Vidhi Specialty Food Ingredients Limited
Your Directors take pleasure in presenting the Twenty-Seventh AnnualReport on the business and operations ofyourCompany togetherwith theAudited FinancialStatementfor thefinancial yearended March 31 2020.
1. Financial Summary or Highlights:
The financial highlights ofthe Company are as follows:
(Rs. in Lakhs)
|Particulars || |
|Total Income || ||22526.05 || ||22894.15 |
|Total Expenditure (excluding Depreciation) || ||17709.56 || ||18571.05 |
|Profit for the year before providing Depreciation || ||4816.49 || ||4323.10 |
|Less: Depreciation ||283.38 || ||238.34 || |
|Less: Exceptional Items ||Nil ||283.38 ||Nil ||238.34 |
|Profit before Tax || ||4533.11 || ||4084.76 |
|Less: Provision for Taxation || || || || |
|Current Year ||1172.00 || ||1197.00 || |
|Earlier Year ||Nil || ||Nil || |
|Deferred Tax ||(46.87) ||1125.13 ||(17.76) ||1179.24 |
|Profit after Tax || ||3407.98 || ||2905.52 |
|Add: Other Comprehensive Income || ||(15.18) || ||8.57 |
|Total Comprehensive Income || ||3392.80 || ||2914.09 |
|Add: Profit brought forward from Previous Year || ||8448.30 || ||6308.79 |
|Total Profit in Balance Sheet || ||11841.10 || ||9222.88 |
|Less: Appropriation || || || || |
|Dividend Paid ||499.45 || ||399.56 || |
|Transfer to General Reserve ||339.28 || ||291.41 || |
|Dividend Distribution Tax ||104.51 || ||83.61 || |
|Transitional Provisions (Ind-AS 116) ||0.84 ||944.08 ||0.00 ||774.58 |
|Balance Profit carried to Balance Sheet || ||10897.02 || ||8448.30 |
2. Financial Performance Operations and State ofthe Company'saffairs:
During the year under review total income of the Company wascontracted by 1.61% for the year ended March 31 2020 to Rs. 22526.05 lakhs as againstRs. 22894.15 lakhs achieved during the previous year. Even though the Company's incomewas reduced in view of the better margin and control on cost profit before tax for theyear was increased to Rs. 4533.11 lakhs as against Rs. 4084.76 lakhs in the previousyear registering a growth of 10.98%. Further profit after tax from continuing operationsfor the year ended
March 31 2020 was increased by 17.29% to Rs. 3407.98 lakhs as againstprofit after tax of Rs. 2905.52 lakhs earned during the previous year.
The financial performance is discussed in detail in the ManagementDiscussion and Analysis Report which forms part of the Annual Report.
The Company has manufactured 3788.88 MT of food colours against3530.81 MT in the previous year. Your Directors assure to maintain the growth momentum incoming years and strive for bright future for your Company.
3. COVID-19 and Cyclone Nisarga:
In the last month of the financial year2019-20 the COVID-19 hasdstarted spreading rapidly which prompted WHO to declare it a Global Pandemic. It wasglobal crisis forcing governments to enforce complete lockdowns in whole Country. Exceptessential services all other economic activity has been stopped. The lock down wasenforced in majority of countries in the world in order to stop it spread further.
In view of the same the manufacturing activities of the Company werestopped during the period March 20 2020 to April 04 2020 as workers were not available.During this period from April 05 2020 to June 01 2020 the Company was working withcontrolled Manpower capacity considering the safety of employees and guidelines issued byauthorities from time to time. Further the production was 70% of average production ofthe Company.
As health and safety of our employees business partners and customersis of the utmost priority to the Company the Company is taking necessary precautions likesanitization providing masks hand sanitizers disinfectants and temperature checks forstaff and essential visitors at all our facilities. The Company had obtained relevantapprovals from local government authorities and ensured compliance with safety norms.Further the Company had provided IT infrastructure & connectivity to most of staffengaged in activities/ department other than Manufacturing to efficiently enable them toWork from Home' and minimize the spread of COVID.
COVID - 19 has impacted supply chain as import and export activitiesare carried out during the lockdown period as permitted by the Central & Stategovernment but not very efficiently due to shortage of labour. Shortage of labours as wellas drivers to operate trucks for container handling and transportation has affected smoothevacuation from/to Nhava heva leading to increase in dwell time. Fighting with all thecircumstances management was successful supplying all raw materials to factory.
