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Eastcoast Steel Ltd.

BSE: 520081 Sector: Metals & Mining
NSE: ESTCSTSTEL ISIN Code: INE315F01013
BSE 00:00 | 14 Dec Eastcoast Steel Ltd
NSE 05:30 | 01 Jan Eastcoast Steel Ltd
OPEN 81.20
PREVIOUS CLOSE 81.20
VOLUME 200
52-Week high 85.45
52-Week low 39.90
P/E
Mkt Cap.(Rs cr) 44
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 81.20
CLOSE 81.20
VOLUME 200
52-Week high 85.45
52-Week low 39.90
P/E
Mkt Cap.(Rs cr) 44
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Eastcoast Steel Ltd. (ESTCSTSTEL) - Director Report

Company director report

Dear Shareholders

The Directors of your Company are pleased to present the Thirty Fourth Annual Reporttogether with the Audited Financial Statements of the Company for the financial year ended31st March 2017.

1. FINANCIAL PERFORMANCE

The financial performance of the Company for the year ended March 31 2017 issummarised below:

(` In Lacs)
Sl. No. Particulars 2016-17 2015-16
1 Revenue from operations - -
2 Other Income 28.08 32.35
3 Total 28.08 32.35
Profit/(Loss) Before Exceptional items Deprecia-
4 (48.30) (73.76)
tion & Tax (PBDT)
5 Less: Depreciation (3.12) (2.94)
Less: Exceptional items (1053.55) -
6 Profit/Loss Before Taxation (PBT) (1104.97) (76.70)
7 Less: Provision for tax
Short/(excess) provision for tax relating to earlier
0.25 -
years
8 Profit/Loss After Taxation (PAT) (1104.73) (76.70)
9 Add: Balance brought forward from last year (1382.26) (1305.55)
10 Balance to be carried forward (2407.47) (1382.26)

2. STATE OF AFFAIRS OF THE COMPANY:

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 Companies.

6. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE 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 ` 53964680/- as on March 312017:

Buy Back of Securities

The Company has not bought back any of its securities during the year under review.

Sweat Equity

The Company has not issued any Sweat Equity Shares during the year under review.

Bonus Shares

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.

8. DEPOSITS

The Company has not accepted any deposits under Chapter V of the Companies Act 2013.

9. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

No information with regard to conservation of energy and technology absorption isrequired to be furnished as the plant has remained closed since 1995.

Further there were no foreign exchange earnings and outgo during the year underreview.

10. 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.

11. 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 Companies Act 2013.

During the year under review the independent directors met on January 31 2017 inorder 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 annual meeting. b ) Resignation ofDirector:

The Company appreciates and places on record the excellent services rendered andguidance provided by Shri. Nalin S. Parikh (DIN : 00106844) who has been on the boardright from the early days of 1989 till date. He has expressed his desire to step down as aDirector due to advancing age and reasons of health and the board has accepted hisresignation 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 and applicable provisions of the Companies Act 2013brief profile of the Director to be re-appointed is included in the Notice which formspart of the Annual Report. 12. 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 2016-17 the Board met 4 (four) times i.e. on May 06

2016 August06 2016 November 14 2016 and January 19 2017.

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 ofthe Directors at the Board Meetings and the Annual General

Meeting held during the financial year 2016-17 is as under: :

Number of

Last Annual
Name of the Director Category

Meetings

General Meeting
attended
Held Attended
Chairman & Non- Yes
Shri Prithviraj S. Parikh 4 3
Executive Director
Non-Executive No
Shri Nalin S. Parikh* 4 4
Director
Shri Anand Independent & Non- Yes
4 4
Sethuprakasem Executive Director
Independent & Non- Yes
Shri Hitesh V. Raja 4 4
Executive Director
Smt Sharmila S. Independent & Non- No
4 4
Chitale Executive Director

* Shri Nalin Parikh resigned w.e.f July 25 2017. 13. 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 literate and have experience in financial management.

The Board has accepted all the recommendations of the Audit Committee during the year2016-1

Meeting and Attendance:

The Committee met 4 (Four) times during the financial year 2016-17 i.e. on

May 06 2016 August 06 2016 November 14 2016 and January 19 2017. The gap betweentwo meetings did not exceed one hundred and twenty days and the necessary quorum waspresent for all the meetings held during the year. The composition of the Audit Committeeand the details of meetings attended by members of the committee are given below:

Number of committee meetings

Name of the Director Category
Held Attended
Shri Hitesh V. Raja - Independent & Non-
Chairman Executive Director 4 4
Shri Nalin S. Parikh - Non-Executive
Member* Director 4 4
Shri Anand Sethuprakasem - Independent & Non-
Member Executive Director 4 4

* Shri Nalin Parikh resigned w.e.f July 25 2017

The previous Annual General Meeting of the Company was held on September 24 2016 andwas attended by Shri Hitesh V. Raja Chairman of the Audit Committee to answershareholders queries.

b) NOMINATION AND REMUNERATION COMMITTEE: Constitution of the Nomination andRemuneration 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 March 31 2017 and the Chairman of the Committee is anIndependent Director.

