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VBC Ferro Alloys

BSE: 513005|ISIN: INE114E01013|SECTOR: Mining & Minerals
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Directors Report Year End : Mar '18    Mar 15

Dear Members,

The Directors have pleasure in presenting the 36th Director’s Report of the Company together with the Audited Statements of Accounts for the Financial Year ended March 31, 2018.

FINANCIAL RESULTS:

(Rs. Lakhs)

PARTICULARS

Current Year 2017-18

Previous Year 2016-17

Gross Revenue

-

-

Profit/(Loss) Before Interest, Depreciation & Tax(PBIDT)

(1817.44)

479.39

Finance Charges

306.36

273.91

Profit/(Loss) before Depreciation and Tax(PBDT)

(2123.80)

205.48

Depreciation

58.40

56.17

Profit/(Loss) Before Tax(PBT)

(2182.20)

149.31

Provision for Tax

-

-

Profit/(Loss) After Tax (PAT)

(2182.20)

149.31

Profit/(Loss) brought forward from previous year

(916.08)

(1065.39

Adjustment in Depreciation

Profit/(Loss) carried to Balance Sheet

(3098.28)

(916.08)

Industry Overview:

The Government of India had announced a vibrant steel policy recently 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 also improved.

It is expected that at the current rate of GDP growth, the steel demand will grow threefold in next 15 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 demand for Ferro Alloys is 4 Million Tons per annum in 2030-31 based on the demand for steel.

Performance of your Company:

Your Company suspended its manufacturing operations during the Financial Year 2017-18 also. As a result, your Company incurred a net loss of Rs.2182.20 Lakhs during the Financial Year 2017-18 as against net profit of Rs.149.31 Lakhs in previous financial year.

Prospects:

The medium to long-term economic outlook in India continues to look promising and it is heartening to see the Government’s drive 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. The progress in domestic steel industry is a pre-requisite for India to succeed in its industrial vision for ‘Make-in India’. This presents good potential growth of Ferro Alloys industry in the Country as it solely depends on steel industry. The total power generation in Telangana by the state sector was to the magnitude of 7,778 MW in the year 2014 and in the last four years, the capacity has been enhanced to 15,284 MW by Telangana State Government. This has made the state power surplus and thereby giving uninterrupted quality power to all the consumers. The Telengana State Government announced reasonable power tariff for the Ferro Alloys industry and fixed the power tariff of Rs.5 for KWh and hence Ferro Alloy Industry can run its industry profitably subject to other market driven factors.

Outlook of your Company:

Keeping in view of the encouragement given by the Telangana Government by way of giving uninterrupted and quality power supply along with reasonable power tariff to Ferro Alloy Industry, we are proposing to raise funds by way of issue of Compulsory Convertible Share Warrants for restarting the manufacturing operations of our plant in order to generate revenues and run the Company profitably.

The Company is exploring the various alternatives to restart the manufacturing operations on its own or through conversion or leasing the facilities to interested parties at the earliest. Therefore, the Shareholders wealth will be increased substantially in the foreseeable future as the demand for Ferro Alloys is quite promising both in Indigenously and for exports.

Projects under Implementation- Thermal Power Plant -120 MW (2x60MW):

You are aware that your Company is setting up 120MW (2x60MW) Coal Based Captive Power Plant at Bodepalli (Village & Gram Panchayat), Sirpur Kagaznagar Mandal, Asifabad, Komaram Bhim District, Telangana State. The estimated project cost is Rs. 696 Cr. The Company has obtained most of the clearances such as Environmental Clearance (EC), Consent for Establishment (CFE), NoC from Forest Department, Permission for water drawal and Airport Authority. Your Company has decided to setup the Captive power Project on priority basis through VBC Power Company Limited, a Special Purpose Vehicle Company and initiated the steps to hive off the power project division. The company has obtained a Fuel Supply Agreement with Western Coal fields by giving a Bank Guarantee of Rs.5.28 crores. The members and unsecured creditors have accorded their approval for scheme of arrangement between VBC Ferro Alloys Limited and VBC Power Company Limited at their meetings held on 5th December 2016. Company is actively pursuing the matter for getting various legal and statutory approvals.

