DIRECTORS' REPORT TO, THE MEMBERS OF BEEKAY STEEL INDUSTRIES LIMITED Your Directors take pleasure in presenting the 34th annual report on the business and operations of your Company together with the audited accounts of your Company for the year ended 31st March, 2015: RESULTS OF OPERATIONS The turnover of your Company, during the year under review, has declined by 4.6 % to Rs.554.20 Crores against Rs.581.13 Crores during the previous year due to economic slowdown in India and across the Globe. The lower demand resulted from economic slump throughout the year in the domestic market which negatively affected our financial performance as it contributed to the market sentiment. There is an increase in operating EBIDTA by merely 1 % to 62.16 Crores against the previous year of Rs. 61.57 Crores. The net profit after tax during the year was Rs. 15.60 Crores against of Rs 18.24 Crores in the previous Year. There was decline in the net profit by 14.65 % comparing with the previous year due to slowdown & stiff competition in the market. The Board of Directors put their Endeavour to improve the overall performance of the company. Production in different units of the Company situated at Visakhapatnam were severely affected due to Hudhud cyclone which caused not only shutdown of plants temporarily for few months but also hit the orders to supply the materials which your Company could not met on time. DIVIDEND Your Directors are pleased to recommend a dividend of Re. 1/- per share (i.e.10%) on 19072052 equity shares for the year ended 31st March, 2015, subject to approval of the shareholder at the ensuing Annual General Meeting. The total outgo on account of dividend will be Rs.aggregating to Rs. 228.85 Lacs (In-taxes). The unpaid and unclaimed dividend lying in the Unpaid Dividend Account becomes due to be transferred to Investor Education & Protection Fund ("IEPF") after a period of 7 (seven) years. Your Directors therefore suggest you to claim the unpaid dividend before the last date. The unpaid and unclaimed Dividend for the year 2006-07 has already been transferred to the Central Government, to Investor Education & Protection Fund ("IEPF") on 2nd December, 2014. The unpaid and unclaimed Dividend for the year 2007-08 is due to be transferred to Investor Education & Protection Fund ("IEPF") by 26th November, 2015. SHARE CAPITAL The paid up equity capital as on March 31, 2015 remained at Rs 19,09,09,270 comprising of 19072052 shares of Rs 10/-each. The Company has not issued any shares during the year under review. The company has not issued shares with differential voting rights nor granted stock options nor sweat equity. FINANCE Cash and cash equivalents as at March 31, 2015 was Rs. 469.53 Lacs.The company continues to focus on judicious management of its working capital, Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring. FIXED DEPOSITS Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance ofDeposits) Rules, 2014. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. The detail of the investments made by company is given in the notes to the financial statements. INTERNAL CONTROL & INTERNAL FIANACIAL CONTROL Overview A Robust System of internal control, commensurate with the size and nature of its business forms an integral part of the company corporate governance. Internal Control: The Company has a proper and adequate system of internal control commensurate with the size and nature of its business. Internal control systems are integral to the Company's corporate governance policy. Some of the significant features of internal control systems include ^ Documenting of policies, guidelines, authorities and approval procedures, encompassing the Company's all primary functions. ^ Deploying of a Matrix- ERP system which covers most of its operations and is supported by a defined online authorization protocol. ^ Ensuring complete compliance with laws, regulations, standards and internal procedures and systems. De-risking the Company's assets/resources and protecting them from anyloss. Ensuring the accounting system's integrity proper and authorized recording and reporting of all transactions. The internal control systems and procedures are designed to assist in the identification and management of risks, the procedure-led verification of all compliance as well as an enhanced control consciousness. Internal Financial Control The Company has in place adequate internal financial controls with reference to financial statements. During the year such controls were tested and no reportable material weakness in the design or operation was observed. This provides the Directors with reasonable assurance regarding the adequacy and operating effectiveness of controls with regards to reporting, operational and compliance risks. To enable them to meet these responsibilities, the Company has devised appropriate systems and framework including proper delegation of authority, policies and procedures, effective IT systems aligned to business requirements, risk based internal audit framework, risk management frame work and whistleblower mechanism. The Internal auditors continuously monitors the efficacy of Internal Financial Control system with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the organization's risk management with regard to the Internal Financial Control system. Audit Committee meets regularly to review reports submitted by the internal auditors. The Audit Committee also meet the Company's Statutory Auditors to ascertain their views on the financial statements, including the financial reporting system and compliance to accounting policies and procedures followed by the Company. