TO THE SHAREHOLDERS
Your Directors present their 30th Annual Report on the business and operations of theCompany and its Audited Statements of Accounts together with Auditors Report for theFinancial year ended 31st March 2016 as under :
| ||Current year ||Previous year |
| ||(31.03.2016) ||(31.03.2015) |
| ||Rupees ||Rupees |
|1. SUMMARY OF FINANCIAL RESULTS AND PERFORMANCE OF THE COMPANY: || || |
|Turnover/Income from Operations(gross) ||40449044 ||85847592 |
|Including other Income || || |
|Less: Excise duty ||NIL ||3385845 |
|Net income from operations ||40449044 ||82461747 |
|Profit/(Loss) before exceptional and || || |
|Extra-ordinary items and taxes ||281205 ||(1674921) |
|Profit/(Loss) before taxation ||281205 ||(2454060) |
|Tax Expenses: || || |
|Current Income Tax ||127000 ||-- |
|Deferred Income Tax (Assets) ||(16650870) ||(1160047) |
|Net Profit/(Loss) after Taxation ||1819292 ||(1294013) |
Your Directors do not recommend any dividend for the year under review.
No amount has been transferred to the Reserves by the Board during the year underreview.
4. THE COMPANYS WORKING/STATE OF AFFAIRS DURING THE YEAR UNDER REVIEW :
The Secondary Steel Sector of the country comprising of Sponge Iron Plants/SteelMelting Shops/Re-rolling Mills have been passing through a very bad phase for the lastseveral years for reasons and circumstances beyond their control and in line with thatyour Companys working has been quite dismal for the year under review as theCompanys both the Sponge Iron Plants at Jamshedpur and also at Dist. Nalgonda(Telengana) remained closed for whole of the year due to uneconomic and unviableoperations on account of unavoidable reasons and circumstances which inter-alia includeunremunerative selling prices and shortage/unavailability of basic raw materials such asgas coal and iron ore at affordable and economically viable rates. The problem wasfurther compounded by highly depressed market conditions for steel in the country due toslow growth in the consumption and huge steel import at cheaper rates from China SouthKorea and Russia etc. The current financial years outlook however looks slightlypromising as the Central
Government has taken several steps to restrict/stop cheaper import of steel from Chinaand the Management is hopeful to re-start both the Sponge Iron Plants as soon as themarket conditions improve and the manufacturing operations become profitable. The
Companys Hydrocarbon Gas Bottling Plant at Raigarh (Chhattisgarh) remained closeddue to high cost of gas thus making the operations economically unviable as it isdifficult to compete with the Govt. owned Oil Companies. The circumstances mentioned asabove are beyond the control of the Directors and the Management but they continue to makeall out efforts for the betterment of the Company and accordingly your Board is seekingpowers and authority from you through a special resolution to sell / lease out / disposeoff / demerge or make any arrangement compromise or monetize merger as the case may bein respect of any or all of the Industrial units of the company so that the fixed expensesof the closed units could be minimized or done away with and the consideration and salevalue received if any could be used for the working capital or any other profitableinvestments/venture or any viable allied or diversified business/industry.
5. CHANGE IN NATURE OF BUSINESS OF THE COMPANY:
None during the year.
6. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR 31.03.2016 TILLTHE DATE OF THIS
No such material changes and commitments have taken place.
7. SIGNIFICANT MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS AGAINST THECOMPANY:
8. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO COMPANYS FINANCIALSTATEMENTS:
In the opinion of the Board the Company has adequate Financial Controls in place withrespect to Companys Financial Statements and Operations. Kindly refer to AnnexureB of the Statutory Auditors Report dated 16.5.2016 on this matter.
9. DETAILS OF NAMES OF COMPANIES WHICH HAVE BECOME OR CEASE TO BE THE COMPANYSSUBSIDIARY COMPANIES/ JOINT VENTURE/ ASSOCIATE COMPANIES DURING THE YEAR UNDER REVIEW ANDTHEIR FINANCIAL PERFORMANCE:
M/s Chandil Industries Private Ltd having changed hands has ceased to be an associate/ group company during the FY: 2015-16. There is no other change.
10. FIXED DEPOSITS :
The Company has not accepted any kind of deposits during the year from the Public undersection 73 or 74 (Chapter V) of the Companies Act 2013 nor did it receive the same in anyof the previous years and hence there are no overdue/outstanding Deposits or any interestpayable thereon and therefore the prescribed details under the Companies Act 2013 are notrequired to be furnished.
11. STATUTORY AUDITORS :
M/s. A Pradhan & Associates Chartered Accountants were appointed as StatutoryAuditors of your Company in the last 29th Annual General Meeting and they being eligiblehave offered themselves for re-appointment at the ensuing 30thAnnual General Meeting. Nochange in Statutory Auditors has taken place during the year under review.
