Your Directors have pleasure in presenting the 41st Director's Report of the
Company together with the Audited Statements of Accounts for the Financial Year ended
March 31,2023.
| 1. FINANCIAL RESULTS: |
|
(Rs. Lakhs) |
| PARTICULARS |
Current Year 2022-23 |
Previous Year 2021-22 |
| Gross Revenue from operations |
17566.53 |
9246.87 |
| Profit/(Loss) Before Interest, Depreciation & Tax (PBIDT) |
784.99 |
677.18 |
| Finance Charges |
6.51 |
11.67 |
| Profit/(Loss) before Depreciation and Tax (PBDT) |
778.48 |
665.51 |
| Depreciation |
712.20 |
642.97 |
| Profit/(Loss) Before Tax (PBT) |
66.28 |
22.54 |
| Provision for Tax |
-- |
3.52 |
| Profit/(Loss) After Tax (PAT) |
66.28 |
19.02 |
| Earlier Tax provision written back |
206.49 |
-- |
| Profit/(Loss) brought forward from previous year |
(18665.19) |
(19291.83) |
| Adjustment in Depreciation |
-- |
607.62 |
| Profit/(Loss) carried to Balance Sheet |
(18392.42) |
(18665.19) |
2. Industry Overview:
The vibrant steel policy announced by Government of India in which the need for growth
of the domestic steel industry to strengthen the Make-in-India concept was recognized. The
domestic steel production is now improving and consequently the demand for Ferro Alloy
Products has improved.
It is expected that at the current rate of GDP growth, the steel demand will grow
threefold in next 10 years to reach a demand of 230 Million MT by 2030-31. It is
anticipated that a crude steel capacity of 300 Million MT will be required by 2030-31,
based on the demand projections as mentioned above. The expected demand for Ferro Alloys
is 4 Million Tons per annum in 2030-31 based on the demand for steel.
Performance of your Company:
During the financial year under review, the total revenue for the Company was Rs.
18251.32 Lakhs against Rs. 9712.35 Lakhs in the previous year. The Company earned a net
Profit of Rs. 66.28 Lakhs compared to a net profit of Rs. 19.02 Lakhs incurred in the
previous year.
Prospects:
The medium to long-term economic outlook in India continues to look promising and it is
important to note that the Government's initiative to continue to liberalize the economy
and focus on social sector spending in building both hard and soft infrastructure. Steel
is the most crucial ingredient in industrial development, infrastructure and construction
industry and is, therefore, of strategic importance for national transformation. India's
steel consumption is expected to grow by 7.5% during the current fiscal year to March
2024, boosted by rising demand from the domestic construction, railways and capital goods
sectors. The progress in domestic steel industry is a pre-requisite for India to succeed
in its industrial vision for ‘Make-in India'. This present's good potential growth of
Ferro Alloys industry in the Country as it solely depends on steel industry hence Ferro
Alloy Industry can run its industry profitably subject to other market driven factors.
Outlook of your Company:
Keeping in view of the increasing trend in metal prices and encouragement given by the
Government of India for increasing domestic steel consumption, we hope that your company
will perform better than previous years.
After exploring various alternatives to improve the profitability of the Company, your
Directors is of view that manufacture of Chemicals in particular Sodium Dichromate is one
of the areas which gives reasonable return on investments and got the permission from the
members to change the business objects through Postal Ballot. Your Company is in the
process of analyzing various alternatives to move forward in this regard.
3. EARNINGS PER SHARE (EPS):
The Basic EPS of our Company stood at R s . 1.66 at standalone level for the year ended
31 March,2023.
4. Dividend & Reserves:
As the Company earned a meager Profit during the year under review, the Directors could
not recommend dividend for the Financial Year 2022-23.
5. Transfer to Reserves:
The Company has not transferred any amount to reserves during the year under review.
6. Liquidity:
The Company continues to be debt-free and maintains sufficient cash reserves to meet
its operations and strategic objectives. As at 31 March 2023, Your Company had liquid
assets of 29.56 Lakhs as at 31st March 2023 as against 201.64 Lkahs at the
previous year. These funds have kept in current Accounts with Scheduled Banks.
7. Deposits:
Your Company has not accepted any deposits within the meaning of Section 73 of the
Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 and as
such, no amount of principal and interest was outstanding as on 31st March, 2023.
8. Share Capital:
The Paid-up Share Capital as on 31 st March, 2023 was Rs.16.39 Cr. During the year
under review, the Company did not issue any Shares.
9. Details of Subsidiary/Joint Ventures/Associate Companies:
Information pursuant to sub-section (3) of section 129 of the Act, i.e., the statement
containing the salient features of the financial statement of a company's subsidiary or
subsidiaries, associate company or companies and joint venture or ventures is not
applicable during the year, as there are no Subsidiary/ Joint Venture Companies.
