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Vikas Proppant & Granite Ltd.

BSE: 531518 Sector: Others
NSE: VIKASPROP ISIN Code: INE767B01022
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VOLUME 388542
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OPEN 2.04
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VOLUME 388542
52-Week high 3.77
52-Week low 1.96
P/E
Mkt Cap.(Rs cr) 105
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Vikas Proppant & Granite Ltd. (VIKASPROP) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 26th Annual Report of the Companytogether with the Audited Financial Statements for the Financial Year ended March 31st2020.

OPERATIONAL & FINANCIAL HIGHLIGHTS

The Management Discussion and Analysis Report for FY 20 is part of the Annual Reportand explain the operating and financial performance of the business for the year.

Summary of the financial results of the Company for the year under review is as under:

Particulars For the Year ended 2020 (Amount in Lac) For the Year ended 2019 (Amount in Lac)
Net Sales/ Revenue from Operation 695.61 5277.21
Other Income - -
Total Revenue 695.61 5277.21
Profit/Loss Before Tax 503.29 5157.96
Less:
(a) Current Income Tax 103.92 1111.54
(b) Deferred Tax 6.90 (378.61)
Net Profit/Loss After Tax 392.47 4425.03

STATE OF AFFAIRS AND REVIEW OF PERFORMANCE OF THE COMPANY

The highlights of the Company's performance are as under:

1. Total revenue for the year decreased from previous year of 5277.21 Lac to currentyear of 695.61 Lac.

2. Net Profit for the year decreased from previous year of 4425.03 Lac to current yearof 392.47 Lac.

CHANGE IN CAPITAL STRUCTURE OF THE COMPANY

During the year under review there was no change in capital structure of the Companyand as at year ended March 31 2020 the paid up capital of the Company stood at506175000 consisting of 506175000 equity shares having face value of Re. 1 /- eachfully paid-up.

CHANGE IN NATURE OF BUSINESS

The guar gum industry is facing a significant down fall from many years. As prices ofguar gum had increased three years back it had encouraged farmers to take guar seed crop.Export demand was good till 201314 but later on it has gradually declined and as resultcarry over stock of guar seed has created stock burden.

While industry is not hopeful for recovery soon the management has diversified itsbusiness into niche global expending market of oil fracturing proppants by making use ofcuttings (waste materials) of granite stones. The company has planned to manufactureproppants and mining of granite and fractured debris in Rajasthan.

During the previous year there were no changes in the aforesaid ESOP Schemes of theCompany and the ESOP Schemes are in compliance with ESOP regulations. A certificate hasalso received from M/s Yogesh Mahipal & Associates Chartered Accountants StatutoryAuditors with respect to the implementation of the Company's ESOP schemes.

DETAILS OF SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANIES:

The Company does not have any subsidiary joint venture or associate Company.

TRANSFER TO RESERVES & DIVIDEND

The Board of Directors on February 06 2020 declared interim dividend of Re. 0.10 perequity share on 506175000 equity shares for FY 20 amounting to Rs. 50617500/-. TheBoard has not considered any further dividend for the year.

The Dividend Distribution Policy of the Company can be accessed at the Company'swebsite.

There is increase in general reserve of the Company from 33.35 Lac to 186.75 Lac whichis given in Note No. 10 of Balance Sheet.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF

THE COMPANY

Except the information given in this report no material changes have taken place aftercompletion of the financial year up to the date of this report which may have substantialeffect on business and finances of the Company.

INDEPENDENT DIRECTORS

The Board of Company consists of three independent Directors namely

• Sh. Neeraj Chhabra

• Sh. Ravi Sharma

• Smt. Aashu Garg

The Company has received declaration from all the Independent Directors of the Companyunder Section 149(7) of the Act confirming that they meet the criteria of independence asprescribed under Section 149(6) of the Act and SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015. Above declaration given by Independent Directors isenclosed as Annexure - I to this report.

POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMININGQUALIFICATION POSITIVE ATTRIBUTES INDEPENDENCE

The Company's policy relating to appointment resignation or removal of key managerialperson payment of managerial remuneration of directors directors qualificationspositive attributes independence of Directors and other related matters as provided underSection 178(3) of the Companies Act 2013 is furnished in Annexure II and is attached tothis report.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY

The Company has in place a Risk Management framework for a systematic approach tocontrol risks. The Risk Management Policy of the Company lays down procedures for riskidentification assessment monitoring review and reporting.

The Policy provides for a robust risk management framework to identify and assess riskssuch as operational strategic financial security property regulatory reputationaland other risks and put in place an adequate risk management infrastructure capable ofaddressing these risks.

Given below are significant potential risks of the Company and measures in place tomitigate them:

The risks are involved in our industry can be classified as mining business isdependent upon government policies and relaxation extended by it.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

In terms of requirement of clause (m) of sub-section (3) of Section 134 of theCompanies Act 2013 read with the Companies Account(s) Rules 2014 the particularsrelating to conservation of energy technology absorption foreign exchange earnings andoutgo as required to be disclosed under the Act are provided in Annexure III to thisreport.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 124 of the Companies Act 2013 Dividend whichremain unclaimed for a period of seven years shall be transferred to the InvestorEducation and Protection Fund (IEPF) of the Central Government within the respective duedates.

Since there was no unpaid/unclaimed Dividend declared which remain unclaimed for aperiod of seven years the provisions of Section 125 of the Companies Act 2013 do notapply.

ANNUAL RETURN

The extracts ofAnnual Return in Form MGT-9 pursuant to the provisions of Section 92read with Rule 12 of the Companies (Management and administration) Rules 2014 isfurnished in Annexure IV and is attached to this Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013

During the year under review the Company has not made any loan given any guarantee orprovided security in connection with the loan to any other body corporate or person underSection 186 of the Companies Act 2013.

COST RECORDS AND AUDIT

The Company is not required to maintain Cost record for any of its product underSection 148 of the Companies Act 2013. The provisions relating to Companies (Cost Recordsand Audit) Rules 2014

does not apply to the Company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All contracts arrangements or transactions entered in to by the Company during thefinancial year 2019-20 were in the ordinary course of business and were at an arm'slength basis. During the year under review the Company had not entered into any contractarrangement or transaction with related parties which could be considered material inaccordance with the Company's policy on materiality of related party transactions readwith the provisions of the Listing Regulations. Accordingly there are no transactionswhich are required to be reported in Form AOC-2 in pursuance of Section 188(1) of the Act.

DEPOSITS

The Company has not accepted any Deposit covered under Section 73 of the Companies Act2013 and The Companies (Acceptance of Deposit) Rules 2014 during the year under review.Hence the requirement for furnishing of details relating to deposits covered underChapter V of the Act or the details of deposits which are not in compliance with theChapter V of the Act is not applicable.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review or between the end of that financial year and the date ofthis report no significant or material orders were passed by the Regulators or Courts orTribunals which may impact the going concern status and future operations of the Company.

VIGIL MECHANISM

Our Vigil Mechanism provides a formal mechanism for all directors employees andvendors to approach the Ethics Counselor/ Chairman of the Audit Committee.

The Vigil mechanism under section 177 of Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 has been laid down by thecompany. The same is provided on the website of the company www.vpgl.in.

The mechanism deals with the reporting of any unfair and malaise practice in thecompany. The policy is also providing safe guard to the persons who are taking initiativesagainst the practice of unfair mean of business.

The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other directors. The Company has alsoprovided adequate safeguards against victimization of employees and directors who expresstheir concerns. The Company has also provided direct access to the chairman of the auditcommittee on reporting issues concerning the interests of co employees and the Company.

The details required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respectof Employees of the Company are given in Annexure V of this Board's Report.

COMPOSITION OF BOARD AND NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDERREVIEW

The Company maintains the optimum combination of Executive and Independent Directorshaving rich experience in related sectors. The Board of Directors always endeavor tocreate an environment of fairness equity and transparency in transactions with theunderlying objective of securing long term stakeholder value while at the same timerespecting the right of all Stakeholders.

As at 31st March 2020 there were six directors in the composition of Boardof Director of the Company. The Board of Directors comprises three executive directorsincluding an executive chairman and three non-executive independent directors.

