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Valecha Engineering Ltd.

BSE: 532389 Sector: Infrastructure
NSE: VALECHAENG ISIN Code: INE624C01015
BSE 00:00 | 04 Mar Valecha Engineering Ltd
NSE 05:30 | 01 Jan Valecha Engineering Ltd
OPEN 111.20
PREVIOUS CLOSE 106.70
VOLUME 27145
52-Week high 112.80
52-Week low 0.00
P/E 209.22
Mkt Cap.(Rs cr) 240
Buy Price 106.70
Buy Qty 865.00
Sell Price 0.00
Sell Qty 0.00
OPEN 111.20
CLOSE 106.70
VOLUME 27145
52-Week high 112.80
52-Week low 0.00
P/E 209.22
Mkt Cap.(Rs cr) 240
Buy Price 106.70
Buy Qty 865.00
Sell Price 0.00
Sell Qty 0.00

Valecha Engineering Ltd. (VALECHAENG) - Director Report

Company director report

To The Members

The Directors present their 43rd Annual Report and theAudited Statement of Accounts for the year ended 31st March 2020 FinancialHighlights (Standalone) Rs. in Crores

2019-20 2018-19
Revenue from Operations 207.89 184.3
Other Income 5.70 17.23
Total Revenue 213.59 201.53
Profit be fore Interest Depreciation Exceptional Items and Tax 4.66 7.62
Less: Finance Cost 0.90 1.28
Profit be fore Depreciation Exceptional Items and Tax 3.76 6.34
Less: Depreciation and Amortization Expenses 2.11 5.18
Profit /(Loss) before Exceptional Item and Tax 1.65 1.16
Exceptional Item - -
Profit/ (Loss) before Tax 1.65 1.16
Provision for Tax ( Including earlier Year Taxation) - -
Profit /(Loss) after Tax 1.65 1.16
Other comprehensive income/(loss) for the year 1.72 1.25
Total comprehensive income for the year 3.37 2.41
Retained Earnings- Opening Balance (142.50) (143.66)
Add: Profit / (Loss) for the Year 1.65 1.16
Retained Earnings- Closing Balance (140.85) (142.50)

1. Share Capital:

The paid up Equity Share Capital as on 31st March 2020 wasRs. 22.53 Crores.

2. Dividend:

In view of the carried forward losses incurred during the year underreview the Board regrets its inability to recommend any dividend for the year ended 31stMarch 2020.

3. Reserves:

No amount is being transferred to reserves.

4. Operations/ State of affairs during the year:

Standalone

The Company has achieved a turnover of Rs.207.89 crores as at 31stMarch 2020 against Rs 184.30 crores resulting into an increase by 12.80%. The Company hasearned Profit after Tax of Rs.1.65 crores against the Profit after Tax of Rs.1.16 croresin the previous year.

Consolidated

The Company has achieved a consolidated turnover of Rs.240.36 crores asat 31st March 2020 against Rs 209.72 crores resulting into an increase by14.61%. The company has incurred a consolidated Loss after Tax of Rs 156.50 crores againstthe Loss after Tax of Rs 150.26 crores in the previous year.

5. Fixed Deposits:

As on 3151 March 2020 Fixed Deposits stood at Rs.27.93Crores as against Rs. 27.94 Crores in the previous year.

Details relating to deposits covered under The Companies (Acceptance ofDeposits) Rules 2014 for the Financial Year 2019-20; Deposit re-paid during the year00.85 Lakhs to 3 FD holders.

The Company has not repaid deposits (including unpaid interest providedupto March 2017 of Rs.2.58 crores) amounting to Rs.30.51 crores as at March 312020 as perthe contractual terms. Pursuant to the NCLT order dated 03.04.2019 11.06.201922.08.201914.11.2019 26.05.2020 and in terms of NCLAT order dated 12.02.2020 the matter has sincebeen sub-judiced. As per these orders the proceeds from Canara Bank and refunds fromIncome Tax department will be exclusively utilized for repayment of deposits to depositholders.

Despite the financial crunch and difficulties faced by the Company theCompany is making repayment to the Fixed Deposit holders.

