Your Directors hereby present the Twenty Seventh Annual Report together with theAudited Accounts of the company for the financial year ended 31st March 2019.
Financial summary or Highlights/Performance of the Company:
The financial highlights for the current year in comparison to the previous year are asunder:
|Particulars ||2018-19 ||2017-18 |
| ||- ||- |
|Revenue from Operations || || |
|Other Income ||274.40 ||- |
|Total Revenue ||274.40 ||- |
|Profit before Finance Charges Tax Expenses || || |
|Exceptional items and Depreciation ||(686.76) ||(26.68) |
|Less : Depreciation ||21.22 ||22.55 |
|Profit before Finance Charges Tax Expenses || || |
|Exceptional items ||(707.98) ||(49.23) |
|Less : Finance Charges ||21.59 ||50.80 |
|Profit before Tax Expenses and Exceptional items ||(729.57) ||(100.03) |
|Add : Exceptional Items ||- ||- |
|Profit before Tax ||(729.57) ||(100.03) |
|Provision for Tax ||(2.46) ||(7.01) |
|Profit after Tax ||(727.11) ||(93.02) |
|Total Comprehensive Income ||(2308.11) ||(93.02) |
|Less: Transfer to Reserves ||- ||- |
|Balance ||(314.24) ||(93.02) |
|Balance of profit of earlier years ||(2308.11) ||(221.22) |
|Less : Dividend Paid on Equity Shares ||- ||- |
|Dividend Distribution Tax ||- ||- |
|Balance Carried Forward ||(2622.35) ||(314.24) |
The Financial Year 2018-19 has been a very tough year for the Companyas the company hadno new order due to huge financial crunch and the biggest slowdown in constructionbusiness over all in the economy. Further the Management is scouting for various otherbusiness opportunities for reviving the company including venturing into earlier businessof the Company that is aquaculture and other related business.
TRANSFER TO RESERVES:
Your Company did not transfer any amount to reserves.
THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR: There are no other subsidiariesjoint ventures or associate companies which have become or ceased during the year.
In view of accumulated losses your Directors do not recommend any dividend for thefinancial year 2018-19.
M/s.NVSR & Associates LLP Chartered Accountants were appointed as StatutoryAuditors of the Company for a period of 5 Years from the Conclusion of 27thAnnual General Meeting of the Company till the Conclusion of 31st AnnualGeneral Meeting of the Company subject to ratification by members in every Annual GeneralMeeting. However by the Companies (Amendment) Act 2017 provisions pertaining toratification of appointment of Statutory Auditor has been omitted with effect from 7thMay 2018. Hence the agenda for ratification of appointment of M/s NVSR & AssociatesLLP Chartered Accountants as Statutory Auditors has not been proposed in the Noticeconvening the Annual General Meeting.
The Independent Auditors report given by M/s. NVSR & Associates LLP CharteredAccountants Statutory Auditors of the Company on standalone Financial Statements of theCompany does not contain any qualification reservation or adverse remark.
The auditors have given their report on the Annual Accounts of the Company and therewas no qualification made by auditor. However Auditors have expressed disclaimer ofopinion on the financial statements of the Company in relation to the investment made inthe subsidiary company
Key Audit Matter:
With regard to uncertainty in respect of subsidiary company's i.e. M/s VSF EnergyProjects Private Limited ability to continue as going concern and consequently provisionfor impairment loss has been made against the investment in subsidiary. Company hasdefaulted in repayment of installments of borrowings payable to banks and other FinancialInstitutions.
Reply of Board a) MCA has Struck the name of subsidiary from the Register ofCompanies and hence the impairment loss has been made in the investment of subsidiaryCompany. b) Due to accumulate financial crisis in the Company Company could not repay theinstallments of borrowings payable to Banks and other Financial Institutions. FurtherCompany have repaid all the loans outstanding as on the date of this Board Report and thedefault has been regularized.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasreceived Secretarial Audit report form M/s. R V N Padmaja Practicing Company Secretaries.The Secretarial Audit Report is annexed herewith as "Annexure I" to thisreport.
REPLY TO QUALIFICATIONS IN SECRETARIAL AUDIT REPORT
1. Company has not appointed Company Secretary and CFO for the positionof Key Managerial Person as required under section 203 of Companies Act 2013 andRegulation 6 of SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015.
As the Company is situated in remote place we could not get an eligible CompanySecretary or CFO. We are trying to find a right candidate and shall appoint a rightcandidate as and when available.
2. Non Appointment of Internal Auditor as required under section 138 of Companies Act2013
The operations of the Company are negligible and company is facing financial crunchthus becoming difficult to appoint internal auditor.
3. The Company is irregular in filing various forms required to be filed underprovisions of Companies Act 2013
Due to constant changes in officers looking after the secretarial matters there havebeen instances of delay in filing of forms.
4. Company has submitted annual Report for FY 2017-18 to Stock exchange with adelay of 42 days and paid the penalty levied by the exchange
The delay in submission of annual report to stock exchange was purely by oversight.
