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To
The Members, Vallabh Steels Limited
The have pleasure in presenting the 35th Annual Report of the Company
alongwith the Audited Statement of Accounts for the year ended 31st
March, 2015:
FINANCIAL RESULTS:
(Rs. in Lacs)
Current Year Previous year
Revenue from Operations
and Other Income 13776.33 16959.54
Profit before Interest,
Depreciation and Tax 547.08 637.03
Less :
Financial Costs 423.20 302.36
Provision for Depreciation 72.79 110.27
Taxes : Current Tax 5.90 -
MAT Credit Entitlement (5.90) -
Deferred Tax/Earlier year
tax adjustment (176.51) 319.48 (35.11) 377.52
Profit after Tax 227.60 259.51
Add:
Balance b/f from Previous Year 2965.04 2730.53
Profit available for
appropriations 3192.64 2990.04
Appropriations
Transferred to General Reserve 25.00 25.00
Surplus Carried to Balance
Sheet 3167.64 2965.04
3192.64 2990.04
PERFORMANCE REVIEW:
During the year under review the Company has recorded a lower Income
from operations & other income of Rs. 13776.33 as compared to Rs.
16959.54 lacs of previous year, which has been mainly on account of
lower production due to sluggish demand and pertaining market
conditions. As a result, the Company earned a lower net profit after
tax of Rs.227.60 lacs as compared to Rs. 259.51 lacs in the previous
year. The Company expects to show better financial performance during
the current year as compared to that of the year under report.
INDUSTRY AND ECONOMIC SCENARIO:
India's steel industry is passing through one of the most challenging
phases. It has been impacted by sluggish domestic demand, Iron ore
supply constraints coupled with strong domestic Iron ore prices,
dumping of steel into India by steel- surplus countries, primarily
China, Russia, Japan and Korea and uncompetitive Steel export due to
stable rupee. The Indian economy, supported by lower oil prices,
improved FDI inflows and pro-growth economic reforms, saw a moderate
improvement in growth momentum during financial year 2014-15; some of
the key macroeconomic Indicators also strengthened over the year. The
Indian economic growth improved to 7.3% in financial year 2014-15 as
compared to 6.9% in financial year 2013-14. However, the Indian economy
will need some time to recover and show positive results on ground. The
new government is focusing on implementing reforms to spur investments
and re-energise the economy for Infrastructure development and
Industrial growth, which will accelerate steel demand in line with
economic growth.
EXPORTS:
We are pleased to inform you that during the year under review, the
Company continued to export its products to African Countries. Due to
wide fluctuation in prices and stiff competition the company registered
lower exports at Rs. 127.63 lacs as compared to Rs. 998.08 lacs in the
previous year.
SHARE CAPITAL:
There was no change in the Company's share capital during the year
under review. The Company's paid up equity share capital remained at
Rs. 4,95,00,000 comprising of 49,50,000 equity shares of Rs. 10/- each.
DIVIDEND AND RESERVES:
With a view to conserve resources for Company's future requirements,
your directors do not recommend any dividend for the year under
consideration. During the year under review, Rs. 25 Lacs has been
transferred to General Reserves.
LISTING OF SHARES:
The Equity Shares of the Company are listed at BSE Limited, Phiroze
Jeejeebhoy Towers, Dalal Street, Mumbai. The company has duly paid the
listing fee to BSE Limited, Mumbai upto the Financial Year 2015-16.
FIXED DEPOSITS:
During the year, your Company has not accepted any fixed deposits
within the meaning of Section 73 of the Companies Act, 2013 and the
Rules made thereunder. As such the required information is not
applicable to be mentioned.
DIRECTORS AND KEY MANAGERIAL PERSONNEL(KMP):
During the year under review, the Company appointed Mrs. Parveen Sharma
(having DIN No. 06388464) as Independent Director of the Company with
effect from March 31, 2015 for a period of five consecutive years. The
Company has received declaration of independence from her that she
meets the criteria of independence as laid down under Section 149(6) of
the Companies Act, 2013 and Clause 49 of the Listing Agreement.
