valecha engineering ltd share price Directors report

To The Members,

In exercise of the powers of the Board of Directors by the Resolution Professional of Valecha Engineering Limited (the Company) as per Section 17(1)(b) of Insolvency and Bankruptcy Code, 2016, hereby present the 46^th Annual Report on business and operations of the Company along with the Audited Statement of Accounts for the financial year ended March 31, 2023.

Rs. in Crores

Financial Highlights (Standalone)
	2022-23	2021-22
Revenue from Operations	90.07	230.81
Other Income	3.61	7.96
Total Revenue	93.68	238.77
Profit/(Loss) before Interest, Depreciation, Exceptional Items and Tax	(16.92)	2.94
Less: Finance Cost	0.19	0.21
Profit before Depreciation, Exceptional Items and Tax	(17.11)	2.73
Less: Depreciation and Amortization Expenses	0.54	0.40
Profit /(Loss) before Exceptional Item and Tax	(17.65)	2.33
Exceptional Item	-	-
Profit/ (Loss) before Tax	(17.65)	2.33
Provision for Tax ( Including earlier Year Taxation)	-	-
Profit /(Loss) after Tax	(17.65)	2.33
Other comprehensive income/(loss) for the year	(0.01)	0.89
Total comprehensive income for the year	(17.66)	3.22
Retained Earnings- Opening Balance	(136.97)	(139.30)
Add: Profit/ (Loss) for the Year	(17.65)	2.33
Retained Earnings- Closing Balance	(154.62)	(136.97)

1. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future:

1. Honble National Company Law Tribunal, Mumbai bench ("Honble NCLT"), passed Order dated 21/10/2022 in Company Petition no. CP (IB) No.594/MB-IV/2021 filed by STATE BANK OF INDIA, the Financial Creditor /Petitioner, under section 7 of Insolvency & Bankruptcy Code, 2016 (I&B Code) against the Company, Corporate Debtor/Respondent, for initiating Corporate Insolvency Resolution Process ("CIRP") and appointed Mr. Anurag Kumar Sinha, a Registered Insolvency Professional having Registration Number [IBBI/IPA-001/ IP-P00427/2017-18/10750] as Interim Resolution Professional, to carry out the functions as mentioned under I&B Code.

2. The appointment of Mr. Anurag Kumar Sinha was confirmed/approved as the Resolution Professional ("RP") of the Company by the Committee of Creditors w.e.f 30.11.2022. As per Section 17(1) (a) of the I&B Code, from the date of appointment of the IRP, the management of affairs of the Corporate Debtor was vested in the IRP/ RP and as per Section 17(1) (b), the powers of the board of directors stood suspended and was exercised by the IRP/ RP.

2. Share Capital: The paid up Equity Share Capital as on 31st March, 2023 was Rs. 22.53 Crores.

3. Dividend: The Company being under CIRP and in view of the carried forward losses incurred during the year under review, the RP does not recommend any dividend for the year ended 31st March, 2023.

4. Reserves: No amount is being transferred to reserves.

5. Operations/ State of affairs during the year:

Standalone: The Company has achieved a turnover of Rs. 90.07 crores for the year ended 31^st March, 2023 against Rs. 230.81 crores in the previous year. The Company has incurred loss of Rs. 17.65 crores against the Profit after Tax of Rs. 2.33 crores in the previous year.

The company has achieved a consolidated turnover of Rs. 113.69 crores for the year ended 31^st March, 2023 against Rs. 234.43 crores in the previous year. The company has incurred a consolidated after tax loss of Rs. 484.97 crores against the Loss after tax of Rs 169.84 crores in the previous year.

6. Fixed Deposits: As on 31^st March, 2023, Fixed Deposits accepted by the Company stood at Rs.22.94 Crores as against Rs. 22.80 Crores in the previous year.

Details relating to deposits covered under The Companies (Acceptance of Deposits) Rule, 2014 for the Financial Year 2022-23; No deposits were re-paid during the year to Fixed Deposit holders.

7. Material changes and commitments: There have been no material changes and commitments, affecting the financial position of the company between the end of the financial year of the company to which the financial statements relate and the date of the report.

