Vallabh Steels Limited
We have pleasure in presenting the 41 st Annual Report of the Company alongwith theAudited Statement of Accounts for the year ended 31 st March 2021:
(Rupees in Lakhs)
| ||Current Year ||Previous Year |
|Revenue from Operations and Other Income ||591.84 ||4097.12 |
|Profit before Interest Depreciation and Tax ||-2346.32 ||-2363.16 |
|Less: || || |
|Financial Costs ||19.93 ||375.26 |
|Provision for Depreciation ||233.77 ||284.77 |
|Taxes: Current Tax ||- ||- |
|MAT Credit Entitlement ||- ||- |
| ||(12.75) ||(18.81) |
|Deferred Tax/Earlier year tax adjustment ||240.95 ||641.22 |
|Profit after Tax ||(2105.37) ||(1721.94) |
During the year under review the Company has recorded a fall in revenue operationswhich are placed at Rs.591.84 lakhs as compared to Rs. 4097.12 lakhs in the previous year.This has been primarily due to shortage of working capital and large imports from China inthe country. Outbreak of pandemic (COVID19) has further adversely affected the industrydenting the performance of the Company.
As a result the Company has registered a loss of Rs. 2105.37 lakhs as compared to Rs.1721.94 lakhs in the previous year.
The management of the Company is seized of the matter and taking all out steps to facethe various challenges.
INDUSTRY AND ECONOMIC SCENARIO:
India is third largest producer of steel in the world after China and Japan. Steeldemand in India is expected to grow in 2021 -22 based on expected growth in differentsectors. Due to COVID-19 the worldwide industry in general has been badly affected.
IMPACT OF COVID-19 ON BUSINESS OF THE COMPANY:
The Company has its manufacturing operations in Punjab. The Company's business wasimpacted in the month of March 2020 when curfew was imposed in Punjab and followed byannouncement of nationwide lockdown from 25th March 2020. This resulted in completeshutdown of all economic and social activities. Keeping in view the guidelines theCompany could resume its manufacturing operations. With the easing of lockdown norms andopening up of commercial activities the manufacturing operations of the Company have beengradually improving.
The Company has made efforts towards maintaining health and safety of its employees byadhering to social distancing norms use of masks and sanitizers etc. Meetings arevirtually held and practice of working from home has been followed.
COVID-19 has also affected the working of the Company on availability of raw materialssales and financial/credit facilities. This has posed unprecedented situations which hasbadly affected its performance.
EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
Presently also the Company is facing the shortage of working capital facilitiesresulting in adversely affecting the Bank borrowings and thus performance of the Company.
CHANGE IN THE NATURE OF BUSINESS IF ANY:
During the year under review there are no changes in the nature of the business of theCompany.
The Company's paid up equity share capital as at March 312021 stood at Rs.49500000/- comprising of 4950000 equity shares of Rs. 10/- each. During the yearunder review the Company has not issued any fresh shares.
Despite all efforts made by the management for exports of its products the companycould not register any exports during the year underreport.
DIVIDEND AND RESERVES:
Keeping in view the loss suffered by the Company the Board of Directors has notrecommended any dividend.
LISTING OF SHARES:
The Equity Shares of the Company are listed at BSE Limited Phiroze Jeejeebhoy TowersDalai Street Mumbai. The Company has duly paid the listing fee to BSE Limited Mumbaiupto the Financial Year 2020-21.
Your Company has not accepted any deposits from the Public during the year within theambit of Section 73 of the Companies Act 2013 and Companies (Acceptance of Deposits)Rules 2014.
DIRECTORS AND KEY MANAGERIAL PERSONNEL(KMP):
ln accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Sh. Kapil Kumar Jain Chairman and Managing Director ofthe Company (having DIN No. 00755228) retires by rotation at the forthcoming AnnualGeneral Meeting of the Company and being eligible offers himself for reappointment. TheBoard of Directors recommends his re-appointment.
During the year under review the Company appointed Mr. Manoj Kumar (having DIN09010294) as an additional Director of the Company with effect from December 28 2020.Their appointment is proposed to be confirmed in the ensuing Annual General Meeting. Thedetail of Director seeking reappointment as required under regulation 36(3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 are given in thenotice of ensuing Annual General Meeting which is being sentto the shareholders along withAnnual Report.
During the year under review Mr. Vijay Kumar Sharma resigned as Director of theCompany. The Board has placed on record its sincerest thanks and gratitude for theinvaluable services rendered by him during his tenure as Director of the company.
The Company has received declaration of independence from all the Independent Directorsof the Company that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company are Mr. Kapil Kumar Jain Managing Director Mr. Ajit Kumar Jha as ChiefFinancial Officer (CFO) and Mrs. Komal Bhalla as Company Secretary and Compliance Officerof the Company.
INTERNAL FINANCIAL CONTROLS:
Your Company has an adequate system of internal control in place which has beendesigned to provide a reasonable assurance with regard to maintenance of proper accountingcontrols monitoring of operations protecting assets from unauthorized use or lossescompliance with regulations and for ensuring reliability of financial reporting asdetailed in Management Discussion and Analysis.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS:
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178 of the Companies Act 2013 has been disclosed in the CorporateGovernance Report which forms part of this report.
