The Member of
Mahamaya Steel Industrial Limited
Your Directors have pleasure in presenting the 28 Annual Report together with auditedaccounts of your Company for the year ended 31 March 2016.
1. FINANCIAL HIGHLIGHTS
(Rs. In Lacs)
|Particulars ||Standalone ||Consolidated |
| ||2015-16 ||2014-15 ||2015-16 |
|Sales (Net) ||30926.31 ||29145.42 ||30926.31 |
|Other Income ||111.19 ||116.57 ||111.19 |
|Total Income ||31037.50 ||29261.99 ||31037.50 |
|Profit before Interest Depreciation & Tax ||258.23 ||1721.85 ||258.23 |
|Less: Finance Cost ||944.73 ||752.65 ||944.73 |
|Depreciation ||665.69 ||670.32 ||665.69 |
|Add: Exceptional Items ||154.23 ||26.05 ||154.23 |
|Profit/(Loss) before tax ||(1197.96) ||324.93 ||(1197.96) |
|Less:Previous Year Adjustment ||0.00 ||3.38 ||0.00 |
|Provision for Wealth Tax ||0.00 ||0.00 ||0.00 |
|Provision for current year Income Tax ||0.00 ||181.66 ||0.00 |
|Deferred Tax ||327.40 ||324.93 ||3.38 |
|Net Profit / (Loss) after Tax ||(1525.36) ||212.15 ||(1525.36) |
|Add: Balance carried from Profit & Loss A/c ||0.00 ||0.00 ||0.00 |
|Less: Provision for earlier year taxation ||0.00 ||0.00 ||0.00 |
|Net Profit after tax and adjustments ||(1525.36) ||212.15 ||(1525.36) |
|Dividends ||- ||- ||- |
|Interim Dividend ||- ||- ||- |
|Final Dividend (Proposed) ||- ||- ||- |
2. FINANCIAL PERFORMANCE AND OPERATIONS
Recession in steel industry saw decline a sharp decline in finished products. Theaverage sales price of billets & blooms has been decreased by 22 percent and theaverage sales price structures have been decreased by 23 percent. Likewise the prices ofend cutting (scrap) declined by 28 percent which in turn affected Company's performanceand resulted in cash loss during financial year 2015-16.
Despite tough environment with the sector the Company achieved a remarkableperformance on the operational front. The Company has achieved a remarkable 10 percentincrease in the capacity utilisation of both divisions and 30 percent increase in salesquantity of its main products (billets & blooms by 24 percent structures by 35percent). However due to continuous fall in market prices of Company's products therevenues from operations grew by 6 percent. Revenues from operations for the year endedMarch 31 2016 stood at Rs. 30926.31 lakhs against Rs. 29145.42 lakhs in the previousyear.
The average sales price of billets & blooms has been decreased by 22 percent andthe average sales price structures fell by 23 percent. Similarly the prices of end cutting(scrap) has decreased by 28 percent which resulted in increase in loss by Rs. 963.43 lakhsduring financial year 2015-16.
On the other hand. the prices of Power and Fuel have gone up by 9.75% resulting inincrease in Loss by Rs. 473.92 Lakhs. Similarly Financial Costs has been increased by Rs.192.09 Lakhs on account of increase in Interest Rates and Employee Cost Administrativeand Selling Expenses has increased by Rs. 23.00 Lakhs and Rs. 65.96 Lakhs respectively.However due to increase in capacity utilisation by 10 per cent the Company has able tosave Rs. 62.72 Lakhs on account of Operational Efficiencies in Contractor Payments andLower Burning Loss.
In spite of Cash Loss the Company has timely cleared its all Statutory Dues such asCentral Excise Duty Service Tax TDS VAT CST and EPF & ESI Contributions. Also theInstalments of Term Loans from Banks and Financial Institutions has been cleared onrespective due dates. Also the Company is continuously working on up gradation andmodernization of Plant & Machineries.
In view of the loss incurred by the Company your Board of Directors do not recommendany dividend for the financial year 2015-16.
4. TRANSFER TO RESRVES
In view of the loss your Board of Directors do not appropriate any amount to betransferred to General Reserves during the year under review.
5. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this report.
6. CHANGE IN THE NATURE OF BUSINESS
During the year under review there are no changes in the nature of the business of theCompany.
7. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed.
8. SUBSIDIARIES ASSOCIATE AND JOINT VENTURE COMPANIES & CONSOLIDATEDFINANCIAL STATEMENTS
As on 31 March 2016 the company have two associates and do not have any subsidiaryand Joint Venture Companies. In accordance with Section 129(3) of the Companies Act 2013we have prepared consolidated financial statements of the Company which forms part ofthis Annual Report. Further a statement containing the salient features of the financialstatement of our associates in the prescribed format AOC-1 is appended as Annexure-A tothe Director's Report.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its associates are available on our websitewww.mahamayagroup.in. These documents will also be available for inspection duringbusiness hours at registered office of the Company.
9. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTY
All Related Party Transactions that were entered into during the financial year were onarm's length and were in the ordinary course of business. All Related Party Transactionswere placed before the Audit Committee of the Board of Directors for their approval.
The Company has formulated a policy on materiality of Related Party Transactions andalso on dealing with Related Party Transactions. The policy is available on the Company'swebsite www.mahamayagroup.in
The Company in the ordinary course of its business enters into transactions relatingto purchase and sale of products rendering and receiving services from its groupcompanies who are 'Related Party' as defined under Companies Act 2013 or rules madethereunder and SEBI (Listing Obligation & Disclosure Requirements) Regulations 2015.The current and the future transactions are/will be deemed to be 'material' in nature asdefined in SEBI (Listing Obligation & Disclosure Requirements) Regulations 2015 asthey may exceed 10 per cent of the annual turnover of the Company based on future businessprojections. Thus as per SEBI (Listing Obligation & DisclosureRequirements)Regulations 2015 such transactions would require the approval of themembers by way of a Ordinary Resolution.
Information on transactions with related parties pursuant to section 134(3)(h) of theAct read with Rule 8(2) of the Companies (Accounts) Rules 2014 are given in Annexure-B inForm AOC-2 and the same forms part of this report.
10. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
During the year the company has not granted any loans investments guarantees andsecurities granted in respect of which the provisions of section 185 & 186 of theCompanies Act 2013 are applicable.
11. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The Company does not have any employee whose particulars are required to be givenpursuant to the provisions of section 197 of the Companies Act 2013 read with Rule 5(2)& (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
Disclosures 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 are annexed hereto marked as Annexure -C and forms part of this report.
12. AWARDS & RECOGNITION
We were awarded for Upscaling Energy Efficient Production and Implementation of Energyefficient technology by UNDP at Delhi on 11.12.2015.
13. REPORT ON CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS
Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Company has taken adequate steps to ensure thatall mandatory provisions of Corporate Governance as prescribed under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 are complied with a separatesection titled Report on Corporate Governance together with a Certificate from thePracticing Company Secretary forms part of this Report.
A detailed Management Discussion & Analysis forms part of this Report.
During the year Eleven Board Meetings were convened and held the details of which aregiven in the Corporate Governance Report. The maximum interval between any two meetingsdid not exceed 120 days as prescribed in the Companies Act 2013.
Audit Committee Meetings
During the year Ten Audit Committee Meetings were convened and held the details ofwhich are given in the Corporate Governance Report.
Nomination & Remuneration Committee Meetings
During the year Seven Nomination & Remuneration Committee Meetings were convenedand held the details of which are given in the Corporate Governance Report.
Stakeholders Relationship Committee Meetings
During the year Four Stakeholders Relationship Committee Meetings were convened andheld the details of which are given in the Corporate Governance Report.
15. POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on 31 March 2016 the Board consists of 6 members three of whom areExecutive Directors and three are Independent Directors.
The Policy of the Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters as required under sub-section (3) of Section 178 of the Companies Act2013 is available on our website www.mahamayagroup.in. There has been no change in thePolicy since the last Financial Year. We affirm that the remuneration paid to thedirectors is as per the terms laid out in the Nomination and Remuneration Policy of theCompany.
16. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations from each Independent Directors undersection 149(7) of the Companies Act 2013 that he/she meets the criteria of Independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015.
17. BOARD EVALUATION
Pursuant to the provisions of the Act and the SEBI Regulations the Board has carriedout the annual performance evaluation of its own performance the Directors individuallyas well as the evaluation of the working of its Audit Nomination and Remuneration andStakeholders Relationship Committee. The Criteria applied in the evaluation process areexplained in the Corporate Governance Report.
18. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
In compliance with the requirements of SEBI Regulations the Company has put in place afamiliarization programme for the Independent Directors to familiarize them with theirrole rights and responsibility as Directors the working of the Company nature of theindustry in which the Company operates business model etc. The details of thefamiliarization programme are explained in the Corporate Governance Report. The same isalso available on the website of the Company www.mahamayagroup.in
19. PREVENTION OF INSIDER TRADING
In January 2015 SEBI (Prohibition of Insider Trading) Regulations 2015 which cameinto effect from May 15 2015. Pursuant thereto the Company has formulated and adopted anew Code for Prevention of Insider Trading.