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The Company has a Corporate Social Responsibility Committee comprising of three directors which stood as follows as on 31st March, 2015: The terms of reference and scope of work is same as prescribed in section 135 of the Companies Act, 2013, and the Rules there under. The Committee met four times during the year to discharge its responsibilities. As part of its inititiatives under 'Corporate Social Responsibility" (CSR) the company has undertaken projects in the areas of Education, Livelihood, Health, Water and Sanitation, Environment, Rural development etc. As per the said policy, the Company continues the strategy of discharging part of its CSR responsibilities related to social service through various trusts/societies in addition to its own initiatives and donations made to other non-government organizations. An Annual Report on CSR activities is annexed herewith as 'Annexure-A' in the prescribed format. During the year the Company has spent Rs. 28.01 lacs Towards CSR activities. EXTRACT OF ANNUAL RETURN In accordance with the provisions of Section 134(3)(a) of the Companies Act, 2013, the details forming part of the extract of the annual return in Form No. MGT- 9, is marked as 'Annexure - B' and annexed hereto and forms a part of this report. NUMBER OF MEETINGS OF THE BOARD The details of the number of meetings of the Board held during the financial year 2014-15 forms part of the Corporate Governance Report. DIRECTORS' RESPONSIBILITY STATEMENT As required by Section 134(3) (c) of the Companies Act, 2013 your Directors state that: (a) in the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed with proper explanation relating to material departures, if any; (b) the accounting policies adopted in the preparation of the annual accounts have been applied consistently except as otherwise stated in the Notes to Financial Statements and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year2014-15 and of the profit for the year ended 31st March, 2015; (c) 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; (d) the annual accounts forthe year ended 31st March, 2015, have been prepared on a going concern basis. (e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. (f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. DECLARATION BYINDEPENDENTDIRECTORS Mr. Brijesh Kumar Dalmia, Mr. Bhal Chandra Khaitan, Mr. Ravishankar Sridharan, Mr. Srikumar Banerjee, Mr. Tapan Kumar Banerjee, and Ms. Shyanthi Sengupta are Independent Directors on the Board of the Company. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges. COMPANY'S POLICY ON DIRECTORS'APPOINTMENT AND REMUNERATION Pursuant to provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors of the Company, based on the recommendation of the Nomination and Remuneration Committee, has formulated a Remuneration Policy. The remuneration policy of the Company, inter alia, includes the aims and objectives, principles of remuneration, guidelines for remuneration to Executive Directors and Non-Executive Directors, fixed and variable components in the remuneration package, criteria for identification of the Board Members and appointment of senior management. The criteria for identification of the Board Members including that for determining qualification, positive attributes, independence etc. are summarily given here under: ^ The Board Member shall possess appropriate skills, qualification, characteristics and experience. The objective is to have a Board with diverse background and experience in business, government, academics, technology, human resources, social responsibilities, finance, law etc. and in such other areas as may be considered relevant or desirable to conduct the Company's business in a holistic manner. ^ Independent director shall be person of integrity and possess expertise and experience and/or someone who the Committee/Board believes could contribute to the growth/philosophy/strategy of the Company. ^ In evaluating the suitability of individual Board Members, the Committee takes into account many factors, including general understanding of the Company's business dynamics, global business, social perspective, educational and professional background and personal achievements. ^ Director should possess high level of personal and professional ethics, integrity and values. He should be able to balance the legitimate interest and concerns of all the Company's stakeholders in arriving at decisions ,rather than advancingthe interests of particular section. ^ Director must be willing to devote sufficient time and energy in carrying out their duties and responsibilities effectively. He must have the aptitude to critically evaluate management's working as part of a team in an environment of collegiality and trust. ^ The Committee evaluates each individual with the objective of having a group that best enables the success of the Company's business and achieves its objectives. CREDITRATING India Rating & Research Private Limited (Ind-Ra), a wing of international rating agency FITCH Group, has upgraded your company long term debt rating from 'IND BBB-'to 'IND BBB'. The outlook is also stable. Ind-Ra has also upgraded yourcompanybankfacilityalso. Ratings are based on established criteria and methodologies that India Ratings is continuously evaluating and updating. RELATED PARTY TRANSACTIONS All transactions entered with Related Parties during the financial year were on an arm's length basis and were in the ordinary course of business and the provisions of Section 188 of the Companies Act, 2013 are not attracted. Further, there are no materially significant related party transactions during the year under review. RISKMANAGEMENT Pursuant to the provisions of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. The Company has a robust Risk Management framework to identify, evaluate business risks, and opportunities. This framework seeks to minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The framework also defines the risk management approach across the enterprise at various levels. Risk Management forms an integral part of the Company's planning process. BOARD EVALUATION & CRITERIA FOR EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board carried out an annual performance evaluation of its own performance, the individual Directors as well as the working of the Committees of the Board. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non- Independent Directors was carried out by Independent Directors. Details of the same are given in the Report on Corporate Governance annexed hereto. For the purpose of proper evaluation, the Directors of the Company have been divided into 3 (three) categories i.e. Executive, Non -Executive Non-Independent & Non-Executive Independent. The criteria for evaluation includes factors such as engagement, strategic planning and vision, team spirit and consensus building, effective leadership, domain knowledge, management qualities, team work abilities, result/ achievements, understanding and awareness, motivation/commitment/diligence, integrity/ethics/values and openness/receptivity. DIRECTORSANDKEYMANAGERIALPERSONNEL i) On the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company during its Meeting held on 31.03.2015 has appointed Mr. Tapan Kumar Banerjee as Independent Director and Ms. Shyanthi Sengupta as Independent Woman Director on the Board of the Company. The requirement under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement also stands complied with such appointments. Shri Vijay Bansal, Promoter Non-Executive Director retires from the Board by rotation and being eligible, offers himself forre-appointment. The above are subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company. In view of the provisions of Section 203 of the Companies Act, 2013 Shri Mukesh Chand Bansal, Managing Director, Shri Manav Bansal, Wholetime Director & CEO, and Shri Rabindra Kumar Sahoo, Company Secretary were identified as Key Managerial Personnel of the Company. Mr. Lalit Chandra Sharma has resigned from the office of the Company Secretary w.e.f. 30.06.2014. The Company has appointed Additional Directors at the Board of Directors Meeting, viz. Mr. Tapan Kumar Banerjee as Independent Director and Ms. Shyanthi Sengupta as Independent Woman Director for a period of five years w.e.f 31.03.2015. Their terms of office as Additional Directors will be expired at the ensuing Annual General Meeting and the Company has received application from a Member proposing their candidature to the office of Directors of the Company. Mr. Krishna Chandra Raut has been resigned from the Directorship of the Company w.e.f. 12.02.2015. Your Directors place on record their deep appreciation of the valuable services rendered by Mr. Krishna Chand Raut during his tenure as Director of the Company. DETAILS OF SIGNIFICANTAND MATERIALORDERS PASSED BYTHE REGULATORS, COURTSANDTRIBUNALS No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and company's operations in future. VIGILMECHANISM/WHISTLE BLOWER POLICY In compliance with provisions of Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has framed a Vigil Mechanism/Whistle Blower Policy to deal with unethical behaviour, actual or suspected fraud or violation of the company's code of conduct or ethics policy, if any. The Vigil Mechanism/Whistle Blower Policy has also been uploaded on the website of the Company. PARTICULARS OF EMPLOYEES There is no such employee in the company the information of which is required to be furnished under provision of the Companies Act, 2013 and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Having regard to the provisions of Section 136 of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEYMANAGERIAL PERSONNEL AND EMPLOYEES Disclosure 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 is marked as 'Annexure-C'which is annexed hereto and forms part of the Directors' Report. HUMAN RESOURCE DEVELOPMENTINDUSTRIALRELATIONS There is a continuous effort for better Human Resource (HR) service delivery in order to better serve the customers with simpler well executed processes with proper use of technology. HR service delivery has become all the more critical in the organization dueto rise in customer expectation. The organization has a mechanism to provide employees with feedback on a continuous basis. Based on the organization's strategic plan, HR planning processes map the capacity of the organization. The knowledge, skills and abilities of the employees are identified. The strategic thrust of HR has been improvement of the performance of the employees through training & development and also to identify high performers who are having potential for taking higher responsibilities. ENVIRONMENTALINITIATIVES Beekay Steel has always been a frontrunner in continuously improving its operational performance in all areas like safety and consumption of natural resources. These initiatives have been taken across all production facilities to ensure they become the culture atourorganization. All the stacke missions, ambient air quality, effluent quality and work zone air quality are generally within the norms. The Company has undertaken various measures to address environmental issues at its plant locations. AUDITORS & AUDITORS' REPORT Statutory Auditors: The Company's Auditors, M/s. Rustagi & Associates, Chartered Accountants, retire at the end of 36th Annual General Meeting of the Company and are eligible for reappointment subject to ratification at the ensuing AGM by members. The members are requested to appoint the auditors and to fix their remuneration. Messrs Rustagi & Associates, Chartered Accountants