A draft calendar of Meetings is prepared and circulated in advance to the Directors.During the year 12 (twelve) Board Meetings and 5 (five) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between two meetings was within the stipulated period prescribed under theCompanies Act 2013
MANAGEMENT DISCUSSION AND ANALYSIS:
Your Directors are pleased to present the Management's Discussion and Analysis ofoperations for the year ended March 312021 attached as Annexure-I which forms partof this Annual Report.
Your Company is committed to maintain highest standards of Corporate Governance andadheres to the corporate governance requirements as set out by Securities and ExchangeBoard of India ('SEBI'). Pursuant to the provision of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. A detailed report on Corporate Governance isattached as Annexure-ll and forms part of this Annual Report. The Company is incompliance with the various requirements and disclosures that have to be made in thisregard. A certificate from the Auditors confirming compliance of the conditions ofCorporate Governance as stipulated under the Listing Regulations is attached and formspart of this Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a Vigil Mechanism named Fraud and Risk Management Policy to deal withinstances of fraud and mismanagement if any. In staying true to our values of StrengthPerformance and Passion and in line with our vision of being one of the respectedcompanies in India the Company is committed to the high standards of corporate governanceand stakeholder's responsibility.
The Company has established a Whistle Blower Policy and the same has been uploaded onthe Company's website www.vallabhsteelsltd.in The said policy has also been made availableat the offices/ manufacturing units to enable the employees to report their concerns ifany directly to the Chairman of the Board and to the Chairman of the Audit Committee. Thenew employees are also given details of Whistle Blower Policy at the time of joining theCompany. There were no occasions during the year under review where any concerns werereported under the said policy.
The Company does not have any Subsidiary/Associate Companies.
RELATED PARTY TRANSACTIONS:
There were no such contracts or arrangements or transactions entered into during theyear ended March 312021 as stated in Form AOC-2 attached as Annexure-lll which formsintegral part of this report. None of the Independent Directors has any pecuniaryrelationships or transactions vis-a-vis the Company.
There have been no materially significant related party transactions between theCompany and the Key Managerial Personnel or other designated Persons PromotersDirectors the management or the relatives except for those disclosed in the financialstatements which are at arm's length basis.
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 purviewof the limits prescribed under the provisions of Section 197 of the Companies Act 2013read with Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
Disclosure pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed hereto marked as Annexure-IV andforms part of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
Corporate Social Responsibility was not applicable to the Company for the financialyear under review. The Philosophy of the company works with objectives of contributing tothe sustainable development of the society and to create a greener and cleaner environmentaround us.
Pursuant to the provisions of Section 92(3) of the Act the Annual Return in formMGT-7 for the Financial Year 2020-21 is uploaded on the website of the company atwww.vallabhsteelsltd.in
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) ofthe Company held on 28th September 2017 for a period of five years i.e. till theconclusion of 42nd AGM (to be held in calendar year 2022) pursuant to provisions ofsections 139141 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 havealso confirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.
Audit Report: The Auditors' Report read with the relevant notes on accounts for theyear under review is self-explanatory and do not call for any further comments. TheAuditors' Report does not contain any qualifications reservations or adverse remarks.However the Company is in the process of getting confirmations about trade receivableloans & advances and trade payables. There is no incidence of fraud requiringreporting by the Auditors under Section 143(12) of the Companies Act 2013. Regardingcategorization of Accounts of the Company as NPA by the Banks we have to state that thishas happened due to the circumstantial adverse affect on the performance of the Company.
b) COST AUDITORS:
As per the requirement 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 getting audit of cost records of the Company every year.
The Board of Directors on recommendation of Audit Committee has approved theappointment of M/s. Meenu & Associates Cost Accountants Ludhiana (Firm Registrationno. 100729) as the Cost Auditors of the Company for the year ending 31st March 2022 on aremuneration of Rs. 30000/- (Rs. Thirty Thousand) plus taxes as applicable andreimbursement of out of pocket expenses. The remuneration is subject to the ratificationof the Members in terms of Section 148 read with Rule 14 of the Companies (Audit andAuditors) Rules 2014 and is accordingly placed for your ratification in the noticecalling the 40th Annual General Meeting.
Audit Report: M/s. Meenu & Associates have also been the Cost Auditors of theCompany for the financial year 2020-21. The Cost Audit Report for the financial year2020-21 will be filed by the company with the Ministry of Corporate Affairs (MCA) withinthe 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 withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhad appointed M/s. RCS & Company Company Secretaries in Practice (C.P. No. 3154) toundertake the Secretarial Audit of the Company for the financial year 2020-21.