Meeting and Attendance:

The Nomination and Remuneration Com0mittee met twice during the financial year 2016-17i.e. on November 14 2016 and January 31 2017.

The requisite quorum was present at the Meeting.

The composition of the Committee and the attendance of members of the Nomination andRemuneration Committee is as follows:

Number of committee meetings

Name of the Director Category
Held Attended
Shri Anand Sethuprakasem - Independent & Non-
2 2
Chairman Executive Director
Shri Nalin S. Parikh - Non-Executive
2 2
Member Director
Shri Hitesh V. Raja - Independent & Non-
2 2
Member Executive Director

* Mr. Nalin Parikh resigned w.e.f July 25 2017

Shri Hitesh V. Raja member duly authorised by the Chairman of the Committee waspresent at the last Annual General Meeting to answer the queries of the shareholders'. c)STAKEHOLDERS RELATIONSHIP COMMITTEE: Constitution of the Stakeholders RelationshipCommittee:

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 2016-17 on May

06 2016 August 06 2016 November 14 2016 and January 19 2017. The composition ofthe Committee and the attendance of the members of the

Stakeholders Relationship Committee during the financial year 2016-17 are as givenbelow:

Number of committee meetings

Name of the Director Category
Held Attended
Smt. Sharmila S. Chitale- Independent & Non-
4 4
Chairperson Executive Director
Shri Prithviraj S. Parikh- Non-Executive
4 3
Member Director
Shri Hitesh V. Raja- Independent & Non-
4 4
Member Executive Director

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 ListingRegulations. Further the Compliance

Certificate under Regulation 7(3) of the SEBI Listing Regulations confirming that allactivities in relation to both physical and electronic share transfer facility aremaintained by Registrar and Share Transfer Agent is also submitted to the Stock Exchangeson a half yearly basis.

Shri Hitesh V. Raja member duly authorized by the Chairperson of the Committee waspresent at the last Annual General Meeting to answer the queries of the Shareholders'.

14. CORPORATE GOVERNANCE

In view of the exemption granted vide Circular No. CIR/CFD/POLICY CELL/7/2014 dtd.15.05.2014 by SEBI and as per Regulation 15(2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the provision with regard to Corporate Governance is notapplicable to the company as the paid up equity capital is not exceeding ` 10 crores andnet worth not exceeding ` 25 crores as on the last day of the previous financial year.

15. 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 processinformation and functioning etc.

16. DETAILS OF LOANS AVAILED FROM DIRECTORS OR THEIR RELATIVES

The Company has availed Temporary Loan from Shri Prithviraj S. Parikhduring the yearunder review as under :

(Amount in `)
Opening Balance Amount Amount Repaid Closing Balance at
beginning of the year Borrowed the end of the year
NIL 6240000 6140000 100000

17. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The details of loan given pursuant to Section 186 of the Companies Act 2013 during thefinancial year under review is provided as under:

Name of the Body Amount (`) Purpose
Corporate
Richline Leasing and Finance General Corporate Purpose
5000000
Private Limited

Further the Company has not made any new investment in any Body Corporate or given anyguarantee or provided any security pursuant to Section 186 of the

Companies Act 2013 during the financial year under review.

18. 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 with the interest of the Company at large. All the related partytransactions as required under

Accounting Standard - 18 are reported in the notes to the financial statements.

The particulars as required under the Companies Act 2013 are furnished in Form AOC - 2which is annexed as "Annexure A" to this report.

19. 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 ratio of remuneration of each Director to the median remuneration ofemployees of the Company for the financial year

Non-executive Directors: No remuneration is being paid to non-executive Directors. b)The Percentage increase in remuneration of Director – Not applicable as noremuneration is being paid to non-executive Directors c) The percentage increase in themedian remuneration of employee – 13% d) The number of permanent employee on the rollof Company - 10 e) Average percentile increase already made in the salaries of employeesother than the managerial personnel in the last financial year and its comparison with thepercentile increase in the managerial remuneration and justification thereof and point outif there are any exceptional circumstances for increase in managerial remuneration: NoneThe Company has not appointed any employee(s) in receipt of remuneration exceeding thelimits specified under Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.Hence disclosures required under Rule

5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 have not been provided.

