Vallabh Steels Limited
We have pleasure in presenting the 39th Annual Report of the Company alongwith the Audited Statement of Accounts for the year ended 31st March 2019:
|(Rupees in Lakhs)|
|Current Year||Previous Year|
|Revenue from Operations and Other Income||11689.13||14277.41|
|Profit before Interest Depreciation and Tax||599.58||671.43|
|Provision for Depreciation||235.17||270.60|
|Taxes: Current Tax||4.92||12.83|
|MAT Credit Entitlement||(4.92)||(12.83)|
|Deferred Tax/Earlier year tax adjustment||(3.90)||(26.84)|
|Profit after Tax||24.33||93.85|
During the year under review your Company has achieved a total revenue of Rs. 11689.13 lakhs as compared to Rs. 14277.41 lakhs of previous year. The net profit is placed at Rs. 24.33 lakhs as against Rs. 93.85 lakhs of previous year. The Company has registered profit before interest depreciation and tax of Rs. 599.58 lakhs as compared to Rs. 671.43 lakhs of the previous year.
The management of the Company is seized of the matter and taking all out effective steps to face the various challenges and your company expects to register better performance in the years to come.
INDUSTRY AND ECONOMIC SCENARIO:
India is Third largest producer of steel in the world after China and Japan. Steel demand in India is expected to grow in 2019-20 based on expected growth in different sectors particularly construction and Real Estate and government spending on infrastructure. Recovery in Automotive Sector and Capital Goods Sectors is likely to lead to stronger growth in the coming years.
EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
There are no material changes or commitments or events affecting the financial position of the Company which have occurred after March 31 2019 till the date of this report.
CHANGE IN THE NATURE OF BUSINESS IF ANY:
During the year under review there are no changes in the nature of the business of the Company.
The Company's paid up equity share capital as at March 31 2019 stood at Rs. 49500000/- comprising of 4950000 equity shares of Rs. 10/- each. During the year under review the Company has not issued any fresh shares.
Despite all efforts made by the management for exports of its products the company could not register any exports during the year under report.
DIVIDEND AND RESERVES:
With a view to conserve resources for Company's future requirements your directors have not recommended any dividend for the year under consideration. The Board of Directors has decided to retain all the profits in statement of profits and loss.
LISTING OF SHARES:
The Equity Shares of the Company are listed at BSE Limited Phiroze Jeejeebhoy Towers Dalal Street Mumbai. The Company has duly paid the listing fee to BSE Limited Mumbai upto the Financial Year 2019-20.
Your Company has not accepted any deposits from the Public during the year within the ambit of Section 73 of the Companies Act 2013 and Companies (Acceptance of Deposits) Rules 2014.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):
In accordance with the provisions of Section 152 of the Companies Act 2013 and the Company's Articles of Association Sh. Kapil Kumar Jain Chairman and Managing Director of the Company (having DIN No. 00755228) retires by rotation at the forthcoming Annual General Meeting of the Company and being eligible offers himself for reappointment. The Board of Directors recommends his re-appointment.
The Company has received declaration of independence from all the Independent Directors of the Company that they meet the criteria of independence as prescribed both under the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
During the year under review The Board of Directors on recommendation of Nomination and Remuneration Committee appointed Mrs. Chandni Jain as Company Secretary of the Company w.e.f. December 12 2018. Subsequently Mrs. Chandni Jain has resigned on 1st August 2019 and the Company is in the process of appointing a new Company Secretary.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel of the Company are Mr. Kapil Kumar Jain Managing Director and Mr. Suresh Gupta Chief Financial Officer.
INTERNAL FINANCIAL CONTROLS:
Your Company has an adequate system of internal control in place which has been designed to provide a reasonable assurance with regard to maintenance of proper accounting controls monitoring of operations protecting assets from unauthorized use or losses compliance with regulations and for ensuring reliability of financial reporting as detailed in Management Discussions and Analysis.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS:
The Company's policy on directors' appointment and remuneration and other matters provided in Section 178 of the Companies Act 2013 has been disclosed in the Corporate Governance Report which forms part of this report.
A draft calendar of Meetings is prepared and circulated in advance to the Directors. During the year 10 (Ten) Board Meetings and 5 (Five) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between two meetings was within the stipulated period prescribed under the Companies Act 2013.
MANAGEMENT DISCUSSION AND ANALYSIS:
Your Directors are pleased to present the Management's Discussion and Analysis of operations for the year ended March 31 2019 attached as Annexure-I which forms part of this Annual Report.
