BOARD REPORT To the Members, 1.Your Directors have pleasure in submitting their 20th Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2015 2. DIVIDEND No Dividend was declared for the current financial year due to conservation of Profits. 3. APPROPRIATIONS During the financial year 2014-15, no amount has been appropriated to General Reserve. 4. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND There was no unpaid/unclaimed Dividend declared and paid last year and hence the provisions of Section 125 of the Companies Act, 2013 do not apply for the year under review. 5. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT Management7s Discussion and Analysis Report for the year under review, as stipulated under Clause 52 of the BSE SME Listing Agreement, is presented in a separate section forming part of the Annual Report. 6. SHARES A. INITIAL PUBLIC OFFER The company has issued 80,04,000 equity shares of face value of Rs. 10 each ("equity shares") for cash at a price band of Rs. 20 per equity share which includes a share premium of Rs. 10 per equity share aggregating to Rs. 1,600.80 lacs in accordance with the provisions of Section 62(1)(c) and all other applicable provisions, if any, of the Companies Act, 2013 (the "Companies Act"), the provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended from time to time (the "ICDR Regulations"), the listing agreements entered into by the Company with SME platform of BSE Limited. B. BONUS SHARES The Company has issued 85,66,500 shares of Rs 8,55,65,000/- as Bonus Shares to the existing shareholders of the Company in the proportion of 2 share for every 1 share held in accordance with the provisions of Section 63 of the Companies Act, 2013 read with Rule 14 of the Companies(Share Capital and Debentures), Rules 2014. C. SWEAT EQUITY The Company has not issued any Sweat Equity Shares during the year under review. D .EMPLOYEES STOCK OPTION PLAN The Company has not provided any Stock Option Scheme to the employees. E. BUY BACK OF SECURITIES The Company has not bought back any of its securities during the year under review. 7. DEPOSITS The Company has neither accepted nor renewed any deposits during the year tinder review. 8. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS Your Directors wish to present the details of Business operations done during the year under review: A. Production and Profitability Our company has achieved a PAT margin of 0.20% in the current year as against PAT margin of 0.40% in the previous year. There has been a decline in the profitability of the company due to the one-time expenses incurred by the company in the previous year related to Initial Public Offer of its equity shares and secondly for the change in Depreciation method of calculation as per the Companies Act, 2013. B. Sales Our Company's sales stood at Rs. 1,90,67,53,739.03 as compared to Rs. 1,90,37,71,810.29 in the previous year, registering an increase in the top line of the company. C. Marketing and Market environment. Iron & Steel industry is the foundation industry of any economy, especially in developing countries whose material intensity is likely to increase significantly in the future, for infrastructure development and growth in manufacturing sector. India certainly is one such economy that is poised to grow significantly over the next decade with its per capita consumption nearly at one-fourth of the global average. A competitive and efficient domestic steel industry is a pre-requisite for India to succeed in its industrial vision for 'Make in India'. Investments in the steel sector are highly capital intensive and long term in nature, whose economic viability is dependent on the fundamental growth assumptions of the domestic economy- The Government of India aims to triple the steel capacity to 300 million tonnes by 2025. In order to ensure that such capacity is viable to set up and value creating for the stakeholders, it is important to ensure that the ease of doing business is enhanced and the Indian steel industry is not unfairly harmed by low priced subsidised imports from overseas. However, in the month of August 2015, the import duty on Steel (Long Products) is increased by 2.5%. D. Future Prospects including constraints affecting due to Government policies. The future of the Indian iron and steel sector looks promising as there is enormous scope for increasing consumption of iron & steel in almost all sectors m India. There is an untapped potential of increasing steel consumption in India; even to reach the comparable developing and lately developed economies like China and other Europe, a quantum jump in steel consumption will be required. India has rich mineral resources. It has abundance of iron ore, coal and many other raw materials required for iron and steel making. Unexplored Rural Market - The Indian rural sector remains fairly unexposed to their multi-faceted use of steel. Enhancing applications in rural areas assumes a much greater significance now for increasing per capital consumption of steel. The usage of steel in cost effective maimer is possible in the area of housing, fencing, structures and other possible applications where steel can substitute other materials which not only could bring about advantages to users but is also desirable for conservation of forest resources. Export Market Penetration - It is estimated that world steel consumption will double in next 25 years. Quality improvement of Indian steel combined with its low cost advantages will definitely help in substantial gain in export. 9. MATERIAL CHANGES AND COMMITMENT I F ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE ENDS OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT. No material changes and commitments affecting the financial position of the Company occurred between the ends of the financial year to which this financial statement relate on the date of this report. 