TO
THE MEMBERS,
Your Directors have pleasure in presenting the 33rd Directors' Report on the business and operations of your Company together with the audited statement of accounts for the financial year ended 31st March, 2023.
FINANCIAL RESULTS
The Company's financial performance for the year ended March 31,2023 is summarized below:
PARTICULERS
Sales/Others receipts
Profit before depreciation and Taxation
Less: depreciation
Profit after depreciation
Less: Provision for Taxation
Income Tax on extraordinary items
Current Year
Deferred Tax
Previous Year Tax
Profit after Taxation
Add: Profit brought forward
Less: Transfer to General Reserve
Profit available for appropriation
Dividend & Tax on dividend
Surplus carried to Balance Sheet
COMPANY'S BUSINESS GROWTH AND PROSPECTS
The total income for the financial year 2022-23 has increased to Rs. 18694.45 Lakhs, as against Rs. 18030.64 Lakhs in the previous year, and the profit after tax has increased to Rs. 318.87 Lakhs in the financial year 2022-23, from Rs. 158 Lakhs in the financial year 2021-22.
DIVIDEND
In terms of the Dividend Distribution Policy of the Company and as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR"), equity shareholders of the Company may expect dividend if the Company is having surplus funds and after taking into consideration the
relevant internal and external factors as mentioned in the said Policy. Accordingly, considering the cash position, fund requirements for growth of business of your Company and agreement with the Lenders, the Board of Directors has not recommended any dividend for the financial year ended 31st March, 2023.
The Dividend Distribution Policy is available on Company's website at the following link:
https://www.qualitygroup.in/wp-content/uploads/2023/01/DIVIDEND-DISTRIBUITIQN-
POLICY.pdf
TRANSFER TO RESERVES
During the reporting financial year, the company has transferred Rs. 70.00 Lakhs to General Reserve for issuing Bonus Shares to the existing shareholders of the company.
SHARE CAPITAL
During the financial year 2022-23, the Authorize shared Capital of the Company was increased from Rs. 2,00,00,000/- divided into 20,00,000 Equity Shares of Rs. 10/- each to Rs. 4,00,00,000 /- divided into 40,00,000 Equity Shares of Rs. 10/- vide shareholders' resolution dated November 12,2022.
The company increased its paid up share capital from Rs. 140 Lakh to Rs. 210 Lakhs by issuing Bonus shares in the ratio of 1:2 to its existing shareholders, as per the special resolution passed in the EGM held on 12th November, 2022. Subsequently, the paid up share capital further increased to Rs. 285.4 Lakh as the company issued and allotted shares in its initial public offer, following the resolutions passed by the shareholders on 19th December, 2022 and 21st March, 2023 respectively.
CHANGE IN NATURE OF BUSINESS
There was no change in nature of business during the year under review.
DEPOSITS
As per Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rule, 2014, your company did not accept any new deposit in the financial year ending on 31.03.2023. However, the company renewed some of the existing deposits during the year. Your company also repaid all the outstanding deposits by 30th June, 2023.
The details relating to deposits, covered under Chapter V of the Act are provided hereunder:
1. Accepted during the year: Nil
2. Remained unpaid or unclaimed as at the end of the year: Rs. 1,50,00,000/-
3. Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved: - no default has been made and hence these details are not applicable:
a) at the beginning of the year: Not Applicable
b) during the year: Not Applicable
c) at the end of the year: Not Applicable
d) The details of deposits, not in compliance with the requirements of Chapter V of the Act: Nil TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
During the period under review, there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF). Therefore, this clause is not applicable on Company.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS BY THE COMPANY UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The particulars of loans, guarantees and investments by your Company, as required under Section 186 of the Act are stated in Notes to Accounts of the financial statements, forming part of the Annual Report.
INTERNAL FINANCIAL CONTROL
The company has in place adequate internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable material weakness in the design or operation was observed.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has a Vigil Mechanism & Whistle Blower Policy to report genuine concerns or grievances. The Vigil Mechanism & Whistle Blower Policy has been posted on the Company's website which may be accessed on the Company's website at the link:
https: / /www.qualitvgroup.in/wp-content/uploads/202 3/05/Vigil-Mechanism-Policv.pdf RISK MANAGEMENT
The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management controls riskthrough means of a properly defined framework. The Company has also devised a Risk Management Policy for identification of elements of risks and procedures for reporting the same to the Board.
