Umiya Tubes Ltd Directors Report.
UMIYA TUBES LIMITED
Your Directors take pleasure in presenting the THIRD Annual Report of the Company together with the Audited Accounts for the financial year ended on 31st March, 2016.
The brief financial results are as under:
|(Rs. in lacs)|
|Profit/(Loss) before Depreciation and Tax||74.53||11.56|
|Profit/(Loss) Before Tax and Extra Ordinary Items||49.07||1.15|
|Less: Extra Ordinary Items||-||-|
|Less: Current Tax||9.35||0.24|
|Add/Less: MAT credit Entitlement||(9.35)||(0.24)|
|Profit/(Loss) After Tax||4.50||1.15|
|Balance Carried to Balance Sheet||5.61||1.11|
The turnover of the Company for the year 2015-16 has substantially increased from Rs. 822.85 Lacs to Rs. 1456.82 Lacs. Due to this, profit before Depreciation and Tax stands increased to Rs.74.53 Lacs as compared to profit of Rs. 11.56 Lacs in the last year.
SUBSIDIARY COMPANIES/JOINT VENTURE COMPANY/ASSOCIATE COMPANY:
The Company does not have any Subsidiary Company or Joint Venture Company or Associate Company.
MATERIAL CHANGES AND COMMITMENT:
There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of financial year of the Company to which the financial statements relate and the date of the report except otherwise disclosed.
REASONS FOR REVISION OF FINANCIAL STATEMENT OR REPORT:
During the year, the financial statement or report was not revised. Hence further details are not applicable.
In order to conserve resources, your Directors express their inability to declare any dividend.
TRANSFER TO RESERVE:
Your Directors find it prudent not to transfer any amount to General Reserve.
The Paid up Equity share capital of the Company as on 31st March, 2016 was Rs. 7.40 Crores divided into 74,00,000 Equity shares of Rs. 10/- each.
SUCCESSFUL INITIAL PUBLIC OFFERING:
At the beginning of the financial year, the Company was an unlisted private Company. With effect from 1st October, 2015, the Company got converted into a Public Limited Company. The Company has made an Initial Public Offer of 20,00,000 Equity Shares of Rs. 10/- each for cash at par vide Prospectus dated 14th March, 2016. The Company has successfully completed the Initial Public Offering (IPO) in the current year pursuant to the applicable SEBI Rules and Regulations. The IPO opened on 18th March, 2016 and closed on 22nd March, 2016.
The IPO of the Company received an encouraging response from the investors and the public issue was oversubscribed. The Equity Shares of the Company have been listed on SME Platform of BSE Limited w.e.f 1st April, 2016.
DIRECTORS & KEY MANAGERIAL PERSONNEL:
During the year, the requirement of Key Managerial Personnel became applicable to the Company.
During the year, Mr. Bharatkumar R. Patel(DIN: 06562786) was appointed as Whole Time Director, Mr. Surendrasinh P Vaghela (DIN: 06415080) was appointed as Managing Director and Mr. Saurabhkumar R Patel (DIN: 06964670) was appointed as Chief Financial Officer of the Company w.e.f 1st January, 2016. Moreover, Mr. Ritendrasinh K Rathod was appointed as Company Secretary of the Company w.e.f 1st February, 2016.
Further Mr. Vikram G Patel (DIN: 07397444), Mr. Rajesh K Dave (DIN: 07398886), Mr. Mitesh G Patel (DIN: 07397651) and Mr. Atul J Popat (DIN: 07323826) were appointed as Independent Directors of the Company for a period of five years w.e.f 1st January, 2016
Pursuant to the provisions of Section 152 of the Companies Act, 2013 Mr. Surendrasinh P Vaghela (DIN: 06415080), Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself to be reappointed as director of the Company.
The Board recommends the re-appointment of Mr. Surendrasinh P Vaghela (DIN: 06415080) as Director of the Company liable to retire by rotation.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement of section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed:
1. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
2. that the Directors 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 at the end of the financial year and of the profit or loss of the Company for that period;
3. that the Directors had 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;
4. that the Directors had prepared the annual accounts on a going concern basis; and
5. that the 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.
