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Vamshi Rubber Ltd.

BSE: 530369 Sector: Others
NSE: N.A. ISIN Code: INE380C01014
BSE 00:00 | 11 Jun 19.40 0.90
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NSE 05:30 | 01 Jan Vamshi Rubber Ltd
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OPEN 19.40
CLOSE 18.50
VOLUME 4
52-Week high 22.45
52-Week low 13.45
P/E
Mkt Cap.(Rs cr) 8
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Vamshi Rubber Ltd. (VAMSHIRUBBER) - Director Report

Company director report

To

The Members

Vamshi Rubber Limited

Your Directors have pleasure in presenting their 25th Annual Report on thebusiness and operations of the Company together with the Audited Statement of Accounts forthe Financial Year ended March 31 2019.

1. Financial summary or highlights/Performance of the Company

The financial statements of the company are as follows:

(Amount in Lakhs)
Particulars Current Year Previous Year
31-03-2019 31-03-2018
Revenue from Operations 8353.65 7628.99
Other Income 37.58 45.21
Total Revenue 8391.23 7674.20
Expenses 8227.94 7702.66
Depreciation 120.67 117.23
Profit / (loss) Before exceptional and extraordinary items 42.63 (145.68)
Less: exceptional and extraordinary items - (2.30)
Profit/ (Loss) Before Taxation 42.63 (143.38)
Less: - Current Tax 6.33 (3.09)
- Income Tax (Earlier years) - -
- Deferred Tax (5.95) (47.74)
Profit / (loss) After Tax 42.25 (92.55)

During the year under review the gross revenue of the Company Increased to Rs. 8353.65Lakhs compared to Rs. 7628.99 Lakhs in the previous year. The expenses of the Company havealso been increased to Rs. 8348.61 Lakhs compared to Rs. 7819.90 Lakhs in the previousyear. However company earned a profit of Rs. 42.25 Lakhs for the Current year due toincrease in sales.

2. Brief description of the Company's working during the year/State of Company'saffair

During the year the turnover increased but due to sudden increase of the rawmaterials margins of sales to State Transport Undertakings (STU'S) has affecteddrastically and impacted the profitability of the Company.

3. Change in the nature of business if any

There is no change in the nature of business during the year.

4. Material Changes and Commitments if any affecting the Financial Position ofthe Company which have occurred between the end of the financial year of the company towhich the financial statements relate and the date of the report

There are no other Material Changes and Commitments affecting the financial position ofthe Company which occurred between the end of the financial year to which the financialstatements relate and the date of this Report.

5. Future Outlook

The Recession in the Indian Economy which is affecting the transportation of thecountry and resulting in business growth of our Company. Our Company is putting bestefforts in retaining the existing business volumes in the market. Company has also startedexports to United States of America and European Countries.

6. Dividend

In view of the planned business growth your Directors deem it proper to preserve theresources of the Company for its activities and therefore do not propose any dividend forthe Financial Year ended 31st March 2019.

7. Reserves

There were no transfers to Reserves during the financial year 2018-19.

8. Share Capital

During the year under review there has been no change in the Share Capital of theCompany. The Authorised Share Capital of the company is Rs. 45000000/- divided into4500000 equity shares of Rs. 10/- (Rupees Ten) each.

The Issued Subscribed and Paid up Capital of the Company as on 31st March2019 is Rs. 42068000/ - divided into 4206800 equity shares of Rs. 10/- (Rupees Ten)each.

The Company has not issued any shares with differential rights and hence no informationas per provisions of Section 43(a) (ii) of the Companies Act 2013 read with Rule 4(4) ofthe Companies (Share Capital and Debenture) Rules 2014 is furnished.

9. Directors and Key Managerial Personnel

The Board of directors of your company is duly constituted with four executivedirectors and four non-executive independent directors.

Approval of the shareholders is being sought for re-appointment of Mr. Mereddy RameshReddy Director retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for reappointment in accordance with the Companies Act 2013 readwith Articles of Association of the Company.

