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The Directors have pleasure in presenting their Annual Report on the business and operations of the Company and the Audited Accounts for the Financial Year ended 31st March, 2016.
1. FINANCIAL SUMMARY/HIGHLIGHTS OF PERFORMANCE OF THE COMPANY:_
Profit Before Depreciation and Tax
Profit (Loss) before tax
Less: Tax Expenses
Net Profit (Loss) for the year
2. PERFORMANCE AND STATE OF AFFAIRS OF THE COMPANY:
Due to recession and acute competition in the Pharma Industry, Performance of your Company for the year under review was affected. The Board of Directors of the Company is continuously making efforts for the growth of the Company.
Due to loss during the year, the Company is not able to declare Dividend.
4. TRANSFER TO RESERVE:
Reserves & Surplus at the end of the year stood at '' (16,31,313) as compared to '' (3,59,38,381) at the beginning of the year.
5. SHARE CAPITAL:
At present, the Company has only one class of shares - equity shares with face value of '' 10/- each. The authorized share capital of the company is '' 40,000,000/- divided into 40,00,000 equity shares of '' 10/- each. The paid up share capital of the company as on March 31, 2016 is '' 18,80,000 /- divided into 1,88,000 equity shares of '' 10/- each.
Preferential allotment of equity shares was made in the meeting of Board of Directors of the Company held on 17/06/2016 and consequently the paid up share capital of the Company has increased from Rs. 18,80,000 divided into 1,88,000 equity shares of 10/- each to Rs. 2,55,00,000 divided into 25,50,000 equity shares of 10/- each.
Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
7. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:
There was no production activity during the year and hence no steps for conservation of energy were required to be taken. There are no plans to import any kind of technology for the project and hence information regarding its absorption is not applicable. There was no research activities carried out during the year as well as no foreign exchange income or outgo during the year
8. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
The shareholders of the Company in their Extra Ordinary General Meeting held on 10/06/2016 approved acquisition of 100% shareholding of Fortune Beverages Private Limited (FBPL)(now Vivanza Life sciences Private Limited) against share swap of allotment of 19,12,000 equity shares of the Company to Mr. H. A. Parikh, the share holder of FBPL on Preferential Basis. Further, Preferential allotment of 4,50,000 equity shares & 14,50,000 convertible warrants to be converted into 14,50,000 equity shares to two strategic investors namely Ardent Ventures Private Limited and Tanya Estates Private Limited was also approved.
Consequent to above allotment and acquisition, FBPL is now a wholly owned subsidiary of the Company.
The preferential allotment of 19,12,000 equity shares of the Company to Mr. H. A. Parikh had triggered an open offer pursuant to Regulation 3(1) and Regulation 4 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and as such Mr. Hemant Parikh had made an open offer for acquisition of upto 6,38,000 equity shares.
The preferential allotment of equity shares was made in the meeting of Board of Directors of the Company held on 17/06/2016 and consequently the paid up share capital of the Company has increased from Rs. 18,80,000 divided into 1,88,000 equity shares of 10/- each to Rs. 2,55,00,000 divided into 25,50,000 equity shares of 10/each.
Consequent to above mentioned arrangement, Mr. Hemant Nanavati (promoter) was reclassified to public category, and Mr. H. A. Parikh was classified as a promoter of the Company and took over the management and control of the Company.
Further, there is change in the constitution of Board and Management of the Company. Mr. Vishnu Chauhan (DIN: 01955762), and Mr. Hemant D. Nanavati (DIN: 05143917) has resigned from the post of Independent Director and Managing Director of the Company respectively and Mr. Bhaskar Bhattacharya (DIN: 00367827) was appointed as the Managing Director of the Company in the meeting of Board of Directors of the Company held on 17/06/2016. In the same meeting the Board has also appointed Mr. Naveen Jain (DIN: 05154306) and Mr. Sitaram Prasad Paikray (DIN: 00367827) as Additional Directors of the Company who are proposed to be regularised as Independent Directors of the Company in the forthcoming Annual General Meeting (AGM) of the Company.
Mr. Jainil Bhatt has been appointed as Chief Financial Officer of the Company w.e.f. 17th June, 2016.
No other material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report which can affect the financial position of the Company.
9. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS:
The Hon''ble High Court of Gujarat vide order dated 30th April, 2015 has sanctioned the Scheme of Re-organization of share capital of the Company. As per the Scheme, the issued, subscribed and paid up share capital of the Company has been reduced from Rs. 3,76,00,000/- (divided into 37,60,000 equity shares of Rs. 10/- each) to Rs. 18,80,000/- (divided into 1,88,000 equity shares of Re. 10/- each) by cancelling the balance share capital. Upon such reduction of share capital, the shareholders of the Company whose names appear on the Register of Members of the Company on the Record Date has been issued 1 new equity share of the Company for every 20 equity shares held by them in the Company on the Record Date.