COVID-19 IMPACT
The Company is closely monitoring the impact of the COVID-19 pandemic and believes that there will not be any adverse impact on the long term operations and performance of the Company.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, asrequired to be disclosed under the Act, are provided in Annexure A to this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with Section 134 (5) of Companies Act, 2013 the Board of Directors confirms that:
1) in the preparation of the annual accounts for the year ended March 31, 2023 the applicable Indian accounting standards (IND-AS) read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
2) the Directors have 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;
3) the Directors have 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;
4) the Directors have prepared the annual accounts on a going concern basis;
5) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
6) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES REFERRED TO IN SUB SECTION (1) OF SECTION 188 IN THE PRESCRIBED FORM
The Company has formulated a Policy on Related Party Transactions and manner of dealing with related party transactions which is available on the Company's website. All related party transactions entered into during FY 2022-23 were on an arm's length basis and in the ordinary
course of business.
The disclosure as required under Section 134(3) (h) of the Act in form AOC-2, of related party transactions entered during the financial year 2022-23,, is provided in Annexure B to this report
The Policy on materiality of related party transactions may be accessed on the Company's website at the link: https://www.qualitygroup.in/wp-content/uploads/2023/01/PQLICY-0N-DEALING-WITH- RELATED-PARTY-TRANSACTIONS.pdf
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Kuldip Bhargava having DIN: 00011103 re-designated as Chairman cum Executive Director for a term of 5 years vide resolution passed by the board in their meeting held on November 15,2022.
Mr. Sumant Bhatnagar having DIN: 00341026; Mr. Rajinder Kedia having DIN: 06972312 and Ms. Uma having DIN: 08473881 have been appointed as non-executive Independent Directors of the Company for a term of 5 years vide resolution passed by the board in their meeting held on November 26, 2022.
Mr. Birdhi Chand Jain has been appointed as Chief Financial Officer and Ms. Meenakshi has been appointed as Company Secretary and Compliance Officer of the Company vide resolution passed by the board in their meeting held on October 20,2022.
DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors of the Company had given the declaration under Section 149(7) of the Act that they meet the criteria of independence as provided in Section 149(6) of the Act read with the Rules framed thereunder and Regulation 16 of SEBI LODR. The Independent Directors have also confirmed that they have complied with the Company's Code of Conduct for Board Members and Senior Management Further, all the Directors have also confirmed that they are not debarred to act as a Director by virtue of any SEBI order or any other authority. The Company has received a declaration from the Independent Directors that their name is included in the data bank.
Your Company has also devised a Policy on Familiarization Programme for Independent Directors which aims to familiarize the Independent Directors with your Company, nature of the industry in which your Company operates, business operations of your Company etc. The said Policy may be accessed on your Company's website at the link: https://www.qualitygroup.in/wp-
content/uploads/2023/01 /FAMIT.IARTZATION-PROGRAMME-FOR-TNDEPENDENT-DTRECTORS.pdf
PERFORMANCE EVALUATION
The Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors. The evaluation of all the Directors and the Board as whole was conducted based on the criteria and framework adopted by the Board.
The policy of the Company on Directors' appointment and remuneration, adopted by the Board, may be accessed on your Company's website at the link: https://www.qualitygroup.in/wp- content/uploads/2023/01 /POI,TCY-ON-NOMINATION-AND-RKMI JNKRATION-COMMITTKK.pdf
COMMITTEES OF THE BOARD
Audit Committee
The Audit Committee (the "Committee") was constituted by the Board of Directors at their meeting held on November 26, 2022 in accordance with the Section 177 of the Companies Act, 2013 and Rule 6 of the Companies (Meeting of board and its powers) Rule, 2014.
Composition of Audit Committee:
Name of the Director
Mr. Rajinder Kedia
Mr. Sumant Bhatnagar
Mr. Tejasvi Bhargava
Stakeholders Relationship Committee
The Stakeholders Relationship Committee was constituted by the Board of Directors at their meeting held on November 26, 2022 in accordance with the Section 178(5) of the Companies Act 2013.
Composition of Stakeholders Relationship Committee
Mr. Kuldip Bhargava
Nomination and Remuneration Committee
The Nomination and Remuneration Committee has constituted by the Board of Directors at their meeting held on November 26, 2022 in accordance with the Section 178 of the Companies Act 2013.
Composition of Nomination and Remuneration Committee
Ms. Uma
Corporate Social Responsibility fCSRl Committee:
As the provisions of Sec-135 of the Companies act, 2013 are not applicable on the Company Therefore Company is not required to constitute CSR Committee.
BOARD MEETINGS
The Board meets at regular intervals to discuss and decide on Company / Business policy and strategy. The gap between any two consecutive meetings was within the limit prescribed under the Act and SEBI LODR. The necessary quorum was present during all the meetings.