6. that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
FORMAL EVALUATION BY BOARD OF ITS OWN PERFORMANCE:
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 (Clause 49 of the Listing Agreement to the extent applicable), the Board shall carry out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of Audit and Nomination & Remuneration Committees based on the criteria and framework adopted by the Board.
NUMBER OF MEETINGS OF BOARD:
The Board of Directors duly met 11 (Eleven) times.
DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received necessary Declaration from each Independent Director/s under section 149(7) of the Companies Act, 2013 that they meets the criteria of Independence laid down in section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS / SWEAT EQUITY SHARES / EMPLOYEE STOCK OPTION SCHEME:
During the year, the Company has not issued any equity shares with differential voting rights or sweat equity shares or shares under employee stock option scheme. Hence disclosure regarding the same is not given.
M/s. Pratirajsinh Raulji & Co., Chartered Accountants, the existing auditors of the Company were appointed as auditors of the Company at the 2nd AGM for holding the office from the conclusion of that 2nd AGM till the conclusion of the 7th AGM (Subject to ratification by the members at every subsequent Annual General Meetings).
However, M/s Pratirajsinh Raulji & Co., has shown their unwillingness to continue as Statutory Auditors of the Company for the financial year 2016-17 and onwards and tendered their resignation. In view of his the Company has to appoint new Statutory Auditor of the Company. In this regard, the Company has received a Special Notice u/s 140 (4) of the Companies Act, 2013 from a member of the Company for appointing P. Singhvi & Associates, Chartered Accountant, Ahmedabad as Statutory Auditor of the Company. P. Singhvi & Associates, Chartered Accountant, Ahmedabad has given their consent to act as Statutory Auditor of the Company and also provided declaration that their appointment, if made shall be within the limit prescribed.
It is further provided that the Company shall place the matter relating to such appointment by members at annual general meeting. Hence the members are requested to consider the matter of appointment of Auditors made and also to fix their remuneration.
AUDITORS REPORT AND NOTES ON ACCOUNTS:
The Board has duly reviewed the Statutory Auditors Report on the Accounts. The observations comments and notes of Auditor are self explanatory and do not call for any further explanation /clarification.
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 has appointed M/s. Manoj Hurkat & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure-1".
The Audit Committee was constituted in the Board Meeting held on 16th January, 2016 consists of the following Directors:
|1. Mr. Rajesh K Dave||Chairman|
|2. Mr. Atul J Popat||Member|
|3. Mr. Surendrasinh P Vaghela||Member|
NOMINATION & REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee was constituted in the Board Meeting held on 16th January, 2016. Composition of the Committee is as under:
|1. Mr. Rajesh K Dave||Chairman|
|2. Mr. Atul J Popat||Member|
|3. Mr. Vikram G Patel||Member|
STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Stakeholders Relationship Committee was constituted in the Board Meeting held on 16th January, 2016. Composition of the Committee is as under:
|1. Mr. Rajesh K Dave||Chairman|
|2. Mr. Atul J Popat||Member|
|3. Mr. Saurabhkumar R Patel||Member|
RISK MANAGEMENT POLICY/PLAN:
It may please be noted that as per the applicable requirement of the Companies Act, 2013 a risk management policy/plan of the Company is developed and implemented for creating and protecting the Shareholders value by minimizing threats or losses and to identify and Provide a framework that enables future activities of a Company to take place in a consistent and controlled manner.
The Company has a vigil mechanism for its directors and employees, to deal with instance of fraud/ mismanagement, if any and to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys code of conduct or ethics policy. The details of the policy is hosted on the website of the Company.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti Sexual Harassment measures in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. During the year, there were no complaints received under the said act.
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 Companys remuneration policy is directed towards rewarding performance based on review of achievements periodically. The remuneration policy is in consonance with the existing industry practice. Extract of Remuneration Policy from Nomination and Remuneration policy is attached as Annexure - 4.
