Valson Industries Ltd Directors Report.

TO THE MEMBERS OF VALSON INDUSTRIES LIMITED

The Directors take pleasure in presenting the Thirty Sixth Annual Report together with the Audited Annual Financial Statements for the financial year ended 31st March, 2020. The Management Discussion and Analysis has also been incorporated into this report.

1. FINANCIAL RESULTS

Key highlights of Financial Results for Valson Industries Limited for the financial year 2019 - 20 are tabulated below:

(Rs. in Lakhs

Particulars Year ending 31.03.20 Year ending 31.03.19
Revenue from operations 9154.72 10482.31
Operating Profit (PBOIDT) before other income and Interest and Depreciation and Tax 418.14 584.56
Finance Cost 107.80 81.34
Depreciation 308.38 306.75
Operating Profit before other income and extra ordinary activity 1.96 196.46
Other Income 55.72 48.46
Profit before Tax 57.68 244.92
Taxation (12.89) 25.69
Profit after Tax 70.57 219.24
Other Comprehensive Income (Net) 7.18 1.92
Total Comprehensive Income 77.75 221.16
Balance of Profit brought forward 1899.61 1780.81
Amount available for appropriations 1977.36 2001.97
Appropriations:
Transfer to General Reserve -- 10.00
Dividend on Equity Shares 76.61 76.61
Dividend Tax on Equity Shares 15.75 15.75
Balance carried forward to Balance Sheet 1885.00 1899.61
Total 1977.36 2001.97
EPS (Basic & Diluted) 0.92 2.89

There was no revision in the Financial Statements.

2. DIVIDEND

There is no dividend in financial year 2019-2020.

During the previous year (31st March, 2019) your Company had declared a final dividend of Re. 1/- per equity share of Rs. 10/- each amounting to Rs. 92.29 Lakhs including Dividend Distribution Tax of Rs. 15.75 Lakhs.

3. BUSINESS OPERATIONS & HIGHLIGHTS OF PERFORMANCE

Your Company is a leading manufacturer of polyester texturised dyed yarn and processor of cotton and other fancy yarns with customers having diverse uses. Quality Products and Services has been the top most priority and after continuous research and efforts, your Company has ventured into the dyeing of various qualities of yarns. Your Company today has wide range of polyester dyed yarn with a strong market acceptance and niche position for exclusive shades and grades.

During the year 2019-2020 the company had started implementing the automisation system in existing dyeing machines which will link to the main automatic colour matching system. This will give the better results in quality and the 100% reproducibility of shades and also results into the redying and wastages. Due to the automisation the life of existing dyeing machines has also increased. The implementation of completed in the month of March 2020. The said automisation and modernization of dyeing machines along with the necessary accessories (i.e. Automisation CAPEX) is of Rs. 399.00 Lakhs which has been partly financed way of term loan from by Kotak Mahindra Bank (i.e. Rs. 275.00 Lakhs).

The company has installed high-density texturizing machine in its Silli unit which can produced the fancy yarns and the production capacity of the said machines is much better than the existing texturizing machine. The said high density Texturising machines along with the necessary accessories (i.e. Automisation CAPEX) is of Rs. 100.00 Lakhs which has been partly financed way of term loan from by Kotak Mahindra Bank (i.e. Rs. 75.00 Lakhs).

During the year 2019-2020 the company has incurred the CAPEX of Rs. 397.77 Lakhs against the said automisation and modernization project and also high density Texturising machine; the details are as under:

Assets Cost (Rs in Lakhs)
Indigenous Plant & Machinery 259.29
Errection, Installation & Other Charges 94.21
Electrical Installation 1.82
Utilities & Ancillary Machinery 31.12
ERP Software 11.33
Total capital expenditure for the Vapi and Silli Unit 397.77

There was no change in nature of business of your Company, during the year under review.

The said year was a very tough phase in textile industry and our company as well; mainly due to the high fluctuations in the crude prices which have affected Raw-materials prices, increase in power cost at UT Dadra & Nagar Haveli, Diu ad Daman and increase in staff (Labour) cost please find below the highlights financial performances of your Company during the financial year 2019-2020:

1) There is increase in growth of 17.5% in Texturising production (5108 MT) compared to last year (4347 MT).

2) There is increase in growth of 1.96% in Twisting production (2379 MT) compared to last year (2333 MT).

3) There is increase in growth of 4.8% in Sales (5456 MT) compared to last year (5205 MT).

4) There is a decline in growth of 18.7% in Dyeing production (3980 MT) compared to last year (4896 MT).

