India Steel Works Ltd.
|BSE: 513361||Sector: Metals & Mining|
|NSE: ISIBARS||ISIN Code: INE072A01029|
|BSE 15:40 | 23 Feb||3.09||
|NSE 05:30 | 01 Jan||India Steel Works Ltd|
India Steel Works Ltd. (ISIBARS) - Director Report
Company director report
Your Directors present their 30th Annual Report and the Company's AuditedAccounts for the financial year ended 31st March 2017.
1. FINANCIAL HIGHLIGHTS
The summarized financial results of the Company for the financial year 2016-17 aregiven hereunder:
2. CHANGE IN THE NATURE OF BUSINESS
There was no material change in the nature of business of the Company during the year.
During the year under review the gross revenue from operations increased to'103845.50 lakh as against ' 58388.74 lakh in the previous year which indicates therise by 77.85% mainly due to focus on production activities and trading business. Theoperating profit (EBITDA) improved to ' 3404.96 Lakh as against ' 3007.82 Lakh in theprevious year by 13.20% The net profit after tax for the year was ' 800.50 lakh as againstprofit of ' 403.99 lakh in the previous year indicating an increase of 98.14%.
Keeping in view the need for strengthening financial soundness of the company andconsidering accumulated losses the Directors regret their inability to declare anydividend on Equity Shares of the Company during the year under review. However yourDirectors are pleased to recommend a Final Dividend @ 0.01% on total paid up Preferenceshare capital of the company for the financial year ended 31st March 2017payable to those Shareholders whose names appear in the Register of Members as on the BookClosure Date for the Financial Year 2016-17. The final dividend amounts to ' 75513/- ontotal paid up preference shares inclusive of tax on distributed profits.
(i) Share Capital
The paid-up Equity Share Capital as on 31st March 2017 was ' 3980.80 Lakh.During the year under review the Company has not issued shares with differential votingrights nor granted stock options nor sweat equity.
(ii) Fixed Deposits
The Company has not accepted any deposits from the shareholders or public underapplicable provisions of the Companies Act 2013 or rules made there under.
(iii) Particulars of loans guarantees or investments
The company has not provided any loan or guarantee directly or indirectly to any personor body corporate during the year under review. The Company also has not invested in thesecurities of any other Company during the year under review.
6. CORPORATE SOCIAL RESPONSIBILITY:
The Company believes in development which is beneficial for the society at large and topractice the corporate values through commitment to grow in socially and environmentallyresponsible way while meeting the interest of our stake-holders. During the year theCompany voluntarily has undertaken CSR initiatives and contributed ' 467000/- foreducational support to underprivileged students from poor town remote rural and conflictafflicted communities in Khopoli town area distribution of books & note booksscholarship to brilliant students etc.
7. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
Pursuant to Section 177(9) of the Companies Act 2013 and Regulation 22 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasadopted a Whistle-Blower Policy whereby employees are free to report violations of lawsrules and regulations or unethical conduct to the Audit Committee. The details of theWhistle Blower Policy are explained in the Corporate Governance Report and also posted onthe website of the Company. During the year the Audit Committee has not received anyreference under the policy.
8. RISK MANAGEMENT POLICY:
The Company has a risk management policy to identify mitigate elements of risk ifany which in the opinion of the Board may threaten the existence of the company. TheBoard of Directors and senior management team assess the operations and operatingenvironment to identify potential risks and take necessary mitigation actions.
9. RELATED PARTIES CONTRACTS OR ARRANGEMENTS:
The Company has made materially significant Related Party Transactions as approved bythe non-interested shareholders at the 29th Annual General meeting of theCompany. Further the said material related Party Transactions made during the year underreview were on an arm's length basis and in the ordinary course of business. Requireddisclosures are made in Annexure-D in Form No. AOC 2. On the recommendation of the AuditCommittee the Board of Directors has adopted a policy on Related Party Transactionswhich is also uploaded on the website of the Company www.indiasteel.inunder the head Investor Relations' and the weblink is provided in the CorporateGovernance Report. The Policy envisages the procedure governing related party transactionsrequired to be followed to ensure compliance with the applicable laws and regulations aswell as to ensure that the Related Party Transactions are managed and disclosed inaccordance with the legal and accounting requirements.
10. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant and material orders passed by the Regulators / Courts whichwould impact the going concern status of the Company and its future operations.
Mr. Sudhir H. Gupta (DIN: 00010853) have been appointed as "ManagingDirector" of the Company subject to approval of the Shareholders of the Company for aperiod of 3 years with effect from 1st October 2016. Mr. Deepak Kumar Gaur(DIN 07636636) has been appointed as an Additional Director of the Company w.e.f. 9thNovember 2016 subject to approval of Shareholders at the Annual General Meeting. Furtherthe details of the above Directors are given in the Corporate Governance Report as well asin the Notice of the Annual General Meeting.
In accordance with the provisions of the Companies Act 2013 in accordance with theArticles of Association of the Company Mr. Ashwinkumar Gupta & Mr. Varun Gupta retiresfrom office by Rotation and being eligible offers themselves as provided in the noticeare eligible for reappointment.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulations16 (1) (B) of SEBI (LODR) 2015.
Attention of the Members is invited to the relevant items in the Notice of the AnnualGeneral Meeting seeking your approval to the aforesaid appointments.
Mrs. Dipti Vartak (FCS - 9057) was appointed as a Company Secretary and ComplianceOfficer of the Company w.e.f. 12th August 2016.
Mr. Rahul Yenurkar has been resigned from the office of Director of the Companyeffective 12th August 2016. The Board places on record its appreciation of theservices rendered by Mr. Rahul Yenurkar during his tenure as a Director.
(iii) Board Evaluation
In compliance with the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Nomination & Remuneration Committee. Themanner in which the evaluation was been carried out has been explained in the CorporateGovernance Report.
(iv) Board Meetings
During the year five (5) Board Meetings were convened and held. The details are givenin the Corporate Governance Report. The intervening gap between the Meetings was withinthe period prescribed under the Companies Act 2013.
(v) Nomination & Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a Policy for selection appointment and remuneration of Directors and KeyManagerial Personnel in accordance with Section 178 of the Companies Act 2013. Moredetails of the same are given in the Corporate Governance Report.
(vi) Audit Committee Policy
The Board has on the recommendation of the Audit committee framed a policy forselection appointment and remuneration of Statutory Auditors and internal Auditor inaccordance with the Section 177 of the Companies Act 2013. More details of the same aregiven in the Corporate Governance Report.
12. DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofthe Section 134(3)(c) of the Companies Act 2013:
I. That in the preparation of the annual financial statements for the year ended March31 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
II. That such accounting policies as mentioned in the Financial Statements asSignificant Accounting Policies' have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the company as at March 312017 and of theprofit of the Company for the year ended on that date;
III. That 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;
IV. That the annual financial statements have been prepared on a going concern basis;
V. That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
VI. That proper systems to ensure compliance with the provisions of all applicable lawswere in place and were adequate and operating effectively.
(i) Statutory Auditors & Audit Report
The Company has received a letter from M/s. Thanawala & Co. Chartered Accountantsregarding their eligibility for the appointment as statutory Auditors of the Company. Thesaid auditor will be appointed subject to approval of shareholders at ensuing AnnualGeneral Meeting for the term of 2 years i.e till the conclusion of 32nd AnnualGeneral Meeting to be held in the year 2019. The shareholders at the ensuing AnnualGeneral Meeting will consider reappointment of the Statutory Auditors.
There is no qualification reservation or adverse remark or disclaimer made by theauditor in his report.
(ii) Cost Auditors
The Board has appointed M/s. Vishesh N. Patani (Membership No. 30328) cost AccountantsMumbai under section 148 of the Companies Act 2013 for conducting the audit of costrecords of the Company for the financial year ending 31st March 2018. Approvalof the members by way of ordinary resolution ratifying the remuneration to be paid to thecost auditors is suitable included in the notice calling the Annual General Meeting of theCompany. The Cost Auditor have further confirmed that their appointment is within thelimits of section 141(3)(g) of the Companies Act 2013.
(iii) Secretarial Auditor & Audit Report
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 hasappointed Mrs. Deepika Arora (ACS 29794 & CP No. 11355) Practicing Company Secretaryto undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit isannexed herewith as "Annexure - A". There is no qualification reservation oradverse remark or disclaimer made by the Secretarial auditor in her report.
14. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Company's Financial Statements are prepared on the basis of the SignificantAccounting Policies that are carefully selected by Management and approved by the AuditCommittee and the Board. These Accounting policies are reviewed and updated from time totime. Your Company uses ERP Systems as a business enabler and also to maintain its Booksof Account. The transactional controls built into the ERP systems ensure appropriatesegregation of duties appropriate level of approval mechanisms and maintenance ofsupporting records.
Kindly refer to the write-up in the section Management Discussion and Analysis.
15. EXTRACT OF THE ANNUAL RETURN:
The extract of the annual return in Form No. MGT - 9 annexed as "Annexure-B"forms part of the Board's report.
16. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The Company has adopted the generally accepted technology for its products. Particularsregarding conservation of energy foreign exchange earnings and outgo are given in"Annexure - C" as required under The Companies Act 2013 read with The Companies(Accounts) Rules 2014 and forms part of this report.
17. DISCLOSURE UNDER THE SEXUAL HARRASSMENT OF WOMAN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
The Company has in place an Anti-Sexual harassment Policy in line with the requirementsof the Sexual harassment of women at workplace (Prevention Prohibition and Redressal)Act 2013. An internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. No complaints pertaining to sexual harassmentwere received during FY 2016-17.
18. MANAGEMENT DISCUSSION AND ANALYSIS:
A detailed analysis of your Company's performance is discussed in the ManagementDiscussion and Analysis Report which forms part of this Annual Report.
19. CORPORATE GOVERNANCE:
The Company has implemented the provisions of Chapter IV of SEBI (LODR) 2015 relatingto the Corporate Governance requirements. A Report on Corporate Governance the Report ofAuditors Certificates thereof is given as annexure to this report.
20. PARTICULARS OF EMPLOYEES:
During the year under review the Company has not employed any individual whoseremuneration falls within the purview of the limits prescribed under the provisions ofSection 197 of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 and Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are annexed as "Annexure E".
21. INDUSTRIAL RELATIONS:
During the year under review industrial relations at the Company's unit continued toremain cordial and peaceful.
The Directors express their appreciation for co-operation and encouragement receivedfrom all the Shareholders Business Associates Dealers and Insurers vendors investorsand bankers during the year. The Directors also place on record their appreciation of thecontribution made by our employees at all levels. Our consistent growth was made possibleby their hard work solidarity cooperation and support.
[Pursuant to section 204(1) of the Companies Act 2013 and rule No. 9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]
FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2017
India Steel Works Limited
India Steel Works Complex
Khopoli 410 203 Dear Sirs
I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate governance practice by M/s. India SteelWorks Limited (hereinafter called "the Company"). Secretarial Audit wasconducted in a manner that provided us a reasonable basis for evaluating the corporateconducts / statutory compliances and expressing my opinion thereon.
Based on my verification of the Company's Books Papers Minutes Books Forms andReturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit I hereby report that in my opinion the Company has duringthe financial year ended 31st March 2017 complied with the statutoryprovisions listed hereunder and also that the Company has proper Board processes andcompliance mechanism in place to the extent in the manner and subject to the reportingmade hereinafter:
I have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March2017 according to the provisions of:
(i) The Companies Act 2013 (the Act) and the rules made there under;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA') and the rules madethere under;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed there under;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment and Overseas Direct Investment andExternal Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act'):-
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
b. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;
c. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;
d. The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Regulations 1999 and The Securities and Exchange Boardof India (Share Based Employee Benefits) Regulations 2014 notified on 28th October 2014(not applicable to the Company during the Audit period);
e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 (not applicable to the Company during the Audit period);
f. The Securities and Exchange Board of India (Registrar to an Issue and Share TransferAgents) Regulations 1993 regarding the Companies Act and dealing with client
g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009 (not applicable to the Company during the Audit period) and;
h. The Securities and Exchange Board of India (Buyback of Securities) Regulations 1998(not applicable to the Company during the Audit period)
(vi) For the other applicable laws our Audit was limited to
a. The Factories Act 1948
b. The Minimum Wages Act 1948
c. The employees Provident Funds and Misc. Provisions Act 1952
d. The payment of Bonus Act 1965
e. The payment of gratuity Act 1972
f. The Contract labour (Regulation and Abolition) Act 1952
g. The Industrial Employment (Standing Orders) Act 1946
h. The Employees Compensation Act 1923
i. The Apprentices Act 1923
j. The Air (Prevention and control of pollution) Act 1981
I have relied on the representation made by the Company its Officers and authorizedrepresentatives during the conduct of the audit and also on the review of Certificates byrespective department Heads/ Company Secretary/ CEO. In my opinion adequate systems andprocess and control mechanism exits in the Company to monitor and ensure compliances underother applicable Acts Laws and Regulations to the Company.
