Your Directors hereby present the Twenty Fifth Annual Report together with the AuditedAccounts of the company for the financial year ended 31st March 2017.
Financial summary or Highlights/Performance of the Company:
The financial highlights for the current year in comparison to the previous year are asunder:
| || |
Rs. In Lakhs
|PARTICULARS ||2016-17 ||2015-16 |
|Total Income from Operations ||125.82 ||913.84 |
|Total Expenses ||112.63 ||836.45 |
|Profit Before Tax (PBT) ||-15.97 ||55.53 |
|Less: Tax ||0 ||31.51 |
|Profit After Tax (PAT) ||-15.97 ||24.02 |
|Loss from Previous Year ||0 ||-10.77 |
|Net Profits/Loss carried to Balance Sheet ||-15.97 ||24.02 |
The Financial Year 2016 -17 has been a very toughyear for the Company and the revenuefrom operations went down toRs. 125.82Lacs against Rs. 913.84 Lacs in the previous yearresulting in Net loss of Rs.-15.97 Lacs as against PAT of Rs. 24.02 Lacs in thepreviousyear.
There is no change in the nature of business during the FY 2016-17.
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:
M/s VSF Energy Projects Private Limited is the existing Subsidiary of the company andthere are no other subsidiaries joint ventures or associate companies which have becomeor ceased during the year. The Statement containing the salient features of thesubsidiaries as per sub -sections (3) of section 129 of the Companies Act 2013 in Form AOC-1 is herewith annexed as Annexure I to this report.
With a view of losses your Directors do not recommendany dividend for the financialyear 2016-17.
The term of M/s Ramana Reddy & Associates. Chartered Accountants Hyderabad theStatutory Auditors of the Company will expire on the conclusion of ensuing Annual GeneralMeeting. Hence it is proposed to appoint M/s. R K Reddy & Associates CharteredAccountants Hyderabad (ICAI Firm Registration No.005597S as Statutory of the Companyfrom the conclusion of this Annual General Meeting (AGM) till the conclusion of the 30thAnnual General Meeting of the Company(FY. 2017-2018 to FY. 2021-2022.
The company has received letter from M/s. R K Reddy & Associates CharteredAccountantsunder Section 139(1) of the Companies Act 2013 and the Rules framed thereunder furnished a certificate of their eligibility and consent for appointment to thateffect that their appointment if made would be within the prescribed limits underprovisions of sections specified under the Act and that they are not disqualified forsuch appointment within the meaning of the section of the said Act.
The auditors have given their report on the Annual Accounts of the Company and therewas a qualification made by auditor in relation to default in repayment of loan.
Qualification made by Auditor:
During the year the company has defaulted in repayment of loan to Shiram City UnionFinance Limited amounting to Rs. 1435970/- including interest of Rs.671644/- which issubject to confirmation from the said financial institution.
Reply of Board:
Due to liquidity issues and slowdown in operations of the Company Company could notrepay the loan within time and the amount was outstanding as on 31st March2017 and Subsequently Company has made the payment and there are no defaults in therepayment of loan.
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. P S Rao& Associates Company Secretaries.
The Secretarial Audit Report is annexed herewith as "Annexure V" to thisreport.
REPLY TO QUALIFICATIONS IN SECRETARIAL AUDIT REPORT:
1. Company has not appointed Company Secretary and CFO for the position of KeyManagerial Person as required under section 203 of Companies Act 2013 and Regulation 6 ofSEBI (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.
In accordance with the provisions of Section 152 of the Companies Act 2013 Sri BobbaLakshmi NarasimhaChowdary who retires by rotation and being eligible offers himself forre-appointment.
The Board of Directors of the Company met 4 (four times) during the Financial Year. Thedetails ofCommittees of the Board and the attendance of members of the Committee ismentioned in theAnnexure- VII
MEETINGS OF BOARD OF DIRECTORS
|30.05.2016 ||12.08.2016 ||12.11.2016 ||14.02.2017 |
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNEDDURING THE YEAR:
During the Financial year under review there were no changes in the Board of Directorsof 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.
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.
In pursuance to the Sub Section (3) of Section 129 of the Companies Act 2013 companyis required to prepare consolidated financial statements for the financial year ended 31stMarch 2017.
The Consolidated Financial Statement of your company with that of its subsidiary M/sVSF Energy Projects Private Limited is provided in the Annual Report.
The annual accounts of the Subsidiary Companies and the related detailed informationshall be made available to members seeking such information at any point of time. Theannual accounts of the M/s VSF Energy Projects Private Limited shall also be kept forinspection by any of the members at the registered office of the company.
The Statement containing the salient features of the subsidiaries as per sub -sections(3) of section 129 of the Companies Act 2013 in Form AOC -1 is herewith annexed asAnnexure I to this report.
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
a) that in the preparation of Annual Accounts for the financial year ended 31 March2017 the applicable accounting standards have been followed along with the properexplanation relating to material departures if any there from;
b) that the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the loss of the company for that period:
c) that the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe 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.
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 Companywww.vsfproiects.com.
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. A detailed description of the risks& threats has been disclosed in theManagement Discussion Analysis Report forming partof the Annual Report
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. AllRelated Party Transactions were placed before the Audit Committee and tothe Board for their approvalwhenever 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 - II and forms part of thisreport.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure - IV" 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 VI' to this report.
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.
MANAGEMENT DISCUSSION & ANALYSIS:
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 onManagement Discussion & analysis is herewith annexed as 'Annexure VII' to this report.
Your Company's shares are presently listed on The BSE Limited Mumbai and the listingfees for FY 2017-2018 is paid.
Pursuant to the provisions of the Companies Act 2013 and Securities And ExchangeBoardof India (Listing Obligations And Disclosure Requirements) Regulations 2015 the Boardhascarried out the annual performance evaluation of its own performance the Directorsindividually aswell as the evaluation of the working of its Audit Nomination andRemuneration and ComplianceCommittees.
A structured questionnaire was prepared after taking into consideration inputs receivedfrom theDirectors covering various aspects of the Board's functioning such as adequacy ofthe composition ofthe Board and its Committees Board culture execution and performanceof specific duties obligationsand governance.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding theChairman of the Board who were evaluated on parameters such as level ofengagement andcontribution independence of judgments safeguarding the interest of theCompany and its minority shareholders etc.
The performance evaluation of the Independent Directors was carried out by the entireBoard. The performance evaluation of the Chairman and the Non Independent Directors wascarried out by the Independent Directors who also reviewed the performance of theSecretarial Department. The Directors expressed their satisfaction with the evaluationprocess.
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
Details pursuant to Section 197 of the Companies Act 2013 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedherewith as "Annexure - IV" 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.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND 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 financial year2016-17:
| 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 |
|Place: Hyderabad || |
| ||B.N. MURTHY |
|Date: 11.08.2017 ||Chiarman& Managing Director |
| ||(DIN: 00073068) |