Your Directors have pleasure in presenting the 33rd Annual Report andAudited Financial Statements for the year ended 31st March 2019 together withthe Independent Auditors Report.
1. FINANCIAL RESULTS
(Rs. in Lakhs)
|Particulars ||2018-19 ||2017-18 |
|Net revenue from operations ||1572 ||4589 |
|Other income ||15 ||28 |
|Profit (Loss) before Depreciation ||(881) ||(171) |
|Depreciation ||25 ||29 |
|Exceptional items ||735 ||Nil |
|Profit (Loss) before Taxation ||(122) ||(200) |
|Profit (Loss) after Taxation ||(288) ||(200) |
2. PERFORMANCE OF THE COMPANY:
Last year was a very tough year for your company. Increased competition in the exportmarket resulted in substantial reduced revenue. Reduction in sales affected theprofitability.
Demand for thin clients is expected to witness high growth in the coming years due tothe reduced cost and energy consumption easy and centralized manageability and increasedinfrastructure security associated with these devices. Rising requirement of cost savingsin enterprises is expected to drive the thin client market.
The demand for thin clients is increasing in health care and education sector.Enterprises are looking for the devices that would reduce the desk space and offer an easyreplacement option for old systems. The thin clients qualify these requirements which inturn is increasing the demand in these industries.
Quick delivery and installation and preference of the users to our software offeringare expected to push the demand for thin clients.
3. RESERVES: In view of the losses the question of transferring any amount to Reservesdoes not arise.
4. SHARE CAPITAL: There were no changes in the Share Capital of the Company during thefinancial year.
Disclosure regarding Issue of Equity Shares with Differential Voting Rights
During the financial year under review the Company has not issued Shares under withDifferential Voting Rights
Disclosure regarding issue of Employee Stock Options
During the financial year under review the Company has not issued Shares underEmployee Stock Options.
Disclosure regarding issue of Sweat Equity Shares
During the financial year under review the Company has not issued Sweat Equity Shares.
5. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:
There were no material changes and commitments which occurred between the end of thefinancial year and the Date of the Report which affect the financial position of theCompany.
6. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
There are no material changes after 31st March 2019 till the signing ofthis Report.
7. CHANGE IN NATURE OF BUSINESS:
There were no changes in the nature of business during the year under review asprescribed in Rule 8(ii) of the Companies (Accounts) Rules 2014.
Whilst your Directors understand the sentiments of the Investors the financials in theyear that has passed do not enable the Board to recommend any dividend. The Board regretsits inability to recommend any Dividend.
VXL Instruments Limited
However the Directors will strive hard to bring the Company back to dividend trackbefore long and the improving performance of the Company is hoped to continue tofacilitate consideration of dividend in the days to come.
9. BOARD MEETINGS:
The Meetings of the Board are held at regular intervals with a time gap of not morethan 120 days between two consecutive Meetings. Additional Meetings of the Board ofDirectors are held when necessary. The Agenda of the Meeting is circulated to theDirectors in advance. Minutes of the Meetings of the Board of Directors are circulatedamongst the Members of the Board for their perusal.
The Board of Directors duly met Nine (9) times during the financial year on 30th May2018 11th July 2018 24th July 2018 31st July 2018 19th September 2018 26th September2018 31st October 2018 7th December 2018 and 29th January 2019.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
|SI. No. ||Name ||Designation ||DIN |
|1. ||Mr.ArunKumar Bhuwania* ||Chairman and Non-Independent Director ||00387445 |
|2. ||Mr. M. V. Shetty ||Whole Time Director ||00515711 |
|3. ||Mr. Vivek Gupta ||Independent Director ||00025519 |
|4. ||Mrs. Kumkum Bhuwania ||Independent Director ||07160610 |
|5. ||Mr. Rakesh Shridas Damani ||Independent Director ||07580652 |
|6. ||Mr. Kishan S Rao ||CFO ||N.A |
|7. ||Ms Shipra Vyas* ||Company Secretary & Compliance Officer ||N.A |
*Mr ArunKumar Bhuvania Resigned from office of Chairmen & Non Independent Directorw.e.f. 11th July 2019. *Ms Shipra Vyas appointed as Company Secretary &Compliance Officer of the Company w.e.f. 30th May 2019.
11. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their Independence laid down in Section 149(6).
12. COMPOSITION OF AUDIT COMMITTEE NOMINATION AND REMUNERATION COMMITTEE ANDSTAKEHOLDERS RELATIONSHIP COMMITTEES.
Following are the composition of various Committees:
|i) ||Composition of Audit Committee: || || |
|a) ||Mrs Kumkum Bhuwania ||- ||Chairperson |
|b) ||Mr. Vivek Gupta ||- ||Member |
|c) ||Mr. Rakesh Shridas Damani ||- ||Member |
|ii) ||Nomination and Remuneration Committee: || || |
|a) ||Mr. Vivek Gupta ||- ||Chairman |
|b) ||Mr. Rakesh Shridas Damani ||- ||Member |
|iii) ||Composition of Stakeholders Relationship Committee: || || |
|a) ||Mr. Vivek Gupta ||- ||Chairman |
|b) ||Mr. Rakesh Shridas Damani ||- ||Member |
13. RISK MANAGEMENT POLICY:
The Company has not yet formulated a Risk Management Policy and has in place amechanism to inform the Board Members about risk assessment and minimization proceduresand undertakes periodical review to ensure that executive management controls risk bymeans of a properly designed framework.
14. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Company has established an effective Vigil Mechanism pursuant to the provisions ofSections 177(9) and (10) of the Companies Act 2013 and as per Regulation 4(2)(d)(iv) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 which isavailable on website of the Company at url http://www.vxl.net/percheditor/resources/vxlwhistleblowerpolicy and there were no cases reportedduring the last period.
15. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY:
The Directors have laid down internal financial controls to be followed by the Companyand such policies and procedures adopted by the Company for ensuring the orderly andefficient conduct of its business including adherence to Companys policiessafeguarding of its assets prevention and detection of frauds and errors accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation.
16. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN OR SECURITY PROVIDEDBY THE COMPANY:
The Company has not given any loan or guarantees covered under the provisions ofSection 186 of the Companies Act 2013.
17. DIRECTORS RESPONSIBILITY STATEMENT:
In pursuance of Section 134(3)(c) of the Companies Act 2013 the Directors herebyconfirm that: a) In the preparation of the Financial Statements the applicable AccountingStandards had been followed along with proper explanation relating to material departures;b) The Directors had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit and loss of the Company for that period; c) The Directors had taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d) The Directors had prepared the FinancialStatements on a going concern basis; e) The Directors had laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and were operating effectively and f ) The Directors had devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.
18. EXTRACT OF ANNUAL RETURN:
As required pursuant to Section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of Annual return inMGT-9 is attached as a part of this Annual Report as Annexure I.
19. STATUTORY AUDITORS:
Messrs YCRJ & Associates Chartered Accountants (ICAI Firm Registration No.006927S) were appointed as the Statutory Auditors of the Company for a period of 5 (Five)years from the conclusion of the 31st Annual General Meeting up to theconclusion of the 36th Annual General Meeting.
20. SECRETARIAL AUDIT REPORT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. J V Shivaprakash Bengaluru a Company Secretary in Practice to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Auditor in the form ofMR-3 is annexed to this Report as Annexure - II.
Explanations by the Board on the comments of Statutory/Secretarial Auditors:
During the financial year under review there were no qualifications reservations oradverse remarks made by the Statutory Auditors/Secretarial Auditors in their respectiveReports.
21. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
|(A) Conservation of energy: || |
|Steps taken / impact on conservation of energy ||The Companys operations are not power intensive. Nevertheless your Company has introduced various measures to conserve and minimize the use of energy wherever it is possible. |
|(i) Steps taken by the company for utilizing alternate sources of energy including waste generated ||Nil |
|(ii) Capital investment on energy conservation equipment ||Not Applicable |
|Total energy consumption and energy consumption per unit of production as per Form A ||Not Applicable |
|(B) Technology absorption: || |
|Efforts in brief made towards technology absorption adaptation and innovation ||Nil |
|Benefits derived as a result of the above efforts e.g. product improvement cost reduction product development import substitution etc. ||Not Applicable |
|In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year) following information may be furnished: ||Nil |
|Technology imported ||Not Applicable |
|Year of Import ||Not Applicable |
|Has technology been fully absorbed ||Not Applicable |
|If not fully absorbed areas where this has not taken place reasons therefore and future plan of action ||Not Applicable |
|(C) Research and Development (R&D) || |
|Specific areas in which R & D carried out by the company ||Research & Development Expenditures in respect of Development of Thin Client |
| ||Embedded Operating Systems. |
|Benefits derived as a result of the above R & D ||Not Applicable |
|Future plan of action ||Not Applicable |
|Expenditure on R & D || |
|(a) Capital ||Nil |
|(b) Recurring ||Nil |
|(c) Total ||Nil |
|(d) Total R & D expenditure as a percentage of total turnover ||Nil |
(D) Foreign exchange earnings and Outgo
|Activities relating to exports ||Company is an Exports Oriented Unit and focuses mainly on Exports. |
|Initiatives taken to increase exports ||We are putting continuous efforts to increase Exports. |
|Development of new export markets for products and services ||Efforts are on to develop new Export market. |
|Export plans ||Efforts are on to develop new Export market. |
|Total Exchange used (Cash basis) ||As on 31st March 2019: Rs. 178296/- |
|Total Foreign Exchange Earned (Accrual Basis) ||As on 31st March 2019: Nil. |
Your Company has not invited/accepted/renewed any deposits from public as defined underthe provisions of Companies Act 2013 and Companies (Acceptance of Deposits) Rules 2014and accordingly there were no deposits which were due for repayment on or before 31stMarch 2019.
23. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company continued to maintain high standards of internal control designed toprovide adequate assurance on the efficiency of operations and security of its assets. Theadequacy and effectiveness of the internal control across various activities as well ascompliance with laid-down systems and policies are comprehensively and frequentlymonitored by your Companys management at all levels of the organization. The AuditCommittee which meets at least four times a year actively reviews internal controlsystems as well as financial disclosures with adequate participation inputs from theStatutory Internal and Corporate Secretarial Auditors.
24. MATERIAL ORDER PASSED BY ANY COURT OR REGULATOR OR TRIBUNAL IMPACTING GOING CONCERNSTATUS OF COMPANY:
No order was passed by any court or regulator or tribunal during the period underreview which impacts going concern status of the Company.
25. RELATED PARTY TRANSACTIONS (RPTs):
All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are of a foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted are audited and a statement giving details ofall related party transactions is placed before the Audit Committee and the Board ofDirectors for their approval.
The Policy on Related Party Transactions as approved by the Board is uploaded on theCompanys website. Web link for the same ishttps://www.vxl.net/investors/disclosures. Particulars of Contracts or Arrangements withRelated parties referred to in Section 188(1) of the Companies Act 2013 in Form AOC- 2annexed to this Report as Annexure - III.
26. HUMAN RESOURCES AND INDUSTRIAL RELATIONS:
Your Company recognizes the critical significance of competent and experiencedemployees. The team VXL Instruments continued to stand by the Company during tiring andtough times and your Board places its appreciation for these relentless efforts untiringdedication and sense of belongingness exhibited by the employees at all levels. YourCompany focuses on long term Human Resources planning aimed at managing change moreefficiently grooming internal talent for future roles and also driving efficiency withinthe Organization.
