Your Directors are pleased to present the 29th Annual Report and the Company's auditedaccounts for the financial year ended 31st March 2017.
The Company's financial performance for the year ended 31st March 2017 is summarizedbelow:
(Rs. in Lacs)
| || |
Financial Year Ended
|Particulars || |
| ||31-03-2017 ||31-03-2016 ||31-03-2017 ||31-03-2016 |
|Total Income ||103689.77 ||84470.59 ||103696.48 ||84473.57 |
|Profit/(Loss) Before Interest Depreciation & Tax (PBIDT) ||20367.25 ||8876.07 ||20363.91 ||8870.25 |
|Finance Charges ||3934.22 ||3151.37 ||3934.25 ||3151.37 |
|Depreciation ||2280.05 ||2225.95 ||2280.05 ||2225.95 |
|Provision for Income Tax and Deferred Tax (Including for earlier years) ||5201.00 ||1629.66 ||5201.00 ||1629.66 |
|Share of Loss of Associate Company ||- ||- ||0.47 ||0.20 |
|Net Profit After Tax (PAT) ||8951.98 ||1869.09 ||8948.62 ||1863.08 |
|Profit brought forward from Previous Years ||25204.54 ||23873.02 ||25158.38 ||23832.71 |
|Profit Carried to Balance Sheet ||34529.46 ||25204.54 ||34479.94 ||25158.38 |
STATE OF AFFAIRS OF YOUR COMPANY
Your Company's performance reflects the strong improvement in the India's businesssentiment fuelled by the positive trend of international market and progressive policiesof the Government.
Your Company's total income increased by 22.75% from Rs. 84470.59 lacs in 2015-16 toRs. 103689.77 lacs in 2016-17. PBIDT increased by 129.46% from Rs. 8876.07 lacs in2015-16 to Rs. 20367.25 lacs in 2016-17. The Profit (PAT) for the Year increased by378.95% from Rs. 1869.09 lacs in 2015-16 to Rs: 8951.98 lacs in 2016-17. Consequentlythe earnings per share stood at Rs. 11.35 (basic) and Rs. 10.63 (diluted) for 2016-17against Rs. 2.50 (basic) and Rs. 2.50 (diluted) for 2015-16.
Your Board needed to strike a prudent balance between rewarding shareholders andreinvesting business surplus in the business for capitalising on emerging growthopportunities. Your Board has strategically laid more emphasis on the later consideringthe promising opportunities over the medium-term catalyzed by Government policies.
The Board of Directors have recommended a 15% dividend on equity shares i.e. Rs. 0.75per equity share of face value of Rs. 5/- each for the year ended on 31stMarch 2017 subject to the approval of the Shareholders at the 29th AnnualGeneral Meeting of the Company.
TRANSFER TO RESERVES
The Company has not transferred any amount to the General Reserve during the financialyear ended on March 312017.
The paid-up Equity Share Capital as on 31st March 2017 was Rs. 4444.52 lacs. TheCommittee for Preferential Issue of Warrants has allotted 10000000 Equity Shares of Rs.5/- each at a premium of Rs. 16.50 to the Promoter Group Companies on preferential basison 31st March 2017 pursuant to conversion of equivalent number of Warrants asunder:
|Name of Allottees ||No. of Equity Shares |
|Global Steel Holdings Asia Pte. Ltd ||2900000 |
|Direct Trading & Investments Singapore Pte. Ltd. ||2900000 |
|Prasan Global Ventures Singapore Pte. Ltd. ||4200000 |
|Total ||10000000 |
Fiscal 2016-17 was an important milestone in your Company's journey as we registeredour highest ferro-alloy production at 131013.76 MT against 122626.53 MT in 2015-16 a6.84% increase.
Besides the untiring efforts of the team in successfully implementing various projects(using the TPM Lean Six Sigma and IMS techniques) also contributed immensely in improvingproductivity and optimizing operational costs.
In keeping with its commitment in saving the environment your Company undertook anumber of green initiatives:
> In-plant initiatives for reducing energy and fuel consumption.
> Sale of 153809 MT of slag which facilitated in conserving granite stoneotherwise used in construction activities.
The Company has commenced its commercial production with effect from 15th September2016 at its sukinda unit which was acquired from Jabamayee Ferro Alloys Limited as agoing concern on a slump sale basis. The installed Capacity of the unit is 15660 MTperannum.
Government of Odisha is pleased to order grant of chromite mining lease vide letterdated 09.01.2017 under section 10A(2) (c) of the Mines and Minerals (Development andRegulations) (MMDR) Act 2015 read with rule 8(2) of Mineral Concession Rules (MCR)2016 to the company over an area of 35.60 Hects and asked to furnish the performancesecurity in form of Bank Guarantee and also to sign the Mines Development and ProductionAgreement followed by execution of the lease deed and registration thereof on or before11.01.2017 as required under rule 8 (4) of the MCR 2016.
As per section 10A(2) (c) of MMDR Act 2015 the mining lease is only required to begranted before 11.01.2017. For this ambiguity between MMDR Act 2015 and MCR 2016 thecompany moved to Orissa High Court as it was found to be difficult in executing the mininglease deed and registering thereof within such a short period.