Following directors as mentioned below were appointed as Non-Executive IndependentDirectors of the Company for a period of five years by the members in the 20thAnnual General Meeting of the Company held on 27th September 2014 and whoseterm of office is expiring on 26th September 2019. In terms of Section 149 andother applicable provisions of Companies Act 2013 the Board of Directors of the Companyhas proposed to re-appoint them as Non-Executive Independent Director of the Company for afurther period of five year who shall not be liable to retire by rotation at every AGM. 1.Mr. Vamsheedhar Reddy Arrabothu 2. Mr. Venkat Reddy Arolla 3. Mr. Neerudu Sundeep KumarReddy Appropriate resolution for the re-appointment of independent directors is beingplaced before you for your approval at the ensuing Annual General Meeting. The briefresume of the aforesaid Director and other information have been detailed in the Notice.Your Directors recommend their re-appointment as envisaged in the notice.

10. Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year Four (4) Board Meetings were convened and held on 30.05.2018 14.08.201814.11.2018 and 14.02.2019. The intervening gap between the Meetings was within the periodof 120 days as prescribed under the Companies Act 2013.

Name of Director Number of Meetings attended
Mr. Mereddy Ramesh Reddy 4
Mr. Surendra Reddy Rachervu 3
Mr. Varun Kumar Pasham 4
Mr. Venkateswara Sarma Kuchibhotla 4
Mr. Arolla Venkat Reddy 3
Mr. Neerudu Sandeep Kumar Reddy 4
Mr. Vamsheedhar Reddy Arrabothu 1
Ms. Akhila Pushpa Sundari 2

11. Board Evaluation

The company believes formal evaluation of the board its Committees and of theindividual directors on an annual basis is a potentially effective way to respond to thedemand for greater board accountability and effectiveness. For the company evaluationprovides an ongoing means for directors to assess their individual and collectiveperformance and effectiveness. In addition to greater board accountability evaluation ofboard and Committee members helps in;

a. More effective board process

b. Better collaboration and communication c. Greater clarity with regard to membersroles and responsibilities d. Improved chairman – managing directors and boardrelations The evaluation process covers the following aspects

- Self evaluation of directors

- Evaluation of the performance and effectiveness of the board

- Evaluation of the performance and effectiveness of the committees

- Feedback from the non-executive directors to the chairman

- Feedback on management support to the board.

12. Declaration by an Independent Director(s) and re- appointment if any

A declaration has been received from all the Independent Directors of the Company thatthey meet the criteria of independence as provided in sub-section (6) of Section149 of the Companies Act 2013 and Regulation 25 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. As per regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 Independent Directors meetingwas held on 30th May 2018 which was attended by the Independent Directors forthe evaluation of the performance of the Non-Independent Directors the Board as a wholeand the Chairman of the Board.

1. Mr. Vamsheedhar Reddy Arrabothu

2. Mr. Venkat Reddy Arolla

3. Mr. Neerudu Sundeep Kumar Reddy

The Board of Directors at their meeting held on 14th August 2019 hasproposed to re-appoint following directors as mentioned above as Non-executive IndependentDirectors of company whose term is expiring on 26th September 2019. Proposeddirectors have given declaration that they meet the criteria of independence as providedin sub-section (6) of Section 149 of the Companies Act 2013.

Appropriate resolution for the re-appointment is being placed in the ensuing AnnualGeneral Meeting for your approval.

13. Familiarisation Programme for Independent Directors

The Company through its Senior Managerial personnel familiarised the IndependentDirectors with the strategy operations and functions of the Company. The IndependentDirectors were also familiarised with their roles rights and responsibilities andorientation on Statutory Compliances as a Board Member.

14. Remuneration Policy

The Company's remuneration policy is driven by the success and performance of theindividual employee and the Company. Through its compensation programme the Companyendeavours to attract retain develop and motivate a high performance workforce. TheCompany follows a compensation mix of fixed pay benefits and performance based variablepay. Individual performance pay is determined by business performance and the performanceof the individuals measured through the annual appraisal process.

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration including criteria for determining qualifications positive attributes andindependence of a director. The Remuneration Policy is available on the website of theCompany viz. www.vamshirubber.org.

15. Deposits

The Company has not accepted any deposit from the public under Chapter V of the Act orunder the corresponding provisions of Section 73 and 74 of the Companies Act 2013 and noamount of principal or interest was outstanding as on the date of Balance Sheet.

16. Particulars of loans guarantees or investments under section 186

Details of loans and guarantees given and investments made under Section 186 of the Actare given in the Notes to the Financial Statements.