There is no decline whatsoever in demand for synthetic food colours inthis situation as food colours are supplied to essential items like pharmaceuticals foodfeed beverage home care personal care products etc.
Company's manufacturing facilities are situated in Dhatav MIDCsituated in the Roha district of Maharashtra. On the June 03 2020 due to severe CyclonicStorm Nisarga approximately 11:30 a.m. heavy rainfall had started falling in Dhatav MIDCand the wind speed started increasing. The heavy to very heavy rainfall along with verystrong wind remained till 05:30 p.m. on that day. Due to this cyclone there was heavydamage to the roofs at manufacturing facilities electrical motors VFDs and other suchcomponents and machinery spoiling of raw materials in process goods as well as finishedgoods in ourfactory.
After Cyclone Nisarga passed and situation normalised the Companystarted assessing the total estimated loss due to the above Cyclone Nisarga. Further toassess the impact of cyclone on Machinery the Management had waited till the electricitysupply resumed. Since the Company has adequately insured all it's assets the Company hassubmitted its claim with its insurer for the losses incurred due to Cyclone. Due toCyclone Nisarga the factory operations remained stopped during June 03 2020 to June 092020. The factory becomes fully operational from June 10 2020.
The Government has started giving relaxation in restriction imposed dueto lock down imposed in view of COVID-19 and situation are slowly normalising. There areuncertainties due to the pandemic and reversal of the positive momentum gained in the lastquarter of FY2020 the strong balance sheet position best-inclass profitability andinherent resilience of the business model position the Company well to navigate thechallenges ahead and gain market share.
4. Change in the nature of business if any:
The Company is engaged in the business of manufacturing and trading insynthetic food colours and chemicals. There was no change in nature of business activityduring the year.
Your Directors are pleased to recommend a final dividend of Rs. 0.20/-(Twenty Paisa Only) per equity share of Rs. 1/- each fully paid up (i.e. 20%) for thefinancial year ended March 31 2020. The total outflow on dividend account will be Rs.99.89 lakhs. The dividend payment is subject to the approval of the Members at the ensuingAnnual General Meeting (AGM') and be paid to the Members whose names appear inthe Register of Members/Beneficial Holders as on Record Date/Book Closure Date fixed forthe said purpose.
The dividend if declared at the AGM would be paid/dispatched withinthirty days from the date of declaration of dividend to those persons or their mandates:
whose names appear as beneficial owners as at the end of thebusiness hours on Tuesday September 222020 in the list of the Beneficial Owners to beobtained from the Depositories i.e. National Securities Depository Limited [NSDL] andCentral Depository Services (India) Limited [CDSL] in respect of the shares held inelectronic/dematerialized mode; and
whose names appear as Members in the Register of Members of theCompany as on Tuesday September 22 2020 in respect of the shares held in physical mode.
In line with our focus on enhancing shareholder returns and in view ofthe Company's strong cash generation and positive growth momentum the Board of Directorshad decided to distribute profits to its Members and accordingly the Board of Directorshad declared interim dividends during the financial year 2019-20 as per details givenbelow:
|Type of Dividend ||Date of Board Meeting ||Rate of Dividend ||Per share Dividend ||Total Outflow* |
|1st Interim Dividend ||August 14 2019 ||20% per share ||Rs.0.20/- per share ||Rs.99.89 lakhs |
|2nd Interim Dividend ||November 12 2019 ||20% per share ||Rs.0.20/- per share ||Rs.99.89 lakhs |
|3rd Interim Dividend ||February 11 2020 ||40% per share ||Rs.0.40/- per share ||Rs.199.78 lakhs |
*excluding Dividend Distribution Tax paid by the Company.
Total dividend payout for the year 2019-20 (including final dividend tobe declared in the ensuing AGM) is Rs. 1/- per equity share of Rs.1/- each againstRs.0.80/- per equity share for previous year.
The Board during the year under review has transferred Rs. 339.28lakhs (PY Rs. 291.41 lakhs) to General Reserves.
