TO THE SHAREHOLDERS
Your Directors present their 34th 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 2020.
| ||Current year (31.03.2020) ||Previous year (31.03.2019) |
| ||Rupees in Lakhs ||Rupees in Lakhs |
|1. SUMMARY OF FINANCIAL RESULTS AND PERFORMANCE OF THE COMPANY: || || |
|Income from Operations (Including other Income) ||1116.65 ||1750.05 |
|Profit/(Loss) before and also after exceptional and Extra-ordinary items and before taxes ||(352.99) ||961.48 |
|Less: Tax Expenses for the year ||2.58 ||255.13 |
|Add: Deferred Income Tax (Assets) ||11.71 ||46.07 |
|Net Profit /(Loss) for the year after tax ||(367.28) ||752.42 |
|Add: Other Comprehensive income ||(120.04) ||42.71 |
|Total Comprehensive income (including |
Post Tax Profit/(Loss) for the year)
|(487.32) ||795.13 |
Your Directors do not recommend any dividend for the year under review.
No amount has been transferred to the reserve by the Board during the year underreview.
4. THE COMPANY'S WORKING/STATE OF AFFAIRS DURING THE FINANCIAL YEAR UNDER REVIEW
The Company's overall working performance during the financial year under review hasnot been satisfactory. The Company's Sponge Iron Plant at Jamshedpur operated for few daysduring may 2019 and thereafter had to be shut down to rectify the major snagsdeveloped/found in the ESP (A critical and important part of the pollution controlequipments and system). Such rectifications were completed by August 2019 but by thattime the market conditions of sponge iron had turned very bearish and operations werefound to be economically unviable and hence the plant remained shut. The plant startedoperations from 22.1.2020 on trial basis to check the smooth operation and efficiency ofESP but suddenly the govt announced lock down to control spread of COVID-19 viral diseaseand hence the plant was shut down on from 24th march 2020. In view of abovethe Plant during the year under review could produce only 4356 M.T. of Sponge Iron. Thetotal sales revenue of the Sponge Iron during the year was only Rs.722.10 lacs net oftaxes and thus the plant incurred substantial fixed overheads and also operational lossesduring the year under review. Since the market conditions continue to be highly bearishand unfavourable together with low selling prices with no corresponding downwardadjustment in raw material prices mainly iron ore making the operations commerciallyunviable; the management has decided to keep the plant shut for an indefinite period. TheBoard is of the considered view that the said plant has not operated profitably for thepast several years for reasons and circumstances beyond the reasonable control of themanagement and on the contrary it has been a loss unit and is likely to be so in future aswell (unless the market conditions become favourable and raw materials begin to beavailable at economical rates on a fairly consistent basis thus turning the operationprofitable on a fairly long term basis) and hence it may be prudent to monetize the sameby disposing off after taking prior consent of the shareholders.
Further the Company had entered in to a Business Transfer Agreement on 03.01.2019 (FY2018-2019) with M/s. SHV Energy Pvt. Ltd. to sell them the Company's LPG Bottling Plantat Uluberia Howrah by way of a slump sale on a going concern basis subject to theconsent and approval of the West Bengal Industrial Infrastructural Development Corporation(WBIIDC) Kolkata. The said slump sale transaction/deal is still pending as the necessaryapproval and consent from WBIIDC has not been received. However the Company is optimisticand hopeful of completing this transaction in the current financial year - 2020-21 aftergetting the approval of WBIIDC.
The Company's LPG Bottling Plant at Raigarh continues to be inoperative as thecommercial operation thereon are not remunerative and economically viable. The Board hastaken authority from the members through Postal Ballot to dispose off the said Plant butunfortunately no buyer/purchaser has come forward till date. The Board considers that onlythe free-hold land of the said Plant has commercial value and the plant & equipmentsbeing very old and obsolete have only scrap value.
Further during the year under review the Company's revenue from operations net oftaxes stood at Rs. 818.11 lacs (previous year Rs.276.47 lacs) and the other income stoodat Rs 298.54 lacs (previous year Rs.1473.58 lacs) and hence the total income stood at Rs1116.65 lacs (previous year Rs.1705.05 lacs). The company has incurred a net loss of Rs.(367.28) lacs (previous year net profit of Rs.752.42 lacs). The Other Comprehensive Income(OCI) for the year stood at Rs.-120.04 lacs (previous year Rs.42.71 lacs). The totalcomprehensive income for the year stood at Rs.-487.32 lacs (previous year Rs.795.13 lacs).