MEETINGS OF BOARD OF DIRECTORS:
The Board of Directors of the Company met 5 (five times) during the Financial Year. Thedetails of Committees of the Board are mentioned in the Annexure- II
|12.05.2018 ||01.06.2018 ||09.08.2018 ||13.11.2018 ||12.02.2019 |
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNEDDURING THE YEAR:
Mr. L RajaraoLingampalli Director (Din: 03307037) has resigned from the office ofDirector W.e.f. 06.11.2018. Sri. Rahul Patibandla (DIN 007344724) and Sri. AjayaPatibandla(DIN 007972941) were appointed as Additional Directors of the Company w.e.f 26th October2017 and their appointment was regularized in the 26th Annual General Meetingof the Company held on 09th August 2018. Excepting for the above said changesthere were no other changes in the office of director of the Company.
DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
Every Independent Director at the first meeting of the Board in which he participatesas a Director andthereafter at the first meeting of the Board in every financial yeargives a declaration that he meetsthe criteria of independence as provided under theCompanies Act 2013.
MEETING OF INDEPENDENT DIRECTOR:
During the year under review the Independent Directors met on 12.02.2019 inter aliato discuss:
Evaluation of the performance of Non-Independent Directors and the Board ofDirectors as a whole;
Evaluation of the performance of the Chairman of the Company taking intoaccount the views of the Executive and Non-Executive Directors.
Evaluation of the quality content and timelines of flow of information betweenthe Management and the Board that is necessary for the Board to effectively and reasonablyperform its duties.
All the Independent Directors were present at the Meeting.
Your Company has not accepted any fixed deposits and as such no principal or interestwas outstanding as on the date of the Balance sheet.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS SECTION 186 OF COMPANIES ACT 2013:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
MATERIAL CHANGES AND COMMITMENTS:
There are no material changes and commitments affecting the financial position of thecompany occurred between the end of the financial year of the company to which thefinancial statements relate and the date of the report.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (5) of the Companies Act 2013 your Directors confirm that tothe best of their knowledge and belief and according to the information and explanationobtained by them
- that in the preparation of Annual Accounts for the financial year ended 31st March 2019 the applicable accounting standards have been followed along with the proper explanation relating to material departures if any there from;
b) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for that period:
- that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities
d) That 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 operatingefficiently.
f) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors and Senior Management personneland fix their remuneration. The Remuneration Policy is posted on the website of theCompany at the link: www.vsfprojects.in
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy framed to deal with instance of fraud andmismanagement if any in the Group. The details of the Policy are explained in theCorporate Governance Report and also posted on the website of the Company www.vsfprojects.in.
The Company has risk management mechanism in place which mitigates the risk atappropriatesituations and there are no elements of risk which in the opinion of Board ofDirectors may threatenthe existence of the Company.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES PURSUANT TO PROVISIONS OF SECTION 188(1)OF COMPANIES ACT 2013
There were no materially significant related party transactions made by the Companywith PromotersDirectors Key Managerial Personnel or other designated persons which mayhave a potential conflictwith the interest of the Company at large. Suitable disclosure asrequiredby the Accounting Standards (AS18) has been made in the notes to the FinancialStatements. All Related Party Transactions were placed before the Audit Committee and tothe Board for their approval whenever required.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The details regarding Energy Conservation Technology Absorption Foreign ExchangeEarnings and Outgo as required by section 134(3) (m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 are given as Annexure IIIand forms partof this report.
MAINTENANCE OF COST RECORDS:
Company is not required to maintain cost records as specified by the Central Governmentunder sub- section (1) of section 148 of the Companies Act 2013.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure - V" to this report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to the provisions of Regulation 34(2) (e) of the Securities and Exchange Boardof India(Listing Obligations and Disclosure Requirements) Regulations 2015 a report onManagementDiscussion & Analysis is herewith annexed as 'Annexure IV' to thisreport.
Since the paid up capital of the Company is less than Rs. 10 Crores and the net worthof the Companyis less than Rs.25 Crores the provisions of Regulations 17 18 19 20 2122 23 24 25 26 27 andclauses (b) to (i) of sub-regulation 2 of Regulation 46 and paraC D & E of Schedule V of the SecuritiesExchange Board of India (Listing Obligationsand Disclosure Requirements)Regulations 2015 arenot applicable to the Company.
Your Company's shares are presently listed on The BSE Limited Mumbai and the listingfees for FY 2019-2020 is paid.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
The Company has in place proper and adequate internal control systems commensurate withthe nature of its business and size and complexity of its operations. Internal controlsystems comprising of policies and procedures designed to ensure reliability of financialreporting timely feedback on achievement of operational and strategic goals compliancewith policies procedure applicable laws and regulations and that all assets andresources are acquired are used economically.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of The Companies
(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company is herewith annexed as 'Annexure VI' to this report.
DETAILS ABOUT THE CORPORATE SOCIAL RESPONSIBILITY POLICY DEVELOPED AND IMPLEMENTED BYTHE COMPANY
The Company does not meet the criteria as specified in Section 135 of the CompaniesAct 2013 regarding Corporate Social Responsibility.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations. DISCLOSUREUNDER 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 sexualharassment complaints received and disposed off during the financial year2018-19:
| No. of complaints received ||: Nil |
| No. of complaints disposed off ||: Nil |
Your directors acknowledge the continued support from regulatory governmentauthorities staff and all the stake holders for their support and cooperation.
| ||BY THE ORDER OF THE BOARD |
| ||For VSF Projects Limited |
| ||Sd/- |
| ||Bobba Narayana Murthy |
| ||Chairman and Managing Director |
| ||(DIN: 00073068) |
|Place: Nellore || |
|Date :14.08.2019 || |