FOR THE FINANCIAL YEAR 2016-2017
AHMEDABAD STEELCRAFT LIMITED CIN: L27109GJ1972PLC011500
Your Directors have pleasure in presenting their 45th Annual Report on thebusiness and operations of the company together with the Audited Statement of Accounts forthe year ended 31st March 2017.
Financial Highlights (Standalone)
The Financial Performance for the year ended March 2017 is summarized as under and theDirectors recommend appropriation of Profit as under:
| || ||(Rupees in Lakhs) |
|Particular ||Year ended ||Year ended |
| ||31st March 2017 ||31st March 2016 |
|Turnover ||417.77 ||319.41 |
|Profit/(Loss) before taxation ||12.76 ||81.26 |
|Less: Tax Expense || || |
|a) Current Tax || || |
|b) Excess/Short Provisions of tax || || |
|c) Deferred tax Liability / (Assets) ||1.59 ||(2.92) |
|Profit/(Loss) after tax ||11.17 ||84.18 |
|Less: Appropriation || || |
|a) Transferred to General Reserve || || |
|b) Proposed Dividend on Equity Shares ||20.46 ||30.69 |
|c) Tax on Dividend ||4.17 ||6.42 |
|Add: Balance B/F from the previous year ||1656.97 ||1609.90 |
|Balance Profit / (Loss) C/F to the next year ||1643.51 ||1656.97 |
STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK:
??STATE OF COMPANY'S AFFAIRS
The income of the company during the year was ` 4.17 Crores in comparison of ` 3.19Crore in the previous year. The Company continues to be partner of LLPs. During the yearunder review the Profit sharing from the LLPs in which the Company is partner is reducedon account of Various factors internal/external affecting the profitability of thePartnership firm engaged in Real Estate.
The management is however optimist once the policies of Government in respect ofrevenue in Real Estate are implemented which will enhance the Profitability of theCompany. The Management is also willing to explore the domestic market which is mainlywith regard to mild stream window section. The Domestic market will get boost once thesteel policy by the Government is executed giving various Incentives for Local traders andmanufacturers of Steel Industry. Besides that the implementation of Goods and Service Taxthe results of which will be reflected in Quarter II defining its impact on profitabilityof the Company.
The trading activities of the Company mostly comprises of export of Mild steel section(Non-Alloy) and others steel items which are subject to Government policies and otherGlobal factor which has direct effect on the operational activities of trading. Howeverthe Company has proved its image in global market and has enough capacity to face theuneven situation in the course of its operation which is within its control.
The Company has also made capital contribution in Limited Liability Partnership engagedin real estate and may independently start this activities considering the fact that thedemand for private capital for real estate investment and supporting infrastructure hasincreased enormously. In the second half of the Financial Year 2016-17 the markets in RealEstate were sluggish. On notification of RERA the trend in sluggishness may vanish andsome improvement in the market may be observed. This will have long term impact on thebusiness of the Company.
Considering the overall improvement in performance as well as the need to conservecapital for continued growth the Directors recommend Dividend of Re. 0.50 per EquityShare of ` 10/- each for the year ended March 31 2017.
The actual amount of Dividend payable would exceed the profit of the Current year. Itis therefore recommended by the Board to pay the balance amount from the Previous Yearbalance of Profit and Loss Account after providing depreciation as per Schedule-II.
DIVIDEND DISTRIBUTION POLICY
??DIVIDEND DISTRIBUTION POLICY
The Board of Directors in their meeting held on 29th May 2017 adopted this DividendDistribution Policy as required by Regulation 43A of the SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 (the "Listing Regulations").
??CIRCUMSTANCES UNDER WHICH THE SHAREHOLDERS MAY OR MAY NOT EXPECT DIVIDEND
The Board of Directors of the Company while declaring or recommending dividend shallensure compliance with statutory requirements under applicable laws including theprovisions of the Companies Act 2013 and Listing Regulations. The Board of Directorswhile determining the dividend to be declared or recommended shall take into considerationthe advice of the Executive management of the Company and the planned and furtherinvestments for growth apart from other parameters set out in this policy.
The Board of Directors of the Company may not declare or recommend dividend for aparticular period if it is of the view that it would be prudent to conserve Capital forthe then ongoing or planned business expansion or other factors which may be considered bythe Board.
??PARAMETRES TO BE CONSIDERED BEFORE RECOMMENDING DIVIDEND
The Board of Directors of the Company shall consider the following Financial/InternalParameters while declaring or recommending Dividend to Share Holders.
1) Profits under during the Financial Year.