Dividend & Reserves:

As the Company incurred losses during the year under review, the Directors could not recommend dividend for the Financial Year 2017-18. Due to inadequate profits, no amount has been transferred to Reserves.

Share Capital:

The Paid-up Share Capital as on 31st March 2018 was Rs.4.39 Cr. During the year under review, the company has not issued Equity Shares/ shares with differential voting rights / granted stock options / sweat equity.

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 2018.

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. We are anticipating that the demand for power will soon increase and the State Governments will make arrangements for supply of natural gas to revive the stranded assets and consequently KGPL will resume profitable operations. The ONGC and RIL have taken exploration of new gas fields in KG Basin and domestic gas supplies are likely to resume in the coming years.

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 76.36 million units during the financial year 201717 and the said generation is below the designed energy level due to failure of monsoon and in turn low inflow to the Plant from upstream Rengali HEPP. OPCL established 3.42 MWp Solar Power Project and achieved COD on 31.10.2016 and generated 5.04 MU during the Financial year under review. Your Company is holding Equity Shares Capital of about 13.43% in OPCL.

Presentation of Financial Statements:

The Financial Statements for the year ended 31st March, 2018 are prepared in due compliance of the Indian Accounting Standards.

Corporate Social Responsibility Policy:

Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility is not applicable and hence the Company has not adopted any Corporate Social Responsibility Policy.

Cash Flow Statement:

A Cash Flow Statement for the year 2017-18 is annexed to the Statement of Accounts.

Board of Directors and Key Managerial Personnel:

a) Resignation of Directors:

i) Dr. D. Kinnera Murthy resigned from the office of Directorship w.e.f. 17.04.2017 and Board acknowledges hereby her invaluable services given to Company.

b) Reappointment/Change in designation of Directors: There are no Directors liable to retire at the Annual General Meeting on the Board of Directors. Sri M.V Ananthakrishna has been appointed as whole time director of the Company w.e.f. 07.04.2018.

c) Additional Director:

i) As per the provisions of the Section 149(4) of the Companies Act, 2013 and rules made there under, every Listed Company shall have at least one Women Director. Accordingly, Board of Directors appointed Smt. Deshraju Rekha as an Additional Director on 16.12.2017 and her tenure expires on the date of the ensuing Annual General Meeting and Board recommends her appointment u/s 149 and 160 of the Companies Act, 2013 at the ensuing Annual General Meeting(AGM).

ii) As per the provisions of the Companies Act, 2013 and Articles of Association of the Company, Board appointed Sri. R K R Gonela as an Additional Director on 16.12.2017 whose term of office expires on the date of ensuing Annual General Meeting and Board recommends his appointment u/s 149 and 160 of the Companies Act, 2013 at the ensuing Annual General Meeting(AGM)

As required under regulation 36 (3) of the SEBI (LODR), Regulations, 2015, brief particulars of the Directors seeking appointment/re-appointment are given as under:-:

Name of the Director

R.K.R. Gonela

Deshraju Rekha

M.V Ananthakrishna

Date of Birth

01.04.1939

12.05.1960

15.02.1958

Qualification

Degree in Law

BE

BE, MBA, CMC, FIMC

Expertise in specific functional areas

While holding the positions in different capacities, Sri R.K.R. Gonela was involved in Industrial Policy, Industrial Development and Industrial Management of Andhra Pradesh Government.

Transmission and System Operation, Open Access and Regulatory Advisory Services post Electricity Act Worked on First open access of Captive users from Andhra Pradesh to Chhattisgarh which enabled Surplus Power Plants to sell Electricity to needy power shortfall states.

Over three and half decades of experience in: General Management, Corporate Strategy, Turnaround Strategy,

Cost Improvement,

Onsite Power Generation, Cogeneration

Names of listed entities in which the person also holds the directorship and the membership of Committees of the board

VBC Industries Limited, and Orrisa Power Consortium Limited

VBC Industries Limited

Shareholding of nonexecutive directors.

