Dear Members,
The Directors have pleasure to present Thirtieth Annual Report on the business and operations of the Company along with the Audited Statement of Accounts for the Financial Year ended 31st March, 2016.
FINANCIAL RESULTS (Rs. in Lacs)
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PARTICULARS
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Year ended 31.03.2016
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Year ended 31.03.2015
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Revenue from Operations
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3,89,353
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4,03,991
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Earning Before Interest, Tax, Depreciation and
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17,566
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18,662
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Amortization (EBITDA)
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Finance Cost
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12,281
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12,294
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Depreciation
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1,456
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1,528
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Profit Before Tax (PBT)
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3,829
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4,840
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Provision for :-
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Income Tax/Adjusted for earlier years (Net)
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957
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1,875
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Deferred Tax
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58
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(50)
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Profit / (Loss) After Tax (PAT)
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2,814
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3,015
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FINANCIAL PERFORMANCE
During the year under review your Company's top line performance is lower than previous financial year. Your Company's Revenue from Operations is Rs. 3,89,353 Lacs as against Rs.4,03,991 Lacs for the corresponding previous year.
Your Company's export turnover is Rs.56,832 Lacs as compared to Rs.64,145 Lacs for the corresponding previous year.
The EBITDA for the year is Rs.17,566 Lacs as compared to Rs.18,662 Lacs in the corresponding previous year. The Profit Before Tax is Rs.3,829 Lacs (Rs.4,840 Lacs in F.Y 2014-15) and Profit After tax is Rs.2,814 Lacs (Rs.3,015 Lacs in F.Y 2014-15).
Major reasons for lower performance includes global economic slowdown, slowdown in the domestic manufacturing and infrastructure sector and excess supply in Indian steel industry leading to lower demand and sales realization.
Your Directors are confident to improve the performance in the current Financial Year.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis, forming part of this report as required under Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 {hereinafter referred as SEBI (LODR) Regulations, 2015}, is attached separately to this Annual Report.
DIVIDEND
The Board of Directors (the Board) has recommended dividend @ 4% on 55,01,022 Redeemable Cumulative Preference Shares for the Financial Year 2015-16.
Keeping in mind the need to conserve resources, your Board did not recommend any dividend on Equity Shares for the year under review.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, the Board has appointed Mr. Munish Mohan as Nominee Director of IDBI Bank Limited with effect from (w.e.f.) 5th August, 2015.
The Board has appointed Mr. Nagalingam Goli as Chief Executive officer of the Company w.e.f. 31st August, 2015 and Mr. Ashok Sharma as Chief Financial Officer w.e.f. 1st September, 2015.
Mr. P. Srikrishna, Managing Director of the Company resigned w.e.f. close of working hours on 31st March, 2016. Subsequent to this, Mr. Nagalingam Goli was appointed as an Additional Director of the Company w.e.f. 1st April, 2016 and also appointed Mr. Nagalingam Goli as Managing Director of the Company w.e.f. 1st April, 2016 subject to the approval of the Equity Shareholders of the Company. Consequent to his appointment as Managing Director, Mr. Goli ceased to be Chief Executive officer of the Company.
The Equity Shareholders of the Company have approved the appointment of Mr. Nagalingam Goli as Director and also as Managing Director of the Company through Postal Ballot on 19th May, 2016.
The Board has extended its deepest gratitude to Mr. P. Srikrishna for his long association, dedication, commitment and outstanding contribution for the growth of the Company.
Mr. Anil Nawal and Mr. Ashok Sharma have resigned from the position of Chief Financial Officer w.e.f. 31st August, 2015 and 1st February, 2016, respectively. Subsequently, the Board has appointed Mr. Mahesh Jain as Chief Financial Officer w.e.f. 12th February, 2016.
The Board has placed on record its appreciation for the contributions made by Mr. Anil Nawal and Mr. Ashok Sharma during their tenure.