20. 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 2016-17. 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 year2016-17.

21. VIGIL MECHANISM / WHISTLEBLOWER 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.

22. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT

WORKPLACE(PREVENTION PROHIBITION & REDRESSAL) ACT 2013

The Company has in place a policy on Prevention of Sexual Harassment in line with therequirements of Sexual Harassment of Women at the Workplace (Prevention Prohibition andRedressal) Act 2013.It has been noted that no complaints were reported during the year.

23. OTHER MATERIAL ORDERS

The Company had arrived at a settlement of electricity charges up to October 1997 i.e.till the termination of agreement with Electricity Dept. Govt. of Puducherry (formerlyPondicherry) for an amount of ` 105354632/- ( Ten Crore Fifty ThreeLakhs Fifty FourThousand Six Hundred Thirty Two Only )with due concurrence of the Finance Dept.Accordingly the Govt. has issued G.O. Ms. No. 08 dtd. 10-03-2017. The liability havingbeen accounted as at 31-03-2017 appear under the head ‘Sundry Creditors' and it hasresulted in a negative net worth as on the said date ( See note No. 22 to the account.)The Hon. Supreme court of India New Delhi has subsequently disposed of the

Civil Appeal No.8079/2003 originally filed as Special Leave petition No. 6370 of

2002 after having heard both the Appellants being Govt. of Pondicherry Industry Dept.(Power) &Anr and the Company being the respondents wherein issues of minimumconsumption guarantees charges and minimum demand charges were claimed and contestedrespectively by the litigants with no additional liability thereto other than what hasbeen set out G.O. Ms. 08 dtd. 10-03-2017.

24. REVIEW OF RISK MANAGEMENT POLICY ADOPTED BY THE COMPANY

The Company in order to comply the provisions of the Companies Act 2013 and to providean effective mechanism for implementing risk management system had adopted the policy onrisk management for evaluating and monitoring various risks that could threaten theexistence 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.

25. 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 this report.

26. 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 Mr. P. S. RamnathCompany Secretary (CP: 4159 ; F.C.S. 819) have been appointed as the SecretarialAuditors to conduct the Secretarial Audit of the

Company for the financial year 2016-17 the Secretarial Audit Report is annexedherewith as "Annexure- C" and forms part of this report.

The Secretarial Audit Report does not contain any adverse remarks qualifications orobservations.

27. STATUTORY AUDITORS

Ratification of Appointment:-

At the Annual General Meeting held on September 27 2014 M/s. Chaturvedi &Shah Chartered Accountants (FRN: 101720W) were appointed as the Statutory

Auditors of the Company to hold office for a term of 5 (five) consecutive years subjectto ratification by the shareholders annually.

In terms of the first proviso to Section 139 of the Companies Act 2013 theappointment of the Auditors shall be placed for ratification at every Annual

General Meeting. Accordingly appointment of M/s. Chaturvedi & Shah Chartered

Accountants as the Statutory Auditors of the Company will be placed for ratificationby the shareholders. In this regard the Company has received a certificate from theStatutory Auditors to the effect that the ratification of appointment if made would bewithin the provisions of Section 139 & 141 of the Companies Act 2013 and theCompanies (Audit and Auditors) Rules 2014 as amended.

Your Directors recommend ratification of their appointment from the conclusion ofthe ensuing Annual General Meeting upto the conclusion of the next Annual General Meeting.

Disclosure under Section 143 (12) of Companies Act 2013:-

The Statutory Auditors of the Company have not reported any fraud as specifiedunder the Second provision of Section 143 (12) of the Companies Act 2013

(including any Statutory modification(s) or re-enactment(s) for the time being inforce)and Rules made thereunder in the management of the Company during financial yearunder review.

Statutory Auditor's Report:-

There are no adverse remarks observations or disclaimer remarks by the

Statutory Auditors in their report for the financial year ended March 31 2017.

28. 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.

29. 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 Auditor monitors and evaluates the efficacy and adequacy of internal financialcontrol system in the Company its compliance with operating systems accountingprocedures application of the instructions and policies fixed by the senior management atall locations of the Company. The Audit Committee reviews the report on Internal Controlsubmitted by the Internal Auditors on a quarterly basis.

30. 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 March 31 2017 andof the profit and loss of the

Company for the year ended on that date;

III. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

On behalf of the Board of Directors
Sd/- Sd/-
Hitesh V. Raja Sharmila S. Chitale
Director Director
DIN : 02681574 DIN : 07146530

Place : Mumbai

Date : 25th July 2017