Eastcoast Steel Ltd.
|BSE: 520081||Sector: Metals & Mining|
|NSE: ESTCSTSTEL||ISIN Code: INE315F01013|
|BSE 00:00 | 01 Mar||Eastcoast Steel Ltd|
|NSE 05:30 | 01 Jan||Eastcoast Steel Ltd|
|BSE: 520081||Sector: Metals & Mining|
|NSE: ESTCSTSTEL||ISIN Code: INE315F01013|
|BSE 00:00 | 01 Mar||Eastcoast Steel Ltd|
|NSE 05:30 | 01 Jan||Eastcoast Steel Ltd|
The Directors of your Company are pleased to present the Thirty Seventh Annual Reporttogether with the Audited Financial Statements of the Company for the financial year ended31st March 2020.
1. FINANCIAL PERFORMANCE
The financial performance of the Company for the year ended 31st March 2020is summarised below:
(Rs. In Lacs)
2. REVIEW OF OPERATIONS:
During the year under review the Company has not undertaken any activity /operationand remains to be at a standstill since 1995. The Company is poised for restructuring itsoperation into some other diversified activities which are still under consideration ofthe board
3. DIVIDEND AND RESERVES
Considering the financial performance during the year and carried forward losses ofprevious years the Board has decided not to recommend any dividend for this year.Further your Directors do not propose to transfer any amount to the reserves.
4. CHANGE IN NATURE OF BUSINESS IF ANY
Your Company has not deviated its line of business activity nor has expanded the areaof activities; therefore there is no change in the nature of business for the year underreview.
5. SUBSIDIARIES ASSOCIATES AND JOINT VENTURES
During the financial year under review the Company did not have any subsidiary jointventure or associate company.
6. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT:-
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements pertain and the date of the report.
7. SHARE CAPITAL
The paid up Equity Share Capital of the Company was Rs. 53964680/- as on 31st March2020:
Buy Back of Securities
The Company has not bought back any of its securities during the year under review.
The Company has not issued any Sweat Equity Shares during the year under review.
The Company has not issued any bonus shares during the year under review.
Employees Stock Option
The Company has not provided any Stock Option Scheme to the employees.
Rights Issue of equity shares
The Company has not issued any shares on right basis during the financial year underreview.
Equity Shares with differential rights
The Company has not issued equity shares with differential rights as to dividendvoting or otherwise.
The Company has not accepted any deposits under Chapter V of the Companies Act 2013.
9. INFORMATION ON THE STATE OF AFFAIRS OF THE COMPANY
Information on the operational and financial performance among others are given inthe Management Discussion and Analysis which forms part of the Directors' Report.
10. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
(A) Conservation of Energy
(i) The steps taken or impact on conservation of energy: The Company makesconscious efforts to reduce its energy consumption. Some of the measures undertaken by theCompany during the year are use of LED Lights at office premises instead of conventionallighting usage of energy efficient air-conditioning and energy efficient officeequipments such as printer scanner and photocopy machines
(ii) Steps taken by the Company for utilizing alternate source of energy:
Apart from steps mentioned above to conserve energy the management is continuouslyexploring feasible alternate sources of energy.
(iii) The capital investment on energy conservation equipment: There is no capitalinvestment on energy conservation equipment during the year under review.
(B) Technology Absorption
(i) The efforts made towards technology absorption: The Company evaluatestechnology developments on a continuous basis and keeps the organization updated.
(ii) The benefits derived: The Company has benefited from technology development.It has helped to understand in better way the requirement for the business.
(iii) The Company has not imported any technology from the beginning of the financialyear.
(iv) The Company has not incurred any expenditure on Research and Development duringthe year under review.
(C) Foreign Exchange Earnings and Outgo
There were no foreign exchange earnings and outgo during the financial year underreview.
11. ENVIRONMENT AND SAFETY
Since the Company has not been engaged in any activity after the closure of the plantin 1995 environment and safety measures are not required to be followed for the timebeing
12. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
a) Independent Directors:
The Company has received declaration from all the Independent Directors confirming thatthey meet the criteria of independence as laid down under Section 149(6) of the CompaniesAct 2013.
During the year under review the independent directors met on 07thFebruary 2020 in order to evaluate the:-
The performance of Non-Independent Directors and Board of Directors as a whole
The performance of Chairman of the Company taking into account the views of all theDirectors on Board.
