Your Directors hereby present the 31st Annual Reporttogether with the Standalone & Consolidated Audited Financial Statements for the yearended 31st March 2021.
1. COMPANY'S FINANCIAL PERFORMANCE
During the year under review your company had recorded a consolidatedoperating revenue of Rs. 2106.79 million as compared to Rs. 1807.12 million in theprevious year and standalone operating revenue of Rs. 2090.51 million as compared to Rs.1806.74 million in the previous year. There is a significant growth of 16.6% and 15.71% atconsolidated and standalone levels respectively as compared with those of the previousyear.
The EBIDTA of 25.4% and 25.5% at consolidated and standalone levelrespectively for 2021 grew significantly well when compared to 18.0% and 17.9% of theprevious year. Your Company's strong performance for the year was driven by healthy growthacross its key testing services including clinical research. Your Company continues tostrengthen its pipeline in both domestic as well as global market for all of its testingservices.
The pandemic of Covid-19 and consequent lockdown at the beginning ofthe financial year had effected 2021 which is reflected in its performance. Further yourcompany is committed to continue its growth trajectory withstanding the global headwindsand has taken all the necessary steps to achieve new milestones.
2. FINANCIAL SUMMARY
The Financial performance of your Company for the year ended 31stMarch 2021 is summarized below.
(Rs. in Millions)
|Sl. No. Particulars ||Year Ended March 31 2021 ||Year Ended March 31 2020 |
| ||Standalone ||Consolidated ||Standalone ||Consolidated |
|I Total Income ||2098.61 ||2115.08 ||1836.92 ||1837.30 |
|i) Expenses other than Finance costs and Depreciation ||1563.60 ||1577.22 ||1506.59 ||1507.62 |
|ii) Finance costs ||21.67 ||21.68 ||37.65 ||37.65 |
|iii) Depreciation ||229.37 ||230.78 ||209.22 ||209.33 |
|II Total Expenses (i+ii+iii) ||1814.64 ||1829.68 ||1753.46 ||1754.60 |
|III Profit before tax (I-II) ||283.97 ||285.40 ||83.46 ||82.70 |
|IV Tax expense ||71.37 ||71.35 ||14.19 ||14.25 |
|V Profit After Tax [III-IV] ||212.60 ||214.05 ||69.27 ||68.45 |
|VI Other Comprehensive Income ||1.00 ||1.00 ||(1.89) ||(1.89) |
|VII Total Comprehensive income for the year (V+VI) ||213.60 ||215.05 ||67.38 ||66.56 |
3. MANAGEMENT DISCUSSION AND ANALYSIS
Company Overview Services
Vimta Labs Ltd. is India's most comprehensive contract research andtesting organization providing wide range of services to pharmaceuticalbiopharmaceutical food consumer goods electronic electrical agrochemical healthcaremedical device and many other industries. Broadly the services include
Drug life cycle management development and discovery supportservices in the areas of preclinical research clinical research central lab and cGMPanalytical services for pharmaceutical and biopharmaceutical companies;
Preclinical research and testing services for medical devicecompanies.
Contract research and testing for Agro-science companies
Food testing and analytical development services to supportmanufacturers processors farmers retailers traders exporters & regulators (viz.FSSAI BIS APEDA EIC etal.). VIMTA is a National Referral Lab for testing of WaterAlcoholic & Non-Alcoholic Beverages.
Clinical diagnostic services with patient service and samplecollection centers across India.
Environmental regulatory services such as impact assessments andpost project monitoring to various industries such as power infrastructure cement oil& gas mining etc.
EMI/EMC testing for electronic and electrical products.
Team & Infrastructure
Vimta is India's largest laboratory (space ~400000 sfft.) equippedwith latest technologies and IT infrastructure. Headquartered in Hyderabad Vimta has anetwork of 18 laboratories in India including food testing and clinical diagnosticslaboratories. With a highly diverse multi-disciplinary team of ~1100 people includingscientific and technical professionals our company's expertise and high standards ofquality systems have enabled us to partner with global market leaders as well as smallmedium and virtual companies across industries.
To be seen as an Indian organization with a global perspective that hascreated an integrated quality driven customer sensitive Contract Research and Testingservice platform that is the most comprehensive of its kind across the globe.
Integrity of service through honesty responsibility and anuncompromising commitment to Quality and Customer service.
Respect for all our team members partners customers suppliersand all other people our business interacts with.
We stay focused on our vision and the long term key strategies. We arecommitted to continue building and growing a comprehensive integrated service organizationthrough the following core strategies:
Innovation & technology- We continuously invest to build newcapabilities and adopt cutting edge technologies to create new services aiming to deliverend-to-end testing development discovery and laboratory services to the customerssupported by robust IT solutions to provide cutting edge solutions to customers.
Quality & Compliance - This is the foundation of our business andit remains the core of our processes. Quality principles and continuous improvementtowards best practices are integrated into all our activities.
Knowledge - People are the strength of Vimta. We continue to focus onattracting and retaining quality talent through a culture of trust and performance. Thediverse education skills and experience of our team is harnessed for operationalexcellence and to deliver accurate and reliable reports.
Reach - Continuously expand the reach to more and more customers andmarkets.
During its 37 years of journey VIMTA has always adapted to markettrends and economic environments. It's multi-basket services are continuously leveraged tostay resilient and pursue long term strategic objectives for growth. All investments longterm and short term are strategically made to support our vision and business objectives.Your company firmly believes that it is at a good growth inflection point and has madethe right investments over the years. Despite the Covid-19 pandemic which impactedrevenues in Q1 of FY 20-21 company could grow at 16.6% during FY 20-21 YOY.
Impact of Covid-19 Pandemic
Your Company has been impacted by Covid-19 pandemic in the 1stquarter of the financial year 2020-21. Travel plans related to business development plansoverseas continue to be rolled back. Animal imports for preclinical studies were impactedand hence a focus was created on expanding in-vitro testing capabilities to complementanimal & human studies. FY 2021-22 will be the maiden year for the newly launchedEMI/EMC services to IT defence suppliers medical devices telecom electronics andallied industries. The launch of these services is delayed by 3-4 months due to slow downin international logistics with respect to equipment supplies and qualifications thusservices are expected to now commence towards beginning of Q2 FY22.
Current State of Affairs
Management continues to closely monitor the developments during thispandemic and business continuity is ensured to provide essential services to foodpharmaceutical and healthcare customers through leverage of multi-site operations spreadacross several States despite recent lockdowns in various states/cities.