Hon'ble High court allowed company's writ and interim order passed that the provisionsof Rule 8(4) of MCR 2016 shall not be made applicable to the company till next date oflisting.
The matter is still pending at the Hon'ble High Court of Orissa.
Your Company exported 109183 MT Ferro Chrome valued at Rs. 86298.78 Lacs in 2016-17against 88537.50 MT valued at ^61186.12 Lacs during 2015-16. Exports constituted 85.29%of your Company's turnover in 2016-17.
BUSINESS EXCELLENCE DRIVE
During the year in its drive to strengthen Business Excellence your Company continuedits thrust on the key Business Excellence initiatives namely Baldrige Business Excellenceframework TPM Lean Six Sigma and Integrated Management System through extensive classroom and shop-floor training and facilitation at site by the Business Excellence team inorder to integrate these with the shop floor operations. The entire system adoption ofBaldrige model was internally driven by Business Excellence (BE') team who now hassenior executives having rich experience of implementation of this model in some of thebest business houses of the country.
The team's efforts in implementing these global techniques yielded heartening results.Productivity and product quality improved asset utilization improved while was tagesdeclined. Besides disciplined preventive maintenance facilitated in improving equipmenthealth. During the financial year your Company received certifications for the latest ISO9001: 2015 ISO 14001: 2015 and ISO 55001: 2014 (Asset Management System). The Company iscontinuing with the OHSAS 18001:2007 certification on Occupational Health & SafetyManagement System and ISO 50001:2011 Energy Management System. Your Company cleared Stage1 Audit of ISO 27001:2013 Information Security Management and SA8000:2014 SocialAccountability Management System. With this the Company has successfully implemented theIntegrated Management System (IMS) which integrates all business processes across thevalue chain in addition to integrating the process involved in Management Initiatives andall forms of ISO Management System.
In its endeavor to emerge as a global conglomerate your Company initiated theimplementation of a comprehensive Business Excellence initiative based on theglobally-respected Malcolm Baldrige Quality Framework. The Company during the year movedforward in its journey on Malcolm Baldrige Model by creating the BAL Business ExcellenceFramework with the objective of building competitive advantage and sustainable business.An external assessment of the Company based on the Malcolm Baldrige Model is scheduled tobe held in July 2017 to calibrate our systems and processes and provide a way forwardforfurther improvements.
Ferrochrome (FeCr) an alloy of chrome and iron is a key raw material for stainlesssteel (SS) production. The markets for chrome ore and ferrochrome are shaped primarily bystainless steel production. All stainless steels contain chrome - indeed it is chromethat makes steel "stainless" and to impart this property a minimum mass fractionof 10.5% chrome contained is required although in practice commercial grades of stainlesssteel contain at least 18%chrome.
As in most commodities in 2016 supply cuts in late 2015 followed by an unexpectedstep-up in Chinese stainless-steel production have caused significant tightness in theFeCr and chrome ore market. FeCr prices increased by 86% and chrome ore by more than 200%as compared from April 2016 to April 2017.
With no real substitute for Ferro Chrome in stainless steel and limited supplyflexibility supply tightness expected to persist to the end of the decade. This haspulled the Indian FeCr industry out of its slump but the real beneficiaries are theintegrated FeCr producers with captive chrome mines.
The market size for High Carbon Ferro Chrome is 11.10 Million Tonnes and Asia forms thelargest consumer segment of this market with Chinese demand alone being over 7 MillionTonnes. With over 80% of the world's Chrome Ore reserves South Africa is a major playerinChrome Alloys.
Volume-driven growth. Your Company has increased the operating capacity to 145000 MTper annum through capacity balancing process optimization and marginal capitalinvestment. This will further increase the operating capacity to 146210 MT.
The company is continuously exploring opportunities for growth and expansion. Thecompany has already acquired the Ferro Chrome Business along with Sukinda Plant ofJabamayee Ferro Alloys Limited as a going concern on a slump sale basis providing therequisite inorganic growth to the Company.
Organically the company is undertaking development of its underground mining inKaliapani Chromite Mines at Sukinda Odisha. In addition to the above growth efforts thecompany is also contemplating setting up of and / or investing in some brown field and /or green field projects relating to the activities of the company.
Value-led growth. The team is working on increasing the production of value-addedproducts namely low and medium-silicon low- phosphorous medium-carbon and high-chromiumamong others. In addition your Company is focused on maximizing its net realizationthrough accurate market segmentation in the domestic and international markets by sellingdirectly to the end user.
Sustainability: Your Company owns natural resource assets of captive Chromite Ore Mineslocated at Sukinda Valley Jajpur Odisha.
The available reserves for open cast mining in the Kaliapani Chromite Mines in Sukindawould continue for few years. For long term sustained business operations the managementis developing underground mining in Kaliapani Chromite Mines of Sukinda.
