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Surani Steel Tubes Ltd.

BSE: 535154 Sector: Metals & Mining
NSE: SURANI ISIN Code: INE01ZJ01015
BSE 05:30 | 01 Jan Surani Steel Tubes Ltd
NSE 05:30 | 01 Jan Surani Steel Tubes Ltd

Surani Steel Tubes Ltd. (SURANI) - Director Report

Company director report

To

The Members

The Directors present the 7th Annual Report of the Company along with theaudited financial statements for the financial year ended March 31 2019.

FINANCIAL RESULTS:

The Company's financial performance for the year under review along with previous yearfigures is given hereunder:

(Amount in Lakh)

Particulars 2018-19 2017-18
Revenue from Operations 9299.42 10077.98
Other Income 1.58 1.74
Total revenue 9301.01 10079.72
Depreciation 36.98 38.87
Finance Cost 86.23 101.53
Profit before Tax (11.14) 274.36
Current Tax Expense 1.05 81.00
MAT Credit Entitlement 0.00 13.28
Deferred tax (2.50) 0.85
Prior Period Tax Adjustment 3.94 2.81
Profit after Tax (13.63) 176.40
Earnings per share for continuing operation
Basic -0.22 3.51
Diluted -0.22 3.51
Share Capital Amount in Rs.
Authorized Share Capital 90000000 60000000
Paid up share capital 82840000 58000000

There are no material changes and commitment affecting the financial position of theCompany which has occurred between 1st April 2018 and date of this report.

DIVIDEND AND RESERVES:

With a view to conserve reserves and Surplus your directors do not recommend anydividend for the financial year ended 31st March 2019.

BRIEF DESCRIPTION OF THE COMPANYS WORKING DURING THE YEAR:

Your Company total income for the year 2018-2019 is Rs. 9301.01 Lakh compared to lastyears income of Rs. 10079.72 Lakh. The loss before tax (after depreciation) during theyear under review was Rs. 11.14 Lakh as compared to previous years profit of Rs.274.36Lakh. Your

Company has incurred the net loss of Rs.13.63 Lakh against the net profit of Rs.176.40Lakh during the previous year. Your Company expects to achieve better performance duringthe current year.

INITAIL PUBLIC OFFERING:

During the year under review your Company come up with a public issue of 2484000equity shares of Rs.10/- each at a premium of Rs.42/- per share aggregating to the totalRs. 129168000/- Subsequently the shares of the Company have been listed on SME platformof NSE EMERGE Limited on 6th February2019.

SHARE CAPITAL:

The Paid up Share Capital of the Company as on 31st March 2018 was Rs.58000000. During the year under review the Company had allotted 2484000 Fresh EquityShares by way of Initial Public Issue on 4th February2019 and the paid upcapital the Company has increased to Rs. 82840000.

UTILIZATION OF IPO FUND:

The Initial Public Offer fund is utilized for the purpose for which the amount israised as mentioned in the prospectus.

CHANGE OF NAME OF COMPANY:

The name of Company has been changed from SURANI STEEL PRIVATE LIMITED to SURANI STEELTUBES PRIVATE LIMITED with effect from 13th August 2018.

CONVERSION INTO PUBLIC LIMITED COMPANY:

Your company converted from private limited company to Public limited Company duringthe year under review. The Company had received a fresh certificate of Incorporation on 12thSeptember 2018 consequent upon conversion into public limited company.

LISTING OF SHARES OF THE COMPANY:

The Company was unlisted public company and listed during the year under review on NSEEMERGE platform on 6th February 2019.

CHANGE IN THE NATURE OF BUSINESS:

There is no Change in the nature of the business of the Company done during the year.

DEPOSITS:

Your Company has not accepted any deposits within the meaning of section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.

PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS:

The company has not given any loans guarantees or made investment covered under theprovisions of section 186 of the Companies Act 2013 during the year 2018-19.

INTERNAL CONTROL AND THEIR ADEQUACY:

The Company has a well-established internal control system. The Company strives tomaintain a dynamic system of internal controls over financial reporting to ensure reliablefinancial record-keeping transparent financial reporting and disclosure and protection ofphysical and intellectual property.

