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Directors Report of Vaswani Industries Ltd.

Mar 31, 2014

Dear Members,

The Directors take pleasure in presenting the Eleventh Annual Report on the business and operations of the company and its financial results for the year ended 31st March, 2014.

FINANCIAL RESULTS

Financial Results of the Company for the financial year ending 31st March 2014 are summarized below for your consideration:

(Rs. in Lacs)

PARTICULARS 31-03-2014 31-03-2013

REVENUE FROM OPERATIONS 22637.98 21440.35

PROFIT BEFORE INTEREST AND DEPRECIATION 1713.29 -299.40

INTEREST 1073.20 943.78

DEPRECIATION 548.78 524.76

PROFIT BEFORE TAX & PRIOR PERIOD ADJ. 91.30 -1767.95

PRIOR PERIOD ADJUSTMENT 0.00 0.00

NET PROFIT BEFORE TAX 91.30 -1767.95

PROVISION FOR TAXES 88.37 630.05

NET PROFIT AFTER TAX 2.94 -1137.45

TRANSFER TO GENERAL RESERVE 0.00 0.00

PERFORMANCE

During the year under review, our Company has achieved sales revenue of Rs. 1197.63 lacs as thereby registering a marginal increase of 5.29% over the previous year. However, the company has gained profit in the recent year due to increase in sales volume and minimized the cost of the raw material, stores and consumables, fuel and power cost.

FUTURE PROSPECTS

The company is enduring to cope up with the recessionary trends in the market by cutting down the manufacturing cost. However, the directors as per last year''s report fulfilled the commitment of improving the situation and bring the profit in the current year.

SAFETY

The company continues to adopt safety measures to protect the health of workers. Company has complied with the measures to be taken regarding hazards or risks to safety and health from the production of iron and steel, including appropriate standards, codes and guidelines as prescribed, approved or recognized by the competent authority.

Company has properly maintained workplaces, plant, equipment, tools and machinery, and also organized work in such a manner so as to eliminate and control hazards and risks in the production of iron and steel, which is in consistent with national laws and regulations.

Company in consultation with workers and their representatives, looks after:

(i) assessment of the hazards and risks to the safety and health of workers arising from the production of iron and steel,

(ii) effective use of the information provided by the supplier of equipment or materials and from other reasonably available sources; and

(iii) measures to reduce exposure to eliminate or control risks to safety and health identified in the above risk assessment.

POLLUTION CONTROL MEASURES

The company has installed Waste Heat Recovery Boilers (WHRB) equipped with 3 kilns 100 X 3 MT per day capacity, which helps to generate 12 Mw power/hour preventing the waste, heat and fumes to dilute in the atmosphere. Emission Stream Pre-treatment (ESP) machines are implemented to filter the gases from the all the chimneys of the industry. Plantation is a vivacious step taken by the company to cover most of the area near the industry.

INCREASE IN SHARE CAPITAL

During the year under review, your company issued 1364500 (Thirteen Lacs Sixty Four Thousand Five Hundred) equity shares by way of preferential allotment and making total subscribed, issued and paid up equity share capital to Rs. 28,65,47,000 (Rupees Twenty Eight Crore Sixty-Five Lacs Forty Seven Thousand only) divided into 28654700 equity shares of Rs. 10/- each as on date of this report.

DIVIDEND

With a view to conserve the liquid resources and to strengthen the financial position of the Company, we have decided not to recommend the dividend for the financial year ended 31st March 2014.

LISTING

The Company is listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Annual Listing Fee for the year 2014-2015 had been paid to those Stock Exchanges where the company''s shares are listed.

DIRECTORS

Shri Yashwant Vaswani, Whole Time Director & Shri Pramod Vaswani, Whole Time Director are due to retire at the ensuing Annual General Meeting and being eligible, offer them for re-appointment as per sec 152 (6) of the Companies Act, 2013. None of the Directors of the Company are disqualified from being appointed as directors specified in section 184 of the Companies Act, 2013.

CONSERVATION OF ENERGY & TECHNICAL ABSORPTION & FOREIGN EXCHANGE EARNIING OUTGO

In accordance with the requirements of section 134 (3) (m) of the Companies Act, 2013 read with the companies (Disclosure of Particulars in Report of Board of Directors) Rules 1988, a statement showing the information relating to the Conservation of Energy, Research and Development, Technology absorption and foreign exchange earnings and is enclosed in Form- A and should be treated as a part of this report.

