UMIYA TUBES LIMITED
Your Directors take pleasure in presenting the THIRD Annual Report of theCompany together with the Audited Accounts for the financial year ended on 31st March2016.
The brief financial results are as under:
| || ||(Rs. in lacs) |
|Particulars ||2015-16 ||2014-15 |
|Gross Income ||1456.82 ||822.85 |
|Profit/(Loss) before Depreciation and Tax ||74.53 ||11.56 |
|Less: Depreciation ||25.46 ||10.41 |
|Profit/(Loss) Before Tax and Extra Ordinary Items ||49.07 ||1.15 |
|Less: Extra Ordinary Items ||- ||- |
|Less: Current Tax ||9.35 ||0.24 |
|Deferred Tax ||44.56 ||- |
|Add/Less: MAT credit Entitlement ||(9.35) ||(0.24) |
|Profit/(Loss) After Tax ||4.50 ||1.15 |
|Balance Carried to Balance Sheet ||5.61 ||1.11 |
The turnover of the Company for the year 2015-16 has substantially increased from Rs.822.85 Lacs to Rs. 1456.82 Lacs. Due to this profit before Depreciation and Tax standsincreased to Rs.74.53 Lacs as compared to profit of Rs. 11.56 Lacs in the last year.
SUBSIDIARY COMPANIES/JOINT VENTURE COMPANY/ASSOCIATE COMPANY:
The Company does not have any Subsidiary Company or Joint Venture Company or AssociateCompany.
MATERIAL CHANGES AND COMMITMENT:
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of financial year of the Company to which thefinancial statements relate and the date of the report except otherwise disclosed.
REASONS FOR REVISION OF FINANCIAL STATEMENT OR REPORT:
During the year the financial statement or report was not revised. Hence furtherdetails are not applicable.
In order to conserve resources your Directors express their inability to declare anydividend.
TRANSFER TO RESERVE:
Your Directors find it prudent not to transfer any amount to General Reserve.
The Paid up Equity share capital of the Company as on 31st March 2016 was Rs. 7.40Crores divided into 7400000 Equity shares of Rs. 10/- each.
SUCCESSFUL INITIAL PUBLIC OFFERING:
At the beginning of the financial year the Company was an unlisted private Company.With effect from 1st October 2015 the Company got converted into a Public LimitedCompany. The Company has made an Initial Public Offer of 2000000 Equity Shares of Rs.10/- each for cash at par vide Prospectus dated 14th March 2016. The Company hassuccessfully completed the Initial Public Offering (IPO) in the current year pursuant tothe applicable SEBI Rules and Regulations. The IPO opened on 18th March 2016 and closedon 22nd March 2016.
The IPO of the Company received an encouraging response from the investors and thepublic issue was oversubscribed. The Equity Shares of the Company have been listed on SMEPlatform of BSE Limited w.e.f 1st April 2016.
DIRECTORS & KEY MANAGERIAL PERSONNEL:
During the year the requirement of Key Managerial Personnel became applicable to theCompany.
During the year Mr. Bharatkumar R. Patel(DIN: 06562786) was appointed as Whole TimeDirector Mr. Surendrasinh P Vaghela (DIN: 06415080) was appointed as Managing Directorand Mr. Saurabhkumar R Patel (DIN: 06964670) was appointed as Chief Financial Officer ofthe Company w.e.f 1st January 2016. Moreover Mr. Ritendrasinh K Rathod was appointed asCompany Secretary of the Company w.e.f 1st February 2016.
Further Mr. Vikram G Patel (DIN: 07397444) Mr. Rajesh K Dave (DIN: 07398886) Mr.Mitesh G Patel (DIN: 07397651) and Mr. Atul J Popat (DIN: 07323826) were appointed asIndependent Directors of the Company for a period of five years w.e.f 1st January 2016
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. Surendrasinh PVaghela (DIN: 06415080) Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible has offered himself to be reappointed as director ofthe Company.