Further, Mr. Santosh Shahra will attain the age of 70 years on 16th December, 2016 and hence pursuant to the provisions of Section 196(3) of the Companies Act, 2013 continuation of his employment requires the approval of Equity Shareholders by way of a special resolution. Keeping the same in mind, the Board has approved appointment of Mr. Santosh Shahra as Whole-time Director (designated as Executive Chairman) of the Company for a period of three years, w.e.f. 17th December, 2016 subject to the approval of the Equity Shareholders of the Company by Special Resolution in the ensuing Annual General Meeting. Independent Directors have given declaration that they meet the criteria of independence as provided in subsection (6) of Section 149 of the Companies Act, 2013.
RETIRE BY ROTATION
Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Santosh Shahra, Whole-Time Director of the Company, retires by rotation and being eligible, offers himself for reappointment.
BOARD EVALUATION
Pursuant to the applicable provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, its Committees and the Directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
AUDIT COMMITTEE
The Audit Committee comprises three Directors namely, Mr. Navin Khandelwal, Mr. Rajesh Nema and Mr. Nagalingam Goli. Mr. Navin Khandelwal, Independent Director is Chairman of the Audit Committee.
The composition of the Audit Committee meets the requirements of the provisions of Section 177 of the Companies Act, 2013 and of Regulation 18 of the SEBI (LODR) Regulations, 2015.
There are no recommendations of the Audit Committee which have not been accepted by the Board during the period under review.
NOMINATION AND REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination and Remuneration Policy is available at the Company's website.
BOARD MEETINGS
During the year under review 5 (Five) Board Meetings were held on 28th May 2015, 5th August 2015, 3rd November 2015, 5th February 2016 and 30th March 2016. The details are given in the Corporate Governance Report. The gap between two meetings did not exceed one hundred and twenty days as provided under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 of the Companies Act, 2013, your Directors confirm that:
a) in the preparation of the annual accounts for the year ended 31st March, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;
b) the accounting policies had been selected and applied 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 Financial Year ended 31st March, 2016 and of the profit of the Company for that period;
c) proper and sufficient care had 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 had been prepared on a going concern basis;
e) internal financial controls, to be followed by the Company, had been laid down and these controls are adequate and were operating effectively; and
f) proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
RELATED PARTY TRANSACTIONS
The transactions entered into with all the related parties during the financial year were on arm's length basis and in the ordinary course of business.
All Related Party Transactions were placed before the Audit Committee and also the Board, pursuant to applicable provisions of SEBI (LODR) Regulations, 2015 & Companies Act, 2013. Prior omnibus approval of the Audit Committee was obtained for the transactions which were repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted were audited and a statement giving details of all related party transactions is placed before the Audit Committee and also the Board of Directors. The policy on Related Party Transactions as approved by the Board, is available at the Company's website. Details of Related Party Transactions are given in "Annexure-A."
RISK MANAGEMENT
The Board has constituted a Risk Management Committee to assess risks in the operations of business of the Company, to mitigate and minimize risks assessed, periodic monitoring of risks and other matters to be delegated to the Committee by the Board from time to time.
Following are the members of the Committee :
1. Mr. Santosh Shahra : Chairman
2. Mr. Nagalingam Goli : Member
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility" (CSR), the Company has during the year under review undertaken projects mainly in the area of Health of the people. The project is largely in accordance with Schedule VII to the Companies Act, 2013 and the Company's CSR Policy. The Report on CSR Activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as "Annexure-B" forming part of this report.
AUDITORS
(a) Statutory Auditors :
The Equity Shareholders of the Company in their Twenty Eighth Annual General Meeting held on 6th September, 2014 had accorded their approval pursuant to the provisions of Sections 139 and other applicable provisions of Companies Act, 2013 and Rules made there under to appoint Gupta Saharia & Co., Chartered Accountants (FRN No. 103446W), as the Statutory Auditor of the Company for the period of five years commencing from the conclusion of Twenty Eighth Annual General Meeting until the conclusion of Thirty Third Annual General Meeting.
The Board of Directors of the Company has, pursuant to the provisions of Section 139, recommended the ratification of appointment of Gupta Saharia & Co., Chartered Accountants (FRN No. 103446W), for the approval of the Equity Shareholders from the conclusion of Thirtieth Annual General Meeting till the conclusion of Thirty First Annual General Meeting.