2) Retained Earnings
3) Earnings outlook for next three to five years
4) Expected Future Capital/liquidity Requirements
5) Any other relevant factors and material events
The Board of Directors of the Company shall consider the following external parameterswhile declaring or recommending dividend to shareholders:
1) Macro Economic Environment - Significant changes in macro - economic environmentmaterially affecting the businesses in which the Company is engaged in the geographies inwhich the Company operates.
2) Regulatory Changes - Introduction of new regulatory requirements or material changesin existing taxation or regulatory requirements which significantly affect the businessesin which the Company is engaged.
3) Technological changes which necessitate significant new investments in any of thebusinesses in which the Company is engaged.
??CONFLICT IN POLICY
In the event of any conflict between this policy and the Provisions contained in theListing Regulations the Listing Regulations shall prevail.
The Board may from time to time make amendments to this Policy to the extent requireddue to change in applicable laws and Listing Regulations or as deemed fit on a review.
AMOUNTS TRANSFERRED TO RESERVES:
No amount has been transferred to General Reserve.
EXTRACT OF ANNUAL RETURN:
The extract of Annual Return in format MGT -9 for the Financial Year 2016-17 has beenenclosed with this report as ANNEXURE - I
DETAILS OF SUBSIDIARIES COMPANIES ASSOCIATE COMPANY & LLP/PARTNERSHIP
|Sr. No. ||Name of Company ||Nature of Relationship ||No. of Share hold/Capital Contribution |
|1. ||Light Works LLC ||Associate Company ||50% |
|2. ||Endor Properties LLP ||Partner ||6.22% |
|3. ||Tesla Properties LLP ||Partner ||11.72% |
|4. ||View Port Properties LLP ||Partner ||2.92% |
|5. ||Aavkar Projects ||Partner ||11.10% |
|6. ||Aavkar Realty ||Partner ||46% |
|7. ||Farpoint Properties LLP ||Partner ||2.885% |
*There is no Subsidiary of Company hence no such information is provided
The Board comprises of Nine Directors as on March 31 2017 viz. Ashok Gandhi (Chairmanand Independent Director) Anand Shah (Managing Director) Darshan Jhaveri (ManagingDirector) Shashank Shah (Executive Director) Anand Jhaveri (Executive Director) ViralJhaveri (Executive Director) Kanishka Kaji (Independent Director) Nita Shah (Whole timeDirector) and Shrujal Patel (Independent Director).
The term of the Executive Director namely Shri Anand Shah and Shri Darshan Jhaveri bothManaging Director and Shri Shashank Shah Shri Anand Jhaveri Shri Viral Jhaveri and SmtNita Shah Whole-time Directors of the Company will expire on 30th September 2017. Takinginto consideration the devotion of time for the development of business of the Companythe Nomination and Remuneration Committee and Audit Committee had suggested the Board torecommend their appointments at the ensuing Annual General Meeting with revised salary forfurther five years commencing from 1st October2017. Accordingly the Board recommendstheir appointments at ensuing Annual General Meeting. The details of the QualificationExperience and Remuneration is annexed to the Notice of Annual General Meeting which is asper Schedule-V Companies Act2013 SEBI Guidelines and SEBI (LODR) 2015.
All the appointees referred herein above have concern or interest in the resolution setout in Item No. 6 to 11 of Notice convening Annual General Meeting
(a) INDEPENDENT NON EXECUTIVE DIRECTORS
(i) Ashok Gandhi (ii) Kanishka Kaji (iii) Shrujal Patel
(b) WOMAN DIRECTOR
In terms of the provisions of Section 149 of the Companies Act 2013 and the ListingRegulations specified Companies are required to have at least one Woman Director in theirBoard. Smt Nita G Shah was appointed as on 22nd January 2015 as Whole Time Director onBoard.
(c) CHAIRMAN OF THE BOARD
Ashok C Gandhi DIN 00022507 has been Chairman and Independent Director since 10thJune 1994
(d) MANAGING DIRECTOR & CEO
Anand Shah DIN 00017452 has been the Managing Director since 17th October1998and CEO from 30th July2015.
Darshan Jhaveri DIN 00489773 has been the Managing Director since 29th June1995.
Anand Jhaveri has been the CFO of the Company since 30th July 2015.
(e) APPOINTMENT/ RE-APPOINTMENT/ RESIGNATION/ RETIREMENT OF DIRECTORS
In order to ensure compliance with Section 152 (6) of the Act the Board has consideredDarshan Jhaveri Managing Director and Nita Shah Whole-time Director are liable toretire by rotation and being eligible offer themselves for reappointment.
