UMIYA TUBES LIMITED
Your Directors take pleasure in presenting the FIFTH Annual Report of theCompany together with the Audited Accounts for the financial year ended on 31stMarch 2018.
The brief financial results are as under:
| || ||(Rs. in lacs) |
|Particulars ||2017-18 ||2016-17 |
|Gross Income ||4506.67 ||2374.01 |
|Profit/(Loss) before Depreciation and Tax ||290.36 ||198.58 |
|Less: Depreciation ||38.31 ||30.74 |
|Profit/(Loss) Before Tax and Extra Ordinary Items ||252.05 ||167.84 |
|Less: Extra Ordinary Items ||Nil ||Nil |
|Less:Current Tax ||51.31 ||36.88 |
|Deferred Tax ||8.27 ||13.90 |
|Add/Less: MAT credit Entitlement ||3.47 ||(36.88) |
|Profit/(Loss) After Tax ||188.98 ||153.94 |
|Balance Carried to Balance Sheet ||348.53 ||159.55 |
The turnover of the Company for the year 2017-18 has substantially increased to Rs.4506.67 Lacs from Rs.2374.01 Lacs. Due to this profit before Depreciation and Tax standsincreased to Rs.290.36 Lacs as compared to profit of Rs. 198.58 Lacs in the last year.
SUBSIDIARY COMPANIES/JOINT VENTURE COMPANY/ASSOCIATE COMPANY:
The Company does not have any Subsidiary Companies or Joint Venture Company orAssociate Company.
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.
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 recommend anydividend.
TRANSFER TO RESERVE:
Your Directors find it prudent not to transfer any amount to General Reserve.
UTILISATION OF ISSUE PROCEEDS:
The Company came out with preferential allotment of 105000 equity shares and 350000convertible warrants to the promoters (including promoter group) on preferential basis atan issue price of Rs. 115/- per Equity Shares/Convertible Warrants aggregating to Rs.12075000 for Equity Shares and Rs. 40250000 (Rs. 10062500/- payable onapplication on warrants) for Convertible Warrants both aggregating to Rs. 52325000("Preferential Allotment ") vide Preferential Allotment Offer Letter dated 22ndJune 2017 ("offer document"). The 105000 equity shares issued under thepreferential allotment were listed on the SME Platform of BSE on 17th July2017.
The Company has deployed the entire funds of Rs. 22137500/- received till datethrough the Preferential Allotment as per the objects laid down in the explanatorystatement attached to the Notice approving the preferential issue.
INCREASE IN AUTHORISED SHARE CAPITAL:
During the year under review the Company has increased authorised share capital fromRs. 75000000 (Rupees Seven Crores Fifty Lacs Only) divided into 7500000 (Seventy FiveLacs) Equity Shares of face value of Rs. 10/- each to Rs. 90000000 (Rupees Nine CroresOnly) divided into 9000000 (Ninety Lacs ) Equity Shares of face value of Rs. 10/- eachThereafter the Company has further increased authorised share capital from Rs.90000000 (Rupees Nine Crores Only) divided into 9000000 (Ninety Lacs ) Equity Sharesof face value of Rs. 10/- each to Rs. 120000000 (Rupees Twelve Crores Only) dividedinto 12000000 (One Crore Twenty Lacs ) Equity Shares of face value of Rs. 10/- byresolution passed on 9th June 2018 through Postal Ballot.
ALLOTMENT OF SHARES UNDER PREFERENTIAL ALLOTMENT:
The Company has on 1st July 2017 allotted 105000 Equity Shares of Rs.10/- each at a price of Rs. 115/- each (including premium of Rs. 105/- each) fully paid upand 350000 Convertible Warrants (with option to convert into 350000 equity shares) atissue price of Rs. 115/ each warrant (Rs. 28.75/- per warrant paid along with theapplication and Rs. 86.25/- per warrant at the time of exercise of option for conversionbe allotted as per terms approved by shareholders in EGM held on 19th June2017 to the promoters (including promoter group) on Preferential Basis
ALLOTMENT OF SHARES UNDER BONUS ISSUE:
The Company has allotted 2501667/- equity shares of Rs. 10 each on 22ndJune 2018 as Bonus equity shares in the ratio of 1 equity shares of Rs. 10 each for every3 Equity shares of Rs. 10 each held by the existing Equity Shareholders of the Company.
The Paid up Equity share capital of the Company as on 31st March 2018 wasRs. 75050000/- divided into 7505000 Equity shares of Rs. 10/- each. Thereafter thesame was increased by issue of bonus shares and at present the paid up share capital ofthe Company is Rs. 100066670/- divided into 10006667/- Equity shares of Rs. 10/-each.