Your Board continues to make its best possible efforts to improve the overall workingand financial performance of your Company.
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 31.03.2020 TILLTHE DATE OF THIS BOARD REPORT:
7. SIGNIFICANT MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS AGAINST THECOMPANY:
8. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO COMPANY'S FINANCIALSTATEMENTS:
In the opinion of the Board the Company has adequate Financial Controls in place withrespect to Company's Financial Statements and Operations. Kindly refer to Annexure 'B' ofthe Statutory Auditors report dated 19th June 2020.
9. DETAILS OF NAMES OF COMPANIES WHICH HAVE BECOME OR CEASE TO BE THE COMPANY'SSUBSIDIARY COMPANIES/ JOINT VENTURE/ ASSOCIATE COMPANIES DURING THE YEAR UNDER REVIEW ANDTHEIR FINANCIAL PERFORMANCE:
The Company neither has nor had in the past any subsidiary associate or joint ventureCompany.
10. FIXED DEPOSIT :
The Company has not accepted any deposits during the year from the Public under section73 or 74 (Chapter V) of the Companies Act 2013 nor did it receive the same in any of theprevious years and hence there are no overdue/outstanding Deposits or any interest payablethereon and therefore the prescribed details under the Companies Act 2013 are notrequired to be furnished.
11. STATUTORY AUDITORS :
M/s. M.R. Singhwi & Company Chartered Accountant were appointed as the StatutoryAuditors of the Company for a period of five years beginning from financial year 2017-18to 2021-22 (32nd AGM to 36th AGM) and accordingly they will continueto be the Statutory Auditors of the Company for the financial year 2020-21.
12. AUDITOR'S REPORT :
The observations made in the Auditor's Report are self-explanatory and do not call forany further comments u/s 134(3) (f) of the Companies Act 2013. The Auditors have not madeany materially significant qualifications in their Report and their opinion is unmodified.
13. EXTRACT OF THE ANNUAL RETURN OF FINANCIAL YEAR ENDED 31.03.2020:
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 information's required under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 are as under:-
(A) CONSERVATION OF ENERGY :
The Power requirement at Company's Gas Bottling Plant is negligible. For Sponge IronPlant the Capacitor Panels of adequate size and number have been installed and aremaintained to save and economize on power consumption. The Company has not made any freshinvestments on this account nor was there any need to take any fresh initiatives on thisaccount.
(B) TECHNOLOGY ABSORPTION :
The Company has in-house technology and expertise for its Hydrocarbon LPG BottlingPlant. The technology to manufacture Sponge Iron was provided by an outside agency longago. The said technology is fully indigenous is now well established and has been fullyabsorbed by the Company. The Company has not so far made use of any imported technologyfor its products/plants. The Company has not made nor felt necessary to absorb any freshtechnology and the Company has not incurred any expenditure on Research and Development.
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO :
|Earnings ||: Nil (Previous Year : Nil) |
|Outgo ||: Nil (Previous Year : Nil) |
D) Annual Evaluation:
Pursuant to the provisions of the Sec 134 (3) (p) of the Companies Act 2013 and clause2 (f) (9) of chapter II of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (hereinafter in this board report called and referred to as "SEBILODR REGULATIONS); your Board has carried out an annual performance evaluation of its ownperformance the performance of each Individual Director as well as the evaluation of theworking of its Audit Nomination and Remuneration Committees as per a suitably conceivedmanner. During the year under review the Independent Directors had their exclusivemeeting on 28th February 2020 inter alia to discuss the Performance evaluation of NonIndependent Directors and Board of Directors as a whole and also of the Managing Directorand the Chairman of the Company and Evaluation of the quality of flow of informationbetween the Management and Board for effective performance by the Board and the same weregenerally found to be satisfactory. As mandated by SEBI (LODR) Regulation 17(10); theBoard as a whole has carried out the performance evaluation of each of the IndependentDirectors of the Company without the participation of the particular Independent Directorwhose performance is being evaluated and fulfillment of the prescribed criteria of theirindependence and the Board is satisfied with the same.
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 2019-20 covered under thisReport.