The Board recommends the re-appointment of Mr. Surendrasinh P Vaghela (DIN: 06415080)as Director of the Company liable to retire by rotation.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement of section 134(5) of the Companies Act 2013 with respectto Directors Responsibility Statement it is hereby confirmed:
1. that in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
2. that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for that period;
3. that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
4. that the Directors had prepared the annual accounts on a going concern basis; and
5. that the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
6. that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
FORMAL EVALUATION BY BOARD OF ITS OWN PERFORMANCE:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015 (Clause 49 of the Listing Agreement to theextent applicable) the Board shall carry out an annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of Auditand Nomination & Remuneration Committees based on the criteria and framework adoptedby the Board.
NUMBER OF MEETINGS OF BOARD:
The Board of Directors duly met 11 (Eleven) times.
DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received necessary Declaration from each Independent Director/s undersection 149(7) of the Companies Act 2013 that they meets the criteria of Independencelaid down in section 149(6) of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS / SWEAT EQUITY SHARES / EMPLOYEESTOCK OPTION SCHEME:
During the year the Company has not issued any equity shares with differential votingrights or sweat equity shares or shares under employee stock option scheme. Hencedisclosure regarding the same is not given.
M/s. Pratirajsinh Raulji & Co. Chartered Accountants the existing auditors of theCompany were appointed as auditors of the Company at the 2nd AGM for holding the officefrom the conclusion of that 2nd AGM till the conclusion of the 7th AGM (Subject toratification by the members at every subsequent Annual General Meetings).
However M/s Pratirajsinh Raulji & Co. has shown their unwillingness to continueas Statutory Auditors of the Company for the financial year 2016-17 and onwards andtendered their resignation. In view of his the Company has to appoint new StatutoryAuditor of the Company. In this regard the Company has received a Special Notice u/s 140(4) of the Companies Act 2013 from a member of the Company for appointing P. Singhvi& Associates Chartered Accountant Ahmedabad as Statutory Auditor of the Company. P.Singhvi & Associates Chartered Accountant Ahmedabad has given their consent to actas Statutory Auditor of the Company and also provided declaration that their appointmentif made shall be within the limit prescribed.
It is further provided that the Company shall place the matter relating to suchappointment by members at annual general meeting. Hence the members are requested toconsider the matter of appointment of Auditors made and also to fix their remuneration.
AUDITORS REPORT AND NOTES ON ACCOUNTS:
The Board has duly reviewed the Statutory Auditors Report on the Accounts. Theobservations comments and notes of Auditor are self explanatory and do not call for anyfurther explanation /clarification.
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 M/s. Manoj Hurkat & Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexedherewith as "Annexure-1".
The Audit Committee was constituted in the Board Meeting held on 16th January 2016consists of the following Directors:
|1. Mr. Rajesh K Dave ||Chairman |
|2. Mr. Atul J Popat ||Member |
|3. Mr. Surendrasinh P Vaghela ||Member |
NOMINATION & REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee was constituted in the Board Meeting held on16th January 2016. Composition of the Committee is as under:
|1. Mr. Rajesh K Dave ||Chairman |
|2. Mr. Atul J Popat ||Member |
|3. Mr. Vikram G Patel ||Member |
STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Stakeholders Relationship Committee was constituted in the Board Meeting held on16th January 2016. Composition of the Committee is as under:
|1. Mr. Rajesh K Dave ||Chairman |
|2. Mr. Atul J Popat ||Member |
|3. Mr. Saurabhkumar R Patel ||Member |
RISK MANAGEMENT POLICY/PLAN:
It may please be noted that as per the applicable requirement of the Companies Act2013 a risk management policy/plan of the Company is developed and implemented forcreating and protecting the Shareholders value by minimizing threats or losses andto identify and Provide a framework that enables future activities of a Company to takeplace in a consistent and controlled manner.
The Company has a vigil mechanism for its directors and employees to deal withinstance of fraud/ mismanagement if any and to report concerns about unethical behavioractual or suspected fraud or violation of the Companys code of conduct or ethicspolicy. The details of the policy is hosted on the website of the Company.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment measures in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. During the year there were no complaints received under thesaid act.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration.
The Companys remuneration policy is directed towards rewarding performance basedon review of achievements periodically. The remuneration policy is in consonance with theexisting industry practice. Extract of Remuneration Policy from Nomination andRemuneration policy is attached as Annexure - 4.