Health and safety of the workforce has been and will continue to be apriority for the Company. All operations strictly comply with the governmental guidanceand requirements issued from time to time for control and prevention of spread of virus.Several significant steps have been taken as preventive measures to ensure the health andsafety of our employees and continuity of operations. However the 2nd wave ofpandemic has not spared its impact on employees' health. Necessary support for employeesto cope with the challenges is provided and productivities are managed at best possiblelevels in the given situation.
Business for Clinical Diagnostics is impacted in States that are inlockdown but has been compensated with increased Covid-19 testing in Telangana state.Environmental business is also impacted temporarily as it is dependent on deployment ofworkforce in off-site works across the country in various projects. Clinical Researchprojects execution has slowed down again temporarily due to challenges in volunteersmanagement.
Uncertainties continue in the sense that productivities are challengedat times due to non availability of staff however impact of lockdown is not adverse aswas in previous year's Q1 on business barring the few mentioned above. Management opinesthat the fundamentals of our business remain very strong and we expect that we cancontinue to meet customer demands and project delivery schedules going forward.
Industry Overview & Trends - Opportunities Life Sciences
The global drug discovery and development services market size isprojected to reach USD 21.4 billion by 2025 from USD 11.1 billion in 2020 at a CAGR of14.0% during the forecast period. The drug discovery services market is segmented intosmall-molecule drugs and biologic drugs where small molecule drugs account for the largestmarket share as small-molecule drugs are simple well-defined and easy to characterize.With the growing R&D expenditure in the areas of pharmaceutical &biopharmaceutical industry there is an increase in demand for non-clinical / preclinicaltesting services as well. Further increase in R&D spending in the near future willprovide a significant boost to drug discovery and development activities which willensure the growth of the drug discovery services market in the future. The globalbioanalytical testing services market size was valued at USD 3.3 billion in 2020 and isexpected to expand at a compound annual growth rate (CAGR) of 8.6% from 2021 to 2028. TheAsia Pacific market is estimated to grow at the highest CAGR during the forecast periodprimarily due to the presence of a large patient population (especially in China andIndia) increasing investments in R&D and growth in the outsourcing of drug discoveryservices to Asian CROs.
Drug innovators are under constant pressure to bring new productsthrough the pipeline at a faster rate. Developing advanced analytical testing tools toassess and monitor the quality attributes of these products requires a broader set ofequipment and expertise which is for many companies beyond the internal capacity. Thiswould subsequently lead to increased instances of outsourcing pharmaceutical analyticaltesting services.
The global pharmaceutical analytical testing outsourcing market size isexpected to reach USD 12.4 billion by 2028 registering a CAGR of 8.3% according to a newreport by Grand View Research Inc. Increasing pipelines for biological candidates alongwith rising demand for additional analytical details on drugs as well as processdevelopment by regulatory agencies are boosting the market growth. Biologics safetytesting market was valued at USD 3.05 billion in 2019 and is projected to reach USD 7.15billion by 2027 growing at a CAGR of 12.13% from 2020 to 2027.
Increasing spending on preclinical CRO services is expected to boostthe market growth significantly in the coming years. 50% of failure of drug candidates inthe preclinical phase is due to toxicology testing which is expected to propel the demandfor preclinical CRO services in the coming years. Apart from this recent regulatorychanges in Europe and significant change in the process of drug approval by the Food andDrug Administration (USFDA) relating to preclinical CRO services are anticipated toincrease the demand for toxicology testing (61.1%) thus contributing to the market growthin the Preclinical testing landscape.
Over the past 15 years outsourcing of biologics has continued toincrease steadily at a rate of around 4% annually. CROs act as outsourcing partners forpharmaceutical & biotechnology companies and academic institutes. Severalpharmaceutical & biotechnology companies and academic institutes are opting tooutsource numerous core functions like manufacturing clinical trial management andportions of drug discovery to CROs. This is mainly because the emergence of newtechnologies has made it unfeasible for companies to undertake all testing functionsin-house. CROs can afford to invest in extensive drug discovery infrastructure as theycater to multiple clients.
Thus through outsourcing various functions to CROs pharmaceutical andbiotechnology companies can reduce their operational costs and R&D budgets. Costsavings commercial sustainability and optimal staffing are some of the key advantagesdriving the outsourcing of analytical testing preclinical studies and clinical trialservices for large companies. In addition expanding pipelines of pharmaceutical andbiopharmaceutical companies is further expected to drive the outsourcing of biologicssafety testing to CROs.
The success of biological safety tests depends mainly on the expertiseof the analysts themselves as much as the environmental conditions under which the test isperformed. For optimal efficacy biologics safety testing needs to be conducted by skilledprofessionals with sufficient knowledge of the nuances of this field. Handling theinstruments used in biologics safety testing also requires expertise. Consequently thelack of a skilled workforce poses a key challenge to the growth of the biologics safetytesting market.
The large number of R&D activities conducted to counteractCovid-19 is anticipated to increase the demand for analytical testing services. Stringentregulatory requirements are creating demands for Extractable & Leachable studiesGenotoxic impurities Physical characterization (polymorphism studies) for different typesof doses formulations & Elemental Impurities. New guidance for Life cycle managementsemphasizes on revalidation of existing methods.
All the above trends are good news to CROs in terms of opportunitiesglobally. VIMTA through its integrated drug development and discovery services is wellpositioned to take advantage of these trends. European and US markets are mostly untappedfor the company and hence creates high opportunities to expand and grow. Hence VIMTA isvery focused on business development efforts in overseas markets and has been able to addnew customers year on year for large projects. VIMTA is a pioneer and is the leader inextractables leachables and trace contaminant analysis (elemental impurities genotoxicimpurities etc.). Regulations are constantly revised to upgrade the safety and efficacyinformation on products and therefore the need for more safety assessments and testingcontinues to grow. VIMTA has grown well in these areas during the year and expected tocontinue doing well.
Food & agri
The global Food testing Market is estimated to surpass $7688 millionmark by 2023 growing at an estimated CAGR of more than 6.1% during 2018 to 2023. Globallydemand of this market is expected to be driven by the increasing global food trade risingmicrobial contamination cases increasing instances of food mislabeling and changinggovernment regulations.
Asia Pacific region is projected to be fastest growing market duringthe forecast period. The growth in the market is attributed to the growing internationaltrade which has mandated food safety testing to comply to the regulatory standards. TheAsia Pacific Food testing market size was worth $ 3.3 Billion in 2020 and estimated to begrowing at a CAGR of 9.4% to reach USD 5.19 billion by 2025. The Indian food pathogentesting market was valued at $ 14 million in 2018 and is projected to grow at a CAGR of11.3% to reach $26.4 million by 2024.
