The Members Vamshi Rubber Limited
Your Directors have pleasure in presenting their 27th AnnualReport on the business and operations of the Company together with the Audited Statementof Accounts for the Financial Year ended March 312021.
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 |
| ||31-03-2021 ||31-03-2020 |
|Revenue from Operations ||5802.06 ||5571.93 |
|Other Income ||33.62 ||73.75 |
|Total Revenue ||5835.68 ||5645.68 |
|Expenses ||6111.17 ||5492.95 |
|Depreciation ||124.92 ||115.85 |
|Total Expenses ||6236.62 ||5608.80 |
|Profit / (loss) Before exceptional and extraordinary items ||-400.94 ||36.88 |
|Less: exceptional and extraordinary items ||(1.04) ||(7.81) |
|Profit/ (Loss) Before Taxation ||-399.90 ||44.69 |
|Less: - Current Tax ||- ||5.65 |
|- Income Tax (Earlier years) ||- ||- |
|- Deferred Tax ||(117.75) ||(2.99) |
|Profit / (loss) After Tax ||-282.15 ||42.03 |
During the year under review the gross revenue of the Company has beenslightly increased to Rs. 5802.06 Lakhs compared to Rs. 5571.93 Lakhs in the previousyear. The expenses of the Company have also been increased to Rs. 6236.62 Lakhs comparedto Rs. 5608.80 Lakhs in the previous year. Due to increase in expenses company hasincurred a loss of Rs. 282.15 Lakhs for the Current year.
2. Brief description of the Company's working during the year/State ofCompany's affair
The sales of the company during the first quarter have been drasticallyreduced due to country-wide lockdown and the expenses have been increased because ofmoratorium benefit on interest which was not availed by the company. As the proportionateincrease in the expenses is quite more when compared to revenue the company has incurredthe losses. However company is under the process of increase their revenue and profitsduring the current financial year.
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 FinancialPosition of the Company which have occurred between the end of the financial year of thecompany to which the financial statements relate and the date of the report
Covid-19 pandemic has impacted the Financial Position of the companyduring the financial year. We expect that this uncertainty may continue further. We arelooking at downsizing expenditure and increasing revenue.
5. Future Outlook
The retread tire market growth has drastically affected by the pandemiccrisis and is witness a substantial drop in 2020. Post the lockdown we have seenfaster-than-anticipated recovery in the domestic replacement segment as economic activityhas improved imports have been restricted and the company expect positive revenue growthin the year 2021. We expect healthy overall growth during the coming financial years.
As the company has incurred loss during financial period yourdirectors do not propose any dividend for the Financial Year ended 31st March2021.
There were no transfers to Reserves during the financial year 2020-21.
8. Share Capital
During the year under review there has been no change in the ShareCapital of the Company.
The Authorised Share Capital of the company is Rs. 45000000/-divided into 4500000 equity shares of Rs. 10/- (Rupees Ten) each.
The Issued Subscribed and Paid up Capital of the Company as on 31stMarch 2021 is Rs. 42068000/- divided into 4206800 equity shares of Rs. 10/- (RupeesTen) each.
The Company has not issued any shares with differential rights andhence no information as per provisions of Section 43(a) (ii) of the Companies Act 2013read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules 2014 isfurnished.
9. Directors and Key Managerial Personnel
The Board of directors of your company is duly constituted with threeexecutive directors and three non-executive independent directors.
There was change in management of the company due to followingcessations:
Mr. Venkteswara Sarma Kuchibhotla was expired on 28thJuly 2020
Mr. Vamsheedhar Reddy Arrabothu resigned from the post ofIndependent director on 13th February 2021
Further approval of the shareholders is being sought forre-appointment of Mr. Varun Kumar Pasham (holding DIN 00293972) Director retires byrotation at the ensuing Annual General Meeting and being eligible and offers himself forreappointment in accordance with the Companies Act 2013 read with Articles of Associationof the Company.