CHANGE IN THE NATURE OF BUSINESS IF ANY
During the year there was no change in the nature of business of the Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES:
MILTON HOLDINGS LIMITED (MHL)
Milton Holdings Limited (MHL) Mauritius a Wholly-owned Subsidiary had investedthrough joint venture in Manganese-ore mining projects in Brazil. As at the date ofBalance Sheet the Company has an investment in shares of MHL aggregating in value to USD4.7351 million (Equivalentto Rs. 2194.83 Lacs).
BALASORE METALS PTE. LIMITED
Balasore Metals Pte. Limited (BMPL) Singapore is a Wholly-owned Subsidiary of theCompany. As at the date of Balance Sheet the Company has an investment in share ofBalasore Metals Pte. Limited aggregating in value to USD1.00.
BALASORE ALLOYS NIGERIA LIMITED
Balasore Alloys Nigeria Limited (BANL) is a Subsidiary of the Company. As at the dateof Balance Sheet the Company has agreed to make an investment in the Share Capital ofBalasore Alloys Nigeria Limited aggregating in value upto ^19.80 Lacs.
Balasore Energy Limited is an Associate of the Company. As at the date of BalanceSheet the Company has an investment in 17000 shares of Balasore Energy Limitedaggregating in value to Rs. 170000.
The company does not have any joint venture.
A report on the performance and financial position of each of the Subsidiaries andAssociate Company is included in form AOC -1 which forms part of this report.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Section 129(3) of the Companies Act 2013 Read with Regulation 34ofSEBI(LODR) Regulations 2015 the Company has prepared a Consolidated FinancialStatement of the Company and all its Subsidiaries and Associate Companies which isforming part of this Annual Report.
The Statement in Form AOC-1 containing the salient features of the financial statementof the Company's Subsidiaries and Associates pursuant to first-proviso to sub-section (3)of Section 129 of the Companies Act 2013 forms part of this Report as Annexure-1.
In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its standalone and the consolidatedfinancial statements has been placed on the website of the Company i.e.www.balasorealloys.com .
Further as perfourth proviso of the said section the audited annual accounts of eachof the Subsidiaries and Associate Companies have also been placed on the website of theCompany. Shareholders interested in obtaining a copy of the audited annual accounts of theSubsidiaries and Associate Companies may write to the Company Secretary at the Company'sregistered office and Administrative office.
The audited financial statements and audit reports of each of the Subsidiaries areavailable for inspection at the registered as well as administrative office of the Companyand that of the Subsidiaries during working days between 11.00 A.M. to 1.00 P.M exceptSaturdays.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loan guarantees provided or made any investmentsexceeding sixty per cent of its paid-up share capital free reserves and securitiespremium account or one hundred per cent of its free reserves and securities premiumaccount whichever is more as prescribed under Section 186 of the Companies Act 2013read with applicable rules made thereunder.
Details of Loans given Guarantees provided and Investments made covered under theprovisions of Section 186 of the Companies Act 2013 are given in the note no. 13 and 14of the Financial Statements of the Company for the year ended on 31st March 2017.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the financial year ended March 31 2017 your Company's transactions with allthe Related Parties as defined under the Companies Act 2013 read with Rules framedthereunder were in the ordinary course of business and at arm's length basis. Your Companydoes not have a material unlisted subsidiary as stipulated under Regulation 16(1) (c)ofthe SEBI (LODR) Regulations 2015. During the year under review your Company did nothave any Related Party Transaction which required prior approval ofthe Shareholders.
All Related Party Transactions (RPT') are placed before the Audit Committee forits prior approval. There has been no materially Significant Related party Transactionduring the year under review having potential conflict with the interest ofthe Company.Hence disclosure in Form AOC-2 is not applicable. Further necessary disclosures requiredunder the Accounting Standards (AS-18) have been made in the Notes forming part ofFinancial Statements of this Annual Report.
The Company has not invited or accepted any deposits from the public as stipulatedunder Section 73 of the Companies Act 2013 and The Companies (Acceptance of Deposits)Rules 2014.
AUDITORS & AUDITORS' REPORT
M/s. Chaturvedi & Shah Chartered Accountants (Firm Registration No. 101720W)Statutory Auditors ofthe Company have been appointed by the members at the 26th AnnualGeneral Meeting held on 25th September 2014 and shall hold office for a period of 4 yearsstarting from 1st April 2014 subject to be ratified by the members ofthe Company at everyAnnual General Meeting ofthe Company.
M/s. Chaturvedi & Shah have given their consent to act as Auditors if appointed.The Company has received a letter from them to the effect that they satisfy the criteriaprovided under Section 141 ofthe Companies Act 2013 and that their appointment would bewithin the limits prescribed under Section 141(3)(g) of the Companies Act 2013.
Members are requested to ratify their appointment as the Statutory Auditors of theCompany and to fix their remuneration for the financial year ending on 31st March 2018.
A resolution proposing appointment of M/s. Chaturvedi & Shah as the StatutoryAuditors of the Company pursuant to Section 139 of the Companies Act 2013 forms a partof the Notice convening the Annual General Meeting ofthe Company.