However, your Company has promoted the following two power companies by way of Equity
Investments:
Investment in KGPL 445 MW Gas Based Power Plant:
Konaseema Gas Power Limited (KGPL) (Associate Company), in which your Company has
invested in equity, could not operate its plant during the financial year under review as
there is no domestic natural gas supply. KGPL suspended its manufacturing operations due
to non-availability of Gas (i.e., raw material) and as a result, the KGPL could not
service its debts to the Financial Institutions/Banks. IDBI Bank, one of the Term Loan
Lenders of KGPL, filed a petition U/s 7 of the Insolvency and Bankruptcy Code (IBC), 2016
against KGPL before Hon'ble National Company Law Tribunal (NCLT), Hyderabad. Hon'ble NCLT
admitted said petition and appointed Interim Resolution Professional to initiate Corporate
Insolvency Resolution Process(CIRP) against KGPL vide its Order dated 18.12.2018. However,
the Hon'ble NCLT passed orders for liquidation of the Company due to the non-approval of
the Resolution Plan by Committee of Creditors. The Liquidation of KGPL is under process.
Investment in OPCL 20 MW Dam Based Hydel Power Plant:
20 MW Dam Based Hydro Electric Power Project by Orissa Power Consortium Limited (OPCL),
in which your Company has invested in equity has generated 97.51 MU million units during
the financial year 2022- 23. OPCL established 3.42 MWp Solar Power Project generated 4.01
MU during the financial year under review. Your Company is holding Equity Share Capital of
about 7.49% in OPCL.
10. Corporate Social Responsibility Policy:
Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is
not applicable under review and hence the Company has not adopted any Corporate Social
Responsibility Policy.
11. Board of Directors and Key Managerial Personnel:
a) Re-appointment of Directors: Board recommended the re-appointment of Shri Siddartha
Mathukumilli, Director, who is liable to retire by rotation, offer himself for
re-appointment.
b) Appointment/Change in designation of Directors:
(i) On the recommendations of the Nomination and Remuneration Committee, Board
initially appointed Shri P.V. Rao, as Additional Director in Professional Category
effective from 30.05.2023. Board recommend to the Shareholders to appoint him as a
Non-Independent NonExecutive Director and Shareholders appointed him by way of Postal
Ballot on 21.07.2023.
(ii) Board recommended to Shareholders to re-appoint Shri Induri Narasingh Rao, who is
appointed as Non- Executive Independent Director effective from 12.03.2019, for second
term as an Independent Director. Board also recommended to Shareholders to accord their
periomission to continue Shri Induri Narasingh Rao as an Independent Director after
attaining the age of 75 years (i.e., from 10.01.2024).
The Board believes that Shri Induri Narasingh Rao and Shri M. Siddartha, have
appropriate skills, professional expertise, experience, knowledge, and experience.
Therefore, their services will be beneficial to the Company and recommended to the
Shareholder for their re-appointment. The resolutions seeking the approval of the members
for the above said appointments have been incorporated in the Notice of the AGM.
As required under regulation 36 (3) of the SEBI (LODR), Regulations, 2015, brief
particulars of the Directors seeking appointment/re-appointment have annexed to the
explanatory statement to the Notice of Annual General Meeting.
12. Policy on Directors Appointment and Remuneration and Other Details:
The Company's policy on directors' appointment and remuneration and other matters
provided in section 178(3) of the Act have been disclosed in the report on Corporate
Governance, which forms part of the directors' report. The web-link for the same has been
disclosed separately at the end of this report.
The Board, on recommendation of Nomination & Remuneration Committee, has framed a
policy for selection and appointment of Directors, Senior Management and their
remuneration. The Policy is also available on the website of the Company i.e., www.vbcfal.in
13. BOARD OF DIRECTORS & KMP:
• Board of Directors:
The Board of the Company is duly constituted. None of the directors of the Company is
disqualified under the provisions of the Act or under the SEBI Listing Regulations.
• Board Diversity:
The Company has a truly diverse Board that includes and makes good use of diversity in
the skills, regional and industry experience, background, race, gender, ethnicity and
other distinctions among directors. This diversity is considered in determining the
optimum composition of the Board. All Board appointments are made on merit, in the context
of the skills, experience, independence and knowledge which the Board as a whole requires
to be effective.
• Independent Directors:
As a policy, the Company believes that independent directors comprise at least 50% of
the board strength. Mr. Hirak Kumar Basu has been nominated as Lead Independent Director.
He acts as a liaison between the non-executive directors and the management and performs
such other duties as the Board/ Independent Directors may decide from time to time.
• Declaration by Independent Directors
The Company has received necessary declaration from each independent director under
Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of
independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of
the SEBI Listing Regulations.
• Certificate from company secretary in practice:
The Certificate on Non- Disqualification of Directors pursuant to Regulation 34(3) and
Schedule V Para C clause 10 (i) of the SEBI Listing Regulations has been obtained.
• Registration of Independent Directors in Independent Directors Databank:
All the Independent Directors of your Company have been registered and are members of
Independent Directors Databank maintained by the Indian Institute of Corporate Affairs
(IICA).
• Changes in the composition of Board of Directors:
Your Company has reorganized Executive Leadership to Accelerate Technology Led Growth
and made certain changes to the Board composition as follows:
• Appointments/Re-appointments and Change in Designation (Including those made
after the end of financial year and the date of this report):
• As per provisions of 17( 1A) of Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015, no listed entity shall appoint
a person or continue the directorship of any person as a non-executive director who has
attained the age of seventy five years unless a special resolution is passed to that
effect. Accordingly, the Special Resolution has been placed in the Notice of 41st AGM for
continuation of Mr. Induri Narasingh Rao (DIN: 01852112 ) even after attaining the age of
75 years.
