TO THE SHAREHOLDERS
The Members of
Beekay Steel Industries Limited
Your Directors take pleasure in presenting the 34th annual report on the business andoperations of your Company together with the audited accounts of your Company for the yearended 31st March 2015:
|FINANCIAL RESULTS || ||( Rs in crores) |
|Particulars ||Financial Year 2014-15 ||Financial Year 2013-14 |
|Sales/Income from Operations ||554.20 ||581.13 |
|Profit for the Year before Interest Depreciation & Tax ||62.16 ||61.57 |
|Interest ||21.36 ||20.04 |
|Depreciation ||16.46 ||12.56 |
|Profit Before Taxation ||24.34 ||28.97 |
|Provision for Tax-Current Tax ||6.63 ||6.16 |
|MAT Credit ||- ||(4.50) |
|Provision for Tax-Deferred Tax ||2.11 ||9.01 |
|Profit for the Year ||15.59 ||18.30 |
|Add/(Less): Adjustments ||0.01 ||(0.06) |
|Balance of Profit for the Previous Year ||74.67 ||61.43 |
|Balance available for appropriation ||90.26 ||79.67 |
|Appropriations: || || |
|Dividend-Equity Shares ||1.91 ||- |
|Dividend Tax ||0.38 ||- |
|Transfer to General Reserve ||5.00 ||5.00 |
|Transfer to Capital Redemption Reserve ||- ||- |
|Balance of Profit carried over ||83.01 ||74.67 |
RESULTS OF OPERATIONS
The turnover of your Company during the year under review has declined by 4.6 % toRs.554.20 Crores against Rs.581.13 Crores during the previous year due to economicslowdown in India and across the Globe. The lower demand resulted from economic slumpthroughout the year in the domestic market which negatively affected our financialperformance as it contributed to the market sentiment. There is an increase in operatingEBIDTA by merely 1 % to 62.16 Crores against the previous year of Rs. 61.57 Crores. Thenet profit after tax during the year was Rs. 15.60 Crores against of Rs 18.24 Crores inthe previous Year. There was decline in the net profit by 14.65 % comparing with theprevious year due to slowdown & stiff competition in the market. The Board ofDirectors put their Endeavour to improve the overall performance of the company.
Production in different units of the Company situated at Visakhapatnam were severelyaffected due to Hudhud cyclone which caused not only shut down of plants temporarily forfew months but also hit the orders to supply the materials which your Company could notmet on time.
Your Directors are pleased to recommend a dividend of Re. 1/- per share (i.e.10%) on19072052 equity shares for the year ended 31st March 2015 subject to approval of theshareholder at the ensuing Annual General Meeting. The total outgo on account of dividendwill be Rs.aggregating to Rs. 228.85 Lacs (In-taxes).
The unpaid and unclaimed dividend lying in the Unpaid Dividend Account becomes due tobe transferred to Investor Education & Protection Fund ("IEPF") after aperiod of 7 (seven) years. Your Directors therefore suggest you to claim the unpaiddividend before the last date.
The unpaid and unclaimed Dividend for the year 2006-07 has already been transferred tothe Central Government to Investor Education & Protection Fund ("IEPF") on2nd December 2014. The unpaid and unclaimed Dividend for the year 2007-08 is due to betransferred to Investor Education & Protection Fund ("IEPF") by 26thNovember 2015.
The paid up equity capital as on March 31 2015 remained at Rs 190909270 comprisingof 19072052 shares of Rs 10/-each. The Company has not issued any shares during the yearunder review. The company has not issued shares with differential voting rights norgranted stock options nor sweat equity.
Cash and cash equivalents as at March 31 2015 was Rs. 469.53 Lacs.The companycontinues to focus on judicious management of its working capital Receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013.
The detail of the investments made by company is given in the notes to the financialstatements.
INTERNAL CONTROL & INTERNAL FIANACIAL CONTROL
A Robust System of internal control commensurate with the size and nature of itsbusiness forms an integral part of the company corporate governance.