Nil

Nil

Nil

No. of Shares held in the Company

Nil

Nil

Nil

Inter se relationship with any Director

Nil

Nil

Nil

Number of Meetings of Board:

During the year, five meetings of the Board of Directors were held, the details of which forms part of the report on Corporate Governance.

Annual Evaluation of the Board, Committees and Individual Directors:

As per section 149 of the Companies Act, 2013 read with clause VII (1) of the schedule IV and rules made thereunder, the independent directors of the company had a meeting on 13.02.2018 without attendance of non-independent directors and members of management. In the meeting the following issues were taken up:

(a) Review of the performance of non-independent directors and the Board as a whole;

(b) Review of the performance of the Chairperson of the company, taking into account the views of executive directors and non-executive directors;

(c) Assessing 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.

The meeting also reviewed and evaluated the performance of non-independent directors. The company has 2 (two) non-independent directors namely:

i.) Sri. M.V. Ananthakrishna - Whole-Time Director

ii.) Sri. M.S Lakshman Rao - Director

The meeting recognized the significant contribution made by Sri. M.V. Ananthakrishna and Sri. M.S Lakshman Rao, non- independent directors in the shaping up of the company and putting the company on accelerated growth path. They have devoted more time and attention to bring up the company to the present level.

The meeting also reviewed and evaluated the performance the Board as whole in terms of the following aspects:

- Preparedness for Board/Committee meetings

- Attendance at the Board/Committee meetings

- Guidance on corporate strategy, risk policy, corporate performance and overseeing acquisitions and disinvestments.

- Monitoring the effectiveness of the company’s governance practices

- Ensuring a transparent board nomination process with the diversity of experience, knowledge, perspective in the Board.

- Ensuring the integrity of the company’s accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, systems for financial and operational control and compliance with the law and relevant standards.

The meeting also noted that Sri. V.S Rao, Chairman of the Board of Directors of the company has performed exceptionally well by attending board meetings regularly, by taking active participation in the discussion of the agenda and by providing required guidance from time to time to the company for its growth etc.

It was noted that the Board Meetings have been conducted with the issuance of proper notice and circulation of the agenda of the meeting with the relevant notes thereon.

Policy on Directors Appointment and Remuneration Policy:

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

Auditors:

In terms of the provisions of the Section 139 of the Companies Act, 2013, the Shareholders have appointed M/s C.V. Ramana Rao, Chartered Accountants, Visakhapatnam as Independent Auditors for a term of five years (FY 2017-18 to 2021-22) from the conclusion of 35th Annual General Meeting to the conclusion of the 40th Annual General Meeting of the Company to be held in the calendar year 2022.

Auditors’ 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

1

Non-provision of load shortfall charges for earlier years amounting to Rs. 42,60,26,056, pending disposal of company’s objections by various administrative authorities as per the directions of Forum for Redressal of Consumer grievances of CPDCL as stated in Note No. 2.28(a) to the standalone Ind AS financial statements has resulted in understatement of the loss for the year.

Company had approached the TSSPDCL / CPDCL with a request to waive the deemed energy charges/load shortfall charges and our request is in consideration. In the hope that we will get a favorable decision from the Government of Telanagana / TSSPDCL and hence, the Board the company is not providing any liability.

2

Non-provision of FSA charges for the year 2008-09 totaling to Rs 5,28,19,683, pending resolution of the appeals pending before various judicial authorities as stated in Note No. 2.28(b) to the standalone Ind AS financial statements, has resulted in understatement of the loss for the year.

Company approached the TSSPDCL /CPDCL with a request to waive the said charges by considering the orders of Hon’ble Courts.

Hope that Company will get a favorable decision from the Government of Telanagana/ TSSPDCL and hence, the Board is not providing any liability.

3

As stated in Note No 2.30 to the standalone Ind AS financial statements, the books of account are maintained under going concern” concept, though the Ferro Alloys plant of the company did not carry out any production activities during the entire year, due to commercially unviable operations because of high power tariff, besides the entire workmen have been retrenched in earlier years

At the request of the Ferro Alloys Manufactures, the Government of Telangana is giving a reasonable tariff for sustainance Ferro Alloy Industry to compete with Overseas market. Company is taking necessary steps for restarting its manufacturing operations by refurbishing the plant and machinery with substantial investment. Hope that the Company will resume its manufacturing operations shortly. Therefore, books of accounts are prepared under going concern concept.