The quality quantity and timeliness of flow of information between the management andthe Board that is necessary for the Board to effectively and reasonably perform theirduties.
All the Independent Directors attended the meeting.
b) Resignation of Director:
The Company appreciates and places on record the excellent services rendered andguidance provided by Shri. Anand Sethuprakasem (DIN:00582677) resigned w.e.f. 27thFebruary 2020 and the board has accepted his resignation in deference to his wishes.
c) Retirement by rotation:
In terms of the provisions of Section 152(6) of the Companies Act 2013 Shri.Prithviraj S. Parikh Director (DIN: 00106727) retires by rotation at the forthcomingAnnual General Meeting and being eligible offers himself for re-appointment. Inaccordance with Regulation 36 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred to as SEBI ListingRegulations') and Secretarial Standard 2 on General Meetings brief profile of theDirector to be re-appointed is included in the Notice which forms part of the AnnualReport. d) Key Managerial Personnel:
Pursuant to the provisions of Section 203 of the Companies Act 2013 read with therules made there under the following employees are the whole time key managerialpersonnel of the Company:
1. Shri. Babush Kamath Chief Executive Officer
2. Shri. Babush Kamath Chief Financial Officer;
3. Shri. P K R K Menon Company Secretary and Compliance Officer.
13. BOARD MEETINGS
The Board meets at regular intervals as and when required to discuss the businesspolices and strategies apart from other routine business.
During the financial year 2019-20 the Board met 5 (Five) times i.e. on 23rdApril 2019 30th May 2019 13th August 2019 14thNovember 2019 7th February 2020.
The gap between two meetings did not exceed one hundred and twenty days and thenecessary quorum was present for all the meetings held during the year.
The attendance of the Directors at the Board Meetings and the Annual General Meetingheld during the financial year 2019-20 is as under:
14. COMMITTEES OF THE BOARD:
a) AUDIT COMMITTEE:
Constitution of the Audit Committee:
A qualified and independent Audit Committee has been set up by the Board in compliancewith the requirements of Section 177 of the Companies Act 2013 read with rules framedthereunder.
The composition quorum powers role and scope are in accordance with Section 177 ofthe Companies Act 2013. All the members of the Audit Committee are financially literateand have experience in financial management.
The Board has accepted all the recommendations of the Audit Committee during the year2019-20.
Meeting and Attendance:
The Committee met 4 (Four) times during the financial year 2019-20 i.e. on 30thMay 2019 13th August 2019 14th November 2019 7thFebruary 2020.
The gap between two meetings did not exceed one hundred and twenty days and thenecessary quorum was present for all the meetings held during the year. The composition ofthe Audit Committee and the details of meetings attended by members of the committee aregiven below:
*Resigned w.e.f 27th February 2020
** Appointed as a Member w.e.f 7th February 2020
The previous Annual General Meeting of the Company was held on 21stSeptember 2019 and was attended by Shri Hitesh V. Raja Chairman of the Audit Committeeto answer shareholders queries.
b) NOMINATION AND REMUNERATION COMMITTEE:
Constitution of the Nomination and Remuneration Committee:
The Nomination and Remuneration Committee of the Company is constituted in compliancewith Section 178 of the Companies Act 2013 read with rules framed thereunder.
The Committee comprises of three Non-Executive Directors out of which two areIndependent Directors as on 31st March 2020 and the Chairman of the Committee is anIndependent Director.
The Committee met 2 (Two) time during the financial year 2019-20. i.e on 23rdApril 2019 and 14th November 2019 The necessary quorum was present for themeeting held during the year.
The composition of the Nomination and Remuneration Committee and the details ofmeetings attended by members of the committee are given below:
*Resigned w.e.f 27th February 2020
** Appointed as a Member w.e.f 7th February 2020
The previous Annual General Meeting of the Company was held on 21stSeptember 2019 and Shri Hitesh V. Raja member duly authorized by the Chairman of theCommittee was present at the last Annual General Meeting to answer the queries
c) STAKEHOLDERS RELATIONSHIP COMMITTEE:
Constitution of the Stakeholders Relationship Committee:
The Board has constituted the Stakeholders Relationship Committee comprising of threemembers vis; Shri Prithviraj S. Parikh Non-Executive Director Shri Hitesh V. RajaIndependent & Non-Executive Director and Smt. Sharmila S. Chitale Independent &Non-Executive Director. Smt. Sharmila S. Chitale is the Chairperson of the Committee. Thecomposition of the Stakeholder Relationship Committee is in compliance with the provisionsof Section 178 of the Companies Act 2013 read with rules framed thereunder.
