The Board of Directors hereby submit the report of the business and operations of yourCompany along with the audited financial statements for the financial year ended March31 2020.
FINANCIAL RESULTS AND OPERATIONS
The financial performance for the year ended March 31 2020 is summarized below:
| || ||(Amount in Lacs) |
|Particulars ||2019-20 ||2018-19 |
|Net Sales /Income from Business Operations ||15515.50 ||21582.35 |
|Other Income ||303.42 ||336.10 |
|Total Income ||15818.93 ||21918.45 |
|Cost of material consumed ||12278.07 ||6074.26 |
|Purchase of Stock in trade ||2122.69 ||14946.85 |
|Employee Benefit Expense ||99.29 ||115.81 |
|Changes in Inventories ||(155.03) ||(673.54) |
|Financial Costs ||501.08 ||620.97 |
|Other Expenses ||544.69 ||613.15 |
|Profit before Depreciation ||428.11 ||220.93 |
|Less: Depreciation ||74.17 ||72.21 |
|Add : Exceptional items ||(103.31) ||146.99 |
|Net Profit Before Tax ||250.62 ||295.72 |
|Less Current Tax ||83.92 ||112.63 |
|Less Previous year adjustment of Income Tax ||(6.10) ||26.65 |
|Less Deferred Tax ||33.08 ||(51.33) |
|Profit for the Period ||139.72 ||207.77 |
During the year under review the Company achieved a turnover of Rs. 155.15 Crore asagainst Rs. 215.82 Crore for previous year whereas the profits of the Company for theperiod under review were Rs. 1.39 Crore as compared to Rs. 2.07 crore in the previousyear.
Your management would like to convey that post demerger the Company acquired the'Recycling and Upcycling Division" from the demerged company i.e. Vikas EcotechLimited pursuant to which the Company had to incur extra expenses to carry out the newmanufacturing and recycling process that came along with the acquisition of new businesssegment .
Further due to the impact of the pandemic "COVID-19" the Company faced adisruptive fourth quarter and thereby the profits of the Company declined as against theprevious financial year however it managed to earn a fair revenue and thus profits forthe year under review and is optimistic to grow exponentially in future by tapping intoother business segments as well.
During the period under review your Company completed the acquisition of 'Recycled andTrading Compounds Division' of group concern 'Vikas Ecotech Limited' through demergerthus taking up the entire manufacturing of recycled materials of the demerged Company andhence putting greater emphasis on taking this production process to greater heights and isexpecting to expand in upcoming future years as the demand for such products will behigher than ever thus creating more demand for the Company.
The management is of the opinion that the recycling and upcycling business will turnout to be a lucrative & growing business for VML with unimaginable Potential.
The Company is also indulged into trading of the plastic and raw rubber polymercompounds the trading industry is growing and is expected to grow multi-folding as themost common ingredient used in the processing of most of the products used in variousindustries requires the plastics and rubber polymer compounds.
The Company has also been performing outstandingly well over both the Stock Exchangeson which it is listed and the price and the volume of the stock has been increasingexponentially. Therefore the major two segments in which the Company is dealing are notonly promising but also caters to the majority industries dealing in different types ofproducts.
Your Company has been performing outstandingly well over the Stock Exchanges due to theexemplary performance of the Company in both recycling of polymer compounds and trading ofplastic and raw rubber polymer compounds.
The Company is venturing into a new product line i.e. 'Food protection and PersonalHygiene' segment of FMCG Industry with the total investment of approx Rs. 100 Crores in 2years and has signed a definite agreement for acquisition of a portfolio of trademarkscomprising of popular and well established national brands.
Your Company with the acquisition of the prestigious 'Brand Portfolio' is initiatingthe process to indentify and acquire an existing plant for manufacturing these items. Inthe interim alternate arrangements are being made to produce these products through thirdparty contract manufacturing.
Your Company always ensures to strategize and plan well in advance about its long termobjectives and seek exponential growth in all its sectors for this purpose the Companyhas formulated an Advisory Board under the Chairmanship of Mr. Sunil Alagh an eminentpersonality in the filed of FMCG industry to tap into the new segment with the rightrationale plan and skillset.