There is no nominee director appointed by any Financial Institution/Bank on the Boardof Directors of the Company. Independent Director did not have any material pecuniaryrelationship or transactions with the Company during the year 2019-20 which may affecttheir judgments in any manner.

During the Year under review five meeting of Board of Directors were held as onfollowing Dates:

Sr. No. Date of Board Meeting
1. 22/05/2019
2. 14/08/2019
3. 02/09/2019
4. 14/11/2019
5. 06/02/2020
DETAILS OF POLICY DEVELOPED AND

IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVE

Pursuant to Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014 the Company has constituted the Corporate SocialResponsibility (CSR) Committee of the Board of Directors which presently comprises ofMrs. Bimla Devi Jindal (Chairman) Mr. Bajrang Dass Aggarwal and Mr. Ravi Sharma asMembers.

However since the Company was not required to spend towards CSR activities during FY2019-20 as per Section 135 of the Companies Act 2013 read with rules thereunder owing tothe inadequacy of profits / loss during the immediately preceding three financial yearsthere was no requirement for the CSR committee to consider any subject matter in thisregard during the year under review.

We continue to remain focused on improving the quality of life and engaging communitiesthrough health education sports and infrastructure development. The Company believes infollowing this provision not in law but in spirit too.

The report on CSR activities in terms of Section 135 of the Companies Act 2013 isannexed to this report as Annexure VI.

PERFORMANCE EVALUATION REPORT

In terms of Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 there is requirement of formal evaluation by the Board ofits Own Performance and that of its committee and individual directors.

The evaluation of individual directors and the Board as a whole was conducted based oncriteria and framework adopted by the Board. The Evaluation criteria has been explained inthe Nomination and Remuneration Policy adopted by the Board and forms part of this AnnualReport.

MANNER & CRITERIA OF FORMAL ANNUAL EVALUATION OF BOARD'S PERFORMANCE AND THAT OFITS COMMITTEES AND INDIVIDUAL DIRECTORS

In compliance with requirements of the act and SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 the formal annual performance evaluation ofthe Board its Committees and Individual Directors has been conducted as under:

A. Manner of evaluation as recommended to the Board by the Nomination Remuneration andCompensation Committee (NRCC)

1. The Chairman of the Board consulted each Director separately about the performanceof Board Committees and other Directors and sought inputs in relation to the above. TheChairman then collated all the inputs and shared the same with the Board.

2. In respect of the evaluation of Chairman of the Board the Chairman of the NRCCcollated the inputs from Directors about Chairman's performance as a Director of the Boardand/ or Chairman or the Member of the Board Committees and shared the same with the Board.

The Board as a whole discussed the inputs on performance of Board/Committees/IndividualDirectors and performed the evaluation excluding the Director being evaluated.

B. Criteria of evaluation as approved by the NRCC. The aforesaid evaluation wasconducted as per the criteria laid down by the NRCC as follows:

Performance of Evaluation Criteria
(i) Board as a whole • Fulfillment of functions of the Board (for instance guiding corporate strategy risk policy business plans corporate performance monitoring Company's governance practices etc. as per the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.
• Number of Board Meetings held during the year.
(ii) Board Committees • Fulfillment of functions of the Committee with reference to its terms of reference the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015
• Number of Committee Meetings held during the year.
“ill) Individual Directors • Fulfillment of responsibilities as a Director as per the Act the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 and applicable Company policies and practices.
• In case of the concerned Director being Independent Director Executive Director Chairperson of the Board or Chairperson or Member of the Committees with reference to such status and role.
• Board and/or Committee meetings attended.
•General Meetings attended.

CORPORATE GOVERNANCE:

Corporate Governance reporting is a real opportunity to build confidence ofstakeholder's. It is the application of best management practices compliance of law andadherence to ethical standard to achieve the Company's objective of enhancingshareholders' value and discharge of social responsibility. The Corporate Governancestructure in the Company assigns responsibilities and entrusts authority among differentparticipants in the Organization viz. the Board of Directors the Senior ManagementEmployees etc. The Company adopts and adheres to the best recognized Corporate Governancepractices and continuously strives to better them.