ANALYSIS OF REMUNERATION:
The details of remuneration paid to Directors and Key Managerial Personnel is given in extract of Annual Return attached with this report.
Disclosure/details pursuant to provisions of Section 197(12) of the Companies Act 2013 read with the Companies (appointment and Remuneration of managerial personnel) Rules, 2014 are given as follows:
|Names and Positions||[A] Ratio of Directors Remuneration to the median Remuneration of Employees||[B] Percentage (%) increase in Remuneration|
|Ms. Beena P Vaghela (Chairperson & Director)||Nil||Nil|
|Mr. Surendrasinh P Vaghela (Managing Director)||Nil||Nil|
|Mr. Bharatkumar P Patel (Whole Time Director)||Nil||Nil|
|Mr. Saurabhkumar R Patel (Director and CFO)||Nil||Nil|
|Mr. Vikram G Patel (Independent Director)||Nil||Nil|
|Mr. Rajesh K Dave (Independent Director)||Nil||Nil|
|Mr. Mitesh G Patel (Independent Director)||Nil||Nil|
|Mr. Atul J Popat (Independent Director)||Nil||Nil|
The median remuneration of employees of the Company during the financial year was Rs. 1,05,600/- p.a.
|[C] Percentage increase in the median Remuneration of Employees||6.05%|
|[D] Number of permanent Employees on the rolls of Company||30 (Thirty)|
|[E] Explanation on the Relationship between average increase in Remuneration and Company Performance||If we compare the performance of the company with the previous year say F.Y. 2014-15 then there is an increase of 77% in income from operation and increase in PAT by 300% while there is an increase in staff cost by 70% as compared to last year. It shows the ability of management to take the effective production from the staff and also the staff satisfaction which emphasis on them to give maximum out of their capacity. Company have regular monitoring and evaluation system which gives regular reward to good, sincere obedient and intelligent workaholic employees and it motivates them and keeps them ready to give better every time to the company and this is the result of the same.|
|[F] Comparison of the Remuneration of the Key Managerial Personnel against the performance of the Company||No remuneration was paid to the Key Managerial Personnel till 31.03.2016, still they worked very hard and almost doubled the turnover of the company and almost quadruple the PAT of the company and that is also even after the huge provision of Deferred Tax Liability. The equity shares of the company have listed on SME Platform of BSE Limited and the Company has also received the ISO Certification which itself indicates the dedication and effective management of KMP.|
|[G] Variations in the Market Capitalisation of the Company as at 31st March, 2016 as compared to 31st March, 2015||N.A. (as the shares of the Company were listed on 01.04.2016 on SME platform of BSE)|
|[H] Price Earnings Ratio as at 31st March, 2016 as compared to 31st March, 2015||N.A. (as the shares of the Company were listed on 01.04.2016 on SME platform of BSE)|
|[I] Percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer||As on the date of Report, the market price of share is approx. Rs. 20 which is doubled from the IPO offer price of Rs. 10.|
|[j] Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof||N.A.(As there is no salary paid to NED and KMP during the year 2015-16 except to the Company Secretary w.e.f. 1st February, 2016)|
[K] Comparison of the each KMPs Remuneration vis-a-vis the performance of the Company
|Name of KMP||Remuneration of KMP (in Rs.)||Net Profit of Company|
|Ms. Beena P Vaghela (Chairperson & Director)||Nil||Net profit of the Company is|
|Mr. Surendrasinh P Vaghela (Managing Director)||Nil||Rs.4,50,280/- in the current|
|Mr. Bharatkumar P Patel(Whole Time Director)||Nil||financial year as compared to|
|Mr. Saurabhkumar R. Patel(Chief Financial Officer)||Nil||Rs. 1,15,399/- in the previous|
|Mr. Ritendrasinh K Rathod(Company Secretary)||Rs. 30000*||financial year.|
* Managing Director, Whole Time Director and Chief Financial Officer were appointed w.e.f 1st January, 2016 and Company Secretary was appointed w.e.f 1st February, 2016.
|[L] The key parameters for any variable component of remuneration availed by the directors||
No Remuneration paid to Directors during the year 2015-16
|[M] The ratio of the remuneration of the highest paid Director to that of the Employees who are not Directors but receive remuneration in excess of the highest paid Director during the year||Highest paid||Remuneration of Ratio|
|Directors Remuneration (I)||Employee receiving remuneration in excess of (I).|
PARTICULARS OF EMPLOYEES:
None of the employees of the Company is drawing remuneration requiring disclosure of information under Section 134 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.