PROVISION FOR TAX

Liability of tax have been determined on the basis of Accounting Standard - 22 which is accounting for taxes on income and accordingly, the tax expenses comprising of deferred tax liability have been calculated.

PERSONNEL

No employee was in receipts of remuneration exceeding the limits set out under Section 134 of the Companies Act, 2013.

AUDITORS

The Auditors, M/s Sunil Johri & Associates, Chartered Accountants, Raipur will retire at the conclusion of the ensuing Annual General Meeting and they being eligible, have offered themselves for reappointment.

The Company has received letter from the auditor to the effect that their re-appointment, if made, would be within the prescribed limits under Section 139 & 142 of the Companies Act, 2013 and that they are not disqualified for re-appointment within the meaning of Section 141 of the said Act.

During the year, the Central Government prescribed the Cost Accounting Records to be maintained by the Company and also mandated that Cost Audit of eligible products/services be carried out. Therefore, the Board had appointed M/s. S C Mohanty & Associates, Raipur as Cost Auditors for the year 2013-2014 pursuant to Section 148 of the Companies Act 2013.

The Company has received letter from the Cost Auditor to the effect that their appointment and re-appointment, if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013 and that they are not disqualified for re-appointment within the meaning of Section 148 read with section 139 and section 141 of the said Act.

AUDITORS QUALIFYING REMARKS

The notes to the accounts are self explanatory in respect of remarks of the auditors appearing in their report.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Company has been practicing good Corporate Governance over the time. In addition to basic governance issue the board lays strong emphasis on transparency, accountability and integrity for building investor confidence, improving investor''s protection and maximizing long-term shareholder value.

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, the followings form part of this Annual Report:

(i) Managing Director''s declaration regarding compliance of Code of Conduct by Board Members and Senior Management personnel;

(ii) Management Discussion and Analysis;

(iii) Report on the Corporate Governance;

(iv) Auditors'' Certificate regarding compliance of conditions of Corporate Governance.

INDUSTRIAL RELATIONS:

Industrial relations in the company during the year were peaceful, cordial and healthy. Company had been able to maintain peaceful industrial atmosphere and mutual trust between the management and the employees.

PUBLIC DEPOSITS

The Company has not accepted Public Deposit within the meaning of Section 73 of the Companies Act, 2013 after complying necessary formalities. There are no overdue or unclaimed deposits.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement Under Section 134 (5) of the Companies Act 2013, with respect to Directors, Responsibility Statement, it is hereby confirmed that:-

(a) in the preparation of the annual accounts, 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 at the end of the financial year and of the profit and loss of the company for that period;

(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 had prepared the annual accounts on a going concern basis; and

(e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

ACKNOWLEDGEMENT

The Board takes this opportunity to sincerely thank all its stakeholders namely, shareholders, customers, suppliers/contractors, bankers, employees, government agencies, local authorities, and the immediate society for their un-stinted support and co- operation during the year.

For and on behalf of the Board of Directors

Ravi Vaswani Raipur, 30th May 2014 (Chairman & Managing Director)


Mar 31, 2013

The Directors take pleasure in presenting the Ninth Annual Report on the business and operations of the company and its financial results for the year ended 31st March, 2013.

FINANCIAL RESULTS

Financial Results of the Company for the financial year ending 31st March 2013 are summarized below for your consideration:

(Rs.In Lacs)

PARTICULARS 31-03-2013 31-03-2012

REVENUE FROM OPERATIONS 21440.35 22,012.71

PROFIT BEFORE INTEREST AND DEPRECIATION -299.40 1,783.98

INTEREST 943.78 1,068.42

DEPRECIATION 524.76 518.06

PROFIT BEFORE TAX & PRIOR PERIOD AD], -1767.95 97.50

PRIOR PERIOD ADJUSTMENT 0.00 9.00

NET PROFIT BEFORE TAX -1767.95 188.50

PROVISION FOR TAXES 630.05 79.35

NET PROFIT AFTER TAX -1137.45 109.15

TRANSFER TO GENERAL RESERVE 0.00 10.92

PERFORMANCE

The fiscal year under review was a very crucial year for the steel industry. Steel manufacturer''s especially domestic steel manufacturing suffered heavily due to high input prices such as of power and iron ore without corresponding increase In selling prices of finished products resulting into lower realizations.

During the year under review despite adverse factors, the Company has achieved sales revenue of Rs. 214.40 crores as against Rs.220.12 crores in the previous year thereby registering a marginal decrease of 2.6% over the previous year. However, the company has suffered a loss as against profit in the previous year due steep prices in the raw material, stores and consumables, fuel and power cost. The company is procuring coal from outsources.