5) There is decrease of 12.66% in terms of Revenue from operations (Rs. 9155.47 Lakhs) compared to last year (Rs. 10482.39 Lakhs) mainly due to fluctuation/volatility in crude price.

6) During the year Company has availed term loan for need based expansions which resulted in increase in finance cost to Rs. 107.80 Lakhs from Rs. 81.34 Lakhs (i.e. increase of 32.5%).

7) Depreciation is Rs. 308.38 Lakhs and has increased in comparison to last year (Rs. 306.75 Lakhs).

8) The Operating Profit (PBOIDT) before other income and Interest and Depreciation and Tax decreased by 28.5% Rs. 418.14 Lakhs as compared to last year amount of (Rs. 584.56 Lakhs).

4. DISCLOSURES UNDER SECTION 134 (3) (l) OF THE COMPANIES ACT, 2013

No material changes and commitments which could affect your Companys financial position have occurred between the end of the financial year of your Company i.e. 31st March, 2020 and date of this report i.e. 30th June, 2020.

5. SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2020 is Rs. 766.08 Lakhs. During the year under review, your Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. There was no change in your Companys share capital during the year under review. The Promoter and Promoter Group are holding 51,39,517 shares equivalent to 67.09% of the total Issued and Paid-up Share Capital.

6. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION & PROTECTION FUND

During the financial year 2019 - 20, no unclaimed Dividend was transferred to the Investor Education and Protection Fund established by the Central Government, in compliance with Section 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, since your Company had not declared any dividend for the financial year 2011 - 12.

7. TRANSFER OF EQUITY SHARES ON UNCLAIMED DIVIDEND TO THE INVESTOR EDUCATION AND PROTECTION FUND

In line with the statutory requirements, your Company is in the process of transferring to the credit of the Investor Education and Protection Fund set up by the Government of India, equity shares in respect of which dividend had remained unpaid / unclaimed for a period of seven (7) consecutive years within the time lines laid down by the Ministry of Corporate Affairs.

8. DIRECTORS

8.1 Retirement by Rotation

Pursuant to Section 152 (6) of the Companies Act, 2013 and in terms of the Articles of Association of your Company, Mr. Kunal S. Mutreja, Director, retires by rotation at the forthcoming Annual General Meeting. Being eligible, he offers himself for re-appointment.

8.2 Re-Appointment of Whole-Time Director and Independent Director

8.2.1. Your Company has at its Board Meeting held on 13th February, 2020 re-appointed Mr. Pradip C Shah as Independent Director for a second consecutive term of 5 years w.e.f. 14th February, 2020. The approval from Members has been proposed at Item No. 4 of the Notice of 36th Annual General Meeting.

8.2.2. Your Company has at its Board Meeting held on 13th February, 2020, re-appointed Mrs. Asha S. Mutreja as Whole-Time Director of your Company for a period of 5 years w.e.f. 01st June, 2020. The approval from Members has been proposed at Item No. 5 of the Notice of 36th Annual General Meeting.

8.3 Declaration by Independent Directors

Your Company has received declarations from all the Independent Directors of your Company confirming that they meet with the criteria of independence as prescribed both, under Sub-Section 6 of Section 149 of the Companies Act, 2013 and under Regulation 16 (1) (b) of the SEBI (LODR) Regulations, 2015 and pursuant to Regulation 25 of the said Regulations that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of finance, people management, strategy, auditing, tax advisory services and they hold highest standards of integrity.

Regarding proficiency, the Company has adopted requisite steps towards the inclusion of the names of all Independent Directors in the data bank maintained with the Indian Institute of Corporate Affairs, Manesar (IICA). Accordingly, the Independent Directors of the Company have registered themselves with the IICA for the said purpose. In terms of Section 150 of the Act read with Rule 6 (4) of the Companies (Appointment & Qualification of Directors) Rules, 2014, certain Independent Directors are required to undertake online proficiency self-assessment test conducted by the IICA within a period of one (1) year from the date of inclusion of their names in the data bank. Those Independent Directors who have to undertake online proficiency self-assessment test will appear for the same.

8.4 Familiarization Program for Independent Directors

The Program intends to provide insights into your Company so that the Independent Directors can understand your Companys business in depth and the roles, rights, responsibility that they are expected to perform / enjoy in your Company to keep them updated on the operations and business of your Company thereby facilitating their active participation in managing the affairs of your Company. In addition to the above, Directors are periodically advised about the changes effected in the Corporate Law, SEBI (LODR) Regulations, 2015 with regards to their roles, rights and responsibilities as Directors of your Company.