4

The company has considered the diminution as temporary in nature as stated in Note No 2.34 to the standalone Ind AS financial statements the value of its investment of Rs 143,06,46,210 in the equity of M/s. Konaseema Gas Power Ltd, whose net-worth has completely been eroded and not in operation for more than four years.

KPGL is not operating its power generation plant due to lack of natural gas.

As informed by KGPL, the government of India is taking active steps to revive the power sector units including Gas based power generating units. Therefore, there is hope that KGPL restarts its manufacturing operations during this financial year.

5

Note No. 2.36 that balances lying in the lenders’, sundry creditors, like, suppliers’, service providers’, employees’ and customers’ accounts are subject to confirmation.

Company is yet to receive responses.

6

No physical verification of inventories has been carried out during the year. Further the inventory is lying with the company for more than five years. 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.

Company is having internal control procedures to monitor the balance of inventories and is taking steps to verify stocks periodically.

7

Note No. 2.03 with marks (#) that 124.589 Lakhs of shares acquired by the company in Konaseema Gas Power Limited, the title in respect of which is in the process of transfer.

Company made its request to KGPL to give effect of transfer by getting approval of its lenders.

Cost Audit Report:

The Company discontinued the Cost Audit as there are no manufacturing operations during the Financial Year 2017- 18 and consequently the Company has not appointed Cost Auditors for the Financial Year 2018-19.

Secretarial Audit Report:

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Company had appointed M. Nagakishore, Practicing Company Secretary to conduct the Secretarial Audit and give a Secretarial Audit Report for the Financial Year 2017-18 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/provisional laws.

Internal Audit & Controls:

The Company appointed M/s K.S. Rao & Co., 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 commensurating 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.

Particulars of Loans, Guarantees or Investments under Section 186:

The particulars of loans, guarantees and investments have been disclosed in the Financial Statements. Extract of Annual Return (MGT-9):

Pursuant to section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in form MGT-9 is provided as Annexure-III.

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

M.S. Lakshman Rao

Nil

R. Dharmender

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 is drawing Rs. 8,500,000/- 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.

Management Discussion & Analysis

Pursuant to SEBI (LODR), Regulations, 2015, a Report on Management Discussion & Analysis is enclosed as Annexure -IV

Corporate Governance:

Pursuant to Reg. 27 of SEBI (LODR), Regulations, 2015 Report on Corporate together with the Auditors Certificate regarding compliance of the conditions of Corporate Governance and Management Discussion and Analysis Report forms part of this Report.

Familiarisation Programmes:

The Company familiarises 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 familiarisation 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 familiarisation programme for Independent Directors is disclosed on the Company’s website www. vbcfal.in

Particulars of Contracts or Arrangements with Related Parties:

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.

Accordingly, the details of Related Party Transactions are annexed in Form AOC-2 is not applicable. Declaration by Independent Director(s):

All the Independent Directors have submitted declarations to the Company to the effect that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013.

DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM:

The Audit Committee consists of the following members as of date:

a) RKR Gonela Independent Director - Chairman

b) V.S. Rao, Independent Director - Member

c) Rekha Deshraju, Non-executive Director - Member

All the members of the Audit Committee are independent Directors.

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 take into account 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, 2018:

Sri. R K R Gonela

Chairman

Independent non-executive Director

Sri. V.S. Rao

Member

Independent Non-executive Director

Smt. Deshraju Rekha

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:

2.1 Director” means a director appointed to the Board of a Company.

2.2 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.

2.3 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

3.1.1 The Nomination and Remuneration 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.

3.1.2 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.

3.1.3 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.

3.1.4 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.

3.2 criteria of independence

3.2.1 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.

3.2.2 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.

3.2.3 The Independent Director shall abide by the Code for Independent Directors as specified in Schedule IV to the companies Act, 2013.