The company is enduring to cope up with the recessionary trends in the market by cutting down the manufacturing cost. The present economic recession will continue for some more time. The current year may not much improve the profitability. However, the director are very optimistic that barring unforeseen circumstances, the company will come out the present situation in the next year.

SAFETY

The company continues to adopt safety measures to protect the health of workers. Company has complied with the measures to be taken regarding hazards or risks to safety and health from the production of iron and steel, Including appropriate standards, codes and guidelines as prescribed, approved or recognized by the competent authority.

Company has properly maintained workplaces, plant, equipment, tools and machinery, and also organized work in such a manner so as to eliminate and control hazards and risks in the production of iron and steel, which is in consistent with national laws and regulations.

Company in consultation with workers and their representatives, looks after:

(i) assessment of the hazards and risks to the safety and health of workers arising from the production of iron and steel,

(ii) effective use of the information provided by the supplier of equipment or materials and from other reasonably available sources; and

(Mi) measures to reduce exposure to eliminate or control risks to safety and health Identified in the above risk assessment.

POLLUTION CONTROL MEASURES

The company has installed Waste Heat Recovery Boilers (WHRB) equipped with 3 kilns 100 X 3 MT per day capacity, which helps to generate 12 Mw power/hour preventing the waste, heat and fumes to dilute in the atmosphere. Emission Stream Pre-treatment (ESP) machines are implemented to filter the gases from the all the chimneys of the industry. Plantation is a vivacious step taken by the company to cover most of the area near the industry.

INCREASE UN SHARE CAPITAL

During the year under review, your company Issued 1299500 (Twelve Lacs Ninety Nine Thousand Five Hundred) equity shares by way of preferential allotment and making total subscribed, issued and paid up equity share capital to Rs. 27,29,02,000 (Rupees Twenty Seven Crore Twenty Nine Lacs two Thousand only) divided into 27290200 equity shares of Rs. 10/- each as on date of this report.

DIVIDEND

With a view to conserve the liquid resources and to strengthen the financial position of the Company, we have decided not to recommend the dividend for the financial year ended 31st March 2013.

LISTING

The Company is Listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) . The Annual Listing Fee for the year 2012-2013 had been paid to those Stock Exchanges where the company''s shares are listed.

DIRECTORS

Shri Sanjay Jadhwani, Independent Director & Shri Yashwant Vaswani, Whole Time Director Director are due to retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appolntment. None of the Directors of the Company are disqualified from being appointed as directors specified in section 274 (1) (g) of the Companies Act, 19S6.

CONSERVATION OF ENERGY ft TECHNICAL ABSORPTION ft FOREIGN EXCHANGE EARNIING PPTGP

In accordance with the requirements of section 217 (i) (e) of the Companies Act, 1956 read with the companies (Disclosure of Particulars in Report of Board of Directors) Rules 1988, a statement showing the information relating to the Conservation of Energy, Research and Development, Technology absorption and foreign exchange earnings and Is enclosed in Form- A and should be treated as a part of this report.

PERSONNEL

No employee was in receipts of remuneration exceeding the limits set out under Section 217 (2A) of the Companies Act, 1956.

AUDITORS

The Auditors, M/s Sunil John & Associates, Chartered Accountants, Raipur will retire at the conclusion of the ensuing Annual General Meeting and they being eligible, have offered themselves for reappointment.

The Company has received letter from the auditor to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appolntment within the meaning of Section 226 of the said Act

During the year, the Central Government prescribed the Cost Accounting Records to be maintained by the Company and also mandated that Cost Audit of eligible products/services be carried out. Therefore, the Board had appointed M/s. S C Mohanty & Associates, Raipur as Cost Auditors for the year 2011- 12 and also for 2012-13 pursuant to Section 233B of the Companies Act 1956.

The Company has received letter from the Cost Auditor to the effect that their appointment and re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appolntment within the meaning of Section 233B (5) read with section 224 and section 226 (3) & (4) of the said Act

AUPITQRS QUALIFYING REMARKS

The notes to the accounts are self explanatory in respect of remarks of the auditors appearing in their report.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Company has been practicing good Corporate Governance over the time. In addition to basic governance issue the board lays strong emphasis on transparency, accountability and integrity for building investor confidence, improving investor''s protection and maximizing long-term shareholder value,

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, the followings form part of this Annual Report:

(i) Managing Director''s declaration regarding compliance of Code of Conduct by Board Members and Senior Management personnel;

(it) Management Discussion and Analysis;

(iii) Report on the Corporate Governance;

(iv) Auditors'' Certificate regarding compliance of conditions of Corporate Governance.

