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VSF Projects Ltd.

BSE: 519331 Sector: Infrastructure
NSE: N.A. ISIN Code: INE923K01014
BSE 00:00 | 20 Mar VSF Projects Ltd
NSE 05:30 | 01 Jan VSF Projects Ltd
OPEN 8.00
PREVIOUS CLOSE 8.00
VOLUME 650
52-Week high 8.00
52-Week low 8.00
P/E
Mkt Cap.(Rs cr) 5
Buy Price 0.00
Buy Qty 0.00
Sell Price 8.40
Sell Qty 500.00
OPEN 8.00
CLOSE 8.00
VOLUME 650
52-Week high 8.00
52-Week low 8.00
P/E
Mkt Cap.(Rs cr) 5
Buy Price 0.00
Buy Qty 0.00
Sell Price 8.40
Sell Qty 500.00

VSF Projects Ltd. (VSFPROJECTS) - Director Report

Company director report

Your Directors hereby present the Twenty Sixth Annual Report together with theAudited Accounts of the company for the financial year ended 31st March 2018.

Financial summary or Highlights/Performance of the Company:

The financial highlights for the current year in comparison to the previous year are asunder:

PARTICULARS 2017-18 2016-17
Total Income from Operations 0 125.82
Total Expenses 100.03 112.63
Profit Before Tax (PBT) -100.03 -15.97
Less: Tax -7.03 0
Profit After Tax (PAT) -93.02 -15.97
Loss from Previous Year 0
Net Profits/Loss carried to Balance Sheet -93.02 -15.97

COMPANY PERFORMANCE:

The Financial Year 2017 -18 has been a very tough year for the Companyas the companyhad no operations as the Company could not bag any new order due to huge financial crunchwhich resulted into zero revenues as against the income of Rs. 125.82Lacs in the previousyear. With the recurring expenditure with relation to employees benefits depreciationetc. the company incurred the Net loss of Rs. 93.02 Lacs as against loss of Rs. 15.97Lacsin the previous year.

There is no change in the nature of business during the FY 2017-18.

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

Ministry of Corporate Affairs has struck off the name of subsidiary Company M/s VSFEnergy Projects Private Limited from Register of Companies maintained by the Registrar ofCompanies Hyderabad.

There are no other subsidiaries joint ventures or associate companies which havebecome or ceased during the year.

DIVIDEND

In view of accumulated losses your Directors do not recommend any dividend for thefinancial year 2017-18.

STATUTORY AUDITORS

R. K. Reddy & Associates Chartered Accountants Statutory Auditor of the companyhas informed that due to pre-occupation of other assignments they will not be able tocontinue as Statutory Auditor of the company and have tendered their resignation w.e.f.12th May 2018.

In order to fill up such casual vacancy the company has appointed NVSR &Associates LLP Chartered Accountants to conduct the audit for the financial year2017-2018 in the Board Meeting held on 12th May 2018

The company has received letter from M/s. NVSR & Associates LLP 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 term of M/s NVSR & Associates LLP 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. NVSR & Associates LLP CharteredAccountants Hyderabad (ICAI Firm Registration No. 008801S/S200060 as Statutory Auditorsof the Company from the conclusion of this Annual General Meeting (AGM) till theconclusion of the 31st Annual General Meeting of the Company(FY. 2018-19 to FY.2022-23)i.e. for a period of five years.

AUDITORS REPORT

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 and re valuation of Property Plant and machinery.

Disclaimer of Opinion made by Auditor a. Investment in Subsidiary

The total investments of the company consists of equity shares in M/s. VSF EnergyProjects Private Limited ("subsidiary company"). Following the principles of IndAS 27 Separate Financial Statements the Company elected to account for its investment inits subsidiary in accordance with Ind AS 109 Financial Instruments.

Ind AS 109 requires an entity to measure the investment in equity shares at fair valueand recognise the changes in fair value through profit and loss account. However it alsogives an irrevocable option to an entity to recognise the aforesaid changes in fair valuethrough other comprehensive income ("OCI"). On the transition date the Companyhas elected the irrevocable option to recognise the fair value changes in the equityshares in the subsidiary in OCI.

However the management of the Company has not submitted the audited financialstatements of the subsidiary company and we were also explained by the management that thesubsidiary company has been in "strike off "status as per the ROC records andthe Board of Directors of the Subsidiary has also been disqualified. This has led to amaterial uncertainty in respect of subsidiary company's ability to continue as a goingconcern. In these circumstance we are of the opinion that the company shall carryoutimpairment test in respect of the investments in equity shares in subsidiary company.

