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Chase Bright Steel Ltd.

BSE: 504671 Sector: Metals & Mining
NSE: N.A. ISIN Code: N.A.
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Chase Bright Steel Ltd. (CHASEBRIGHTST) - Director Report

Company director report

Dear Members

Your Directors have pleasure in submitting their Fifty-Sixth Annual Report andStatement of Accounts for the year ended 31st March 2016.

Financial Summary of the Company

The Company’s financial performance for the year ended March 31 2016 issummarised below.

Particular 2015-16 2014-15
Rs Rs
Profit /(Loss) for the year before tax (6279897) (2695729)
Less: Provision for taxes
Less: Income Tax Adjustments 22596
Less: Deferred tax / (Assets) (net) (939631) ( 953990)
Add: Income Tax Refund
Profit /(Loss) for the year after tax (5362862) (1741739)

Brief Description of the company’s working

The company has made a loss after tax of Rs (53.63) lacs as compared to loss of Rs(17.41) lacs in the previous year. Although turnover has remained the same. The Net Worthof the company has got eroded and the company will need to be referred to the BIFR. Margincontinue to be under pressure and the current scenario look bleak.


The Board considering the companies performance and financial positions for the yearunder review has not recommended any dividend.

Transfer to Reserves

In view of losses incurred by the Company during the year no amount has beentransferred to the General Reserve

Erosion of Networth

With accumulated losses of Rs 1.09 crores at the end of the financial year resultingin erosion of over 50% of peak net worth during the immediately preceding four financialyears we regret to inform that Your Company has become a "Potential SickCompany" within the meaning of Section 23 of the Sick Industrial Companies (SpecialProvisions) Act 1985 (SICA). The Board in its meeting held on 12th August2016 has reviewed the causes for such erosion and the reasons amongst others whichadversely affected the company’s performance are;

1. Weak demand for the products manufactured by the Company due to overall slowdown inthe economy.

2. Weak export demand for the products manufactured by the Company

3. Crash in prices of Stainless Steel products due to heavy imports from China.

4. Additional demand for NMMC Cess and LBT of more than Rs 75 lakhs

5. Slow recovery of amounts due from Debtors resulting into additional requirements offunds and additional interest costs.

6. Interest burden on secured loans.

7. Higher cost of production due to levy of Cess and LBT.

Steps Taken for Revival

The Company is implementing various measures for improvement of the performance inconsultation with all concerned parties which is expected to result in improved turnoverand profitability. The Company is in the process to reduce the debt burden which willresult in lower interest burden. Also the Company is in process to add more value addedproducts in its product range and cater to OEM customers for better margins andprofitability.

The Board after considering the various steps implemented and/or to be undertaken forimprovement of performance of the Company is confident/optimistic that the Company wouldbe able to implement effective measures in normal course of business and revive theCompany. Accordingly the financial statements for the Financial Year 2015-16 has beenprepared on a going concern basis.

In the meanwhile the shareholders are requested to note the fact of such erosion inthe peak net worth. The Board of Directors of the Company is in the process of making areport of such erosion to the Board for Industrial & Financial Reconstruction in theprescribed Form "C" in compliance with the provision of Section 23(1)(a)(i) ofthe above referred Act.

Presentation of Financial Statements:

The financial statements for the year ended 31st March 2016 are prepared indue compliance of the Schedule III of the Companies Act 2013

Cash Flow Statement:

A Cash Flow Statement for the year 2015-16 is included in the annexed Statement ofAccounts.

Extract of the Annual Return

Pursuant to the provisions of Section 92(3) of the Companies Act 2013 and Rules framedthereunder an_extract_of the annual return as on 31st March 2016 in theprescribed Form No. MGT-9 is annexed to this Board’s Report - ‘Annexure-I’

Public Deposits

The Company had no unpaid / unclaimed deposits as on 31st March 2016. Ithas not accepted any fixed deposits during the year.


Statutory Auditors

The Statutory Auditors of the Company M/s. Mahendra Kumbhat & Associates CharteredAccountants retiring at the ensuring Annual General Meeting and have confirmed theireligibility and willingness to accept office of Auditors if re-appointed. The appointmentof Statutory Auditors of the Company shall be from the conclusion of the forthcomingAnnual General Meeting till the conclusion of the next Annual General Meeting of theCompany. Your Directors recommend their reappointment.

The Notes on financial statement referred to in the Auditors’ Report are self– explanatory and do not call for any further comments. The Auditors Report does notcontain any qualification reservation or adverse remark.

Cost Auditors

Pursuant to the provisions of Section 148 of the Companies Act 2013 and Companies(Cost Records and Audit) Rules 2014 the company were not covered for the cost audit andconsequently the company had not appointed Cost Auditor for the financial year 2016-17.

Secretarial Audit

In accordance with the provision of section 204 of the Companies Act 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the companyhas appointed M/s Leena Agrawal & Co. Practising Company Secretaries (MN No.6607 CPNo. 7030) Mumbai to undertake the Secretarial Audit of the company. The SecretarialAudit report for the year 2015-16 in the prescribed form MR-3 is annexed herewith as‘Annexure-II ’ The report does not contain any qualification.

Details of Subsidiary/Joint Ventures/Associates

The Company does not have any subsidiary/ Joint Venture or Associate and hence nodisclosure is applicable.

Significant and Material Orders passed by the Regulators or Courts

No material orders were passed by any Regulators or Courts or Tribunals during thefinancial year under review impacting the going concern status of the company’soperations in future.

Internal Financial Controls

The company has in place adequate internal financial controls with were tested and noreportable material weakness in the design-or operation was observed.