The Company has a proper and adequate system of internal control commensurate with thesize and nature of its business. Internal control systems are integral to theCompanys corporate governance policy. Some of the significant features of internalcontrol systems include
Documenting of policies guidelines authorities and approval proceduresencompassing the Companys all primary functions.
Deploying of a Matrix- ERP system which covers most of its operations and issupported by a defined on- line authorization protocol.
Ensuring complete compliance with laws regulations standards and internalprocedures and systems.
De-risking the Companys assets/resources and protecting them from anyloss.
Ensuring the accounting systems integrity proper and authorized recordingand reporting of all transactions.
The internal control systems and procedures are designed to assist in theidentification and management of risks the procedure-led verification of all complianceas well as an enhanced control consciousness.
Internal Financial Control
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportable materialweakness in the design or operation was observed.
This provides the Directors with reasonable assurance regarding the adequacy andoperating effectiveness of controls with regards to reporting operational and compliancerisks. To enable them to meet these responsibilities the Company has devised appropriatesystems and framework including proper delegation of authority policies and procedureseffective IT systems aligned to business requirements risk based internal auditframework risk management framework and whistleblower mechanism.
The Internal auditors continuously monitors the efficacy of Internal Financial Controlsystem with the objective of providing to the Audit Committee and the Board of Directorsan independent objective and reasonable assurance on the adequacy and effectiveness ofthe organizations risk management with regard to the Internal Financial Controlsystem.
Audit Committee meets regularly to review reports submitted by the internal auditors.The Audit Committee also meet the Companys Statutory Auditors to ascertain theirviews on the financial statements including the financial reporting system and complianceto accounting policies and procedures followed by the Company.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company has a Corporate Social Responsibility Committee comprising of threedirectors 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 theCompanies Act 2013 and the Rules there under. The Committee met four times during theyear to discharge its responsibilities. As part of its inititiatives under CorporateSocial Responsibility" (CSR) the company has undertaken projects in the areas ofEducation Livelihood Health Water and Sanitation Environment Rural development etc.As per the said policy the Company continues the strategy of discharging part of its CSRresponsibilities related to social service through various trusts/societies in addition toits own initiatives and donations made to other non-government organizations.
An Annual Report on CSR activities is annexed herewith as 'Annexure-A' in theprescribed format. During the year the Company has spent Rs. 28.01 lacs Towards CSRactivities.
EXTRACT OF ANNUAL RETURN
In accordance with the provisions of Section 134(3)(a) of the Companies Act 2013 thedetails forming part of the extract of the annual return in Form No. MGT 9 ismarked as Annexure B and annexed hereto and forms a part of thisreport.
NUMBER OF MEETINGS OF THE BOARD
The details of the number of meetings of the Board held during the financial year2014-15 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 theapplicable accounting standards have been followed with proper explanation relating tomaterial departures if any;
(b) the accounting policies adopted in the preparation of the annual accounts have beenapplied consistently except as otherwise stated in the Notes to Financial Statements andreasonable and prudent judgments and estimates have been made so as to give a true andfair view of the state of affairs of the Company at the end of the Financial Year 2014-15and of the profit for the year ended 31st March 2015;
(c) proper and sufficient care has been taken 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 annual accounts for the year ended 31st March 2015 have been prepared on agoing concern basis.
(e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
(f) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
DECLARATION BY INDEPENDENT DIRECTORS
Mr. Brijesh Kumar Dalmia Mr. Bhal Chandra Khaitan Mr. Ravishankar Sridharan Mr.Srikumar Banerjee Mr. Tapan Kumar Banerjee and Ms. Shyanthi Sengupta are IndependentDirectors on the Board of the Company. The Company has received declarations from all theIndependent Directors of the Company confirming that they meet the criteria ofindependence as prescribed both under the Companies Act 2013 and Clause 49 of the ListingAgreement with the Stock Exchanges.
COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
Pursuant to provisions of Section 178 of the Companies Act 2013 and Clause 49 of theListing Agreement the Board of Directors of the Company based on the recommendation ofthe Nomination and Remuneration Committee has formulated a Remuneration Policy.
The remuneration policy of the Company inter alia includes the aims and objectivesprinciples of remuneration guidelines for remuneration to Executive Directors andNon-Executive Directors fixed and variable components in the remuneration packagecriteria for identification of the Board Members and appointment of senior management.
The criteria for identification of the Board Members including that for determiningqualification positive attributes independence etc. are summarily given here under:
The Board Member shall possess appropriate skills qualificationcharacteristics and experience. The objective is to have a Board with diverse backgroundand experience in business government academics technology human resources socialresponsibilities finance law etc. and in such other areas as may be considered relevantor desirable to conduct the Companys business in a holistic manner.
Independent director shall be person of integrity and possess expertise andexperience and/or someone who the Committee/Board believes could contribute to thegrowth/philosophy/strategy of the Company.
In evaluating the suitability of individual Board Members the Committee takesinto account many factors including general understanding of the Companys businessdynamics global business social perspective educational and professional background andpersonal achievements.
Director should possess high level of personal and professional ethicsintegrity and values. He should be able to balance the legitimate interest and concerns ofall the Companys stakeholders in arriving at decisions rather than advancing theinterests of a particular section.
Director must be willing to devote sufficient time and energy in carrying outtheir duties and responsibilities effectively. He must have the aptitude to criticallyevaluate managements working as part of a team in an environment of collegiality andtrust.
The Committee evaluates each individual with the objective of having a groupthat best enables the success of the Companys business and achieves its objectives.
India Rating & Research Private Limited (Ind-Ra) a wing of international ratingagency FITCH Group has upgraded your company long term debt rating from INDBBB-to IND BBB. The outlook is also stable. Ind-Ra has also upgradedyour company bank facility also.
Ratings are based on established criteria and methodologies that India Ratings iscontinuously evaluating and updating.
The Companys financial discipline and prudence is reflected in the strong creditratings ascribed by rating agencies as given below:
|Instrument Rating ||Agency ||Rating ||Outlook ||Remarks |
|Long Term Debt ||Ind-Ra (A Fitch Group Co.) ||IND BBB ||Stable ||One notch above Indias sovereign rating |
RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties during the financial year were on anarms length basis and were in the ordinary course of business and the provisions ofSection 188 of the Companies Act 2013 are not attracted. Further there are no materiallysignificant related party transactions during the year under review.
Pursuant to the provisions of Clause 49 of the Listing Agreement the Company hasconstituted a Risk Management Committee. The details of the Committee and its terms ofreference are set out in the Corporate Governance Report forming part of the BoardsReport.
The Company has a robust Risk Management framework to identify evaluate businessrisks and opportunities. This framework seeks to minimize adverse impact on the businessobjectives and enhance the Companys competitive advantage. The framework alsodefines the risk management approach across the enterprise at various levels. RiskManagement forms an integral part of the Companys planning process.
BOARD EVALUATION & CRITERIA FOR EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board carried out an annual performance evaluation of its own performancethe individual Directors as well as the working of the Committees of the Board. Theperformance evaluation of the Independent Directors was carried out by the entire Board.The performance evaluation of the Chairman and the Non- Independent Directors was carriedout by Independent Directors. Details of the same are given in the Report on CorporateGovernance annexed hereto.
For the purpose of proper evaluation the Directors of the Company have been dividedinto 3 (three) categories i.e. Executive Non Executive Non-Independent &Non-Executive Independent. The criteria for evaluation includes factors such asengagement strategic planning and vision team spirit and consensus building effectiveleadership domain knowledge management qualities team work abilities result/achievements understanding and awareness motivation/ commitment/ diligenceintegrity/ethics/values and openness/receptivity.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
i) On the recommendation of the Nomination and Remuneration Committee the Board ofDirectors of the Company during its Meeting held on 31.03.2015 has appointed Mr. TapanKumar Banerjee as Independent Director and Ms. Shyanthi Sengupta as Independent WomanDirector on the Board of the Company. The requirement under Section 149 of the CompaniesAct 2013 and Clause 49 of the Listing Agreement also stands complied with suchappointments.