Your Company is also tapping into recycling of Multi-Layered Packages (MLP's) yourCompany is in the advance stages of joining hands with the renowned research institutionto acquire technology and to set up its own manufacturing units for recycling of MLP's. Itis expected that within a span of 15-20 days the technology would be transferred to theCompany and by the end of this year the erection and installation of machinery andmanufacturing unit would be completed.
Your Company is the first one to initiate the process of recycling of MLP'sconsidering the adverse effects of MLP's and its disposal the Company is not onlyfocusing to cater to the investors but to the environment and society at large.
CHANGE IN NATURE OF BUSINESS IF ANY
During the year under review there is no change in the nature of business. Thoughconsidering the changed domestic and global market scenarios alongside the anticipatedchange in world-economy order and the resultant expected manufacturing shift to India inthe post Covid-19 pandemic global outbreak the management of the company in line with thecompany's long-term business plan to expand its business further into wider product linesand newer application areas recently decided to foray into new business segments namelyProducer Responsibility Organization (PRO) Extended Producer Responsibility (EPR) as anextension of its recycling of plastic waste business personal hygiene and other items offast moving consumer goods. This will enable your Company to venture into new productsprocesses segments businesses which are under the existing circumstances convenientlyand advantageously could be combined with the present activities of the Company and asaccordingly members approval is being sought to make the necessary amendment in the Mainobjects of the Company.
The proposed amendment of the Objects Clause will not affect any of the rights of theCompany or any shareholder(s) and/or other stakeholder(s) of the Company.
LISTING OF EQUITY SHARES
During the year under review pursuant to the scheme of arrangement Shareholders ofVikas Ecotech Limited were allotted equity shares of your Company in the ratio of 1:1 andaccordingly equity shares of the Company were listed on the National Stock Exchange ofIndia Limited (NSE) and BSE Limited (BSE) on May 8 2019.
Authorised Share Capital
The Authorized Share Capital of the Company as on 31st March 2020 wasRs.670000000 divided into 670000000 Equity Shares of Re.1 each.
Paid-up Share Capital
As on 31st March 2020 the Issued and Paid up Share Capital of the Company stood atRs. 663495495/- divided into 663495495 equity shares of face value of Re.1/- pershare.
However the management of the company by mean of passing a special resolution and anordinary resolution through postal ballot on 18th June 2020 had seek members approval toconsolidate the nominal value of shares from Re. 1 to Rs 5 per share and thus toaccordingly revise the authorized capital of the Company from Rs. 670000000 dividedinto 670000000 shares of Re. 1 each to 134000000 shares of Rs 5 each respectively.
The member's resolution was passed with requisite majority and Board of directors ofthe Company was authorized to act in accordance with the resolution and perform allnecessary acts to give effect to the resolution so passed through postal ballot.
The Board of your company pursuant to the powers conferred upon it by the above saidmembers resolution however based on the certain recommendation it received company'sfuture business plan along with the cost involved and likelihood of implementation of theproposal for fixing uniform nominal value of all listed shares to be Re. 1/- decided inthe best interest of the company and its investors to keep the proposal to consolidatethe nominal value of shares in abeyance.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ('Listing Regulations') Management Discussion and Analysis report("MD&A Report") providing a detailed overview of your Company's performanceindustry trends business and risks involved is provided separately and is forming part ofthe Annual Report.
SUBSIDIARY COMPANIES JOINT VENTURE AND CONSOLIDATED FINANCIAL STATEMENTS
During the year under review your Company does not have a subsidiary joint venture orassociates hence reporting requirements are not applicable.
To conserve the resources for the expansion of business in the long run your Directorshave not recommended any dividend for the Financial Year 2019-20 and have decided toretain the profits .
CORPORATE GOVERNANCE AND ETHICS
The Company believes in adhering to the best corporate governance practices and itsphilosophy emphasizes on fair and transparent governance and disclosure practices whichhelps your Company to follow the path of its vision and mission. It strongly believes indeveloping best corporate governance policies and procedures based on principals of fairand transparent disclosures equity accountability and responsibility.
A detailed report on Corporate Governance in terms of Regulation 34 of the ListingRegulations is forming part of the Annual Report. A certificate confirming compliance withrequirements of Corporate Governance as enumerated under the extant provisions of ListingRegulations issued by Ms. Teena Rani Sole Proprietor MSTR & Associates CompanySecretaries is also annexed to the said report.