Share Capital

The paid up Equity Share Capital as at March 31 2016 stood at Rs 16750000/-. Duringthe year under review the company has not issued shares with differential voting rightsand has not granted any stock option or sweat equity.

Corporate Governance Report

The Company is falling under criteria 1.a. of the SEBI Circular CIR/CFD/POLICYCELL/7/2014 dated 15th September 2014 and its paid up capital is much below 10crores and its networth is also much below 25 crores and hence Corporate Governance reportis not applicable to the Company.

Conservation of Energy Technology Absorption and Foreign Exchange_Earnings and Outgo

Conservation of energy During the year under review the company maintained power factor to unit throughout the year resulting in getting maximum rebate in electricity bills.
Technology absorption No expenditure is incurrent by the Company attributable to Technology absorption during the year.
Expenditure on Research & Development No expenditure is incurred by the Company attributable to Research & Development during the year.
Foreign exchange earnings and Out go During the year under review FOB value of export of manufactured goods Rs 214.93 lakhs.

Particulars of Contracts or arrangements with Related Parties:

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm’slength basis. During the year the Company had not entered into any contract / arrangement/ transaction with related parties which could be considered material in accordance withthe policy of the Company on materiality of related party transactions.

Your Directors draw attention of the members to ‘Note No. 31 Part W’ to thefinancial statement which sets out related party disclosures. The policy on materiality ofrelated party transactions and dealings with related party

Particulars of Loans Guarantees or Investments by Company

There were no loans or guarantees given or investments made by your company during thefinancial year 2015-16.

Number of Meetings of the Board

The Board met 4 times during the financial year 2015-16 on 16.05.2015 07.08.201514.11.2015 03.02.2016. The intervening gap between the Meetings was within the periodprescribed under the Companies Act. 2013.

Appointment of Directors

Mrs. Manjudevi Jajodia who retires by rotation at the ensuing Annual General Meetingunder the provisions of the Companies Act 2013 and being eligible offers herself forre-appointment.

Directors’ Responsibility Statement

As required by sub-section (5) of Section 134 of the Companies Act 2013 the Directorsstate that-

a) In the preparation of the annual accounts for the year ended March 31 2016 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) The Directors have selected such accounting policies and applied them consistentlyand made judgements 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 March 31 2016 and of the loss ofthe Company for the year ended as on that date;

c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors have prepared the annual accounts on a ‘going concern’basis;

e) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

f) The Directors have devised proper systems to ensure compliance with all applicablelaws and that such systems are adequate and operating effectively.


Statement on Declaration given by Independent Directors:

All the Independent Directors have submitted declarations to the company to the effectthat they meet the criteria of independence as provided in sub-section (6) of Section 149of the Companies Act 2013.

The Company as also devised a Policy on Familiarization Programme for IndependentDirectors which aims to familiarize the Independent Directors with the Company nature ofthe industry in which the Company operates business operations of the Company etc. Thesaid Policy may be accessed on the Company’s website at the

Policy on Directors appointment and Remuneration Policy.

The Board on recommendation of Nomination & Remuneration Committee has framed apolicy for selection and appointment of Directors Senior Management and theirremuneration. The Policy is also available on the website of Company

Board evaluation

Pursuant to the provisions of the Companies Act 2013 the Board of Directors hasapproved the criteria for performance evaluation of all Directors the Committees ofDirectors and the Board as a whole on the Recommendation of the Nomination andRemuneration Committee of the Company. An annual performance evaluation of all Directorsthe Committee of Directors and the Board as a whole was carried out during year. For thepurpose of carrying out performance evaluation assessment questionnaires were circulatedto all Directors and their feedback was obtained and recorded.

Employee Strength

The total number of employees on the rolls of the company was 85 (which include 53Worker 30 Staff and CMD AND WTD as on March 31 2016.

Ratio of the Remuneration of each Director to the Median Employees Remuneration(Section 197(12)

Details pertaining to remuneration as required under section 197(12) of the CompaniesAct2013 read with rule 5(1) of the companies (appointment and Remuneration of managerialpersonnel) rules 2014 are provided in ‘Annexure-III’ to the Board’sReport.

Disclosure as per the Sexual Harassment of Women at workplace (Prevention Prohibitionand Redressal) Act 2013

The Company has always believed in a policy against sexual harassment which has alsofound its place in the governing Codes of Conduct and Ethics applicable to its employeeswhich includes a mechanism to redress such complaints. During the year under review therewere no complaints of sexual harassment at any of the units

Vigil Mechanism / Whistle Blower Policy

The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors Employees and its stakeholders to report their concerns about unethicalbehaviour actual or suspected fraud or violation of the Company’s Code of Conduct orEthics Policy. The policy provides for adequate safeguards against victimisation ofemployees who avail of the mechanism and also provides for direct access to the chairmanof the Audit Committee. It is affirmed that no personnel of the Company has been deniedaccess to the Audit Committee. The Whistle Blower Policy is posted on the website of theCompany at the

Particulars of Employees and Related Disclosures

There were no employees drawing remuneration during the year under review in excess ofthe limits laid down under Section 197(12) of the Act read with rules 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.


Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the financial institutions banks Government authoritiescustomers vendors and members during the year under review. Your Directors also wish toplace on record their deep sense of appreciation for the committed services by theCompany’s executives staff and workers.

For and on behalf of the Board of Directors
M/s. Chase Bright Steel Limited
Avinash Jajodia
Date:12th August 2016 (DIN 00074886)
Place: Mumbai Chairman & Managing Director