I further report that the compliance by the Company of applicable financial laws likeDirect and Indirect Tax laws has not been reviewed in this Audit since the same have beensubject to review by Statutory financial Audit and other designated professionals.
I have also examined compliance with the applicable clause of the following:
a. Secretarial Standards issued by The Institute of Company Secretaries of India; and
b. The Listing Agreements entered into by the Company with Bombay Stock ExchangeLimited. During the period under review the Company has complied with the provisions ofthe Act Rules regulations Guidelines Standards etc. mentioned above subject to theabove observations.
I further report that:
The Board of Directors of the Company is constituted with proper balance of ExecutiveDirectors Non-Executive Directors. The changes in the composition of the Board ofDirectors that took place during the year under review were carried out in compliance withthe provisions of the Act.
I further report that as per information provided the Company has generally givenadequate notice to all directors to schedule the Board Meetings and agenda were sent atleast seven days in advance.
Majority decision is carried through while the dissenting members' views if any arecaptured and recorded as part of the minutes.
I further report that subject to above observations there are adequate systems andprocesses in the Company commensurate with the size and operations of the Company tomonitor and ensure compliance with applicable laws rules regulations and guidelines.
I further report that the management is responsible for compliance of all business lawsand other applicable laws. This responsibility includes maintenance of Statutoryregister/files as required by the concerned authorities and internal control of theconcerned department.
I Further report that during the year under review the Company has no specific PublicIssue/ Right Issue/Preferential issue of Shares/ Debentures/Sweat Equity/Redemption/Buy-Back of Securities/ Merger/ Amalgamation/ Reconstruction/ Foreign TechnicalCollaborations.
(A) Conservation of energy-
Total energy consumption and energy consumption per unit of production is given in thetable below: Power & fuel Consumption
(B) Technology absorption-
In-house expertise has been used to successfully develop various grades of specialsteels meeting international standards of quality.
The fume-extraction system of the AOD converter has been upgraded to reduce consequentAir Pollution.
Quality System: To continue in pursuit of quality Steel and Rolling Mill Division ofyour Company at Khopoli has been accredited with "TUV CERT" by RWTUV forcompliance in accordance with AD-Merkblatt W0/W2/W10 manufacturing process. The KhopoliPlant as well as Purchase and Marketing Departments of your Company remains ISO 9001certified by IRQS Mumbai.
(C) Foreign exchange earnings and Outgo-
The Foreign Exchange earned in terms of actual inflows during the year is '973456558/- and the Foreign Exchange outgo during the year in terms of actual outflowsis 3577609442/-.
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014 Form for disclosure of particulars ofcontracts/arrangements entered into by the company with related parties referred to insub-section (1) of Section 188 of the Companies Act 2013 including certain arm's lengthtransactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm's length basis
2 (a). Details of material contracts or arrangements or transactions at arm's lengthbasis
(b). Details of material contracts or arrangements or transactions at arm's lengthbasis
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014
(i) The percentage increase in remuneration of each Director Chief Financial Officerand Company
Secretary during the financial year 2016-17 ratio of the remuneration of each Directorto the median remuneration of the employees of the Company for the financial year 2016-17and the comparison of remuneration of each Key Managerial Personnel (KMP) against theperformance of the Company are as under::
(ii) The median remuneration of employees of the Company during the financial year was' 198000/-
(iii) In the financial year there was an increase of 4.76% in the median remunerationof employees.
(iv) There were 487 permanent employees on the rolls of Company as on March 312017;
(v) Average percentage decrease made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2016-17 was 20.30 % whereas theincrease in the managerial remuneration for the same financial year was 94.09 %.
*Ceased to be the Director of the Company w.e.f. 12th August 2016 **Appointed as Additional Director w.e.f. 9th November 2017 *** Appointed asCompany Secretary w.e.f. 12th August 2017