3.3 Other Directorships/ Committee Memberships

3.3.1 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 take into account 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.

3.3.2 A Director shall not serve as director in more than 20 companies of which not more than 10 shall be public limited companies.

3.3.3 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.

3.3.4 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:

1.1 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:

2.1 Director” means a Director appointed to the Board of the company.

2.2 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 finance Officer; and

(v) Such other office as may be prescribed under the companies Act, 2013

2.3 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:

3.1 Remuneration to Executive Director and Key Managerial Personnel

3.1.1 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 approved by the shareholders.

3.1.2 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.

3.1.3 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

3.1.4 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.

3.2 Remuneration to Non - Executive Directors

3.2.1 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.

3.2.2 Non - Executive Directors shall be entitled to sitting fees attending the meetings of the Board and the Committees thereof..

3.3 Remuneration to other employees

3.3.1 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

A.) Composition:

The Details of Compostion of the Committee are given below:

Name of the Director

Designation

Category

No. of Meetings Attended

Sri. V. S. Rao

Chairman

Independent Non-Executive Director

4

Sri. M.V. Ananthakrishna

Member

Whole-Time Director

4

Smt. Deshraju Rekha*

Member

Independent Non-Executive Director

1

* Committee reconsituted on 16.12.2017

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 Transfer Agents, who process share transfers within a week of lodgement 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

Sri. V. S. Rao

Chairman

Independent Non-Executive Director

Sri. M.V. Ananthakrishna

Member

Whole-Time Director

Smt. Deshraju Rekha

Member

Independent Non-Executive 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.

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. Accordingly, the Members are hereby informed that the 7 years period for payment of the dividend pertaining to financial year 20102011 will expire on 11.09.2018 and thereafter the amount standing to the credit in the said account will be transferred to the Investor Education and Protection Fund” of the Central Government.

The details of Dividend of earlier years remain unclaimed by the shareholders as on 31.03.2018 are as given below:

Financial Year

Date of Declaration

Last Date of Claiming the Dividend

Unclaimed amount as on 31.03.2018

Due date for transfer to Investor Education and Protection Fund (IEPF)

2010-11

12-09-2011

11-09-2018

4,99,221

12-10-2018

2011-12

29-09-2012

28-09-2019

5,63,316

29-10-2019

Pursuant to provisions of Section 124 of Companies Act, 2013, the unclaimed dividend within the last date mentioned for the respective years, will be transferred to Investor Education and Protection Fund (IEPF) established by Government of India pursuant to Section 125 of the Companies Act, 2013.

NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR. Nil

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:

There have been no frauds reported by the auditors u/s 143(12).

18. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 134(3) (f) & Section 204 of the Companies Act, 2013, Secretarial audit report as provided by Mr. M. Nagakishore, Practicing Company Secretary is annexed to this Report as an annexure.

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.

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 K. S. Rao & Co, Chartered Accountant, Hyderabad as Internal Auditors for the year 2018-19. 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.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

A separate section on Corporate Governance for fiscal 2018 forms part of this Annual Report.

SECRETARIAL STANDARDS

The Company is in compliance with the applicable secretarial standards.

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 31.03.2018.

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.

Prevention of Sexual Harassment of Women at Work Place:

In order to prevent sexual harassment of women at work place 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, there were no women employees employed by the Company.

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:

a) 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 is not applicable as there are no manufacturing operations during the year under review.

b) 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.

Human Resources:

The Cost of production of Ferro Silicon has exceeded the market price due to steep increase of power tariff. Accordingly, Company has closed down its production unit at Rudraram Village, Medak District. To reduce the fixed cost burden, your Company has entered into a cordial settlement with the worker’s union for Retrenchment under the Industrial Disputes Act on 30th June, 2014. Your Directors and Management express their appreciation for the commitment and devotion shown by the employees.

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 2018, 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 2018 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.

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 cooperation.

For and on behalf of the Board

Sd/-

Place: Hyderabad V.S. RAO

Date: 01.06.2018 Chairman

Source : Dion Global Solutions Limited
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