INPUSTRIAL RELATIONS;

Industrial relations in the company during the year were peaceful, cordial and healthy. Company had been able to maintain peaceful industrial atmosphere and mutual trust between the management and the employees.

PUBLIC DEPOSITS

The Company has not accepted Public Deposit within the meaning of Section 58A of the Companies Act, 1956 after complying necessary formalities. There are no overdue or unclaimed deposits.

DIRECTORS'' RESPONSIBILITY STATEMENT

ACKNOWLEDGEMENT

The Board takes this opportunity to sincerely thank all its stakeholders namely, shareholders, customers, suppliers/contractors, bankers, employees, government agencies, local authorities, and the immediate society for their un-stinted support and co-operation during the year.

For and on behalf of the Board of Directors

Ravi Vaswani

Raipur, 30th May 2013 (Chairman & Managing Director)


Mar 31, 2010

The Directors have pleasure in presenting the 7th Annual Report of your Company together with the Audited Statement of accounts for the year ended 31st March 2010.

1. FINANCIAL RESULTS

Financial Results of the Company for the financial year ending 31st March 2010 are summarized below for your consideration:

Rs. in Lacs

PARTICULARS 31-03-2010 31-03-2009

SALES 9196.44 13380.83

PROFIT BEFORE INTEREST AND 1450.28 1517.39 DEPRECIATION

INTEREST 512.05 567.13

DEPRECIATION 338.14 326.23

NET PROFIT BEFORE TAX & PRIOR 600.08 624.03 PERIOD ADJUSTMEN

PRIOR PERIOD ADJUSTMENT 2.53 5.38

NET PROFIT BEFORE TAX 602.61 629.41

PROVISION FOR TAXES 234.42 220.48

NET PROFIT AFTER TAX 368.19 4,08.93

PROPOSED DIVIDEND 33.73 56.33

TAX ON PROPOSED DIVIDEND 5.73 9.57

TRANSFER TO GENERAL RESERVE 36.82 40.89

2. PERFORMANCES

During the year under review, the Company has achieved sales revenue of Rs. 9196.44 lacs as against Rs. 13380.83 lacs in the previous year thereby registering a decline of approx 31.27% over the previous year. The profit before depreciation and interest amounted to Rs.1450.28 lacs as against Rs. 1517.39 lacs in the previous year. After providing for interest, depreciation and tax, the net profit of the Company stands at Rs.368 lacs as against Rs.409 lacs in the previous year.

3. OPERATIONAL REVIEW

Your directors are pleased to inform you that the physical performances in the entire chain of the integrated steel operation of the Company has been excellent during the year as the units have achieved the highest ever production levels. The performance of the Company to a large extent is influenced by the Power and Steel Division.

The key contribution in the sales revenue of the year preceding the previous year is the sales of billet, which is reduced by 89.36% in the previous year. This is the major reason behind the decline in sales revenue in the previous year.

However, this reduction is compensated by the turnover of Sponge Iron which is increased by 211% in comparison with the year preceding the previous year and the turnover of the Power division which is increased by 45.54% in comparison with the year preceding the previous year.

4. FUTURE PROSPECTS AND EXPANSIONS

The Company is already in the process of expanding its power generating capacity by setting a 4 MW Power plant which is expected to be completed soon. On the other hand, the Company has set up 30000 MT kiln in Sponge division w.e.f. 30.03.2010. All these expansion plans are expected to increase the present volumes significantly in the ensuing year and the Company is expected to maintain this growth momentum in future year also.

5. DIVIDEND

Your Directors are pleased to recommend the dividend of Rs. 0.25 per share on Equity Shares having face value of Rs.10 each, for the financial year ended 31st March 2010.

6. No material changes and commitment occurred since the conclusion of the financial year.

7. There are no changes, which have occurred during/the financial year in the name of business of the Company.

8. PROVISION FOR TAX

Liability of tax have been determined on the basis of Accounting Standard - 22 which is accounting for taxes on income and accordingly. The tax expenses comprising of deferred tax liability & current tax have been calculated.

9. PERSONNEL

Since there was no employee who was drawing more than Rs.24.00 Lacs per annum, if employed through out the year, or Rs.200000/- per month if employed for the part of the year, the required information under sub-section (2A) of section 217 of the Companies Act, 1956 read with companies (particulars of the employees) rules 1974 as amended is not given.