• It is proposed to reappoint Mr. Induri Narasingh Rao (DIN: 01852112 ), who is
the Non- Executive Independent Director appointed effective from 12.03.2019 for a period
of five years, for further period of five years effective from 12.03.2024. Accordingly,
the Special Resolution has been placed in the Notice of 41st AGM for his re-appointment.
• Re-Appointments (Director liable to retire by rotation):
A) Shri M Siddartha (DIN No. 07630456, a director retire by rotation and being
eligible, offer themselves for re-appointment in the ensuing AGM
B) Re-appointment of Independent Director:
Mr. Induri Narasingh Rao (DIN: 01852112 ), is proposed to be appointed for a
second term of 5 years in the ensuing AGM. The details of the same form part of the notice
convening the AGM. Pursuant to the provisions of regulation 36 of the SEBI Listing
Regulations and Ss 2 on General Meetings issued by ICSI, brief particulars of the director
proposed to be reappointed are providedas an annexure to the notice convening the AGM.
• KMP as at the end of the financial year:
• Following are the KMP of the Company in accordance with the provisions of
Section 2(51), and 203 of the Act read with the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 as at 31 March 2023:
| SL. No |
Name of the KMP |
Designation |
| 1 |
Mr. M.V. Annathakrishna, |
Whole-Time Director and CEO |
| 2 |
Ms. Shivangi Tibrewala |
Company Secretary & Compliance Officer |
| 3 |
Mr. R. Dharmender |
CFO |
• Changes in composition of KMP:
There was no change in the composition of the KMP for the FY 2023 except Ms. Sonali
Solenki, Company Secretary has resigned effective from 17.09.2022 and appointed Ms.
Shivangi Tibrewala as Company Secretary effective from 14.11.2022.
• Changes in composition of KMP after the end of financial year and the date of
this report: There was no change in the composition of the KMP.
The details about the composition of board, KMP and the committees of the board can be
found at the Report of Corporate Governance, which forms part of this report.
14. Number of Meetings of Board:
During the year, Six meetings of the Board of Directors were held, the details of which
forms part of the report on Corporate Governance.
15. Annual Evaluation of the Board, Committees and Individual Directors:
The Board of Directors has carried out an annual evaluation of its own performance,
Board Committees and individual Directors pursuant to the provisions of the Act and the
corporate governance requirements as prescribed by SEBI Listing Regulations. The
performance of the Board was evaluated by the board after seeking inputs from all the
Directors based on the criteria such as the Board composition and structure, effectiveness
of the board processes, information and functioning etc. In a separate meeting of
Independent Directors, performance of Non-Independent Directors, performance of the Board
as a whole and performance of the Chairman was evaluated, taking into account the views of
Executive Directors and Non-Executive Directors. The same was discussed in the Board
meeting that followed the meeting of the Independent Directors, at which the performance
of the Board, its committees and Individual Directors was also discussed. Performance
evaluation of Independent Directors was done by the entire Board, excluding the
Independent Director being evaluated.
16. Disclosure of Composition of Audit Committee:
The details of composition of Audit Committee is disclosed in the report on Corporate
Governance
17. Policy on Directors' Appointment and Remuneration and other details:
The Company's policy Directors' appointment and remuneration and other matters provided
in
Section 178(3) of the Act have been disclosed in the report on Corporate Governance
Reports, which forms part of Directors' Report.
NOMINATION & REMUNERATION COMMITTEE Terms of reference:
The main term of reference of the Committee is to approve the fixation/revision of
remuneration of the Managing Director/Whole Time Director of the Company and while
approving:
• To consider the financial position of the Company, trend in the industry,
appointee's qualification, experience, past performance, past remuneration etc.
• To bring out objectivity in determining the remuneration package while striking
a balance between the interest of the Company and the Shareholders.
Remuneration Policy:
The objectives of the remuneration policy are to motivate Directors to excel in their
performance, recognize their contribution and retain talent in the organization and reward
merit.
The remuneration levels are governed by industry pattern, qualifications and experience
of the Directors, responsibilities shouldered, individual performance etc.
Composition of the Committee as on 31st March, 2023:
| Mr. Hirak Kumar Basu |
Chairman |
Independent Non-executive Director |
| Shri. I Narsingh Rao |
Member |
Independent Non-executive Director |
| Shri. Packirisamy Raju |
Member |
Independent Non-executive Director |
Policy for Selection of Directors and Determining Directors' Independence
1. Scope:
This policy sets out the guiding principles for the Nomination & Remuneration
Committee for identifying persons who are qualified to become Directors and to determine
the independence of Directors, in case of their appointment as independent Directors of
the Company.
2. Terms and References:
"Director" means a Director appointed to the Board of a Company.
"Nomination and Remuneration Committee means the committee constituted in
accordance with the provisions of Section 178 of the Companies Act, 2013 and reg. 19 of
SEBI (Listing Obligation and Disclosure Requirement), Regulations, 2015.
