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VBC Ferro Alloys Ltd.

BSE: 513005 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE114E01013
BSE 09:50 | 25 May 42.50 -2.20
(-4.92%)
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42.55

HIGH

42.55

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42.50

NSE 05:30 | 01 Jan VBC Ferro Alloys Ltd
OPEN 42.55
PREVIOUS CLOSE 44.70
VOLUME 427
52-Week high 65.70
52-Week low 14.80
P/E
Mkt Cap.(Rs cr) 70
Buy Price 0.00
Buy Qty 0.00
Sell Price 42.50
Sell Qty 495.00
OPEN 42.55
CLOSE 44.70
VOLUME 427
52-Week high 65.70
52-Week low 14.80
P/E
Mkt Cap.(Rs cr) 70
Buy Price 0.00
Buy Qty 0.00
Sell Price 42.50
Sell Qty 495.00

VBC Ferro Alloys Ltd. (VBCFERROALLOYS) - Director Report

Company director report

Your Directors have pleasure in presenting the 39th Director's Report of theCompany together with the Audited Statements of Accounts for the Financial Year endedMarch 312021.

FINANCIAL RESULTS:

(Rs. Lakhs)

PARTICULARS Current Year 2020-21 Previous Year 2019-20
Gross Revenue from operations 176.42 4245.95
Profit/(Loss) Before Interest Depreciation & Tax(PBIDT) (3844.49) (1450.69)
Finance Charges 54.82 78.24
Profit/(Loss) before Depreciation and Tax(PBDT) (3899.31) (1528.93)
Depreciation 661.33 695.86
Profit/(Loss) Before Tax(PBT) (4560.64) (2224.80)
Provision for Tax - 17.24
Profit/(Loss) After Tax (PAT) (4560.64) (2242.04)
Profit/(Loss) brought forward from previous year (18009.79) (17295.50)
Adjustment in Depreciation 3278.60 1527.75
Profit/(Loss) carried to Balance Sheet (19291.83) (18009.79)

Industry Overview:

The Government of India had announced a vibrant steel policy recently in which the needfor growth of the domestic steel industry to strengthen the Make-in-India concept wasrecognized.The domestic steel production is now improving and consequently the demand forFerro Alloy Products has also improved.

It is expected that at the current rate of GDP growth the steel demand will growthreefold in next 15 years to reach a demand of 230 Million MT by 2030-31. It isanticipated that a crude steel capacity of 300 Million MT will be required by 2030-31based on the demand projections as mentioned above.The expected demand for Ferro Alloys is4 Million Tons per annum in 2030-31 based on the demand for steel.

Performance of your Company:

During the financial year under review the total revenue for the Company wasRs.2175.63 Lakhs against Rs.4384.13 Lakhs in the previous year.The Company incurred anoperational loss of Rs.4560.64 Lakhs compared to Rs.2224.80 Lakhs in the previous year.

Prospects:

The medium to long-term economic outlook in India continues to look promising andthough there is slowdown in economy due to COVID-19 it is important to note that theGovernment's initiative to continue to liberalize the economy and focus on social sectorspending in building both hard and soft infrastructure. Steel is the most crucialingredient in industrial development infrastructure and construction industry and istherefore of strategic importance for national transformation.The progress in domesticsteel industry is a pre-requisite for India to succeed in its industrial vision for‘Make-in India'.This presents good potential growth of Ferro Alloys industry in theCountry as it solely depends on steel industry hence Ferro Alloy Industry can run itsindustry profitably subject to other market driven factors.

Outlook of your Company:

Your Company suspended its manufacturing operations from 10th October 2019due to unfavorable market and other conditions. However keeping in view of the increasingtrend in metal prices and also encouragement given by the Telangana Government by way ofgiving uninterrupted and quality power supply along with reasonable power tariff to FerroAlloy Industry we hope that your company will resume its manufacturing operationsshortly.