DETAILS OF HOLDING SUBSIDIARY AND ASSOCIATES:

The Company has no holding subsidiary and associate Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

Information in accordance with the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 regardingconservation of energy technology absorption and foreign exchange earnings and outgo:

TECHNOLOGY ABSORPTION:

Your Company firmly believes that adoption and use of technology is a fundamentalbusiness requirement for carrying out business effectively and efficiently. While theindustry is labor intensive we believe that mechanization of development throughtechnological innovations is the way to address the huge demand supply gap in theindustry. We are constantly upgrading our technology to reduce costs and achieve economiesof scale.

ENERGY:

Energy conservation is very important for the company and therefore energy conservationmeasures are undertaken wherever practicable in its plant and attached facilities. TheCompany is making every effort to ensure the optimal use of energy avoid waste andconserve energy by using energy efficient equipment's with latest technologies.

FOREIGN EXCHANGE:

There are no foreign exchange earnings and out-go during the financial year.

INDUSTRIAL RELATION:

During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

As per Provisions of Section 152 of the Companies Act 2013 Mr. Mukesh Patel is liableto retires by rotation and being eligible to offer himself for re-appointment.

Mr. Dinesh Karshan Patel appointed as Joint Managing Director with effect from 14thAugust 2018.

Mr. Mukesh Patel appointed as Joint Managing Director with effect from 14thAugust 2018.

Mr. Karshanbhai Patel appointed as Non-executive director with effect from 14thAugust 2018.

Mr. Dineshbhai Dhanjibhai Patel appointed as Non-executive Additional Independentdirector with effect from 21st September 2019 and regularize as director inthe Annual General Meeting held on 29th September 2019.

Ms. Hetika Dipak Kinger appointed as Non-executive Additional Independent director witheffect from 21st September 2019 and regularize as director in the AnnualGeneral Meeting held on 29th September 2019.

Mr. Gaurav Rajeshbhai Patel appointed as Chief Financial Officer of the company witheffect from 21st September 2019.

Mr. Maulik Nikhilkumar Dixit appointed as Company Secretary with effect from 7thJuly 2018 and resigned with effect from 31st October 2018.

Ms. Hetal Bhansali appointed as Company Secretary with effect from 1stNovember 2018 and resigned with effect from 22nd February 2019.

Ms. Anita Lalwani appointed as Company Secretary with effect from 1st March2019.

BUSINESS RISK MANAGEMENT:

The Company has taken various steps in connection with the implementation of RiskManagement measures in terms of provisions contained in the Companies Act 2013 afteridentifying the elements of risks which in the opinion of the Board may threaten the veryexistence of the Company. The Company has laid down a comprehensive Risk Assessment andMinimization Procedure which is reviewed by Board from time to time. Key risks identifiedare methodically addressed through mitigating actions on a continuing basis. The policy ofrisk management available on the website of the company at www.suranisteel.com.

NUMBER OF BOARD MEETINGS AND ATTENDANCE:

During the year 2018-19 the Board of Directors met Twenty Second (22) time viz.03.04.2018 22.06.2018 07.07.2018 09.07.2018 30.07.2018 06.08.2018 08.08.201810.08.2018 14.08.2018 20.08.2018 23.08.2018 29.08.2018 15.09.2018 21.09.201806.10.2018 17.10.2018 01.11.2018 10.12.2018 28.12.2018 04.02.2019 01.03.2019 and14.03.2019. The interval between any two meetings was well within the maximum allowed gapof 120 days.

Name of Director Category No of Meetings Entitled to attend No of Meetings Attended
Dinesh Karshan Patel Joint Managing Director 22 22
Mukesh Patel Joint Managing Director 22 22
Karshanbhai Patel Non-Executive 13 13
Hetika Dipak Kinger Independent Director 8 5
Dineshbhai Dhanjibhai Patel Independent Director 8 7

EXTRACTS OF ANNUAL RETURN:

In accordance with section 134(3)(a) of the Companies Act 2013 an extract of AnnualReturn in the prescribed format is appended to this Report as Annexure III and alsoavailable on the website of the company at www.suranisteel.com.

CORPORATE GOVERNANCE REPORT:

As per regulation 15(2) of the Listing Regulation the Compliance with the CorporateGovernance provisions shall not apply in respect of the following class of the Companies:

a. Listed entity having paid up equity share capital not exceeding Rs. 10 Crore and Networth not exceeding Rs. 25 Crore as on the last day of the previous financial year;

b. Listed entity which has listed its specified securities on the SME Exchange.