16. DIRECTORS :
A) Changes in Directors and Key Managerial Personnel:
Mrs. Sushma Chhibbar was re-appointed as the director of the company through E-VOTINGand in the last 33rd AGM.
Mr. Dalbir Chhibbar the managing director's reappointment for a further period of fiveyears from 17.05.2019 to 16.05.2024 was approved and confirmed by the members throughE-voting and in the last 33rd AGM.
Mr. Lalit kishore Choudhury's re-appointment as the independent director of the companyfor a further period of five years from 28.03.2019 to 27.03.2024 was confirmed andapproved by the members through E-voting and in the last 33rd AGM. Mostunfortunately Sri Lalit kishore choudhury expired on 17.05.2020. The board offers deepestcondolences on his Sudden most sad and untimely demise and gratefully appreciates hisvaluable contributions to the company during his tenure as independent director and as thenon-executive Chairman. May god give peace to his noble soul.
Mr. Neeraj Chhabra was appointed as the independent director for a period of five yearsfrom 18-01-2019 to 17-01-2024 and his appointment was confirmed and ratified by themembers through E-voting and in the last 33rd AGM.
Mr. Baninder Singh Sahni was appointed as the new independent director of the companyon 19.06.2020 to fill in the casual vacany caused by the demise of Sri Lalit KishoreChoudhury.
Further Mr. Vishesh Chhibbar and Mr. Puranmal Agarwal are the Directors who retire byrotation at the forthcoming 34th AGM and who being eligible have offered themselves forre-appointment in the said ensuing 34th AGM. The brief resume about Mr. Vishesh Chhibbarand Mr. Puranmal Agarwal Director seeking re-appointment is annexed with the notice ofAGM. Your Board recommend their reappointment.
Shweta Mishra the Company Secretary had resigned from her post for personal reasonsand the Board in it's meeting held on 29.5.2019 had accepted her resignation and hencew.e.f. 29.5.2020 she ceased to be the Company Secretary. The Board in its meeting held on28.02.2020 has appointed Mrs Anamika Sinha Roy as the new company secretary of thecompany.
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-section (6) of Section 149 of the Companies Act 2013 and Rule 5 of theCompanies (Appointment and Qualification of Directors) Rules 2014 has been received andtaken on record.
17. BOARD MEETINGS HELD DURING THE YEAR :
During the year the Board of Director's Meetings were held on five occasions e.g. on29.05.2019 29.07.2019 08.11.2019 17.01.2020 and 28.02.2020. The Independent Directorsheld their separate exclusive meeting on 28.02.2020.
18. AUDIT COMMITTEE NOMINATION & REMUNERATION COMMITTEE STAKEHOLDERS RELATIONSHIPCOMMITTEE :
The Board in it's meeting held on 19.06.2020 upon the sudden demise of Sri lalitkishore choudhury has re-constituted all the aforesaid Committees and the details of there-constituted Committees are stated in the Corporate Governance Report annexed hereto.
19. LOANS GUARANTEES AND INVESTMENTS:
Regarding loans given by the Company please refer to Note No.12 and for investmentsmade by the Company please refer to the Note No.5 in the annual Financial Statements ofAccounts. The Company has not given any guarantee of any kind to any person or to any Bankor Financial Institution.
20. RELATED PARTY TRANSACTIONS AS REQUIRED UNDER SECTION 188(1) COMPANIES ACT. 2013:
The company has paid Rs. 3.00 lacs to a related party as office rent and has also paidRs. 11.62 lacs as remuneration to the Managing Director. These Related Party transactionsare in the normal course and are not considered to be material and hence approval of thesame from the shareholders is not required. There are no other related party transactions.Please refer to Form AOC-2 annexed with this Board Report and which forms part of it. Thedetails of payment made to other related parties is defined under Ind-AS AccountingStandards are as per Note No.33(4) on financial statements.
21. MANAGERIAL/DIRECTOR'S REMUNERATION:
The particulars of the same are as mentioned in the Corporate Governance Report annexedto this Board Report.