CORPORATE SOCIAL RESPONSIBILITY
The provisions of Corporate Social Responsibility are not applicable to the Company andhence disclosures under Sec 135 of the Companies Act 2013 are not applicable to theCompany.
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board of Directors provides the blue print to the success of any organization itplans and implements various strategies to grow not only in numbers but in value and caterto its stakeholders.
Your Company's Board consists of learned professionals and experienced individuals fromdifferent fields. Presently your Board comprises of Six Directors Chief FinancialOfficer and Chief Executive Officer. Amongst the directors two are executive one isnon-executive and three are Independent Directors including two women Directors on theBoard. The Board met 6 (six) times during the year details pertaining to Board andCommittee Meetings held during the year are detailed in Corporate Governance Report.
During the year Mr. Kapil Gupta Director of the Company resigned w.e.f 07thJune 2019 and Ms. Anubhuti Mishra Independent director resigned w.e.f from 01stJuly 2019.
Subsequently Ms. Meena was inducted on the Board as Independent director w.e.f 01stJuly 2019 and Mr. Vijay Kumar Sharma was appointed as the Chief Executive Officer andWhole Time Director of the Company w.e.f 01st July 2019 and 12thFebruary 2020 respectively.
Further Mr. Hari Bhagwan Sharma Whole Time Director of the Company tendered hisresignation from the post w.e.f 15th October 2019 and the position of theChairman became vacant post the sad demise of Mr. Purushottam Dass Bhoot on 07thFebruary 2020.
KEY MANAGERIAL PERSONNEL
The Board of your Company consisted of the following Key Managerial Personnel (KMP'S)as on the year ended 31st March 2020:
i. Chief Financial Officer: Mr. Chandan Kumar
ii. Chief Executive Officer : Mr. Vijay Kumar Sharma
iii. Company Secretary: Mr. Gaurav Aggarwal
During the financial year under review there has been no change in the Key ManagerialPersonnel of your Company except as detailed herein below.
Mr. Vijay Kumar Sharma was appointed to for the position of Chief Executive Officer ofyour Company from the w.ef. 01st July 2019.
Mr. Deepanshu Arora resigned from the office of Company Secretary and ComplianceOfficer w.e.f 30th September 2019. Thereafter Mr. Gaurav Aggarwal wasappointed as the Company Secretary and Compliance officer on 11th November2019 who later resigned w.e.f 03rd August 2020.
Further Ms. Ujjwal Verma has been appointed as the Compliance Officer and CompanySecretary of the Company w.e.f 03rd August 2020 and 07th September 2020 respectively.
DECLARATION OF INDEPENDENCE
The Independent Directors have confirmed that they meet the criteria of Independence asstipulated under Section 149(6) of the Companies Act 2013 read with the Regulation 16 (1)(c) of the Listing Regulations and they are not aware of any circumstances or situationwhich exist or may be reasonably anticipated that could impair or impact their ability todischarge their duties with an objective independent judgment and without any externalinfluence as an Independent Director of the Company.
The Board conforms to the declaration of the Independent Directors and there being nodoubts as to veracity of the same places the same on record.
In compliance with the requirements of Companies Act 2013 and Listing Regulations yourBoard had constituted various Board Committees including Audit Committee Nomination &Remuneration Committee Stakeholders Relationship Committee and Corporate SocialResponsibility Committee. Details of the constitution of these Committees which are inaccordance with regulatory requirements have been uploaded on the website of the Companyviz. www.vikasmulticorp.com.
Details of scope constitution terms of reference number of meetings held during theyear under review along with attendance of Committee Members are provided under CorporateGovernance Report forming part of the Annual Report.
AUDITORS AND AUDITORS' REPORT
M/s Goyal Nagpal & Co. Chartered Accountants (FRN 018289C) were appointed as theStatutory Auditors of the Company with the shareholders' approval for their appointmentobtained at the Annual General Meeting held on September 26 2019 to hold office for aterm of 5 years commencing from the conclusion of the 34th Annual GeneralMeeting till the conclusion 39th Annual General Meeting.
Further there are no qualifications reservations or adverse remarks in the Reportissued by M/s Goyal Nagpal & Co. Statutory Auditors for the year under review.Remarks made in the Report are selfexplanatory and do not call for any further commentsfrom your Directors.