NUMBER OF BOARD MEETINGS:
During the Financial Year 2016-17 the following meetings of the Board of Directors ofthe company were held.
|Sr. ||Date of Board Meeting ||No. of Director Present in the Meeting |
|No. || || |
|1. ||26th May2016 ||Seven Directors were Present out of Nine Directors. |
|2. ||11th August2016 ||Nine Directors were Present out of Nine Directors. |
|3. ||20th October2016 ||Nine Directors were Present out of Nine Directors. |
|4. ||23rd January2017 ||Eight Directors were Present out of Nine Directors. |
|5. ||31st March2017 ||Nine Directors were Present out of Nine Directors. |
SYSTEM FOR INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
The Financial Statements are prepared based on Computer system outputs. Responsibilityof preparation of Financial Statements is entrusted to a dedicated unit which iscompletely independent of business risk audit or other functions. This unit does notoriginate accounting entries except for limited matters such as Share Capital Taxes andTransfers to Reserves. The Company has implemented adequate procedures and internalcontrols which provide reasonable assurance regarding reliability of financial reportingand preparation of Financial Statements and that such internal financial controls wereadequate and were operating effectively during the year.
PARTICULARS OF LOAN GUARANTEES AND INVESTMENTS UNDER SECTION 186 :
The Company has taken requisite permission of Board and Shareholders in respect ofinvestment made and loans given to other parties as per compliances of Companies Act1956and 2013.
As on date the Company has not provided any guarantee to Body Corporates and Associateconcern.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All the transactions entered by Company with the Related Parties were in ordinarycourse of business and are at Arm's length. Remuneration paid to the Working Directorsi.e. Managing Directors& Executive Directors is in respect of their time involvementin development of Company. Other transactions are in the form of capital contribution. Thedividend/Profit earned from this associate is tax free in the hands of Company. All theCompliances under the Companies Act 1956/ 2013 have been done.
There are no material significant related party transaction that may have potentialconflict with interest of the Company at large.
EXPLANATION TO AUDITOR'S REMARKS
The remarks made by the Auditors in their Report have been suitably dealt with in theschedules and notes and therefore do not call for any further clarification.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The details of Energy Technology Absorption Foreign Exchange Earnings and Outgo areas under:
A. Conservation of Energy: Particulars with respect to Conversation of Energy are notapplicable as the Company has not done any manufacturing activities.
|B. (1) Research and Development ||: ||Not Applicable |
|(2) Technology absorption ||: ||Not Applicable |
|C. Foreign Exchange earnings and outgo: || || |
|(1) Activities relating the export ||: ||Company exports steel related items & Merchant Trade Activites |
|(2) Foreign Exchange earned ||: ||` 29095357 & ` 9918483 |
|(3) Foreign Exchange used ||: ||` 9128847 |
Risk Management Policy:
The Company has developed a very comprehensive risk management policy and the same isreviewed by the Audit Committee at periodical intervals which in turn informs the Boardabout the risk assessment and minimization procedures adopted by the management.Suggestions or guidance given by the audit committee members are immediately implemented.At the corporate level major risks are reviewed by the Managing Directors and directionsin this regard are issued accordingly.
Details of Directors and Key Managerial Personnel:
|NAME OF DIRECTOR ||DIN ||DESGNATION ||DATE OF ||RESIDENTIAL ADDRESS |
| || || ||APPOINTMENT || |
|ASHOK C.GANDHI ||00022507 ||INDEPENDENT DIRECTOR ||10/06/1994 ||2 PRABHAT SOCIETY PALDI AHMEDABAD - 7 |
|ANAND V. SHAH ||00017452 ||MANAGING DIRECTOR ||17/10/1998 ||VRUNDAVAN 53 VIJAY PARK C.G. ROAD AHMEDABAD - 09 |
|DARSHAN A. JHAVERI ||00489773 ||MANAGING DIRECTOR ||29/06/1995 ||FAGUN DR. V.S. MARG P.O. POLYTECHNIC AHMEDABAD -15 |
|SHASHANK I. SHAH ||00545449 ||WHOLE TIME DIRECTOR ||20/03/1995 ||MADHUBAN DR. V.S. ROAD NR. APANG MANAV |
| || || || ||MANDAL AHMEDABAD-15 |
|ANAND N. JHAVERI ||00489833 ||WHOLE TIME DIRECTOR ||20/03/1995 ||ANAND BUNGLOW CHANDRA VIHAR SOCIETY AHMEDABAD -15 |
|VIRAL A. JHAVERI ||00489644 ||WHOLE TIME DIRECTOR ||25/06/2002 ||SHAGUN NR. BANK OF INDIA SOCIETY AMBAWADI |
| || || || ||AHMEDABAD -15 |
|NITA GIRISH SHAH ||03225876 ||WHOLE TIME DIRECTOR ||22/01/2015 ||KAJAL VIJAYPARK OPP MUNICIPAL MARKET |
| || || || ||NAVRANGPURA AHMEDABAD 380009 Gujarat INDIA |
|KANISHKA H. KAJI ||02329312 ||INDEPENDENT DIRECTOR ||10/06/1994 ||503 SAMRUDHI SATTARTALUKA SOCIETY OPP. HIGH |
| || || || ||COURT LANE AHMEDABAD - 14 |
|SHRUJAL. S. PATEL ||02087840 ||INDEPENDENT DIRECTOR ||23/01/2014 ||625/8 VASANT BAUG OPP. GULBAI TEKRA PUMPING |
| || || || ||STATION ELLISBRIDGE AHMEDABAD 380006 |
COMPARISON OF REMUNERATION TO DIRECTORS AND EMPLOYEES:
There is 20% increase in the remuneration payable to Directors in Comparison to 10%increase in the salary of employee. Increase in remuneration of Executive Director isgiven after two years while employees increase in salary in year.