Growing foodborne diseases and increased retail chains have developedconsciousness among the consumers thus driving the growth of food safety testing marketglobally. This is also attributed to the growth in demand for convenience and packagedfood products an increase in outbreaks of chemical contamination in food processingindustries and the rise in consumer awareness about food safety.
Vimta has food testing laboratories in 7 cities across India which isthe largest network in the country. The laboratory network enables us to gain more accessto the domestic markets and leverage our pan India presence to grow the business withinthe food industry. This is a fast growing service for Vimta.
The size of country's pathology testing market is estimated at Rs50000-60000 Cr out of which approximately 48% is still unorganized & 37% captivewith hospital based labs. Organized diagnostic players control ~15% market share (Rs.8000-9000 Cr). The industry is expected to grow at a compounded annual growth rate (CAGR)of ~16% over the next 5 years.
With more than one lakh labs in the country the industry is highlyfragmented. Currently only 1% of labs are accredited by National Accreditation Board ofLaboratories (NABL) and College of American Pathologists (CAP) which is less than 1accredited lab per million population. The major and top 4 organized players just commanda market share of ~4%.
The diagnostic industry has emerged as an attractive segment in India'sgrowing healthcare sector and is one of the fastest growing services in the country. Themarket provides a huge opportunity for national players to consolidate and plan for bothorganic & inorganic growth.
The diagnostic industry is witnessing a strong growth even with thecorona virus pandemic primarily driven by testing for this virus and allied tests changein demographics increase in lifestyle diseases higher income levels across all strata ofsociety rise in preventive testing deeper penetration with asset-light expansion andspread of healthcare services & insurance.
Diagnostic chains have been rapidly increasing footprint by openingmore testing and collection centres across the country. Newer tests constantly keep addingto the repertoire of diagnostic labs. The factors which are expected to further drivegrowth are ever expanding middle class and aging population innovative customizedpackaging point-of-care testing improvement in collection logistics and e-deliverymechanisms. Consolidation automation digital technology & door step services (homecollections) are bringing in rapid changes in business models.
The industry is at the cusp of growth and witnessing ever increasingdemand for complex testing such as molecular diagnostics and genetic testing. Theapplication of AI in this area is likely to change the way treatments are identified anddelivered to patients a step forward in personalized medicine. The increasing use of suchtechnologies will bring diagnostics closer to the masses over the next few years.
A huge addressable market with under-spending/under- penetratedhealthcare services in India provides demand longevity to players with reach brand andquality service. The fragmented nature of the industry healthy growth of the sector andscalable business offers huge opportunity for prominent players to scale up in their coremarkets as high volumes drive cost benefits.
The outlook for the diagnostics industry in India is very promisingconsidering the growth drivers mentioned above and also because doctors are increasinglyrelying on evidence based treatment.
The lack of regulatory framework and minimum standard requirements leadto low-entry barriers. However there are huge opportunities for diagnostic chain playerswho have the advantage of scientific expertise brand trust and recall global qualitystandards and accreditations extensive test menu multiple touch points to servicepatients value-added offerings and the ability to scale up into newer markets. The muchawaited government regulations for the sector will significantly change landscape of themarket in favor of organized players.
Vimta enjoys a strong quality brand in the country and has a pan Indiapresence offering both routine and specialized clinical diagnostic services. We continueto invest in expanding our geographic reach and building specialized test capabilities togrow in this growing market. During the year your company has made a beginning into theB2C market with the opening of three patient service centres. Rapid expansions are plannedduring the new fiscal year to add one regional reference laboratory each in north &east India and 5 more patient service centres & 1 branch lab in south India. Theseservices will continue to be a focus in the short term and mid term for driving highergrowth through network expansion.
Environmental testing and consultancy
Global Environmental Testing Market size is expected to reach US$ 12.95Bn by 2026 from US$ 7.76 Bn in 2019 at a CAGR of 7.6% during the forecast period. Themarket for India's environmental testing is forecast to reach $342.5 million by 2025growing at a CAGR of 10.8% from 2020 to 2025.
Sector with major growth potential are Environmental ConsultancyServices Environmental Monitoring & Testing Services & Continuous EmissionMonitoring System Implementation.
As India is grappling with significant challenges in air water andwaste management; air quality monitoring water and wastewater treatment and testing arethe most promising sub-sectors in India's environmental segment. Policies have beenlaunched to tackle air pollution is the National Clean Air Programme (NCAP) launched inearly 2019. It set a target of reducing key air pollutants by 20-30 percent by 2024 with2017 as the base year. The Solid Waste (Management & Handling) Rules 2016 contain newstandards for composition of compost treatment of leachates emissions from incinerationand criteria for waste treatment facilities and landfills.
Regulations play a major role in converting government commitments toactions which in turn will drive the demand for Environmental testing and impactassessment services. While in the long term increased regulations will propel the demandfor such services in the current environment operational challenges exist in projectsexecution for environmental laboratories and consultants.
Vimta is the first gazette notified EPA laboratory (1986) in India andis highly reputed for its technical expertise quality and integrity. The divisionspecializes in conduct of EIA studies and is one of the very few companies in India whohave capabilities to perform offshore monitoring surveys. It is expected that the longterm prospects in these services for the Company will be high. It has a strong order bookfor the year which is significantly higher than last year. However to address the nearterm uncertainties and project execution challenges Vimta has diversified itsenvironmental services portfolio to now include Continuous Emissions Monitoring SystemsCalibration/Audit Performance Guarantee Testing Compressed Air Quality Monitoring andIndoor Air Quality Monitoring with more focus on regional business.
Electrical & electronics testing
The global digital health market size is expected to reach USD 295.4billion by 2028 and is projected to expand at a CAGR of 15.1% over the forecast period.Global demand for automobile electronics market was valued at approximately USD 250.3billion in 2019 and is expected to generate revenue of around USD 489.2 billion by end of2026 growing at a CAGR of around 10.2% between 2020 and 2026. The 5G infrastructuremarket was valued at USD 3.4 billion in 2020 and it is expected to reach USD 53 billionby 2026 registering a CAGR of 53.01% during the forecast period 2021-2026. The Indiangovernment has set the defence production target at USD 25.00 billion by 2025 includingUSD 5 billion by exports. Consumer Electronics Market size valued at USD 1 trillion in2019 and is estimated to grow at a CAGR of over 7% between 2020 and 2026 to USD 1.5trillion.