10. INTERNAL FINANCIAL CONTROLS Aanchal Ispat Limited has an adequate system of internal control, commensurate with the size and nature of its business to ensure that the resources of the Company are used efficiently and effectively, all assets are safeguarded and protected against loss from unauthorised use or disposition whatsoever and the transactions are authorised, recorded and reported correctly, financial and other data are reliable for preparing financial information and other data and for maintaining accountability of assets. The internal control is supplemented by extensive programme of internal audits, review by management, documented policies, guidelines and procedures. The Audit Committee of the "Board" continuously reviews the significant observations, if any, of the internal and Statutory Auditors on financials. 11. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company does not have any Subsidiary, Joint venture or Associate Company. 12. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings arid outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure I and is attached to this report. 13. DIRECTORS In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Manoj Goel, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. During the year under review, the members approved the appointments of Mr. Sudhir Kumar Budhia (DIN: 02869779) arid Mr. Mukesh Agarwal (DIN: 06954595) as Independent Directors on 30th day of July, 2014 and 1st day of September, 2014 respectively who are not liable to retire by rotation. The members have also re-appointed Mr. Mukesh Goel as the Managing Director on 12th day of August, 2014 for a term of 5 years and Mr. Manoj Goel was redesignated as the non-executive director w.e.f 3rd day of September, 2014. The Company has received declarations front all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 52 of BSE SME Listed Companies. 14. MEETINGS OF BOARD OF DIRECTORS During the financial year ended 31st March, 2015, Ten Board Meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. 15. AUDIT COMMITTEE During the period under review, the Board of Directors of your Company constituted a Audit Committee in accordance with the provisions of Section 177 of the Companies Act, 2013 read with Rule 6 and 7 of the Companies (Meetings of the Board and its Powers) Rules, 2013. The Audit Committee consists of the following member's: Name of the members Category Position Held Mr. Sudhir Kumar Budhia Non -Executive Independent Director Chairman of the Audit Committee Mr. Mukesh Agarwal Non -Executive Independent Director Member Mr. Manoj Goel Non- Executive Director Member The above composition of the Audit Committee consists of independent Directors viz., Mr Sudhir Kumar Budhia and Mr Mukesh Agarwal, who form the majority. All the recommendations made by the Audit Committee were accepted by the Board. 16. VIGIL MECHANSIM The Company has established a vigil mechanism policy through the audit committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on repotting issues concerning the interests of co employees and the Company. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company’s website at the link: http://aanchalispat.com/policies .html. 17. NOMINATION AND REMUNERATION COMMITTEE During the year under review, the Board of Directors of your Company constituted a Nomination and Remuneration Committee in accordance with the provisions of Section 178 of the Companies Act, 2013 and Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 52 of the BSE SME Listing Agreement. The composition of the committee is as under: Name of the members Category Position Held Mr. Mukesh Agarwal Non -Executive Independent Director Chairman Mr. Sudhir Kumar Budhia Non -Executive Independent Director Member Mr. Manoj Goel Non- Executive Director Member COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES The Committee has formulated the Nomination and Remuneration Policy which broadly laid down the various principles of remuneration and covers the procedure for selection, appointment and compensation structure of Board members, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company- The said Policy is available on your Company's website at the link http://aanchalispat.com/ policies.html. 18. PERFORMANCE EVALUATION The Nomination and Remuneration Committee (NRC) of your Company has formulated and laid down criteria for Performance Evaluation of the Board (including Committees) and every Director (including Independent Directors) pursuant to provisions of Section 134, Section 149 read with Code of Independent Directors (Schedule IV) and Section 178 of the Companies Act, 2013 and the Clause 52 of the SME Listing Agreement covering inter-alia the following parameters namely: i) Board Evaluation ii) Board Committee Evaluation iii) Individual Director Evaluation Based on these criteria, the performance of the Board, various Board Committees viz. Audit Committee, Stakeholders' Relationship Committee, Nomination and Remuneration Committee and Corporate Social Responsibility Committee, and Individual Directors (including Independent Directors) was evaluated to be satisfactory. During the year under review, the Independent Directors of your Company reviewed the performance of Non- Independent Directors and Chairperson of your Company, taking into account the views of Executive Directors and Non-Executive Directors. 19. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES: In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there were no such employees drawing remuneration in excess of the limits set out in the said rules. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary' in this regard. The Nomination and Remuneration Committee has affirmed that the remuneration is as per remuneration policy of the Company. 