The Auditors' Report to the shareholders for the year under review does not contain anyqualifications or adverse remarks. The Notes on Financial Statements referred to in theAuditors' Report are self-explanatory and do not call for any further comments.
Pursuant to Section 148 ofthe Companies Act 2013 read with the Companies (Cost recordand Audit) Rules 2014 and based on the recommendation of the Audit Committee the Boardof Directors at its meeting held on May 19 2017 has approved the re-appointment of M/s.Shome & Banerjee (Firm Registration Number 000001) as the Cost Auditors ofthe Companyfor the Financial Year 2017-18 to conduct audit of the Cost Records maintained by theCompany. As required under the Companies Act 2013 a resolution seeking approval for theremuneration payable to the Cost Auditors forms part of the Notice convening the ensuringAnnual General Meeting ofthe Company.
The Cost Audit Report for the Financial Year ended on March 312016 was filed withCentral Government in specified forms within the due date by the Cost Auditors oftheCompany. The Report of the CostAuditorsforthe Financial Year ended on March 312017 isunder finalization and will be filed with the MCA within the prescribed period.
Pursuant to the provisions of Section 138 of the Companies Act 2013 read with Rules13 of (The Companies (Accounts) Rules 2014) and based on the recommendation of the AuditCommittee the Board of Directors ofthe Company at its meeting held on May 192017 hasapproved the appointment of M/s. Das & Prasad Chartered Accountants (FirmRegistration Number 303054E) as the Internal Auditor of the Company for the financial year2017-18 to conduct the internal audit ofthe Company.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and based on therecommendation of the Audit Committee the Board of Directors at its meeting held on May192017 has approved the appointment of M/s. MKB & Associates Company Secretariesas the Secretarial Auditor of the Company for conducting the Secretarial Audit of theCompany for the financial year 2017-18.
The report of M/s. MKB & Associates Secretarial Auditor of the Company for thefinancial year ended on 31st March 2017 is annexed to this Report as Annexure - 2. TheSecretarial Audit Report contains the following qualification as:
"out of the entire shareholding of the Promoters 4660 equity shares (0.005% ofthe total share capital of the Company) are not held in dematerialized form as requiredunder Regulation 31(2) of Listing Regulations 2015."
The shareholders may kindly note that 4660 Shares of the Promoters are lying ascollateral securities with Bank. The same shall be dematerialized in due course inconsultation with the Bank.
DIRECTORS & KEY MANAGERIAL PERSONNEL:
I. INDEPENDENT DIRECTORS:
(a) APPOINTMENT OF INDEPENDENT DIRECTORS:
Ms. Mita Jha (DIN: 07258314) was appointed as Non - Executive Independent Director atthe Annual General Meeting of the Company held on 28th September 2016 for a term of fiveyears with effect from 12th August 2016.However consequent to her appointment asWhole-time Director Designated as Executive Director - Human Resource with effect from27th July 2017 Ms. Mita Jha shall cease to be the Independent Director of the Company.
(b) STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (7) OFSECTION149 OF THE COMPANIES ACT 2013 AND REGULATION 160FSEBI (LODR) REGULATIONS 2015.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of Independence as laid down in Section 149(6)of the Companies Act 2013 and Regulation 16ofSEBI (LODR) Regulations 2015.
(c) FAMILIARIZATION PROGRAMME UNDERTAKEN FOR INDEPENDENT DIRECTORS
The Independent Directors are familiarised with the Company their roles rightsresponsibilities in the Company nature of the industry in which the Company operatesbusiness model of the Company etc. On appointment the Independent Director is issued aLetter of Appointment setting out in detail the terms of appointment dutiesresponsibilities and expected time commitments. Each newly appointed Independent Directoris taken through a formal induction program including the presentation from the ManagingDirector on the Company's manufacturing marketing finance and other important aspects.The Company Secretary briefs the Directors about their legal and regulatoryresponsibilities as a Director. The induction for Independent Directors includeinteractive sessions with Committee Members Business and Functional Heads visit to themanufacturing site etc. On the matters of specialized nature the Company engages outsideexperts/consultants for presentation and discussion with the Board members. The Details offamiliarisation Programme imparted by the Company to its Independent Directors isdisplayed at its website i.e. www.balasorealloys.com .
II. NON-INDEPENDENT DIRECTORS:
(a) WOMAN DIRECTOR:
As per the provisions of Section 149(1) of the Companies Act 2013 and Regulation 17 ofSEBI (LODR) Regulation 2015 the Company is required to have atleast one Woman Directoron its Board. The Company complies with the aforesaid requirement as Mrs. Vartika MittalGoenka (DIN: 02451225) has been a Director of the Company till 29th May 2016.Thereafter Ms. Mita Jha was appointed as Director of the Company on 12th August 2016.