The growing Indian Regulation Continuous R&D Activities &Domain Specific Regulation are the key revenue drivers for the testing and certificationlaboratories. India's mandatory as well as voluntary product performance testing andlabelling standards and secondly the Government incentives and initiatives such as Makein India Start-up India NPE 2019 FAME etc. along with other enabling policies arehelping global technology firms (such as IT telecomm automobile AV IoT AI) set uptheir R&D centers in India. As such India is a vast market for such industries and hasbecome a key contributor in global R&D sector. Proactive government costefficiencies technical competencies and a low-cost workforce make India a lucrativedestination for companies setting up their R&D centers here. Global R&D centerspartner with startups & SMEs to tap into their knowledge and also save time and cost.This ecosystem provides ample opportunities for testing laboratories to support in productdevelopment and testing for EMI/EMC Safety and Environmental tests.
Vimta through its acquisition of EMTAC Laboratories Pvt Ltd. hasexpanded its services to now include electronics and electrical testing of variousproducts. With the addition of the EMI/EMC testing capabilities the company now has astrong USP in the EMI/EMC testing space.
The Risk Management Committee duly constituted by the Board hadformulated a Risk Management Policy for dealing with different kinds of risks attributableto the operations of the Company. Risk Management Policy of the Company outlines differentkinds of risks and risk mitigating measures to be adopted by the Board. The Company hasadequate internal control systems and procedures to combat risks. The Risk Managementprocedure will be reviewed periodically by the Audit Committee and the Board.
Risks are inherent to any business. They are managed by your Companythrough a risk management process of risk identification and risk mitigation through riskreduction strategies & plans and continuous monitoring of the effectiveness of therisk mitigation measures to control them.
Your company continues to strive to stay ahead on the competition curvethrough creation of new service opportunities operational excellence and itsuncompromising commitment to quality regulatory compliance and customer service. Howeverthere may be certain factors that are beyond Vimta's control that could adversely impactbusiness. A few that generally could impact most of the companies in this industryinclude change in regulations and regulatory environment; downturn in economies that ourbusiness operates in; steep drop in service prices from competition; increase in prices ofinput material; changes in laws such as tax laws etc. that could adversely impact thecompetitiveness of Vimta in global markets; foreign exchange risks; interest rate risks;risks from terrorism etc. There could be many more risks from external factors whichmanagement currently doesn't foresee to be material.
Other threats risks and mitigations
Quality related risks - Poor performance in regulatory audits andaccreditation body audits could adversely impact Vimta's business. Maintaining quality andcompliance is part of every activity in the organization. Your company's management leadsthe quality culture understanding very well that this is critical for business success andsurvival. However surprises from poor or inadequate performance by employees could leadto regulatory risks. There are adequate built in controls and checks to mitigate thisrisk. Nevertheless these risks cannot be completely ruled out.
Financial risks - Vimta makes continuous investments in capacityexpansion market reach and new business streams. These investments are based on goodbusiness judgement through market study backed up by strong planning and risk mitigationmeasures. However time factors and market dynamics could delay results and/or createrisks in obtaining returns on such investment. Other financial risks include bad debtsfrom customers for various reasons; and liquidity risks as a result of any poor cash flowsthat could further lead to non-servicing of loans. Your company has dedicated groups forcustomer relations management and credit control. There are adequate checks to identifyrisky customer accounts and control business with them to minimize risks. Neverthelessthese risks cannot be completely ruled out.
Data risks - As a third party provider of services we often get intovarious service agreements with customers including requirements on data confidentialitydata security and IP protection. Given the large scale of human resources involved in ourorganization and the inherent vulnerability of IT solutions deployed company may be atrisk as a result of unintentional violations of customer contracts and agreements whichcould further lead to significant legal risks for the business. This is mitigated throughstrong physical security and electronic security systems; trainings to employees businesscontinuity processes such as electronic data disaster recovery systems; confidentialityoaths from employees; well-propagated whistle blower policies etc. Nevertheless theserisks cannot be completely ruled out.
Pandemic risks - The impact of Covid-19 pandemic on the demand forCompany's services across the industries and geographies cannot be predicted withcertainty. However it is expected that our diversified services with many of themfalling under essential services will continue enabling company's resilience. Managementcontinues to closely watch the developments and service demands and swiftly takes actionsto scale operations appropriately. Despite the proactive steps initiated the increasingnumbers of Covid-19 infection across the country could temporarily impact teamproductivities and revenues.
Other risks include: Critical equipment breakdowns power breakoutsshort supply of any input material or consumable fire and natural calamities. These arehandled through a robust business continuity plan where adequate backups are created andtested from time to time for their effectiveness.
It is possible that the above risk analysis does not cover all risksexhaustively. But being an experienced organization the mitigation measures are in-builtinto the organization its strategy and processes which have so far helped theorganization go through and grow through various phases of business and the marketsituations. It will be management's continuous endeavour to develop strategies that wouldhelp the organization de-risk its business & grow with opportunities.
Key Financial Ratios
In accordance with SEBI (Listing obligations and Disclosure requirement2018) (Amendment) Regulations 2018 the company is required to give details ofsignificant changes (changes of 25% or more as compared to the immediately previousfinancial year) in key sector specific financial ratio.
The key financial ratios as under:
|Ratio ||Financial Year 2020-21 ||Financial Year 2019-20 |
|Debtors Turnover Ratio (in days) ||114.25 ||117.37 |
|Inventory Turnover Ratio (in days) ||27.73 ||36.53 |
|Interest Coverage Ratio ||14.10 ||3.22 |
|Current Ratio ||2.09 ||1.67 |
|Debt Equity Ratio ||0.40 ||0.41 |
|Operating Profit Margin (%) ||14.22 ||5.03 |
|Net Profit Margin (%) ||10.12 ||3.77 |
|Return on Net Worth (%) ||10.93 ||4.02 |
Debtors Turnover Ratio (in days) - calculated by dividing averageaccounts receivable (net of impairment loss on receivables) for last two years with therevenue from operation and multiplied by 365 days.
Inventory Turnover Ratio (in days) - calculated by dividing averageinventory for last two years with the revenue from operation and multiplied by 365 days.
Current Ratio - calculated by dividing the current assets with thecurrent liability of the company.
Debt Equity Ratio - calculated by dividing company's total liabilitiesby its shareholder fund.