has confirmed that their appointment is within the limits of the Section 139 of the Companies Act, 2013 and has certified that they are free from any disqualifications specified under Section 148(5) and all other applicable provisions of the Companies Act, 2013. The notes on accounts referred to in the Auditors' Report are self-explanatory and, therefore, do not call for any further comments. Secretarial Auditor: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Mr. Santosh Kumar Tibrewalla, Practicing Company Secretary to conduct Secretarial Audit of the Company for the Financial Year 2014-15. The Secretarial Audit Report for the Financial Year ended 31st March, 2015 is annexed herewith and marked as 'Annexure - D'. The Report is self-explanatory and do not call for any further comments. Cost Auditors: Pursuant to Section 148 of the Companies Act, 2013, in terms of the Central Government's approval, the Board of Directors on the recommendation of the Audit Committee appointed M/s. Musib & Co., Cost Accountants, as the Cost Auditor of the Company for the year 2015-16. The remuneration proposed to be paid to the Cost Auditor requires ratification of the shareholders of the Company. In view of this, your ratification for payment of remuneration to the Cost Auditor is being sought at the ensuing Annual General Meeting. The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arm's length relationship with the Company. The Company submits it's Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period and the Cost Audit Reportforthefinancial year2013-14 has already been filed with MCA. CORPORATE GOVERNANCE Your Company has initiated, by providing the shareholders, to avail the option of receiving online the requisite documents i.e. notices, annual reports, disclosures and all other communications, by registering their e-mail Ids. For the success of 'Green Initiative' as per MCA circular no. 17/2011 &No. 18/2011. The Company continues to comply with the requirements of Clause 49 of the Listing Agreement regarding Corporate Governance. The Report on Corporate Governance together with a certificate from Mr. S.K. Tibrewalla, Practicing Company Secretary regarding Compliance of Conditions of Corporate Governance, certification by M.D. /CEO and the Management Discussion &Analysis Report are attached herewith which form part of this Annual Report. STOCK EXCHANGE LISTING The Equity Shares of your Company are listed on BSE Limited (nation-wide trading terminal) under direct listing route, the trading of shares have started w.e.f. 25th March, 2015. The Company's Equity Shares are also listed with the Calcutta Stock Exchange and Uttar Pradesh Stock Exchange and the applicable annual listing fees to all stock exchanges have been paid till financial year2015-16. CODE OF CONDUCT FOR PREVENTION OF INSIDERTRADING In terms of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 your Company has adopted the Code of Conduct for Prevention of Insider Trading. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSANDOUTGO Information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013, read with 8(3) of the Companies (Accounts) Rules, 2014 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo, are given in the 'Annexure E', annexed hereto and forms a part of this report. DISCLOSURESAS PER APPLICABLE ACT ANDLISTINGAGREEMENT: i) Composition of Audit Committee: The Board has constituted the Audit Committee under the Chairmanship of Mr. Bhal Chandra Khaitan. Complete details of the Committee are given in the Corporate Governance Report, attached as Annexure to this Board's Report. ii) Post Balance Sheet Events: The company has received contract from TATA Steel Limited for job work of TMT Bars at company's new unit/work at Parwada, Visakhapatnam.There is no other material changes in commitments affecting the financial position of the Company occurred since the end of the financial year2014-15. iii) Subsidiaries, Associates or Joint Ventures: Your Company has only one associate company i.e. M/s. AKC Steel Industries Ltd. and does not have any subsidiaries, associates or joint ventures, during the year under review. iv) Nomination, Remuneration and Evaluation Policy: The Company on recommendation of its Nomination & Remuneration Committee has laid down a Nomination, Remuneration and Evaluation Policy, in compliance with the provisions of the Companies Act, 2013 read with the Rules made therein and the Listing Agreement with the stock exchanges (as amended from time to time). This Policy is formulated to provide a frame workand set standards in relation to the followings. a. Criteria for appointment and removal of Directors, Key Managerial Personnel (KMP) and Senior Management Executives of the Company. b. Remuneration payable to the Directors, KMPs and Senior Management Executives. c. Evaluation of the performance of the Directors. d. Criteria for determining qualifications, positive attributes and independence of a Director. APPRECIATION Your Directors take this opportunity to express their appreciation for the cooperation and assistance received from the Government of India,; the State Governments of Andhra Pradesh, Tamil Nadu, West Bengal and Jharkhand; the financial institutions, banks as well as the shareholders and debenture holders during the year under review. The Directors also wish to place on record their appreciation of the devoted and dedicated services rendered by all employees of the Company. For and on behalf of the Board For Beekay Steel Industries Ltd. Sd/- Suresh Chand Bansal – Executive Chairman (DIN : 00103134) Mukesh Chand Bansal- Managing Director (DIN : 00103098) Date: 13th August, 2015 Place : Kolkata Registered Office: 'Lansdowne Towers' , 4th Floor, 2/1A, Sarat Bose Road Kolkata - 700 020 |