TO THE SHAREHOLDERS
Your Directors present their 31st 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 2017.
| ||Current year ||Previous year |
| ||(31.03.2017) ||(31.03.2016) |
| ||Rupees ||Rupees |
|1. SUMMARY OF FINANCIAL RESULTS AND || || |
|PERFORMANCE OF THE COMPANY: || || |
|Turnover/Income from Operations ||40044648 ||40449044 |
|Including other Income || || |
|Profit before exceptional and || || |
|Extra-ordinary items and taxes ||8181904 ||281205 |
|Less: Tax Expenses for the year ||2026397 ||127000 |
|Add: Deferred Income Tax (Assets) ||1670085 ||1665087 |
|Net Profit for the year ||7825592 ||1819292 |
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 Secondary Steel Sector of the country comprising of Sponge Iron Plants/SteelMelting Shops/Re-rolling Mills have been passing through a bad phase for the last severalyears for reasons and circumstances beyond their control and in line with that yourCompany's working has also been dissatisfactory for the year under review as the Company'sboth the Sponge Iron Plants at Jamshedpur and also at Dist. Nalgonda (Telengana) remainedinoperative due to uneconomic and non viable operations on account of unavoidable reasonsand circumstances which inter-alia included un-remunerative selling prices andshortage/unavailability of basic raw materials such as gas coal and iron ore ataffordable and economically viable rates and as a result there was no production of spongeiron during the FY-2016-17. However as a matter of prudence the company sold out a majorportion of its degraded/degrading/decaying coal stock at Nalgonda sponge iron plant beforeit became further degraded and lost its commercial value and use.
However signs of improvement in overall market and operational conditions of spongeiron started from January 2017 onwards and accordingly the company has resumed commercialproduction at its Jamshedpur Sponge Iron Plant from April2017 (During the current FY2017-18) after completing all statutory compliances/requirements and necessary repairs andmaintenance of the plant. The selling prices of Sponge however have declined afterApril 2017 till the date of this report but your Board expects a cut in the prices ofIron Ore and also expect the selling prices to rebound after the Monsoon season is over.After a careful watch and if market conditions stabilize improve further and operationsbecome remunerative; the board will strive to recommence production at its NalgondaTelengana based Sponge Iron Plant as well hopefully after the end of the monsoon season ofthe current calendar year 2017.
5. CHANGE IN NATURE OF BUSINESS OF THE COMPANY:
None during the year
6. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR31.03.2017 TILL THE DATE OF THIS BOARD REPORT:
The company's Sponge Iron Plant at Jamshedpur has resumed commercial production fromApril 2017. Besides this; there are no other material changes requiring disclosure.
7. SIGNIFICANT MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALSAGAINST THE COMPANY:
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 AnnexureB' of the Statutory Auditors report dated 19.05.2017.
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:
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 interestpayable thereon and therefore the prescribed details under the Companies Act 2013 are notrequired to be furnished.
11. STATUTORY AUDITORS :
The Company's Statutory Auditors M/s A. Pradhan & Associates CharteredAccountants will hold office until the conclusion of upcoming 31st AGM being held on18.09.2017. As per provisions of Section139 of Companies Act 2013 and relevant rules theywill compulsory retire on the conclusion of this 31st AGM and cannot continue anymorehaving completed the maximum of three years of extension/transitory period allowedtherein.
The Board of Directors recommend appointment of M/S M.R.Singhwi firmRegistrationno.& company (bearing 312121E) as the new statutory auditorsofthecompanyfor fiveyearsbeginning from the conclusion of 31st periodof
AGM and upto the conclusion of 36th AGM subject to their appointment being ratified bymembers in the upcoming
31st AGM and in every AGM held thereafter till they hold office. made would be withinthe prescribed limits and they are eligible for appointment as such and do not suffer fromany disqualifications as specified in section 141 of the companies act 2013 and therelevant rules made there under has been received from them and accordingly the membersare requested to consider adoption of the respective ordinary resolution as set out in thenotice convening the next 31st AGM .
12. AUDITORS' REPORT :
The observations made in the Auditors' 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 made any materially significantqualifications in their Report.
13. EXTRACT OF THE ANNUAL RETURN OF PREVIOUS YEAR ENDED 31.03.2017:
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 withClause 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 as only bottling ofgases is being done. For Sponge Iron Plants the Capacitor Panels of adequate size andnumber have been installed and are maintained to save and economise on power consumption.As the Company's manufacturing units were lying inoperative ; the Company has not made anyfresh investments on this account nor was there any need to take any fresh initiatives onthis account.
(B) TECHNOLOGY ABSORPTION :
The Company is using in-house technology and expertise for its Hydrocarbon Gas BottlingPlants. 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)
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 2016-17 covered under thisReport. The Company will however formulate and implement
CSR Policy as and when it gets applicable to the Company.