12. AUDITORS REPORT :
The observations made in the Auditors Report are self-explanatory and do not callfor any further comments u/s 134(3)(f) of the Companies Act 2013. The Auditors have notmade any materially significant qualifications in their Report.
13. EXTRACT OF THE ANNUAL RETURN OF FINANCIAL YEAR ENDED 31.03.2016:
The same is annexed with this Report in the prescribed FORM NO. MGT-9.
14. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION EXPORTS AND FOREIGN EXCHANGEEARNINGS AND OUTGOINGS.
The informations required under Section 134(3)(m) of the Companies Act 2013 read withClause 8 of the Companies (Accounts) Rules 2014 are as under:-
(A) CONSERVATION OF ENERGY :
The Power requirement at Companys Gas Bottling Plant is negligible as onlybottling of gases is being done. For Sponge Iron Plants the Capacitor Panels of adequatesize and number have been installed and are maintained to save and economise on powerconsumption. As the Companys manufacturing units are lying closed; the Company hasnot made any fresh investments on this account nor was there any need to take any freshinitiatives on this account.
(B) TECHNOLOGY ABSORPTION :
The Company is using in-house technology and expertise for its Hydrocarbon Gas BottlingPlants. The technology to manufacture Sponge Iron was provided by an outside agency longago. The said technology is fully indigenous and is now well established and has beenfully absorbed by the Company. The Company has not so far made use of any importedtechnology for its products/plants. The Company has not made nor felt necessary to absorbany fresh technology and the Company has not incurred any expenditure on Research andDevelopment.
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO :
Earnings: Nil (Previous Year: Nil)
Outgo : Nil (Previous Year : Nil)
15. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY:
As per criteria prescribed under section 135 of the Companies Act 2013; the CSR is notapplicable to the Company in respect of the financial year 2015-16 covered under thisReport. The Company will however formulate and implement CSR Policy as and when it getsapplicable to the Company.
16. DIRECTORS :
A) Changes in Directors and Key Managerial Personnel:
Mr. Suresh Kumar Agarwal and Mrs. Sushma Chhibbar were re-appointed as Directors of theCompany by the members in the last Annual General Meeting held on 21st September 2015.Mr. VisheshChhibbar was appointed as an Additional Director of the Company by the Board inits meeting held on 21st March 2016 to hold office till the next Annual General Meeting.He is eligible for re-appointment and has offered as such. Mr. Puranmal Agarwal Mr.YudhbirChhibbar and Mr. Suresh Kumar Agarwal the Directors retire by rotation and areeligible for re-appointment. The Board in its meeting held on 16.10.2015 appointed Mr.Dalbir Chhibbar as the new Chairman of the Company and accordingly he is now acting as theChairman & Managing Director of the Company. The Chairman & Managing Director andthe Independent Directors are not liable to retire by rotation as per relevant provisionsof the Companies Act 2013. Mr. Subhash Chandra Rana the General Manager of the Companyhad resigned during the year due to personal reasons and the Board appreciates hisexcellent services provided to the Company during his long tenure with the Company.
B) Declaration by an Independent Director(S) and Re-Appointment If Any:
Declaration given by Independent Directors meeting the criteria of independence asprovided in sub-sub-section (6) of Section 149 of the Companies Act 2013 and Rule 5 ofthe Companies (Appointment and Qualification of Directors) Rules 2014 has been receivedand taken on record.
C) Formal Annual Evaluation:
Pursuant to the provisions of the Sec 134 (3) (p) of the Companies Act 2013 and clause2(f)(9) of chapter IIof SEBI (Listing Obligations and disclosure requirements)regulations 2015 ( hereinafter in this board report called and referred to as "SEBI
DISCLOSURE REGULATIONS); your Board has carried out an annual performance evaluation ofits own performance the Directors individually as well as the evaluation of the workingof its Audit Nomination and Remuneration Committees as per a suitably conceived formalmanner and system. During the year under review the Independent Directors met on 21stMarch 2016 inter alia to discuss the Performance evaluation of Non Independent Directorsand Board of Directors as a whole and of the Chairman & Managing Director andEvaluation of the quality of flow of information between the Management and Board foreffective performance by the Board and were satisfied overall. The Board has carried outthe performance evaluation of all Independent Directors of the Company and is satisfiedwith their performance.
17. BOARD MEETINGS HELD DURING THE YEAR :
During the year the Board of Directors Meetings were held on eight occasions e.g.on 24th April 2015 29th May 2015 3rd August 2015 10th August 2015 16th October2015 6th January 2016 18th January 2016 and 21st March 2016. The IndependentDirectors held their separate annual meeting on 21st March 2016.