8. Changes in the nature of business There has been no change in the nature of business

9. UPDATE:

1. The Subsidiary Company Valecha L M Toll Private Limited (VEL Stake - 74%).

NCLT, Mumbai has passed Order that the Corporate Debtor i.e Valecha L M Toll Private Limited has to be liquidated in terms of the provisions of Section 33 of IBC, 2016 and has appointed Mr. Udayraj Patwardhan, Resolution Professional having IBBI Registration No. IBBI/IPA-001/IP-PP00024/2016-2017/10057, as Liquidator of the Corporate Debtor.

2. The Subsidiary Company Valecha Kachchh Toll Roads Limited (VEL Stake - 58.15%).

The Canara Bank Limited, Financial Creditor has filed Petition No. C.P. (IB)/360(MB)2023 under Section 7 of I&B Code, 2016 with Honble National Company Law Tribunal, Mumbai bench ("Honble NCLT") against Corporate Debtor i.e Valecha Kachchh Toll Roads Limited, for initiation of CIRP. The hearings are under progress in the matter.

10. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo pursuant to Section 134 of the Companies Act, 2013, and Rules thereunder:

A. Conservation of Energy: At all the sites of the Company the consumption of power is regularly monitored and necessary measures are taken to regulate the consumption.

B. Technology absorption: During the year under review, there is no expenditure on Technology Absorption and on Research and Development.

C. Foreign Exchange Earnings & Outgo:

(Rs. in lakhs)

	2022 - 23	2021 - 22
Foreign Exchange Outgo	NIL	NIL
Foreign Exchange Earned	NIL	NIL

11. Details of Subsidiary/Joint Ventures/Associate Companies:

As on 31^st March, 2023, the Company has the following 6 subsidiaries namely:-

1. Valecha Infrastructure Limited

2. Professional Realtors Private Limited

3. Valecha LM Toll Private Limited (under liquidation)

4. Valecha Badwani Sendhwa Tollways Limited

5. Valecha Kachchh Toll Roads Limited

6. Valecha International FZE

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of Financial Statements of subsidiaries in Form AOC-1 forms part of the Financial Statement and hence not repeated here for the sake of brevity.

12. Consolidated Financial Statements: The audited Consolidated Financial Statements of the Company also form part of the Annual Report.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Company has placed separate audited accounts of its subsidiaries as on 31.03.2023 on its website www.valecha.in. The Company will make available the audited annual accounts and associated information of its subsidiaries, upon request by any of its shareholders.

13. Particulars of Loans, Guarantees or Investments under Section 186: Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

14. Auditors and their Report:

- Statutory Auditor M/s. Bagaria & Co. LLP conducted the Statutory Audit for the year 2022-23. The Independent Auditors Report to the members of the Company in respect of the Standalone and Consolidated Financial Statements for the year ended 31^st March, 2023 form part of this Annual Report.

STATUTORY AUDITORS: In accordance with the provisions of Section 139 of the Companies Act, 2013, at the Annual General Meeting held on 30.09.2019, M/s. Bagaria & Co. LLP, Chartered Accountants were appointed as the Statutory Auditors of the Company for a period of 5 years till the conclusion of 47^th AGM subject to the ratification by the members at every AGM. The requirement to place the matter relating to appointment of Auditors for ratification by members at every Annual General Meeting was omitted vide notification dated May 7, 2018, issued by the Ministry of Corporate Affairs. Accordingly, no resolution is proposed for ratification of appointment of Auditors in ensuing AGM of the Company. The Company has received a letter from M/s. Bagaria & Co. LLP, Chartered Accountants confirming that they are eligible for continuing as Statutory Auditors of the Company.

Statutory Auditors Remarks: Relevant Notes to Standalone Financial Statement provide clarification to the Auditors opinion in related points of the Audit report (Standalone)

Relevant Notes to Consolidated Financial Statement provide clarification to the Auditors opinion in related point of the Audit report (Consolidated)

Cost Auditor: Pursuant to Section 148 of the Companies Act, 2013, in terms of the Central Governments directives, and on the recommendation of the Audit Committee M/s Darshan Vora & Co (M/36481), Cost Accountant, has been re-appointed as the Cost Auditor of the Company for the year 2023-24.