16. DIRECTORS :
A) Changes in Directors and Key Managerial Personnel:
Mr. Vishesh Chhibbar Mr. Suresh Kumar Agarwal Mr. Puranmal Agarwal and Mr. YudhbirChhibbar were reappointed as Directors of the Company by the members in the last AnnualGeneral Meeting held on 29th August 2016. Mrs. Sushma Chhibbar and Mr. Suresh KumarAgarwal the Directors retire by rotation and are eligible for re-appointment in theensuing 31st AGM. Miss Manisha Chopra Company Secretary resigned due to personalreasons during the year and on the recommendations of the Nomination and RemunerationCommittee; the Board appointed Sri Nikhil Deora as the new Company Secretary cumcompliance officer. Mr. Shibani Sankar Mishra the CFO of the company due to cancerdisease and resultant prolonged illness expired on 23.02.2017 ; after serving the companymost sincerely diligently and honestly for over 25 years. The Board feels extremely sadfor his untimely demise and pays it's heart full tributes to him and prays for the peaceof his great and noble soul. All expenses related to his medical treatment were borne bythe company. On the recommendations of the Nomination and Remuneration Committee; theBoard of Directors in their meeting held on 19.05.2017 have appointed Sri SangalaVenuGopal as the new chief financial officer (CFO) of the company.
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-sub-section
(6) of Section 149 of the Companies Act 2013 and Rule 5 of the Companies (Appointmentand Qualification of
Directors) Rules 2014 has been received and taken on record.
C) Formal 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 Directors individually as well as the evaluation of the working of itsAudit Nomination and Remuneration Committees as per a suitably conceived formal manner.During the year under review the Independent Directors met on 29 MARCH 2017 inter aliato discuss the Performance evaluation of Non Independent Directors and Board of Directorsas a whole and of the Chairman & Managing Director and
Evaluation of the quality of flow of information between the Management and Board foreffective performance by the Board and were satisfied overall. The Board has carried outthe performance evaluation of all Independent Directors of the Company and is satisfiedwith their performance.
17. BOARD MEETINGS HELD DURING THE YEAR :
During the year the Board of Director's Meetings were held on five occasions e.g. on16.05.2016 1.08.2016 23.09.2016
26.10.2016 and on 20.01.2017. The Independent Directors held their separate annualmeeting on 29.03.2017.
18. AUDIT COMMITTEE:
As Per Corporate Governance Report annexed hereto.
19. VIGIL MECHANISM:
As per Corporate Governance Report annexed hereto.
20. NOMINATION & REMUNERATION COMMITTEE :
As per Corporate Governance Report annexed hereto.
21. LOANS GUARANTEES AND INVESTMENTS:
Refer Note: 39 in the Financial Statements of Accounts.
22. RELATED PARTY TRANSACTIONS AS REQUIRED UNDER SECTION 188A(1)/ COMPANIES ACT 2013:
During the year the company invested a sum of RS 35205500/- in buying the equityshares of an associate company namely Chhibbar Business & Fiscals Pvt. Ltd . Pleaserefer to form AOC-2 attached with this board report.
23. MANAGERIAL REMUNERATION:
The particulars of Managerial remuneration are mentioned in the Corporate GovernanceReport as annexed to this Board Report.
24. SECRETARIAL AUDIT REPORT:
A Secretarial Audit Report given by J. Patnaik & Associates a Company Secretary inPractice is annexed hereto in the prescribed Form No- MR-3 of Companies Act 2013.
25. CORPORATE GOVERNANCE :
The Company files quarterly Corporate Governance Report with BSE Ltd. as required underSEBI LODR REGULATION- 24 .Corporate Governance Report along with the Certificate of theAuditors confirming compliance of conditions of
Corporate Governance as required under the relevant Regulations of the ListingAgreement with the Stock Exchange (BSE Ltd.) is annexed hereto.
26. 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 several of the Iron-Ore Mines in the Country still remain closed and Coal hasto be sourced mainly from Government-Owned Companies who decide and fix the pricesarbitrarily. The other risks are the wide fluctuations in the selling price of Sponge-Ironwhich again depend on Demand and Supply and your Company being a nominal player has nocontrol or influence on the same. The Company has however laid down procedures to informthe Board o Directors about Risk Assessments and it's minimization procedures. The Boardhas also framed and implemented the Risk Management Plan for the Company to the extent itwas possible and feasible.
The formation of Risk Management Committee is not applicable to the Company as therequirement is applicable to only top 100 listed entities on BSE Ltd. as per SEBI LODRREGULATION No:-21.
27. DISCLOSURES ABOUT REMUNERATION TO DIRECTORS VIS--VIS EMPLOYEES AND OTHERPARTICULARS AS REQUIRED UNDER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014:
A. During the year a remuneration of Rs 360000/- was paid to Managing Director andsitting fees of Rs 39000/- was paid to the Independent Directors for attending the BoardMeetings and therefore the computation of ratio of remuneration of each Director to themedian remuneration of the employees of the Company are not furnished. The remunerationpaid and/or payable to the Key Managerial Personnel's are very reasonable and iscommensurate with their performances. The remuneration paid to the employees is as per theremuneration policy of the Company which is dynamic in nature and changes as per thefinancial performance of the Company and of an individual
B. No employee of the Company during the financial year was in receipt of remunerationaggregating to Rs.60 lacs or more if employed for the whole year and Rs.5 lacs per monthif employed for a part of the financial year. No employee of the Company is holding 2% ormore of the Equity Shares of the Company.
28. 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.
29. 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 2017 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 2017on 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 all Stakeholders during the year under review. Your Directorsalso wish to place on record their appreciation for the contribution of the employees atall levels.
| ||For and on behalf of the Board |
| ||Ashirwad Steels & Industries Limited |
|Place: Kolkata ||Dalbir Chhibbar |
|Dated: 19th May 2017 ||Chairman & Managing Director |