Projects under Implementation- Thermal Power Plant -120 MW (2x60MW):

You are aware that your Company is setting up 120MW (2x60MW) Coal Based Captive PowerPlant at Bodepalli (Village & Gram Panchayat) Sirpur Kagaznagar Mandal AsifabadKomaram Bhim District Telangana State. The Company has obtained most of the clearancessuch as Environmental Clearance (EC) Consent for Establishment (CFE) NoC from ForestDepartment Permission for water drawal and Airport Authority. Your Company has decided tosetup the Captive power Project on priority basis through VBC Power Company Limited aSpecial Purpose Vehicle Company and initiated the steps to hive off the power projectdivision and demerge the said power division into VBC Power Company Limited. Theconstruction period of Thermal Power Plant is about 36-48 months. Keeping in view of longgestation period for our own power plant your Directors are exploring the possibilitiesto invest in existing Captive Power Plants to get early captive power supply.

Dividend & Reserves:

As the Company incurred losses during the year under review the Directors could notrecommend dividend for the Financial Year 2020-21 also due to inadequate profits and noamount has been transferred to Reserves.

Share Capital:

The Paid-up Share Capital as on 31st March 2021 was Rs.16.39 Cr. During theyear under review the Company did not issue any Shares.

Deposits:

Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014 and assuch no amount of principal and interest was outstanding as on 31st March2021.

Details of Subsidiary/Joint Ventures/Associate Companies:

Information pursuant to sub-section (3) of section 129 of the Act i.e. the statementcontaining the salient features of the financial statement of a company's subsidiary orsubsidiaries associate company or companies and joint venture or ventures is notapplicable during the year as there are no Subsidiary/ Joint Venture Companies.

However your Company has promoted the following two power companies by way of EquityInvestments:

Investment in KGPL 445 MW Gas Based Power Plant:

Konaseema Gas Power Limited (KGPL) (Associate Company) in which your Company hasinvested in equity could not operate its plant during the financial year under review asthere is no domestic natural gas supply. KGPL suspended its manufacturing operations dueto non-availability of Gas (i.e. raw material) and as a result the KGPL could notservice its debts to the Financial Institutions/Banks. IDBI Bank one of the Term LoanLenders of KGPL filed a petition U/s 7 of the Insolvency and Bankruptcy Code (IBC) 2016against KGPL before Hon'ble National Company Law Tribunal (NCLT) Hyderabad. Hon'ble NCLTadmitted said petition and appointed Interim Resolution Professional to initiate CorporateInsolvency Resolution Process(CIRP) against KGPL vide its Order dated 18.12.2018. Howeverthe Hon'ble NCLT ordered for liquidation of the Company as resolution plan has not beenapproved by Committee of Creditors. The Liquidation of KGPL is under process.

Investment in OPCL 20 MW Dam Based Hydel Power Plant:

20 MW Dam Based Hydro Electric Power Project by Orissa Power Consortium Limited (OPCL)in which your Company has invested in equity has generated 89.97 MU million units duringthe financial year 2020- 21. OPCL established 3.42 MWp Solar Power Project and achievedCOD on 31.10.2016 and generated 4.15 MU during the financial year under review. YourCompany is holding Equity Share Capital of about 13.43% in OPCL.

Presentation of Financial Statements:

The Financial Statements for the year ended 31st March2021 are prepared indue compliance of the Indian Accounting Standards.

Corporate Social Responsibility Policy:

Section 135 of the Companies Act 2013 relating to Corporate Social Responsibility isnot applicable and hence the Company has not adopted any Corporate Social ResponsibilityPolicy.

Cash Flow Statement:

A Cash Flow Statement for the year 2020-21 is annexed to the Statement of Accounts.

Board of Directors and Key Managerial Personnel:

a) Resignation of Directors: No

b) Reappointment/Change in designation of Directors: Shri Vijay Govind Gejji Directorsliable to retire by rotation at the forthcoming Annual General Meeting and beingeligible offer himself for reappointment.