6. Material changes and commitments:

There have been no material changes and commitments affecting thefinancial position of the Company between the end of the financial year of the Company towhich the financial statements relate and the date of the report.

7. Changes in the nature of business There has been no change in thenature of business

8. Details of significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and company's operations infuture:

Few supplier/vendors had filed winding up petitions before the BombayHigh Court and/or for liquidation under IBC. The company has challenged such cases byfiling necessary legal action and Bombay High Court has stayed/put in abeyance therelevant cases.

9. Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo pursuant to Section 134 of the Companies Act 2013 and Rulesthereunder:

A. Conservation of Energy: At all the sites of the Company theconsumption of power is regularly monitored and necessary measures are taken to regulatethe consumption.

B. Technology absorption: During the year under review there is noexpenditure on Technology Absorption and on Research and Development.

C. Foreign Exchange Earnings & Outgo:

2019 - 20 2018-19
Foreign Exchange Outgo NIL NIL
Foreign Exchange Earned NIL NIL

10. Details of Subsidiary/Joint Ventures/Associate Companies:

As on 31st March 2020 the Company has the following 6subsidiaries namely:-

Valecha Infrastructure Limited Valecha LM Toll Private Limited
Valecha Kachchh Toll Roads Limited Professional Realtors Private Limited
Valecha International FZE Valecha Badwani Sendhwa Tollways Limited

Pursuant to the provisions of Section 129(3) of the Companies Act2013 a statement containing salient features of Financial Statements of subsidiaries inForm AOC-1 forms part of the Financial Statement and hence not repeated here for the sakeof brevity.

11. Consolidated Financial Statements

The audited Consolidated Financial Statements of the Company also formpart of the Annual Report.

Pursuant to the provisions of Section 136 of the Companies Act 2013the Company has placed separate audited accounts of its subsidiaries on its websitewww.valecha.in. The Company will make available the audited annual accounts and associatedinformation of its subsidiaries upon request by any of its shareholders.

12. Particulars of Loans Guarantees or Investments under Section 186:

Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.

13. Auditors' and their Report:

- Statutory Auditor

M/s. Bagaria & Co. LLP conducted the Statutory Audit for the year2019-20. The Independent Auditors Report to the members of the Company in respect of theStandalone and Consolidated Financial Statements for the year ended 31st March2020 form part of this Annual Report.

STATUTORY AUDITORS In accordance with the provisions of Section 139 ofthe Companies Act 2013 at the Annual General Meeting held on 30.09.2019 M/s. Bagaria& Co. LLP Chartered Accountants were appointed as the Statutory Auditors of theCompany for a period of 5 years till the conclusion of 47th AGM subject to theratification by the members at every AGM. The requirement to place the matter relating toappointment of Auditors for ratification by members at every Annual General Meeting wasomitted vide notification dated May 7 2018 issued by the Ministry of Corporate Affairs.Accordingly no resolution is proposed for ratification of appointment of Auditors inensuing AGM of the Company. The Company has received a letter from M/s. Bagaria & Co.LLP Chartered Accountants confirming that they are eligible for continuing as StatutoryAuditors of the Company.

Statutory Auditors' Remarks

Relevant Notes to Standalone Financial Statement provide clarificationto the Auditors' opinion in related points of the Audit report (Standalone) Relevant Notesto Consolidated Financial Statement provide clarification to the Auditors' opinion inrelated point of the Audit report (Consolidated) Cost Auditor:

Pursuant to Section 148 of the Companies Act 2013 in terms of theCentral Government's directives the Board of Directors on the recommendation of the AuditCommittee had appointed M/s Darshan Vora & Co (M/36481) Cost Accountant as the CostAuditor of the Company for the year 2020-2021.

M/s Darshan Vora & Co have confirmed that their appointment iswithin the limits of Section 139 of the Companies Act 2013 and has certified that theyare free from any disqualifications specified under Section 148(5) and all otherapplicable provisions of the Companies Act 2013.

The said auditors have given their eligibility certificate forappointment as Cost Auditor.

- Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Act and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company had appointed M/s Ragini Chokshi & Co Practicing Company Secretary(Membership No.2390) a firm of Company Secretaries in practice to undertake theSecretarial Audit for the financial year ended 31st March 2020. Their Reportis annexed as Annexure-A to this report.

14. Adequacy of Internal Financial Control

The Company has in place adequate internal financial controlscommensurate with the size scale and complexity of its operations. The Company haspolicies and procedures in place for ensuring proper and efficient conduct of itsbusiness the safeguarding of its assets the prevention and detection of frauds theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information to Directors

15. Directors:

- Cessation of term of Directors:

- Mr Ketan H Gandhi a resigned as Director with effect from 10.10.2019

Mr. Arvind Thakkar Mr. Jagdish Valecha and Mrs Sonal Jitiya resignedas Director with effect from 19.11.2019

The Board places on record its appreciation for the immensecontributions and valuable guidance given by all aforesaid 4 directors during their longassociation as Directors of the Company

- Appointment of Directors:

The Board of Directors at its meeting held on 14.11.2019 have appointedMr. Tejas Deshpande (DIN: 01942507) and Mr S N Kavi (DIN: 05134904) as AdditionalDirectors of the Company.

The Board therefore recommends their appointment as a Non Executive& Independent Directors of the Company. A brief resume and other relevant informationhas been furnished in the notice convening the AGM.

Declaration by Independent Directors:

Mr. Tejas Deshpande Mr S N kavi & Mr. Arvind M. Thakkar NonExecutive & Independent Directors on the Board of the Company confirm that they meetthe criteria of Independence as prescribed both under the Companies Act 2013 and SEBI(Listing Obligation and Disclosure Requirements) Regulation 2015.

All Independent Directors have given declaration that they meet thecriteria of independence as provided in section 149 (6) of the Act and Regulation 16 and25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. There hasbeen no change in the circumstances which has affected their status as IndependentDirector. The Non-Executive Directors of the company had no pecuniary relationship ortransactions with the company.

In the opinion of the Board they fulfill the conditions ofindependence as specified and are independent of the management.

16. Board Evaluation

The Nomination and Remuneration Committee has laid down criteria forperformance evaluation of the Directors Chairperson Board Level Committees and the Boardas a Whole and also the evaluation process for the same. The Directors were satisfied withthe evaluation results which reflected the overall engagement of the Board Members andits Committees with the Company.

17. Meetings of the Board of Directors:

The details of the number of meetings of the Board held during theFinancial Year 2019-20 forms part of the Corporate Governance Report.

18. Committees of the Board of Directors

The Board of Directors have the following Committees

- Audit Committee

- Nomination and Remuneration Committee

- Stakeholders Relationship Committee

The details of the Committees along with their composition number ofmeetings and attendance at the meetings are provided in the Corporate Governance sectionof this Report.

19. Policies of the Board of Directors

I. Corporate Social Responsibility

During the year under review in view of the carried forward lossesSection 135 (1) of the Companies Act 2013 is not applicable.

II. Vigil Mechanism/Whistle Blower

In compliance with the provisions of Section 177(9) of the CompaniesAct 2013 and Regulation 22 of the SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 the Company has framed a Vigil Mechanism/Whistle Blower Policy with aview to maintain high standards of transparency in Corporate Governance deal withunethical behavior actual or suspected fraud or violation of the Company's code ofconduct or ethics policy if any. No communication from any employee of the company underthe Whistle Blower Policy was received during the year.

III. Remuneration Policy for Directors Key Managerial Personnel andother employees

A. Executive Directors

a) No remuneration paid to the Managing Director and Whole TimeDirectors during the year under review

b) The Remuneration to the Key Managerial Personnel and other employeeswill be such as to ensure that the relationship of remuneration to performance is clearand meets appropriate performance benchmarks.

B. Non-Executive Directors

Non-Executive Directors of a Company's Board of Directors addsubstantial value to the Company through their contribution to the Management of theCompany. In addition they also play an appropriate control role.