Shri Vijay Bansal Promoter Non-Executive Director retires from the Board by rotationand being eligible offers himself for re-appointment.
The above are subject to the approval of the shareholders in the ensuing Annual GeneralMeeting of the Company. In view of the provisions of Section 203 of the Companies Act2013 Shri Mukesh Chand Bansal Managing Director Shri Manav Bansal Wholetime Director& CEO and Shri Rabindra Kumar Sahoo Company Secretary were identified as KeyManagerial Personnel of the Company. Mr. Lalit Chandra Sharma has resigned from the officeof 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 IndependentWoman Director for a period of five years w.e.f 31.03.2015. Their terms of office asAdditional Directors will be expired at the ensuing Annual General Meeting and the Companyhas received application from a Member proposing their candidature to the office ofDirectors 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 valuableservices rendered by Mr. Krishna Chand Raut during his tenure as Director of the Company.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS COURTS ANDTRIBUNALS
No significant and material order has been passed by the regulators courts tribunalsimpacting the going concern status and companys operations in future.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
In compliance with provisions of Section 177(9) of the Companies Act 2013 and Clause49 of the Listing Agreement the Company has framed a Vigil Mechanism/Whistle BlowerPolicy to deal with unethical behaviour actual or suspected fraud or violation of thecompanys code of conduct or ethics policy if any. The Vigil Mechanism/WhistleBlower 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 befurnished under provision of the Companies Act 2013 and Rule 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Havingregard to the provisions of Section 136 of the Companies Act 2013 the Annual Reportexcluding the aforesaid information is being sent to the members of the Company.
DETAILS RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND EMPLOYEES
Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is marked as Annexure C which is annexed hereto and forms part of the Directors Report.
HUMAN RESOURCE DEVELOPMENT INDUSTRIAL RELATIONS
There is a continuous effort for better Human Resource (HR) service delivery in orderto better serve the customers with simpler well executed processes with proper use oftechnology. 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 continuousbasis. Based on the organizations strategic plan HR planning processes map thecapacity of the organization. The knowledge skills and abilities of the employees areidentified.
The strategic thrust of HR has been improvement of the performance of the employeesthrough training & development and also to identify high performers who are havingpotential for taking higher responsibilities.
Beekay Steel has always been a frontrunner in continuously improving its operationalperformance in all areas like safety and consumption of natural resources. Theseinitiatives have been taken across all production facilities to ensure they become theculture at our organization. All the stack emissions ambient air quality effluentquality and work zone air quality are generally within the norms. The Company hasundertaken various measures to address environmental issues at its plant locations.
AUDITORS & AUDITORS REPORT
The Companys Auditors M/s. Rustagi & Associates Chartered Accountantsretire at the end of 36th Annual General Meeting of the Company and are eligible forreappointment subject to ratification at the ensuing AGM by members. The members arerequested to appoint the auditors and to fix their remuneration.
Messrs Rustagi & Associates Chartered Accountants has confirmed that theirappointment is within the limits of the Section 139 of the Companies Act 2013 and hascertified that they are free from any disqualifications specified under Section 148(5) andall other applicable provisions of the Companies Act 2013.
The notes on accounts referred to in the Auditors Report are self-explanatoryand therefore do not call for any further comments.
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 hadappointed Mr. Santosh Kumar Tibrewalla Practicing Company Secretary to conductSecretarial Audit of the Company for the Financial Year 2014-15. The Secretarial AuditReport for the Financial Year ended 31st March 2015 is annexed herewith and marked asAnnexure - D. The Report is self-explanatory and do not call for any furthercomments.
