Umiya Tubes Ltd Directors Report.
UMIYA TUBES LIMITED
Your Directors take pleasure in presenting the FOURTH Annual Report of the Company together with the Audited Accounts for the financial year ended on 31st March, 2017.
The brief financial results are as under:
|(Rs. in lacs)|
|Profit/(Loss) before Depreciation and Tax||198.58||74.53|
|Profit/(Loss) Before Tax and Extra Ordinary Items||167.84||49.07|
|Less: Extra Ordinary Items||-||-|
|Less: Current Tax||36.88||9.35|
|Add/Less: MAT credit Entitlement||(36.88)||(9.35)|
|Profit/(Loss) After Tax||153.94||4.50|
|Balance Carried to Balance Sheet||159.55||5.61|
The turnover of the Company for the year 2016-17 has substantially increased from Rs. 1475.45 Lacs to Rs. 2374.01 Lacs. Due to this, profit before Depreciation and Tax stands increased to Rs.198.58 Lacs as compared to profit of Rs. 74.53 Lacs in the last year.
SUBSIDIARY COMPANIES/JOINT VENTURE COMPANY/ASSOCIATE COMPANY:
The Company does not have any Subsidiary Companies 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.
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 recommend 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, 2017 was Rs. 7.40 Crores divided into 74,00,000 Equity shares of Rs. 10/- each.
UTILISATION OF ISSUE PROCEEDS:
The Company came out with public issue of 20,00,000 Equity shares of Rs. 10/- each for cash at par aggregating to Rs. 2 Crores ("Public Issue") vide Prospectus dated 14th March, 2016 ("offer document"). The equity shares of the Company were listed on the SME Platform of BSE on 1st April, 2016.
The Company has fully deployed the entire funds of Rs. 2 Crores received through the public offer as per the objects of the issue.
DIRECTORS & KEY MANAGERIAL PERSONNEL:
Pursuant to the provisions of Section 152 of the Companies Act, 2013 Mrs. Beena P Vaghela (DIN: 03577571), Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, has offered herself to be re-appointed as director of the Company.
The Board recommends the re-appointment of Mrs. Beena P Vaghela (DIN: 03577571) 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 Regulation 34(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its 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 4 (Four) 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. P. Singhvi & Associates, Chartered Accountants, the existing auditors of the Company were appointed as auditors of the Company at the 3rd AGM for holding the office from the conclusion of that 3rd AGM till the conclusion of the 8th AGM (Subject to ratification by the members at every subsequent Annual General Meetings).
As per Section 139(1) every company shall, at the first annual general meeting, appoint an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting and thereafter till the conclusion of every sixth meeting and the manner and procedure of selection of auditors by the members of the company at such meeting shall be such as may be prescribed.
It is further provided that the Company shall place the matter relating to such appointment for ratification by members at every annual general meeting. Hence the members are requested to consider the matter of ratification 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 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 consists of the following Directors:
|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 consists of the following Directors:
|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 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 are posted 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 shareholders may refer the Companys website for the detailed Nomination & Remuneration Policy of the Company on the appointment and remuneration of Directors including criteria for determining qualifications, positive attributes, independence of a Director; and other matters provided under sub-section (3) of section 178.
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.
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 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)||10.19||Not applicable*|
|Mr. Surendrasinh P Vaghela (Managing Director)||10.19||Not applicable*|
|Mr. Bharatkumar P Patel (Whole Time Director)||10.19||Not applicable*|
|Mr. Saurabhkumar R Patel (Director and CFO)||10.19||Not applicable*|
|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|
* Last year, there was no remuneration paid to any of the Directors of the Company.
Note: The median remuneration of employees of the Company during the financial year was Rs. 58870/- p.a.
|[C] Percentage Decrease in the median Remuneration of Employees||0.56%|
|[D] Number of permanent Employees on the rolls of Company||43 (Forty Three)|
|[E] 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||There was increase of 84.62% increase in average salaries of employees other than NEDs and KMPs made in the year 2016-17. There was no remuneration paid to managerial personnel in the previous financial year. Hence, percentile increase in remuneration of managerial personnel is not applicable. In view of this, comparison and justification thereof cannot be given.|
PARTICULARS OF EMPLOYEES:
The statement showing the names of the top ten employees in terms of remuneration drawn is given as "Annexure 2."
There are no employees of the Company 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.
DETAILS OF THE REMUNERATION TO MD/WTD (AS PER CLAUSE-IV OF SECTION-II OF PART-II OF SCHEDULE V):
(i) all elements of the remuneration package such as salary, benefits, bonuses, stock options and pension:
The details are given in clause- VI(A) of MGT-9 attached to this report as Annexure 3.
(ii) details of fixed component and performance-linked incentives, along with the performance criteria:
The details are given in clause- VI(A) of MGT-9 attached to this report as Annexure 3 and performance criteria is linked with net profit of the Company.
(iii) service contracts, notice period and severance fees:
Term valid till 31st December, 2018. And no notice period was mentioned no severance fees.
(iv) stock option details, if any, and whether these have been issued at a discount, as well as the period over which they accrued and how they are exercisable:
The Company has not granted any stock option.
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||(1) The Company uses LED lamps in the whole factory premises which save 30-40% electricity as compared to normal lamps.|
|(2) The Company uses LED lamps and fans at whole factory premises including offices at factory which lead to reduction in electricity consumption as compared to normal lamps.|
|(3) The Company have also installed LED street light at whole factory which lead to savings in electricity consumption around 40-50%|
|(ii) the steps taken by the company for utilizing alternate sources of energy||N.A.|
|(iii) the capital investment on energy conservation equipments||The Company uses AC Drives for almost all Tube mills and it also saves around 30-40% of electricity as compared to DC Drives.|
|(B) Technology absorption|
|(i) the efforts made towards technology absorption||(1) The Company have installed 6 Voltage Protection device (VPD) for purpose stable voltage for main panel of individual tube mill.|
|(2) The Company have installed power factor penal for maintained good power factor ratio.|
|(ii) the benefits derived like product improvement, cost reduction, product development or import substitution||(1) The Company tried different composition of gases which ultimately found good quality and competitive cost of welding.|
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)||(2) The Company also started polishing work with low RPM electric motors which reduced consumption of energy and polishing material to a huge extent.|
|(a) the details of technology imported;||N.A.|
|(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||The Company have invented embossing machine which is used for embossing Company name on each product. As the company is new and at kid stage it do 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||As it was an attempt of marketing abroad no inflow took place but the Company is still behind export and definitely will export during the next year.|
|The Foreign Exchange outgo during the year in terms of actual outflows||To find export business for the Company the team of Company visited gulf countries in the month of May 2016 and they spent around 1596/- AED.|
|The Foreign Exchange outgo during the year is Rs. 20000/-.|
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.
Details of money accepted (if any during the year) by the Company from the Directors and/or the relatives of Directors of the Company are given in the notes to the Financial Statements and the same are not deposit as per the applicable provisions of Companies Act, 2013 and rules made thereunder.
It may please be noted that as our Company is not falling in the applicability criteria prescribed as mentioned 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 -3"
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. 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. The related party transactions are due to business exigencies.
MANAGEMENT DISCUSSION AND ANALYSIS:
Necessary Management Discussion and Analysis Report, pursuant to Regulation 34(2)(e) of The SEBI (LODR) Regulations, 2015 is appended as "Annexure-4"to Directors Report.
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 : 19th May, 2017||(DIN:03577571)|
|Chairperson & Director|