The new code viz. "Code of Internal Procedures and Conduct for RegulatingMonitoring and Reporting Trading by Insiders" and the "Code of Practices andProcedures for Fair Disclosure of Unpublished Price Sensitive Information" allows theformulation of a trading plan subject to certain conditions and requires pre-clearance fordealing in the Company's shares. It also prohibits the purchase or sale of Company'sshares by the Directors designated employees and connected persons while in possessionof unpublished price sensitive information in relation to the Company and during theperiod when the Trading Window is closed.
The Company Secretary is responsible for implementation of the Code.
All Board Directors designated employees and connected persons have affirmedCompliance with the Code.
20. LISTING AGREEMENT
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement for different segementsof capital markets to ensure better enforceability. The said regulations were effectiveDecember 1 2015. Accordingly all listed entities were required to enter in to theListing Agreement within six months from the effective date. The Company entered in toListing Agreement with BSE Limited during December 2015.
We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 mandated the formulation of certain policiesfor all listed companies. All our Corporate Governance Policies are available on ourwebsite (www.mahamayagroup.in). The policies are updated based on need and new compliancerequirement.
In addition to its Code of Conduct and Ethics key policies that have been adopted bythe Company are as follows:
Whistleblower Policy (Policy on Vigil Mechanism):
The Company has adopted the whistle blower mechanism for directors and employees toreport concerns about unethical behavior actual or suspected fraud or violation of theCompany's Code of Conduct and Ethics.
Nomination and Remuneration Policy:
This Policy formulates the criteria for determining qualifications competenciespositive attributes and independence for the appointment of a director(executive/non-executive) and also the criteria for determining the remuneration of thedirectors key managerial personnel and other employees.
Related Party Transaction Policy:
The Policy regulates all transactions between the Company and its related parties.
Code of Internal Procedures and Conduct for Regulating Monitoring and ReportingTrading by Insiders:
The Code provides the framework in dealing with securities of the Company.
Policy for determining materiality for disclosures:
This Policy applies to disclosures of material events of the Company it deals withdissemination of unpublished price-sensitive information.
Document Retention and Archival Policy:
The Policy deals with the retention and archival of Corporate Records of the Company
22. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of Companies Act 2013 Mr. Yewesh Yede (DIN: 07275526) wasappointed as Additional Director (Executive and Non Independent) with effect from 26September 2015.
Yewesh Yede holds office as an Additional Director up to the date of this AnnualGeneral Meeting. He has submitted a declaration that he is eligible for appointment and inrespect of whom the Company has received a Notice in writing under section 160 of theCompanies Act 2013 proposing his candidature for the office liable to retire byrotation.
Mrs. Rekha Agrawal (DIN 00597156) retires by rotation as Director at the ensuingAnnual General Meeting and being eligible offers herself for reappointment.
Pursuant to the provisions of Section 149 of the Act Mr. Niraj Kansal (DIN 02513034)Mr. Manish Kumar Agrawal (DIN 02822174) and Mr. Atul Garg (02822051) were appointed asIndependent Directors at the Annual General Meeting of the Company held on 30th September2014. The terms and conditions of appointment of Independent Directors are as per ScheduleIV of the Act and there has been no change in the circumstances which may affect theirstatus as Independent Director during the year.
Mr. Devarshi Pandey Chief Financial Officer of the Company has resigned from theCompany w.e.f 23.06.2015 and in his place Mr. Parveen Kumar Chavda was appointed as ChiefFinancial Officer of the Company with effect from 21.12.2015
Mr. Jai Prakash Jhunjhunwala Chief Executive Officer has resigned from the Companyw.e.f 21.12.2015.
Mr. Rajesh Agrawal Managing Director Mr. Praveen Kumar Chavda Chief FinancialOfficer and Mrs. Jaswinder Kaur Mission Company Secretary are the KMPs of the Company asper the provisions of the Act.
23. COMMITTEES OF THE BOARD
Currently the Board has 3 Committees the Audit Committee the Nomination andRemuneration Committee and the Stakeholders Relationship Committee.
A detailed note on the composition of the Board and its committees is provided in theCorporate Governance Report Section of this Annual Report.
During the year the Company has dissolved two Committees Corporate SocialResponsibility Committee and Risk Management Committee as they were no longer applicablefor our Company as per Companies Act 2013 and SEBI(LODR) Regulations 2015 respectively.Though the Company had dissolved the Committee but the Company has done always and willcontinue to take initiatives and support social causes like running of Schools Socialcommunity center and will always enhance the beauty of earth by plantations and to reducethe pollution.
Further though the Company had dissolved the Risk Management Committee but the RiskManagement Policy will be effective and will be overseen by the Audit Committee.
24. EXTRACT OF THE ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format is appended as Annexure D to the Board's Report.