Mr. Ramesh Reddy Mereddy was appointed as Executive Chairman &Whole-time Director of the Company for a period of five years by the members in the 22ndAnnual General Meeting of the Company held on 29th September 2016 and whoseterm of office was expired on 30th July 2021. In terms of applicableprovisions of Companies Act 2013 the Board of Directors of the Company has proposed tore-appoint him as Executive Chairman & Wholetime Director of the Company for a furtherperiod of five year.
Appropriate resolution for the re-appointment of Chairman &Whole-time Director is being placed before you for your approval at the ensuing AnnualGeneral Meeting. The brief resume of the aforesaid Director and other information havebeen detailed in the Notice. Your Directors recommend his re-appointment as envisaged inthe notice.
A calendar of Meetings is prepared and circulated in advance to theDirectors. During the year Six (6) Board Meetings were convened and held on 24.04.202030.06.2020 05.09.2020 13.11.2020 13.02.2021 and 16.03.2021. The intervening gap betweenthe Meetings was within the period of 120 days as prescribed under the Companies Act2013.
|Name of Director ||Number of Meetings attended |
|Mr. Mereddy Ramesh Reddy ||6 |
|Mr. Surendra Reddy Rachervu ||6 |
|Mr. Varun Kumar Pasham ||6 |
|Mr. Arolla Venkat Reddy ||3 |
|Mr. Neerudu Sandeep Kumar Reddy ||5 |
|Ms. Akhila Pushpa Sundari ||4 |
11. Board Evaluation
The company believes formal evaluation of the board its Committees andof the individual directors on an annual basis which is potentially effective way torespond to the demand for greater board accountability and effectiveness. For the companyevaluation provides an ongoing means for directors to assess their individual andcollective performance and effectiveness. In addition to the accountability andevaluation a board and Committee member helps in;
a. More effective board process
b. Better collaboration and communication
c. Greater clarity with regard to members roles and responsibilities
d. Improved chairman - managing directors and board relations
The performance of the Board was evaluated after seeking inputs fromall the directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board afterseeking inputs from the committee members on the basis of criteria such as the compositionof committees effectiveness of committee meetings etc.
The above criteria are broadly based on the Guidance Note on BoardEvaluation issued by the Securities and Exchange Board of India on January 5 2017.
At the board meeting followed the meeting of the independent directorsand meeting of Nomination and Remuneration Committee the performance of the Board itsCommittees and individual directors was also discussed. Performance evaluation ofIndependent Directors was done by the entire Board excluding the independent directorbeing evaluated.
12. Declaration by an Independent Director(s)
A declaration has been received from all the Independent Directors ofthe Company that they meet the criteria of independence as provided in sub-section (6) ofSection 149 of the Companies Act 2013 and Regulation 25 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
As per regulation 25 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Independent Directors meeting was held on 30thJune 2020 which was attended by the Independent Directors for the evaluation of theperformance of the Non-Independent Directors the Board as a whole and the Chairman of theBoard.
13. Familiarisation Programme for Independent Directors
The Company through its Senior Managerial personnel familiarised theIndependent Directors with the strategy operations and functions of the Company and newregulations of criteria of independent director eligibility. The Independent Directorswere also familiarised with their roles rights and responsibilities orientationeligibility criteria on Statutory Compliances as a Board Member. Independent directors arealso requested to complete their independent director registration process to be eligibleto continue as independent director in any company.
14. Remuneration Policy
The Company's remuneration policy is driven by the success andperformance of the individual employee and the Company. Through its compensationprogramme the Company endeavours to attract retain develop and motivate a highperformance workforce. The Company follows a compensation mix of fixed pay benefits andperformance based variable pay. Individual performance pay is determined by businessperformance and the performance of the individuals measured through the annual appraisalprocess.
The Board on the recommendation of the Nomination & RemunerationCommittee framed a policy for selection and appointment of Directors Senior Managementand their remuneration including criteria for determining qualifications positiveattributes and independence of a director. The Remuneration Policy is available on thewebsite of the Company viz. www.vamshirubber.org.
The Company has not accepted any deposit from the public under ChapterV of the Act or under the corresponding provisions of Section 73 and 74 of the CompaniesAct 2013 and no amount of principal or interest was outstanding as on the date of BalanceSheet.