7. Investor Education and Protection Fund (IEPF):
Pursuant to the applicable provisions of the Companies Act 2013 readwith the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 ("theIEPF Rules") all unpaid or unclaimed dividends are required
to be transferred by the Company to the IEPF after the completion ofseven years. Further according to the IEPF Rules the shares on which dividend has notbeen paid or claimed by the shareholders for seven consecutive years or more shall also betransferred to the demat account of the IEPF Authority. During the year the Company hastransferred the unclaimed and unpaid dividend of Rs. 87355/-. The said dividend pertainto the 1st Interim Dividend for the financial year 2012-13 declared on November12 2012. Further 99062 corresponding equity shares on which dividends were unclaimedfor seven consecutive years were transferred as per the requirements of the IEPF Rules.Further the details of unclaimed dividend and due dates for transfer of unclaimeddividend to IEPF account has been given in Notes to the Notice calling Twenty-Seventh AGMand are also available on our website at http:// www.vidhifoodcolour.com/investorrelation.php?m=52.
8. Details of the Companies which have become or ceased to be itsSubsidiaries Joint Ventures or Associate Companies during the year:
During the year under Report your Company has acquired 100% EquityShares of Arjun Food Colorants Manufacturing Private Limited a Company held by thePromoters of the Company thus making it as Wholly Owned Subsidiary Company of ourCompany. However the Company did not have any Joint Venture or Associate Company duringthe year under review. During the year under report no Company become or ceased to bejoint ventures or Associate Companies. Further during the year no Company ceased to beSubsidiary of the Company.
Arjun Food Colorants Manufacturing Private Limited did not have anybusiness operation during the year 2019-20.
As required pursuant to first proviso to sub section (3) of section 129read with Rule 5 of Companies (Accounts) Rules 2014 Form AOC-1 forms part of thisreport appended as Annexure A
Further pursuant to the provisions of Section 136 of the Act thefinancial statements of the Company consolidated financial statements along with relevantdocuments and separate audited financial statement in respect of subsidiary are availableon the website of the Company at http://www.vidhifoodcolour.com/ investorrelation.php?m=52.
9. Directors and Key Managerial Personnel:
As on the date of this Report your Company has 9 (Nine) Directorsconsisting of 5 (Five) Independent Directors including 1 (One) Independent Woman Director2 (Two) Executive Directors and 2 (Two) NonExecutive Directors including a Woman Director(Promoter).
In pursuance of the provisions of Section 152(6) of the Companies Act2013 ("Act") and Articles of Association of the Company Mr. VijayKrishnaswamirao Atre (DIN: 00416853) retires by rotation from the Board in the ensuing AGMand being eligible for re-appointment has offered himself for reappointment. The Boardof Directors recommends his re-appointment to the Members of the Company.
The details of Directors or Key Managerial Personnel who were appointedor have resigned during the year are as follows:
a. Mr. Ashit Kantilal Doshi (DIN: 08486679) was appointed as anAdditional Independent Non-Executive Director w.e.f. June 20 2019 for a period of fiveyears i.e. upto June 19 2024 subject to the approval of the Members of the Company in the26th AGM u/s 149 and 161 of the Act. The Members in the 26th AGM hasapproved the said appointment.
b. Mrs. Jyoti Sunil Modi (DIN: 08699101) was appointed as an AdditionalIndependent Non-Executive Director w.e.f. March 19 2020 for a period of five years i.e.upto March 18 2025 subject to the approval of the Members of the Company in the ensuingAGM u/s 149 160 and 161 of the Act.
c. Ms. Sherry Jain (Membership No.: A57258) Company Secretary &Compliance Officer of the Company had resigned from the Companyw.e.f. January 11 2020due to betterfuture prospects.
d. Mr. Awdhesh Kumar Pandey (Membership No.: A60501) was appointed asthe Company Secretary & Compliance Officerofthe Company w.e.f. February 11 2020.
After closure of financial year on the recommendation of theNomination and Remuneration Committee the Board of Directors in their meeting held onJune 25 2020 has re-appointed Mr. Mihir Bipin Manek (DIN: 00650613) as Joint ManagingDirector for a period of five years w.e.f. July 15 2020 on existing terms and conditions.The said re-appointment is subject to the approval ofthe Members in the ensuing AGM.
In terms of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (the Listing Regulations') approval of the Members byway of a Special Resolution shall be obtained every year in which the annual remunerationpayable to a single Non-Executive Director exceeds 50% ofthe total annual remunerationpayable to all the Non-Executive Directors giving details of the remuneration thereof.Since payment of remuneration to Mr. Vijay Krishnaswamirao Atre (DIN: 00416853) as a Non-Executive Director is more than 50% of the total annual remuneration payable to all theNon-Executive Directors in order to comply with the Listing Regulations and continue topay him a remuneration on his existing scale during the financial year2020-21 a SpecialResolution is proposed in the ensuing AGM.