As required under regulation 36 (3) of the SEBI (LODR) Regulations 2015 briefparticulars of the Directors seeking appointment/re-appointment are given as under:-:

Name of the Director Vijay Govind Gejji
Date of Birth 10-01-1960
Qualification B.E.
Expertise in specific functional areas Shri Vijay Govind Gejji aged about 60 years did Mechanical Engineering from Karnataka University. He also completed his Post Graduate Diploma in Operations Management from All India Institute of Management New Delhi. He worked in India and abroad for more than 30 years in various Managerial & Senior Managerial capacities in reputed organizations such as Voltas Limited BPL Limited and PZ Cussons PLC (UK) etc. He is the Managing Director of Orissa Power Consortium Limited.
Names of listed entities in which theperson also holds the directorship and the membership of Committees of the board Nil
Shareholding of non- executive directors. Nil
No. of Shares held in the Company Nil
Interse-relationship with any Director Nil

Number of Meetings of Board:

During the year Six meetings of the Board of Directors were held the details of whichforms part of the report on Corporate Governance.

Annual Evaluation of the Board Committees and Individual Directors:

As per section 149 of the Companies Act 2013 read with clause VII (1) of the scheduleEvaluation has been carried out without attendance of non-independent directors andmembers of management. In the meeting the following issues were taken up:

(a) Review of the performance of non-independent directors and the Board as a whole;

(b) Review of the performance of the Chairperson of the company taking into accountthe views of executive directors and non-executive directors;

(c) Assessing the quality quantity and timeliness of flow of information between thecompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties.

The meeting also reviewed and evaluated the performance of non-independent directors.The company has 2 (two) non-independent directors namely:

i. ) Shri. Vijay Govind Gejji-Director

ii. ) Shri M . Siddhartha - Director

The Meeting also reviewed and evaluated the performance of the Executive Director:

iii.) The meeting recognized the significant contribution made by Shri. M.V.Ananthakrishna Whole- Time Director and is satisfied with his performance.

The meeting also reviewed and evaluated the performance of the Board as whole in termsof the following aspects:

• Preparedness for Board/Committee meetings

• Attendance at the Board/Committee meetings

• Guidance on corporate strategy risk policy corporate performance andoverseeing acquisitions and disinvestments.

• Monitoring the effectiveness of the company's governance practices

• Ensuring a transparent board nomination process with the diversity ofexperience knowledge perspective in the Board.

• Ensuring the integrity of the company's accounting and financial reportingsystems including the independent audit and that appropriate systems of control are inplace in particular systems for financial and operational control and compliance withthe law and relevant standards.

The meeting also noted that Shri. K.V. Anjaneyulu Chairman of the Board of Directorsof the company has performed exceptionally well by attending board meetings regularly bytaking active participation in the discussion of the agenda and by providing requiredguidance from time to time to the company for its growth etc.

It was noted that the Board Meetings have been conducted with the issuance of propernotice and circulation of the agenda of the meeting with the relevant notes thereon.

Policy on Directors Appointment and Remuneration Policy:

The Board on recommendation of Nomination & Remuneration Committee has framed apolicy for selection and appointment of Directors Senior Management and theirremuneration. The Policy is also available on the website of the Company i.e.www.vbcfal.in

Auditors:

In terms of the provisions of the Companies Amendment Act 2017 read with NotificationS.O. 1833(E) dated 7th May 2018 deletes provision of annual ratification of theappointment of auditor. Now during a single term of 5 years there shall be no requirementfor ratification of the appointment of auditor. A company sending notices for AnnualGeneral Meeting on or after 7th May 2018 is not required to includeratification of the auditor as its agenda item.

The Auditors M/s Pavuluri & Associates Chartered Accountants were appointed asStatutory Auditors to hold office till the conclusion of AGM to be held in the year 2026since there is no requirement of annual ratification of appointment of Statutory Auditorsthe Board has not recommended for ratification of Statutory Auditors in the Notice of 39thAGM.