(b) APPOINTMENT OF DIRECTORS:
Based on the recommendations of Nomination and Remuneration Committee and AuditCommittee the Board at its meeting held on 12th August 2016 appointed Ms. Mita Jha (DIN:07258314) as Non Executive Director (Category - Independent Director)of the Companyw.e.f. 12th August 2016. Further the Board of Directors of the Company in its Meetingheld on 19thMay2017 based on the recommendations of Nomination and Remuneration Committeeand Audit Committee appointed her as Whole-time Director designated as Executive Director-Human Resource to hold office for a term of 5 years w.e.f. 27th July 2017subject to theapproval of Shareholders of the Company at the 29th Annual General Meeting of the Company.
(c) RESIGNATION OF DIRECTORS:
During the year under review Mrs. Vartika Mittal Goenka (DIN: 02451225) WomenDirector of the Company resigned from the Board ofthe Companyw.e.f. 29th May 2016 and Mr.R K Parakh (DIN: 00459699) resigned w.e.f. 30th June 2017 from the office of Director -Finance & Chief Financial Officer (CFO) ofthe Company. The Board placed on record itssincere appreciation for the valuable guidance and contribution made by Mrs. VartikaMittal Goenka and Mr. R K Parakh in the deliberation ofthe Board during their tenure asDirectors on the Board ofthe Company.
(d) RETIREMENT BY ROTATION:
As per the provisions of Section 152(6)(c) ofthe Companies Act 2013 Mr. AnilSureka(DIN: 00058228) retires by rotation and being eligible offers himself forre-appointment. In view of his considerable experience and contribution to the Companyyour Directors recommend his re-appointment.
Resume and other informations in respect of the Directors seekingappointment/re-appointment as required under Regulation 36 ofthe SEBI (LODR) Regulations2015 and Secretarial Standard-2 on General Meetings duly issued by The Institute ofCompany Secretaries of India' has been given in the Notice convening the ensuring AnnualGeneral Meeting. The Board of Directors recommends the aboveappointment(s)/re-appointment(s).
III. KEY MANAGERIAL PERSONNEL:
The Board of Directors at its meeting held on 20th May 2014 pursuant to Section203(2) of the Companies Act 2013 noted and ratified the appointments terms andconditions of appointments including remuneration of Mr. Anil Sureka Managing DirectorMr. R K Parakh Director-Finance & Chief Financial Officer and Mr. Trilochan SharmaPresident & Company Secretary of the Company as Key Managerial Personnel oftheCompany. The Board of Directors ofthe Company has appointed Ms. Mita Jha (DIN: 07258314)as Whole-time Director of the Company designated as Executive Director - Human Resourcew.e.f. 27th July 2017.
MEETINGS OF BOARD OF DIRECTORS :
During the financial year ended on 31st March 2017 Five Board Meetings were held thedetail ofthe meetings and the number of meetings attended by each director ofthe Companyare separately given in the Corporate Governance Report. The intervening gap between thetwo Board Meetings was within the period as prescribed under the Companies Act 2013 andSEBI (LODR) Regulations 2015.
MEETINGS OF INDEPENDENT DIRECTORS :
Pursuant to Section 149 Schedule IV of the Companies Act 2013 and Regulation 25 ofSEBI (LODR) Regulations 2015 a separate meeting ofthe Independent Directors oftheCompany for the financial year 2016-17 was held on Saturday 25th March 2017. In thismeeting the Directors evaluated the performance of Board and its Committee as a wholeChairman ofthe Board Directors NonExecutive Directors and further assessed the qualityquantity and the timeliness of flow of information between the Management and the Board.
Further based on the Board Evaluation Report duly prepared by Dr. Asish K.Bhattacharyya Chairman of Audit Committee and Nomination and Remuneration Committee theBoard advised the management to take corrective actions in order to access the qualityquantity and the timeliness of flow of information between the Management and the Board.
PARTICULARS OF EMPLOYEES :
Disclosures pertaining to remuneration and other details as required under Section197(12) ofthe Companies Act 2013read with Rule 5(1) ofthe Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are attached as Annexure-3.
The particulars of employees as required under Section 197 ofthe Companies Act 2013read with Rule 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 (including any statutory modifications or re-enactments for the time being inforce) in respect of the Top 10 Employees including Employees employed throughout thefinancial year under review and in receipt of remuneration aggregating not less than Rs.10200000 per annum as given in Annexure-4' hereto and forms part of this Report.
There was no employee who was employed for part of the financial year requiring suchdisclosure. There was also no employee receiving remuneration during the year is in excessof that drawn by the Managing Director or Whole-time Director and holding by himself oralong with his spouse and dependent children not less than two percent of the equityshares of the Company.
Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Companies Act 2013with respect to Directors' Responsibility Statement the Directors hereby confirm that:-
(i) in the preparation of the annual accounts for the year ended 31st March 2017 theapplicable accounting standards have been followed and there are no material departuresfrom the same;
(ii) 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 the end of the financial year andofthe profit of the Company for that period;
(iii) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;and;
(iv) the directors have prepared the annual accounts ofthe Company on a goingconcern' basis.
(v) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
(vi) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
MANAGEMENT DISCUSSION AND ANALYSIS
Management's Discussion and Analysis for the year under review as stipulated underRegulation 34 read with Schedule V ofthe SEBI (LODR) Regulations 2015 is presented in aseparate section forming part of the Annual Report.
