) entered with Veeral Additives Private Limited during Financial year 2021-2022

  ›Against Bank of India Mutual Fund, Edelweiss Mutual Fund

  • Bank of India Mutual FundVAPL is a promoter-owned company and was setting up a plant to manufacture anti-oxidants for petrochemicals in FY22. Vinati Organics Limited (VOL) and VAPL are proposed to be amalgamated: the scheme has been approved by the boards of VOL and VAPL and is pending regulatory/shareholder approvals. VOL has extended loans of Rs. 1.2 bn at a simple interest of 6.25% per annum. The company had also entered into other operational related party transactions.We believe the borrowing rate of 6.25% p.a. does not reflect the credit risk associated with the borrower and the unsecured nature of the loan. It is unclear how the loans are at arm’s length pricing given that VAPL borrows at higher interest rates from banks. The company must clarify the process followed by the audit committee in determining arm’s length pricing for these loans.
  • Edelweiss Mutual FundRelated party transaction involving conflict of interest

  9 for2 against
• Approval of Material Related Party Transaction(s) to be entered with Veeral Additives Private Limited during Financial year 2022-2023

  ›Against Bank of India Mutual Fund, Edelweiss Mutual Fund

  • Bank of India Mutual FundThe transactions are being undertaken due to delay in receiving approval for merger of VAPL with VOL. The proposed transaction limit of Rs. 5.0 bn includes sale / purchase of materials and services of Rs. 4.0 bn and loans of Rs. 1.0 bn. While we support the operational transactions, we are unable to support the resolutions since the loan to VAPL will be at 6.25% simple interest, which does not reflect the credit risk of the borrower and the unsecured nature of the loan (refer resolution #6). It is unclear how the loans are at arm’s length price given that VAPL has borrowed at higher interest rates from banks.
  • Edelweiss Mutual FundRelated party transaction involving conflict of interest

  10 for2 against