18. AUDIT COMMITTEE:
As Per Corporate Governance Report annexed hereto.
19. VIGIL MECHANISM:
As per Corporate Governance Report annexed hereto.
20. NOMINATION & REMUNERATION COMMITTEE AND STAKEHOLDERS RELATIONSHIP COMMITTEE:
As per Corporate Governance Report annexed hereto.
21. LOANS GUARANTEES AND INVESTMENTS:
Refer Note: 39 in the Financial Statements of Accounts.
22. RELATED PARTY TRANSACTIONS AS REQUIRED UNDER SECTION 188A(1)/ COMPANIES ACT 2013:
No related party transactions have taken place during the year under review and hencepreparation and filing of form AOC-2 is not required.
23. MANAGERIAL REMUNERATION:
The particulars of Managerial remuneration are mentioned in the Corporate GovernanceReport as annexed to this Board Report.
24. SECRETARIAL AUDIT REPORT:
A Secretarial Audit Report dated 14.5.2016 given by J. Patnaik & AssociatesCompany Secretaries in Practice is annexed here to in the prescribed Form No.-MR-3 ofCompanies Act 2013.
25. CORPORATE GOVERNANCE :
The Company files quarterly Corporate Governance Report with BSE Ltd. as required underSEBI DISCLOSURE REGULATION- 24. Corporate Governance Report along with the Certificate ofthe Auditors confirming compliance of conditions of Corporate Governance as required underthe relevant Regulations of the SEBI is annexed hereto.
26. RISK MANAGEMENT POLICY:
The Companys biggest risk is with regard to procurement of critical raw materialsnamely Iron-Ore and Coal at reasonable/affordable rates but it has virtually no control onthe sameasseveral of the Iron-Ore Mines in the Country still remain closed and Coal has tobe sourced mainly from Government-Owned Companies who decide and fix the pricesarbitrarily. The other risks is the wide fluctuations in the selling price of Sponge-Ironwhich again depend on Demand and Supply and your Company being a nominal player has nocontrol or influence on the same. The Company has however laid down procedures to informthe Board of Directors about Risk
Assessments and its minimization procedures. The Board has also framed andimplemented the Risk Management Plan for the Company to the extent it was possiblefeasible and necessary.
The formation of Risk Management Committee is not applicable to the Company as therequirement is applicable to only top 100 listed entities on BSE Ltd. as per SEBIDISCLOSURE REGULATION no. -21.
27. DISCLOSURES ABOUT REMUNERATION TO DIRECTORS VIS--VIS EMPLOYEES AND OTHERPARTICULARS AS REQUIRED UNDER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014:
A. During the year no Remuneration was paid to any of the Directors including ManagingDirector except nominal sitting fees to the Independent Directors for attending the BoardMeetings and therefore the computation of ratio of remuneration of each Director to themedian remuneration of the employees of the Company are not furnished. Due to closure ofall the manufacturing units of the Company and resultant financial hardship; no incrementto the employees was awarded during the year under review.
The remuneration paid and/or payable to the Key Managerial Personnels is veryreasonable and is commensurate with their performances. The remuneration paid to theemployees is as per the remuneration policy of the Company which is dynamic in nature andchanges as per the financial performance of the Company and also of an individualemployee.
B. No employee of the Company during the financial year was in receipt of remunerationaggregating to Rs.60 lacs or more if employed for the whole year and Rs.5 lacs per monthif employed for a part of the financial year. No employee of the Company is holding 2% ormore of the Equity Shares of the Company.
28. DISCLOSURE UNDER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013 :
The Board of Directors and/or the Management of the Company has not received anycomplaint on this account from any of the employees of the Company or from any otherperson.
29. DIRECTORS RESPONSIBILITY STATEMENT:
The Directors Responsibility Statement referred to in clause (c) of sub-section(3) of Section 134 of the Companies Act 2013 states:-
(i) that in the preparation of the annual accounts for the financial year ended 31stMarch 2016 the applicable accounting standards had been followed alongwith properexplanation relating to material departures.
(ii) that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profits of the Company for the year under review.
(iii) that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
(iv) that the Directors have prepared the accounts for the financial year ended 31stMarch 2016 on a going concern basis.
(v) that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(vi) that the Directors had devised proper systems to ensure compliance with provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Directors would like to convey their sincere appreciation for the assistance andco-operation received from all Stakeholders during the year under review. Your Directorsalso wish to place on record their appreciation for the contribution of the employees atall levels.
|Place : Kolkata ||For and on behalf of the Board |
|Dated :16th May 2016 ||Dalbir Chhibbar |
| ||Chairman & Managing Director |