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements as set out in Regulation 17 of the SEBI(LODR) Regulations 2015. The Report on corporate governance as stipulated in Regulation34 read with Schedule Vof the SEBI (LODR) Regulations 2015 forms an integral part of thisAnnual Report.
The Certificate received from M/s. Chaturvedi & Shah Chartered AccountantsStatutory Auditor of the Company confirming compliance with the conditions of corporategovernance as stipulated under Regulation 34 read with Schedule V ofthe SEBI (LODR)Regulations 2015 is attached to the Report on corporate governance. This Certificatewill be forwarded to the Stock Exchanges along with the Annual Report of the Company.
Pursuant to Regulation 17 ofthe SEBI (LODR) Regulations 2015 pertaining to corporategovernance norms Mr. Anil Sureka Managing Director of the Company and Mr. R KParakhDirector Finance cum Chief Financial Officer of the Company have certified inter-aliaabout review of financial statements and establishing & maintaining internal controlto the financial reporting for the year ended on 31st March 2017. The said certificateforms an integral part of annual report.
Pursuant to the provisions of requirements of Section 149 Schedule IV of the CompaniesAct 2013 and Regulation 25 of SEBI (LODR) Regulations 2015 the Board has carried out anannual performance evaluation of its own performance and that of its Committees andindividual Directors. A structured questionnaire was prepared after taking intoconsideration inputs received from the Directors covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its Committees Boardculture execution and performance of specific duties obligations and governance.
To determine the criteria of evaluation ofthe performance ofthe Independent Directorsas required under the Regulation 19 of the SEBI (LODR) Regulations 2015 the Nominationand Remuneration Committee at its meeting established the criteria based on which theBoard will evaluate the performance ofthe Directors.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on the parameters such as level ofengagement and contribution independence ofjudgement. The performance evaluation of theIndependent Directors was carried out by the entire Board. The performance evaluation ofthe Chairman and the Non Independent Directors was carried out by the IndependentDirectors.
The Directors expressed their satisfaction over the evaluation process and resultsthereof.
COMMITTEES OF BOARD
The composition terms of reference details of the meeting held during the year andthe number of meeting attended by each member of the Audit Committee has been furnished inthe Corporate Governance Report forming a part of this Annual Report. There has been noinstance where the Board has not accepted the recommendations of the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE
The composition terms of reference details of the meeting held during the year andthe number of meeting attended by each member of the Nomination and Remuneration Committeehas been furnished in the Corporate Governance Report forming a part of thisAnnual Report.
The compositionterms of reference details of the meeting held during the year and thenumber of meeting attended by each member of theStakeholders Relationship Committee hasbeen furnished in the Corporate Governance Report forming a part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
The composition and terms of reference details of the meeting held during the year andthe number of meeting attended by each members of the Corporate Social Responsibility(CSR) Committee has been furnished in the Corporate Governance Report forming a part ofthis Annual Report.
POLICIES AND CODES
Your company has formulated a remuneration policy for the Board Members Key ManagerialPersonnel (KMPs) and Senior Management Personnel (SMPs) in terms of the provisions ofSection 178 of the Companies Act 2013 read with the relevant rules there under and theSEBI (LODR) Regulations 2015. The said policy may be referred to at the Company'swebsite at the weblink:
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company has formed a Whistle Blower Policy / Vigil Mechanism policy as requiredunder Section 177 of the Companies Act 2013 and Regulation 22 of the SEBI (LODR)Regulations 2015. A Vigil (Whistle Blower) mechanism provides a channel to the employeesand Directors to report to the management concerns about unethical behavior actual orsuspected fraud or violation of the Codes of conduct or policy. The mechanism provides foradequate safeguards against victimization of employees and Directors to avail of themechanism and also provide for direct access to the Chairman of the Audit Committee inexceptional cases. No personnel of the Company denied access to the Audit Committee. Thesaid policy may be referred to at the Company's website at the weblink: http://www.balasoreallovs.com/upload/media/code/Whistle%20Blower%20Policv%20-%20Final.pdf
RISK MANAGEMENT POLICY
In order to fulfill the objectives of Risk Management Policy and lay a strongfoundation for the development of an integrated risk management framework the policyoutlines the following guiding principles of Risk Management.
Principles of Risk Management:
1. All business decisions will be made with the prior information and acceptance ofrisk involved.
2. The Risk Management Policy shall provide for the enhancement and protection ofbusiness value from uncertainties and consequent losses.
3. All employees of the company shall be made aware of risks in their respectivedomains and their mitigation measures.
4. The risk mitigation measures adopted by the Company shall be effective in thelong-term and to the extent possible be embedded in the business processes of the Company.
5. Risk tolerance levels will be regularly reviewed and decided upon depending on thechange in Company's strategy
6. The occurrence progress and status of all risks will be promptly reported andappropriate actions be taken thereof.
Risk Management Policy Statement
The policy statement is as given below:
1. To ensure protection of shareholder value through the establishment of an integratedRisk Management Framework for identifying assessing mitigating monitoring evaluatingand reporting of all risks.