Sitting Fees

Non-Executive Directors are entitled to sitting fees for attendingmeetings of the Board Audit Committee Nomination and Remuneration Committee andStakeholders Relationship Committee. The sitting fees presently paid to the Non -Executive Directors for the F.Y. 2019-20 is Rs. 10000/ - per meeting of the Board AuditCommittee Nomination and Remuneration Committee and Stakeholders Relationship Committee.

IV. Policy on Related Party Transaction

Pursuant to Section 134 of the Companies Act 2013 read with Rule 8(2)of the Companies (Accounts) Rules 2014 the Company has formulated guidelines foridentification of related parties and the proper conduct and documentation of all relatedparty transactions.

In light of the above VEL has framed a policy on related partytransaction. This policy has been adopted by the Board of Directors of the Company basedon recommendations of Audit Committee.

The policy on Related Party Transactions as approved by the Board isavailable for viewing on the Company's website.

Particulars of Contracts or Arrangements with Related Parties:

The Contracts or Arrangements entered into by the Company with RelatedParties have been done at arms' length and are in the ordinary course of business. FormAOC-2 as required under Section 134 (3)(h) is enclosed as Annexure - B to this report.

20. Compliance with Secretarial Standards

The Company has complied with applicable provisions of the SecretarialStandards issued by the Institute of Company Secretaries of India and approved by theGovernment of India under Section 118(10) of the Companies Act 2013.

21. Maintenance of Cost Records

Pursuant to sub-section (1) of Section 148 of the Companies Act 2013the Company is required to maintain cost records and accordingly the Company has made andmaintained such cost records.

22. Particulars of Employees:

There are no employees drawing salary pursuant to Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

23. Disclosures under Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 [14 of 2013]:

As required by Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 the Company has formulated and implemented apolicy on prevention of sexual harassment at workplace. The Company has also constitutedan Internal Complaints Committee with a mechanism of lodging complaints. During the yearunder review there were no cases filed pursuant to the aforesaid Act.

24. Extract of the Annual Return:

The details forming part of the extract of the Annual Return in FormMGT - 9 as required under Section 92 of the Companies Act 2013 is marked as Annexure - Cwhich is annexed hereto and forms part of the Directors' Report.

25. Corporate Governance and Management Discussion & AnalysisReport:

The Company has complied with the Corporate Governance Code asstipulated under 27(2)(b) of the SEBI (Listing Obligation and Disclosure Requirements)Regulation 2015. A separate section on Corporate Governance along with certificate fromSecretarial Auditors confirming the compliance is annexed and forms part of the AnnualReport. The Management Discussion and Analysis Report and Corporate Governance Reportappearing elsewhere in this Annual Report forms part of the Board's Report

26. Risk Management Policy:

Details on Risk Management Policy have been mentioned in the CorporateGovernance Report annexed to this report.

27. Reporting of Frauds

During the year under review there have been no instances of fraudreported by the Auditors including the Statutory Auditors of the Company under Section143(12) of the Companies Act 2013 and the Rules framed thereunder either to the Companyor to the Central Government

28. Director's Responsibility Statement:

As required by Section 134(3)(c) of the Companies Act 2013 yourDirectors state that:

(a) In the preparation of the annual accounts for the year ended 31stMarch 2020 the applicable accounting standards have been followed with properexplanation relating to material departures if any;

(b) The accounting policies adopted in the preparation of the annualaccounts have been applied consistently. Reasonable and prudent judgments and estimateshave been made so as to give a true and fair view of the state of affairs of the Companyat the end of the Financial Year 2019-20 and of the profit for the year ended 31stMarch 2020.

(c) Proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(d) The annual accounts for the year ended 3151 March 2020have been prepared on a going concern basis.

(e) That proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively;

(f) That systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.

29. Acknowledgements:

The Board wishes to place on record its appreciation to all employeesof the Company for their continued contribution to the performance of the Company. TheBoard thanks all the Shareholders Customers and various Authorities for their continuedsupport during the year. Also our sincere thanks and gratitude to Bankers/NBFCs who arecontinuously supporting the Company and its group at all the times for achieving its goal

For and on Behalf of the Board

S. N KAVI TEJAS DESHPANDE LALNA B TAKEKAR
Director Director Director
Place :Mumbai
Date :20.08.2020

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