17. Particulars of contracts or arrangements with related parties:

There were no material significant related party transactions made by the Company withthe Promoters Directors Key Managerial Personnel or the designated persons which mayhave a potential conflict with the interest of the Company at large.

Particulars of every contract or arrangements entered into by the Company with relatedparties referred to in sub-section (1) of section 188 of the Companies Act 2013 includingcertain arm's length transactions under third proviso thereto shall be disclosed in FormNo. AOC-2 is appended as ‘Annexure-I' to the Board's report.

The policy on related party transactions as approved by the board of directors ishosted on the website of the company viz. www.vamshirubber.org The details ofrelated party disclosures form part of the notes to the financial statements provided inthis annual report.

18. Particulars of Employees

Details in respect of remuneration paid to employees as required under Section 197(12)of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended forms part of this report.In terms of Section 136 of the Companies Act 2013 the same is open for inspection at theRegistered Office of the Company. Copies of this statement may be obtained by the membersby writing to the Company Secretary at the Registered Office of the Company.

The ratio of the remuneration of each Director to the median employee's remunerationand other details in terms of Section 197(12) of the Companies Act 2013 read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 areenclosed in Annexure -II and forms part of this Report.

19. Constitution of Audit Committee

The Audit Committee of the Company is duly constituted as per Section 177 of theCompanies Act 2013. During the year four (4) Audit Committee Meetings were convened andheld on 30.05.2018 14.08.2018 14.11.2018 and 14.02.2019.

The members of Audit Committee are:

Mr. A. Venkat Reddy Chairman
Mr. Vamsheedhar Reddy Arrabothu Member
Mr. Neeredu Sundeep Reddy Member

20. Constitution of Nomination & Remuneration Committee

The Nomination & Remuneration Committee of the Company is duly constituted as perSection 178 of the Companies Act 2013. During the year two (2) Nomination &Remuneration Committee Meetings were convened and held on 30.05.2018 14.08.2018

The members of Nomination & Remuneration Committee are:

Mr. Neeredu Sundeep Reddy Chairman
Mr. A. Venkat Reddy Member
Mr. Vamsheedhar Reddy Arrabothu Member

21. Statutory Auditors

M/s CSVR Associates Chartered Accountants (Firm Registration No. 012121S) who hasbeen appointed as statutory auditors of the company in the 23rd Annual GeneralMeeting for a period of five years from the conclusion of 23rd AGM till theconclusion of 28th AGM subject to ratification by the members at every yearas may be applicable.

However Pursuant to notification issued by the Ministry of Corporate Affairs on 7thMay 2018 amending section 139 of the Companies Act 2013 and the rules framed thereunderthe mandatory requirement for ratification of appointment of auditors by the members atevery Annual General Meeting ("AGM") has been omitted and hence the company isnot proposing an item on ratification of appointment of Auditors at this AGM.

Replies to Auditors' Report

The Auditors' Report does not contain any qualification. Notes to Accounts and Auditorsremarks in their report are self-explanatory and do not call for any further comments.

22. Secretarial Audit Report

In terms of Section 204 of the Act and Rules made there under Mr. Venkata Satya SeshaSuryanarayana Rao Nedunuri Practicing Company Secretary has been appointed asSecretarial Auditor of the Company. The report of the Secretarial Auditors is enclosed as Annexure– III to this report.

23. Replies to Secretarial Auditor's Report

S.No Qualification Management response
1 Delay in filing form MGT-15 and IEPF-1 with Registrar of Companies The delay in filing the e-forms with Registrar of Companies was purely un-intentional and due to lack of information/documents within the due time. Board will take necessary steps to ensure there is no delay in filing forms.
2 In pursuance of Section 124(6) of the Companies Act 2013 company is yet to transfer the shares in respect of which dividend has not been paid or claimed for seven consecutive years or more in the name of Investor Education and Protection Fund for the financial year 2017-18. Company has already transferred the amount of unpaid or unclaimed dividend to Investor Education and protection fund. Company is in the process of transferring the shares which are unclaimed or unpaid for seven consecutive years or more to Investor Education and protection fund.

24. Cost Auditors

The provisions of Section 148 of the Companies Act 2013 relating to mandatory CostAudit does not apply to the Company and hence no Cost Audit is conducted. However theCompany is required to maintain Cost records which the Company is maintaining.