8.5 Annual Performance Evaluation

The annual performance evaluation of the Independent Directors and Board Committees i.e. Audit, Stakeholders Relationship and Nomination & Remuneration Committees was carried by the entire Board and the annual performance evaluation of the Chairman, Board as a whole, Non - Independent Directors was carried out by the Independent Directors. The annual performance evaluation was carried out in accordance with the criteria laid down by the Nomination and Remuneration Committee of your Company and as mandated under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015, as amended from time to time.

8.6 Key Managerial Personnel

The following persons have been designated as Key Managerial Personnel of your Company pursuant to Section 2 (51) and Section 203 of the Act, read with Rule 8 (5) (iii) of the Companies (Accounts) Rules, 2014 framed there under:

1. Mr. Suresh N. Mutreja, Chairman - Managing Director

2. Mrs. Asha S. Mutreja, Whole - Time Director

3. Mr. Varun S. Mutreja, Whole-Time Director - CFO

4. Mr. Kunal S. Mutreja, Director - CEO

None of the Key Managerial Personnel have resigned during the year under review.

None of the Directors have attained the age of 75 years except Mr. Surendrakumar Suri. In terms of Regulation 17 (1) (c) of SEBI (LODR) Regulations, 2015, the approval of the members for his re-appointment by way of special resolution has been taken at the 35th Annual General Meeting of the Company held on 30th September, 2019.

8.7 Appointment and Resignation of Company Secretary

Your Company had appointed Mr. Anand Dubey as Company Secretary and Compliance Officer of the Company w.e.f. 11th June, 2019. Mr. Anand Dubey resigned as Company Secretary and Compliance Officer of the Company w.e.f. 8th July, 2019.

Your Company had thereafter appointed Ms. Khushboo Hanswal as Company Secretary and Compliance Officer of the Company w.e.f. 3rd September, 2019. Ms. Khushboo Hanswal resigned as Company Secretary and Compliance Officer of the Company w.e.f. 31st December, 2019.

At present, Mr. Pritesh Shah, qualified Chartered Accountant is the Compliance Officer of the Company. The Company is in the process of searching a suitable candidate for Company Secretary.

Your Company has intimated about the above changes to the Stock Exchange(s) where the securities of Company are listed i.e. BSE Limited. The necessary Form DIR - 12 for the above appointments and resignations of Company Secretary and Compliance Officer has also been filed with Registrar of Companies, Mumbai.

8.8 Remuneration Policy

The Board has in accordance with the provisions of Sub-Section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management Employees. The detail of the same has been disclosed in the Corporate Governance Report.

8.9 Board Meetings

A calendar of Board Meetings is prepared and circulated in advance to the Directors.

During the financial year, your Company has held 4 (Four) Board Meetings which were held on 30th May, 2019; 14th August, 2019; 14th November, 2019 and 13th February, 2020. The maximum interval between any two meetings did not exceed 120 days.

9. PARTICULARS OF EMPLOYEES

During the year, there was no employee in receipt of remuneration as prescribed in the Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The prescribed particulars of Employees as required under Section 197 (12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as "Annexure A" and form part of this Report.

10. DIRECTORS RESPONSIBILITY STATEMENT

To the best of their 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:

a) that in the preparation of the Annual Financial Statements for the year ended 31st March, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note 2 of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2020 and of the profit of your Company for the year ended on that date;

c) that 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 your Company and for preventing and detecting fraud and other irregularities;

d) that the Annual Financial Statements 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.

11. INTERNAL CONTROL SYSTEM

Your Company maintains an adequate and effective Internal Control System commensurate with its size and complexity. We believe that these internal control systems provide, among other things, a reasonable assurance that transactions are executed with Management authorization and that they are recorded in all material respects to permit preparation of financial statements in conformity with established accounting principles and that the assets of your Company are adequately safeguarded against significant misuse or loss.

12. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

There are no companies which have become or ceased to be its Subsidiaries, Joint Venture or Associate Companies during the financial year 2019 - 20.

