Vikram Thermo (India) Ltd Directors Report.

To,

The MEMBERS,

VIKRAM THERMO (INDIA) LTD

Your Directors have pleasure in presenting their 26THAnnual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2020.

1. FINANCIAL SUMMERY & HIGHLIGHTS

The Boards Report is prepared based on the stand alone financial statements of the company.

(Rs. in Lakhs)

PARTICULARS 2019-20 2018-19
Revenue from Operations 5585.05 5823.95
Other income 40.77 16.91
Total Income 5625.83 5840.86
Profit/loss before Depreciation, Finance Costs, Exceptional items and Tax Expense 1222.36 912.41
Less: Depreciation 198.01 182.10
Profit/loss before Finance Costs, Exceptional items and Tax Expense 1024.35 730.31
Less: Finance Cost 79.76 114.06
Profit/loss before Exceptional items and Tax Expense 944.59 616.25
Less: Exceptional Items 0 0
Profit / (Loss) Before Tax 944.59 616.25
Provision for Tax & Deferred Tax 220.86 173.37
Profit / (Loss) After Tax 723.73 442.88
Other Comprehensive income (net of tax effect) 8.95 10.72
Total Comprehensive income 714.77 453.60
Add : Balance as per last Financial Statement 3416.25 3026.30
Disposable Surplus 4131.02 3479.9
Less : Transfer to General Reserve 30.00 30.00
Dividend Paid (18-19) 83.73 Nil
Dividend Paid (17-18) Nil 27.91
Dividend Distribution Tax (18-19) 17.21 Nil
Dividend Distribution Tax (17-18) Nil 5.74
Balance carried forward 4000.08 3416.25

2. STATE OF AFFAIRS AND REVIEW OF OPERATIONS AND WAY AHEAD

Amidst an uncertain global economic environment and challenging industry dynamics, especially the later part of the financial year due to sudden outbreak of Covid-19 resulted in the disruption of economic activity worldwide. Your company too lost local as well as overseas business towards close of the financial year. Despite all the challenges, the company has continued to succeed on its growth journey.

The company clocked total revenue of Rs. 5585.06 lacs with a net profit of Rs.723.73 lacs during the year under review. This encouraging performance has been supported by our commitment to quality and constant focus on product differentiation and innovation. The company shall strive hard to exceed the expectations of all its stake-holders in the coming years and perform even better.

3. DIVIDEND:

Your Directors are pleased to recommend payment of Dividend at 15 % on equity shares of Rs. 10/- each, amounting to Rs. 1.50 per share on paid up equity capital of the company to those shareholders whose names appear on the Register of Member on record date. With a view to share the profits of the company with its shareholders, directors feel that recommendation of dividend is a way of appreciation to them. The dividend payout will result in total outflow of Rs.9407355/- (Previous Year Rs.1,00,95,126/- including Dividend Distribution Tax amounting to Rs. 17,21,271/-).

4. THE AMOUNTS, IF ANY, WHICH IT PROPOSES TO CARRY TO ANY RESERVES;

The company has transferred Rs. 30,00,000/- to General Reserves during the financial year 2019-20.

5. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Pursuant to the provisions of Section 152(6) of the Companies Act, 2013, DR. CHIMANBHAI K.PATEL, Whole Time Director of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible, offer himselffor reappointment.

Changes in Director during the Financial Year 2019-20:

S.N. Name of Director Designation Date Change
1 Mr. Vipulkumar Vitthalbhai Patel Independent Director 15th May, 2019 Appointment
2 Mr. Ghanshyambhai Dungarbhai Kewadia * Independent Director 15th May, 2019 Resignationdue to his pre occupation in other Companies

*Mr. GhanshyambhaiDungarbhaiKewadia has confirmed that there is no other material reason of resignation other than those provided.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

Reappointment of Independent Director of the Company in upcoming Annual General Meeting:

The present term of appointment of Mr. Shaileshkumar Patel (DIN: 07395238), Independent Directors of the Company is going to be expired at the forthcoming Annual General Meeting. The Board has, subject to the approval of theMembers in the forthcoming AGM, proposed the re-appointmentof Mr. Shaileshkumar Patel (DIN: 07395238), Independent Directorforanother period of five years, with effect from 29th September, 2020:

The Company has received declarations from Mr. Shaileshkumar Patel (DIN: 07395238), Independent Director of the Company confirming that they meet with the criteria of independence as prescribed under sub-section 6 of Section 149 of the Companies Act, 2013 and under Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 and complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

Justification for Reappointment of Independent Directors:

Mr. Shaileshkumar Patel (DIN: 07395238), Independent Director of the Company ishaving vast experience and profound knowledge with respect to workings of the Company. He also possess industry specific knowledge and skills which is beneficial for growth of the Company. The Company can reach higher level of growth in terms of business expansion and turnover under his guidance and leadership.