According Regulation 17(6)(e) of the Listing Regulations if theaggregate annual remuneration payable to more than one Executive Director who is aPromoter or is a Member of the Promoter Group exceeds 5% of the net profits ofthe Companycalculated as per Section 198 ofthe Act even though the annual remuneration payable to theExecutive Directors is within the limit of 5% and 10% as specified u/s 197(1) of the Actthen approval ofthe Members by way of a Special Resolution is required. Such approvalofthe Members under this provision shall be valid only till the expiry of the term of suchDirector. The approval of the Members by way of a Special Resolution was already taken inprevious AGM. However the Board of Directors in their meeting held on June 25 2020 hadapproved re-appointment and payment of remuneration to Mr. Mihir Bipin Manek (DIN:00650613) as Joint Managing Director w.e.f. July 15 2020 for their remaining tenure. Inorder to comply with the Listing Regulations a Special Resolution is proposed in theensuing AGM for payment of remuneration to Executive Director.
The Board recommends the aforesaid re-appointment and continuation asthe Directors of the Company. The Board also recommends the approval for payment ofaggregate annual remuneration to the Promoter- Executive Directors/ Members of thePromoter Group exceeding 5% of the net profits of the Company and the payment of aggregateannual remuneration to Mr. Vijay Krishnaswamirao Atre (DIN: 00416853) as a Non-ExecutiveDirector of the Company which exceeds fifty percent of the total annual remunerationpayable to all the Non-Executive Directors.
The Company has received declarations from all the IndependentDirectors of the Company pursuant to the provisions of Section 149(7) of the Act statingthat they meet the criteria of independence as provided under the Act and the ListingRegulations and that they are not disqualified to become Directors under the Act; and inthe opinion of the Board of Directors all the Independent Directors fulfill the criteriaof independence as provided under the Act read with the Listing Regulations and that theyare independent of the Management.
Further at the time of the appointment of an Independent Director theCompany issues a formal letter of appointment outlining his role function duties andresponsibilities. The format of the letter of appointment is available on our website athttp://www.vidhifoodcolour.com/pdf/9.%20Codes%20and%20Polices/14.%20Terms%20&%20Conditions%20of%20ID.pdf
Brief resume and other details of the Director proposed to be appointedand re-appointed as stipulated under the Listing Regulations and Secretarial Standard-2has been furnished separately in the Notice convening the AGM read with the Annexurethereto forming part of this Report.
Details of the number of meetings of the Board of Directors andCommittees and attendance at the meetings have been furnished in the Report onCorporate Governance.
Following persons are designated as Key Managerial Personnel (KMP):
Mr. Bipin Madhavji Manek(DIN: 00416441) Chairman and ManagingDirector
Mr. Mitesh Dinesh Manek ChiefFinancial Officer
Mr. Awdhesh Kumar Pandey Company Secretary and ComplianceOfficer
10. Board Evaluation:
The Board of Directors is committed to continued improvement in itseffectiveness. Accordingly formal evaluation of Board's it's Committee and Directorsperformance is carried out annually. This was designed to ensure amongst other thingsthat the Board its Committees and each Director continue to contribute effectively.
As per Section 134(3)(p) of the Act a statement indicating the mannerin which formal annual evaluation was made by the Board of their performance and that ofits Committees and individual Directors has to be furnished to the Members as part of theBoard's Report.
As per provisions of Section 178(2) of the Act Nomination andRemuneration Committee shall specify the manner for effective evaluation of performance ofBoard its Committees and individual Directors to be carried out. Further the IndependentDirectors as part of their mandate under Schedule IV of the Act need to make anevaluation of performance of the Board it's Committee and constituents of the Board apartfrom their self-evaluation. Under this process a structured questionnaire was preparedafter taking into consideration inputs received from the Directors setting out parametersof evaluation; the questionnaire for evaluation are to be filled in consolidated anddiscussed with the Chairman. The evaluation by the Independent Directors has beenundertaken at their meeting held on November 12 2019. The Board of Directors undertookevaluation of Independent Directors at their meeting held on August 14 2019 and placed onits record that the Independent Directors have the requisite qualification expertise andtrack record for performing their duties as envisaged under the Law and they add value inthe decision making process of the Board.