Ratio where there has been a significant change from financial year2019-20 to financial year 2020-21 are as follows
Interest coverage ratio - is calculated considering the Earnings beforeInterest and Tax (EBIT) divided by the Interest Expenses. The Interest Coverage Ratio(ICR) is used to determine how well a company can pay the interest expenses on itsoutstanding debts. It also indicates how many times the company can pay its interestcompared to its operating profit. A higher Interest coverage ratio indicates less chanceof default by the company.
The company Interest coverage ratio has mainly increased from 3.22times to 14.10 times due to increase in EBIT and decrease in interest expense during thecurrent fiscal year.
Operating Profit Margin: - reflects the operating profit of the company(excluding other income) generated as a percentage of Total Revenue from operations. Bytracking increases and decreases in its operating profit margin an operationalperformance of the company can be measured in absolute terms.
The increase in operating profit is mainly owing to economies of scalearising from the increase in revenue for financial year 2020-21 by 16% over financial year2019-20.
Net Profit Margin: - reflects the net profit after tax is generated asa percentage of Total Income. By tracking increases and decreases in its net profitmargin an overall performance of the company can be measured in absolute terms.
The increase in net profit for financial year 2020-21 by 16% overfinancial year 2019-20 is mainly owing to economies of scale arising from the increase inrevenue and a careful cost management.
Return on Net Worth - Return on net worth (RONW) is a measure offinancial performance calculated by dividing net profit after tax by average shareholders'equity. RONW is considered a measure of how effectively management is using a company'sassets to create profits.
Net worth increased owing to significant growth of PAT in financialyear 2020-21. PAT grew by 3X times in financial year 2020-21 compared to financial year2019-20.
Material developments in human resources / industrial relationsincluding number of people employed
The COVID -19 pandemic rapidly introduced an array of new and elevatedrisks to the safety of our people resilience of our operations strength of our balancesheet and financial securities of the community. At Vimta we're committed to protectingthe safety and health of our employees our contractors and our customers. We are alsostrongly committed to ensure maximum possible extent continuity of service for ourclients. We have taken several measures for achieving both the objectives such asreinforcement of safety and hygiene protocols across our offices and facilities shieldinghigh-risk employees protecting frontline workers and moving office employees to 'remotework mode'. Additionally virtual meetings daily checkin calls to employees where neededincreased connect sessions with team leaders counselling services and other initiativesfocused on improving the employees' resilience.
As an Essential Service partner in business relationships true to ourcustomer centric approach we supported our clients and worked closely with them to meetthe commitments despite operational challenges presented by the pandemic. We haveconstantly monitored and performed contingency planning for several factors that couldhinder client delivery. A few employee self-services tools were developed and launchedduring this year. This enabled the employees to complete the respective processesseamlessly.
As on 31st March 2021 Company had 1096 employees.
Statements in the Management Discussion which are forward looking andactual factors that come into play for the business and the consequent results mightdiffer materially from those expressed or implied.
Your Directors have recommended a dividend of Rs. 2/- per equity shareof Rs. 2/- each for 2020-21 fiscal.
5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION &PROTECTION FUND (IEPF)
Members may please note that as per the provisions of Sections 124& 125 of the Companies Act 2013 read with Investor Education and Protection FundAuthority (Accounting Audit Transfer and Refund) Rules 2016 dividends that remainunclaimed for a period of seven years from the date of transfer to the Unpaid DividendAccount shall be transferred to the Investor Education & Protection Fund.
Some of the Shareholders have not claimed dividend for the followingyears and these amounts have been transferred to the respective Unpaid Dividend Accountsand are liable to be transferred to the Investor Education & Protection Fund as shownbelow:
|Year of Dividend - Final ||No. of Shareholders who have not claimed ||Unclaimed Amount ||Date of Declaration ||Date of transfer to unpaid account ||Last date of transfer to IEPF |
|2013-14 ||744 ||595150.00 ||07.07.2014 ||12.08.2014 ||11.08.2021 |
|2014-15 ||770 ||361246.00 ||21.08.2015 ||26.09.2015 ||25.09.2022 |
|2015-16 ||841 ||438203.00 ||02.09.2016 ||08.10.2016 ||08.10.2023 |
|2016-17 || ||Dividend Not Declared || |
|2017-18 ||649 ||375028.00 ||25.08.2018 ||30.09.2018 ||29.09.2025 |
|2018-19 ||525 ||342216.00 ||27.07.2019 ||01.09.2019 ||31.08.2026 |
|2019-20 || ||Dividend Not Declared || |
6. TRANSFER TO RESERVES
No amount is proposed to be transferred to reserves of the Company.
7. CORPORATE GOVERNANCE REPORT
In compliance with the provisions of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate report on corporate governancealong with a certificate from a practicing Company Secretary on its compliance is attachedherewith which forms an integral part of this Annual Report.
8. EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) ofthe Companies (Management and Administration) Rules 2014 the details forming part of theextract of the Annual Return in form MGT 9 is enclosed as Annexure I to this report andthe same is uploaded on the website of the Company www.vimta.com.
9. CORPORATE SOCIAL RESPONSIBILITY
The Company as part of its Corporate Social Responsibility (CSR)initiative undertook and supported many projects including promoting health carepromoting education including special education and employment enhancing vocation skillsespecially among children women elderly and the differently abled and livelihoodenhancement projects rural development projects and animal welfare wherein it rescues andrehabilitates sick and needy animals.
During the year under review the Company has spent a total sum of Rs.4492009/- on the CSR activities as approved by the CSR Committee. Disclosures as perRule 8 of Companies (Corporate Social Responsibility Policy) Rules 2014 is enclosed asAnnexure II to this report.
During the year under review five Board Meetings and four AuditCommittee Meetings were convened and held the details of which are given in the CorporateGovernance Report which forms part of this report. The intervening gap between theMeetings was within the time limits prescribed under the Companies Act 2013.
11. SHARE CAPITAL
The Authorised Share Capital is Rs. 70000000
(Rupees Seven Crore only) and Paid up Capital is Rs. 44215620(Rupees Four Crore Forty-Two Lakh Fifteen Thousand Six Hundred and Twenty Only) divided into 22107810 equity shares of Rs. 2/- each. During the year under review there was nochange in capital structure of the Company. Disclosure under Section 67(3)(c) of the Actin respect of voting rights not exercised directly by the employees of the Company is notapplicable.