"Independent Director" means a Director referred to in sub-section (6) of
Section 149 of the Companies Act, 2013 and Regulation 16(1) (b) of the SEBI (Listing
obligations and Disclosure Requirements) Regulations, 2015.
3. Policy:
Qualifications and criteria
The Nomination and Remuneration (NR) Committee, and the Board, shall review on annual
basis, appropriate skills, knowledge and experience required of the Board as a whole and
its individual members. The objective is to have a board with diverse background and
experience that are relevant for the Company's operations.
In evaluating the suitability of individual Board member, the NR Committee may take
into account factors, such as:
• General understanding of the company's business dynamics, global business and
social perspective;
• Educational and professional background
• Standing in the profession;
• Personal and professional ethics, integrity and values;
• Willingness to devote sufficient time and energy in carrying out their duties
and responsibilities effectively.
The proposed appointee shall also fulfil the following requirements:
• shall possess a Director Identification Number;
• shall not be disqualified under the Companies Act, 2013;
• shall Endeavour to attend all Board Meeting and Wherever he is appointed as a
Committee
Member, the Committee Meeting;
• shall abide by the code of Conduct established by the company for Directors and
senior
Management personnel;
• shall disclose his concern or interest in any company or companies or bodies
corporate, firms, or other association of individuals including his shareholding at the
first meeting of the Board in every financial year and thereafter whenever there is a
change in the disclosures already made;
• Such other requirements as may be prescribed, from time to time, under the
Companies Act, 2013, SEBI (Listing obligations and Disclosure Requirements) Regulations,
2015 and other relevant laws.
The Nomination & Remuneration Committee shall evaluate each individual with the
objective of having a group that best enables the success of the company's business.
Criteria of independence
The Nomination & Remuneration Committee shall assess the independence of Directors
at time of appointment/ re-appointment and the Board shall assess the same annually. The
Board shall re-assess determinations of independence when any new interest or
relationships are disclosed by a Director.
The criteria of independence shall be in accordance with guidelines as laid down in
Companies Act, 2013 and reg. 16(1) (b) of the SEBI (Listing obligations and Disclosure
Requirements) Regulations, 2015.
The Independent Director shall abide by the "Code for Independent Directors
"as specified in Schedule IV to the companies Act, 2013.
Other Directorships/ Committee Memberships
The Board members are expected to have adequate time and expertise and experience to
contribute to effective Board performance Accordingly, members should voluntarily limit
their directorships in other listed public limited companies in such a way that it does
not interfere with their role as Director of the company. The NR Committee shall consider
the nature of, and the time involved in a Director service on other Boards, in evaluating
the suitability of the individual Director and making its recommendations to the Board.
A Director shall not serve as director in more than 20 companies of which not more than
10 shall be public limited companies.
A Director shall not serve an independent Director in more than 7 listed companies and
not more than 3 listed companies in case he is serving as a whole-time Director in any
listed company.
A Director shall not be a member in more than 10 committee or act chairman of more than
5 committee across all companies in which he holds directorships.
For the purpose of considering the limit of the committee, Audit committee and
stakeholder's relationship committee of all public limited companies, whether listed or
not, shall be included and all other companies including private limited companies,
foreign companies and companies under section 8 of the Companies Act, 2013 shall be
excluded.
Remuneration policy for Directors, key managerial personnel and other employees
1. Scope:
This policy sets out the guiding principles for the Nomination and Remuneration
committee for recommending to the Board the remuneration of the directors, key managerial
personnel and other employees of the company.
2. Terms and Reference:
In this policy the following terms shall have the following meanings:
"Director" means a Director appointed to the Board of the company. "key
managerial personnel" means
(i) The Chief Executive Office or the managing director or the manager;
(ii) The Company Secretary;
(iii) The Whole-Time Director;
(iv) The Chief Financial Officer; and
(v) Such other office as may be prescribed under the companies Act, 2013
"Nomination and Remuneration Committee" means the committee constituted by
Board in accordance with the provisions of section 178 of the companies Act,2013 and reg.
19 of SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015.
3. Policy:
Remuneration to Executive Director and Key Managerial Personnel
The Board on the recommendation of the Nomination and Remuneration (NR) committee shall
review and approve the remuneration payable to the Executive Director of the company
within the overall limits approved by the shareholders.
The Board on the recommendation of the NR committee shall also review and approve the
remuneration payable to the key managerial personnel of the company.
The Remuneration structure to the Executive Director and key managerial personnel shall
include the following components:
(i) Basic pay
(ii) Perquisites and Allowances
(iii) Commission (Applicable in case of Executive Directors)
(iv) Retrial benefits
(v) Annual performance Bonus
The Annual plan and Objectives for Executive committee shall be reviewed by the NR
committee and Annual performance Bonus will be approved by the committee based on the
achievement against the Annual plan and Objectives.
Remuneration to Non - Executive Directors
The Board, on the recommendation of the Nomination and Remuneration Committee, shall
review and approve the remuneration payable to the Non-Executive Directors of the Company
within the overall limits approved by the shareholders as per provisions of the companies
act.
