Narayani Steels Limited
Your Company's Directors are pleased to present the 24th Annual Report of theCompany along with Audited Financial Statement (Standalone & Consolidated) for theFinancial Year ended March 31 2019.
The standalone financial highlights and performance of the Company for the financialyear ended March 31 2019 is given herein below.
(Rs. In Lakhs)
|Particulars || |
| || |
|Total revenue including other ||75484.36 ||75484.36 ||78256.68 ||78256.68 |
|income || || || || |
|Total Expenditure ||75141.68 ||75141.68 ||77885.90 ||77885.90 |
|Profit / (Loss) before tax ||342.68 ||342.68 ||370.78 ||370.78 |
|Exceptional Item ||- ||- ||76.82 ||76.82 |
|Tax Expenses ||123.70 ||123.70 ||116.72 ||116.72 |
|Profit / (Loss) after tax ||218.98 ||218.98 ||177.26 ||177.26 |
|EPS Weighted Average || || || || |
|-Basic (Rs.) ||2.03 ||2.12 ||1.64 ||1.80 |
|-Diluted (Rs.) ||2.03 ||2.12 ||1.64 ||1.80 |
MATERIAL CHANGES AND COMMITMENTS
The Board of Directors of the Company at its meeting held on December 3 2018 and theshareholders of the Company on January 13 2019 through postal ballot approved migrationof the Company from BSE SME Exchange to BSE Main Board; consequent to which theapplication was made to BSE for the migration. The Company received the migration letterfrom BSE dated March 06 2019 advising that effective from March 08 2019 the equityshares of the Company will be migrated from BSE SME Platform to BSE Main board of theExchange. The corporate office of the Company shifted from 30-15-138/20 II FloorBinayaka Complex Dabagardens Visakhapatnam 530020 Andhra Pradesh' to DoorNo.49-24-66 Plot No 5 2nd Floor Sankarmatam Road Madhuranagar AllipuramVisakhapatnam 530016 Andhra Pradesh. Hence the statutory registers and books of accountswere also shifted. The Company received the approval of Registrar of Companies on June 142019.
During the year under review the profits of the Company increased from Rs. 177.26lakhs to Rs. 218.98 lakhs. There was a decline in turnover of the Company. The revenuefrom operations declined from Rs. 77996.89 lakhs to Rs. 75168.43 lakhs and there was acorresponding decrease in the expenditures of the Company.
Report on Performance and Financial Position in Form AOC-1of Hari Equipments (P)Limited Associate of your Company forms a part of the consolidated Financial Statements.
LOANS GUARANTEES & INVESTMENTS
As required to be reported pursuant to the provisions of Section 186 and Section134(3)(g) of the Companies Act 2013 the particulars of loans guarantees or investmentsby the Company under the aforesaid provisions during the Financial Year2018-19 have beenprovided in the Notes to the Standalone Financial Statements.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year Mr. Bivor Bagaria resigned as a Whole-time Director and a ChiefFinancial Officer of your Company with effect from March 30 2019 and March 29 2019respectively. Also Mr. Ramesh Prathapa who was appointed on September 10 2015 asIndependent Director of the Company resigned from your Company with effect from August 312019 and Smt. Swarnalath Mandaleeka who was appointed on March 25 2019 as Non-executiveDirector resigned as the Directors of your Company with effect from March 30 2019. TheBoard placed on record its appreciation for the services rendered by Mr. Bivor BagariaMr. Ramesh Prathapa and Smt. Swarnalath Mandaleeka during their tenure. Mr. Ankit Gupta aChartered Accountant by qualification was appointed as an Additional Executive Directorand Chief Financial Officer of the Company with effect from April 6 2019 and March 302019 respectively. Mr. Ankit Gupta was appointed as an Additional Director of the Companyto hold office upto the forthcoming Annual General Meeting. Being eligible Mr. AnkitGupta offers himself for appointment as a Director of the Company. Ms. Jaya PadmavathiBandi was appointed as an Additional Non-Exective Non-Independent Director of the Companywith effect from August 27 2019 to hold office upto the forthcoming Annual GeneralMeeting. Being eligible Ms. Jaya Padmavathi Bandi offers herself for appointment as aDirector of the Company. In terms of the requirements of the Companies Act 2013 theIndependent Directors of the Company were appointed for a period of five years onSeptember 10 2015 and accordingly their tenure will come to an end on September 9 2020.In view of the same the Board of Directors have basis the recommendation of theNomination and Remuneration Committee proposed to re-appoint Mr. Krishnamacharyulu EunnyMr. Bhaskararao Puvvala and Mr. Atul Kumar Saxena as the Independent Directors of theCompany for another term of five years from September 10 2020 to September 09 2025. Aresolution proposing re-appointment of Independent Directors of the Company for the secondterm of five consecutive years pursuant to Section 149(6) of the Companies Act 2013forms part of the Notice of Annual General Meeting. Mr. Krishnamacharyulu Eunny attainsthe age of seventy five years on September 11 2019. The Board at its meeting held onAugust 27 2019 on recommendation of the Nomination and Remuneration Committeerecommended the approval of members for continuation of his term as an IndependentDirector of the Company from the date he attains the age of 75 years. A resolution to hiseffect forms part of the Notice of Annual General Meeting. In accordance with theprovisions of Companies Act 2013 (the Act') one-third of the total Directors ofthe Company if any shall retire by rotation at every Annual General Meeting andaccordingly Ms. Bina Choudhary shall retire by rotation at the forthcoming Annual GeneralMeeting and being eligible offers herself for reappointment.