During the financial year 2022-23, the board of directors held a total of 13 meetings. Out of these meetings, 12 were held physically while one board resolution was passed by circulation. The respective dates of the Board Meetings and Number of Directors who attended the meeting during the mentioned Period are as follows:
Serial No.
1
2
3
4
5
6
7
8
9
10
11
12
GENERAL MEETINGS:
During the financial year ended 31st March, 2023, Total 4 meetings of shareholders were held for seeking approval of shareholders. The respective dates and types of Shareholder's meeting are as follows:
Sr.
No.
STATUTORY AUDITORS AND AUDITOR'S REPORT
The existing Statutory Auditors M/s. V S Jain and Associates, Chartered Accountants, Hisar (Firm Registration No.03533N] were duly appointed for a period of 5 years in the Annual General Meeting
duly held on 30-09-2019 i.e., upto the Annual General Meeting to be held in the year of 2024.
The report of the Statutory Auditors on the Balance Sheet and Profit and Loss Account for the year ended on 31-03-2023 is self-explanatory and does not require any statement from the Company. Furthermore, the Auditors' Report does not contain any qualification, reservation or adverse remark.
SECRETARIAL AUDITORS
M/s. Rajesh Garg & Co., Practicing Company Secretaries, Hisar (FCS No. 5960) was appointed by the Board as Secretarial Auditor, to conductthe Secretarial Audit of the Company for the financial year 2022-23.
The Secretarial Audit Report for financial year 2022-23 forms part of the Annual Report as Annexure-C to the Board's report The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
INTERNAL AUDITORS
Pursuant to the provisions of Section 138 of the Act and the Companies (Accounts) Rules, 2014, on the recommendation of the Audit Committee, Mr. Kapil Mittal, Chartered Accountant was appointed by the Board of Directors to conduct internal audit for the financial year 2022-23.
COST AUDITORS
On the recommendation of the Audit Committee, the Board has appointed M/s. N. R. Goyal & Company, Cost Accountants, Delhi having Firm Registration No. 101252 with the Institute of Cost Accountants of India, as the Cost Auditor of the Company for conducting the Cost Audit of the Company for the financial year 2023-24 in the Board Meeting duly held on 23rd May, 2023 and the remuneration to be paid to Cost Auditors as recommend and approved by the Board, proposed to be ratified in the forthcoming Annual General Meeting of the Company.
COST RECORDS
Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is required by the Company and accordingly such accounts and records are made and maintained.
ANNUAL RETURN
As provided under Section 92(3) & 134(3)(a) of the Act, Annual Return for FY 2022-23 is uploaded on thewebsite of the Company at www.qualitygroup.in
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
There was no such employee of the Company who is covered under provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel] Rules, 2014.
The Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure D to this Report
CORPORATE GOVERNANCE
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Your Company has complied with all the mandatory provisions of corporate governance of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Your company is committed to maintain the highest possible standards of Corporate Governance. Being a SME listed entity a separate report on Corporate Governance along- with Auditors' certificate in this regard is not required to be provided.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forms part of the Annual Report as Annexure E to the Board's report.
STOCK EXCHANGES WHERE THE SECURITIES ARE LISTED
SME Exchange of National Stock Exchange of India Ltd., ("NSE Emerge")
Exchange Plaza, 5th Floor, Plot No. C/l,
G-Block, Bandra-Kurla complex,
Bandra (E), Mumbai - 400 051
COMPLIANCE OF GUIDELINES OF SEBI/STOCK EXCHANGE
We have duly complied with all the applicable guidelines issued by SEBI/Stock Exchange. SECRETARIAL STANDARDS OF ICSI
The Directors have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems were adequateand operating effectively.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT
Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year and date of this report.
STATEMENT OF DEVIATION OR VARIATION
As per Regulation 32 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations,
2015, there is no deviation or variation in the use of funds raised through Public Issue of Equity Shares from the objects stated in the Prospectus of the Company.
INDUSTRIAL RELATIONS
Industrial relations continued to be cordial during the year under review.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report ("BRR"] as per the requirements of Regulation 34(2](f) of the SEBI LODR is not mandatorily required to be given by Companies which have listed their specified securities on the SME Exchange. Your Company has not voluntarily adopted disclosure requirement of the Business Responsibility Report.
POLICY ON PREVENTION OF SEXUAL HARASSMENT
Your Company has in place a policy on prevention of sexual harassment at workplace in accordance with the provisions of Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013 ("POSH Act"]. The policy aims at prevention of harassment of women employees and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy.