In accordance with the provisions of Section 152 of the Companies Act,
2013 and the Company's Articles of Association, Sh. Rahul Jain Director
of the company retires by rotation at the forthcoming Annual General
Meeting and being eligible offers himself for re-appointment.
During the year under review, Sh. Mohan Lal, Sh. Mohinder Kumar Jain
and Sh. Mohinder Pal Gupta resigned as Director of the company. The
Board has placed on record its sincerest thanks and gratitude for the
invaluable contribution for the services rendered by them during their
tenure as a Director of the company.
As on date of this report Sh. Kapil Kumar Jain, Chairman and Managing
Director and Sh. Suresh Gupta, Chief Financial Officer of the Company
are Key Managerial Personnel of the Company.
BOARD EVALUATION:
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an evaluation of its
own performance, the directors individually as well as the evaluation
of the working of its Audit, Appointment & Remuneration Committees. The
Details of the same are given in the Report on Corporate Governance
annexed hereto.
REMUNERATION POLICY:
The Board has on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. The Remuneration Policy is
stated in the Corporate Governance Report.
MEETINGS:
A calendar of Meetings is prepared and circulated in advance to the
Directors. During the year 9 (Nine) Board Meetings and 4 (Four) Audit
Committee Meetings were convened and held. The details of which are
given in the Corporate Governance Report. The intervening gap between
the Meetings was within the stipulated period prescribed under the
Companies Act, 2013.
CORPORATE GOVERNANCE:
Your company has been practicing the principle of good Corporate
Governance over the years. The Board of Directors supports the broad
principles of Corporate Governance. In addition to the basic governance
issues as dictated by compliance of statutory requirements, the Board
lays strong emphasis on transparency, accountability and integrity.
Corporate Governance Report and Management Discussion and Analysis
along with Certificate of the Auditors of your company pursuant to
clause 49 of the Listing Agreement with the Stock Exchange(s) has been
annexed to the report as Annexure-I.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a vigil mechanism named Fraud and Risk Management
Policy to deal with instance of fraud and mismanagement, if any. In
staying true to our values of Strength, Performance and Passion and in
line with our vision of being one of the respected companies in India,
the Company is committed to the high standards of Corporate Governance
and stakeholder responsibility. The Company has a Fraud Risk and
Management Policy to deal with instances of fraud and mismanagement, if
any. The FRM Policy ensures that strict confidentiality is maintained
whilst dealing with concerns and also that no discrimination will be
meted out to any person for a genuinely raised concern. A high level
Committee has been constituted which looks into the complaints raised.
The Committee reports to the Audit Committee and the Board.
EXTRACT OF ANNUAL RETURN:
The extract of Annual Return, in format MGT-9, for the Financial Year
2014-15 has been enclosed as Annexure-II with this report.
SUBSIDIARY COMPANIES:
The Company does not have any Subsidiary.
STATUTORY AUDITORS:
M/s. Raj Gupta & Co., Chartered Accountants, Auditors of the company,
retire at the conclusion of this Annual General Meeting and are
eligible for re-appointment. They have furnished a certificate to the
effect that their re-appointment, if made, will be in accordance with
Section 139(1) of the Companies Act, 2013.
AUDITORS' REPORT:
The Auditors' Report read with the relevant notes on accounts for the
year under review is self explanatory and do not call for any further
comments as there are no adverse remarks in the Auditors' Report.
AUDIT COMMITTEE:
The committee re-constituted by the Board of Directors in their meeting
held on March 31, 2015. Presently the constituent members of the Audit
Committee are Mrs. Parveen Sharma (Chairman), M r. Rahul Jain and M r.
Jawahar Jain. The primary objective of the Committee is to monitor and
provide effective supervision of the Management's financial reporting
process, to ensure accurate and timely disclosures, with the highest
levels of transparency, integrity and quality of financial reporting.
