Dear Shareholders,
The Board of Directors are pleased to present the 4th Annual Report of the Company together with its Audited Financial Statements for the Financial Year (‘FY') ended March 31,2024.
FINANCIAL PERFORMANCE
During the year under review, the performance of your Company was as under:
(Amount in Lakhs)
STATE OF COMPANY'S AFFAIRS
The Company is engaged in the business of trading of couplers, threading services and crimping services for couplers, trading, importing and exporting of engineered construction products, MS products and construction machinery and spares. Your Company has achieved a total income of Rs. 2217.41/- Lakhs during the year under review as against Rs. 1309.62/- Lakhs in the previous financial year. The net profit after tax of the Company for the year under review is Rs. 57.29/- Lakhs as compared to profit of Rs. 75.34/- Lakhs for the previous year. The net profit before tax for the year under review is Rs. 79.59/- Lakhs as compared to profit of Rs. 101.45/- Lakhs for the previous year.
FUTURE OUTLOOK
Our continuous focus on providing quality products and services consistently to our customers has helped us nurture long-term relationships with them. Our track record of delivering timely services and demonstrated industry expertise has helped in forging strong relationships with them. We have a history of high customer retention and derive a significant proportion of our revenue from repeated business.
We intend to leverage our design and engineering capabilities to increase our focus on advanced products. We believe that high value added and technology driven components will provide us with early- mover advantages and higher profit margins, thus giving us the opportunity to consolidate our position with our customers. We believe that the construction industry is evolving rapidly both in terms of products and also in terms of quality. We would keep upgrading our product portfolio to meet this every changing dynamic, to further improve the quality of our products and our introducing technology-oriented products and to add new products to our portfolio. For instance, we are testing Grouting couplers a product used in precast concrete structure for mechanical splicing of joints Saves cost and time in construction. Further, these grouting couplers can be customised to meet our customer specifications. We believe that an expanded product portfolio will assist us in developing long-term relationships with our customers.
Our Company intends to focus on adhering to the quality standards of the produc?s and Services. This is necessary so as to make sure that we get repeat orders from our customers. Quality of the product and services is very important for the company from both customer and regulatory point of view. Providing the desired and quality products help us in enhancing our reputation and maintaining long term relationships with customers. We conduct quality testing from IIT, Kanpur as well as we have started with international testing of our products.
CHANGE IN NATURE OF BUSINESS
There has been no change in nature of the Business during the year under review.
DIVIDEND
With a view to conserve the resources for expansion of the business activities and working capital requirements of the Company, the board of directors of the Company have not recommended any dividend for the year under review (Previous Year: Nil). There is no unclaimed/unpaid Dividend within the meaning of the provisions of Section 125 of the Companies Act, 2013.
There is no unclaimed/unpaid Dividend within the meaning of the provisions of Section 125 of the Companies Act, 2013.
DEPOSITS
The Company has not accepted deposits from the public during the year under review. No deposits were outstanding at the beginning or at the closure of the financial year under review.
MAJOR EVENT OCCURRED DURING THE YEAR INCLUDING CHANGES IN SHARE CAPITAL
During the year following major events occurred:
Acquisition of M/s Kosmo Ventures, a proprietorship of Mrs. Bindi Kunal Mehta
The Company acquired the running business of M/s Kosmo Ventures, proprietorship Concern of Mrs. Bindi Mehta on January 31, 2023 against the allotment of 51,890 equity shares at issued price of Rs. 168.11/- per share. Further, with the acquisition of M/s. Kosmo Ventures we have also ventured into supply of Steel Products thus diversifying our products offerings which helps our Company in cross selling and up-selling of products within our existing customer.
Issue of Bonus Shares
During the year the Company has issued and allotted 17,28,360 equity shares as the Bonus shares in the ration of 15 Equity Shares for every 1 Equity Share held in our Company.
Change of Name and Object
During the year the name of the company has been changed to Vruddhi Engineering Works Limited from Vruddhi Steel Limited. Further the Company has also changed its main object by addition of new clause as a diversification plans of the Company.
INITIAL PUBLIC OFFER (IPO)
During the year, your Company has debuted in the capital market by making an "Initial Public Offer of 6,80,000" Equity Shares to the public at large via Prospectus. The Issue was opened for subscription on March 26, 2024 and closed on March 28, 2024 and subsequently, the shares of the Company has been listed on the BSE SME Platform dated April 03, 2024. Further, the Directors placed on record their appreciation of contributions made by the entire IPO team with all the dedication, diligence and commitment which led to successful listing of the Company's equity shares on the BSE SME platform. Further, the success of the IPO reflects the trust and faith reposed in Your Company by the Investors, customers and business partners and your directors thank them for their confidence in Your Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Particulars of loans, guarantees or investments pursuant to Section 186 of the Companies Act, 2013 are provided in the notes to the financial statements.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have subsidiary company, joint venture or associate companies during the year.
