vapi paper mills ltd Directors report

To,

The Members,

Your Directors have pleasure in presenting their 49th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31st, 2023.

1.FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANY (Standalone)

The Boards Report has been prepared based on the standalone financial statements of the company.

Particulars	2022-2023	2021-2022
	(Amt in Rs.)	(Amt in Rs.)
Revenue	1,42,98,573	1,42,67,858
Other Income	1,80,30,673	1,10,20,888
Total Income	3,23,29,246	2,52,88,746
Expenses
Operating expenditure	1,68,40,415	1,96,16,757
Depreciation and amortization expense	13,09,347	17,38,317
Total expenses	1,81,49,762	2,13,55,074
Profit before finance costs and tax	1,41,79,484	39,33,672
Finance costs	0	0
Exceptional Items	(47,57,26,897)	1,17,431
Profit before tax (PBT)	48,99,06,381	38,16,241
Tax expense	10,50,00,000	12,65,000
Profit for the year	38,49,06,381	25,51,241
Attributable to:
Shareholders of the Company
Non-controlling interests	NA	NA
Opening balance of retained earnings	(14,05,23,909)	(14,30,75,150)
Closing balance of retained earnings	24,43,82,472	(14,05,23,909)

2. COMPANYS PERFORMANCE

During the year Company has earned revenue of Rs 3,23,29,246 (Previous year Rs 2,52,88,746) and incurred a profit before exceptional items, depreciation, and taxes of Rs 1,54,88,831 (Previous year Rs 56,71,989). The company earned an exceptional amount in the form of Capital Gains from relinquishing leasehold land rights net of transaction related expenses of Rs 47,57,26,897, details of which are shared below. Net of exceptional corporate income taxes payable on this transaction, the company has turned net worth positive.

As declared in our last year Annual report, we wish to reiterate that the Board at its meeting held on 23/12/2021 approved to relinquish the leasehold rights towards Plot No. 298/1,2/3 & 299 admeasuring about 32,440 Sq. Meters situated at Phase 2, GIDC, Vapi, Gujarat - 396195 together with all easements, rights, profits, privileges, advantages and rights appurtenant for a consideration based on the terms and conditions of a Memorandum of Understanding (MOU) received and approved and subsequently executed on 24/12/2021.

Disclosure of Information pursuant to Regulation 30 of the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015 read with the SEBI Circular No. CIR/CFD/CMD/4/2015 dated September 9, 2015, for sale or disposal of unit(s) or division(s) or subsidiary of the listed entity are as follows:

Name of the Buyer: Bayer Vapi Private Limited (CIN U99999GJ1990PTC049322 and PAN AABCB2100L), Plot no. 306/3, II Phase, GIDC Estate, Vapi-396195

Consideration Amount: Rs. 50,28,20,000/= (Rupees Fifty Crore Twenty-Eight Lakh Twenty Thousand Only) net of Indirect taxes on the mutually agreed terms and conditions as laid down in the Memorandum of Understanding (MOU) approved by the Board.

This transaction was subject to meeting various conditions including the approval from the Gujarat Industrial Development Corporation ("GIDC"), satisfaction of legal due diligence and other necessary approvals and clearances from regulatory bodies. The company will continue to operate normal operations at the site until all the conditions and approvals are met.

It is further informed that the company has 100% of its revenue and 100% of its net worth connected to activities at this site and hence this is a "Material Event" disclosure as defined by the policies.

The Board hereby certifies that the transaction is not with any "Related Party".

None of the Directors or Promoter Shareholders are in any current form or in the past connected or an interested party to the proposed Buyer.

We wish to further intimate that the company in March 2023, has received all final approvals from the Gujarat Industrial Development Corporation ("GIDC") and provided satisfaction of all legal due diligence and other necessary approvals and clearances from regulatory bodies to relinquish the leasehold rights towards Plot No. 298/1,2/3 & 299

Pursuant to these approvals, the transaction has been registered and executed and accounted for in the quarter ended March 2023 and financial year ended March 2023.

As per terms of the MOU, the company is currently in the process of winding down all activities at the site, removing of all structures and equipments at the site, undertaking environmental clean up of the land and finish preparation for final handover and possession, which is expected to be completed by the early part of the second half of financial year 2023-2024.

Shareholders approval, pursuant to the provisions Section 180(1)(a) and Section 110 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 has been taken vide Resolution No 4 which has been passed in the Annual General Meeting of the Company held on 30th September,2019.

The company continues to safeguard all company assets in a conservative manner and continues to constantly evaluate value enhancing opportunities for the company. It is the stated long term goal of the company to be net worth positive and to improve the financial position of the company to enable long term value creation for shareholders by increase in share value, dividends and/or buybacks.