The Committee met 4 (Four) times during the financial year 2019-20 on 30thMay 2019 13th August 2019 14th November 2019 07thFebruary 2020.
The composition of the Committee and the attendance of the members of the StakeholdersRelationship Committee during the financial year 2019-20 are as given below:
The Company obtains half-yearly certificate from a Company Secretary in Practiceconfirming the issue of certificates for transfer sub-division consolidation etc. andsubmits a copy thereof to the Stock Exchanges in terms of Regulation 40(9) of the SEBIListing Regulations. Further the Compliance Certificate under Regulation 7(3) of the SEBIListing Regulations confirming that all activities in relation to both physical andelectronic share transfer facility are maintained by Registrar and Share Transfer Agent isalso submitted to the Stock Exchanges on a half yearly basis. Shri Hitesh V. Raja memberduly authorized by the Chairperson of the Committee was present at the last Annual GeneralMeeting to answer the queries of the Shareholders'.
15. CORPORATE GOVERNANCE
Pursuant to Chapter IV of the SEBI Listing Regulations the provision with regard toCorporate Governance is not applicable to the company as the paid up equity capital doesnot exceed Rs.10 crores and net worth does not exceed Rs. 25 crores as on the last day ofthe previous financial year.
16. EVALUATION OF BOARD AND DIRECTORS:
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance and that of the Directorsindividually. The performance of the Board was evaluated after seeking input from allDirectors on the basis of the criteria such as the effectiveness of Board process qualityof discussion contribution at the meetings business acumen strategic thinkingcorporate governance practices contribution of the Committees to the Board in dischargingits functions etc.
In a separate meeting of independent directors performance of non-independentdirectors and the board as a whole was evaluated. The Independent Directors in the saidmeeting also evaluated the quality quantity and timeliness of flow of information betweenthe company management and the Board that is necessary for the Board to effectively andreasonably perform their duties. Additionally the Chairman of the Board was alsoevaluated on key aspects of his role taking into account the views of executive directorsand non-executive directors in the aforesaid meeting. Performance evaluation ofindependent directors was done by the entire board excluding the independent directorbeing evaluated
17. TRAINING IMPARTED TO THE INDEPENDENT DIRECTORS :
Every Independent Director of the Board Executive Directors / Senior ManagerialPersonnel is familiarized about the Company's strategy operations organisationstructure human resources quality finance and risk management.
Further at the time of appointment of an Independent Director the Company issues aformal letter of appointment outlining his/her role functions duties andresponsibilities as a Director. The terms and conditions of letter of appointment isavailable on the Company's website at www. eastcoaststeel.com
18. CRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES AND INDEPENDENCE OF ADIRECTOR:
The company has adopted a policy on Director's appointment and remuneration includingcriteria for determining qualifications positive attributes independence of Directorand also remuneration for key managerial personnel and other employees. The policy isavailable on the website of the Company at www.eastcoaststeel.com
19. DETAILS OF LOANS AVAILED FROM DIRECTORS OR THEIR RELATIVES
The Company has availed Loan from Shri Prithviraj S. Parikh Director of the Companyduring the year under review.
(Amount in Rs.)
The Company has received the declaration from the Director as required under rule 2(viii) of the Companies (Acceptance of Deposits) Rules 2014.
20. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
There was no loan or guarantee given or investment made or security provided pursuantto Section 186 of the Companies Act 2013 during the financial year under review.
21. PARTICULARS OF CONTRACTS OR ARRANGEMENT MADE WITH RELATED PARTIES
All related party transactions entered by the Company during the financial year were onan arm's length basis and were carried out in the ordinary course of business. There areno materially significant related party transactions made by the Company during the yearunder consideration with the Promoters Directors or Key Managerial Personnel which mayhave a potential conflict with the interest of the Company at large. All the related partytransactions as required under Ind-AS 24 Related Party Disclosures' are reported inthe other explanatory information forming part of the financial statements. Details ofrelated party transactions are regularly placed before the Audit Committee and also beforethe Board for its approval. Wherever required prior approval of the Audit Committee isobtained.