13. DEPOSITS

Your Company has not accepted deposits from the public. Your Company has accepted deposit from the members and directors falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. The details relating to Deposits, covered under Chapter V of the Companies Act, 2013 are tabled below:

(Rs. In Lakhs)

Sr. No. Particulars Amount
1. Accepted during the year 139.90
2. Repaid during the year 3.50
3. Remained outstanding but not due as at the end of the year 274.40
4. Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved:- NIL
(i) at the beginning of the year
(ii) maximum during the year
(iii) at the end of the year
5. Details of deposits which are not in compliance with the requirements of Chapter V of the Companies Act. NIL

Your Company has also accepted exempted deposits. The details of the same as on 31st March, 2020 are given below:

(Rs. In Lakhs)

Particulars Amount
Any amount received as a loan or facility from any banking company 936.54
Any amount received from a person who, at the time of the receipt of the amount, was a director of your 263.40
company or the relative of the director of a public company

Your Company has filed form DPT-3 being Return of Deposits for the financial year ended 31st March, 2020.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are given in the Notes to the Audited Standalone Annual Financial Statements.

15. RELATED PARTY TRANSACTIONS

A Related Party Policy has been adopted by the Board of Directors for determining the materiality of transactions with related parties and dealings with them. The said policy may be referred to, at your Companys website at the web link, http://valsonindia. com/investor-relations/. All transactions with related parties are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the RPTs, which are foreseeable and repetitive. A statement giving details of all RPTs are placed before the Audit Committee and the Board of Directors on a quarterly basis.

Further the members may note that your Company has not entered into the following kinds of related party transactions:

- Contracts/arrangement/transactions which are not at arms length basis or in the ordinary course of business.

- Any Material contracts/arrangement/transactions [as per Regulation 23 of the SEBI (LODR) Regulations, 2015]

16. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The criteria prescribed for the applicability of Corporate Social Responsibility under Section 135 of the Companies Act, 2013 is not applicable to your Company.

17. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure B".

18. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

In line with the regulatory requirements, your Company has framed a Risk Management Policy to identify and access the key business risk areas and a risk mitigation process. A detailed exercise is being carried out at regular intervals to identify, evaluate, manage and monitor all business risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

The inherent risks to the business of your Company are as follows:

a) Foreign Exchange Risk

b) Yarn Price Risk

c) Stiff Global Competition

d) Government Policy on incentives for exports

e) Risk elements in business transactions

f) Success of Cotton Crop

All the above risk has been discussed in the Management Discussion and Analysis Report. The Chairman and Managing Director, CEO & CFO mitigate the risk with the help of their depth of knowledge of market, assistance of senior management and forecast based on various data available with your Company. Your Company has developed the analysis of market data which helps in decision making and to ensure the mitigation of the risk.

Your Company has not formed Risk Management Committee as it is not applicable as per Regulation 21 of the SEBI (LODR) Regulations, 2015.

19. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Over the years, your Company has established a reputation for doing business with integrity and displays zero tolerance for any form of unethical behaviour. Whistle Blower Policy is the vigil mechanism instituted by your Company to report concerns about unethical behaviour in compliance with the requirements of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. The Boards Audit Committee oversees the functioning of this policy. Protected disclosures can be made by a whistle blower through several channels to report actual or suspected frauds and violation of your Companys Code of Conduct and / or Whistle Blower Policy. Details of the Whistle Blower Policy have been disclosed on your Companys website at http://valsonindia.com/ investor-relations/.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of your Company and its future operations.

21. AUDITORS

21.1 Statutory Auditors

Your Company Statutory Auditors, M/s. Bastawala And Associates, Chartered Accountants, who retire at the forthcoming Annual General Meeting of your Company, are eligible for re-appointment. Necessary resolution for their re-appointment for a period of 3 financial years w.e.f. 1st April, 2020 has been proposed at item no. 3 of the Notice of AGM. Necessary disclosure required to be made in terms of Regulation 36 (5) of SEBI (LODR) Regulations, 2015 have been given in the Explanatory Statement of the Notice of AGM forming part of Annual Report.

The statutory auditors have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for re-appointment as statutory auditors of your Company. As required under Regulation 33 of SEBI (LODR) Regulations, 2015, they have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The statutory auditors have also furnished a declaration confirming their independence as well as their arms length relationship with your Company as well as declaring that they have not taken up any prohibited non-audit assignments for your Company. The Audit Committee reviews the independence of the statutory auditors and the effectiveness of the audit process. The statutory auditors or their representative attend the Annual General Meeting of your Company.

21.2 Statutory Auditors Observations

The Report given by the Auditors on the financial statements of your Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

21.3 Secretarial Audit

In terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed Mr. Punit Shah, Practicing Company Secretary as Secretarial Auditors for conducting Secretarial Audit of your Company for the financial year ended 31st March, 2020.