There is no company, which has ceased to be Company's subsidiary, joint venture or associate company during the year. The Company does not require to prepare consolidated financial statements.
CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
The composition of the Board of Directors and Key Managerial Personnel underwent changes set out below:
During the year under review:
> The Designation of Mrs. Varsha Mukesh Mehta was changed to Director from additional director and later on re-designated as the Whole-time Director of the Company.
> The Designation of Mr. Karan Manoj Doshi, Ms. Shivani Kumari Joshi and Mrs. Ankita Rohan Kothari were changed to Director from Additional Director.
> Mrs. Kishori Jaysingh Sodha was appointed as the Company Secretary and Compliance officer of the Company w.e.f. July 01, 2023.
Subsequent changes in composition till the date of this Report:
> Mrs. Hiral Rushang Gandhi was resigned from the post of CFO of the Company w.e.f. August 28, 2024.
> Mrs. Yogita Ramesh Kadam was appointed as the CFO of the Company w.e.f. August 28, 2024.
> Mr. Vedant Mukesh Mehta, Whole-time Director, being longest in office, retires by rotation and being eligible, offers himself for reappointment.
STATEMENT ON DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations from each of the Independent Directors to the effect that they respectively meet the criteria of independence as stipulated under Section 149 (6) of the Companies Act, 2013 read with the schedules, rules made thereunder and Regulation 16(1) (b) and Regulation 17 of the Listing Regulations. The Board has assessed the veracity of the same to their satisfaction. The Board of Directors have satisfied themselves about the integrity, expertise and experience (including the proficiency) of the independent directors of the Company.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
Pursuant to Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the Nomination and remuneration policy for the Directors, Key Managerial Personnel and Senior Management Personnel as per Section 178(3) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended from time to time is available on the website of the Company i.e. www.vruddhicouplers.com under investor section.
PARTICULARS OF REMUNERATION OF DIRECTORS / KMP / EMPLOYEES
Disclosures required pursuant to the provisions of Section 197(12) of the Act read with Rule 5(1) is not applicable to the Company during the Financial Year under review. The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under, Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary and Compliance Officer of the Company.
NUMBER OF MEETINGS OF THE BOARD
During the year under review, the Board of Directors of the Company duly met 14 (Fourteen) times. The applicable details of these Board meetings including the attendance of the Directors at those meetings are given in the report on Corporate Governance which forms part of the Annual Report.
COMMITTEES OF THE BOARD
The Company has the following 3 (Three) Board Committees which have been established in compliance with the requirement of applicable law(s) and statute(s) and function accordingly:
> Audit Committee
> Nomination and remuneration Committee
> Stakeholders Relationship Committee
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The Board adopted the evaluation performed by the Independent Directors on the Board's performance carried out in accordance with the requirements of LODR Reg. 25(4)(a). which took into account factors like ‘compliances with the provisions of the applicable act(s), rules, regulations' and ‘corporate governance norms'. Satisfaction has been recorded about the performance based on the aforesaid criteria. The performance of the Committees was adjudged based on the criteria like ‘adequacy of composition, execution and performance of specific duties, obligations and governance, quorum,
compliance with procedures applicable for the conduct of meetings, and review of the recommendations and decisions of the committees. The Board records its satisfaction about the performance of all the committees of the Board. The performance evaluation of Chairperson of the Company has been carried out by the Independent Directors in accordance with LODR Reg. 25(4)(b) and stands duly adopted by the Board. The performance evaluation of non-independent directors has been carried out by the Independent Directors in accordance with LODR Reg. 25(4)(a) and it has been likewise adopted by the Board. The remaining members of the Board were evaluated at the Board Meetings based on various parameters like attendance, level of their engagement, contribution, independency of judgment, contribution in safeguarding the interest of the Company and other relevant factors.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms that:
> In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;
> They 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;
> They 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;
> They had prepared the annual accounts on a going concern basis;
> They 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
> They had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
AUDITORS AND THEIR REPORTS Statutory Auditor
Pursuant to the provisions of Section 139 of the Companies Act, 2013 and rules made thereunder, M/s. Maheshwari & Co., Chartered Accountants (FRN: 105834W), is appointed as the Statutory Auditor of the Company at the Annual General Meeting held on September 30, 2023, to conduct statutory audit till the conclusion of Annual General Meeting of the Company to be held in 2028.
The Auditor's Report for the financial year ended 31st March, 2024 does not contain any qualification, adverse remark, reservation or disclaimer and therefore, does not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.