The criteria for evaluation of performance of Directors the Board as awhole and the Board's Committee as specified by Nomination and Remuneration Committeeare summarized in the table given below:
|Evaluation of ||Evaluation by ||Criteria |
|Non-Independent Director (Executive) ||Independent Directors ||Transparency Leadership (business and people) Governance and Communication |
|Non-Independent Director (Non-Executive) ||Independent Directors ||Preparedness Participation Value addition Governance and Communication |
|Independent Director ||All other Board Members ||Preparedness Participation Value addition Governance and Communication |
|Chairman ||Independent Directors ||Meeting dynamics Leadership (business and people) Governance and Communication |
|Committees ||Board Members ||Composition Process and Dynamics |
|Board as a whole ||Independent Directors ||Composition Process and Dynamics |
11. Board Familiarization Program:
At the time of appointment of Independent Director through theinduction process he/she is familiarized with the Company the Director's roles rightsand responsibilities in the Company nature of the industry in which the Company operatesbusiness model of the Company etc. Detailed presentations are made before the BoardMembers at the Board Meetings covering various areas including business strategyfinancial performance and forecast compliances/regulatory updates audit reports riskassessment and mitigation industry roles rights responsibilities of IndependentDirectors etc. The Familiarization Program aims to provide insights into the Company toenable the Independent Directors to understand its business in depth and contributesignificantly to the Company. All Independent Directors attended the orientation andfamiliarization programs held during the financial year 2019-20.
The details of training and familiarization programs are available onour website at http://www.vidhifoodcolour.com/Ddf/9.%20Codes%20and%20Polices/5.%20Familarisation%20Proaramme%20of%20Independent%20Directors. pdf
12. Policy on the Directors' appointment and remuneration:
The Company's Policy on the Directors' appointment and remunerationincluding criteria for determining qualifications positive attributes independence ofDirectors and other matters as provided under section 178 of the Act is annexed to thisReport as Annexure B to this Report.
13. Number of meetings of the Board of Directors:
The Board of Directors met 5 (Five) times during the Financial Yearunder review. The intervening gap between any two meetings was not more than 120 days asprescribed under the Act. Details of the dates of Board Meetings and the attendance of theDirectors at the Board Meetings are provided separately in the Report on CorporateGovernance.
14. Committees of the Board:
As on March 31 2020 the Board had four Committees namely AuditCommittee Nomination and Remuneration Committee Stakeholder's Relationship Committee andCorporate Social Responsibility Committee. The Composition of all the Committees is inline with the requirement of the Act and the Listing Regulations. During the year all therecommendations made by the Committees were approved by the Board.
A detailed note on the composition of the Audit Committee Nominationand Remuneration Committee Stakeholder's Relationship Committee is provided separately inthe Report on Corporate Governance.
15. Corporate Social Responsibility Committee (CSR Committee):
Since net profit of the Company is in excess of Rs. 5 Crores theprovisions of Section 135 of the Act regarding Corporate Social Responsibility becameapplicable to the Company. The constitution composition quorum requirements terms ofreference role powers rights and obligations of CSR Committee are in conformity withthe provisions of Section 135 and all other applicable provisions of the Act read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 and all other applicableRules made under the Act.
The CSR Committee comprises of the following Directors as on the dateof this Report:
|Name ||Designation ||Category |
|Mr. Prafulchandra Anantlal Shah (DIN: 00417022) ||Chairman ||Non-Executive Independent |
|Mr. Nirenbhai Dinkerrai Desai (DIN: 01978382) ||Member ||Non-Executive Independent |
|Mr. Rahul Chakradhar Berde (DIN: 06981981) ||Member ||Non-Executive Independent |
During the financial year under review the Committee met twice onAugust 14 2019 and February 11 2020. Brief description of terms of reference of theCommittee inter-alia includes:
formulate and recommend to the Board of Directors (Board) aCorporate Social Responsibility (CSR) Policy which shall indicate the activities to beundertaken by the Company as specified in Schedule VII of the Act;
approve CSR activities;
recommend to the Board the amount of expenditure to be incurredon the CSR activities;
monitor the CSR Policy of the Company from time to time;
institute a transparent monitoring mechanism for implementationof the CSR projects or programs or activities undertaken by the Company; and
carry out any other functions as authorized by the Board fromtime to time or as enforced by statutory/ regulatory authorities.