The particulars as required under the Companies Act 2013 are furnished in Form AOC 2 which is annexed as "Annexure A" to this report.
22. PARTICULARS OF EMPLOYEES
The information required under section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow: a) The Board affirms that the remuneration paid is as per the Remuneration Policyof the Company. b) The percentage increase in the median remuneration of employees in thefinancial year is - Nil. c) Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year and itscomparison with the percentile increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase inmanagerial remuneration: Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year (2019-
20) is Nil and the percentile increase in the managerial remuneration is Nil. d) Numberof permanent employees on the rolls of the Company as on 31st March 2020 is 10e) The ratio of the remuneration paid to each Director to the median remuneration of theemployees of the Company during the financial year 2019-20:
f) The percentage increase in remuneration of Director: Nil g) The percentage increasein remuneration of Chief Financial Officer: Nil h) The percentage increase in remunerationof Company Secretary: Nil i) There has been no remuneration or sitting fees paid to theDirectors during the year under review.
The Company does not have any employee who is drawing a remuneration of Rs.10200000/- per annum or Rs. 850000/- per month as stipulated in the Act and the rulesmade thereunder. Hence disclosures required under Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 have not been providedduring the year under review.
The Company does not have any scheme or provision of money for the purchase of orsubscription to its own shares by the employees/ Directors or by trustees for the benefitof the employees/ Directors.
23. CODE OF CONDUCT
The Board has prescribed Code of Conduct ("Code") for all Board Members andSenior Management of the Company. All Board Members and Senior Management personnel haveconfirmed compliance with the Code for the year 2019-20. A declaration to this effect asrequired under Regulation 34(3) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 forms part of the Annual Report for the financial year2019-20.
24. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Pursuant to Section 177(9) and (10) of the Companies Act 2013 read with the rulesframed thereunder the Company has formulated a Whistle Blower Policy for vigil mechanismfor Directors and employees to report to the management about the unethical behaviorfraud or violation of Company's Code of Conduct. The mechanism provides for adequatesafeguards against victimisation of employees and Directors who use such mechanism andmakes provision for direct access to the Chairman of the Audit Committee and no personnelof the Company have been denied access to the Audit Committee. The policy is available onthe website of the Company at www.eastcoaststeel.com.
25. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTIONPROHIBITION & REDRESSAL) ACT 2013
The Company is committed to provide an environment which is free of discriminationintimidation and abuse. Pursuant to Sexual Harassment of Women at the Workplace
(Prevention Prohibition and Redressal) Act 2013 and rules made thereunder theCompany has a Policy for prevention of Sexual Harassment in the Company. All employees(permanent contractual temporary and trainees) are covered under this policy. InternalComplaints Committee has also been set up to redress the complaints received regardingsexual harassment.There were no cases reported during the financial year 2019-20.
26. OTHER MATERIAL ORDERS
The High Court of Judicature at Madras has passed an order dtd. 26-08-2019 dismissingthe Company Appeal No: 20 of 2015 and C.M.P. Nos: 15207 of 2017 & 13385 of 2019 filedby M/s Suresh Kumar Jalan & others aggrieved by the order dtd. 11-05-2015 passed inC. P. No. 56 of 2013 by The Company Law Board Chennai Bench which authority haddismissed the petition & rejected allegations of oppression & mismanagement.
27. REVIEW OF RISK MANAGEMENT POLICY ADOPTED BY THE COMPANY
The Company in order to comply with the provisions of the Companies Act 2013 and toprovide an effective mechanism for implementing risk management system had adopted thepolicy on risk management for evaluating and monitoring various risks that could threatenthe existence of the Company. The Company had not faced any major risks and no majordeviations from the actuals as attained by the Company. The Audit committee has reviewedthe policy periodically. The Board takes overall responsibility for the overall process ofrisk management in the organisation.
The Board shall take note of any future threats and shall report to the Company forformulating an effective mechanism and strategy. The risk management policy is availableon the website of the Company at www.eastcoaststeel.com
28. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 92 (3) of the Companies Act 2013 an extract ofannual return is annexed hereto as_"Annexure- B" and forms part of thisreport.
Pursuant to the provisions of Section 134(3)(a) of the Act Cpmpany 2013 From MGT 9 isuploaded on Company's website and can be accessed at www.eastcoaststeel.com
29. SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Shri P. S. RamnathPractising Company Secretaries (CP: 4159 ; F.C.S. 819) have been appointed as theSecretarial Auditors to conduct the Secretarial Audit of the Company for the financialyear 2019-20 the Secretarial Audit Report is annexed herewith as "Annexure-C" and forms part of this report.