Company's Philosophy on Code of Governance

Vikas Group defines Corporate Governance as a process directing the affairs of theCompany with integrity transparency and fairness so as to optimize its performance andmaximize the long-term shareholder value in legal and ethical manner ensuring justicecourtesy and dignity in all transactions of the Company. The Company is committed to goodCorporate Governance in all its activities and processes.

The Company considers stakeholders as partners in the success and remains committed tomaximizing stakeholder value. Good Corporate Governance leads to long term stakeholdervalue.

The Company is committed to the adoption of and adherence to the best CorporateGovernance practices at all times and continuously benchmarks itself with

the best standards of Corporate Governance not only in form but also in spirit. GoodGovernance practices stem from the dynamic culture and positive mindset of theorganization.

We ensure that we evolve and follow the corporate governance guidelines and bestpractices sincerely to not just boost long-term shareholder value but to also respectminority rights. We consider it our inherent responsibility to disclose timely andaccurate information regarding our financials and performance as well as the leadershipand governance of the Company.

Pursuant to the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) the CorporateGovernance Report and the Auditors' Certificate regarding compliance of conditions ofCorporate Governance are annexed to this report Annexure VIII.

CHANGE IN DIRECTORS

Mr. Bajrang Dass Aggarwal who was liable to be retires by rotation and presentedhimself for reappointment was reappointed as director in the annual general meeting heldon 28th September 2019.

RELATIONSHIP AMONG THE DIRECTORS

Sr. No Name of Director Related Director Relation
1. Bajrang Dass Aggarwal Bimla Devi Jindal Wife
Kamini Jindal Daughter
2. Bimla Devi Jindal Bajrang Dass Aggarwal Husband
Kamini Jindal Daughter
3. Kamini Jindal Bimla Devi Jindal Mother
Bajrang Dass Aggarwal Father

FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS

Independent Directors are provided with necessary documents reports and internalpolicies to enable them to familiarise with the Company's procedures and practices.Periodic presentations are made at the Board and Board Committee Meetings on the businessand performance updates of the Company business strategy and risks involved. Quarterlyupdates on relevant statutory changes and landmark judicial pronouncements encompassingimportant laws are regularly circulated to the Directors. Site visits to various locationswhere the Company's operations / activities are carried out are organized for theIndependent Directors to enable them to understand the operations of the Company.

The details of familiarization programme for Independent Directors are available onCompany's website www.vpgl .in.

SECRETARIAL AUDITOR

In terms of Section 204 of the Companies Act The Company had appointed M/s S Vivek& Associates Company Secretaries to conduct its Secretarial Audit for the FinancialYear ended 31st March 2020. The Secretarial Auditors have submitted theirreport for compliance of the provisions of applicable Corporate Laws and other applicableLaws on the Company. The Report on Secretarial Audit is self-explanatory on compliances.The report of the Secretarial Auditors is enclosed as Annexure VII to this report.Secretarial auditor made the qualification in Secretarial auditor report for some noncompliance. In this regard your management wants to ensure each stakeholder that yourCompany is making the efforts to comply with the provisions of each and every law with thespirit not only by words.

STATUTORY AUDITORS:

M/s Yogesh Mahipal & Associates who was ppointed as Statutory Auditors of theCompany for a period of 5 year in Annual General meeting held on 30th September2017.

The Auditors' Report is unqualified. The notes to the Accounts referred to in theAuditors Report are selfexplanatory and therefore do not call for any furtherclarifications under Section 134 of the Companies Act 2013.

Statutory Auditor made the qualification in Statutory Auditor Report for delay inpayment of TDS & PF. In this regard your management wants to ensure each stakeholderthat your Company is making the efforts to comply with the provisions of each and everylaw with the spirit not only by words

M/s Yogesh Mahipal & Associates Chartered Accountants vide their letter dated 31stAugust 2020 have resigned from their position as the Statutory Auditors of the Company dueto pre occupancy in other assignments with effect from 04th September 2020after finalization of unaudited financial results of the Company for quarter ended 30thJune 2020.