Declaration of Independence
The Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under Section 149(6) of the Actand Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 (Listing Regulations') (including anystatutory modification(s) or re-enactment(s) thereof for the time being in force).
Familiarisation Programme for Independent Directors
The details of training and familiarisation programme and Annual Board Evaluationprocess for Directors have been provided under the Corporate Governance Report. The policyand details of familiarization programme imparted to the Independent Directors of theCompany is available at www.narayanisteels.com.
Appointment and Remuneration of Directors
The policy on Director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Director and alsoremuneration for key managerial personnel and other employees forms part of the CorporateGovernance Report of this Annual Report.
COMPLIANCE WITH SECRETARIAL STANDARDS
The applicable secretarial standards on Board Meetings and General Meetings have beenduly followed by the Company.
The Board of Directors meet at regular intervals to discuss and decide on Company'soperation business policies or projects to be undertaken and strategy apart from otherBoard business. The notice of Board Meeting is given well in advance to all the Directors.Usually meetings of the Board are held in Visakhapatnam. The Agenda is circulated a weekprior to the date of the meeting. The Agenda for the Board Meetings include detailed noteson the items to be discussed at the meeting to enable the Directors to take an informeddecision. During the financial year ended March 31 2019 twenty five meetings of theBoard were held during the year on April 5 2018 April 19 2018 May 3 2018 May 112018 May 28 2018 June 9 2018 June 11 2018 June 16 2018 July 16 2018 July 302018 August 20 2018 August 31 2018 September 10 2018 November 5 2018 November 142018 November 21 2018 December 3 2018 December 31 2018 January 21 2019 February1 2019 February 5 2019 February 15 2019 February 28 2019 March 25 2019 and March30 2019. The details of Board Meetings and the attendance record of the Directors areprovided in the Report on Corporate Governance section of the Annual Report. Theprovisions of Companies Act 2013 Secretarial Standard 1 and the Listing Regulations wereadhered to while considering the time gap between two meetings.
COMMITTEES OF THE BOARD
The Board Committees play a crucial role in the governance structure of the Company andhave been constituted to deal with specific areas / activities; which concern the Companyand need a closer review. The Board Committees are set up under the formal approval of theBoard to carry out clearly defined roles which are considered to be performed by Membersof the Board as a part of good governance practice. The Board is informed about thesummary of the discussions held in the Committee Meetings. The minutes of the meetings ofall Committees are placed before the Board for review. The Board Committees are authorisedto request special invitees to join the meeting if required. The Board of Directors ofyour Company have constituted various Committees as follows:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders Relationship Committee
The composition and terms of reference of the Audit Committee Nomination andRemuneration Committee and Stakeholders Relationship Committee are provided in the Reporton Corporate Governance which forms part of this Annual Report.
COMMITTEE FOR PREVENTION OF SEXUAL HARASSMENT
As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules made thereunder your Company hasconstituted an Internal Complaints Committee having designated independent member(s) toredress complaints regarding sexual harassment. During the year no complaint regardingSexual Harassment has been reported. The detailed statement of complaints under SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen appended in the Corporate Governance Report of the Company forming part of thisAnnual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company believes in the conduct of the affairs of its constituents in a fair andtransparent manner by adopting highest standards of professionalism honesty integrityand ethical behavior. Pursuant to Section 177(9) of the Act the Company has formulated arobust vigil mechanism to deal with instances of unethical behavior actual or suspectedfraud or violation of Company's code of conduct or ethics policy. The details of policy isexplained in Corporate Governance Report and also uploaded on website of the Company underCorporate Governance section at:http://narayanisteels.com/investors/policies-and-programme/.
NOMINATION AND REMUNERATION POLICY
In terms of the provisions of Section 178(3) of the Act the Nomination andRemuneration Committee (NRC) is responsible for formulating the criteria for determiningqualification positive attributes and independence of a Director. The NRC is alsoresponsible for recommending to the Board a policy relating to the remuneration of theDirectors Key Managerial Personnel and other employees. The Board has on therecommendation of the NRC framed a policy for selection and appointment of DirectorsSenior Management and their remuneration. The said policy is available on the Company'swebsite at http://narayanisteels.com/investors/policies-and-programme/.