The report of the Secretarial Auditor is attached as "Annexure C". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark except provided at point 21.4 below.

21.4 Qualifications in Secretarial Audit Report a) Appointment of Company Secretary:

As per Section 203(1)(ii), the Company is required to appoint Company Secretary. The Company has not appointed Company Secretary from 01st April, 2019 to 10th June, 2019; 08th July, 2019 to 02nd September, 2019 and 01st

January, 2020 to 31st March, 2020, consequently the Audited Annual Financial Statements for the financial year ended 31st March, 2019 were not signed by Company Secretary.

The Company had received notices from BSE Limited imposing fine in respect of non appointment of Company Secretary for the aforesaid periods.

In this regard the management of the Company has provided the following reply:

i. The Company has appointed Mr. Pritesh Shah, Chartered Accountant as Compliance Officer of the Company during the intervening period, when the Company did not had any Company Secretary to ensure compliance of the Companies Act, 2013 and SEBI Act and rules made there under.

ii. The Company has availed the services of Practicing Company Secretary to advice on the compliance of the Companies Act, 2013 and the SEBI Act and rules made there under.

iii. The Company had appointed Mr. Anand Dubey as Company Secretary and Compliance Officer of the Company w.e.f. 11th June, 2019. He resigned w.e.f. 08th July, 2019.

iv. Thereafter, the Company had appointed Ms. Khushboo Hanswal as Company Secretary and Compliance Officer w.e.f. 03rd September, 2019. She resigned w.e.f. 31st December, 2019.

v. The Company is in process of recruiting Company Secretary.

22. REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the statutory auditors nor the secretarial auditors have reported to the Audit Committee of the Board, under Section 143 (12) of the Act, any instances of fraud committed against your Company by its officers or employees, the details of which would need to be mentioned in this Report.

23. COMPLIANCE OF SECRETARIAL STANDARDS

The Board of Directors affirms that your Company has complied with the applicable Secretarial Standards (SS) issued by the Institute of Companies Secretaries of India (SS1 and SS2), respectively relating to Meetings of the Board, its Committees and General Meeting, which have mandatory application during the year under review.

24. EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92 (3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in Form MGT - 9 of your Company for the financial year ended 31st March, 2020 is annexed herewith as "Annexure D".

25. HUMAN RESOURCES

The industrial relations at the manufacturing facilities of your Company have been cordial during the year. Employees are considered to be team members being one of the most critical resources in the business which maximize the effectiveness of the Organization. Human resources build the Enterprise and the sense of belonging would inculcate the spirit of dedication and loyalty amongst them towards strengthening your Companys Polices and Systems. Your Company maintains healthy, cordial and harmonious relations with all personnel and thereby enhancing the contributory value of the Human Resources.

26. ENVIRONMENT AND SAFETY

Your Company is conscious of the importance of environmentally clean and safe operations. Your Companys policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

27. ENHANCING SHAREHOLDERS VALUE

Your Company believes that its Members are among its most important stakeholders. Accordingly, your Companys operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socioeconomic and environmental dimensions and contribute to sustainable growth and development.

28. GREEN INITIATIVES

Electronic copies of the Annual Report 2019 - 20 and Notice of the 36th Annual General Meeting are sent to all members whose email addresses are registered with your Company / Depository Participant(s).

For members who have not registered their email addresses, physical copies of the Annual Report were being sent under Section 101 of the Companies Act, 2013 in the permitted mode. However, in view of Covid 19 pandemic, the Ministry of Corporate Affairs vide its circular no. 17 / 2020 dated 13th April, 2020 and circular no. 20 / 2020 dated 5th May, 2020 and SEBI vide its circular bearing reference no. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated 12th May, 2020 has dispensed with the requirement of sending hard copy of full annual report to the shareholders. Accordingly, Members who have not registered their email address with the Company or the Depository Participant(s) are requested to download the copy of the Annual Report from the website of the Company i.e. www.valsonindia.com or from the website of BSE Limited i.e. www.bseindia.com or write to the Company at pritesh@valsonindia.com.

Your Company provides e-voting facility to all its members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to the Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Amendment Rules, 2015.

29. CORPORATE GOVERNANCE

The Board of Directors affirm their continued commitment to good corporate governance practices. During the year under review, your Company has complied with the provisions relating to corporate governance as provided under the SEBI (LODR) Regulations, 2015. The compliance report together with a certificate from the Companys Secretarial Auditor, Mr. Punit Shah, Practicing Company Secretary confirming the compliance is provided in the Report on Corporate Governance, which forms part of the Annual Report.