10. DIRECTORS

a. Pursuant to the Articles 135, 154, 155, 156 & 165 of the Article of Association of the Company read with Sec. 255 and 256 of the Companies Act, 1956. Shri Pramod Vaswani, Whole-Time Director of the Company and Sh. Sunny Saini, Director of the Company are due to retire at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

b. None of the Directors of the Company are disqualified from being appointed as directors specified in section 274 (1)(g) of the Companies Act, 1956.

11. BOARD OF DIRECTORS

The constitution of the Board is as follows:

Name Status in Nature of Date of the Board Directorship Appointment

Executive & Non- 22-07-2003 Mr. Ravi Vaswani Chairman Independent Director (Managing Director)

Executive & Non - 22-07-2003 Mr. Pramod Vaswani Member Independent Director (Whole Time Director)

Executive & Non - 16-04-2004 Mr. Yashwant Vaswani Member Independent Director (Whole Time Director)

Non-Executive & 01-04-2009 Mr. Lekhu Mulchandani Member Independent Director

Non-Executive & 01-04-2009 Mr. Ashok Suri Member Independent Director

Non- Executive & 01-04-2009 Mr. Sunny Saini Member Independent Director

12. AUDIT COMMITTEE

Your Company has an Audit Committee at the Board level. The Committee acts as a link between the management, the statutory auditors and the Board of Directors and oversees the financial reporting process. The Chairman of the Committee is an independent director with sound financial and accounting knowledge.

The details of composition of the Committee are as follows:

Mr. Lekhu Thadharam Mulchandani Chairman Non - Executive & Independent Director

Mr. Sunny Saini Member Non - Executive & Independent Director

Mr. Pramod Vaswani Member Executive & Non- Independent Director (Whole Time Director)

13. AUDITORS

The Auditors, M/s Sunil John & Associates, Chartered Accountants, Raipur will retire at the conclusion of the ensuing Annual General Meeting and they, being eligible, have offered themselves for reappointment. The shareholders are requested to reappoint the Auditors for the current year.

14. AUDITORS REPORT (QUALIFICATIONS/ COMMENTS)

The Observations made by the Statutory Auditors in their report, read with relevant notes to accounts, are self- explanatory. The following are the explanations to the qualifications of auditors in their report for the year ended 31st March, 2010.

(a) During the year the Company has not produced M.S. Ingots, due to high profit margin in power generation.

(b) In view of long standing relationship with particular enterprises your Company. enjoys credit period higher than the period prescribed by law and outstanding dues are paid accordingly. However your Company would ensure that the outstanding dues to these parties would be minimize over a period.

(c) Confirmation from creditors regarding certain disclosure relating to Micro/ Small/Medium Enterprises is in process. In next year your company would ensure the bifurcation relating to Micro/Small/Medium Enterprises.

15. CONSERVATION OF ENERGY & TECHNICAL ABSORPTION & FOREIGN EXCHANGE EARNIING OUTGO

In accordance with the requirements of section 217 (i) (e) of the companies Act, 1956 read with the companies (disclosure of particulars in report of Board of Directors) rules 1988, a statement showing the information relating to the Conservation of Energy, Research and Development,Technology absorption and foreign exchange earning and is enclosed in form- A and should be treated as a part of this report.

16. PUBLIC DEPOSITS

The Company has not accepted Public Deposit within the meaning of Section 58A of the Companies Act, 1956 after complying necessary formalities. There are no overdue or unclaimed deposits.

17. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement Under Section 217(2AA) of the Companies Act 1956, with respect to Directors, Responsibility Statement, it is hereby confirmed that:-

(i) In the preparation of the Annual Accounts, the mandatory Accounting Standards as referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, has been followed and there were no material departures.

(ii) Appropriate accounting policies have been selected and applied consistently and have 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 on 31st March 2010 and the profit of the company for the year ended 31st March 2010.

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) The Annual Accounts for the financial year ended 31st March, 2010 have been prepared on going concern basis.

18. ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for the continued assistance and support extended by various Government authorities, Companys bankers, consultants, auditors, suppliers, customers and all its esteemed shareholders of the Company during the year under review.

Your Directors also wish to place on record their deep sense of appreciation to the committed services and support of the executives, staff and workers of the Company.

For and on behalf of the Board of Directors

Ravi Vaswani Pramod Vaswani (Managing Director) (Whole- time Director)

Place: Raipur (C.G.) Date : August 30,2010

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