Your Company is committed to maintain highest standards of Corporate Governance and adheres to the corporate governance requirements as set out by Securities and Exchange Board of India ('SEBI'). Pursuant to the provision of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. A detailed report on Corporate Governance is attached as Annexure-II and forms part of this Annual Report. The Company is in compliance with the various requirements and disclosures that have to be made in this regard. A certificate from the Auditors confirming compliance of the conditions of Corporate Governance as stipulated under the Listing Regulations is attached and forms part of this Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a Vigil Mechanism named Fraud and Risk Management Policy to deal with instances of fraud and mismanagement if any. In staying true to our values of Strength Performance and Passion and in line with our vision of being one of the respected companies in India the Company is committed to the high standards of corporate governance and stakeholder's responsibility.
The Company has established a Whistle Blower Policy and the same has been uploaded on the Company's website www.vallabhsteelsltd.in The said policy has also been made available at the offices/ manufacturing units to enable the employees to report their concerns if any directly to the Chairman of the Board and to the Chairman of the Audit Committee. The new employees are also given details of Whistle Blower Policy at the time of joining the Company. There were no occasions during the year under review where any concerns were reported under the said policy.
SUBSIDIARY /ASSOCIATE COMPANIES:
The Company does not have any Subsidiary/Associate Companies.
RELATED PARTY TRANSACTIONS:
There were no such contracts or arrangements or transactions entered into during the year ended March 31 2019 as stated in Form AOC-2 attached as Annexure-III which forms integral part of this report. None of the Independent Directors has any pecuniary relationships or transactions vis--vis the Company.
There have been no materially significant related party transactions between the Company and the Key Managerial Personnel or other designated Persons Promoters Directors the management or the relatives except for those disclosed in the financial statements which are at arm's length basis.
All the related Party Transactions are placed before the Audit Committee and also to the Board for approval. Prior omnibus approval was obtained for transactions and a statement giving details of all related party transactions are placed before the Audit Committee and the Board for review and approval on a quarterly basis. The Policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company i.e. www.vallabhsteelsltd.in.
PERSONNEL AND INDUSTRIAL RELATIONS:
The Management-Employees relations remained cordial throughout the year.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The Company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act 2013 read with Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are annexed hereto marked as Annexure-IV and forms part of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
Corporate Social Responsibility was not applicable to the Company for the financial year under review. The Philosophy of the company works with objectives of contributing to the sustainable development of the society and to create a greener and cleaner environmental around us.
EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 92(3) of the Act the details forming part of the extract of the Annual Return in form MGT-9 for the Financial Year 2018-19 is annexed herewith as Annexure-V.
AUDITORS & THEIR REPORTS:
a) STATUTORY AUDITORS:
M/s. K. R. Aggarwal & Associates Chartered Accountants (Firm Regn. No. 030088N) were appointed as Statutory Auditors of the Company at the Annual General Meeting (AGM) of the Company held on 28th September 2017 for a period of five years i.e. till the conclusion of 42nd AGM (to be held in calendar year 2022) pursuant to provisions of sections 139 141 and other applicable provisions of the Companies Act 2013 as amended.
As required under Regulation 33(1)(d) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
Audit Report: The Auditors' Report read with the relevant notes on accounts for the year under review is self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualifications reservations or adverse remarks. There is no incidence of fraud requiring reporting by the Auditors under Section 143(12) of the Companies Act 2013
b) COST AUDITORS:
As per the requirement of Section 148 of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 as amended from time to time your Company has been getting audit of cost records of the Company every year.
The Board of Directors on recommendation of Audit Committee has approved the appointment of M/s. Meenu & Associates Cost Accountants Ludhiana (Firm Registration no. 100729) as the Cost Auditors of the Company for the year ending 31st March 2020 on a remuneration of Rs. 30000/- (Rs. Thirty Thousand) plus taxes as applicable and reimbursement of out of pocket expenses. The remuneration is subject to the ratification of the Members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules 2014 and is accordingly placed for your ratification in the notice calling the 39th Annual General Meeting.
Audit Report: M/s. Meenu & Associates have also been the Cost Auditors of the Company for the financial year 2018-19. The Cost Audit Report for the financial year 2018-19 will be filed by the company with the Ministry of Corporate Affairs (MCA) within the stipulated time as per the provisions of the Companies Act 2013.
c) SECRETARIAL AUDITORS:
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company had appointed M/s. RCS & Company Company Secretaries in Practice (C.P. No. 3154) to undertake the Secretarial Audit of the Company for the financial year 2018-19.
The Report of the Secretarial Audit carried out for the financial year 2018-19 is annexed to this Report as Annexure VI. The Secretarial Audit Report does not contain any qualifications reservations or adverse remarks and statements referred in the Secretarial Audit Report are self explanatory.