The Report of the Secretarial Audit carried out for the financial year 2020-21 isannexed to this Report as Annexure-V. Regarding registration of one independentdirector under the provisions of companies (Creation and Maintenance of Data Bank ofIndependent Directors) Rules 2019 as amended we report that the company 1 Director isunder the process of doing needful. The Secretarial Audit Report does not contain anyother qualifications reservations or adverse remarks and statements referred in theSecretarial 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 have issued Secretarial Compliance Report for thefinancial year 2019-20. The Secretarial Compliance Report is annexed as Annexure VI tothe Directors' Report. The Board has re-appointed M/s. RCS & Company CompanySecretaries as Secretarial Auditors of the Company for the financial year 2021 -22 andthis item is included in the notice and agenda for approval by the members in theforthcoming annual general meeting.
RISK MANAGEMENT COMMITTEE:
The Risk Management Committee of the Company is constituted under the chairmanship ofMr. Kapil Kumar Jain and other members being Mr. Manoj Kumar and Mr. Suman Jain. Nomeeting of Committee was held during the financial year 2020-2021.
Risk Management Policy:
The Risk Management Policy is formulated and implemented by the Company. The Policyhelps to identify the various elements of risks faced by the Company which in opinion ofthe Board threatens the existence of the Company. The Risk Management Policy as approvedby 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 anyInvestments covered under the provisions of Section 186 of the Companies Act 2013.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS:
There have not been any significant material orders passed by the Regulators or Courtsor Tribunals which would impact the going concern status of the Company and its futureoperations.
The Company has duly followed the applicable Secretarial Standards issued by TheInstitute of Company Secretaries of India and the Company has in place proper systems toensure compliance with applicable Secretarial Standards.
Your Directors state that no reporting is required in respect of the following items asthere 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 underany scheme.
Further the company does not have a scheme for purchase of its own shares by employeesor 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 Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety to all concerned compliances of environmental regulations and preservationsof 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 sevenyears and as such no funds were required to be transferred to Investor Education andProtection 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 CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 regarding conservationof energy technology absorption and foreign exchange earnings and outgo is givenhereunder:
I. CONSERVATION OF ENERGY:
a) Energy Conservation measure taken: The Company ensures that the manufacturingoperations are conducted in the manner whereby optimum utilization and savings of energyis achieved.
b) Additional investments and proposals if any being implemented for reduction ofconsumption of energy: No specific investment has been made.
c) Impact of the measures at (a) and (b) above for reduction of energy consumption andconsequent impact on the cost of production: Impact of measures taken is not quantitativeand as such cannot be stated accurately.
d) Total Energy consumption per unit of production as per form 'A' to the Rules inrespect of industries specified in schedule hereto:
|A. POWER & FUEL CONSUMPTION ||2020-21 ||2019-20 |
|a) Electricity-Purchased || || |
|Tube Mill Cold Rolled Mill || || |
|Purchased Units ||2182110 ||5065544 |
|Total Amount ||17470337 ||36988550 |
|Rate/Unit (Rs.) ||8.01 ||7.30 |
|b) Electricity-Own Generation || || |
|Through Diesel Generator ||14300 ||25856 |
|Unit per liter of diesel oil ||3.25 ||3.20 |
|Cost/Unit (Rs.) ||44.00 ||20.25 |
|c) Furnace Oil || || |
|Quantity (Ltrs.) ||20762 ||78371 |
|Total Cost ||9.00772 ||2590839 |
|Average Rate (Rs.) ||43.60 ||33.06 |
|B. CONSUMPTION PER UNIT OF PRODUCTION || || |
|Tube Mill Cold Rolled Mill Electricity Per MT ||2631 ||2605 |
II. R & D AND TECHNOLOGY ABSORPTION:
Your Company has always been making best efforts towards technology absorptionadaptation and innovation to improve the quality of its products being manufactured at itsvarious units and to reduce the cost of production. During the year under review theCompany 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 causeddisappointment in exports. Despite all the efforts made the company did not register anyexports during 2020-21.
(Amt. in Lakh)
|b) Total Foreign Exchange used and earned ||2020-21 ||2019-20 |
|Foreign Exchange Used (CIF Value of Imports) ||Nil ||15.21 |
|Foreign Earnings (FOB value of Exports) ||Nil ||- |
DIRECTORS- RESPONSIBILITY STATEMENT:
To the best of knowledge and belief and according to the information and explanationsobtained 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 312021 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;
ii. That they had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 312021 and the profit or loss ofthe Company for the year ended on that date;
iii. That the directors have taken proper and sufficient care 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;
iv. That they had prepared the annual accounts for the financial year ended on 31stMarch 2021 on a going concern basis;
v. 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; and
vi. That the directors had devised proper system to ensure compliance with theprovisions of all applicable laws and that such system were adequate and operatingeffectively.
Your Directors take this opportunity to express their sincere thanks and appreciationto the team of executives staff members and workers at all levels for their co-operationhard work dedication and devotion. Our thanks are also due to the Bankers GovernmentAuthorities and Business constituents for their continued support and co-operationextended from time to time to the Company.
| ||BY ORDER OF THE BOARD OF DIRECTORS |
| ||SdJ- |
| ||(KAPIL KUMAR JAIN) |
|PLACE : LUDHIANA ||CHAIRMAN & MANAGING DIRECTOR |
|DATED : 30.08.2021 ||DIN: 00755228 |