The Salary rise is based on the inflation data. The increase in salary of Director isafter two years. As such the rise in the salary is at par with other employee of theCompany. The Performance of the Company has been affected by Global recession and economicslowdown in the Indian economy.
In comparison to the Remuneration of Directors and other employees is as under:
1) Median of Directors remuneration:- ` 6480000/- Per Annum.
2) Median of employees remuneration:- ` 809420/- Per Annum
DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL:
No order has been passed by the Court/Tribunal during the financial year 2016-2017.
DEPOSITS (AS PER THE DEFINITION SECTION 2(31) OF THE COMPANIES ACT 2013)
The following details of deposits covered under Chapter V of the act: I. DepositsAccepted during the year: Nil II. Remained unpaid or unclaimed as at the end of the year:Nil
III. Whether there has been any default in repayment of deposits or payment of interestthereon during the year and if so number of such cases and the total amount involved-N.A. a. At the beginning of the year : Nil b. Maximum during the year : Nil c. At the endof the year : Nil
IV. The details of deposits which are not in compliance with the requirements ofChapter: There is no such Deposit held by the Company.
RECEIPT OF ANY COMMISSION BY MANAGING DIRECTOR / WHOLE TIME DIRECTOR FROM A COMPANY ORFOR RECEIPT OF COMMISSION / REMUNERATION FROM IT HOLDING OR SUBSIDIARY:
Company is not paying any commission to it's director
DECLARATION BY INDEPENDENT DIRECTOR:
The Company has received declaration from all the Independent Directors under theCompanies Act 2013 and rules made thereunder.
SECRETARIAL AUDIT REPORT:
In terms of Section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed M/s D. N.Motwani& Co. to undertake Secretarial Audit. The Secretarial Audit Report submitted byM/s. D. N. Motwani& Co. is furnished as Annexure II.
The explanation pertaining to Para 3(i) of the Secretarial Audit Report followingexplanation is furnished:-
??The Company is in the process of appointing Company Secretary under section 203of the Companies Act 2013.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY:
The Company is not falling within the criteria of Section 135 of the Companies Act2013 and hence the Company is not required to form CSR committee.
The Audit Committee comprises of Kanishaka H. Kaji Ashok C. Gandhi Anand V. Shah andDarshan A. Jhaveri. All the recommendations made by the Audit Committee were accepted bythe Board.
The Vigil Mechanism of the Company incorporates Whistle Blower Policy in terms of theListing Agreement. Protected disclosures can be made by a Whistle Blower through a mail ora letter to the Chairman of the Company. The Policy on Vigil Mechanism and Whistle BlowerPolicy may be accessed on Company's Website.
STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THEBOARD OF ITS OWN PERFORMANCE ITS DIRECTORS AND THAT OF ITS COMMITTEES:
During the year the Board adopted a formal mechanism for evaluating its performanceand as well as that of its Committees and individual Directors including the Chairman ofthe Board. The exercise was carried out through a structured evaluation process coveringvarious aspects of the Boards functioning such as composition of the Board &committees experience & competencies performance of specific duties &obligations governance issues etc. Separate exercise was carried out to evaluate theperformance of individual Directors including the Board Chairman who were evaluated onparameters such as attendance contribution at the meetings and otherwise independentjudgement safeguarding of minority shareholders interest etc.