Your Company appointed M/s Singh Ajai & Co. Chartered Accountants (having FirmRegistration No:007495C) located at “320 Prince Complex Hazaratganj Lucknow (U.P.)to fill casual vacancy caused by the resignation of M/s Yogesh Mahipal & Associates.Chartered Accountants (FRN: 030845N)

subject to approval o f the shareholders in ensuing annual general meeting.

INTERNAL FINANCIAL CONTROL

M/s Sanjay Goyal & Associates has been appointed as an internal auditor of thecompany to review and strengthen the Internal Financial Control system of the Company. Theboard of director timely review the internal control system and plan company's furtherstrategies accordingly. Their scope of work includes review of processes for safeguardingthe assets of the Company review of operational efficiency effectiveness of systems andprocesses and assessing the internal control strengths in all areas.

INTERNAL CONTROLS

The Company has robust internal control systems and procedures commensurate with itsnature of business which meets the following objectives:

• Providing assurance regarding the effectiveness and efficiency of operations;

• Efficient use and safeguarding of resources;

• Compliance with policies procedures and applicable laws and regulations; and

• Transactions being accurately recorded and promptly reported.

The Company continues to have periodical audits conducted of all its functions andactivities to ensure that systems and procedures are followed across all areas.

The Audit Committee of Directors of the Company regularly reviews the adequacy ofinternal control systems through such audits.

The Internal Auditor reports directly to the Audit Committee. The Company also has abudgetary control system to monitor expenditure against approved budgets on an ongoingbasis.

AUDIT COMMITTEE AND VIGIL MECHANISM

AUDIT COMMITTEE

The Company has an adequately qualified Audit Committee constituted in accordance withthe provisions of Section 177 of the Companies Act 2013 read with Rule 6 and 7 of theCompanies (Meetings of the Board and its Powers) Rules 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.

As on 31st March 2020 there were three directors in the composition ofAudit Committee of the Company.

The Audit Committee comprises two non-executive independent directors including anon-executive independent chairman and one executive director. The members of auditcommittee are as follow:

Mr. Ravi Sharma Mr. Neeraj Mrs. Bimla
(Non-Executive Chhabra Devi Jindal
Independent (Non-Executive (Executive
Director Independent Director
Chairman) Director Member) Member)

All members of the Committee are financially literate and have accounting or relatedfinancial management expertise.

EMPLOYEES STOCK OPTION SCHEMES

Pursuant to the resolution passed by the Shareholders at the Extra Ordinary GeneralMeeting held on December 12 2018 for the grant of 8500000 options which is convertibleinto 8500000 equity shares of face value Re. 1/- each under Vikas Gran Employees StockOption Plan 2018 to Vikas Gran Employee Welfare Trust. In this regard the Company hasreceived in principle approval from BSE on 20th February 2019. During the FY2018-19 your company had granted the 8500000 stock options to Vikas Gran EmployeeWelfare Trust under Vikas Gran Employees Stock Option Plan 2018 on 11th March2019.

Pursuant to the provisions of SEBI (Share Based Employee Benefits) Regulations 2014(the ESOP Regulations) a disclosure with respect to ESOP Scheme of the Company as onMarch 312020 has been uploaded on Company's website at (web link: http://www.vpgl.in)and attach in Annexure-IX in the Directors Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as required by the Listing Regulations isincorporated herein by reference and forms an integral part of this report. A report isannexed to this report as Annexure X.

INDUSTRIAL RELATIONS AND HUMAN RESOURCE DEVELOPMENT

The Company continued to maintain harmonious and cordial relations with its workers inall its Divisions which enabled it to achieve this performance level on all fronts.

The Company has a team of able and experienced professionals. The Company believes thatthe quality of its employees is the key to its success in the long run. The Companycontinues to have cordial relations

with its employees. The Company provides personal development opportunities andall-round exposure to them.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:

a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

d) The directors had prepared the annual accounts on a going concern basis; and

e) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.

For and on behalf of the Board of Directors

Sd/-
Bimla Devi Jindal
Managing Director
DIN:00034997
Address: 123 Vinoba Basti
Sri Ganganagar-335001
Place: Sri Ganganagar
Date: 04/09/2020

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