Auditors' Report:

The following is the reply of the Board on the qualifications made by the Auditors intheir Report:

No Audit Qualification Reply given by the Board
a Non-provision of shortfall of deemed energy charges for earlier years amounting to Rs 565481522/- pending disposal of company's petition before TSERC as stated in Note No. 2.33 to the standalone Ind AS financial statements has resulted in understatement of the loss for the year. Company approached Telangana State Electricity Regulatory Commission(TSERC) with a request to waive the demand as the said amounts relating to deemed energy charges. As the TSSPDCL imposed said deemed energy charges even period relating to power cuts/ power holidays/non supply of power due to acute power shortage in the erstwhile undivided state of Andhra Pradesh. Therefore the company is confident to get a favourable decision from TSERC/TSSPDCL and hence the Board did not provide for any liability.
b As stated in Note No. 2.04c the company has not measured its Investments in Equity Instruments designed to be measured at Fair Value through Other Comprehensive Income at fair values as required by Indian Accounting Standard"FinancialInstruments" (Ind AS 109) which is not in compliance with the provisions of section 133 of the Companies Act 2013. We approached by the investment companies and they informed that due to COVID-19 and consequential lockdown and absence of public transport system etc. the qualified staff is not available for the finalisation of matters relating to investments.
c As stated in Note No. 2.41 that balances lying in the lenders' sundry creditors like suppliers' service providers' employees' and customers' accounts are subject to confirmation. Company is yet to receive conformations from parties.
d Provision towards present liability in respect of future payments of gratuity and leave encashment has not been made using Projected Unit Credit method as required by Ind AS 19 "Employee Benefits" which is non compliance with the provisions of section 133 of the Companies Act 2013. As per the company's assessment the required liability has been created. Hence no impact on Financial Statements.
e As stated in Note No. 2.40 the company has not conducted the impairment test of its cash generating assets despite of the indication of asset remaining idle as required by Ind AS 36 "Impairment of Assets" which is non compliance with the provisions of section 133 of the Companies Act 2013. Non availability of technical staff due to COVID- 19 we could not conduct impairment status of assets. However the Board is confident to get benefits from all the assets in future therefore no provision has been made for impairment.
f No physical verification of inventories has been carried out during the year. Accordingly we are unable to express our opinion on the realisability of the amount at which the same are stated in the books of account. The company is having a system to make periodical physical verification of stock / inventories and also arriving at the values. However we could not conduct physical verification due to COVID-19 pandemic for the Financial Year ended 31st March2021.

Cost Audit Report:

The requirement of appointment of cost auditor depends up on the turnover of theprevious financial year and consequently the Company have not appointed Cost Auditors forthe Financial Year 2021-22.

Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act 2013 the Company hadappointed M. Nagakishore Practicing Company Secretary to conduct the Secretarial Auditand give a Secretarial Audit Report for the Financial Year 2020-21 to be annexed to theReport of Board of Directors.

The Board has gone through the report of the secretarial auditor and decided to addressall the issues in an appropriate manner and while specifically authorizing the Whole-TimeDirector to take all such steps as may be required in this regard in order to ensureproper compliance of all the applicable/provisional laws.

Internal Audit & Controls:

The Company appointed M/s K.S.Rao & Co. Chartered Accountants Hyderabad as itsInternal Auditors. Their scope of work includes review of Records Ledgers voucherchecking and the internal controls applied and practiced by the Company to ensure theAssets are safeguarded and payments are made only for the benefits received and alsoreview of operational expenditure effectiveness of internal control procedures andsystems and assessing the internal control strengths in all areas.

The internal control procedures and systems are adequate commensurate with the natureand size of the operations of the Company.

Internal Auditors findings are discussed and suitable corrective actions are taken asper the directions of Audit Committee on an ongoing basis to improve efficiency inoperations.

Particulars of Loans Guarantees or Investments under Section 186:

The particulars of loans guarantees and investments have been disclosed in theFinancial Statements. Extract of Annual Return (MGT-9):

Pursuant to section 92(3) of the Companies Act 2013 read with rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in formMGT-9 is provided in this Annual Report as Annexure-II.