ANALYSIS OF REMUNERATION:
The details of remuneration paid to Directors and Key Managerial Personnel is given inextract of Annual Return attached with this report.
Disclosure/details pursuant to provisions of Section 197(12) of the Companies Act 2013read with the Companies (appointment and Remuneration of managerial personnel) Rules 2014are given as follows:
|Names and Positions ||[A] Ratio of Directors Remuneration to the median Remuneration of Employees ||[B] Percentage (%) increase in Remuneration |
|Ms. Beena P Vaghela (Chairperson & Director) ||Nil ||Nil |
|Mr. Surendrasinh P Vaghela (Managing Director) ||Nil ||Nil |
|Mr. Bharatkumar P Patel (Whole Time Director) ||Nil ||Nil |
|Mr. Saurabhkumar R Patel (Director and CFO) ||Nil ||Nil |
|Mr. Vikram G Patel (Independent Director) ||Nil ||Nil |
|Mr. Rajesh K Dave (Independent Director) ||Nil ||Nil |
|Mr. Mitesh G Patel (Independent Director) ||Nil ||Nil |
|Mr. Atul J Popat (Independent Director) ||Nil ||Nil |
The median remuneration of employees of the Company during the financial year was Rs.105600/- p.a.
|[C] Percentage increase in the median Remuneration of Employees ||6.05% |
|[D] Number of permanent Employees on the rolls of Company ||30 (Thirty) |
|[E] Explanation on the Relationship between average increase in Remuneration and Company Performance ||If we compare the performance of the company with the previous year say F.Y. 2014-15 then there is an increase of 77% in income from operation and increase in PAT by 300% while there is an increase in staff cost by 70% as compared to last year. It shows the ability of management to take the effective production from the staff and also the staff satisfaction which emphasis on them to give maximum out of their capacity. Company have regular monitoring and evaluation system which gives regular reward to good sincere obedient and intelligent workaholic employees and it motivates them and keeps them ready to give better every time to the company and this is the result of the same. |
|[F] Comparison of the Remuneration of the Key Managerial Personnel against the performance of the Company ||No remuneration was paid to the Key Managerial Personnel till 31.03.2016 still they worked very hard and almost doubled the turnover of the company and almost quadruple the PAT of the company and that is also even after the huge provision of Deferred Tax Liability. The equity shares of the company have listed on SME Platform of BSE Limited and the Company has also received the ISO Certification which itself indicates the dedication and effective management of KMP. |
|[G] Variations in the Market Capitalisation of the Company as at 31st March 2016 as compared to 31st March 2015 ||N.A. (as the shares of the Company were listed on 01.04.2016 on SME platform of BSE) |
|[H] Price Earnings Ratio as at 31st March 2016 as compared to 31st March 2015 ||N.A. (as the shares of the Company were listed on 01.04.2016 on SME platform of BSE) |
|[I] Percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer ||As on the date of Report the market price of share is approx. Rs. 20 which is doubled from the IPO offer price of Rs. 10. |
|[j] Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof ||N.A.(As there is no salary paid to NED and KMP during the year 2015-16 except to the Company Secretary w.e.f. 1st February 2016) |
[K] Comparison of the each KMPs Remuneration vis-a-vis the performance of the Company
|Name of KMP ||Remuneration of KMP (in Rs.) ||Net Profit of Company |
|Ms. Beena P Vaghela (Chairperson & Director) ||Nil ||Net profit of the Company is |
|Mr. Surendrasinh P Vaghela (Managing Director) ||Nil ||Rs.450280/- in the current |
|Mr. Bharatkumar P Patel(Whole Time Director) ||Nil ||financial year as compared to |
|Mr. Saurabhkumar R. Patel(Chief Financial Officer) ||Nil ||Rs. 115399/- in the previous |
|Mr. Ritendrasinh K Rathod(Company Secretary) ||Rs. 30000* ||financial year. |
* Managing Director Whole Time Director and Chief Financial Officer were appointedw.e.f 1st January 2016 and Company Secretary was appointed w.e.f 1st February 2016.
|[L] The key parameters for any variable component of remuneration availed by the directors || |
No Remuneration paid to Directors during the year 2015-16
|[M] The ratio of the remuneration of the highest paid Director to that of the Employees who are not Directors but receive remuneration in excess of the highest paid Director during the year ||Highest paid ||Remuneration of Ratio |
| ||Directors Remuneration (I) ||Employee receiving remuneration in excess of (I). |
| ||Nil ||Nil ||Nil |
PARTICULARS OF EMPLOYEES:
None of the employees of the Company is drawing remuneration requiring disclosure ofinformation under Section 134 of the Companies Act 2013 read with Rule 5(2) of theCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014.