M/s Darshan Vora & Co have confirmed that their re-appointment is within the limits of Section 139 of the Companies Act, 2013 and has certified that they are free from any disqualifications specified under Section 148(5) and all other applicable provisions of the Companies Act, 2013.

The said auditors have given their eligibility certificate for appointment as Cost Auditor.

- Secretarial Auditors: Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Ragini Chokshi & Co, Practicing Company Secretary (Membership No.2390), firm of Company Secretaries in practice, has been re-appointed to undertake the Secretarial Audit for the financial year ended 31^st March, 2023. Their Report is annexed as Annexure-A to this report.

15. Adequacy of Internal Financial Control: The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information to Directors.

16. Directors:

The tenure of Directorship of existing Independent Directors of the Company namely, Ms. Chetna Verma (DIN: 08981045), Ms. Bharti Ranga (DIN: 06864738) and Mr. Achal Kapoor (DIN: 09150394) ceases / expires at the 46th Annual General Meeting and they are not eligible to reappointment pursuant to the provision of Section 149 (11) of the Companies Act, 2013.

- Appointment of Directors: The Board of Directors in its meeting held on 27.08.2022, have appointed Ms. Swati Jain (DIN: 09436199) as an Additional Non Executive - Independent Directors of the Company.

- Resignation of Directors:

- The Board of Directors in its meeting held on 27.08.2022, have accepted resignation of Mr. Tejas Deshpande as a Non Executive - Independent Directors of the Company.

- Mr. S. N. Kavi, a Non-Executive - Independent Directors has submitted resignation letter dated 19.07.2023 to the Company.

- Retirement by Rotation In accordance with the requirement of the Companies Act, 2013, Ms. Lalna Takekar (DIN: 08111805) NonExecutive Director, liable to retire by rotation at the ensuing Annual General Meeting, being eligible, offers herself for re-appointment.

- Declaration by Independent Directors: Ms. Chetna Verma (DIN: 08981045), Ms. Bharti Ranga (DIN: 06864738) and Mr. Achal Kapoor (DIN: 09150394) and Ms. Swati Jain (DIN: 09436199) Non Executive & Independent Directors on the Board of the Company, confirm that they meet the criteria of Independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015.

All Non Executive and Independent Directors have given declaration that they meet the criteria of independence as provided in section 149 (6) of the Act, and Regulation 16 and 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There has been no change in the circumstances, which has affected their status as Independent Director. The Non-Executive and Independent Directors of the company had no pecuniary relationship or transactions with the company.

In the opinion of the Board, they fulfill the conditions of independence as specified and are independent of the management.

17. Board Evaluation Since the powers of the Board of Directors has been suspended with effect from 21.10.2022 pursuant to Honble NCLT Order dated 21.10.2022, the question of evaluation of Board does not arise.

18. Meetings of the Board of Directors: The details of the number of meetings of the Board held during the financial year 2022-23 forms part of the Corporate Governance Report.

19. Committees of the Board of Directors: The Board of Directors have the following Committees:

- Audit Committee

- Nomination and Remuneration Committee

- Stakeholders Relationship Committee

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance section of this Report.

20. Policies of the Board of Directors

I. Corporate Social Responsibility During the year under review, in view of the loss incurred, Section 135 (1) of the Companies Act, 2013 is not applicable.

II. Vigil Mechanism/Whistle Blower In compliance with the provisions of section 177(9) of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company has framed a Vigil Mechanism/Whistle Blower Policy with a view to maintain high standards of transparency in Corporate Governance, deal with unethical behavior, actual or suspected fraud or violation of the companys code of conduct or ethics policy, if any. No communication from any employee of the company under the Whistle Blower Policy was received during the year.

III. Remuneration Policy for Directors, Key Managerial Personnel and other employees

A. Executive Directors

c) Having not appointed any Managing Director and Whole Time Directors during the year under review, the question of payment of Remuneration does not arise.

d) The Remuneration to the Key Managerial Personnel and other employees will be such as to ensure that the relationship of remuneration to performance is clear and meets appropriate performance benchmarks.

B. Non-Executive Directors

The total sitting fees paid to Non-Executive & Independent Directors from 01.04.2022 to 21.10.2022 is as below.