Particulars of Employees:

The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

(i) the ratio of the remuneration of each Director to the median remuneration of theemployees of the company for the financial year;

Our Non-executive Directors draw remuneration only by way of sitting fee. The detailsof the same are provided in the Corporate Governance Report which forms Annexure to thisreport. Hence the ratio of remuneration of each Non-executive Director to the medianremuneration could not be given.

(ii) the percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;

Name of the Person % increase in remuneration in the financial year
MSP Rama Rao Nil
M.V. Ananthakrishna Nil
R. Dharmender Nil
Sonali Solanki Nil

(iii) the percentage increase in the median remuneration of employees in the financialyear: Nil

(iv) the number of permanent employees on the rolls of company: 20.

(v) the explanation on the relationship between average increase in remuneration andcompany performance;

There is no increase of the salary of the employees during the year under review.

(vi) comparison of the remuneration of the Key Managerial Personnel against theperformance of the company;

The Remuneration to Key Managerial Personnel is below the norms being practiced inComparable Industries for such experienced persons.

(vii) average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: There is noincrease of salaries to the employees.

(viii) the key parameters for any variable component of remuneration availed by theDirectors: There is no variable component of remuneration availed by Directors

(ix) the ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year: Not Applicable as Company paid only sitting fees toNon-executive Directors.

(x) Affirmation that the remuneration is as per the remuneration policy of thecompany.The Company affirms remuneration is as per the remuneration policy of the Company.None of the employees are drawing Rs. 850000/- and above per month or Rs.10200000/-and above in aggregate per annum the limits prescribed under Section 197(12) of theCompanies Act 2013 read with rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

Management Discussion & Analysis

Pursuant to SEBI (LODR) Regulations 2015 a Report on Management Discussion &Analysis is provided in this Annual Report as Annexure -Ill.

Corporate Governance:

Pursuant to Reg. 27 of SEBI (LODR) Regulations 2015 Report on Corporate together withthe Practicing Company Secretary Certificate regarding compliance of the conditions ofCorporate Governance and Management Discussion and Analysis Report forms part of thisReport.

Familiarization Programmes:

The Company familiarises its Independent Directors on their appointment as such on theBoard with the Company their roles rights responsibilities in the Company nature ofthe industry in which the Company operates etc. through familiarisation programme. TheCompany also conducts orientation programme upon induction of new Directors as well asother initiatives to update the Directors on a continuing basis. The familiarisationprogramme for Independent Directors is disclosed on the Company's website www. vbcfal.in

Particulars of Contracts or Arrangements with Related Parties:

Your Company has formulated a policy on related party transactions which has beenplaced on the website of the company i.e. www.vbcfal.in. There are no related partytransactions except mentioned in the Financial Statements.

Accordingly the details of Related Party Transactions are annexed in Form AOC-2 is notapplicable. Declaration by Independent Director(s):

All the Independent Directors have submitted declarations to the Company to the effectthat they meet the criteria of independence as provided in sub-section (6) of Section 149of the Companies Act 2013.

DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM:

The Audit Committee consists of the following members as of date:

Smt. Rekha Deshraju Chairman Independent Non-executive Director
Shri. K. V. Anjaneyulu Member Independent Non-executive Director
Shri. I Narsingh Rao Member Independent Non-executive Director

All the members of the Audit Committee are independent Directors.

NOMINATION & REMUNERATION COMMITTEE Terms of reference:

The main term of reference of the Committee is to approve the fixation/revision ofremuneration of the Managing Director/Whole Time Director of the Company and whileapproving:

• To consider the financial position of the Company trend in the industryappointee's qualification experience past performance past remuneration etc.

• To bring out objectivity in determining the remuneration package while strikinga balance between the interest of the Company and the Shareholders.

Remuneration Policy:

The objectives of the remuneration policy are to motivate Directors to excel in theirperformance recognize their contribution and retain talent in the organization and rewardmerit.