12. ISSUE OF SHARES
During the year under review the Company has not:
i) Issued any shares with differential voting rights pursuant toprovisions of Rule 4 of the Companies (Share Capital and Debenture) Rules 2014;
ii) Issued any sweat equity shares to any of its employees pursuant tothe provisions of Rule 8 of the Companies (Share Capital and Debenture) Rules 2014; and
iii) Implemented any Employee Stock Option Scheme for its employees.
13. PURCHASE OF SHARES OF THE COMPANY
During the year under review the Company has not given any loanguarantee or security or any financial assistance to the employees of the Company for thepurpose of purchase or subscription for any shares of the Company pursuant to Section67(2) of the Act.
14. EMPLOYEE STOCK OPTION PLAN
The Board of Directors reviewed the structure and competitiveness ofthe employee compensation of the Company. The current compensation structure does not haveany component in the nature of long term incentive. Compensation best practices indicatethat stock based on long term incentive plans align managerial performance to long termshareholder value creation. In order to build ownership motivate and retain talent aswell as make compensation competitive the Board proposed for institution of an EmployeeStock Options Plan subject to approval of the shareholders in the ensuing annual generalmeeting.
15. CHANGE IN NATURE OF BUSINESS
There has been no change in the nature of business of the Companyduring the year under review.
16. PARTICULARS OF DEPOSITS
During the year under review your Company has not accepted any depositwithin the meaning of Sections 73 and 74 of the Companies Act 2013 read together with theCompanies (Acceptance of Deposits) Rules 2014 nor has contravened the Compliancerequirements of Chapter V of the Act.
EMTAC Est. in 2014 is a wholly subsidiary of Vimta Labs Ltd. Itsprincipal business is testing and certification. It provides safety/performance testingservices for electrical electronic and mechanical products and is also a physicalsecurity products (bank safes/lockers ATMs home use lockers fire wall doors etc.)certification company.
It's subsidiary's laboratory division is accredited to ISO 17025 byNational Accreditation Board for Testing and Calibration Laboratories (NABL) and thecertification division is accredited to ISO 17065 by NABCB (National Accreditation Boardfor Certification Bodies). It is also a Bureau of Indian Standards (BIS) approved andTelecommunication Engineering Center (TEC) designated laboratory established inHyderabad India. Its vision is to be one of the world's most respected product testingand certification laboratories recognized for its technical competence qualityintegrity and customer partnership.
The subsidiary was acquired by Vimta Labs Ltd. in March 2020. It isIndia's First Laboratory to be awarded NABL accreditation for Physical Security Productsand also the first Laboratory in Telangana state to be accredited by NABL for safetytesting of IT Products (viz. mobile phones CCTV cameras laptop components cashregisters set top boxes adapters etc.) UPS LED lights Electric Fans Power banksetc. It is the only lab recognized by BIS for testing of table fans. It has a very strongtechnical team which has made India's first ATM testing standard.
Investment in the wholly owned subsidiary is a strategic investment toenter into electronic and electrical testing space and has started performing recordinga growth of 37% in the financial year 2020-21 at Rs. 16.3 million. Profit before tax forthe financial year 2020-21 stands at Rs. 1.4 million compared to a loss of Rs. 2.2millions in the previous year.
The statement containing the salient features of the financialstatements of subsidiary as per sub-section (3) of Section 129 of the Companies Act 2013in Form AOC-1 is herewith annexed as Annexure III to this report.
18. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
The overall borrowings of your Company is within the limits specifiedunder the provisions of Companies Act 2013. Further the outstanding details of loanguarantees securities and investments as on 31st March 2021 (reported in FormMBP-2) pursuant to section 186 Companies Act 2013 are given in Annexure IV and formspart of this report.
19. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are provided in theprescribed format and annexed herewith as Annexure V to this Report.
The statement containing particulars of employees as required underSection 197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided separatelyin Annexure V forming part of this report. Further the Report and the accounts are beingsent to the members excluding the aforesaid annexure. In terms of Section 136 of the Actthe said annexure is open for inspection at the Registered Office of the Company duringthe business hours till the date of the ensuing Annual General Meeting. Any shareholderinterested in obtaining a copy thereof may write to the Company Secretary of the Company.
During the year under review the Auditors have not made anyqualification reservation or adverse remark or disclaimer in their Report on thefinancial statements of the Company and there was no instance of fraud reported by theauditors under section 143(12) of the Companies Act 2013.
b) Statutory Auditors
Pursuant to the provisions of sections 139142 and other applicableprovisions of the Act read with rules made thereunder M/s Gattamaneni & Co.Chartered Accountants (Firm Reg. No. 009303S) were appointed as Statutory Auditors for aperiod of five consecutive years at the 27th Annual General Meeting (AGM) heldon 27th September 2017 by the Members on a remuneration to be mutually agreedupon by the Board of Directors and the Statutory Auditors. They hold office until theconclusion of the AGM to be held in the calendar year 2022. The auditors have confirmedthat they hold valid certificate issued by the Peer Review Board of the Institute ofChartered Accountants of India and eligible to continue to hold the office for rest oftheir tenure.
c) Internal Auditors
Pursuant to the provisions of section 139 of the Act and based onrecommendations of Audit Committee the Board of Directors at their meeting held on 14thMay 2021 reappointed M/s Chaitanya V & Associates Chartered Accountants as InternalAuditors of the Company for the financial year 2021-2022. M/s Chaitanya V &Associates Chartered Accountants have confirmed their consent for the appointment.Further the Audit Committee in consultation with Internal Auditors formulated the scopefunctioning periodicity and methodology for conducting the Internal Audit.
d) Cost Auditors
On the recommendations of Audit Committee the Board of Directors atits meeting held on 23rd January 2021 accepted the resignation of M/s U S Rao& Co. Cost Accountants Cost Auditors of the company who have resigned due to theirpersonal pre-occupations.
Pursuant to the provisions of section 148 of the Act read with theCompanies (Audit and Auditors) Rules 2014 and based on the recommendation of the AuditCommittee the Board of Directors at their meeting held on 23rd January 2021appointed M/s Lavanya & Associates Cost Accountants (Firm Registration No. 101257) toconduct the cost audit of the Company for the financial year 2020-21. Necessary item isincluded in the notice convening 31st AGM of the Company to ratify theremuneration payable to the cost auditor for 2020-2021.