No other orders have been passed by the Regulators/Court or Tribunals which can impact the going concern status and Company''s operation in future.
10. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
The Company has no Subsidiary Company during the year under review. Hence, details relating to Subsidiary Company are not provided for.
However, the Company has acquired 100% Equity Shares of Vivanza Life sciences Private Limited (Formerly Fortune Beverages Private Limited) by virtue of the holding in Vivanza Life sciences Private Limited it had became Wholly Owned Subsidiary w.e.f. 17/06/2016.
11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT BY THE COMPANY:
Details of Loans, Guarantees and Investments, if any covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
12. MEETING OF BOARD OF DIRECTORS:
During the year under the review, 7 (Seven) Board meetings were held, with gap between Meetings not exceeding the period prescribed under the Companies Act, 2013 and Rules made there under. Details of Board and Board committee meetings held during the year are given in the Corporate Governance Report.
Board meeting dates are finalized in consultation with all directors and agenda papers backed up by comprehensive notes and detailed background information are circulated well in advance before the date of the meeting thereby enabling the Board to take informed decisions.
The intervening gap between the Board Meetings was within the period prescribed under the Companies Act, 2013.
13. EXTRACTS OF ANNUAL RETURN:
An extract of Annual Return in Form MGT-9 is attached herewith as ANNEXURE-II.
All the Properties of the Company are adequately insured.
15. RELATED PARTY TRANSACTIONS:
There are no materially significant related party transactions made by the Company which may have a potential conflict with the interest of the Company at large and thus disclosure in Form AOC-2 is not required.
16. DIRECTORATE AND KEY MANAGERIAL PERSONNEL:
The Board of Directors of your company has various executive and non-executive directors including Independent Directors who have wide and varied experience in different disciplines of corporate functioning.
In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Harshul Shah (DIN: 01955747) retires by rotation at the ensuing Annual General Meeting and being eligible in terms of Section 164 of the Act offers himself for re-appointment.
Pursuant to the provisions of section 149 of the Companies Act, 2013 (Act), Mr. Vishnu Chauhan (DIN: 01955762), Ms. Sheetal G. Pandya (DIN: 07148000), were appointed as Independent Directors of the Company and they have served as Independent Directors on the Board of the Company during the year under review.
There is no change in the constitution of Board of Directors during the year under review. However, the management and constitution of Board has been changed w.e.f. 17/06/2016 as elaborated in Point No. 8 of Director''s Report above.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.
As required under Section 203 of the Companies Act, 2013, the Company has Mr. Hemant Nanavati as Key Managerial Personnel of the Company during the year under review.
17. EVALUATION OF BOARD, COMMITTEES AND DIRECTORS:
Pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015, the Board had carried out performance evaluation of its own, the Board Committees and of the Independent directors. Independent Directors at a separate meeting evaluated performance of the Non-Independent Directors, Board as a whole and of the Chairman of the Board.
The following were the Evaluation Criteria:
(a) For Independent Directors:
- Knowledge and Skills
- Professional conduct
- Duties, Role and functions
(b) For Executive Directors:
- Performance as Team Leader/Member.
- Evaluating Business Opportunity and analysis of Risk Reward Scenarios
- Key set Goals and achievements
- Professional Conduct, Integrity
- Sharing of Information with the Board
The Directors expressed their satisfaction with the evaluation process.
18. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS:
The Board has on the recommendation of the Nomination & Remuneration Committee, formulated criteria for determining Qualifications, Positive Attributes and Independence of a Director and also a Policy for remuneration of Directors, Key managerial Personnel and senior management. The details of criteria laid down and the Remuneration Policy are given in the Corporate Governance Report.
19. MANAGERIAL REMUNERATION:
The Company had not paid any remuneration to Executive Directors or any sitting fees to Non-Executives Directors for attending any meetings during the financial year ended 31st March, 2016.
20. INDEPENDENT DIRECTORS'' MEETING:
Independent Directors of the Company had met during the year under review on 30/03/2016.
21. COMMITTEES OF THE BOARD:
There are currently Three Committees of the Board, as follows:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders'' Relationship Committee
Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the Report on Corporate Governance, a part of this Annual Report.
A. Statutory Auditors
M/s. Pradip B. Gandhi & Co., Chartered Accountants (Firm Registration No.118674W) have tendered their resignation from the position of Statutory Auditors due to pre-occupancy. The Company has appointed M/s. GMCA & Co., Chartered Accountants (Firm Registration No.109850W) to fill the casual vacancy caused by the resignation of M/s. Pradip B. Gandhi & Co., Chartered Accountants (Firm Registration No.118674W) in its Extra Ordinary General Meeting held on 01/02/2016 to hold the office of the Statutory Auditors of the Company until the conclusion of forthcoming Annual General Meeting.