The Secretarial Audit Report does not contain any adverse remarks qualifications orobservations except with regard to provision of Section 203 of the act which has sincebeen complied with.
30. STATUTORY AUDITORS
M/s. Chaturvedi & Shah LLP (Firm Reg No. 101720W / W100355) were appointed asAuditors of the Company for a second term of 1 (One) year at the Annual General Meeting(AGM) held on 21st September 2019 to hold office until the conclusion of the37th (Thirty Seventh) AGM. Further based on the recommendation of AuditCommittee the Board has proposed to the Shareholders for the appointment of M/s. PareshRakesh & Associates Chartered Accountants (ICAI Firm Registration No.119728W) as theStatutory Auditors of the Company for a period of five consecutive years from theconclusion of the 37th AGM until the conclusion of the 42nd AGM to be held in the year2025 in place of retiring auditors M/s. Chaturvedi & Shah LLP Chartered Accountants(ICAI Firm Registration No.101720W) They have confirmed that they are not disqualifiedfrom being appointment as the Statutory Auditors of the Company.
Disclosure under Section 143(12) of Companies Act 2013:-
The Statutory Auditors of the Company have not reported any fraud or irregularities asspecified under the Second provision of Section 143(12) of the Act (including anyStatutory modification(s) or re-enactment(s) for the time being in force) read with Rule13 of the Companies (Audit and Auditors) Rules 2014 during financial year under review.
Statutory Auditor's Report:-
There are no adverse remarks observations or disclaimer remarks by the StatutoryAuditors in their report for the financial year ended 31st March 2020
31. COMPLIANCE OF SECRETARIAL STANDARDS
The Board of Directors hereby confirms that all the applicable Secretarial Standardshave been complied with during the year under review.
32. COST AUDIT
The Company is not required to maintain cost record as prescribed by the CentralGovernment under the provisions of Section 148 of the Companies Act 2013 in view of theclosure of the plant in 1995 and cessation of manufacturing activities. No activities orservices have been undertaken by the Company since then.
33. INTERNAL AUDITOR
The Board of Directors has appointed M/s. Krishnan & Giri (Chartered Accountants)(FRN No. 1512S) as Internal Auditor of the Company for the financial year 2019-20.
34. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place a robust internal financial control system commensurate withthe size of its operations and nature of its business activities. The Company has astandard operating procedure for various activities and operations and follows thisstandard operating procedure for its internal control procedures. The Internal Auditormonitors and evaluates the efficacy and adequacy of internal financial control system inthe Company its compliance with operating systems accounting procedures application ofthe instructions and policies fixed by the senior management at all locations of theCompany. The Audit Committee reviews the report on Internal Control submitted by theInternal Auditors on a quarterly basis. Based on the assessment carried out by the AuditCommittee the internal financial controls were adequate and effective and no materialweakness or significant deficiencies in the design or operation of internal financialcontrols were observed during the financial year ended 31st March 2020.
35. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 your Directors based on therepresentations received from the Operating Management and after due enquiry herebyconfirm that:
I. In the preparation of annual accounts the applicable accounting standards have beenfollowed and no material departures have been made from the same; II. They had inconsultation with Statutory Auditors selected accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31stMarch 2020 and loss of the Company for the year ended on that date; III. They have takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; IV. They haveprepared the annual accounts on a "going concern" basis; V. They have laid downinternal financial controls which are adequate and operating effectively; VI. They havedevised proper system to ensure compliance with the provisions of all applicable laws andsuch systems are adequate and operating effectively.
36. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
Provisions of Section 135 of the Companies Act 2013 and the Companies (CorporateSocial Responsibility Policy) Rules 2014 as amended from time to time are notapplicable to your Company as the Company does not fall under any of the criteriaspecified therein
The shares of the Company are listed at the BSE Limited. The annual listing fee hasbeen paid to the stock exchange before the due date.
38. CAUTIONARY STATEMENT
Statements in these reports describing company's projections statements expectationsand hopes are forward looking. Though these expectations etc are based on reasonableassumption the actual results might differ.
Your Directors acknowledge with thanks the co-operation and understanding displayed bythe shareholders & others and continues to look forward to the same.