CSR Policy development and implementation:
The CSR Policy is available on the Company's website at:
Annual Report on CSR activities as required under the Companies(Corporate Social Responsibility Policy) Rules 2014 has been appended as Annexure Cto this Report.
16. Vigil Mechanism:
The Company has a Whistle Blower Policy'/Vigil Mechanism'in place. The objective of the Vigil Mechanism is to provide the employees Directorscustomers contractors and other stakeholders of the Company an impartial and fair avenueto raise concerns and seek their redressal in line with the Company's commitment to thehighest possible standards of ethical moral and legal business conduct and fair dealingswith all its stakeholders and constituents and its commitment to open communicationchannels. The Company is also committed to provide requisite safeguards for the protectionof the persons who raise such concerns from reprisals or victimization for whistleblowing in good faith. The Board of Directors affirms and confirms that no personnel havebeen denied access to the Audit Committee. The Policy contains the provision for directaccess to the Chairman of the Audit Committee in appropriate or exceptional cases.
Vigil Mechanism cum Whistle Blower Policy is available on the Company'swebsite at:
17. Audit Report:
a) Statutory Audit Report:
The financial statements of the Company have been prepared inaccordance with Indian Accounting Standards (Ind AS) notified under section 133 of theAct. The Company has received an unmodified opinion in the Auditors' Report for thefinancial year 2019-20.
b) Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hadappointed M/s. Hemanshu Kapadia & Associates Practicing Company Secretaries toundertake the Secretarial Audit of the Company for the financial year 2019-20 and issueSecretarial Audit Report. Secretarial Audit Report issued by M/s. Hemanshu Kapadia &Associates for the financial year 2019-20 in Form MR-3forms part of this report andannexed hereto as Annexure D.
The Secretarial Auditor has qualified the Secretarial Audit Reportdated August 14 2020. The observations of the Secretarial Auditors and the reply of theManagement for the same are as under:
|Sr. No. ||Secretarial Auditors' Observation ||Reply from the Management |
|1 ||The Compliance Officer of the Company had resigned w.e.f. closing working hour of January 11 2020. The Company has appointed the existing Compliance Officer w.e.f. February 11 2020. Hence there was no Compliance Officer during the period January 12 2020 till February 10 2020. ||In the SEBI Listing Regulation 2015 there is no timeline given for filling casual vacancy in the office of Compliance Officer. However the Company within one month of resignation of existing Company Secretary and Compliance Officer has appointed Mr. Awdhesh Kumar Pandey as a Company Secretary designated as Compliance Officer of the Company. |
|2 ||As per regulation 20(3) of Listing Regulations the Chairperson of Stakeholders Relationship Committee shall be present at the Annual General Meeting. Mrs. Pravina Bipin Manek (DIN: 00416533) Chairperson of the Stakeholders Relationship Committee of the Company has not attended the 26th Annual General Meeting of the Company held on September 23 2019. However in terms of Secretarial Standard - 2 the Chairperson authorized Mr. Prafulchandra A. Shah (DIN: 00417022) Member of the said Committee to attend the meeting on her behalf and he has attended the meeting on her behalf. ||Mrs. Pravina Bipin Manek (DIN: 00416533) Chairperson of the Stakeholders Relationship Committee of the Company has not attended the 26th Annual General Meeting of the Company held on September 23 2019 due to prior commitment. However in terms of Clause 4.1.1 of the Secretarial Standard - 2 Mrs. Pravina Bipin Manek (DIN: 00416533) has authorized Mr. Prafulchandra A. Shah (DIN: 00417022) Member of the said Committee to attend the meeting on her behalf and he has attended the meeting on her behalf. |
|3 ||The 1st interim dividend of the financial year 2019-20 declared in the Board Meeting held on August 14 2019 was deposited in a separate account opened with schedule bank on 8th days from the date of declaration of said dividend. ||Immediately after the Board Meeting the Company has submitted the documents to the Bank for opening of Bank account but the Bank took time in opening dividend accounts which causes delay. As soon as the dividend accounts were opened the requisite dividend amount was deposited in the respective dividend accounts. |
|4 ||The 2nd interim dividend of the financial year 2019-20 declared in the Board Meeting held on November 12 2019 was deposited in a separate account opened with schedule bank on 11th days from the date of declaration of said dividend. |
a) Statutory Auditors:
On the recommendation of the Audit Committee and the Board the Membersin their Twenty-Fourth AGM had appointed M/s. JMR & Associates Chartered AccountantsMumbai (Firm Registration No: 106912W) as the Statutory Auditors of the Company for aperiod of five consecutive financial years from the conclusion of the Twenty-Fourth AGM ofthe Company till the conclusion of the Twenty-Ninth AGM to be held for the financial year2021-22.
b) Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and on thebasis of the recommendation of Audit Committee the Board in their meeting held on June25 2020 had appointed M/s. Hemanshu Kapadia & Associates Practicing CompanySecretaries (FCS: 3477 and C.P. No.: 2285) to undertake the Secretarial Audit of theCompany for the financial year 2020-21 and issue Secretarial Audit Report as requiredunder the Act.
c) Internal Auditors:
Pursuant to the provisions of Section 138 of the Act read with Rule 13of Companies (Accounts) Rules 2014 and on the basis of the recommendation of AuditCommittee the Board of Directors in their meeting held on June 25 2020 had appointedM/s. Jayesh Kothari & Co. Chartered Accountants (FRN: 148528W) as the InternalAuditors ofthe Company for the financial year 2020-21.
19. Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo:
The information as per Section 134(3)(m) of the Act read with theCompanies (Accounts) Rules 2014 with respect to Conservation of Energy TechnologyAbsorption & Foreign Exchange Earnings and Outgo are given in Annexure E tothis Report.
20. Managerial Remuneration and Particulars of Employees:
Disclosures pertaining to remuneration and other details as requiredunder section 197 of the Act read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are appended as Annexure F tothis Report.
21. Extract of Annual Return:
In accordance with Section 134(3)(a) read with Section 92(3) of theAct an extract of the Annual Return in Form MGT-9 is placed on the website of the Companyat the following link: http://www.vidhifoodcolour.com/pdf/4.%20Annual%20Reports/2019-20/1.0%20MGT-9 2019-20.pdf '
22. Share Capital & Listing of Securities:
During the financial year under review the Company has not issued:
any equity shares with differential rights as to dividendvoting or otherwise;
any equity shares (including sweat equity shares) to employeesof the Company under any scheme; and
any sweat equity shares.
The Company's equity shares are listed on BSE Ltd. (BSE) and NationalStock Exchange of India Limited (NSE). The stock code of the Company at BSE is 531717 andthe symbol for NSE is VIDHIING.
23. Management Discussion and Analysis Report:
Management Discussion and Analysis Report for the financial year underreview as stipulated under regulation 34 of the Listing Regulations is set out in aseparate section forming part of this Report.
24. Corporate Governance:
The Company is adhering to good corporate governance practices in everysphere of its operations. The Company has taken adequate steps to comply with theapplicable provisions of Corporate Governance as stipulated under the Listing Regulations.A separate Report on Corporate Governance is enclosed as a part ofthis Report alongwith the Certificate from the Practicing Company Secretary on Corporate Governance.
25. Directors' Responsibility Statement:
As stipulated under section 134(3)(c) read with Section 134(5) of theAct your Directors hereby state and confirm that:
a) in the preparation of the annual accounts for the financial yearended on March 31 2020 the applicable accounting standards have been followed and thatthere are no material departures from the same;
b) they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year ended on March 31 2020 and of the profit and loss of the Company for thatperiod;
c) they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls for the Company andsuch internal financial controls are adequate and operating effectively during thefinancial year ended March 31 2020; and
f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and such systems are adequate and operating effectivelyduring the financial year ended March 31 2020.
26. Particulars of Contracts and arrangements with related parties:
During the financial year under review the Company has not enteredinto any contracts/arrangements/ transactions with related parties which could beconsidered material in accordance with the Company's Policy on materiality of relatedparty transactions. All contracts/arrangements/transactions entered into by the Companyduring the financial year under review with related parties were in the ordinary course ofbusiness and on an arm's length basis but not material in nature. Accordingly thedisclosure of related party transactions to be provided under section 134(3)(h) of the Actin Form AOC-2 is not applicable.
The details of transactions entered into with related parties as perAccounting Standards are disclosed in the Note No. 27 of the Financial Statement.