30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company firmly believes in providing a safe, supportive and friendly workplace environment - a workplace where our values come to life through the supporting behaviours. Positive workplace environment and a great employee experience are integral part of our culture. Your Company believes in providing and ensuring a workplace free from discrimination and harassment based on gender.

Your Company educates its employees as to what may constitute sexual harassment and in the event of any occurrence of an incident constituting sexual harassment, your Company provides the mechanism to seek recourse and redressal to the concerned individual subjected to sexual harassment.

Your Company has a Sexual Harassment Prevention and Grievance Handling Policy in place to provide clarity around the process to raise such a grievance and how the grievance will be investigated and resolved. An Internal Complaints Committee has been constituted in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No complaint was raised and pending as on 01st April, 2019 and no complaint has been raised during the financial year ended 31st March, 2020.

31. CEO AND CFO CERTIFICATION

Certificate from Mr. Kunal S. Mutreja, Director & CEO and Mr. Varun S. Mutreja, Director & CFO, pursuant to provisions of SEBI (LODR) Regulations, 2015, for the year under review was placed before the Board of Directors of your Company at its meeting held on 30th June, 2020. The certificate is attached and forms part of this Report.

32. CERTIFICATION FROM COMPANY SECRETARY IN PRACTICE

Mr. Punit Shah, Practicing Company Secretary, has issued a certificate as required under the SEBI (LODR) Regulations, 2015, confirming that none of the Directors on the Board of your Company have been debarred or disqualified from being appointed or continuing as Director of companies by the SEBI / Ministry of Corporate Affairs or any such statutory Authority. The certificate is attached and form part of this Report.

33. ANNUAL SECRETARIAL COMPLIANCE REPORT

Mr. Punit Shah, Practicing Company Secretary, has issued Annual Secretarial Compliance Report for the financial year ended 31st March, 2020 pursuant to Regulation 24A of the SEBI (LODR) Regulations, 2015 which covers a broad check on compliance with the applicable SEBI Regulations and circulars / guidelines issued thereunder on an annual basis. The said Report has been filed with BSE Limited on 03rd June, 2020.

34. INDIAN ACCOUNTING STANDARDS (IND-AS)

Your Company has followed the relevant Accounting Standards notified by the Companies (Indian Accounting Standards) Rules, 2015 while preparing its Standalone Financial Statements.

35. CAPITAL EXPENDITURE

Your Company has made an application for need based Capital Expenditure at Vapi unit for automisation of dyeing machine and ancillaries and at Silli Unit high density Texturising machines along with the necessary accessories during the financial year 2019-20. The said capex is partly financed way of term loan from by Kotak Mahindra Bank.

The details of CAPEX made at Vapi unit and Silli unit are as under:

Assets Cost (Rs in Lakhs)
Indigenous Plant & Machinery 259.29
Errection, Installation & Other Charges 94.21
Electrical Installation 1.82
Utilities & Ancillary Machinery 31.12
ERP Software (WIP) 11.33
Total capital expenditure for the Vapi and Silli Unit 397.77

36. SUBSIDIARY COMPANIES

Your Company does not have any Subsidiary Company.

37. PLEDGE OF SHARES

None of the equity shares of the Promoters / Directors of your Company are pledged with any banks or financial institutions.

38. FEES PAID TO STATUTORY AUDITORS

During the financial year ended 31st March, 2020, your Company have paid a consolidated sum of Rs. 3 Lakhs to the Statutory Auditor.

39. MANAGEMENT DISCUSSION AND ANALYSIS

As required under the Schedule V (B) of SEBI (LODR) Regulations, 2015, report on "Management Discussion and Analysis" is attached and form part of this Annual Report.

40. LISTING WITH STOCK EXCHANGES

Your Company is listed with one Stock Exchange i.e. BSE Limited and your Company has duly paid the listing fees to the Exchange.

41. ACKNOWLEDGEMENTS

Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of your Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of your Company for their unstinted commitment and continued contribution to your Company.

42. CAUTIONARY STATEMENT

Statements in the Boards Report and the Management Discussion & Analysis describing your Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement.

For and on behalf of the Board of Directors
Suresh N. Mutreja
Chairman & Managing Director
DIN: 00052046
Varun S. Mutreja
Director - Chief Financial Officer
DIN: 07022832
Kunal S. Mutreja
Place: Mumbai Director - Chief Executive Officer
Date: 30th June, 2020 DIN: 07022857