16. Particulars of loans guarantees or investments under section 186
Details of loans and guarantees given and investments made underSection 186 of the Act are given in Notes to the Financial Statements.
17. Particulars of contracts or arrangements with related parties:
There were no material significant related party transactions made bythe Company with the Promoters Directors Key Managerial Personnel or the designatedpersons which may have a potential conflict with the interest of the Company at large.
There were no contract or arrangements entered by the Company withrelated parties referred to in sub-section (1) of section 188 of the Companies Act 2013during the period under review. Hence Form No. AOC-2 is not required to be annexed toBoard's report.
The policy on related party transactions as approved by the board ofdirectors is hosted on the website of the company viz. www.vamshirubber.org.
The details of related party disclosures form part of the notes to thefinancial statements provided in this annual report.
18. Particulars of Employees
Details in respect of remuneration paid to employees as required underSection 197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 as amended forms part of thisreport. In terms of Section 136 of the Companies Act 2013 the same is open for inspectionat the Registered Office of the Company.
Copies of this statement may be obtained by the members by writing tothe Company Secretary at the Registered Office of the Company.
The ratio of the remuneration of each Director to the median employee'sremuneration and other details in terms of Section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 are enclosed in Annexure - I and forms part of this Report.
19. Constitution of Audit Committee
The Audit Committee of the Company is duly constituted as per Section177 of the Companies Act 2013. During the year four (4) Audit Committee Meetings wereconvened and held on 30.06.2020 05.09.2020 13.11.2020 and 13.02.2021.
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 dulyconstituted as per Section 178 of the Companies Act 2013. During the year three (2)Nomination & Remuneration Committee Meetings were convened and held on 30.06.2020 and05.09.2020
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 has been appointed as statutory auditors of the company in the 23rdAnnual General Meeting for a period of five years from the conclusion of 23rdAGM till the conclusion of 28th AGM subject to ratification by the members atevery year as may be applicable.
However Pursuant to notification issued by the Ministry of CorporateAffairs on 7th May 2018 amending section 139 of the Companies Act 2013 and the rulesframed there under the mandatory requirement for ratification of appointment of auditorsby the members at every Annual General Meeting ("AGM") has been omitted andhence the company is not proposing an item on ratification of appointment of Auditors atthis AGM.
Replies to Auditors' Report
The Auditors' Report does not contain any qualification. Notes toAccounts and Auditors remarks in their report are self-explanatory and do not call for anyfurther comments.
22. Secretarial Audit Report
In terms of Section 204 of the Act and Rules made there under Mr.Nagamalla Sricharan Practicing Company Secretary has been appointed as SecretarialAuditor of the Company. The report of the Secretarial Auditors is enclosed as Annexure -II to this report.
23. Replies to Secretarial Auditor's Report
|S.No Qualification ||Management response |
|1 During the period under review Company has delayed in filing the form IEPF-2 ||The delay in filing the e-form 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 Company has delayed in transfer of 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 in pursuance of Section 124(6) of the Companies Act. ||Company has initiated the process of transferring the shares to Investor Education and protection fund during the period under review and the same has been transferred to IEPF account on 04th August 2021 after completion of respective formalities in transfer of shares. |
24. Cost Auditors
The provisions of Section 148 of the Companies Act 2013 relating tomandatory Cost Audit does not apply to the Company and hence no Cost Audit is conducted.However the Company is required to maintain Cost records which the Company ismaintaining.
25. Internal Audit & Internal Financial Control Systems
The Company has a proper and adequate system of internal control toensure all the assets are safeguarded and protected against loss from unauthorized use ordisposition and the transactions are authorized regarded and reported correctly. Theinternal control is supplemented by an extensive program of internal audits review bymanagement and procedures. It is designed to ensure that the financial and other recordsare reliable for preparing financial statements and other data and for maintainingaccountability of assets.