20. KEY MANAGERIAL PERSONNEL (KMPs) Pursuant to the resolution of the Board of Directors passed at its meeting held on Sep 01, 2014 and Sep 06, 2014 the following executives of the Company are whole-time Key Managerial Persons (KMPs) as on March 31, 2015 in accordance with the provisions of Section 203 of the Companies Act, 2013. Name Designation Effective Date Ms. Babita Kaur Bagga Company Secretary 06.09.2014 Mr. Ritesh Shaw Chief Financial Officer 21. RISK MANAGEMENT PO LICY The process of Risk Management in the Company identifies inherent risks in its operations and records residual risk after taking specific risk mitigation steps The Company has identified and categorized risks in the area of Operations, Finance and Marketing, Regulatory Compliances and Corporate matters. Wherever possible and necessary, appropriate insurance cover is taken for financial risk mitigation. On the Financial front, the Company has not borrowed any amount in foreign currency however the foreign exchange fluctuation may affect the prices of raw material and other allied inputs, but at present the Company is not importing its Raw Material or other allied inputs. Such Raw Materials and other allied inputs are abundantly available in the domestic market. Credit Policy of the Company is primarily based on the customer profile. The Management does not perceive any major technological, environmental and/ or financial risks for the Company in the near future. 22. POLICY ON SEXUAL HARRASEMENT Your Company is committed to provide and promote a safe, healthy and congenial atmosphere irrespective of gender, caste, creed or social class of the employees. Your Company in its endeavour to provide a safe and healthy work environment for all its employees has developed a policy to ensure zero tolerance towards verbal, physical, psychological conduct of a sexual nature by any employee or stakeholder that directly or indirectly harasses, disrupts or interferes with another's work performance or creates an intimidating, offensive or hostile environment such that each employee can realize his / her maximum potential. Your Company has put in place a 'Policy on Prevention of Sexual Harassment' as per The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The company maintains an open door for reportees; encourages employees to report any harassment concerns and is responsive to employee complaints about harassment or other unwelcome and offensive conduct. Our board has been empowered to enquire into complaints and to recommend appropriate action wherever required. 23. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The Company has not developed and implemented any Corporate Social Responsibility initiatives as the provisions of section 135 of the Companies Act, 2013 along with Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable. 24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013 There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence there are no disclosures. 25. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES All the related party transactions of your Company are entered on arm's length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Agreement. There are no materially significant transactions made by the Company with Promoters, Directors or Key Managerial Personnel (KMPs) which have potential conflict with the interest of your Company at large. Members may refer to the notes to the financial statements for details of related part}'- transactions. Since all related party transactions entered into by your Company were in the ordinary course of business and were on an arm's length basis, Form AOC- 2 is not applicable to your Company. 26. ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure II and is attached to this Report. 27. STATUTORY AUDITORS M/ s R.Modi & Co, Chartered Accountants were appointed as Statutory Auditors for a period of 1 year in the Annual General Meeting held on 25/09/2014. AUDIT QUALIFICATIONS There were no qualifications, reservations or adverse remarks made by the Auditors for the year under review. 28. SECRETARIAL AUDIT REPORT Your Company appointed Ms. Manisha Saraf, member of The Institute of Company Secretaries of India (Membership No. FCS 7607 Certificate of Practice No. 8207 as the Secretarial Auditor of your Company for FY 2014-15 to conduct the Secretarial Audit pursuant to Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. There were no qualifications, reservations or adverse remarks made by the Practicing Company Secretary in Secretarial Audit Report MR 3 except as mentioned below: The Company has not appointed Woman Director as required under section 149 (1) of the Companies Act, 2013 read with rides 3 of Companies (Appointment and Qualification) Rules, 2014 and clause 49(ii)(A)(1) of the Listing Agreement. The Secretarial Audit Report for the Financial Year 2014-15 forms a part of the Annual Report. 29. CORPORATE GOVERNANCE A separate section on Corporate Governance and a Certificate from the Auditors of your Company regarding compliance with the requirements of Corporate Governance as stipulated under Clause 52 of the SME Equity Listing Agreement with the Stock Exchanges (revised effective October 01, 2014 vide SEBI Circular nos. ER/ CFD/POLICY/ CELL/2/2014 dated April 17, 2014 and CER/CFD/POLICY/CELL/7/2014 dated September 15, 2014), forms part of the Annual Report. 30. DIRECTORS RESPONSIBILITY STATEMENT In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement: — (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors 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 arid of the profit and loss of the company for that period; (c) the directors 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; (d) the directors had prepared the annual accounts on a going concern basis; and (e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. Internal financial control means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy arid completeness of the accounting records and the timely preparation of reliable financial information. (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively- 31. ACKNOWLEDGEMENT Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS: Managing Director Mukesh Goel DIN: 00555061 Place:: Kolkata Date:30/05/2015 |