DIRECTORS' REPORT Dear Members, Your Directors present their 28th Annual Report and the Company's Audited Accounts for the financial year ended 31st March, 2015. OPERATIONS During the year under review, though the gross revenue declined to Rs. 51296.63 lacs as against Rs. 61322.72 lacs in the previous year by 16.35% mainly due to strategic decision to reduce the lower margin and working capital intensive trading activities and focus mainly on production activities, operating profit (EBIDTA) improved to Rs. 2841.59Lacs as against Rs. 1304.65 Lacs in the previous year by 118%. The net profit after tax for the year was Rs. 212.06 lacs as against loss of Rs. 1257.37 lacs in the previous year; DIVIDEND Keeping in view the need for strengthening financial soundness of the company and considering accumulated losses, the Directors regret their inability to declare any dividend on Preference Shares as well as on Equity Shares of the Company during the year under review. FINANCE (i) Share Capital The paid-up Equity Share Capital as on 31st March, 2015 was Rs. 3980.80 Lacs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. (ii) Fixed Deposits The Company has not accepted any deposits from the shareholders or public under applicable provisions of the Companies Act 2013 or rules made there under. (iii) Particulars of loans, guarantees or investments During the year under review, the inter-corporate loans of Rs. 3.83 lacs has been refunded to the Company on 25th day of May,2015 and no other loan is outstanding. The company has also not provided any loan or guarantee directly or indirectly to any person or body corporate, during the year under review. The Company also has not invested in the securities of any other Company during the year under review. (iv) Revaluation of Assets During the year company has revalued factory land at Khopoli by Rs. 7413. 22 Lacs. CORPORATE SOCIAL RESPONSIBILITY The Company believes in development which is beneficial for the society at large.As per the relevant provisions of the Companies Act, 2013, the Company is not required to incur any expenditure in pursuance of CSR Policy. The Company has voluntarily incurred Rs. 4.75 Lacs making Donation for educational support to underprivileged students from poor town ,remote rural and conflict afflicted communities In Khopoli Town Area, Distrubution of Books & Note Book etc.,Blood Donation Camp, Scholership to Brilliant Students etc. VIGIL MECHANISM / WHISTLE BLOWER POLICY Pursuant to Section 177(9) of the Companies Act, 2013 and clause 49 of the Listing Agreement, the Company has adopted a Whistle-Blower Policy, whereby employees are free to report violations of laws, rules, and regulations, or unethical conduct to the Audit Committee. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company can be accessed at <http://www.indiasteel.in/pdfs/> Vigil%20Mechanism%20Policy%20&%20Whistle%20Blower%20Mechanism.pdf. During the year the Audit Committee has not received any reference under the policy. RISK MANAGEMENT POLICY The Company has a risk management policy to identify, mitigate elements of risk, if any, which in the opinion of the Board may threaten the existence of the company. The Board of Directors and senior management team assess the operations and operating environment to identify potential risks and take necessary mitigation actions. RELATED PARTIES CONTRACTS OR ARRANGEMENTS: The Company has made materially significant Related Party Transactions, as approved by the non-interested shareholders at the 27th Annual General meeting of the Company. Further the said material related Party Transactions made during the year under review were on an arm's length basis and in the ordinary course of business. Required disclosures are made in Annexure-D. On the recommendation of the Audit Committee, the Board of Directors has adopted a policy on Related Party Transactions, which is also uploaded on the website of the Company www.indiasteel.in under the head 'Investor Relations' and the weblink is provided in the Corporate Governance Report. The Policy envisages the procedure governing related party transactions required to be followed to ensure compliance with the applicable laws and regulations as well as to ensure that the Related Party Transactions are managed and disclosed in accordance with the legal and accounting requirements. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. DIRECTORS (i) Appointment Mr.T.R Bajalia, Mr. Gaurav Chhabria have been appointed as additional Directors independent of Management (in the category of Independent Directors) subject to approval of the Share holders of the Company are proposed for appointment as Independent Directors for a period of 5 years with effect from 13th february,2015. The Board has also appointed Mr. S. P. Khosla, existing Independent Director for a period of 2 years with effect from 13th february,2015 subject to the approval of the Share holders of the Company. The Board has also appointed Mrs. Kavita R. Joshi additional Director independent of Management (in the category of Independent Directors) subject to approval of the Share holders of the Company is proposed for appointment as Independent Directors for a period of 5 years with effect from 30th May, 2015. Further the details of the above Directors are given in the Corporate Governance Report as well as in the Notice of the Annual General Meeting. In accordance with the provisions of the Companies Act, 2013 the Directors Liable to retire by Rotation as provided in the notice are eligible for reappointment. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Attention of the Members is invited to the relevant items in the Notice of the Annual General Meeting seeking your approval to the aforesaid appointments. (ii) Resignation Mr.Neeraj D. Agarwala, has been resigned from the office of Independent Director of the Company effective 12th February,2015. The Board places on record its appreciation of the services rendered by Mr. Neeraj D. Agarwala during his tenure as a Director. (iii) Board Evaluation In compliance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Nomination & Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. (v) Nomination & Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a Policy for selection, appointment and remuneration of Directors and Key Managerial Personnel. More details of the same are given in the Corporate Governance Report. (vi) Board Meetings During the year, five (5) Board Meetings and four (4) Audit Committee Meetings were convened and held. The details are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. DIRECTORS RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of the Section 134(3)(c) of the Companies Act, 2013: I. That in the preparation of the annualfinancial statements for the year ended March31, 2015, the applicable accounting standardshave been followed along with properexplanation relating to material departures, ifany; II. That such accounting policies, as mentioned in the Financial Statements as 'Significant Accounting Policies' have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2015 and of the profit of the Company for the year ended on that date; III. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; IV. That the annual financial statements have been prepared on a going concern basis; V. That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; VI. That proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. AUDITORS (i) Statutory Auditors & Audit Report The Company has received a letter from M/s. Thanawala& Co., Chartered Accountants regarding his eligibility for the appointment as statutory Auditors of the Company. The said auditor was appointed effective Annual General Meeting held on 8th September, 2014 for a period of 3 years subject to ratification at every Annual general meeting. The shareholders at the ensuing annual general meeting will consider ratification of the appointment of the Statutory Auditors. There are no qualification, reservation or adverse remark or disclaimer made by the auditor in his report. (ii) Cost Auditors The Board has appointed M/s. Vishesh N. Patani (Membership No. 30328) cost Accountants, Mumbai for conducting the audit of cost records of the Company for the Financial year ending 31st March, 2016. Approval of the members by way of ordinary resolution ratifying the remuneration to be paid to the cost auditors is suitable included in the notice calling the Annual general Meeting of the Company. (iii) Secretarial Auditor & Audit Report Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. V.M. Kundaliya& Associates, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure - A". The qualifications /remarks made by the secretarial auditor addressed herein below: a. The Company has shortlisted a candidate and shall appoint the CFO by end of September, 2015. b. The Board has appointed an independent women Director on 30th day of May, 2015 subject to approval of the share holders in the ensuing Annual general Meeting. c. The Company had granted loans of Rs. 3.83 Lakhs to entities in which the Directors are interested, which has been refunded on 25th, May, 2015. d. The prescribed form MGT-15 was under filling. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY Kindly refer to the write-up in the section Management Discussion and Analysis. EXTRACT OF THE ANNUAL RETURN The extract of the annual return in Form No. MGT - 9 annexed as Annexure-B forms part of the Board's report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The Company has adopted the generally accepted technology for its products. Particulars regarding conservation of energy foreign exchange earnings and outgo are given in Annexure - C as required under The Companies Act,2013 read with The Companies (Accounts) Rules, 2014 and forms part of this report. MANAGEMENT DISCUSSION AND ANALYSIS A detailed section on the Management Discussion and Analysis forms part of this Report. CORPORATE GOVERNANCE The Company has implemented the provisions of Clause 49 of the Listing Agreement relating to the Corporate Governance requirements. A Report on Corporate Governance, the Report of Auditors Certificates thereof are given as annexure to this report. PARTICULARS OF EMPLOYEES During the year under review, the Company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed as Annexure E to this Report. INDUSTRIAL RELATIONS During the year under review, industrial relations at the Company's unit continued to remain cordial and peaceful. ACKNOWLEDGEMENTS The Directors express their appreciation for co-operation and encouragement received from all the Shareholders, Business Associates, Dealers, Insurers, vendors, investors and bankers during the year. The Directors also place on record their appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support. For and on behalf of the Board of Directors of INDIA STEEL WORKS LIMITED Ashwinkumar H. Gupta Chairman Place: Mumbai Date: 30th May, 2015 |