The remuneration levels are governed by industry pattern qualifications and experienceof the Directors responsibilities shouldered individual performance etc.

Composition of the Committee as on 31st March 2021:

Shri. I Narsingh Rao Chairman Independent Non-executive Director
Shri M Siddhartha Member Non-executive Director
Smt. Deshraju Rekha Member Independent Non-executive Director

POLICY FOR SELECTION OF DIRECTORS AND DETERMINING DIRECTORS' INDEPENDENCE

1. Scope:

This policy sets out the guiding principles for the Nomination & RemunerationCommittee for identifying persons who are qualified to become Directors and to determinethe independence of Directors in case of their appointment as independent Directors ofthe Company.

2. Terms and References:

"Director" means a Director appointed to the Board of a Company.

"Nomination and Remuneration Committee means the committee constituted inaccordance with the provisions of Section 178 of the Companies Act 2013 and reg. 19 ofSEBI (Listing Obligation and Disclosure Requirement) Regulations 2015.

"Independent Director" means a Director referred to in sub-section (6) ofSection 149 of the Companies Act 2013 and Regulation 16(1) (b) of the SEBI (Listingobligations and Disclosure Requirements) Regulations 2015.

3. Policy:

Qualifications and criteria

The Nomination and Remuneration (NR) Committee and the Board shall review on annualbasis appropriate skills knowledge and experience required of the Board as a whole andits individual members.The objective is to have a board with diverse background andexperience that are relevant for the Company's operations.

In evaluating the suitability of individual Board member the NR Committee may takeinto account factors such as:

• General understanding of the company's business dynamics global business andsocial perspective;

• Educational and professional background

• Standing in the profession;

• Personal and professional ethics integrity and values;

• Willingness to devote sufficient time and energy in carrying out their dutiesand responsibilities effectively.

The proposed appointee shall also fulfil the following requirements:

• shall possess a Director Identification Number;

• shall not be disqualified under the Companies Act 2013;

• shall Endeavour to attend all Board Meeting and Wherever he is appointed as aCommittee Member the Committee Meeting;

• shall abide by the code of Conduct established by the company for Directors andsenior Management personnel;

• shall disclose his concern or interest in any company or companies or bodiescorporate firms or other association of individuals including his shareholding at thefirst meeting of the Board in every financial year and thereafter whenever there is achange in the disclosures already made;

• Such other requirements as may be prescribed from time to time under theCompanies Act 2013 SEBI (Listing obligations and Disclosure Requirements) Regulations2015 and other relevant laws.

The Nomination & Remuneration Committee shall evaluate each individual with theobjective of having a group that best enables the success of the company's business.

Criteria of independence

The Nomination & Remuneration Committee shall assess the independence of Directorsat time of appointment/ re-appointment and the Board shall assess the same annually.TheBoard shall re-assess determinations of independence when any new interest orrelationships are disclosed by a Director.

The criteria of independence shall be in accordance with guidelines as laid down inCompanies Act 2013 and reg. 16(1) (b) of the SEBI (Listing obligations and DisclosureRequirements) Regulations 2015.

The Independent Director shall abide by the "Code for Independent Directors"as specified in Schedule IV to the companies Act 2013.

Other Directorships/ Committee Memberships

The Board members are expected to have adequate time and expertise and experience tocontribute to effective Board performance Accordingly members should voluntarily limittheir directorships in other listed public limited companies in such a way that it doesnot interfere with their role as Director of the company. The NR Committee shall considerthe nature of and the time involved in a Director service on other Boards in evaluatingthe suitability of the individual Director and making its recommendations to the Board.

A Director shall not serve as director in more than 20 companies of which not more than10 shall be public limited companies.

A Director shall not serve an independent Director in more than 7 listed companies andnot more than 3 listed companies in case he is serving as a whole-time Director in anylisted company.

A Director shall not be a member in more than 10 committee or act chairman of more than5 committee across all companies in which he holds directorships.