During the year the Company has implemented the suggestions andrecommendations of the internal auditor to improve the control environment. Their scope ofwork included review of processes for safeguarding the assets of the Company review ofoperational efficiency effectiveness of systems and processes and assessing the internalcontrol strengths in all areas. Internal Auditors findings are discussed with the processowners and suitable corrective actions taken as per the directions of Audit Committee onan ongoing basis to improve efficiency in operations. In the Board meeting held on30.06.2021 company has re-appointed Mr. Ramana Reddy & Associates CharteredAccountant as Internal Auditor of the Company for the F.Y. 2021-22.
26. Whistle Blower Policy/Vigil Mechanism
Pursuant to the provisions of section 177 of the Companies Act 2013and the rules framed there under and pursuant to the applicable provisions of the SEBI(LODR) Regulations 2015 the company has established a mechanism through which all stakeholders can report the suspected frauds and genuine grievances to the appropriateauthority. The Whistle blower policy which has been approved by the board of directors ofthe company has been hosted on the website of the company viz. www.vamshirubber.org.
27. Secretarial Standards
The Company has complied with all the applicable secretarial standardsfor the financial year 2020-21.
28. Prevention of Insider Trading
The Company has adopted a Code of Conduct for Prevention of InsiderTrading with a view to regulate trading in securities by the Directors and designatedemployees of the Company. The Code requires pre-clearance for dealing in the Company'sshares and prohibits the purchase or sale of Company shares by the Directors and thedesignated employees while in possession of unpublished price sensitive information inrelation to the Company and during the period when the Trading Window is closed.
Members of the Board have confirmed compliance with the Code.
29. Risk management policy
Your Company has put in place a risk management policy based onglobally recognized standards which enables the company to proactively take care of theinternal and external risks of the company and ensures smooth business operations.
The company's risk management policy ensures that all its material riskexposures 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)
Clause (f) of sub regulation (2) of regulation 34 of SEBI (ListingObligations and Disclosures Requirements) Regulations 2015 as amended from time to timehas mandated the inclusion of BRR as part of the Annual Report for the top 1000 listedentities based on their market capitalization on Bombay Stock Exchange Ltd and NationalStock Exchange of India Ltd as on the end of financial year. In view of the requirementsspecified the company is not mandated for the providing the BRR and hence do not formpart of this Report.
31. Annual Return
The Ministry of Corporate Affairs vide Companies (Amendment) Act 2017effective from 28th August 2020 has dispensed with the requirement to attach extract ofAnnual Return in form MGT-9 to the Board's report provided every Company shall place acopy of Annual return on the website of the Company if any and disclose the web- link ofsuch Annual return in the Board's report.
The copy of Annual Return in Form MGT-7 as on March 31 2021 isavailable on the Company's website and can be accessed at the given web-linkhttp://www.vamshirubber.org/investor relation.php
32. Details of significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and company's operations infuture
No significant and material order has been passed by the regulatorscourts tribunals impacting 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 AssociateCompany as on 31.03.2021.
34. Corporate Governance Certificate
As per Regulation 15 of SEBI (Listing Obligations and DisclosureRequirements) 2015 provisions relating to corporate governance are not applicable toyour company and therefore no separate report on corporate governance is required.
However in pursuance of Schedule V of SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 a certificate from Mr. N.V.S.S. SuryanarayanaPracticing Company Secretary that none of the directors on board has been debarred ordisqualified from being appointed or continuing as directors of companies by theBoard/Ministry of Corporate Affairs or any such statutory authority is annexed asAnnexure-III and forms part of this Report.
35. Management Discussion and Analysis Report
Management Discussion and Analysis Report pursuant to Regulation 34 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forms part ofthis report and same is annexed as Annexure-IV.
36. Obligation of Company Under the Sexual Harassment of Women AtWorkplace (Prevention Prohibition And Redressal) Act 2013
The Company has in place an Anti Sexual Harassment Policy in line withthe requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. Internal Complaints Committee (ICC) has been setup to redress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy.