Name of Directors	Total Sitting Fees from 01.04.2022
1 Mrs. Lalna Takekar	1,75,000
2 Mr. Tejas Deshpande	40,000
3 Mr. S.N. Kavi	80,000
4 Ms. Chetna Verma	2,00,000
5 Ms. Bharti Ranga	2,00,000
6 Mr. Achal Kapoor	2,00,000
7 Ms. Swati Jain	50,000
Total	9,45,000

IV. Policy on Related Party Transaction Pursuant to section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the Company has formulated guidelines for identification of related parties and the proper conduct and documentation of all related party transactions.

In light of the above, VEL has framed a policy on related party transaction. This policy has been adopted by the Board of Directors of the Company based on recommendations of Audit Committee.

The policy on Related Party Transactions, as approved by the Board, is available for viewing on the Companys website

Particulars of Contracts or Arrangements with Related Parties: The Contracts or Arrangements entered into by the Company with Related Parties have been done at arms length and are in the ordinary course of business. Form AOC-2 as required under Section 134 (3) (h) is enclosed as Annexure - B to this report.

21. Compliance with Secretarial Standards: The Company has complied with applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Government of India under Section 118(10) of the Companies Act, 2013.

22. Maintenance of Cost Records: Pursuant to sub-section (1) of Section 148 of the Companies Act, 2013, the Company is required to maintain cost records and accordingly the Company has made and maintained such cost records.

23. Particulars of Employees: There are no employees drawing salary pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

24. Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 [14 of 2013]: As

required by Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at workplace. The Company has also constituted an Internal Complaints Committee with a mechanism of lodging complaints. During the year under review, there were no cases filed pursuant to the aforesaid Act.

25. Extract of the Annual Return: Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return for the financial year ended March 31,2023 is available on Companys website at www.valecha.in. The same can be accessed by clicking on the web link: https://valecha.in/Investor-Room/Other-Disclosure

26. Corporate Governance and Management Discussion & Analysis Report: The Company has complied with the Corporate Governance Code as stipulated under 27(2)(b) of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015. A separate section on Corporate Governance along with certificate from Secretarial Auditors confirming the compliance is annexed and forms part of the Annual Report. The Management Discussion and Analysis Report and Corporate Governance Report, appearing elsewhere in this Annual Report forms part of the Boards Report

27. Risk Management Policy: Details on Risk Management Policy have been mentioned in the Corporate Governance Report annexed to this report.

28. Reporting of Frauds: During the year under review, there have been no instances of fraud reported by the Auditors including the Statutory Auditors of the Company under Section 143(12) of the Companies Act, 2013 and the Rules framed thereunder either to the Company or to the Central Government

29. Directors Responsibility Statement: As required by Section 134(3)(c) of the Companies Act, 2013, it is stated that:

(a) In the preparation of the annual accounts for the year ended 31^st March, 2023, the applicable accounting standards have been followed with proper explanation relating to material departures, if any;

(b) The accounting policies adopted in the preparation of the annual accounts have been applied consistently. Reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year 2022-23 and of the loss for the year ended 31^st March, 2023.

(c) Proper and sufficient care has been taken 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;

(d) The annual accounts for the year ended 31^st March, 2023 have been prepared on a going concern basis.

(e) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

(f) That systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

30. Acknowledgements: The RP wishes to place on record his appreciation to all employees of the Company for their continued contribution to the performance of the Company and to all the Shareholders, Customers and various Authorities for their continued support during the year. The RP also wishes to give sincere thanks and gratitude to Bankers/NBFCs who are continuously supporting the Company and its group at all the times for achieving its goal. The RP has signed the Annual Report for administrative purpose only and without having any liability on his part.

For Valecha Engineering Limited

(Company under Corporate Insolvency Resolution Process)

Anurag Kumar Sinha, Resolution Professional

Registration Number: IBBI/IPA-001/IP-P00427/2017-18/10750

Address: Flat No.3602, Redwood (Tower No. 7), Runwal Greens, Mulund-Goregaon Link Road,

Bhandup (West), Mumbai City, Maharashtra, 400078

Place: Mumbai

Date: 14.08.2023