The statutory auditors and internal auditors are the permanent invitees
to the audit committee meetings. The Committee met 4 (four) times
during the year under review, the details of which are given in the
Corporate Governance Report that forms part of this Annual Report.
COST AUDITORS:
As per Section 148 of the Companies Act, 2013, the Company is required
to have the audit of its cost records conducted by a Cost Accountant in
practice. In this connection, the Board of Directors of the Company
approved the appointment of M/s. Meenu & Associates, Cost Accountants,
Ludhiana (Firm Registration No.100729 ) as the Cost Auditors of the
Company for the year ending 31 March, 2016, on a remuneration of
Rs.55,000 plus service tax as applicable and reimbursement of out of
pocket expenses. The remuneration is subject to the ratification of the
Members in terms of Section 148 read with Rule 14 of the Companies
(Audit and Auditors) Rules, 2014 and is accordingly placed for your
ratification.
M/s. Meenu & Associates were also the cost auditors of the company for
the financial year 2014-15. The Cost audit report for the financial
year 2014-15 will be filed by the company with the Ministry of
Corporate Affairs (MCA) in the stipulated time as per the provisions of
the Companies Act, 2013.
SECRETARIAL AUDITORS:
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 had appointed M/s. RCS & Company,
Company Secretaries in Practice to undertake the Secretarial Audit of
the Company. The Report of the Secretarial Audit carried out is annexed
herewith as Annexure "III". The report does not contain any
qualification however as regards of appointment of Company Secretary,
the Board states that it has interviewed various candidates but could
not find a suitable person for this job and the company is in process
of appointment of a Company Secretary.
The Board at its meeting held on August 14, 2015 has reappointed M/s.
RCS & Company, Practicing Company Secretaries, as Secretarial Auditor,
for conducting Secretarial Audit of the Company for financial year
2015-16.
INTERNAL FINANCIAL CONTROL SYSTEM AND ITS ADEQUACY:
The Company continues to engage M/s. Gupta Sanjeev & Co., Chartered
Accountants, (FRN: 005365N) as its Internal Auditors. During the year,
the Company continued to implement their suggestions and
recommendations to improve the control environment. Their scope of work
includes review of processes for safeguarding the assets of the
Company, review of operational efficiency, effectiveness of systems and
processes, and assessing the internal control strengths in all areas.
Internal Auditors findings are discussed with the process owners and
suitable corrective actions taken as per the directions of Audit
Committee on an ongoing basis to improve efficiency in operations. The
Audit Committee of the Board of Directors review the adequacy and
effectiveness of internal control systems and suggests improvements for
strengthening them from time to time.
PERSONNEL AND INDUSTRIAL RELATIONS:
The Management - Employees relations remained cordial throughout the
year. The results achieved during the year have been possible only with
the dedication and hard work at all levels of workers, staff and
executives of the Company.
PARTICULARS OF EMPLOYEES:
The Company has not employed any individual whose remuneration falls
within the purview of the limits prescribed under the provisions of
Section 197 of The Companies Act, 2013, read with Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014. 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 employees of the Company, will be
provided upon request. In terms of Section 136 of the Act, the Report
and Accounts are being sent to the Members and others entitled thereto,
excluding the information on employees' particulars which is available
for inspection by the Members at the Registered Office of the Company
during business hours on working days of the Company up to the date of
the ensuing Annual General Meeting. If any Member is interested in
obtaining a copy thereof, such Member may write to the Company in this
regard.
RELATED PARTY TRANSACTIONS:
All the related party transactions that were entered during the
financial year were on arm's length basis and were in the ordinary
course of business. There have been no materially significant related
party transactions between the Company and the Key Managerial Personnel
or other designated Persons, Promoters, Directors, the management or
the relatives except for those disclosed in the financial statements
which may have potential conflict with the interest of the company at
large.