For the purpose of considering the limit of the committee Audit committee andstakeholder's relationship committee of all public limited companies whether listed ornot shall be included and all other companies including private limited companiesforeign companies and companies under section 8 of the Companies Act 2013 shall beexcluded.

Remuneration policy for Directors key managerial personnel and other employees

1. Scope:

This policy sets out the guiding principles for the Nomination and Remunerationcommittee for recommending to the Board the remuneration of the directors key managerialpersonnel and other employees of the company.

2. Terms and Reference:

In this policy the following terms shall have the following meanings:

"Director" means a Director appointed to the Board of the company "keymanagerial personnel" means

(i) The Chief Executive Office or the managing director or the manager;

(ii) The Company Secretary;

(iii) The Whole-Time Director;

(iv) The Chief Financial Officer; and

(v) Such other office as may be prescribed under the companies Act 2013

"Nomination and Remuneration Committee" means the committee constituted byBoard in accordance with the provisions of section 178 of the companies Act2013 and reg.19 of SEBI (Listing obligations and Disclosure Requirements) Regulations 2015.

3. Policy:

Remuneration to Executive Director and Key Managerial Personnel

The Board on the recommendation of the Nomination and Remuneration (NR) committee shallreview and approve the remuneration payable to the Executive Director of the companywithin the overall limits approved by the shareholders.

The Board on the recommendation of the NR committee shall also review and approve theremuneration payable to the key managerial personnel of the company.

The Remuneration structure to the Executive Director and key managerial personnel shallinclude the following components:

(i) Basic pay

(ii) Perquisites and Allowances

(iii) Commission (Applicable in case of Executive Directors)

(iv) Retrial benefits

(v) Annual performance Bonus

The Annual plan and Objectives for Executive committee shall be reviewed by the NRcommittee and Annual performance Bonus will be approved by the committee based on theachievement against the Annual plan and Objectives.

Remuneration to Non - Executive Directors

The Board on the recommendation of the Nomination and Remuneration Committee shallreview and approve the remuneration payable to the Non - Executive Directors of theCompany within the overall limits approved by the shareholders as per provisions of thecompanies act.

Non - Executive Directors shall be entitled to sitting fees attending the meetings ofthe Board and the Committees thereof.

Remuneration to other employees

Employees shall be assigned grades according to their qualifications and workexperience competencies as well as their roles and responsibilities in the organization.Individual remuneration shall be determined within the appropriate grade and shall bebased on various factors such as job profile skill sets seniority experience andprevailing remuneration levels for equivalent jobs.

VI. STAKEHOLDERS RELATIONSHIPCOMMITTEE

A.) Composition:

The Details of composition of the Committee are given below:

Name of the Director Designation Category
Smt. Rekha Deshraju Chairman Independent Non-Executive Director
Shri I. Narsingh Rao Member Independent Non-Executive Director
Shri M.V. Ananthakrishna Member Whole-Time Director

B) Powers:

The Committee has been delegated with the following powers:

• To redress shareholder and investor complaints relating to transfer of sharesDematerialization of Shares non-receipt of Annual Reports non-receipt of declareddividend and other allied complaints.

• To approve transfer transmission and issue of duplicate / fresh sharecertificate(s)

• Consolidate and sub-division of share certificates etc.

• To redress approve and dispose off any other complaints transactions andrequests etc. received from any shareholder of the company and investor in general.

The Board has delegated the power to process the transfer and transmission of shares tothe Registrar and Share Transfer Agents who process share transfers within a week oflodgment in the case of shares held in physical form.

The Company has designated an exclusive e-mail ID called vbcfalhyd@gmail.com forcomplaints/ grievances.

VII. RISK MANAGEMENT COMMITTEE

A.) Composition:

The Details of composition of the Committee are given below:

Name of the Director Designation Category
Shri I. Narsingh Rao Chairman Independent Non-Executive Director
Smt. Rekha Deshraju Member Independent Non-Executive Director
Shri. M.V. Ananthakrishna Member Whole-Time Director

B) RISK MANAGEMENT POLICY:

The Company follows a comprehensive system of Risk Management. The Company has adopteda procedure for assessment and minimization of probable risks. It ensures that all therisks are timely defined and mitigated in accordance with the well-structured riskmanagement process.