During the year there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.
As the requirement of CSR Committee is not applicable to the Company, no further details/disclosure required to be given in this regard.
DETAILS ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
|(A) Conservation of energy|
|(i) the steps taken or impact on conservation of energy||The company uses LED lamps/bulbs in the whole factory premises which save 30-40% electricity as compared to normal lamps/bulbs|
|(ii) the steps taken by the company for utilizing alternate sources of energy||NIL|
|(iii) the capital investment on energy conservation equipments||NIL|
|(B) Technology absorption|
|(i) the efforts made towards technology absorption||1. The company uses AC Drives for almost all Tube mills and it also saves around 30-40% of electricity as compared to DC Drives.|
|2. The company started using inverter based welding machines instead of thyristor based welding machines to save energy.|
|3. The company tried different composition of gases which ultimately found good quality and competitive cost of welding.|
|4. The company also started polishing work with low RPM electric motors which reduced consumption of energy and polishing material to a huge extent.|
|(ii) the benefits derived like product improvement, cost reduction, product development or import substitution||The quality of the product and cost of product has improved significantly.|
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)|
|(a) the details of technology imported;||NIL|
|(b) the year of import;|
|(c) whether the technology been fully absorbed;|
|(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and|
|(iv) the expenditure incurred on Research and Development||As the company is new and at kid stage. it does not have separate R&D department but all motivated employees and KMPs always works for new ways and forms of doing work and saving cost and all energy saving and technology absorption benefits narrated above are the results of our R&D work only.|
|(C) Foreign exchange earnings and Outgo|
|The Foreign Exchange earned in terms of actual inflows during the year and||To find export business for the company, the team of company visited gulf countries in the month of July- Aug 2015.|
|As it was the first attempt of marketing abroad no inflow took place but the company is still pursuing opportunities to export the products of the Company very soon.|
|The Foreign Exchange outgo during the year in terms of actual outflows||The company has spend around 1250 USD on Foreign Visit|
INTERNAL FINANICAL CONTROL:
The 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.
During the year under report, your Company has not accepted any deposits pursuant to Section 73 of the Companies Act, 2013. Hence further details are not given.
It may please be noted that as our Company is not falling in the applicability criteria prescribed in the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.
Hence, the Report on Corporate Governance is not forming part of the Directors Report.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure -2"
PARTICULARS OF LOANS, INVESTMENTS OR GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT, 2013:
There are no Loans, Investments or Guarantees /Security given by the Company during the year under section 186 of the Companies Act, 2013; hence no particulars are required to be given.
RELATED PARTY TRANSACTION:
There are no particulars of contacts or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013 which are required to be reported in the prescribed form AOC-2 which is appended as an "Annexure-3"to Directors Report. The details of related party transactions as per AS-18 are otherwise reported in the financial statements. The related party transactions are otherwise carried out in the ordinary course of business and on arms length basis and the same are in the best interest of the Company.
Your Directors wish to place on record their sincere appreciation for significant contribution made by the employees at all the levels through their dedication, hard work and commitment, thereby enabling the Company to boost its performance during the year under report.
Your Directors also take this opportunity to place on record the valuable co-operation and continuous support extended by its valued business associates, Practicing Company Secretary, Auditors, Supplier, Customers, Banks / Financial Institutions, Government authorities and the shareholders for their continuously reposed confidence in the Company and look forward to having the same support in all its future endeavors.
|By Order of the Board|
|Place : Gandhinagar||Beena P Vaghela|
|Date : 25th May, 2016||(DIN:03577571)|
|Chairperson & Director|