MIGRATION FROM BSE SME PLATFORM TO MAIN BOARD:
The Company has been migrated from BSE SME Platform to Main Board of BSE Limited as pernotice given by the BSE vide Notice No. 20180719-25 dated 19th July 2018w.e.f. 23rd July 2018.
DIRECTORS & KEY MANAGERIAL PERSONNEL:
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. Bharatkumar P.Patel (DIN: 06562786) Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible has offered himself to be re-appointed as director ofthe Company.
The Board recommends the re-appointment of Mr. Bharatkumar P. Patel (DIN: 06562786) asDirector of the Company liable to retire by rotation.
Mr. Saurabhkumar R Patel was appointed (DIN: 06964670) as Managing Director w.e.f. 1stSeptember 2018 for a period of 3 years.
Mr. Saurabhkumar R Patel (DIN: 06964670) would be CFO of the Company upto 31stAugust 2018 and Mr. Riken Bharatbhai Patel has been appointed as CFO of the Companyw.e.f. 1st September 2018 by the Nomination and Remuneration Committee and theBoard of Directors at its meeting held on 25th August 2018.
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 Regulation 34(3) ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has carried out an annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsAudit and Nomination & Remuneration Committees based on the criteria and frameworkadopted by the Board.
NUMBER OF MEETINGS OF BOARD:
The Board of Directors duly met 5 (Five) 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. P. Singhvi & Associates Chartered Accountants the existing auditors of theCompany were appointed as auditors of the Company at the 3rd AGM for holdingthe office from the conclusion of that 3rd AGM till the conclusion of the 8thAGM At the same AGM any one of the Directors of the Company was authorized to fix theremuneration of the Statutory auditors.
In view of the Companies (Amendment) Act 2017 the first proviso in sub-section (1)in section 139 of the Companies Act 2013 has been omitted with effect from 7thMay 2018. In view of this the said appointment of auditor is no longer required to beratified by the members at every annual general meeting.
The Board has duly reviewed the Statutory Auditor's Report on the Accounts. Theobservations comments and notes of the Auditor are self explanatory and do not call forany further explanation /clarification.
AUDITORS' REPORT AND NOTES ON ACCOUNTS:
The Board has duly reviewed the Statutory Auditor's 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 consists 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 consists of the following Directors:
|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 consists of the following Directors:
|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 Companies Act 2013 arisk management policy/plan of the Company is developed and implemented for creating andprotecting the Shareholder's value by minimizing threats or losses and to identify andprovide a framework that enables future activities of a Company to take place in aconsistent 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 Company's code of conduct or ethics policy.The details of the policy are posted 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 Company's shareholders may refer the Company's website for the detailed Nomination& Remuneration Policy of the Company on the appointment and remuneration of Directorsincluding criteria for determining qualifications positive attributes independence of aDirector; and other matters provided under sub-section (3) of section 178.
The Company's remuneration policy is directed towards rewarding performance based onreview of achievements periodically. The remuneration policy is in consonance with theexisting industry practice.
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 Companies (appointment and Remuneration of managerial personnel) Rules 2014 aregiven 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) ||5.64 ||Nil |
|Mr. Surendrasinh P Vaghela (Managing Director) ||5.64 ||Nil |
|Mr. Bharatkumar P Patel (Whole Time Director) ||5.64 ||Nil |
|Mr. Saurabhkumar R Patel (Director and CFO) ||5.64 ||Nil |
|Mr. Vikram G Patel (Independent Director) ||Nil ||N.A. |
|Mr. Rajesh K Dave (Independent Director) ||Nil ||N.A. |
|Mr. Mitesh G Patel (Independent Director) ||Nil ||N.A. |
|Mr. Atul J Popat (Independent Director) ||Nil ||N.A. - |
* Last year there was no increase in the remuneration paid to the Directors of theCompany.
Note: The median remuneration of employees of the Company during the financial year wasRs. 106373/- p.a.
|[C] Percentage Decrease in the median Remuneration of Employees ||80.69% |
|[D] Number of permanent Employees on the rolls of Company ||37 (Thirty Seven) |
|[E] 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 ||There was increase of 39.97% in average salaries of employees other than NEDs and KMPs made in the year 2017-18. There was no change in the Managerial Remuneration in the year 2017-18 as compared to the year 2016-17. |
PARTICULARS OF EMPLOYEES:
The statement showing the names of the top ten employees in terms of remuneration drawnis given as "Annexure 2." There are no employees of the Companydrawing remuneration requiring disclosure of information under Section 134 of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014.