Since our Company falls in the ambit of aforesaid exemption (b); hence compliance withthe provisions of Corporate Governance shall not apply to the Company and it does not formthe part of the Annual Report for the financial year 2018-2019.

REVIEW OF AUDITORS REPORT AND SECRETARIAL AUDITORS REPORT:

The auditors report and secretarial auditors report does not contain anyqualifications reservations or adverse remarks.

The Board pursuant to Section 204 of the Companies Act 2013 read with Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 hasappointed M/s. Sejal Shah & Associates Practicing Company Secretary Ahmedabad as

Secretarial Auditor of the Company to conduct the Secretarial Audit as per theprovisions of the said Act for the Financial Year 2018-19. A Secretarial Audit Report forthe Financial Year 2018-19 is annexed herewith as Annexure-IV in Form MR-3. Thereare no adverse observations in the Secretarial Audit Report which call for explanation.

REPORTING OF FRAUDS BY AUDITORS:

During the year under review the Statutory Auditors has not reported to the AuditCommittee under Section 143(12) of the Companies Act 2013 any instances of fraudcommitted against the Company by its officers or employees the details of which wouldneed to be mentioned in the Board's Report.

STATUTORY AUDITORS:

The Audit committee and Board has recommended the appointment of M/s. Ambalal Patel& Co. (FRN No. 100305W) Chartered Accountants as the statutory auditors of theCompany to hold office for a period of 5 consecutive years until the conclusion of 12thAnnual General Meeting in the ensuing Annual General Meeting.

MANAGEMENT DISCUSSION AND ANALYSIS:

As required under Regulation 34 of the Securities Exchange Board of India (ListingObligations and Disclosure Requirement) Regulations 2015 (“ListingRegulations”) the Management Discussion and Analysis of the Company for the yearunder review is presented in a separate section forming the part of the Annual Report isattached here with as Annexure V.

DEMATERIALISATION OF SHARES:

During the year under review all the equity shares were dematerialized throughdepositories viz. National Securities Depository Limited and Central Depository Services(India) Limited which represents 100% of the total paid-up capital of the Company. TheCompany ISIN No. is INE01ZJ01015 and Registrar and Share Transfer Agent is Link IntimeIndia Private Limited.

DIRECTOR REMUNERATION

Member's attention is drawn to Financial Statements wherein the disclosure ofremuneration paid to Directors is given during the year 2018-19. No Sitting fees have beenpaid to the directors. The Nomination and remuneration policy available on the website ofthe company at www.suranisteel.com.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Act the Board of Directors to the best of itsknowledge and ability confirm that:

(i) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe loss of the Company for that period;

(iii) The directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of Companies Act 2013 andRules made thereunder for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities;

(iv) The directors had prepared the annual accounts on a going concern basis;

(v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

MEETING OF INDEPENDENT DIRECTORS:

During the year under review the Independent Directors met on 14th March2019 inter alia to discuss:

1. Review of the performance of the Non- Independent Directors and the Board ofDirectors as a whole.

2. Review of the Chairman of the Company taking into the account of the views of theExecutive and Non- Executive Directors.

3. Assess the quality content and timeliness of flow of information between themanagement and the Board that is necessary for the Board to effectively and reasonablyperform its duties.

All the Independent Directors were present in the meeting.

1. DECLARATION FROM INDEPENDENT DIRECTORS

All the Independent Directors on the Board have given a declaration of theirindependence to the Company as required under section 149(6) of the Companies Act 2013.

2. CRITERIA FOR APPOINTMENT OF INDEPENDENT DIRECTORS

An Independent Director shall be a person of integrity and possess appropriate balanceof skills experience and knowledge in one or more fields of finance law managementsales marketing and technical operations or any other discipline related to the Company'sbusiness. The Company did not have any peculiar relationship or transactions withnon-executive Directors during the year ended 31st March 2019.