Non-Executive Directors shall be entitled to sitting fees attending the meetings of the
Board and the Committees thereof.
Remuneration to other employees
Employees shall be assigned grades according to their qualifications and work
experience, competencies as well as their roles and responsibilities in the organization.
Individual remuneration shall be determined within the appropriate grade and shall be
based on various factors such as job profile skill sets, seniority, experience and
prevailing remuneration levels for equivalent jobs.
VI. Stakeholders Relationship committee
The Composition of Stakeholders Relationship Committee and details of its meetings ect
have been disclosed in the report on Corporate Governance Reports, which forms part of
Directors' Report.
A.) Composition:
The Details of composition of the Committee are given below:
| Name of the Director |
Designation |
Category |
| Shri M Siddartha |
Chairman |
Non-Independent Non-Executive Director |
| Shri I. Narsingh Rao |
Member |
Independent Non-Executive Director |
| Shri M.V. Ananthakrishna |
Member |
Whole-Time Director |
B) Powers:
The Committee has been delegated with the following powers:
• To redress shareholder and investor complaints relating to transfer of shares,
Dematerialization
of Shares, non-receipt of Annual Reports, non-receipt of declared dividend and other
allied complaints.
• To approve, transfer, transmission, and issue of duplicate / fresh share
certificate(s)
• Consolidate and sub-division of share certificates etc.
• To redress, approve and dispose off any, other complaints, transactions and
requests etc., received from any shareholder of the company and investor in general.
The Board has delegated the power to process the transfer and transmission of shares to
the Registrar and Share T ransfer Agents, who process share transfers within a week of
lodgment in the case of shares held in physical form.
The Company has designated an exclusive e-mail ID called vbcfalhyd@gmail.com for
complaints/ grievances.
VII. Risk Management Committee
A.) Composition:
The Details of composition of the Committee are given below:
| Name of the Director |
Designation |
Category |
| Shri M Siddartha |
Chairman |
Non-Independent Non-Executive Director |
| Shri Hirak Kumar Basu |
Member |
Independent Non-Executive Director |
| Shri. M.V. Ananthakrishna |
Member |
Whole-Time Director |
B) Risk Management Policy:
The Company follows a comprehensive system of Risk Management. The Company has adopted
a procedure for assessment and minimization of probable risks. It ensures that all the
risks are timely defined and mitigated in accordance with the well-structured risk
management process.
18. Unpaid / Unclaimed Dividend:
In terms of the provisions of the Companies Act, the Company is obliged to transfer
dividends which remain unpaid or unclaimed for a period of seven years from the
declaration to the credit of the Investor education and Protection Fund established by the
Central Government. Company has transferred the unclaimed dividends to the IEPF.
19. Details of Adequacy of Internal Financial Controls:
Your Company has well established procedures for internal control across its various
locations, commensurate with its size and operations. The organization is adequately
staffed with qualified and experienced personnel for implementing and monitoring the
internal control environment. The internal audit function is adequately resourced
commensurate with the operations of the Company and reports to the Audit Committee of the
Board.
The Board has appointed M/s G.P. Rao & Associates, Chartered Accountant, Hyderabad
as Internal Auditors for the year 2023-23. Deviations are reviewed periodically and due
compliances are ensured. Summary of significant Audit observations along with
recommendations and its implementations are reviewed by the Audit committee and concerns,
if any, are reported to Board.
20. Auditors:
• In terms of the provisions of the Companies Amendment Act, 2017 read with
Notification S.O. 1833(E) dated 7th May 2018 deletes provision of annual ratification of
the appointment
of auditor. Now during a single term of 5 years, there shall be no requirement for
ratification of the appointment of auditor. A company sending notices for Annual General
Meeting on or after 7th May 2018 is not required to include ratification of the auditor as
its agenda item. The Auditors, M/s Pavuluri & Associates, Chartered Accountants were
appointed as Statutory Auditors to hold office till the conclusion of AGM to be held in
the year 2026, since there is no requirement of annual ratification of appointment of
Statutory Auditors, the Board has not recommended for ratification of Statutory Auditors
in the Notice of 41st AGM.
• Secretarial Auditors:
The Board appointed Mr. Jameel Babu, K (CP No.21932) as the Secretarial Auditors
for the Financial Year ended 31st March 2023.
• Cost Auditors
Members have ratified the appointment of Shri AVNS Nageshwara Rao ( M.No. M/8029) as
Cost Auditors of the Financial Year 2022-23.
• Internal Auditors:
M/s G.P. Rao & Associates, Chartered Accountants are the internal auditors of the
Company for the Financial Year ended 31st March 2023.
21. Auditors' Report:
a) Independent Auditors Report:
The report of the Independent Auditors for the Financial Year 2022-23 is enclosed with
the Financial Statements in this Annual Report. The following is the reply of the Board on
the qualifications made by the Auditors in their Report:
| No |
Audit Qualification |
Reply given by the Board |
| a |
Non-provision of shortfall of deemed energy charges for earlier years amounting to Rs
53,44,77,378/-, pending disposal of company's petition before TSERC as stated in Note No.