There were various cases pending with the Honourable High Court of Karnataka and in theCourt of Industrial Tribunal. This was mainly on account of the closure of the unitmanufacturing CRT Terminals which were phased out in the national and internationalmarket. Further on 18th July 2018 settlement with 31 workmen was reached(more than 50% of the workmen included in all the pending cases) and the same recorded bythe Honourable High Court and in the Industrial Tribunal. The payments to the settledworkmen were done from the deposit placed with the Honourable High Court and there is nocash outflow for the Company. There are 28 workmen involved in various cases who have nottaken the settlement. Further after taking into account the deposit and interest thereonplaced with the Honourable High Court the outflow would be minimal if they were to besettled.
Industrial relations have been cordial and constructive which have helped your Companyto meet customers demands.
27. DETAILS OF HOLDING COMPANY/SUBSIDIARIES/JV:
VXL Instruments Limited UK a Subsidiary Company was wound up by the Honourable HighCourt of Justice Chancery Division Companies Court United Kingdom vide its Order dated 7thNovember 2016. Further to the Insolvency Proceedings under the Insolvency Act 1986 VXLUK was dissolved on 11th March 2018. Pursuant to this the Company hasrequested permission from the Reserve Bank of India for writing off the Investments of 108000 in the Joint Venture.
28. ANNUAL BOARD EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard has carried out an annual performance evaluation of its own performance and theDirectors individually. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report.
29. CORPORATE SOCIAL RESPONSIBILITY:
Since the Company does not meet the criteria for the applicability of Section 135 ofthe Companies Act read with the Companies (Accounts) Rules 2015 the same is notapplicable.
30. NOMINATION AND REMUNERATION COMMITTEE POLICY:
On the recommendation of the Nomination and Remuneration Committee the Board hasframed a Policy for selection and appointment of Directors Senior Management and forother employees and their remuneration. The same has been disclosed on the website of theCompany.
31. RATIO OF REMUNERATION TO EACH DIRECTOR:
Pursuant to Section 197(12) of the Companies Act 2013 and Rule 5(1)(2)(3) of theCompanies (Appointment and Remuneration) Rules 2014 details/disclosures of Ratio ofRemuneration to each Director to the median employees remuneration is annexed tothis report as Annexure-IV.
32. LISTING WITH STOCK EXCHANGE:
The Company confirms that it has paid the Annual Listing fees for the financial year2019-20 to BSE Limited where the Companys Shares are listed.
33. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:
A separate Report on Corporate Governance in terms of Regulation 34 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 along with a Certificate from aPractising Company Secretary regarding compliance to the Conditions stipulated underChapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isattached to this report as Annexure V.
34. CAPITAL EXPENDITURE:
As on 31st March 2019 the gross tangible and intangible assets stood atRs. 84701706/- and the net tangible and intangible assets at Rs. 73699835/-.Additions during the financial year amounted to Rs. 2047365/-. The Company has notpurchased any assets under lease.
35. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) 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 &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed offduring the financial year 2018-19: No. of complaints received: NIL
No. of complaints disposed off: NIL
36. MANAGEMENT DISCUSSION AND ANALYSIS:
As requisite and appropriate Management Discussion and Analysis is covered under thisReport itself a separate note on the same is not being furnished.
The Directors place on record their appreciation for valuable contribution made byemployees at all levels active support and encouragement received from the Government ofIndia Government of Maharashtra Government of Karanataka Companys BankersCustomers Principals Business Associates and other Acquaintances.
Your Directors recognize the continued support extended by all the Shareholders andgratefully acknowledge with a firm belief that the support and trust will continue infuture also.
| ||For and on behalf of the Board of Directors || |
|Place: Bangalore ||Vivek Gupta ||M. V. Shetty |
|Date : 29th July 2019 ||Independent Director ||Whole Time Director |
| ||DIN: 00025519 ||DIN: 00515711 |
| ||Address: 87 Dariya Mahal A 80 ||Address: No 317 5th Main |
| ||Nepean Sea Road Malbar Hill ||1st Block Koramangala |
| ||Mumbai - 400006 ||Bangalore-560 034 |