Further, in terms of the provisions of the SEBI LODR, the details in relation to the POSH Act, for the financial year ended on 31st March, 2023 are as under:
a] Number of complaints pertaining to sexual harassment filed during the financial year: NIL
b] Number of complaints pertaining to sexual harassment disposed off during the financial Year: NIL
c] Number of complaints pertaining to sexual harassment pending as at the end of the financial year: NIL
The policy of the Company on Prevention of Sexual Harassment, as adopted by the Board, may be accessed on your Company's website at the link: https://www.qualitygroup.in/wp-
content/uploads/2023/Ol/POLICY-ON-PROTECTION-OF-WOMEN-FROM-SEXUAL- HARASSEMENT.pdf
OTHER DISCLOSURES
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1] There was no issue of equity shares with differential rights as to dividend, voting or otherwise.
2) There was no issue of shares (including sweat equity shares) to the employees of the Company under any scheme.
3) No application has been admitted against the Company under the Insolvency and Bankruptcy Code, 2016.
4) There was no instance of one time settlement with any bank or financial institution.
5) Company does not have any subsidiary.
6) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.
7) There are no shares in the demat suspense account/unclaimed suspense account of the Company.
THE STATEMENT CONTAINING ADDITIONAL INFORMATION AS REQUIRED IN SCHEDULE V OF THE COMPANIES ACT, 2013.
I. General Information:
1) Nature of Industry
Steel: The Company is engaged in the Manufacture and sale of stainless steel Cold rolled Stainless Steel (CR) Strips/ Coils and Stainless Steel Flexible hose pipes etc.
2) Date of commencement of commercial production
N.A. since the Company has already commenced its business activities
3) In case of new companies, expected date of commencement of activities as perproject approved by financial institutions appearing in the prospectus: Not
applicable
4) Financial performance based on given indicators (Rs. In lakhs)
Particulars
Total Income
Profit before depreciation and tax
Depreciation
Profit before tax
Tax Expense
Profit after tax
Equity capital (face value Rs. 10/-)
Earnings per share (Rs.) (face value Rs. 10/-)
5) Foreign investments or collaborators, if any:
The Company did not have any foreign investment or collaboration.
II. Information About Managing Director:
1) Background Details
Aged about 44 years, is a Graduate from New Delhi with an MBA from TUV London and management courses from IIM Ahmadabad, he has extensive and diverse experience in business and the steel industry.
2) Past Remuneration
Financial Year
2022-23
2021-22
2020-21
2019-20
2018-19
3) Recognition or Awards
Mr. Tejasvi Bhargava is well recognized for his leadership, visionary, and entrepreneur skills in managing business activities and has been efficiently managing overall affairs of the Company.
4) Job Profile and his Suitability
Mr. Tejasvi Bhargava was inducted in 2003 as a member of the Board and become Managing Director of the Company with effect from August 8, 2015 and further reappointed as Managing Director for a term of 5 years with effect from March 01, 2021. He has an extremely rich experience in the steel industry. Mr. Tejasvi Bhargava is responsible for the overall conduct and management of business and affairs of the Company. This includes broad development of business; providing strategic direction to the business units of the Company; review of product portfolio and continual introduction of new products; enhancement of manufacturing efficiencies and rationalization of costs. The Company has registered an incredible growth under his leadership.
5) Comparative remuneration Profile with respect to Industry, size of the Company, profile of the position and person
The remuneration is much below the prevailing remuneration in the industry of similar size for similarly placed persons.
6) Pecuniary relationship directly or indirectly with the Company, or relationship withthe managerial personal, if any.
Apart from their remuneration in the capacity of Managing Director, Mr. Tejasvi Bhargava, has also provided unsecured loan during the year to the Company @ 9% p.a. (Outstanding as on 31-03-2023 is Nil). He also holds 123600 shares in the Company.
III. OTHER INFORMATION:
1) Reasons of loss or inadequate profits: The Company has been profitable since its inception. However, it may have faced low profits at times due to following reasons:
Competition;
Pressure on pricing;
High Interest rates.
2) Steps taken or proposed to be taken for improvement
To launch new products;
Reduce break-even;
Enhance performance ethics;
Leadership and outsourcing;
Specialization.
3) Expected increase in productivity and profit in measurable terms.
The above steps taken/proposed to be taken by the Company are expected to increase the productivity and profits of the Company.
ACKNOWLEDGEMENT
The Board of Directors thanks and deeply acknowledge the co-operation, assistance and support provided by all the stakeholders' viz., workers, shareholders, bankers, customers, dealers, vendors, Government and Regulatory agencies.
For and on behalf of the Board of Directors
Date: July 5, 2023
Place: Hisar