We are pleased to inform you that our company has diligently managed and deposited shareholder funds into interest bearing bank deposits in a bank of pristine credit rating. The safety and growth of your investments are of utmost importance to us, and we have taken steps to ensure that your funds are safeguarded while working to enhance their value.

Your Company has decided to not declare dividend at the current time pending full completion of the transaction and completion of tax returns and assessments. The Board of Directors will in due course consider taking appropriate steps to declare dividends and/or consider share buybacks with appropriate timings and terms in order to enhance shareholder value.

We continue to explore new markets, products, projects and partnerships so as to ensure a resilient and prosperous future for the company and its shareholders. Any decisions taken will be keeping the best interest of the Shareholders long term value creation in mind and will be communicated to the Shareholders at the appropriate time.

3. TRANSFER TO GENERAL RESERVE

No amount has been transferred to the General Reserve for the financial year 2022-23.

4. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in the nature of business of the Company during the year under review except the details of sale of assets as indicated above.

5. SHARE CAPITAL

During the year under review, the Company has not altered/modified its authorized share capital and has not issued any shares including equity shares with differential rights as to dividend, voting or otherwise. The Company has not issued any sweat equity shares to its directors or employees. The authorized capital of the Company stood at Rs. 3,20,00,000.

6. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.

7. DEPOSITS

The Company has not accepted any deposits from the public within the meaning of Section 73 and 76 of the Companies Act, 2013 and Rules made there under. There were no unclaimed or unpaid deposits as on March 31, 2020.

8. EXTRACT OF ANNUAL RETURN

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report as ANNEXURE I.

9. RELATED PARTY TRANSACTIONS

There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.

10. SIGNIFICANT ORDERS PASSED BY THE REGULATORS, COURTS OR TRIBUNAL IMPACTING GOING CONCERN AND COMPANYS OPERATIONS

To the best of our knowledge, the company has not received any such orders passed by the regulators, courts or tribunals during the year, which may impact the going concern status or companys operations in future.

11. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments affecting the financial position of the company have occurred between the end of financial year to which the financial statements relate and the date of the Directors Report.

12. DIRECTORS RESPONSIBILITY STATEMENT

The Directors Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that-

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

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

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

13. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from the Independent Directors of the Company confirming that:

a) Meet the criteria of independence prescribed under the Act and the Listing Regulations;

b) Compliance of Code of Conduct; and

c) Have registered their names in the Independent Directors Databank.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Retirement by rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Mr. Rajeev Patel, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.

Key Managerial Personnel (KMP)

The following have been designated as the Key Managerial Personnel of the Company pursuant to sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

Sr.No.	Name of the Person	Designation
1.	Mr. Manoj Patel	Chairman and Managing Director
2.	Mrs. Laxmiben Patel	Director
3.	Mr. Rajeev Patel	Whole Time Director and CFO
4.	Ms. Priyanka Kunwar	Company Secretary

There has been no change in the KMPs during the year under review.

There has been no change in the constitution of Board of Directors of the Company during the financial year 2022-23. None of the Director resigned from the directorship of the Company during the year.

15. PARTICULARS OF EMPLOYEES

The Company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

16. VIGIL MECHANISM

In accordance with the provisions of the Act and listing regulations, Vigil Mechanism for directors and employees to report genuine concerns has been established.

17. MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year 4(Four) Board Meetings were held.

Sr.No.	Date of Meeting
1.	26/05/2022
2.	13/08/2022
3.	14/11/2022
4.	14/02/2023

18. STATUTORY AUDITOR

Members of the Company at the Annual General Meeting that was held on 30th September, 2019 have reappointed M/s Chirag N. Shah & Associates, Chartered Accountant(Firm Registration No. 118215W), as a Statutory Auditor of the Company for a period of 5 years which term expires on 30th September 2024 subject to the ratification at every Annual General Meeting and as per Notification issued by MCA the Company need not place the resolution for ratification at the AGM and hence no resolution is placed before the AGM.

19. AUDITORS REPORT

The Auditors Report contains the following qualification.

1. Rs.47,48,076/- is long term borrowings from inter corporate which is subject to confirmations.

2. Balance of Rs.8,02,224/- of long-term trade payables are subject to confirmation and adjustment, if any, required upon such confirmations are not determinable.