22. SECRETARIAL AUDIT REPORT AND SECRETARIAL COMPLIANCE REPORT :
Annual Secretarial Audit Report for the financial year ended 31st March2020 along with Annexure 'A' dated 12th June 2020 (in the prescribed Form No.MR-3) asgiven by the secretarial auditors M/s Patnaik & Patnaik Company Secretaries isannexed hereto and forms part of this Board Report as Annexure - 1
The Secretarial Compliance report dated 12th June 2020 for the financial year ended 31stMarch 2020 in relation to compliance of applicable SEBI Regulations/Circulars/guidelinesissued there under pursuant to requirement of regulation 24A of listing regulations; asissued by the aforesaid secretarial auditors is also annexed as Annexure "2" andforms part of this Board report. With respect to the said auditors observation about thedemateralisation of shares under promoter's group; the board wish to submit that only avery negligible 58500 number of shares representing just 0.47% are yet to bedematerialized due to some unavoidable pending legal issues concerning transmission ofshares upon death of some shareholders and for some other unavoidable reasons. Managementis constantly following up the matter and it is hoped that the pending shares shall bedematerialized during the current FY -2020-2021.
23. CORPORATE GOVERNANCE :
The Company files quarterly Corporate Governance Report with BSE Ltd. as required underSEBI LODR REGULATION-27. Corporate Governance Report along with the certificate dated 12thJune 2020 of the Secretarial Auditors confirming compliance of conditions of CorporateGovernance as required under the relevant Regulations of SEBI LODR Regulation - 2015 isannexed to and forms part of this Board Report.
24. RISK MANAGEMENT POLICY:
The Company's 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 same as only a limited number of Iron Ore Mines are in operation with almost monopolystatus and similarly the coal has to be procured form the Coal India Ltd. again virtuallythe monopoly supplier in the Country and fixes the coal prices arbitrarily. The Companyalso procures imported coal whose prices keep changing in the International Market as perdemand supply equations. The other risks are the wide fluctuations in the selling price ofSponge-Iron which again depend on Demand and Supply and your Company being a nominalplayer has no control or influence on the same. The Company has however laid downprocedures to inform the Board of Directors about Risk Assessments and it's minimizationprocedures. The Board has also framed and implemented the Risk Management Plan for theCompany to the extent it was possible feasible and practical. The formation of RiskManagement Committee is not applicable to the Company as the requirement is applicable toonly top 500 listed entities on BSE Ltd. as per Regulation 21 of SEBI LODR REGULATIONS2015.
25. DISCLOSURES ABOUT REMUNERATION TO DIRECTORS VIS-A-VIS EMPLOYEES AND OTHERPARTICULARS AS REQUIRED UNDER SECTION 197 OF THE COMPANIES ACT 2013 READ WITH RULE 5 OFCOMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014:
A. During the year a remuneration of Rs. 1162500/- was paid to Managing Director andDirector sitting fees of Rs.40000/- was paid to the Independent Directors for attendingthe Board Meetings and none of the other directors received any remuneration andtherefore the computation of ratio of remuneration of each Director to the medianremuneration of the employees of the Company are not furnished. The remuneration paidand/or payable to the Key Managerial Personnel's is very reasonable and commensurate withtheir performances. The remuneration paid to the employees is as per the remunerationpolicy of the Company which is dynamic in nature and changes as per the financialperformance of the Company and of an individual employee including their work experiencecompetency job profile skill and seniority.
B. No employee of the Company during the financial year was in receipt of remunerationaggregating to Rs.102 lacs or more if employed for the whole year and Rs. 8.5 lacs permonth if employed for a part of the financial year. No employee of the Company is holding2% or more of the Equity Shares of the Company. The number of permanent employees as atyear- end were thirteen and the ratio of remuneration paid to Managing Director to medianremuneration of the employees was 5:1.
26. 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.
27. DIRECTORS' RESPONSIBILITY STATEMENT:
The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) ofSection 134 of the Companies Act 2013 states:-
(i) That in the preparation of the annual accounts for the financial year ended 31stMarch 2020 the applicable accounting standards had been followed along with 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 profit 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 2020 on a going concern basis.
(v) That the Directors had laid down internal financial controls which are to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.
(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 the Stakeholders during the year under review. Your Directorsalso wish to place on record their appreciation for the contribution of the employees .
|Place : Kolkata ||For and on behalf of the Board |
|Dated : 19.06.2020 || |
Ashirwad Steels & Industries Limited
| ||Dalbir Chhibbar ||Vishesh Chhibbar |
| ||Managing Director ||Director |
| ||(DIN :00550703) ||(DIN:03553892) |