In the absence of such fair valuation of equity shares in the subsidiary company wecannot determine the impact of such fair valuation on the total comprehensive income ofthe Company in the Standalone Financial Statements and also the recoverability ofinvestments disclosed in the balance sheet of the company.

b. Property Plant and Equipment

Following the principles of Ind AS 16 Property plant and equipment an entity shouldchoose either the cost model or the revaluation model as its accounting policy forsubsequent measurement of its items of property plant and equipment. Consequently theCompany has chosen to adopt revaluation model as its accounting policy for subsequentmeasurement of its items of property plant and equipment. Accordingly all therevaluation changes shall be recognised in the statement of OCI.

In the absence of revaluation of the item of property plant and equipment (Land) on adate near to the reporting period i.e. 31st March 2018 the company has not accounted forany revaluation difference in the Statement of OCI. Consequent to this we are unable todetermine the impact of such revaluation on the total comprehensive income of the Companyfor the year ended 31st March 2018.

Reply of Board

a) Since the Company is proposing to revive the Subsidiary the management is of theopinion that the fair value approximates to carrying amount of the investment.

b) Company is in the process of appointing valuer for revaluing the asset of theCompany.

SECRETARIAL AUDIT

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 I" tothis report.

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.

4.The Company did not appointed Independent Directors as required under theprovisions of section 149 of Companies Act 2013

One of the Independent Directors of the Company got disqualified during the yearpursuant to non filing of annual returns for period of three years in subsidiary Company/group Companies and other Independent Director has resigned from the Board w.e.f22.01.2018. Company is in the process of appointing new director and the disqualifieddirector has informed the Company that he is taking all measures to get reactivation ofDIN.

5. Constitution of Audit Committee and Nomination and Remuneration Committee is not incompliance with section 178 under section 177 of Companies Act 2013 respectively.

One of the Independent Directors of theCompany got disqualified during the yearpursuant to non filing of annual returns for period of three years in subsidiary Company/group Companies and other Independent Director has resigned from the Board w.e.f22.01.2018. Company is in the process of appointing new director and the disqualifieddirector has informed the Company that he is taking all measures to get reactivation ofDIN.

6. Company does not have minimum number of Directors post resignation of Mr. GopalanManoharan w.e.f. 22.01.2018

During the year five (5) Directors of the Company got disqualified pursuant to nonfiling of annual returns for period of three years in subsidiary Company/ group Companiesand it is informed by them that they are taking all measures to get reactivation of DIN.

7. The following Directors of the Company have been disqualified under provisions ofCompanies Act 2013

Name of the Director along with DIN Designation
1 BOBBA MURTHY Managing
NARAYANA (DIN: 00073068) Director
2 SUBBIAH KAMBAN (DIN: 01023097) Independent Director
3 VIJAYA LAKSHMI Director
BOBBA (DIN:01496696)
4 LAKSHMI NARASIMHA CHOWDARY BOBBA (DIN:02381545) Director
5 RAJARAO LINGAMPALLI Director
(DIN:03307037)

8. Ministry of Corporate Affairs has struck off the name of subsidiary Company M/s VSFEnergy Projects Private Limited from Register of Companies maintained by the Registrar ofCompanies Hyderabad

Since the Company is proposing to revive the Subsidiary the management is of theopinion that the fair value approximates to carrying amount of the investment.

MEETINGS OF BOARD OF DIRECTORS

The Board of Directors of the Company met 5 (five times) during the Financial Year. Thedetails ofCommittees of the Board and the attendance of members of the Committee ismentioned in theAnnexure- II

29-05-2017 11-08-2017 26-10-2017 14-11-2017 12-02-2018

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNEDDURING THE YEAR

The Directors Bobba Murthy Narayana Vijaya Lakshmi Bobba Lakshmi Narasimha ChowdaryBobba Subbaiah Kambhan and Rajarao Lingampalli were disqualified to act as director of acompany by Registrar of Companies Hyderabad.

All the directorsare disqualified except Mr. Gopalan Manoharan who has resigned formthe Board w.e.f 22.01.2018.

Sri. Rahul Patibandla (DIN 007344724) and Sri. AjayaPatibandla (DIN 007972941) wereappointed as Additional Directors of the Company w.e.f 26th October 2017. The newappointee Directors have given their eligibility and consent letters for getting appointedas director in the ensuing AGM. Excepting for the said changesthere were no other changein the office of directorship 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.

FIXED DEPOSITS

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

a) that in the preparation of Annual Accounts for the financial year ended 31st March2018 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 the Company andthat such internal financial Controls are adequate and were operating efficiently.

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 Company www.vsfprojects.com.

RISK MANAGEMENT

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.

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 V' to thisreport.

CORPORATE GOVERNANCE

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.

LISTING

Your Company's shares are presently listed on The BSE Limited Mumbai and the listingfees for FY 2018-2019 is yet to be 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 of employeesof the Company is herewith annexed 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

ACKNOWLEDGEMENTS

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 RAHUL PATIBANDLA AJAYA
PATIBANDLA
Date: 01.06.2018 DIRECTOR DIRECTOR
(DIN: 07344724) (DIN: 07972941)