M/s. MSTR & Associates Company Secretaries were appointed as the SecretarialAuditors of your Company to carry out the Secretarial Audit for the financial year underreview. The Secretarial Audit Report issued by the Secretarial Auditors in Form No. MR-3is annexed with this Report.
In terms of extant provisions of Listing Regulations read with SEBI circulars issued onthe subject a Secretarial Compliance Report was also obtained by the Company from theSecretarial Auditors and the same was also intimated to the Stock Exchange.
There are no qualifications or reservations in the Secretarial Audit Report or in theAnnual Secretarial Compliance Report expect:
Observation regarding non submission of certificate as required in term of Regulation74(5) of the SEBI (Depositories and Participants) Regulations 2018
Our comment: Necessary Certificate was obtained from the RTA as per the compliancecalendar but inadvertently it could not be filed to the stock exchanges in prescribedtime though the same was filed subsequently and is also available on the website of theCompany.
As your Company is in trading business and during the year under review was neitherengaged in the manufacturing of goods nor a service provider therefore requirements ofmaintenance of cost records and cost audit as prescribed under the provisions of CompaniesAct 2013 are not applicable to the Company.
During the year under review the Company has complied with all applicable SecretarialStandards issued by Institute of Company Secretaries of India.
During the period under review the Company has not accepted any public deposits andtherefore no amount on account of principal or interest on public deposits was outstandingas on the date of the Balance Sheet.
REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES
Disclosures pertaining to the remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is also annexed to this Report.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant or material orders passed by the regulators courts ortribunals having an impact on the future operations of the Company or its going concernstatus.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
In terms of Section 186 of the Companies Act 2013 particulars of inter-corporateloans guarantees and investments are provided in the notes to Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITHRELATED PARTIES REFERRED TO IN SECTION 188
All Related party transactions are entered on an arm's length basis and are incompliance with the applicable provisions of the Companies Act 2013 and the ListingRegulations. There are no materially significant related party transactions made by theCompany with Promoters Directors or Key Managerial Personnel etc. which may havepotential conflict with the interest of the Company at large. Company's policy on relatedparty transactions can be accessed at its website www.vikasmulticorp.com.
The particulars of every contract and arrangement entered into by the Company withrelated parties referred to in sub- section (1) of section 188 of the Companies Act 2013including certain arm's length transactions under third proviso thereto are disclosed inForm No. AOC-2 which is annexed to this Report.
The Annual Return pursuant to the provisions of Section 92 read with Rule 12 of theCompanies (Management and Administration) Rules 2014 of your Company for the financialyear under review is available at website of your Company www.vikasmulticorp.com under the"Investor Zone" section.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position ofyour Company occurring between the end of the Financial Year and the date of this Report.
PARTICULARS REGARDING CONSERVATION OF ENERGY ETC.UNDER SECTION 134(3)(m) OF THECOMPANIES ACT 2013 AND RULES MADE THEREIN
As per the provisions of Section 134(3)(m) of the Act read with Companies (Accounts)Rules 2013 Details of steps taken by your Company to conserve energy through itsSustainability initiatives Research and Development and Technology Absorption have beendisclosed as part of the Annual Report.
ADEQUACY OF INTERNAL CONTROLS
The Company's internal control systems are commensurate with the nature of its businessand the size and complexity of its operations. The Statutory and the Internal Auditorsroutinely conduct system checks and give their report after evaluation of the efficacy andadequacy of internal control systems including controls with respect to the financialstatements its compliance with operating systems accounting procedures and policies inthe Company. Based on the report of Internal Audit the departments undertake correctiveaction in their respective areas and thereby strengthen the controls.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONANDREDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. During the year under review no compliant was received in this regard.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(C) read with Section134(5) of the Act the Directors to thebest of their knowledge and ability hereby confirm that:
i. in the preparation of the annual accounts the applicable accounting standards hadbeen followed with proper explanation relating to material departures;
ii. they have selected such accounting policies in consultation with Statutory Auditorsand applied them consistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the company at theend of the Financial Year March 31 2019 and of the profit and loss of the company for theFinancial Year;
iii. they have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities;
iv. the annual accounts of the Company have been prepared on a going concern basis.
v. the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
vi. they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Your Directors place on record their appreciation for the valuable support andcooperation of the Company's Bankers Government Agencies Customers SuppliersShareholders Employees and other statutory authorities who have reposed their continuedtrust and confidence in the Company.