UNPAID / UNCLAIMED DIVIDEND:

In terms of the provisions of the Companies Act the Company is obliged to transferdividends which remain unpaid or unclaimed for a period of seven years from thedeclaration to the credit of the Investor education and Protection Fund established by theCentral Government. The company is taking necessary steps to transfer unclaimed dividendto Investor Education and Protection Fund (IEPF).

NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR. : Nil

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB SECTION (12) OF SECTION 143OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:

There have been no frauds reported by the auditors u/s 143(12).

VIGIL POLICY

Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 aVigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Company empowered the victimized Employees or Director to approachdirectly the Chairman of the Audit Committee for a solution to the issue so that thevictimized Employee/Director is rescued. The said policy is available on the website ofthe Company www.vbcfal.in.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

Your Company has well established procedures for internal control across its variouslocations commensurate with its size and operations. The organization is adequatelystaffed with qualified and experienced personnel for implementing and monitoring theinternal control environment. The internal audit function is adequately resourcedcommensurate with the operations of the Company and reports to the Audit Committee of theBoard.

The Board has appointed M/s K.S.Rao & Co Chartered Accountant Hyderabad asInternal Auditors for the year 2020-21. Deviations are reviewed periodically and duecompliances are ensured. Summary of significant Audit observations along withrecommendations and its implementations are reviewed by the Audit committee and concernsif any are reported to Board.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

A separate section on Corporate Governance for fiscal 2021 forms part of this AnnualReport as Annexure-IV.

SECRETARIAL STANDARDS

The Company is in compliance with the applicable secretarial standards.

MATERIAL CHANGES AND COMMITMENTS:

No material changes occurred subsequent to the close of the financial year of theCompany to which the balance sheet relates and the date of this report which affectingFinancial position of the Company as on 31.03.2021.

MATERIAL ORDERS IF ANY PASSED BY THE REGULATORS COURTS ETC.:

There are no orders passed by Regulators/Courts/Tribunals which have impact on thegoing concern status and Company's operations in future.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

In order to prevent sexual harassment of women at workplace as per provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013the Company adopted a policy for prevention of Sexual Harassment of Women at workplace andhas set up Committee for implementation of said policy. During the year under review thecompany has not received any complaints.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN ExCHANGE EARNINGS AND OUTGO:

The details of conservation of Energy Technology Absorption Foreign Exchange Earningsand Outgo are as follows:

a) Conservation of Energy

The information in accordance with the provision of Section 134 of the Companies Act2013 read with the Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules 2014 regarding conservation of Energy a separate Annexure has beenprovided in this annual report.

b) Technology Absorption

No expenditure is incurred by the Company attributable to Technology absorption duringthe year under review.

(c) Foreign exchange earnings and outgo.

During the year there are no foreign exchange inflows/earnings oroutflows/investments.

(d) Expenditure on Research and Development

No expenditure is incurred by the Company attributable to Expenditure on Research andDevelopment during the year under review.

HUMAN RESOURCES:

The company has maintained cordial relations with the employees Your Directors andManagement express their appreciation for the commitment and devotion shown by theemployees.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors the bestof their knowledge and ability confirm that:

(a) in the preparation of the annual accounts for the year ended 31st March2021 the applicable accounting standards had been followed along with proper explanationrelating to material departures;

(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at 31st March 2021 and ofthe profit and loss of the company for the year ended on that date;

(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) 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

(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Directors thank the Government of India and Government of Telangana for theirsupport. They also place on record their appreciation for the help and encouragementreceived from Bank of India and other Financial Institutions.

Your Directors sincerely thank Customers Vendors and Members for their sustainedsupport and cooperation.

For and on behalf of the Board
Sd/-
Place: Hyderabad K.V. Anjaneyulu
Date: 30.10.2021 Chairman

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