DETAILS OF THE REMUNERATION TO MD/WTD (AS PER CLAUSE-IV OF SECTION-II OF PART-II OFSCHEDULE V):
(i) all elements of the remuneration package such as salary benefits bonuses stockoptions and pension: The details are given in clause- VI(A) of MGT-9 attached to thisreport as Annexure 3.
(ii) details of fixed component and performance-linked incentives along with theperformance criteria:
The details are given in clause- VI(A) of MGT-9 attached to this report as Annexure 3 and performance criteria is linked with net profit of the Company.
(iii) service contracts notice period and severance fees:
Term valid till 31st December 2018. And no notice period was mentioned noseverance fees.
(iv) stock option details if any and whether these have been issued at a discount aswell as the period over which they accrued and how they are exercisable:
The Company has not granted any stock option.
During the year there were no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and Company's 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 ||a. The Company uses LED lamps and fans in the whole factory premises including offices at factory and street light in factory which save approx. 30- 40% electricity as compared to normal lamps. |
| ||b. The Company uses AC Drives for almost all Tube mills and it also saves around 30-40% of electricity as compared to DC Drives. |
| ||c. The Company have installed 6 Voltage Protection device (VPD) for purpose stable voltage for main panel of individual tube mill. |
| ||d. The Company have installed power factor penal for maintained good power factor ratio. |
| ||e. The Company tried different composition of gases which ultimately found good quality and competitive cost of welding. |
| ||f. 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 steps taken by the company for utilizing alternate sources of energy ||N.A. |
|(iii) the capital investment on energy conservation equipments ||NIL |
|(B) Technology absorption || |
|(i) the efforts made towards technology absorption ||NIL |
|(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) ||As the Company has not imported any technology there are no details required to be given in any of the sub clauses under this clause.The Company have invented embossing machine which is used for embossing Company name on each product. |
|(a) the details of technology imported; || |
|(b) the year of import; || |
|(c) whether the technology been fully absorbed; ||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 benefits narrated above are the results of our R&D work only. |
|(d) if not fully absorbed are as where absorption has not taken place and the reasons thereof; || |
| ||The Company have invented embossing machine which is used for embossing Company name on each product. |
| ||As the company is new and at kid stage it do 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. |
|(iv) the expenditure incurred on Research & Development ||Nil |
|(C) Foreign exchange earnings and Outgo || |
|The Foreign Exchange earned in terms of actual inflows during the year and ||Inspite of attempts of marketing abroad no inflow took place but the Company is still pursuing export opportunities and is quite hopeful of exporting during the years to come. |
|The Foreign Exchange outgo during the year in terms of actual outflows ||Expenditures incurred in Foreign Currency is Rs 4238450/- for purchase of Raw material (S.S. Pipes) for USD 34151.60 |
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.
Details of money accepted (if any during the year) by the Company from the Directorsand/or the relatives of Directors of the Company are given in the notes to the FinancialStatements and the same are not deposit as per the applicable provisions of Companies Act2013 and rules made thereunder.
It may please be noted that as our Company is not falling in the applicability criteriaprescribed as mentioned in the SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015. However subsequent to migration to BSE Main Board the requirements ofCorporate Governance as laid down under the SEBI-LODR shall be applicable to the Company.The Company is already complaint with most of those Corporate Governance requirements.
In view of above in this year the Report on Corporate Governance is not forming partof the Directors' Report.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT- 9 is annexedherewith as "Annexure -3". The Annual return is also being uploaded on thewebsite of the Company.
COMPLIANCES OF APPLICABLE SECRETARIAL STANDARDS:
The Company has complied with applicable Secretarial Standards during the year underreview.
PARTICULARS OF LOANS INVESTMENTS OR GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT2013:
The investments made by the Company during the year under section 186 of the CompaniesAct 2013 are already reported in the financial statements. The same may be treated assufficient disclosure for the purpose of this Directors report. There are no LoansGuarantees /Security given by the Company during the year under section 186 of theCompanies Act 2013; hence no particulars are required to be given.
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. The details of related party transactions as per AS-18 areotherwise reported in the financial statements. The related party transactions areotherwise carried out in the ordinary course of business and on Arms' length basis and thesame are in the best interest of the Company. The related party transactions are due tobusiness exigencies.
MANAGEMENT DISCUSSION AND ANALYSIS:
Necessary Management Discussion and Analysis Report pursuant to Regulation 34(2)(e) ofThe SEBI (LODR) Regulations 2015 is appended as "Annexure-4"to Director'sReport.
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 August 2018 ||(DIN:03577571) |
| ||Chairperson & Director |