The Auditors' Report to the Members for the year under review does not contain any qualification, reservation or adverse remark or disclaimer.
(b) Cost Auditors :
Pursuant to provisions of Section 148 and other applicable provisions of the Companies Act 2013, the Board of your Company has re-appointed M. Goyal & Co., Cost Accountants (FRN No. 000051) as the Cost Auditor of the Company for the financial year 2016-17. The said Auditors have confirmed that their appointment, if made, shall be within the limits as prescribed under Section 141(3) of the Companies Act, 2013. The Cost Audit Report with Annexure shall be submitted along with full information and explanation on every reservation or qualification contained therein, if any, to the Central Government within stipulated time period.
The Cost Audit Report for the financial year ended 31st March, 2015 was filed with the Central Government (Ministry of Corporate Affairs) vide SRN S42953240.
(c) 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 Company had appointed Mr. Ashish Garg, Company Secretary in Practice (FCS 5181/CP 4423) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure-C". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as "Annexure-D".
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed as "Annexure-E".
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements and are within the limits.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's Policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records, and the timely preparation of financial disclosures.
The Company has an Internal Control System commensurate with the size, scale and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditor. Significant audit observations and corrective action are reported to the Audit Committee.
The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has formulated a mechanism called "Vigil Mechanism/Whistle Blower Policy" for directors and employees to report to the management instances of unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct and provided a framework to protect employees wishing to raise a concern about serious irregularities within the Company.
The policy permits all the directors and employees to report their concerns to the Competent Authority, Managing Director of the Company and if the Whistle Blower believes that there is a conflict of interest between the Competent Authority and the Whistle Blower, he/she may send his/her protected disclosure directly to the Chairman of the Audit Committee.
The policy with the name and address of the Competent Authority, Managing Director of the Company and Chairman of the Audit Committee has been communicated to the employees by uploading the same on the website of the Company.
DEPOSITS
Your Company did not accept any deposit from the Public during the year under review.
INSURANCE
Your Company's Fixed Assets have been adequately insured.
CORPORATE GOVERNANCE
Your Company has been particular in implementing and complying with the norms of Corporate Governance and complying all the mandatory requirements as specified in Clause 49 of the Listing Agreement for the period from 1st April, 2015 to 30th November, 2015 and in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and paragraph C, D and E of Schedule V of the SEBI (LODR) Regulations, 2015 for the period from 1st December, 2015 to 31st March, 2016. A detailed report on Corporate Governance along with Certificate from Statutory Auditors confirming the compliance of the conditions of Corporate Governance is attached separately to this Annual Report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in "Annexure-F," forming part of this report.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Directors state that during the year under review, there was no complaint filed/pending pursuant to the provisions of "Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013".
MATERIAL CHANGES AND COMMITMENTS
There is no material change and commitment has occurred, affecting the financial position of the Company, between the end of the financial year of the Company i.e. 31st March, 2016 and the date of this report.
SIGNIFICANT AND MATERIAL ORDERS
The Securities and Exchange Board of India (SEBI) has issued an ex-parte ad-interim order on 24th May, 2016 against the Company and restrained the Company from buying, selling or dealing in the securities market, either directly or indirectly, in any manner whatsoever, till further directions and given the Company time of 21 days from the date of the Order to file its objections, if any, or request for personal hearing before SEBI. The Company shall file detailed reply to SEBI and take necessary action in the matter shortly.
ACKNOWLEDGEMENT
The Board of Directors take this opportunity to express their deep sense of gratitude to the Central , State Government and Local Authorities, Financial Institutions, Banks, Customers, Dealers, Vendors and all the stakeholders for their continued cooperation and support to your Company.
The Board of Directors wishes to express its appreciation to all the employees of the Company for their outstanding contribution to the successful operations of the Company.
The Board specially thank to the shareholders for their continued confidence and faith in the Company.
For and on behalf of the Board of Directors
Place : Indore Santosh Shahra
Date : 27th May, 2016 Executive Chairman
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