During the year there were no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and Companys operations infuture.
As the requirement of CSR Committee is not applicable to the Company no furtherdetails/disclosure required to be given in this regard.
DETAILS ON CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO:
|(A) Conservation of energy || |
|(i) the steps taken or impact on conservation of energy ||The company uses LED lamps/bulbs in the whole factory premises which save 30-40% electricity as compared to normal lamps/bulbs |
|(ii) the steps taken by the company for utilizing alternate sources of energy ||NIL |
|(iii) the capital investment on energy conservation equipments ||NIL |
|(B) Technology absorption || |
|(i) the efforts made towards technology absorption ||1. The company uses AC Drives for almost all Tube mills and it also saves around 30-40% of electricity as compared to DC Drives. |
| ||2. The company started using inverter based welding machines instead of thyristor based welding machines to save energy. |
| ||3. The company tried different composition of gases which ultimately found good quality and competitive cost of welding. |
| ||4. The company also started polishing work with low RPM electric motors which reduced consumption of energy and polishing material to a huge extent. |
|(ii) the benefits derived like product improvement cost reduction product development or import substitution ||The quality of the product and cost of product has improved significantly. |
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) || |
|(a) the details of technology imported; ||NIL |
|(b) the year of import; || |
|(c) whether the technology been fully absorbed; || |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and || |
|(iv) the expenditure incurred on Research and Development ||As the company is new and at kid stage. it does not have separate R&D department but all motivated employees and KMPs always works for new ways and forms of doing work and saving cost and all energy saving and technology absorption benefits narrated above are the results of our R&D work only. |
|(C) Foreign exchange earnings and Outgo || |
|The Foreign Exchange earned in terms of actual inflows during the year and ||To find export business for the company the team of company visited gulf countries in the month of July- Aug 2015. |
| ||As it was the first attempt of marketing abroad no inflow took place but the company is still pursuing opportunities to export the products of the Company very soon. |
|The Foreign Exchange outgo during the year in terms of actual outflows ||The company has spend around 1250 USD on Foreign Visit |
INTERNAL FINANICAL CONTROL:
The directors had laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively.
During the year under report your Company has not accepted any deposits pursuant toSection 73 of the Companies Act 2013. Hence further details are not given.
It may please be noted that as our Company is not falling in the applicability criteriaprescribed in the SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015.
Hence the Report on Corporate Governance is not forming part of the DirectorsReport.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure -2"
PARTICULARS OF LOANS INVESTMENTS OR GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT2013:
There are no Loans Investments or Guarantees /Security given by the Company during theyear under section 186 of the Companies Act 2013; hence no particulars are required to begiven.
RELATED PARTY TRANSACTION:
There are no particulars of contacts or arrangements with related parties referred toin section 188(1) of the Companies Act 2013 which are required to be reported in theprescribed form AOC-2 which is appended as an "Annexure-3"to DirectorsReport. The details of related party transactions as per AS-18 are otherwise reported inthe financial statements. The related party transactions are otherwise carried out in theordinary course of business and on arms length basis and the same are in the best interestof the Company.
Your Directors wish to place on record their sincere appreciation for significantcontribution made by the employees at all the levels through their dedication hard workand commitment thereby enabling the Company to boost its performance during the yearunder report.
Your Directors also take this opportunity to place on record the valuable co-operationand continuous support extended by its valued business associates Practicing CompanySecretary Auditors Supplier Customers Banks / Financial Institutions Governmentauthorities and the shareholders for their continuously reposed confidence in the Companyand look forward to having the same support in all its future endeavors.
| ||By Order of the Board |
| ||sd/- |
|Place : Gandhinagar ||Beena P Vaghela |
|Date : 25th May 2016 ||(DIN:03577571) |
| ||Chairperson & Director |