3. FORMAL ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act 2013 the nomination and remunerationcommittee has laid down the evaluation of the performance of Individual Directors and theBoard as a whole. Based on the criteria the exercise of evaluation was carried out throughthe structured process covering various aspects of the Board functioning such ascomposition of the Board and committees experience & expertise performance ofspecific duties & obligations attendance contribution at meetings etc. Theperformance evaluation of the Chairman and the Non- Independent Directors was carried outby the Independent Director. The performance of the Independent Directors was carried outby the entire Board (excluding the Director being evaluated). The Director expressed theirsatisfaction with the evaluation process and no other observations of board evaluationcarried out for the year.

RELATED PARTY TRANSACTION:

All related party transactions that were entered into during the year under the reviewwere on an arm's length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company which may have apotential conflict with the interest of the Company at large. Your Directors draw yourattention to related parties' transactions entered during the year as are detailed inAnnexure VI attached to this report.

POLICIES OF THE COMPANY:

REMUNERATION AND APPOINTMENT POLICY:

The remuneration of the Directors Key Managerial Personnel Senior Management andOther employees must be in accordance with the provisions of Companies Act 2013 and theRules made there under and as per SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 as per other applicable provisions as amended from time to time.

The committee must ensure that:

a. The level and composition of remuneration is reasonable and sufficient to attractretain and motivate directors and key managerial personnel of the quality required to runthe company successfully.

b. relationship of remuneration to performance is clear and meets appropriateperformance benchmarks and

c. remuneration to directors key managerial personnel and senior management involves abalance between fixed and incentive pay reflecting short and long-term performanceobjectives appropriate to the working of the company and its goals.

The Company follows a policy on directors' appointment and remuneration and the sameare available in the website of the Company www.suranisteel.com and salient pointsare as follows:

POLICY ON MATERIALITY OF RELATED PARTY TRANSACTION:

Your Company has adopted the policy on Materiality of Related Party Transaction to setout the dealing with the transaction between the Company and its related parties. ThePolicy on Materiality of Related Party Transaction has been available on the website ofthe Company www.suranisteel.com.

POLICY OF CODE OF CONDUCT FOR DIRECTOR AND SENIOR MANAGEMENT:

Your Company has adopted the policy of code of Conduct to maintain standard of businessconduct and ensure compliance with legal requirements. The Policy on Code of Conduct forDirector and Senior Management has been available on the website of the Company www.suranisteel.com.

PREVENTION OF INSIDER TRADING:

Pursuant to provisions of the regulations the Board has formulated and implemented aCode of Conduct to regulate monitor and report trading by employees and other connectedpersons and code of practices and procedure for fair disclosure of unpublished priceSensitive Information. The same has been available on the website of the Company www.suranisteel.com.

PARTICULARS REGARDING EMPLOYEES REMUNERATION:

During the year under review there are no employees drawing remuneration which is inexcess of the limit as prescribed under Section 197 of the Companies Act 2013 read withrule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014. The information pertaining to section 197 read with rules 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) 2014 is annexed herewith asAnnexure-VII.

BUSINESS RISK MANAGEMENT:

The Management regularly reviews the risk and took appropriate steps to mitigate therisk. In the opinion of the Board no risk has been identified that may threaten theexistence of the Company.

DISQUALIFICATIONS OF DIRECTORS:

During the financial year 2018-2019 under review the Company has received Form DIR-8from all Directors as required under the provisions of Section 164(2) of the CompaniesAct 2013 read with Companies (Appointment and Qualification of Directors) Rules 2014that none of the Directors of your Company is disqualified; to hold office as directordisqualified as per provision of Section 164(2) of the Companies Act 2013 and debarredfrom holding the office of a Director pursuant to any order of the SEBI or any suchauthority in terms of SEBI's Circular No. LIST/COMP/14/2018-19 dated 20th June2018 on the subject “Enforcement of SEBI orders regarding appointment of Directors byListed Companies”.

The Directors of the Company have made necessary disclosures as required under variousprovisions of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

SECRETARIAL STANDARD:

Your Directors states that they have devised proper systems to ensure compliance withthe Secretarial Standards and that such system are adequate and operating effectively.

COMMITTEES OF THE BOARD:

Matters of policy and other relevant and significant information are furnishedregularly to the Board. To provide better Corporate Governance & transparencycurrently your Board has three (3) Committees viz. Audit Committee Remuneration &Nomination Committee and Stakeholder Relationship Committee to look into various aspectsfor which they have been constituted. The Board fixes the terms of reference of Committeesand also delegate powers from time to time.

