BOARD'S REPORT To The Members, 1. Yours Directors are pleased to present the Twenty Fifth Annual Report of your Company together with the Audited Financial Statememt for the year ended on 31 st March, 2015. 2. DIVIDEND Your Directors do not recommend any dividend on the equity shares of the Company in view of carried forward losses. 3. REVIEW OF OPERATIONS During the year under review, the Company has made a net loss of Rs. 313 Lakhs on turnover of 88,293 MT valuing Rs. 57,422 Lakhs against a net loss of Rs. 372 Lakhs on turnover of 82,176 MT valuing Rs. 53,583 Lakhs in the previous year. The Company has made cash loss of Rs. 883 Lakhs for the year ended on 31st March, 2015 as against a cash profit of Rs. 73 Lakhs in the previous year. Essentially the cash Loss arose due to: - Failure of the Mill Motor - Problem in procuring Raw material from domestic suppliers - The supplies shortage was alleviated by the company procuring imported material on credits. As a consequence together with seasonal factors in the second half the cash loss was reduced. However the market continues to be extremely fluid. 4. PERFORMANCE OF SUBSIDIARY COMPANY The Company has its wholly owned subsidiry Company viz, Steelco Colors Coating Ltd., ('SCCL") vide (CIN No. U27310GJ2015PLC082627), which was incorporated in March 2015. SSCL has not yet commenced its operations. 5. CONSOLIDATED ACCOUNTS The consolidated financial statements of the Company are prepared in accordance with the relevant accounting standard viz. AS-21; AS-23 & AS-27 issued by the Institute of Chartered Accountants of India and forms a part of this Annual Report. 6. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9, as required under section 92 of the Companies Act, 2013 is included in this Report as Annexure - A and forms as intergal part of this report. 7. BOARD OF DIRECTORS During the year under review, Mr. N M Mohnot, Managing Director of the company was relieved from his services on 14th August, 2014 and Dr. R S Mamak, was appointed as Executive Vice Chairman of the Company for a period of one year from 14th August, 2014. During the year under review Mr. Mitesh H Shah was inducted as Managing Director of the Company w.e.f. 14th November 2014. He is an Engineer in Metallurgy having an experience of 24 years in steel industry. Ms. Ameeta Trehan has been appointed as Additional Director of the Company w.e.f. 16th May 2015 to hold the office upto the next Annual General Meeting. 9. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the listing agreement, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Chairman and Non Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process. 10. NUMBER OF MEETINGS OF THE BOARD Five meeting of the Board of Directors of the Company were held during the year under reivew. 11. WHISTLE BLOWER POLICY The Company has a Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on website of the Company. 12. NOMINATION AND REMUNERATION POLICY The Board of Directors has framed a policy, which lays down a framework in relation to remuneration of directors, key managerial personnel and senior management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The details of this policy have been elaborated in the Corporate Governance Report. 13. CORPORATE GOVERNANCE As per clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of the report. 14. RELATED PARTY TRANSACTIONS All transactions entered with related parties for the year under review were on arms length basis and in ordinary course of business and that the provision of Section 188 of the Companies Act, 2013 are not attracted. Thus, the disclosure in Form AOC-2 is not required. Further, there are no material related party transaction during the year under review with the promoters, directors or key managerial personnel. All related party transactions are placed before the Board for approval. 15. DIRECTORS' RESPONSIBILITY STATEMENT To the best of the knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134(4)(c) of the Companies Act, 2013 : i. That in preparation of the annual accounts for the year ended on 31st March, 2015, the applicable accounting standards read with requirements set out under Schedule III have been followed along with proper explanation relating to material departures, if any; ii. The Directors have selected such accounting policies and applied them consistently and made judgements and estiamtes that are reasonable and purdent so as to give a ture and fair view of the state of affairs of the Company as at 31 st March, 2015 and of the loss of the Company for the year ended on that date; iii. That the directors have taken proper and sufficient care 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 regularities; iv. The annual accounts have been prepared on a 'Going Concern' basis; v. That 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 vi. That the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. 16. AUDITORS M/s Mukesh M Shah & Co., Chartered Accountants, Ahmedabad, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a consent and a certificate from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limit under Section 141 of the Companies Act, 2013. 17. AUDITORS' OBSERVATION Note 36 relating to preparation of financial statement on Going Concern Basis, in spite of substantial erosion of net worth, is self explanatory as regards the obervation made by the auditors in their report. 