25. 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 statement in terms ofSection 134 of the Act;
Your Directors state that:
1. In the preparation of the annual accounts for the year ended 31 March 2016 theapplicable accounting standards have been followed and there are no material departuresfrom the same;
2. the Directors have 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 31 March 2016 and of the profit ofthe Company for the year ended on that date;
3. 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;
4. the Directors have prepared the annual accounts on a 'going concern' basis;
5. the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and 6. the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
26. AUDITORS AND AUDITOR OBSERVATION STATUTORY AUDITOR
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s R.K. Singhania & Associates Chartered Accountants were appointed as statutoryauditors of the Company from the conclusion of the 26 annual general meeting (AGM) of theCompany held on September 30 2014 till the conclusion of the 30 AGM of the Companysubject to ratification of their appointment at every AGM. Accordingly the appointment ofM/s R.K. Singhania & Associates Chartered Accountants as Statutory Auditors of theCompany is placed for ratification by the Shareholders.
STATUTORY AUDITORS' OBSERVATIONS ON STANDALONE AND CONSOLIDATED FINANCIAL STATEMENTS
With reference to the Qualification/Observation of the Auditor in Standalone andConsolidated Audit Report Management reply is given below:
Regarding Electricity Duty Exemption
The Company is eligible for electricity duty subsidy under the Industrial Policy of theState of Chhattisgarh. In this regard Company had already filed an application to the CGMDIC and now CGM DIC had recommended same to Industry of Secretary along with all papersand documents which is well progressed and is in final stage. Therefore there isreasonable certainty regarding ultimate collection of the same. So company has recognizedit in books of account in accordance with the accounting standards.
The Cost Audit Records maintained by the Company in respect of its activity arerequired to be audited pursuant to Section 148 of the Act and the rules framed thereunder.Your Directors have on the recommendation of the Audit Committee appointed M/s S.C.Mohanty & Associates Cost Accountants for conducting the audit of cost records of theCompany for the financial year 2015-16. As required under the Act the remunerationpayable to the Cost Auditor is required to be placed before the Members in a GeneralMeeting for their ratification. Accordingly a resolution for seeking Members ratificationfor the remuneration payable to M/s S.C. Mohanty & Associates Cost Auditor isincluded in the Notice convening the Annual General Meeting.
The Board has appointed Brajesh R. Agrawal Practising Company Secretary as theSecretarial Auditor of your Company to conduct Secretarial Audit for the financial year2015-16. The Secretarial Audit Report for the financial year ended March 31 2016 isannexed herewith marked as Annexure-E to this Report. The Secretarial Audit Report doesnot contain any qualification reservation or adverse remark.
27. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AN FOREIGN EXCHANGE EARNINGS ANDOUTGO.
The Information on conservation of energy technology absorption foreign exchangeearnings and out go which is required to be given pursuant to the provisions of section134(3)(m)of the Companies Act 2013 read with Rule 8(3) of Companies (Account) Rules2014 is annexed hereto marked as Annexure-F and forms part of this report.
28. PAYMENT OF ANNUAL LISTING FEES
Shares of the Company are presently listed at BSE Limited P.J.Towers Dalal StreetMumbai and the Company has paid listing fee upto 31 March 2017 in respect of above stockexchange.
29. GENERAL DISCLOSURE
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save or ESOS.
4. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
30. INVESTOR RELATIONS & SERVICES
Your Company always endeavors to keep the time of response to shareholders request /grievance at the minimum. Priority is accorded to address all the issues raised by theshareholders and provide them a satisfactory reply at the earliest possible time. TheStakeholders Relationship Committee of the Board meets periodically and reviews the statusof the Shareholders' Grievances. The shares of the Company continue to be traded inelectronic forum and de-materialization exists with both the depositories viz. NationalSecurities Depository Limited and Central Depository Services (India) Limited.
Mrs. Jaswinder Kaur Mission Compliance Officer of the Company and the Registrar M/sSystem Support Services are looking after the physical as well as Demat work and alsoshareholders correspondence they endeavored their best to service the Investorssatisfactorily.
31. EMPLOYEE RELATIONS
Employee relations throughout the Company were harmonius. The Board wishes to place onrecord its sincere appreciation of the devoted efforts of all the employees in advancingthe Company's vision and strategy to deliver good performance.
Your Directors place on record their sincere appreciation and gratitude for theassistance and generous support extended by all Government authorities FinancialInstitutions Banks Customers and Vendors during the year under review. Your Directorswish to express their immense appreciation for the devotion commitment and contributionshown by the employees of the Company while discharging their duties.
| ||By Order of the Board |
| ||Rajesh Agrawal |
|Place: Raipur ||Managing Director |
|Date: 15 June 2016 || |