The following is a summary of sexual harassment complaints received anddisposed off during the year 2020-21:
| No. of complaints received: ||- NIL - |
| No. of complaints disposed off: ||- NIL - |
37. Conservation of energy technology absorption and foreign exchangeearnings and outgo
Information on conservation of Energy Technology absorption ForeignExchange earnings and outgo required to be disclosed under Section 134 of the CompaniesAct 2013 read with Companies (Accounts) Rules 2014 are as follows:
(A) Conservation of Energy
|(i) the steps taken or impact on conservation of energy ||An electrical Energy unit saved during 2020-21 is 9746 units and cost Rs. 80208/-. a. Cooling Tower operations is 7750 Units and Cost Rs 63783/- and b. Plant lighting 1996 units cost Rs.16425/-. By taking the following steps. |
| ||a. Maximum effective operations done on Cooling Towers reduced power consumption with effective cooling water circulation temperature |
| ||b. Plant lighting changed from high wattage lamps to low wattage lamps with higher illumination levels. |
|(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 yearand the Foreign Exchange outgo during the year in terms of actual outflows is as follows:
|Particulars ||Current Year ||Previous Year |
|Expenditure in Foreign Currency: || || |
|On Raw Material ||21370102 ||18383320 |
|On Machinery Consumables ||NIL ||NIL |
|On Capital Goods ||NIL ||NIL |
|Earning in Foreign Currency: ||57863997 ||52583647 |
38. Corporate Social Responsibility (CSR)
The provisions w.r.t. CSR is not applicable to the Company. Thereforethe Company had not constituted CSR committee during the year 2020-21.
39. Transfer of Amounts to Investor Education and Protection Fund
Pursuant to the applicable provisions of the Companies Act 2013 readwith the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 ("theIEPF Rules") 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. 387053/- to IEPF Authority.
Further shares for which dividend has not been claimed for sevenconsecutive years till 2012-13 has been transferred to IEP Fund. The process of claimingthe shares from the IEP fund has been placed on the website of the company.
40. Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors of your Company make the following statements with the best of their knowledgeand belief and according to the information and explanations obtained by them:
1. that in the preparation of the annual accounts for the financialyear ended 31st March 2021 the applicable accounting standards have beenfollowed and there have been no material departures from them;
2. that the accounting policies mentioned in notes to FinancialStatements have been selected and applied consistently and judgments and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at 31st March 2021 and of the profit of thecompany for the year ended on that date;
3. that proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
4. that the annual financial statements have been prepared on agoing concern' basis;
5. that proper internal financial controls have been laid down to befollowed by the Company and such internal financial controls are adequate and operatingeffectively; and
6. that proper systems are in place to ensure compliance with theprovisions of all applicable laws and such systems are adequate and operating effectively
41. Listing with Stock Exchanges:
The Securities Exchange Board of India (SEBI) on 02ndSeptember 2015 has issued SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 with an aim to consolidate and streamline the provisions of ListingAgreement for different segments of capital market to ensure better enforceability. Thesaid regulations were effective from 1st December 2015. Accordingly alllisted entities were required to enter into the Listing Agreement within 6 months from theeffective date. The Company entered into Listing Agreement with the BSE Limited.
The Company confirms that it has paid the Annual Listing Fees for theyear 2020-21 to BSE where the Company's Shares are listed.
42. Disclosures with respect to Demat Suspense Account/ UnclaimedSuspense Account
Your Company does not have any shares in the Demat suspense account orunclaimed suspense account and therefore no disclosure as per Point F of Schedule V ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is required.
43. Industry Relations
The company enjoyed cordial relations with its employees during theyear under review and the Board appreciates the employees across the cadres for theirdedicated service to the Company and looks forward to their continued support and higherlevel of productivity for achieving the targets set for the future.
44. Human Resources
Your Company treats its "human resources" as one of its mostimportant assets.
Your Company continuously invests in attraction retention anddevelopment of talent on an ongoing basis. A number of programs that provide focusedpeople attention are currently underway. Your Company thrust is on the promotion of talentinternally through job rotation and job enlargement.
Your Directors wish to place on record their appreciation of thecontribution made by the employees at all levels to the continued growth and prosperityof your Company.
Your Directors also wish to place on record their appreciation tobusiness associates banks and other financial institutions and shareholders of theCompany for their continued support.