25. Internal Audit & Internal Financial Control Systems

The Company has a proper and adequate system of internal control to ensure all theassets are safeguarded and protected against loss from unauthorized use or disposition andthe transactions are authorized regarded and reported correctly. The internal control issupplemented by an extensive program of internal audits review by management andprocedures. It is designed to ensure that the financial and other records are reliable forpreparing financial statements and other data and for maintaining accountability ofassets.

The Company appointed Mr. Ramana Reddy & Associates Chartered Accountant asInternal Auditor of the Company for the F.Y. 2018-19. During the year the Companycontinued to implement their suggestions and recommendations to improve the controlenvironment. Their scope of work included review of processes for safeguarding the assetsof the Company review of operational efficiency effectiveness of systems and processesand assessing the internal control strengths in all areas. Internal Auditors findings arediscussed with the process owners and suitable corrective actions taken as per thedirections of Audit Committee on an ongoing basis to improve efficiency in operations. Inthe Board meeting held on 30.05.2019 company re-appointed Mr. Ramana Reddy &Associates Chartered Accountant as Internal Auditor of the Company for the F.Y. 2019-20.

26. Whistle Blower Policy/Vigil Mechanism

Pursuant to the provisions of section 177 of the Companies Act 2013 and the rulesframed there under and pursuant to the applicable provisions of the SEBI (LODR)Regulations 2015 the company has established a mechanism through which all stake holderscan report the suspected frauds and genuine grievances to the appropriate authority. TheWhistle blower policy which has been approved by the board of directors of the company hasbeen hosted on the website of the company viz. www.vamshirubber.org.

27. Secretarial Standards

The Company has complied with all applicable secretarial standards for the financialyear 2018-19.

28. Prevention of Insider Trading

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The ‘Manager' is responsible forimplementation of the Code along with the management of the Company.

Members of the Board have confirmed compliance with the Code.

29. Risk management policy

The Risk Management Policy is in place in the company enables the company toproactively take care of the internal and external risks of the company and ensures smoothbusiness operations. The company's risk management policy ensures that all its materialrisk exposures are properly covered all compliance risks are covered and the company'sbusiness growth and financial stability are assured. Board of Directors decide thepolicies and ensure their implementation to ensure protection of company from any type ofrisks.

30. Business Responsibility Report (BRR)

Securities Exchange Board of India (SEBI) vide circular CIR/CFD/DIL/8/2012 dated August13 2012 has mandated the inclusion of BRR as part of the Annual Report for the top 100listed entities based on their market capitalization on Bombay Stock Exchange Ltd andNational Stock

Exchange of India Ltd as at 31 March 2012. In view of the requirements specified thecompany is not mandated for the providing the BRR and hence do not form part of thisReport.

31. Extract of Annual Return

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in FormMGT 9 is given as Annexure – IV to this report and also placedon the website of the company vamshirubber.org.

32. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future

No significant and material order has been passed by the regulators courts tribunalsimpacting the going concern status and Company's operations in future.

33. Details of Subsidiary Joint Venture or Associate Companies

The Company does not have any Subsidiary Joint Venture or an Associate Company as on31.03.2019.

34. Corporate Governance Certificate

As per Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) 2015provisions relating to corporate governance are not applicable to your company andtherefore no separate report on corporate governance is required.

However in pursuance of Regulation 17 to 27 read with Schedule V of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 a certificate from Mr.N.V.S.S. Suryanarayana Practicing Company Secretary regarding its compliance is annexedas Annexure-V and forms part of this Report.

35. Management Discussion and Analysis Report

Management Discussion and Analysis Report pursuant to Regulation 34 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of this report andsame is annexed as Annexure-VI.

36. Obligation of Company Under the Sexual Harassment of Women At Workplace(Prevention Prohibition And Redressal) Act 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed offduring the year 2018-19:

No. of complaints received: - NIL -
No. of complaints disposed off: - NIL -

37. Conservation of energy technology absorption and foreign exchange earnings andoutgo

Information on conservation of Energy Technology absorption Foreign Exchange earningsand outgo required to be disclosed under Section 134 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 are as follows:

(A) Conservation of Energy
(i) the steps taken or impact on conservation of energy 1. Saved 36755 units of Electrical Energy and thereby saving Rs.310580/- during the year 2018-19 when compared to the year 2017-18. This was achieved by effective planning and running of Mixing Extruder and Buffing production and controlling the running of the utilities.
2. Saved 18345 ltrs of LDO Fuel by controlling effective running of the Thermic fluid Heaters during the year 2018-19 when compared to the year 2017-18. Savings accrued Rs.905693/-
(ii) the steps taken by the company for utilizing alternate sources of energy -
(iii) the capital investment on energy conservation equipments
(B) Technology absorption
(i) the efforts made towards technology absorption The Company has neither absorbed nor adopted any new technology. The Company has also not made any innovation in technology other than the R&D.
(ii) the benefits derived like product improvement cost reduction product development or import substitution No benefits derived in the year under review.
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - No new technology is imported during the last three years.
(a) the details of technology imported -
(b) the year of import; -
(c) whether the technology been fully absorbed -
(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof -
(iv) the expenditure incurred on Research and Development No expenditure incurred on Research and Development.

(C) Foreign exchange earnings and Outgo

The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows is as follows: Foreign ExchangeInflows: Rs. 60396423 Foreign Exchange Outflows: Rs. 8269328 38. CorporateSocial Responsibility (CSR)

The provisions w.r.t. CSR is not applicable to the Company. Therefore the Company hadnot constituted CSR committee during the year 2018-19.

39. Transfer of Amounts to Investor Education and Protection Fund

Pursuant to the applicable provisions of the Companies Act 2013 read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 ("the IEPFRules") all unpaid or unclaimed dividends are required to be transferred by theCompany to the IEPF established by the Government of India after the completion of sevenyears. Further according to the Rules the shares on which dividend has not been paid orclaimed by the shareholders for seven consecutive years or more shall also be transferredto the demat account of the IEPF Authority. During the year the Company has transferredthe unclaimed and unpaid dividend of Rs. 341588 to IEPF Authority.

40. Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of yourCompany make the following statements with the best of their knowledge and belief andaccording to the information and explanations obtained by them:

1. that in the preparation of the annual accounts for the financial year ended 31stMarch 2019 the applicable accounting standards have been followed and there have been nomaterial departures from them;

2. that the accounting policies mentioned in notes to Financial Statements have beenselected and applied consistently and judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2019 and of the profit of the company for the yearended on that date;

3. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

4. that the annual financial statements have been prepared on a ‘going concern'basis;

5. that proper internal financial controls have been laid down to be followed by theCompany and such internal financial controls are adequate and operating effectively; and

6. that proper systems are in place to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively

41. Listing with Stock Exchanges:

The Securities Exchange Board of India (SEBI) on 02nd September 2015 hasissued SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with anaim to consolidate and streamline the provisions of Listing Agreement for differentsegments of capital market to ensure better enforceability. The said regulations wereeffective from 1st December 2015. Accordingly all listed entities wererequired to enter into the Listing Agreement within 6 months from the effective date. TheCompany entered into Listing Agreement with the BSE Limited.

The Company confirms that it has paid the Annual Listing Fees for the year 2018-2019 toBSE where the Company's Shares are listed.

42. Disclosures with respect to Demat Suspense Account/ Unclaimed Suspense Account

Your Company does not have any shares in the Demat suspense account or unclaimedsuspense account and therefore no disclosure as per Point F of Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is required.

43. Industry Relations

The company enjoyed cordial relations with its employees during the year under reviewand the Board appreciates the employees across the cadres for their dedicated service tothe Company and looks forward to their continued support and higher level of productivityfor achieving the targets set for the future.

44. Human Resources

Your Company treats its "human resources" as one of its most importantassets.

Your Company continuously invests in attraction retention and development of talent onan ongoing basis. A number of programs that provide focused people attention are currentlyunderway. Your Company thrust is on the promotion of talent internally through jobrotation and job enlargement.

45. Acknowledgements

Your Directors wish to place on record their appreciation of the contribution made bythe employees at all levels to the continued growth and prosperity of your Company.

Your Directors also wish to place on record their appreciation to business associatesbanks and other financial institutions and shareholders of the Company for theircontinued support.

By order of the Board
for Vamshi Rubber Limited
Sd/- Sd/-
R.Surendra Reddy M.Ramesh Reddy
Managing Director Chairman & CFO
DIN: 00294240 DIN: 00025101
Date : 14/08/2019
Place : Hyderabad

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