Reappointment of Whole Time Director of the Company:

The term of appointment of Dr. Chimanbhai K. Patel(*)Whole time Directors of the Company is going to be expired in the current Financial Year. Accordingly, the Board of Directors of the Company in its Board Meeting held on 14th August, 2020 reappointed him subject to the approval of shareholders in upcoming Annual General Meeting:

Brief Profile and other relevant Information of Dr. Chimanbhai K. Patel who is going to be reappointed, forms part of this Notice of Annual General Meeting.

 

(*)Dr. Chimanbhai K. Patel, having age of more than 70 years, required to be reappointed by way of passing Special Resolution at AGM.

6. MEETINGS OF THE BOARD & COMMITTEE:

During the year,(6)SixBoard Meetings and (4) Four Audit Committee Meetings were duly convened and held. The following are the dates on which the said Board Meetings held:

Sr. No. Board Meeting Audit Committee Meeting
1 15.05.2019 30.05.2019
2 30.05.2019 13.08.2019
3 27.06.2019 14.11.2019
4 13.08.2019 13.02.2020
5 14.11.2019
6 13.02.2020

The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

7. COMMITEES OF BOARD:

The company has several committees which have been established as a part of best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statues.

The Board has constituted following Committees:

• Audit Committee

• Nomination and Remuneration Committee

• Stake holders Relationship Committee

• Corporate Social Responsibility Committee

The details with respect to the compositions, powers, roles, terms of reference etc. of relevant committees are given in detail in the ‘Report on Corporate Governance of the company which forms part of this Annual Report.

8. EXTRACT OF ANNUAL RETURN:

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extract of the Annual Return as at March 31, 2020forms part of this Directors Report as ‘Annexure: I

9. STATUTORY AUDITORS &AUDIT REPORT:

Pursuant to the provisions of Section 139 of the Companies Act, 2013, M/s. J.T. Shah & Co., CharteredAccountants, (firm Registration No.109616W),has been appointed as statutory auditors in the Annual General Meeting of the company held on 28th September, 2018to hold office till the conclusion of the Annual General Meeting of the Company for the financial year 2021-22. In this regard, the Company has received a certificate from the auditors to the effect that if they are appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every AGM. Hence, Agenda for the ratification of Statutory auditor of the company has not been included in the Notice of AGM.

The Report given by the Auditors on the financial statement of the Company is part of this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. The Auditors comments on your companys accounts for year ended March 31, 2020 are self explanatory in nature and do not require any explanation as per provisions of Section 134(3)(f) (i) of the Companies Act, 2013.

10. DISCLOSURE OF REPORTING OF FRAUD BY AUDITORS UNDER SECTION 143(12):

During the financial year 2019-20, neither the Statutory Auditor nor the Secretarial Auditor of the Company has reported to the audit committee any instance of fraud committed against the Company by its employees or officers under section 143(12), the details of which need to be reported in Boards Report.

11. INTERNAL AUDIT AND FINANCIAL CONTROL:

The Company has appointed M/S. SAMIR M.SHAH & ASSOCIATES, Chartered Accountant as Internal Auditor of the Company. The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures. The reports of Internal Audit are reviewed by the Audit Committee of the Board.

12. COST RECORDS AND COST AUDIT:

Company has maintained necessary Cost Records and which are required to be maintained by Company Pursuant to Section-148 (1) of the Companies Act, 2013, read with Companies (Cost Records and Audit) Rules, 2014.

As per the requirement of Section 148(3) and rule 6(2) of the Companies (Cost Records and Audit Rules) 2014, the Company is required to appoint cost auditor to conduct the cost audit for the Financial year 2020-21. Accordingly, the Board has approved the appointment of M/S. V. H. Shah & Co., Cost Accountants (Registration No. 100257) and remuneration to be paid to him in the Board Meeting held on 29th June, 2020 and said agenda for the ratification of same has been proposed in this AGM.

13. SECRETARIAL AUDIT:

Pursuant to section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the company has appointed M/s. A. SHAH & ASSOCIATES, Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is enclosed as Annexure –II to the Boards Report. The Board of Directors of the Company has discussed the remarks as mentioned in Secretarial Audit Report at arms length. The qualification raised by the Secretarial Auditor in its report and the justification of Board of Directors on the same are as follows:

SR. QUALIFICATION JUSTIFICATION OF BOARD
1 The Company has not provided prior intimation of Board meeting in which agenda of recommendation of Dividend is to be considered. The Company has already paid penalty of Rs. 11800/- imposed by BSE notice ref no. LIST/COMP/530477/REG. 29(2) /MAY-19/89/2019-20 DATED 11TH JUNE, 2019 for the non-compliance.
The Company has further ensured not to repeat the same in future.
2. The company has made delay of 36 days in transferring the amount of Rs. 2,94,517/- to IEPF. The Company has clarified that the delay has been occurred due to delay in receipt of data and reconciliation statement from Bank.