Pursuant to Regulations 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 M/s. RCS & Company the Secretarial Auditors has issued Secretarial Compliance Report for the financial year 2018-19. The Secretarial Compliance Report is annexued as Annexure VII. to the Directors' Report.
The Board has re-appointed M/s. RCS & Company Company Secretaries as Secretarial Auditors of the Company for the financial year 2019-20 and this item is included in the notice and agenda for approval by the members in the forthcoming annual general meeting.
RISK MANAGEMENT COMMITTEE:
The Risk Management Committee of the Company is constituted under the chairmanship of Mr. Kapil Kumar Jain and other members being Mr. Vijay Kumar Sharma and Mr. Suman Jain. No meeting of Committee was held during the financial year 2018-2019.
Risk Management Policy:
The Risk Management Policy is formulated and implemented by the Company. The Policy helps to identify the various elements of risks faced by the Company which in opinion of the Board threatens the existence of the Company. The Risk Management Policy as approved by the Board is uploaded on the Company's website at the web link www.vallabhsteelsltd.in.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The Company has neither given/provided any Loans Guarantees; nor it made any Investments covered under the provisions of Section 186 of the Companies Act 2013.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:
There have not been any significant material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.
The Company has duly followed the applicable Secretarial Standards issued by The Institute of Company Secretaries of India and the Company has in place proper systems to ensure compliance with applicable Secretarial Standards.
Your Directors state that no reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
Further the company does not have a scheme for purchase of its own shares by employees or by trustees for the benefit of employees.
The Company has a zero-tolerance approach towards sexual- harassment at workplace. During the year under review there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner so as to ensure safety to all concerned compliances of environmental regulations and preservations of natural resources.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:
Your Company did not have any funds lying unpaid or unclaimed for a period of seven years and such no funds were required to be transferred to Investor Education and Protection Fund (IEPF).
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information in accordance with the provisions of Section 134(3) (m) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 regarding conservation of energy technology absorption and foreign exchange earnings and outgo is given hereunder:
I. CONSERVATION OF ENERGY:
a) Energy Conservation measure taken: The Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and savings of energy is achieved.
b) Additional investments and proposals if any being implemented for reduction of consumption of energy: No specific investment has been made.
c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production: Impact of measures taken is not quantitative and as such cannot be stated accurately.
d) Total Energy consumption per unit of production as per form 'A' to the Rules in respect of industries specified in schedule hereto:
|A. POWER & FUEL CONSUMPTION||2018-19||2017-18|
|a) Electricity - Purchased|
|Tube Mill Cold Rolled Mill|
|b) Electricity - Own Generation|
|Through Diesel Generator||39342||34320|
|Unit per liter of diesel oil||3.16||3.12|
|c) Furnace Oil|
|Average Rate (Rs.)||30.04||24.33|
|B. CONSUMPTION PER UNIT OF PRODUCTION|
|Tube Mill Cold Rolled Mill Electricity Per MT||2299||1585|
II. R&D AND TECHNOLOGY ABSORPTION:
Your Company has always been making best efforts towards technology absorption adaptation and innovation to improve the quality of its products being manufactured at its various units and to reduce the cost of production. During the year under review the Company has not procured imported technology.
III. FOREIGN EXCHANGE EARNINGS AND OUTGO:
a) Activities relating to export initiatives for export of its products:
During the year under review various indigenous and international factors caused disappointment in exports. Despite all the efforts made the company did not register any exports during 2018-19.
|(Amt. in Rupees)|
|b) Total Foreign Exchange used and earned||2018-19||2017-18|
|Foreign Exchange Used (CIF Value of Imports)||-||834912|
|Foreign Earnings (FOB value of Exports)||-||Nil|
DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of knowledge and belief and according to the information and explanations obtained by them your directors make the following statements in terms of Section 134 (3) (c) and Section 134 (5) of the Companies Act 2013:
i. That in the preparation of the annual accounts for the year ended March 31 2019 the applicable accounting standards have been followed along with proper explanation relating to material departures if any;
ii. That they 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 as at March 31 2019 and the profit or loss of the Company for the year ended on that date;
iii. That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. That they had prepared the annual accounts for the financial year ended on 31st March 2019 on a going concern basis;
v. That 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; and
vi. That the directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.
Your Directors take this opportunity to express their sincere thanks and appreciation to the team of executives staff members and workers at all levels for their co-operation hard work dedication and devotion. Our thanks are also due to the Bankers Government Authorities and Business constituents for their continued support and co-operation extended from time to time to the Company.
|BY ORDER OF THE BOARD OF DIRECTORS|
|PLACE : LUDHIANA||(KAPIL KUMAR JAIN)|
|DATED : 27.08.2019||CHAIRMAN & MANAGING DIRECTOR|