The Company's Policy on Materiality of related party transactions anddealing with related party transactions is available on the Company's website at:
27. Particulars of loans given investments made guarantees given andsecurities provided:
The Company has not given any loan except loan to employees and loanto Wholly-owned Subsidiary Company or given guarantee or provided securities as coveredunder section 186 of the Act.
Further on the recommendation of the Audit Committee and the Board ofDirectors the Members in their Extra-ordinary General Meeting held on Thursday March 292018 has approved acquisition of 100% shareholding in Arjun Food Colorants ManufacturingPrivate Limited a Company promoted by the Promoters of the Company. The Company hasacquired 100% shares of Arjun Food Colorants Manufacturing Private Limited during thefinancial year under report making the said Company as the Wholly Owned Subsidiary of theCompany.
The details of loan given and Investment made by the Company have beengiven in the Financial Statement.
28. Risk Management:
The Company is exposed to inherent uncertainties owing to the sector inwhich it operates. A key factor in determining a Company's capacity to create sustainablevalue is the risks that the Company is willing to take (at strategic and operationallevels) and its ability to manage them effectively. Many risks exist in a Company'soperating environment and they emerge on a regular basis. The Company's Risk Managementprocess focuses on ensuring that these risks are identified on a timely basis andaddressed.
The Audit Committee oversees enterprise risk management framework toensure execution of decided strategies with focus on action and monitoring risks arisingout of unintended consequences ofdecisions or actions and related to performanceoperations compliance incidents processes systems and transactions are managedappropriately. The Company believes that the overall risk exposure of present and futurerisks remains within risk capacity.
29. Internal Financial Controls with reference to the FinancialStatement:
The Company has adopted the policies and procedures for ensuring theorderly and efficient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timely preparationof reliable financial information.
The Company has in place adequate internal financial controls withreference to financial statements. The Company's internal control systems includinginternal financial controls are commensurate with the nature of its business and the sizeand complexity of its operations and the same are adequate and operating effectively.These systems are periodically tested and no reportable material weakness in the design oroperation was observed. The Audit Committee reviews adequacy and effectiveness of theCompany's internal control system including internal financial controls.
30. Disclosure under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013:
Your Company has always believed in providing a safe andharassment-free workplace for every individual working in the Company. The Company hascomplied with the applicable provisions of the aforesaid Act including constitution ofthe Internal Complaints Committee. The Company has in place an Anti-Sexual HarassmentPolicy in line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. All employees (permanent contractualtemporary and trainees) are covered under this Policy. The Policy is gender neutral. Weare pleased to inform you that no complaints pertaining to sexual harassment were receivedduring the Financial Year 2019-20.
31. Secretarial Standards:
The Company has complied with all the applicable Secretarial Standardsissued by The Institute of Company Secretaries of India and notified by the CentralGovernment.
32. Cost Records:
As per Section 148(1) of the Act read with the Companies (Cost Recordsand Audit) Rules 2014 the maintenance of cost records is not mandated for the productsmanufactured by the Company.
33. Business Responsibility Report (BRR)
The Listing Regulations mandate the inclusion of the BRR as part of theAnnual Report for the top 1000 listed entities based on market capitalization. Since yourCompany is Top 1000 Companies by Market Cap in compliance with the Listing Regulationswe have integrated BRR disclosures into our Annual Report as Annexure G.
34. Other Disclosures/Reporting:
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no events/instances/transactions occurred onthese items during the year under review:
a) Material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report;
b) Details relating to deposits covered under Chapter V of the Act;
c) Voting rights which are not directly exercised by the employees inrespect of shares for the subscription/ purchase of which loan was given by the Company(as there is no scheme pursuant to which such persons can beneficially hold shares asenvisaged under section 67(3)(c) ofthe Act);
d) Significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operations infuture; and
e) Details in respect of frauds reported by the Auditors under section143(12) other than those which are reportable to the Central Government as there were nosuch frauds reported by the Auditors.
Your Board wish to place on record their appreciation and acknowledgewith gratitude the support and cooperation extended by the Government AuthoritiesBankers Customers Employees and Members during the year under review and look forward totheir continued support.
For and on behalf of the Board of Directors
| || |
|Date: August 14 2020 ||Bipin Madhavji Manek |
|Place: Mumbai ||Chairman & Managing Director |
| ||(DIN:00416441) |
| ||Address: Flat No.12 Somerset House |
| ||Off Bhulabhai Desai Road |
| ||Warden Road Mumbai - 400 026 |