2.33 to the standalone Ind AS financial statements has resulted in understatement of the
loss for the year.. |
Company approached Telangana State Electricity Regulatory Commission (TSERC) with a
request to waive the demand as the said amounts relating to deemed energy charges. As the
TSSPDCL imposed said deemed energy charges even period relating to power cuts/ power
holidays/ non supply of power due to acute power shortage in the erstwhile undivided state
of Andhra Pradesh. Therefore, the company is confident to get a favourable decision from
TSERC/TSSPDCL and hence, the Board is not providing any liability. We take into
consideration of Rs.53,44,77,378 for Adjusted Figures (audited figures after adjusting for
qualifications) |
| b |
As stated in Note No. 2.04c the company has not measured its Investments in Equity
Instruments designed to be measured at Fair Value through Other Comprehensive Income at
fair values as required by Indian Accounting Standard "Financial Instruments"
(Ind AS 109) which is not in compliance with the provisions of section 133 of the
Companies Act, 2013. |
We approached by the investment companies and they informed that they are in the
process of finalizing their accounts and related matters. Therefore, we could not comply
the said requirement. As per the Board's view all the investments are considered as good.
Therefore we have not taken any impact on for Adjusted Figures (audited figures after
adjusting for qualifications). |
| c |
As stated in Note No. 2.41 that balances lying in the Long Term and short term
borrowings, Trade payables, Trade Receivables and other payables are subject to
confirmation |
Company send the balance confirmation letter to the respective parties as per the
standard audit practice. But Company is yet to receive the response from them. As per the
Board's view all the balances are correct as per our books of accounts. Therefore we have
not taken any impact on for Adjusted Figures (audited figures after adjusting for
qualifications) |
| d |
The Company has not made provision towards present liability in respect of future
payments of gratuity and leave encashment has not been made using Projected Unit Credit
method as required by Ind AS 19 "Employee Benefits", which is noncompliance with
the provisions of section 133 of the Companies Act, 2013. |
The Company has made necessary provisions in the books of accounts without getting the
report from the Actuarial valuation. However, Board is of view that the Company is made
required amounts in the Books. Therefore, we have not taken any impact on for Adjusted
Figures (audited figures after adjusting for qualifications) |
| e |
As stated in Note No. 2.40 the company has not conducted the impairment test of its
cash generating assets despite of the indication of asset remaining idle as required by
Ind AS 36 "Impairment of Assets", which is noncompliance with the provisions of
section 133 of the Companies Act, 2013 |
Non availability of technical staff due to COVID-19, we could not conduct impairment
status of assets. However, the Board is confident to get benefits from all the assets in
future, therefore no provision has been made for impairment, As per the Board's view all
the balances are correct as per our books of accounts. Therefore we have not taken any
impact on for Adjusted Figures (audited figures after adjusting for qualifications |
| f |
No physical verification of inventories has been carried out during the year.
Accordingly, we are unable to express our opinion on the realisability of the amount at
which the same are stated in the books of account. |
The company is having a system to make periodical physical verification of stock /
inventories and also arriving at the values. |
b) Cost Audit Report:
M/s Nageswara Rao & Co as the Cost Auditors of the Company for the Financial Year
2022-23. The Board of Directors of the Company has, on the recommendation of the Audit
Committee, approved the appointment of M/s Nageswara Rao & Co as the Cost Auditors of
the Company for the financial year ending March 31,2024.
In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the
Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration of Rs. 0.35 lakh
plus applicable taxes payable to the Cost Auditors as recommended by the Audit Committee
and approved by the Board has to be ratified by the Members of the Company. Accordingly, a
resolution to this effect forms part of the Notice convening the AGM.
c) Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Company had
appointed Jameel Babu K, Practicing Company Secretary to conduct the Secretarial Audit and
give a Secretarial Audit Report for the Financial Year 2022-23 to be annexed to the Report
of Board of Directors.
The Board has gone through the report of the secretarial auditor and decided to address
all the issues in an appropriate manner and while specifically authorizing the Whole-Time
Director to take all such steps as may be required in this regard in order to ensure
proper compliance of all the applicable/provisions and laws.
d) Instances of fraud reported by the Auditors:
During the FY 2023, the statutory auditors and the secretarial auditor have not
reported any instances of frauds committed in the Company by its Officers or Employees
under section 143(12) of the Act to the Central Government or the Audit Committee under
section 143(12) of the Companies Act.
e) Annual Secretarial Compliance Report:
The Annual Secretarial Compliance Report for the Financial Year 2023 for all applicable
compliance as per the Securities and Exchange Board of India Regulations and Circulars/
Guidelines issued thereunder has been duly obtained by the Company.
The Annual Secretarial Compliance Report issued by Mr. Jameel Babu K, practicing
company secretary (CP No. 21932) has been submitted to the Stock Exchanges within 60 days
of the end of the Financial Year.
22. Vigil Policy
Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a
Vigil Mechanism for directors and employees to report genuine concerns has been
established. The Company empowered the victimized Employees or Director to approach
directly the Chairman of the Audit Committee for a solution to the issue so that the
victimized Employee/Director is rescued. The said policy is available on the website of
the Company www.vbcfal.in.
23. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and
Outgo:
The details of conservation of Energy, Technology Absorption, Foreign Exchange Earnings
and Outgo are as follows:
• Conservation of Energy
The information in accordance with the provision of Section 134 of the Companies Act,
2013, read with the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules 2014, regarding conservation of Energy a separate Annexure has been
provided in this annual report.
• Technology Absorption
No expenditure is incurred by the Company attributable to Technology absorption during
the year under review.
(c) Foreign exchange earnings and outgo.
During the year, there are no foreign exchange inflows/earnings or
outflows/investments.
(d) Expenditure on Research and Development
No expenditure is incurred by the Company attributable to Expenditure on Research and
Development during the year under review.
24. Management Discussion & Analysis
Pursuant to SEBI (LODR), Regulations, 2015, a Report on Management Discussion &
Analysis is provided in this Annual Report as Annexure -III.
25. Particulars of Loans, Guarantees or Investments under Section 186:
The particulars of loans given, guarantees given, securities provided and investments
made along with the purpose for which the loan, guarantee, or security is proposed to be
utilitsed by the recipient are have been disclosed in the Financial Statements.
26. Particulars of Contracts or Arrangements with Related Parties:
All transactions entered into with Related Parties as defined under the Companies Act,
2013 and Regulation 23 of SEBI Listing Regulations, 2015 during the financial year were in
the ordinary course of business and on an arms' length pricing basis. There were no
materially significant transactions with related parties during the financial year, which
were in conflict with the interest of the Company.
A statement, in summary form, of all the transactions entered into with the related
parties in the ordinary course of business, details of individual transactions with
related parties are placed before the audit committee for the review from time to time.
Your Company has formulated a policy on related party transactions which has been
placed on the website of the company i.e. www.vbcfal.in. There are no related party
transactions except mentioned in the Financial Statements.
Suitable disclosure as required by the Indian Accounting Standards (Ind AS-24) has been
made in the notes to the financial statements. Accordingly, the details of Related Party
Transactions are annexed in Form AOC-2 is not applicable.
27. Annual Return
As required by Section 92(3) of the Act read with Section 134(3)(a) of the Act the
Annual Return in Form MGT-7 is placed at the company website www.vbcfal.in.
28. Particulars of Employees:
The information required under Section 197 of the Act read with rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given
below:
(i) the ratio of the remuneration of each Director to the median remuneration of the
employees of the company for the financial year;
Our Non-executive Directors draw remuneration only by way of sitting fee. The details
of the same are provided in the Corporate Governance Report which forms Annexure to this
report. Hence, the ratio of remuneration of each Non-executive Director to the median
remuneration could not be given.
(ii) the percentage increase in remuneration of each director, Chief Financial Officer,
Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;
| Name of the Person |
% increase in remuneration in the financial year |
| MSP Rama Rao |
Nil |
| M.V. Ananthakrishna |
Nil |
| R. Dharmender |
Nil |
| Shivangi Tibrewala |
Nil |
(iii) the percentage increase in the median remuneration of employees in the financial
year: Nil
(iv) the number of permanent employees on the rolls of company: 20.
(v) the explanation on the relationship between average increase in remuneration and
company performance;
There is no increase of the salary of the employees during the year under review.
(vi) comparison of the remuneration of the Key Managerial Personnel against the
performance of the company;
The Remuneration to Key Managerial Personnel is below the norms being practiced in
Comparable Industries for such experienced persons.
(vii) 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 and point out if there
are any exceptional circumstances for increase in the managerial remuneration: There is no
increase of salaries to the employees.
(viii) the key parameters for any variable component of remuneration availed by the
Directors: There is no variable component of remuneration availed by Directors
(ix) 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: Not Applicable as Company paid only sitting fees to
Non-executive Directors.
(x) Affirmation that the remuneration is as per the remuneration policy of the company.
The Company affirms remuneration is as per the remuneration policy of the Company. None of
the employees are drawing Rs. 8,50,000/- and above per month or Rs.1,02,00,000/- and above
in aggregate per annum, the limits prescribed under Section 197(12) of the Companies Act,
2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014.
29. Prevention of Sexual Harassment of Women at Workplace:
In order to prevent sexual harassment of women at workplace as per provisions of the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013,
the Company adopted a policy for prevention of Sexual Harassment of Women at workplace and
has set up Committee for implementation of said policy. During the year under review, the
company has not received any complaints.
30. Risk Management Policy
The Company has an adequate risk management policy in place. The risk management
process is reliable and broad based, ensuring that the Company is well guarded against
foreseeable risks and aptly prepared for future contingencies. Risk management encompasses
risk identification, evaluation, reporting and resolution to ensure the smooth functioning
of operations and business sustainability. Risk Management has become an integral part of
business decision making.
31. Loans and Advances in the nature of Loans to Firms/Companies in which Directors are
interested:
The information as required to be provided under Schedule V Para C clause 10(n) of the
SEBI (LODR) Regulations forms part of the report on Corporate Governance Enclosed to the
Annual Report.
32. Corporate Governance and Shareholders Information:
A separate section on Corporate Governance for fiscal 2022 forms part of this Annual
Report as Annexure-IV. Pursuant to Reg. 27 of SEBI (LODR), Regulations, 2015 Report on
Corporate Governance together with the Certificate issued by Practicing Company Secretary
regarding compliance of the conditions of Corporate Governance forms part of this Report.