Secretaria! Auditor
M/s. Krushang Shah & Associates, Practicing Company Secretaries, is appointed as the Secretarial Auditors, to conduct the audit of secretarial records of the Company for the financial year ended on March 31, 2024 pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by him in the prescribed form MR- 3 is annexed to this Report as Annexure-1.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls in order to ensure that the financial statements of the Company depict a true and fair position of the business of the Company. The Company continuously monitors and looks for possible gaps in its processes and its devices and adopts improved controls wherever necessary.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
Except described below, there has been no material changes and commitments, that affect the financial position of the Company from the end of the financial year of the Company to which the financial statements relate till the date of the directors' report.
During the Year under review, your Company has decided to debut in the capital market by making Initial Public Offer of 6,80,000 (Six Lakhs Eighty Thousand) Equity Shares at Issue Price of Rs. 70/- per share (which includes Face Value of Rs.10/- and premium of Rs.60/-) which was opened for subscription on March 26, 2024 and closed on March 28, 2024.
Accordingly, your Company by passing a Board Resolution dated April 01, 2024 has made an allotment of the above-mentioned equity shares as subscribed through Initial Public Offer and listed on BSE SME Platform dated April 03, 2024.
RISK MANAGEMENT
The Board of your Company has adopted Risk Management plan to create and protect shareholders value by identifying and mitigating major operating, and external business risk. Currently the board is responsible for reviewing the risk management plan and ensuring its effectiveness. The Company recognizes that the emerging and identified risks need to be managed and mitigated to (a) protect its shareholders and other stakeholders' interest; (b) achieve its business objectives; and (c) enable sustainable growth.
The details of various risks that are being faced by the Company are provided in Management Discussion and Analysis Report, which forms part of this Report.
ANNUAL RETURN OF THE COMPANY
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return as on 31st March, 2024 is available on the Company's website i.e. www.vruddhicouplers.com under investor section.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. The information on transactions with related parties, compiled in Form AOC-2, appears at "Annexure 2" to this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under Sub-section (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, appears at "Annexure 3" to this report.
CORPORATE GOVERNANCE REPORT
The provisions mentioned in para C, D and E of Schedule V are not applicable to our Company. However, the Company has voluntarily attached report on "Corporate Governance" except a certif?cate from a company secretary in practice that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority and Compliance certificate from either the auditors or practicing company secretaries regarding compliance of conditions of corporate governance shall be annexed with the directors' report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report, highlighting the important aspects of the business of the Company appears separately in the Annual Report.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company provides an avenue to the Directors and Employees of the Company to report without fear any instance of actual or suspected violation, wrong doings or any illegal or unethical or improper practice which may adversely impact the image and / or the financials of the Company. For this, the Company has in place a Vigil Mechanism Policy (Whistle Blower Policy) for Directors and employees to report genuine concerns.
This provides for adequate safeguards against victimization of employees and Directors who wish to use the vigil mechanism to bring any wrong deed(s) to the notice of the Company.
During the year under review, the implementation of the vigil mechanism has been properly and regularly monitored by the Audit Committee. However, no complaints or instances in this regard have been reported. The said policy is available on the Company's Website i.e. www.vruddhicouplers.com under investor section.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
No complaints pursuant to the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 have been received during the year under review. Further, the Company did not require to constitute Internal Complaints Committee under the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
GENERAL
Your directors state that no disclosure or reporting is required in respect of the following matters under the
Companies Act, 2013, and SEBI Regulations either on account of absence of any transaction or the
inapplicability of the provisions:
> Reporting of fraud(s) by the Auditors within the meaning of Section 143(12) of the Companies Act, 2013.
> The Company has not transferred an amount to capital reserve during the year.
> Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013.
> 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.
> Regulation 32 (4) of SEBI LODR Regulations regarding explanation for the variation in the utilisation of money raised by public issue.
> Disclosure pursuant to section 43(1) read with Rule 4(4) of Companies (share capital and debenture) rules, 2014 regarding issue of equity shares with differential rights.
> Details of any scheme for providing money for the purchase of shares of the Company by employees for the benefit of employees.
> Issue of shares (including sweat equity shares) to the employees of the Company under any scheme.
> Performance and Financial position of the Subsidiary Companies /Joint Venture/ Associate company.
> The company has not bought back any of its securities/ not issued any sweat equity shares / not provided any Stock Option Scheme to its employees / not issued any equity shares with differential rights.
> Details of policy developed and implemented on corporate social responsibility.
> Receipt of any commission from the Company or remuneration from any of its subsidiary by the Managing Director or the Whole time Directors of the Company as per section 197(14).
> Revision in the financial statements (apart from regrouping adjustments) or directors' report in any of the three preceding financials years.
> Significant or material orders passed by the regulators, courts, tribunals impacting the going concern status and Company's operations in future.
> There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.
ACKNOWLEDGMENT
Your directors place on records their gratitude to the Central Government, State Governments and Company's Bankers for the assistance, co-operation and encouragement they extended to the Company. Your directors also wish to place on record their sincere thanks and appreciation for the continuing support and unstinting efforts of investors, vendors, dealers, business associates and employees in ensuring an excellent all around operational performance.