AUDIT COMMITTEE:

The Audit Committee comprises of non-executive Independent Director and Director as itsMember. The Chairman of the committee is Independent Director.

During the Financial year 2018-19 one meeting of audit committee held on 28thDecember 2018.

The Composition of Audit Committee and the details of meetings attended by the membersduring the year are given below.

Name of the Director Status Nature of Directorship No. of Meetings Meeting attended
1 Dineshbhai Dhanjibhai Patel Chairman Independent Director 1 1
2 Karshanbhai Patel Member Non-executive Director 1 1
3 Hetika Dipak Kinger Member Independent Director 1 1

NOMINATION AND REMUNERATION COMMITTEE

The Committee comprises of three non-executive Directors as its members. The Chairmanof the Committee is an Independent Director.

During the Financial year 2018-19 one meeting of Nomination and Remuneration Committeeheld on 14th March 2019.

The Composition of Nomination and Remuneration Committee and the details of meetingsattended by the members during the year are given below:

Name of the Director Status Nature of Directorship No. of Meetings Meeting attended
1 Dineshbhai Dhanjibhai Patel Chairman Independent Director 1 1
2 Karshanbhai Patel Member Non-executive Director 1 1
3 Hetika Dipak Kinger Member Independent Director 1 1

The Nomination and remuneration committee available on the website of the company at www.suranisteel.com.

STAKEHOLDER RELATIONSHIP COMMITTEE

The Committee comprises of three non-executive Directors as its members. The Chairmanof the Committee is an Independent Director.

During the Financial year 2018-19 one meeting of Stakeholder Relationship Committeeheld on 14th March 2019.

The Composition of Stakeholder and Relationship Committee and the details of meetingsattended by the members during the year are given below:

Name of the Director Status Nature of Directorship No. of Meetings Meeting attended
1 Dineshbhai Dhanjibhai Patel Chairman Independent Director 1 1
2 Karshanbhai Patel Member Non-executive Director 1 1
3 Hetika Dipak Kinger Member Independent Director 1 1

COST AUDITORS AND THEIR REPORT:

Pursuant to the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 as amended from time to time your Companyhas been carrying out audit of Cost Records every year. The Board of Directors on therecommendation of Audit Committee has appointed C. B. MODH AND COMPANY Cost Accountant(Firm Registration No. 101474) as Cost Auditor of the Company for conducting the CostAudit of the Company for the Financial Year 2018-19.The Cost Audit report given by C. B.MODH AND COMPANY for F.Y. 2018-19 placed before the Board and approved.

OTHER REGULATORY REQUIREMENT:

The Company has been complied with all regulatory requirements of central governmentand state government and there were no significant and material orders passed by theRegulators or Courts or Tribunals during the year impacting the going concern status andthe Company's operations in future.

CORPORATE SOCIAL RESPONSIBILITY:

The provision of section 135 of Companies Act 2013 for implementing Corporate SocialResponsibility Policy constitute committee and expenditure thereof is not applicable tothe company since the company is not meeting with the criteria of net-worth turnover ornet profits mentioned therein.

VIGIL MECHANISM/WHISTLE BLOWER MECHANISM:

Your Company has framed a Whistle Blower Policy to deal with instances of fraud andmismanagement if any. The Vigil Mechanism has been available on the website of theCompany www.suranisteel.com.

STATEMENT PURSUANT TO LISTING AGREEMENT:

The Company Equity Shares is listed at National Stock Exchange Limited (SME segment).The Annual Listing fees for the year 2019-20 has been paid.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:

During the year under review there were no cases filed pursuant to the SexualHarassment of Women at the Workplace (Prevention Prohibition & Redressal) Act 2013and Rules there under.

ACKNOWLEDGEMENT:

Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.

Registered Office: For and on behalf of Board of Directors
S. No.110 115 For SURANI STEEL TUBES LIMITED
Opp. Vinayak TMT Bayad Road
Sampa Tal. Dahegam
Gandhinagar- 382315
Dinesh Patel Mukesh Patel
Date : 29.07.2019 Chairman & Joint Managing
Place : Sampa Dahegam Joint Managing Director Director
(DIN: 03585273) (DIN: 05331136)