33. Material Orders, if any, Passed by the Regulators, Courts Etc.:
There are no orders passed by Regulators/Courts/Tribunals which have impact on the
going concern status and Company's operations in future.
34. Material Changes and Commitments:
No material changes occurred subsequent to the close of the financial year of the
Company to which the balance sheet relates and the date of this report which affecting
Financial position of the Company as on 31.03.2023.
35. Maintenance of Cost Records
The Company has properly maintained cost records and accounts during the financial year
ended 31.03.2023.
36. Application under Insolvency and Bankruptcy Code, 2016:
The Company has not made any application under the Insolvency and Bankruptcy Code, 2016
during the FY 2023.
37. Valuations:
Details of difference between amount of the Valuation done at the time of One Time
Settlement and the Valuation Done While Taking Loan from the Banks or Financial
Institutions along with the Reasons thereof:
The Company has not made any such valuation during the FY 2023.
38. VARIOUS POLICIES AT WEBSITE:
All the required policies of the Company has been placed on website of the
Company(www.vbcfal.in).
39. Declaration by Independent Director(s):
All Independent Directors of the Company have given declarations as required under the
provisions of Section 149(7) of the Companies Act, 2013 and Regulations 16(1 )(b) and
25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
stating that they meet the eligibility criteria of independence as laid down under Section
149(6) of the Companies Act, 2013 and Regulation 16(1 )(b) of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations").
In the opinion of the Board all, our Independent Directors possess requisite
qualifications experience expertise and hold high standards of integrity for the purpose
of Rule 8(5) (iiia) of the Companies (Accounts) Rules 2014.
40. Separate Meeting of Independent Directors
During the year under review, the Independent Directors held their separate meeting on
February 14th, 2023 inter alia, to discuss:
- Review the performance of the Non-Independent Directors.
- Review the performance of the committees and Board as a whole.
- Review the performance of the Chairman of the Company, taking into account the views
of Executive Directors and Non- Executive Directors.
- Assess the quality, quantity and timeliness of flow of information between the
Company management and the Board that is necessary for the Board to effectively and
reasonably perform their duties.
41. Presentation of Financial Statements:
The Financial Statements for the year ended 31st March,2023 are prepared in
due compliance of the Indian Accounting Standards.
42. Internal Audit & Controls:
The Company appointed M/s G.P. Rao & Associates., Chartered Accountants, Hyderabad,
as its Internal Auditors. Their scope of work includes review of Records, Ledgers, voucher
checking and the internal controls applied and practiced by the Company to ensure the
Assets are safeguarded and payments are made only for the benefits received and also
review of operational expenditure, effectiveness of internal control procedures and
systems, and assessing the internal control strengths in all areas.
The internal control procedures and systems are adequate commensurate with the nature
and size of the operations of the Company. Internal Auditors findings are discussed, and
suitable corrective actions are taken as per the directions of Audit Committee on an
ongoing basis to improve efficiency in operations.
43. Cash Flow Statement:
A Cash Flow Statement for the year 2022-23 is annexed to the Statement of Accounts.
44. Familiarization Programmes:
The Company familiarizes its Independent Directors on their appointment as such on the
Board with the Company, their roles, rights, responsibilities in the Company, nature of
the industry in which the Company operates, etc. through familiarization programme. The
Company also conducts orientation programme upon induction of new Directors, as well as
other initiatives to update the Directors on a continuing basis. The familiarization
programme for Independent Directors is disclosed on the Company's website www. vbcfal.in
45. Secretarial Standards
The Company is in compliance with the applicable secretarial standards.
46. Human Resources:
The company has maintained cordial relations with the employees Your Directors and
Management express their appreciation for the commitment and devotion shown by the
employees.
47. Declaration by the CEO:
Pursuant to the provisions of Regulation 17 of the SEBI Listing Regulations, a
declaration by the CEO of the company declaring that all the members of the board and the
senior management personnel of the company have affirmed compliance with the Code of
Conduct of the company is enclosed to this report. Kindly refer to Annexure K.
The CEO/CFO certification to the board pursuant to Regulation 17 of the SEBI Listing
Regulations is enclosed to this report. Kindly refer to Annexure L.
48. Directors' Responsibility Statement:
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, the best
of their knowledge and ability confirm that:
(a) in the preparation of the annual accounts for the year ended 31st March 2023, the
applicable accounting standards had been followed along with proper explanation relating
to material departures;
(b) 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 as at 31st March 2023 and of the profit
and loss of the company for the year ended on that date;
(c) 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;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) 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; and
(f) 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.
49. Acknowledgements
Your Directors thank the Government of India and Government of Telangana for their
support. They also place on record their appreciation for the help and encouragement
received from Bank of India, and other Financial Institutions.
Your Directors sincerely thank Customers, Vendors and Members for their sustained
support and co- operation.
|
For and on behalf of the Board |
|
Sd/- |
| Place: Hyderabad |
I. Narshingh Rao |
| Date: 14-08-2023 |
Chairman |
|
DIN :01852112 |
|