2. To provide clear and strong basis for informed decision making at all levels of theorganization.
3. To continually strive towards strengthening the Risk Management System throughcontinuous learning and improvement POLICY ON PREVENTION OF SEXUAL HARASSMENT
Your Company has adopted the policy against Sexual Harassment of Women at Workplacefor the purpose of preventing prohibiting and redressing sexual harassment of femaleemployees including permanent temporary on training and on contract basis at all theworkplace within the company which are based on fundamental principles of justice andfair play.
Further an Internal Complaints Committee (ICC) has been constituted at every locationwhere offices of the Company is situated which shall be responsible for redressal ofcomplaints related to sexual harassment. The Company has put in place suitable processesand mechanisms to ensure issues of sexual harassment if any are effectively addressed.During the year under review there were no complaints of sexual harassment received bythe ICC of the Company.
CORPORATE SOCIAL RESPONSIBILITY POLICY
Balasore Alloys has been at the forefront in extending benefits of the localcommunities in and around its projects. We have always believed in the sustainabledevelopment of the society. We have earned the trust of the local community over the yearsthrough our community services on a regular basis throughout the year.
The Company perceives corporate social responsibility as an opportunity to contributetowards uplifting the society at a large empowering individual making them self-reliant.
In compliance with the provisions of Section 135 and Schedule VII of the Companies Act2013 the Corporate Social Responsibility (CSR) Committee of the Board has formulated andrecommended to the Board a CSR Policy for its approval.
This policy which encompasses the Company's philosophy for delineating itsresponsibility as a corporate citizen lays down the guidelines and mechanism forundertaking socially useful programmes for welfare & sustainable development of thecommunity at large. The CSR Policy may be accessed on the Company's website at link:
http://www.balasoreallovs.com/upload/media/CSR/CSR Policy Final.pdf
The Report on CSR activities or initiatives for the financial year 2016-17 as requiredunder the Companies (Corporate Social Responsibility) Rules 2014 has been attached asAnnexure - 7 to this Report.
POLICY ON MATERIALITY & DEALING WITH RELATED PARTY TRANSACTIONS
The Board at its meeting held on 20th May 2014 had approved the policy on materialityof and dealing with Related Party Transactions. The policy regulates the transactionsbetween the Company and its Related Parties based on the laws and regulations applicableto the Company and also lays down mechanism for identification approval review andreporting of such transactions.
The policy on materiality of and dealing with Related Party Transactions may beaccessed on the Company's website at link:
POLICYON PRESERVATION ANDARCHIVING OF THE DOCUMENTS
The Company in its meeting held on 14th November 2015 had approved the policy onpreservation and archiving of the documents. The policy ensures safe-keeping of therecords and safeguard of the documents from getting manhandled while at the same timeavoiding superfluous inventory of documents.
POLICYTO DETERMINE THE MATERIAL EVENTS
The Board at its meeting held on 14th November 2015 had approved the Policy todetermine the material events or information. The Policy to determine the material eventsor information provides the guidelines for proper sufficient and timely disclosure of thematerial events or information to the Stock Exchange(s) and / or any other regulatoryauthorities.
POLICY FOR DETERMINING MATERIAL SUBSIDIARIES
The Board at its meeting held on 28th September 2016 had approved the Policy fordetermining Material Subsidiaries. The Policy for determining Material Subsidiariesspecifies the process of determination and compliances in respect of MaterialSubsidiaries.
The Company's Code of Conduct is based on the principle that business should beconducted in a professional manner with honesty and integrity and thereby enhancing thereputation of the Company. The Code ensures lawful and ethical conduct in all affairs anddealings of the Company.
CODE OF INSIDERTRADING
The Company has devised a framework to avoid Insider Trading and abusive self-dealing.The Code on prevention of Insider Trading which applies to the Board Members and allofficers and employees seeks to prohibit trading in the securities of the Company basedon unpublished price sensitive information. Trading window remains closed so longunpublished price sensitive information is not made public.
EXTRACT OF THE ANNUAL RETURN
Extract of the Annual Return as on the financial year ended on 31st March 2017 in FormMGT-9 is annexed hereto as Annexure-5' and forms a part of this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BYTHE REGULATORS/COURTS/TRIBUNALS.
There are no significant material orders passed by the Regulators / Courts / Tribunalswhich would impact the going concern status of the Company and its future operations.
Your Company is continuing the tradition of excellence in human capital management byadopting all modern tools and techniques of human management. The pragmatic and proactiveapproach of management has contributed in enhancing the job satisfaction of employees. Thecontinuous dialogue sessions with the office bearers of union prompt grievance redressaland implementation of employees' friendly welfare scheme has been institutionalized. Acongenial productive atmosphere has been created through mutual trust and transparencybetween the management and the union. Your Company always remains vigilant to capitalizeon talent pool in orderto promote performance driven work culture both within and outsidethe organization.