The Board has also undertaken to take care of such qualification and to comply with the same in future.

14. NOMINATION AND REMUNERATION POLICY:

The Board has on the recommendation of Nomination and Remuneration / Compensation Committee framed a policy on directors appointment and remuneration of Directors including criteria for determining qualification, positive attributes, independence of directors and remuneration for Directors, Key Managerial Personnel and other employees. The policy is annexed to this report as ‘Annexure: III.

15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

AllRelated Party Transactions those were entered during the financial year were in ordinary course of the business of the company and were on arms length basis. There were no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the company.

All such Related Party Transactions have been placed before the Audit Committee for approval.

The policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions as approved by the Audit Committee and the Board of Directors has been uploaded on the website of the Company at www.vikramthermo.comunder investors/policy documents/Related Party Transaction Policy.

The particulars of every contract or arrangements entered into by the Company with related parties referred to the subsection (1) of section 188 of the Companies Act, 2013, are disclosed in Form No. AOC-2 ‘Annexure: IVthe same forms part of this report, pursuant to Section 134 (3) (h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014.

16. TRANSFER OF UNPAID/UNCLAIMED AMOUNTS TO IEPF

Pursuant to the provisions of Section 125 of Companies Act, 2013 the Unclaimed Dividend, Fixed Deposits and interest thereon which remained unpaid/unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 125 of the Companies Act, 2013. The company has also transferred the unclaimed shares to IEPF account.

17. BOARD EVALUATION:

The Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Regulation 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and Para C, D and E of Schedule V of SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

18. DEPOSITS:

Your Company has not accepted any fixed deposits from the public within the provisions of Section 73 to 76 of the Companies Act, 2013. Hence, the disclosures required as per Rule 8(5)(v)&(vi) of the Companies (Accounts) Rules, 2014, read with Section 73 to 76 of the Companies Act, 2013 are not applicable to your Company.

19. CORPORATE GOVERNANCE:

The Company believes that good Corporate Governance is a continuous process and it is our continuous endeavor to achieve good governance, by way of a conscious and conscientious effort whereby ensuring the truth, transparency, accountability and responsibility in all our dealings with all our stakeholders.

A separate section on Corporate Governance Standards followed by your Company, as stipulated under Regulation 34(3) read with Schedule V of SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015 is enclosed as Annexure to this Report. The Report on Corporate Governance also contains certain disclosures required under Companies Act, 2013.

A Certificate from M/S. A. SHAH & ASSOCIATES., Practicing Company Secretaries, conforming compliance to the conditions of Corporate Governance as stipulated under Regulations 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C, D and E of Schedule Vof SEBI (Listing Obligation and Disclosure Requirement) Regulation 2015, is annexed to this Report.

20. GRATUITY

The Company has already established a Group Gratuity Fund for the benefit of the employees of the company. The Group policy has been taken with Life Insurance Corporation of India (Pension and Gratuity Fund Scheme). During the year contribution amounting to Rs.1563076/-was made towards this fund. (Previous year Rs. 24,54,575/-).

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

In terms of provisions of Section 134(3)(g)of the Companies Act 2013, the Particulars of Loans, Guarantees or Investments under Section 186, is annexed hereto as ‘Annexure: V and forms part of this Report.

22. PARTICULARS OF EMPLOYEES REMUNERATION:

A. The ratio of the remuneration of each director to the median employees remuneration and other details in terms of sub-section 12 of Section 197, of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as ‘Annexure: VI to the Directors Report.

B. The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not provided as no employee is paid remuneration of Rs. 8.5 Lac Per month and Rs. 1.02 Cr. Per Annum if employed for the whole year.

23. FOREIGN EXCHANGE EARNINGS / OUTGO:

Particulars regarding the foreign exchange earnings and outgo during the year 2019-20 is as Annexed hereto as

"ANNEXURE VII". 24. VIGIL MECHANISM:

Pursuant to the provisions of section 177 (9) & (10) of the Companies Act, 2013, and Regulation 22 of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.vikramthermo.com under investors / policy documents / Vigil Mechanism Policy link.

25. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the company which has been approved by the Board.

The CSR Policy can be accessed from the investors section on the companys website at the link http:// www.vikramthermo.com. This being the Sixthyear of implementation of the CSR Policy, The company is pleased to inform the members that an amount of Rs.15,00,000/-towards its CSR obligation for 2019-20 has been spent which is over and above the requirement as specified by the Government and it is committed to further spend appropriate amount towards its obligation of the current financial year during 2020-21 as well.The Report on CSR activity is annexed as Annexure VIII.

26. CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION:

(a) Conservation of energy:

(i) the steps taken or impact on conservation of energy The company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum savings of energy is achieved.
(ii) the steps taken by the company for utilizing alternate sources of energy No alternate source of energy is available at present. However, the company is exploring various alternatives in this direction.
(iii) the capital investment on energy conservation equipments No specific investment has been made in energy conservation areas.

As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.

(b) Technology absorption:

(i) the efforts made towards technology absorption N.A
(ii) the benefits derived like product improvement, cost reduction, product development or import substitution N.A
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) N.A
(a) the details of technology imported N.A
(b) the year of import; N.A
(c) whether the technology been fully absorbed N.A
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof N.A
(iv) the expenditure incurred on Research and Development Capital expenditure – Nil
Revenue expenditure – 792659
Total – 792659
R&D expenditure as & of total revenue 0.14%

The efforts are being made for energy conservation to new and innovative means. Further, the Company did not have any imported technology during the financial year.

27. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

1. Disclosure under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

Pursuant to Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 the company has setup the Internal complaints committee and the said committee has framed policy for prevention of sexual harassment at work place in accordance with the section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. However, during the year no complaints were received by the Internal Complaints committee for sexual harassment from any of the women employees of the company.

28. HUMAN RESOURCES DEVELOPMENT:

Your Company treats its "Human Resources" as one of its most significant assets. The Company continues its focus on retention through employee engagement initiatives and provides a holistic environment where employees get opportunities to realize their potential. A number of programs that provide focused people attention are currently underway. Your Companys thrust is on the promotion of talent internally through job rotation and job enlargement. The Companys Health and Safety Policy commits to provide a healthy and safe work environment to all employees.

29. CHANGE IN NATURE OF THE BUSINESS:

There has been no change in the nature of business of the company during the year under review.

30. MANAGEMENT DISCUSSION AND ANALYSIS:

As per corporate governance norms, a separate section on Management Discussion and Analysis outlining the business of the Company is set out in Annexure forming part of this Report.

31. SIGNIFICANT OR MATERIAL ORDERS AGAINST COMPANY:

No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Companys operation in future.

32. SIGNIFICANT OR MATERIAL EVENTS OCCURRED DURING THE YEAR:

• The Company has increased the Authorised Share Capital of the company to Rs. 7,00,00,000/- divided into 7000000 equity shares of Rs. 10/- each on 14th June, 2019 through Postal Ballot resolution.

• The Company has altered the MOA and AOA of the Company and adopted new set of Memorandum of Association and Articles of Association as per Companies Act, 2013.

• The Company has issued and allotted 689000 equity shares of Rs. 10/- each at a price of Rs. 80/- to the promoters on Preferential allotment basis. The details of utilization of funds raised through preferential allotment as specified under Regulation 32(7) of SEBI(Listing Obligation & Disclosure Requirement) Regulations, 2015 forms the part of Corporate Governance Report of this Annual Report.

• The Company has also received listing approval form BSE for such allotment as on 08th July, 2019 vide letter Ref. no. DCS/PREF/BA/FIP/188/2019-20.

• The Company has also received trading Approval from BSE for such allotment as on 31ST July, 2019 vide letter Ref. no. DCS/PREF/TP/BA/9249/2019-20

33. SIGNIFICANT OR MATERIAL EVENTS OCCURING AFTER THE BALANCE SHEET DATE:

No Event has occurred after the balance sheet date that representing the material changes and commitment that affecting the Financial position of the company.

34. STATEMENT OF DIRECTORS RESPONSIBILITY:

Pursuant to requirement under Section 134(3)(c) and Section 134(5) of the Companies Act, 2013 (Act), Directors, confirm that:

(a) in the preparation of the annual accounts for the year ended on 31st March, 2020, the applicable accounting standards read with requirement set out under Schedule III to the Act, have been followed and there are no material departures from the same;

(b) the Directors have 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 as at March 31, 2020 and of the profit of the company for the year ended on that date;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the 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;

(e) the Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively and;

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

35. ACKNOWLEDGEMENT:

Your Directors wish to place on record their gratitude and sincere appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review.

Your Directors would like to express a profound sense of appreciation for the commitment shown by the employees in supporting the Company in its continued robust performance on all fronts.

PLACE : AHMEDABAD BY THE ORDER OF THE BOARD OF DIRECTORS,
DATE : 14/08/2020 FOR, VIKRAM THERMO (INDIA) LIMITED
DR. C. K. PATEL
CHAIRMAN & WTD
(DIN:00044241)