18. POTENTIAL SICK COMPANY As on 31st March, 2015, there is erosion of more than 50 % of its peak net worth, during the immediately preceding four financial years, the Company within the meaning of Section 23 of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) is termed as Potentially sick and accordingly the same is to be reported to the Board for Industrial and Financial Reconstruction -BIFR. The Board of Directors at its meeting held on 28th May, 2015, has decided to report the same if approved by the members of the Company. 19. COST AUDITORS Your Directors have appointed M/s A G Tulsian & Co., Cost Accountants, Ahmedabad, as Cost Auditors in compliance with the Companies (Cost Accounting Records) Rules, 2011. The Cost Auditors have filed the Cost Audit Report for the financial year ended on 31st March, 2014 on September 27, 2014 within the due date. 20. SECRETARIAL AUDIT Pursuant to the provisions of section 204 of the Companies Act, 2013 and the rules made thereunder, the Company has appointed M/s. Devesh Vimal & Co., Practising Company Secretary Vadodara to undertake the secretarial audit of the Company. The secretarial audit report is included as Annexure -B and forms an integral part of this report. 21. INTERNAL FINANCIAL CONTROLS 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 weakness in the design or operation was observed. 22. ENVIRONMENT & SAFETY The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner so as to ensure safety of all concerned compliances environmental requirement regulations and preservation of natural resources. As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at workplace with a mechanism of lodging complaints. Its Redressal is placed on the company's' website for the benefit of employees. During the year under review, no complaints were reported to the Board. 23. HUMAN RESOURCES & INDUSTRIAL RELATIONS The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. The Company has structured induction process and management development programs to upgrade skills of managers. Objective appraisal systems based on Key Result Areas (KRAs) are in place for senior management staff. The company is committed to nurturing, enhancing and retaining top talent through superior learning & organizational development. 24. CREDIT RATING During the year under review, the Company was rated for the first time by an independent credit rating agency M/s Brickwork Ratings India Pvt. Ltd., and the ratings awarded were BWR 'B' in respect of long term debts and BWR 'A4' in respect of Short term Debts. 25. STATUTORY INFORMATION Information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134 (3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure -C to this report. 26. CORPORATE SOCIAL RESPONSIBILITY As on date, the Company does not fall within the purview of CSR requirements. 27. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES In terms of the provisions of Section 197 (12) of the Act read with Rules 5(1), 5(2) and Rules 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement/details showing the names and other particulars of the employees as set out in the said rules are separately provided in the Annual report. Having regard to the provisions of the first proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full annual report excluding the aforesaid information is being sent electronically to all those members who have registered their email addresse(s) and is available on the Company's website. 27. GENERAL 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: a) Details relating to deposits covered under Chapter V of the Act b) Details of remained, unpaid or unclaimed dividend at the end of year c) Issue of equity shares with differential right as to dividend, voting or otherwise. d) Issue of shares (including Sweat Equity Shares) to employees of the Company under any scheme. e) Neither the Managing Director nor the Whole Time Directors of the Company receive any remuneration or commission from any of its subsidiaries. f) No significant or material orders passed by the Regulators or Courts or Tribunals, which impact the going concern status and Company's operations in future. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women under Workplace (Prevention Prohibition and Redressal) Act, 2013. 29. ACKNOWLEDGEMENT Your Directors take this opportunity to express their apprecition for the co-operation and assistance received from the Government of India, Government of Gujarat, Financial Institution, the Company's Bankers, Electricity Companies, Palej Gram Panchayat, other Government Agencies, Customers, Suppliers and Investors. Your Directors express gratitude to the investors for their confidence reposed in the Company and Co-operation, and especially to the employees for their dedicated service and support. 30. CAUTIONARY STATEMENT Statement in the Board's Report and Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be 'Forward Looking Statements' within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed or implied. Important factors that may make difference to the Company's operations include raw material availability and its prices, cyclic demand and the pricing in the Company's principal markets, changes in government policies, regulations, tax regimes, economic developments within India and countries in which the Company conducts business. For and on behalf of the Board of Directors Dr. R. S. Mamak Executive Vice Chairman Place : Mumbai Date : 13th August, 2015 |