AWARD AND RECOGNITION
The Company has received many awards from various organizations in recognition of itsoutstanding performance / contribution to the industry and society. Some of the awardsreceived during the financial year 2016-17 are mentioned below:
1. Odisha Metalliferrous Mines Safety week celebration 2016-17:
a. 1st prize in Innovation category.
b. 1st prize in Safety performance & Consciousness category of group B'Contractual working category of Mines.
c. 1st prize in Overall First Aid of group B and D' category of Mines.
d. IstPrizein "Water Management/Monsoon Preparation in Mines".
e. 2nd prize in Health & Welfare category of group B' category of Mines.
f. 2nd prize in Maintenance category of group B' Contractual working category ofMines.
g. 2nd prize in Maintenance category of group B' category of Mines.
h. 3rd prize in Safety & Compliance category of group B' category of Mines.
2. The Company was awarded Best Meritorious Award in 21st NALCO All OdishaQuality Circle Convention' in the "Meritorious Category" organized by NALCO atBhubaneswar.
3. Accredited by National Accreditation Body for Laboratory testing & calibration(NABL) CISR New Delhi for Testing Laboratory.
4. Certified by Japanese Industrial Standard (JIS) Japan for Product certification.
5. Awarded Energy Savings certificate by BES Ministry of Power Government of Indiafor implementing energy conservation measures.
6. BAL was awarded with State Export Awards for outstanding performance in the field ofexport of Ferrochrome in the Metallurgical Product category for the year 2012-13 and2014-15 at Bhubaneswar.
7. The Company was awarded CSR Silver Medal for Value Driven Social Change organized byInstitute of Quality & Environment Management Services (IQEMS) backed by support fromSouth Africa High Commission CREDAI Odisha Rotary International.
PARTICULARSASPERSECTION134(3)(m) OF THE COMPANIES ACT 2013.
Particulars of conservation of energy technology absorption and foreign exchangeearnings and outgo as required under Section 134(3)(m) of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 are given in the Annexure-6' hereto andforms part of this Report.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 124 of the Companies Act 2013 relevant amountswhich remained unpaid or unclaimed fora period of seven years shall be transferred by theCompany from time to time on due dates to the Investor Education and Protection Fund.
During the year under review Credit Analysis & Research Limited (CARE) hasreaffirmed the Credit Rating of CARE BBB-; Stable (Triple B Minus; Outlook: Stable) forthe Long-term Bank Facilities and CARE A3 (AThree)forthe Short-term Bank Facilities ofyour Company. The outlook on the Long Term Rating is Stable'.
Your Directors place on record their deep appreciation to employees at all levels fortheir hard work dedication and commitment. The enthusiasm and unstinting efforts of theemployees have enabled the Company to remain as a leading player in the industry.
Your Directors express their sincere appreciation for the continued co-operation andsupport extended to the Company by the Central Government the Government of OdishaGovernment Agencies Regulatory Authorities Stock Exchanges Company's Bankers BusinessAssociates Shareholders and the Community at large.
For and on behalf of the Board
| ||Anil Sureka ||Asish K. Bhattacharyya |
|Place : Kolkata ||Managing Director ||Director |
|Date : 19th May 2017 ||DIN: 00058228 ||DIN: 00799039 |
STATEMENT PURSUANT TO SECTION 129 (3) OF THE COMPANIES ACT 2013 RELATED TO ASSOCIATECOMPANIES
Part "B": Associates
|SI. Name of the Associate No. ||Balasore Energy Limited |
|1. Latest audited Balance Sheet Date ||31st March 2017 |
|2 Date on which the Associate or Joint Venture was associated or acquired ||15th May 2008 |
|3. Sharesof Associate heldbythecompanyontheyearend || |
|- No. of Shares ||17000 |
|- Amount of Investment in Associates (Rs. in Lacs) ||1.70 |
|- Extend of Holding % ||34% |
|4. Description of how there is significant influence in Associates ||There is significant influence due to holding 34% of Share Capital. |
|5. Reason why the associate is not consolidated ||Associate has been considered in Consolidation. |
|6. Net worth attributable to Shareholding as per latest audited Balance Sheet (Rs. in Lacs) ||0 |
|7. Profit / Loss for the year || |
|i. Considered in Consolidation (Rs. in Lacs) ||- |
|ii. Not Considered in Consolidation* ||(-0.90) |
* Loss not considered due to losses exceeding cost of investment.
1. Names of Associates or Joint Ventures which are yet to commence operations :-Balasore Energy Ltd. is yet to commence its operations.
2. Names of Associates or Joint Ventures which have been liquidated or sold during theyear: - N.A.
3. The Company does not have any Joint Venture.
For Chaturvedi & Shah For and on behalf of the Board of Directors
Firm Registration Number: 101720W Chartered Accountants
|Amit Chaturvedi ||Anil Sureka ||R K Parakh |
|Partner ||(Managing Director) ||(Director-Finance) |
|Membership no.: 103141 ||DIN No.- 00058228 ||DIN No.- 00459699 |
| ||Trilochan Sharma || |
|Place : Kolkata ||(Company Secretary) || |
|Date : 19th May 2017 ||Membership No. FCS 6024 || |