Pursuant to Section 148 of the Companies Act 2013 in terms of the CentralGovernments approval the Board of Directors on the recommendation of the AuditCommittee appointed M/s. Musib & Co. Cost Accountants as the Cost Auditor of theCompany for the year 2015-16. The remuneration proposed to be paid to the Cost Auditorrequires ratification of the shareholders of the Company. In view of this yourratification for payment of remuneration to the Cost Auditor is being sought at theensuing Annual General Meeting.
The Audit Committee has also received a Certificate from the Cost Auditors certifyingtheir independence and arms length relationship with the Company.
The Company submits its Cost Audit Report with the Ministry of Corporate Affairswithin the stipulated time period and the Cost Audit Report for the financial year 2013-14has already been filed with MCA.
Your Company has initiated by providing the shareholders to avail the option ofreceiving online the requisite documents i.e. notices annual reports disclosures and allother communications by registering their e-mail Ids. For the success of GreenInitiative as per MCA circular no. 17/2011 & No. 18/2011.
The Company continues to comply with the requirements of Clause 49 of the ListingAgreement regarding Corporate Governance. The Report on Corporate Governance together witha certificate from Mr. S.K. Tibrewalla Practicing Company Secretary regarding Complianceof Conditions of Corporate Governance certification by M.D. /CEO and the ManagementDiscussion & Analysis Report are attached herewith which form part of this AnnualReport.
STOCK EXCHANGE LISTING
The Equity Shares of your Company are listed on BSE Limited (nation-wide tradingterminal) under direct listing route the trading of shares have started w.e.f. 25thMarch 2015. The Companys Equity Shares are also listed with the Calcutta StockExchange and Uttar Pradesh Stock Exchange and the applicable annual listing fees to allstock exchanges have been paid till financial year 2015-16.
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
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 InsiderTrading.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information in accordance with the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with 8(3) of the Companies (Accounts) Rules 2014 regarding conservationof energy technology absorption and foreign exchange earnings and outgo are given in theAnnexure E annexed hereto and forms a part of this report.
DISCLOSURES AS PER APPLICABLE ACT AND LISTING AGREEMENT:
i) Composition of Audit Committee:
The Board has constituted the Audit Committee under the Chairmanship of Mr. BhalChandra Khaitan. Complete details of the Committee are given in the Corporate GovernanceReport attached as Annexure to this Boards Report.
ii) Post Balance Sheet Events:
The company has received contract from TATA Steel Limited for job work of TMT Bars atcompany's new unit/work at Parwada Visakhapatnam.There is no other material changes incommitments affecting the financial position of the Company occurred since the end of thefinancial year 2014-15.
iii) Subsidiaries Associates or Joint Ventures:
Your Company has only one associate company i.e. M/s. AKC Steel Industries Ltd. anddoes not have any subsidiaries associates or joint ventures during the year underreview.
iv) Nomination Remuneration and Evaluation Policy:
The Company on recommendation of its Nomination & Remuneration Committee has laiddown a Nomination Remuneration and Evaluation Policy in compliance with the provisionsof the Companies Act 2013 read with the Rules made therein and the Listing Agreement withthe stock exchanges (as amended from time to time). This Policy is formulated to provide aframework and 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 aDirector.
Your Directors take this opportunity to express their appreciation for the cooperationand assistance received from the Government of India; the State Governments of AndhraPradesh Tamil Nadu West Bengal and Jharkhand; the financial institutions banks as wellas the shareholders and debenture holders during the year under review. The Directors alsowish to place on record their appreciation of the devoted and dedicated services renderedby all employees of the Company.
|Registered Office: ||For and on behalf of the Board |
|'Lansdowne Towers' 4th Floor ||For Beekay Steel Industries Ltd. |
|2/1A Sarat Bose Road ||Sd/- |
|Kolkata 700 020 ||Suresh Chand Bansal - Executive Chairman |
| ||(DIN : 00103134) |
|Place : Kolkata ||Mukesh Chand Bansal- Managing Director |
|Date: 13th August 2015 ||(DIN : 00103098) |