As per Section 139 of the Companies Act, 2013 the Board recommends to appoint M/s. GMCA & Co., Chartered Accountants (Firm Registration No.109850W), as Statutory Auditors of the Company at the forthcoming Annual General Meeting.
The Company has obtained a written confirmation under section 139 of the Companies Act, 2013 from M/s. GMCA & Co., Chartered Accountants (FRN 109850W) that their appointment, if made, would be in conformity with the limits specified under the Act.
The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. The notes to the accounts referred to in the Auditors'' Report are self-explanatory and therefore do not call for any further comments.
There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
B. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Patel & Associates, Practicing Company Secretaries, Ahmadabad to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure IV
There is no qualification, reservation or adverse remark in the report.
C. Internal Auditors:
The Board of Directors has appointed M/s. Naimish K. Shah & Co., Chartered Accountant (FRN 106828W) as Internal Auditors of the Company for the F. Y. 2016-17.
23. INTERNAL FINANCIAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORK:
The Company has an Internal Control System, commensurate with size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. The Company has appointed M/s. Naimish K. Shah & Co., Chartered Accountant (FRN 106828W) as an Internal Auditors of the Company. The Audit Committee in consultation with the internal auditors formulates the scope, functioning, periodicity and methodology for conducting the internal audit. The internal auditors carry out audit, covering inter alia, monitoring and evaluating the efficiency & adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations and submit their periodical internal audit reports to the Audit Committee. Based on the internal audit report and review by the Audit committee, process owners undertake necessary actions in their respective areas. The internal auditors have expressed that the internal control system in the Company is robust and effective. The Board has also put in place requisite legal compliance framework to ensure compliance of all the applicable laws and that such systems are adequate and operating effectively.
24. RISK MANAGEMENT:
Company has implemented an integrated risk management approach through which it reviews and assesses significant risks on a regular basis to help ensure that there is a robust system of risk controls and mitigation in place. Senior management periodically reviews this risk management framework to keep updated and address emerging challenges. Major risks identified for the Company by the management are Currency fluctuation, Compliances of various applicable Laws, Regulatory changes, Manufacturing & Supply, Litigation, Technological Changes and new capital investments return. The management is however, of the view that none of the above risks may threaten the existence of the Company as robust Risk mitigation mechanism is put in place to ensure that there is nil or minimum impact on the Company in case any of these risks materialize.
25. VIGIL MECHANISM AND WHISTLE BLOWER POLICY:
In accordance with Section 177 of the Companies Act, 2013 and Regulation 22 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted a Whistle Blower Policy/ Vigil Mechanism to establish a vigil mechanism for the directors and employees to report genuine concerns in such manner as may be prescribed and to report to the management instances of unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct.
26. PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code.
27. DIRECTORS'' RESPONSIBILITY STATEMENT:
In accordance with Section 134(5) of the Companies Act, 2013 and to the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors state that-
i. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
ii. 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 31st March, 2016 and of the profit and loss of the company for that period;
iii. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 and Rules made there under for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
iv. The directors had prepared the annual accounts on a going concern basis; and
v. The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
vi. 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.
28. CORPORATE GOVERNANCE:
Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) the Company has executed fresh Listing Agreement with the Stock Exchange.
As per Regulation 15(2) of the SEBI Listing Regulations, compliance with the corporate governance provisions as specified in 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, shall not apply to the Company. Although as a good governance practice a detailed report on Corporate Governance is given as a part of the Annual Report. The Certificate of the non applicability of submission of Report on Corporate Governance is attached to the Report on Corporate Governance. Report on Corporate Governance is given elsewhere in this Annual Report, herewith attached as Annexure V.
29. CORPORATE GOVERNANCE CERTIFICATE:
The Certificate of the non applicability of submission of Report on Corporate Governance as stipulated in Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended to the report on Corporate Governance, herewith attached as Annexure VI.
30. CORPORATE SOCIAL RESPONSIBILITY:
The Company is not covered under section 135 of Companies Act, 2013 hence details regarding policy on Corporate Social Responsibility is not applicable to the Company.
31. GENERAL SHAREHOLDER INFORMATION:
General Shareholder Information is given in Report on Corporate Governance forming part of the Annual Report.
Your Directors take this opportunity to express their gratitude for the unstinted commitment, dedication, hard work and significant contribution made by employees at all levels in ensuring sustained growth of the Company. Your Directors also sincerely thank to all the stakeholders, customers, vendors, bankers, business associates, government, other statutory bodies and look forward to their continued assistance, co-operation and support.
Place: Ahmedabad For and on behalf of the Board
Date: August 13, 2016
Harshul K. Shah Bhaskar Bhattacharya
Director Managing Director
DIN: 01955747 DIN: 00367827