Accordingly, particulars of contracts or arrangements with related
parties referred to in Section 188(1) along with the justification for
entering into such contract or arrangement in Form AOC-2 does not form
part of the report. None of the Independent Directors has any pecuniary
relationships or transactions vis-…-vis the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The Company has neither given/provided any Loans, Guarantees; nor it
made any Investments covered under the provisions of Section 186 of the
Companies Act, 2013.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
During the year under review, there are not any significant and
material orders passed by the Regulators or Courts to the Company.
GENERAL:
Your Directors state that no reporting is required in respect of the
following items as there were no transactions on these items during the
year under review:
1. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme.
During the year, there were no women employee worked in your company,
hence provision to frame Policy under Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 was not
applicable to your company.
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider
Trading with a view to regulate trading in securities by the Directors
and designated employees of the Company. The Code requires
pre-clearance for dealing in the Company's shares and prohibits the
purchase or sale of Company shares by the Directors and the designated
employees while in possession of unpublished price sensitive
information in relation to the Company and during the period when the
Trading Window is closed. The Board is responsible for implementation
of the Code. All Board Directors and the designated employees have
confirmed compliance with the Code.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Management's Discussion and Analysis of operations for the year
under review, as stipulated under clause 49 of the listing agreement
with the stock exchanges, is provided in Annexure-'I' forms part of
this Annual Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO.
Information in accordance with the provisions of Section 134(3) (m) of
the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)
Rules, 2014 regarding conservation of energy, technology absorption and
foreign exchange earnings and outgo is given hereunder:
i. CONSERVATION OF ENERGY:
a) Energy Conservation measure taken: The Company ensures that the
manufacturing operations are conducted in the manner whereby optimum
utilization and savings of energy is achieved.
b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy: No specific investment has been
made.
c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production: Impact of
measures taken not quantitative and as such can not be stated
accurately.
d) Total Energy consumption per unit of production as per form 'A' to
the Rules in respect of industries specified in schedule hereto:
ii. TECHNOLOGY ABSORPTION:
Your Company has always been making best efforts towards technology
absorption, adaption and innovation to improve the quality of its
products being manufactured at its various units and to reduce the cost
of production.
DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of knowledge and belief and according to the information
and explanations obtained by them, your directors make the following
statements in terms of Section 134 (3)(c) of the Companies Act, 2013:
i. that in the preparation of the annual accounts for the year ended
March 31, 2015, the applicable accounting standards have been followed
along with proper explanation relating to material departures, if any;
ii. that they had 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 as at March 31, 2015 and the profit or loss of the Company
for the year ended on that date;
iii. that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv. that they had prepared the annual accounts for the financial year
ended on 31st March,2015;
v. that he directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively; and
vi. that the directors had devised proper system to ensure compliance
with the provisions of all applicable laws and that such system were
adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
Corporate Social Responsibility was not applicable to the Company for
the financial year under review. The Philosophy of the company works
with objectives of contributing to the sustainable development of the
society and to create a greener and cleaner environmental around us.
The Corporate Social Responsibility (CSR) activities of Vallabh Steels
Limited reflect its philosophy of enhancing value to the society and
the environment around us.
The CSR activities done by the Company are identified after conducting
a proper market research to identify the social and environment needs
which are need of the hour.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:
Your Company did not have any funds lying unpaid or unclaimed for a
period of seven years. Therefore there were no funds which were
required to be transferred to Investor Education and Protection Fund
(IEPF).
ACKNOWLEDGEMENT:
Your Directors take this opportunity to express their sincere thanks
and appreciation to the team of executives, staff members and workers
at all levels for their co-operation, hard work, dedication and
devotion. Our thanks are also due to the Bankers, Government
Authorities and Business constituents for their continued support and
co-operation extended from time to time to the Company.
BY ORDER OF THE BOARD OF DIRECTORS
Sd/-
PLACE : LUDHIANA (KAPIL KUMAR JAIN)
DATED : 14.08.2015 CHAIRMAN & MANAGING DIRECTOR |