Based on the recommendations of Audit Committee Board of Directors attheir meeting held on 14th May 2021 reappointed M/s Lavanya & AssociatesCost Accountants (Firm Registration No. 101257) as Cost Auditors of the Company for thefinancial year 2021-2022. A resolution seeking ratification of remuneration payable to M/sLavanya & Associates Cost Accountants to conduct cost audit of the Company for thefinancial year 2021-22 has been included in the notice convening 31st AGM ofthe Company. The necessary consent letter and certificate of eligibility was received fromM/s Lavanya & Associates confirming their eligibility to be re-appointed as the CostAuditors of the Company.
e) Maintenance of cost records
The Company is maintaining the cost records as specified by the CentralGovernment under subsection (1) of section 148 of the Companies Act 2013.
f) Secretarial Auditors
Pursuant to the provisions of section 204 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and based onthe recommendations of the Audit Committee the Board of Directors at their meeting heldon 14th May 2021 reappointed M/s D Hanumanta Raju & Co. Practicing CompanySecretaries as Secretarial Auditors for the financial year 2021-22. The consent letter andcertificate of eligibility was received from M/s D Hanumanta Raju & Co. confirmingtheir eligibility for the appointment.
The Secretarial Audit Report for the financial year 2020-21 in theprescribed form MR-3 is enclosed to this Report as Annexure VI.
g) Annual Secretarial Compliance Report
Secretarial Compliance Report for the financial year ended March 312021 on compliance of all applicable SEBI Regulations and circulars/ guidelines issuedthereunder was obtained from M/s D Hanumanta Raju & Co. Practicing CompanySecretaries and submitted to both the stock exchanges.
21. AUDIT COMMITTEE
The Board has constituted Audit Committee as per the provisions ofSection 177 of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The composition attendance powers and role of the AuditCommittee are included in Corporate Governance Report. All the recommendations made by theAudit Committee were accepted by the Board of Directors.
22. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERALMEETINGS
During the year under review the Company has complied with secretarialstandards issued by the Institute of Company Secretaries of India as applicable to BoardMeetings and Annual General Meetings.
23. POSTAL BALLOT
During the year under review no postal ballot resolutions were passed.
24. DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliancesystems established and maintained by the Company the work performed by the InternalStatutory and Secretarial Auditors and the reviews performed by the Management and therelevant Board Committees including the Audit Committee the Board believes that theCompany's internal financial controls were adequate and effective during the year ended 31stMarch 2021.
Accordingly pursuant to section 134(5) of the Act based on the aboveand the representations received from the Operating Management the Board of Directors tothe best of their knowledge and ability state that:
i) In the preparation of the annual accounts the applicable accountingstandards have been followed and that there were no material departures therefrom;
ii) They had selected such accounting policies as mentioned in thenotes to the financial statements and applied consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the company as at 31st March 2021 and of the profit of theCompany for year ended on that date;
iii) They had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
iv) They had prepared the annual accounts on a going concern basis;
v) They had laid down proper internal financial controls to be followedby the Company that such internal financial control were in place and that the financialcontrols were adequate and were operating effectively; and
vi) They had devised proper systems to ensure compliance with theprovisions of all applicable laws that such systems were adequate and operatingeffectively.
25. DIRECTORS AND KEY MANGERIAL PERSONNEL
The Board of Directors of the Company has an optimum combination ofExecutive Non-Executive and Independent Directors.
a) Directors retiring by rotation
As per the provisions of the Act and the Articles of Association of theCompany Shri. Satya Sreenivas Neerukonda Executive Director retires by rotation andbeing eligible offers himself for re-appointment.
The proposal for re-appointment of Shri. Satya Sreenivas Neerukonda isbeing placed at the AGM along with the necessary details.
b) Changes in Directorship / Committee Position
During the year under review Shri. P.A. Chowdary Independent Directorof the Company resigned from the office on 30th June 2020.
The Board places on record its appreciation for the services renderedby him during his association with the Company.
During the year under review Dr. Yadagiri R Pendri (DIN: 01966100) wasappointed as Independent Director w.e.f. 10th August 2020.
With the above changes in the Directors following committees werereconstituted and the present composition of the Committees is as follows:
|Audit Committee ||Position |
|Shri. G Purnachandra Rao ||Chairman |
|Smt. Y Prameela Rani ||Member |
|Shri. Sanjay Dave ||Member |
|Stakeholders Relationship Committee ||Position |
|Smt. Y Prameela Rani ||Chairperson |
|Shri. G Purnachandra Rao ||Member |
|Shri. Sanjay Dave ||Member |
|Nomination and Remuneration Committee ||Position |
|Shri. Sanjay Dave ||Chairman |
|Shri. G Purnachandra Rao ||Member |
|Smt. Y Prameela Rani ||Member |
|Corporate Social Responsibility Committee ||Position |
|Smt. Harita Vasireddi ||Chairperson |
|Shri. Harriman Vungal ||Member |
|Shri. Sanjay Dave ||Member |
c) Disclosure by Directors
None of the Directors of your Company are disqualified as per theprovisions of Section 164(2) of the Companies Act 2013. Your Directors have madenecessary disclosures to this effect as required under Companies Act 2013. Further theCompany has obtained Certificate pursuant to Regulation 34(3) and Schedule of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 from M/s D HanumantaRaju & Co. Practicing Company Secretaries Secretarial Auditors and attached the sameto this report.
d) Reappointment of Executive Director- Operations Shri. HarrimanVungal (DIN: 00242621)
The members of the Company at the 29th Annual GeneralMeeting held on 27th July 2019 granted approval for the reappointment of Shri.Harriman Vungal (DIN: 00242621) as Executive Director- Operations of the Company liableto retire by rotation for a term of 2 (two) years w.e.f. 14th July 2019 up to13th July 2021.
Shri. Harriman Vungal will attain the age of 70 years on 1stOctober 2021 and hence pursuant to the provisions of section 196(3)(a) of the CompaniesAct 2013 his reappointment as Executive Director - Operations requires approval ofmembers by way of special resolution.
The Board of Directors at its meeting held on 14th May 2021on the recommendation of Nomination and Remuneration Committee appointed Shri. HarrimanVungal as Executive Director - Operations for a period of three years w.e.f. 14thJuly 2021 to 13th July 2024 subject to approval of members at the ensuingAnnual General Meeting. Necessary item is included in the notice of AGM for the approvalof members.
e) Changes in the Key Managerial Personnel
During the year under review Shri. Amit Pathak Chief FinancialOfficer of the Company resigned from the office on 28th January 2021 and Shri.D.R. Narahai Naidu was appointed as Chief Financial Officer of the Company w.e.f. 22ndFebruary 2021.