The evaluation of the Independent Directors was carried out by the entire Board andthat of the Chairman and the Non-Independent Directors were carried out by the IndependentDirectors. The Directors were satisfied with the evaluation results which reflected theoverall engagement of the Board and its Committees with the Company.
NOMINATION & REMUNERATION COMMITTEE POLICY:
The sitting fee paid to the non-executive directors commission to independentdirector and remuneration paid to the whole- time director is approved by theremuneration committee. Remuneration Committee consists of Ashok C. Gandhi (DIN:00022507) Shrujal S. Patel (DIN: 02087840) and Anand N. Jhaveri DIN(00489833). Out ofwhich two are Independent Directors and Shrujal S. Patel Chairman of the Committee.
DECLARATION OF FINANCIAL PERFORMANCE
A half - yearly/Quarterly Declaration of financial performance including summary ofsignificant events in the last six months is currently not being send to each household ofshareholders. However the Company publishes its results in national and state levelnewspapers having wide circulation. The results are also posted on the website of theCompany i.e. www.steelcraft.co.in
|Sr. ||Name of Director ||Remuneration for ||Remuneration for |
|No. || ||F.Y 2016-2017 ||F.Y 2015-2016 |
| || ||(Amount In ` ) ||(Amount In ` ) |
|1. ||ANAND V. SHAH (Managing Director) ||1080000 ||900000 |
|2. ||DARSHAN A. JHAVERI (Managing Director) ||1080000 ||900000 |
|3. ||ANAND N. JHAVERI (Whole-time Director) ||1080000 ||900000 |
|4. ||SHASHANK I. SHAH (Whole-time Director) ||1080000 ||900000 |
|5. ||VIRAL A. JHAVERI (Whole-time Director) ||1080000 ||900000 |
|6. ||NITA G. SHAH (Whole time Director) ||1080000 ||900000 |
*Remuneration is not required to be paid to independent director as per Section 149read with Schedule IV of Companies Act 2013.
The Term of M/s. Dhiren Shah & Co. (Firm Reg No: 114633W) the existing StatutoryAuditor of the Company expires on the date of this Annual General Meeting. Accordingly theCompany has obtained the consent of M/s Nautam R. Vakil & Co. to act as StatutoryAuditor of the Company in place of M/s. Dhiren Shah & Co. (Firm Reg No: 114633W) forthe Financial Year 2017-18 till the conclusion of next Annual General Meeting.
Company does not fall within the purview of Section 148 of the Companies Act 2013andhence there is no requirement for the Company to appoint Cost Auditor for the F.Y 2016-17.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 yourdirectors confirm that:
a) In the preparation of the annual accounts for the financial year ended 31st March2017 the applicable accounting standards had been followed along with proper explanationrelating to material departures;
b) The directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2017 and of the profit/loss of the Company for that period;
c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
d) The directors had prepared the annual accounts on a going concern basis;
e) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
f) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
MATERIAL EVENTS THAT HAVE HAPPENED AFTER THE BALANCE SHEET DATE
No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year to which the Financial Statementsrelate and the date of the Report.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN ATWORKPLACE
The Company has zero tolerance for sexual harassment at the Workplace and has adopted a'Policy on Prevention Prohibition and Redressal of Sexual Harassment of Women at WorkPlace' in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules made thereunder.
The Policy aims to provide protection to women employees at the workplace and preventand redress complaints of sexual harassment and for matters connected or incidentalthereto with the objective of providing a safe working environment. However no complaintwas registered with regard to the same.
During fiscal 2011 we started a sustainability initiative with the aim of going greenand minimizing our impact on the environment. Like the previous years this year too weare publishing only the statutory disclosures in the print version of the Annual Report.Additional information is available on our website www.steelcraft.co.in.
Electronic copies will be the Annual Report 2016-17 and Notice of the 45th AnnualGeneral Meeting willbe sent to all members whose email addresses are registered with theCompany / Depository Participant(s). For members who have not registered their emailaddresses physical copies of the Annual Report 2016-17 and the Notice will be the 45thAnnual General Meeting are sent in the permitted mode. Members requiring physical copiescan send a request to the Company.
The Company provides e-voting facility to all its members to enable them to cast theirvotes electronically on all resolutions set forth in the Notice. This is pursuant toSection 108 of the Companies Act 2013 and Rule 20 of the Companies (Management andAdministration) Amendment Rules 2015. The instructions for e-voting are provided in theNotice.
The Directors express their sincere appreciation to the valued shareholders bankersand clients for their support.
| ||For and on behalf of the Board |
|Place: Ahmedabad ||Darshan A. Jhaveri (DIN:00489773) |
|Date : 29/05/2017 ||Managing Directors |