3. The company has not charged GST on Accommodation charges (Income) received by it and has not complied with GST Act

20. EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION

In the recent audit of our financial statements for the FY 2022-23, the auditors raised certain qualifications as mentioned in above Auditors Report point related to specific aspects of our financial reporting. Our comments to the auditors qualifications are as follows:

1. Long-Term Borrowing of Rs.47,48,076/- are borrowed Promoter Companys. This borrowing arrangement was established to support our strategic initiatives and operational growth, and it reflects our ongoing commitment to optimize our funding sources. There is no material impact on the P&L and Balance Sheet.

2. The trade payable amounts unconfirmed in the balance sheet is due to unresponsive creditors request to get confirmation. There is no material impact on the P&L and Balance Sheet.

3. The Accommodation Charges was related to use by employee of the company property and such accommodation charges was deducted from employees Salary. The company believes that as this was salary deduction, it does not attract GST and hence there is no material impact on the P&L and Balance Sheet.

We are committed to ensuring the accuracy and integrity of our financial statements and are actively working to implement the necessary changes to prevent similar qualifications in the future.

21. COST AUDITORS

The Company is not required to maintain cost records as per The Companies (Cost Records and Audit) Amendments Rules, 2014.

22. SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Act and Rules made there under, M/s. Anjana Manseta & Co., Practicing Company Secretary has been appointed Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure II to this report. The report is selfexplanatory and do not call for any further comments.

23. AUDIT COMMITTEE

The Audit Committee acts in accordance with the terms of reference specified by the Board of Directors of the Company. Further during the period under review, the Board of Directors of the Company had accepted all the recommendations of the Committee. During the financial year ended on 31st March 2023 the Audit Committee met Four times on 26/05/2022, 13/08/2022, 14/11/2022 and 14/02/2023.

24. NOMINATION AND REMUNERATION COMMITTEE

The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees.

25. STAKEHOLDERS RELATIONSHIP COMMITTEE

As per Section 178(5) of Companies Act, the Board of Directors of a company has constituted a Stakeholder Relationship Committee consisting of a Chairperson and such other members as may be decided by the Board. The Committee has been constituted to strengthen the investor relations and to inter-alia, look into issues relating to shareholders grievances pertaining to transfer of shares, non- receipt of declared dividends, non-receipt of Annual Report, issues concerning dematerialization etc.

26. RISK MANAGEMENT POLICY

A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, this in the opinion of the Board may threaten the existence of the company.

27. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As per Section 135(9) of Companies Act, 2013 the amount required to be spent by a company on CSR does not exceed fifty lakh rupees, the requirement for constitution of the CSR Committee is not mandatory and the functions of the CSR Committee, in such cases, shall be discharged by the Board of Directors of the company.

The broad objectives, as stated in the CSR Policy, includes supporting causes concerning healthcare, education, rural development, skill development, etc. Our company is committed for better utilization of CSR funds so that it can serve the public at large.

28. CORPORATE GOVERNANCE COMPLIANCES

As per Regulation 15(2) of SEBI(LODR), Regulation,2015, the compliance with the corporate governance provisions as specified in regulations 17,53 [17A,] 18, 19, 20, 21,22, 23, 24, 54[24A,] 25, 26, 27 and clauses (b) to (i)[and (t)] of sub-regulation (2) of regulation 46 and para C , D and E of Schedule V shall not apply, in respect of -

(a) listed entity having paid up equity share capital not exceeding rupees ten crore and net worth not exceeding rupees Twenty Five crore, as on the last day of the previous financial year:

[Provided that where the provisions of regulations 17 to 27, clauses (b) to (i) and (t) of subregulation (2) of regulation 46 and para C, D and E of Schedule V become applicable to a listed entity at a later date, it shall ensure compliance with the same within six months from such date:]

As per the SEBI (LODR) Corporate Governance Regulations, the applicability of these provisions is applicable 6 months from meeting of the conditions above which the company has met on 31st March 2023 as its net worth is more than 25 crores. The company intends to implement all measures to meet all the above regulations by the applicable date (6 months from applicability, i.e. September 30th, 2023).

29. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which is a part of this report.

30. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Companys future operations.

31. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

There was no technology absorption and no foreign exchange earnings or outgo, during the year under review. Hence, the information as required under Section 134(3)(m) of the Companies Act, 2013, read with The Companies (Accounts) Rules, 2014, is to be regarded as Nil. The Company has not entered into any technology transfer agreement.

32. INDUSTRIAL RELATIONS

Industrial relations have been cordial at the manufacturing units of the Company.

33. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

34. ACKNOWLEDGEMENTS

An acknowledgement to all with whose help, cooperation and hard work the Company is able to achieve the results.

Place : Mumbai	For and on behalf of the Board of Directors
Date : 15-06-2023
	SD/-
	MANOJ R PATEL
	CHAIRMAN AND MANAGING DIRECTOR
	DIN 00485197