Apart from the above said changes there were no other changes in KMPsof the Company.
f) Declaration by Independent Directors
As per the requirement of section 149(7) of the Act all theIndependent Directors of the Company have submitted their respective declarations thatthey fulfil the criteria of independence under Section 149 of the Act and Regulation 25 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
26. REMUNERATION POLICY
Based on the recommendation of Nomination & Remuneration Committeethe Board of Directors approved and adopted a Remuneration Policy for selection andappointment of Directors Key Managerial Personnel and other employees of the Company asrequired under Section 178(3) of the Act.
The Nomination and Remuneration Policy is set out as Annexure - VII andforms an integral part of this Report and can also be accessed at the website of theCompany.
27. HUMAN RESOURCES
Your Company considers its Human Resources as the key to achieve itsobjectives. Keeping this in view your Company takes utmost care to attract and retainquality employees. The employees are sufficiently empowered and such work environmentpropels them to achieve higher levels of performance. The unflinching commitment of theemployees is the driving force behind the Company's vision. Your Company appreciates thespirit of its dedicated employees.
28. PARTICLUARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the contracts/ arrangements/ transactions entered by the Companyduring the year under review with related parties were in the ordinary course of businessand at arm's length basis. The particulars of such contracts or arrangements with relatedparties pursuant to the provisions of section 134(3)(h) and Rule 8 of the Companies(Accounts) Rules 2014 in the prescribed form AOC-2 is enclosed as Annexure - VIII.
The policy on Related Party Transactions as approved by the Board isuploaded on the website of the Company.
29. CONSIDERATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 is enclosed asAnnexure - IX to this report.
30. RISK MANGEMENT
Your Company continues to have an effective Risk Management process inplace. The management and the Board continuously oversees the risk management processincluding identification impact assessment and drawing mitigation plans. The details ofrisks perceived by the Management are reported in the Management Discussion and AnalysisReport.
31. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITSCOMMITTEES AND OF DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and Regulation 25of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hascarried out the annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Audit Nomination andRemuneration and all other Committees.
A structured questionnaire was prepared after taking into considerationthe inputs received from the Directors covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its Committees Boardculture execution and performance of specific duties obligations and governance aspects.
A separate exercise was carried out to evaluate the performance ofindividual Directors including the Chairman of the Board who were evaluated on parameterssuch as level of engagement and contribution independence of judgement safeguarding theinterest of the Company and its minority shareholders etc. The performance evaluation ofthe Independent Directors was carried out by the entire Board. The performance evaluationof the Chairman and the Non Independent Directors was carried out by the IndependentDirectors who also reviewed the performance of the Secretarial Department. The Directorsexpressed their satisfaction with the evaluation process.
32. CODE OF CONDUCT FOR BOARD OF DIRECTORS AND SENIOR MANAGEMENTPERSONNEL
The Company has in place a comprehensive Code of Conduct (the Code)pursuant to Regulation 17(5) of SEBI (LODR) Regulations applicable to all the seniormanagement personnel and directors including independent directors to such extent as maybe applicable to them depending on their roles and responsibilities. The Code coversduties of independent directors and also gives guidance and support needed for ethicalconduct of business and compliance of law. Further a policy on obligation of directorsand senior management personnel for disclosure of committee positions and commercialtransitions pursuant to Regulation 26(2) (5) and (6) of Listing Regulation is in place.All the Directors and senior management confirmed the compliance to the code of conduct.Declaration on compliance with Code of Conduct is annexed herewith as Annexure - X to theCorporate Governance Report.
33. PREVENTION OF INSIDER TRADING
Pursuant to SEBI (Prohibition of Insider Trading)(Amendment)Regulations 2018 the Company has adopted the Code of Internal Procedures andConduct for Regulating Monitoring and Reporting of Trading by Designated Persons andtheir immediate relatives along with Code of Fair Disclosures.
34. POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUALHARASSMENT AT WORK PLACE
The Company has adopted a policy on Prevention Prohibition andRedressal of Sexual Harassment at Work Place. Company formed a Committee to attend to anycomplaint of sexual harassment. During the financial year ended 31st March2021 the Company has not received any complaint from any employee pertaining to anysexual harassment.
35. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy framed to deal with instance offraud and mismanagement if any in the Company. The Policy provides for adequatesafeguards against victimization of employees who avail the mechanism and also providesfor direct access to the Chairman of the Audit Committee. The details of the Policy areexplained in the Corporate Governance Report and also posted on the website of theCompany.
36. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has appropriate internal control systems for businessprocesses efficiency in its operations and compliance with all the applicable laws andregulations. Regular internal checks and audits ensure that the responsibilities are beingeffectively executed. In-depth review of internal controls accounting procedures andpolicies of Company is conducted. Your Company has adopted adequate internal control andaudit system commensurate with its size and nature of business.
Internal audit is carried on a quarterly basis. Internal auditors workwith all levels of management and the report is placed before the audit committee. Theaudit committee after reviewing the findings and suggestions directs the respectivedepartments through Board to implement the same.
37. CASH FLOW STATEMENT
In due compliance of the listing agreement and in accordance with therequirements prescribed by SEBI the cash flow statement is prepared and is appended tothis Annual Report.
38. 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
No material changes have occurred subsequent to the end of thefinancial year of the Company to which the financial statements relate and till the dateof the report that will have an impact on the financial position of the Company.
39. PARTICULARS OF SIGNIFICANT/MATERIAL ORDERS PASSED IF ANY
During the year under review there were no significant and / ormaterial orders passed by any Regulator/ Court/ Tribunal which could impact the goingconcern status of the Company and its operations in future.
40. GREEN INITIATIVE IN CORPORATE GOVERNANCE
The Ministry of Corporate Affairs (MCA) has taken a green initiative inCorporate Governance by allowing paperless compliances by the Companies and permitted theservice of Annual Reports and documents to the shareholders through electronic modesubject to certain conditions. Your Company supports the green initiatives and practicesthem as per the conditions laid down. Members who have not yet registered their emailaddresses are requested to register the same with their Depositories in case the sharesare held by them in electronic form and with Company's Registrars and Transfer Agents CILSecurities Limited in case the shares are held by them in physical form.
The Directors wish to place on record their a special greatappreciation for the contributions made by the employees at all levels for theirsincerity hard work solidarity and dedicated support to the Company during the pandemicyear. The Directors also wish to place on record their gratitude to shareholders and thankthe customers vendors consultants bankers and all other stakeholders for theircontinued support to the Company.