Risk Management is embedded in your Company's operating framework. The Company believesthat managing risks helps in maximizing returns. The Company has devised and implemented aRisk Management Policy and all the risks are discussed at the Senior Management Level attheir Meetings periodically to ensure that the risk mitigation plans are well thought outand implemented and adverse impact of risks is avoided or kept within manageableproportions though the elements of risk threatening the Company's existence are veryminimal. The said policy is available on the Company's website athttp://narayanisteels.com/investors/policies-and-programme/.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that: In the preparation of annual accountsthe applicable accounting standards have been followed along with proper explanationrelating to material departures if any; The Directors have selected such accountingpolicies and applied them consistently and made judgements and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year 2018-19 and of the loss of the Company for thatperiod; The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; The Directors have prepared the annual accounts on a going concernbasis; The Directors had laid down proper internal financial controls and such internalfinancial controls are adequate and were operating effectively; and The Directors havedevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated underRegulation 34(2) of the Listing Regulations is appended as Annexure forming part of thisAnnual Report.
In compliance with the Regulation 34 read with Schedule V of the Listing Regulations adetailed report on Corporate Governance is given as Annexure and forms an integral part ofthis Annual Report. A Certificate from the Practicing Company Secretary confirmingcompliance of the conditions of Corporate Governance as stipulated under the ListingRegulations is appended to the Corporate Governance Report. A Certificate of the CEO andCFO of the Company in terms of Regulation 17(8) of the Listing Regulations is alsoannexed.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO INSUCH MANNER AS MAY BE PRESCRIBED UNDER CLAUSE (m) TO SUB-SECTION (3) OF SECTION 134 OFCOMPANIES ACT 2013
The particulars as prescribed under Clause (m) to Sub-section (3) of Section 134 of theCompanies Act 2013 read with Companies' (Accounts) Rules 2014 regarding Conservation ofEnergy Technology Absorption and Foreign Exchange Earnings/ Outgo is provided as under:(a)Conservation of Energy:
|i) The steps taken or impact on conservation of energy || |
To improve the Power Factor upto 0.99.
|ii) The steps taken by the company for utilizing alternate sources of energy ||125 KVA DG power is used whenever APEPDCL power fails. |
|iii) The capital investment on energy conservation equipments ||Power Capacitors. |
|i) The efforts made towards technology absorption || |
Spectrometer of Oxford and MK for In-house testing lab
|ii) The benefits derived like product improvement cost reduction product development or im port substitution ||Saved expenses on testing from Outside agencies. |
|iii) In case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year)- |
|(a)the details of technology imported ||- |
|(b)the year of import; ||- |
|(c)whether the technology been fully absorbed ||- |
|(d) if not fully absorbed areas where absorption ||- |
|has not taken place and the reasons thereof || |
|iv) The expenditure incurred on Research and Development ||- |
|(b)Foreign Exchange Earnings /Outgo: || || |
| || ||(Rs. In Lakhs) |
|Particulars || |
|Foreign Exchange Earnings ||Nil ||Nil |
|Foreign Exchange Outgo || || |
|Interest on Buyers' Credit Loan ||Nil ||Nil |
|Import of Traded Goods ||Nil ||Nil |
|Travel and Miscellaneous Matters ||0.14 ||0.21 |
In compliance with provisions of Section 134(3)(a) of the Companies Act 2013 theAnnual Return as per Section 92(3) of the Companies Act 2013 has been hosted on thewebsite of the Company viz.www.narayanisteels.com.
MANAGERIAL REMUNERATION AND REMUNERATION PARTICULARS OF EMPLOYEES
There were no permanent employees during the year under review whose particulars arerequired to be given in the Board's Report in accordance with the provisions of Section197 of the Act read with Rule 5(1) & 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended from time to time. Theremuneration paid to Directors and Key Managerial Personnel of the Company during theFinancial Year 2018-19 was in accordance with the Nomination and Remuneration Policy ofthe Company.
The Company intends to invest in future opportunities and therefore your Directors didnot recommend any dividend for the year under review.
TRANSFER TO RESERVE
The Company has transferred an amount of Rs.221.73 Lakhs to Reserves for the financialyear ended March 31 2019.
During the year your Company did not accept any public deposits under Chapter V ofCompanies Act 2013.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an adequate internal control system to effectively and efficientlymanage the business operations. The internal audit department closely monitors thecompliance of all operations with prescribed business standards. The audit team supervisesall internal processes and recommends necessary changes to ensure any deviation ispromptly corrected. Any variance from the budget is flagged off to the senior managementwhich advises modification to ensure strict adherence to compliances. Periodic monitoringand effective implementation of recommendations ensure high business compliance withadequate adherence to rules and regulations that govern the Company. The controls alsoascertain the reliability of financial controls and strict adherence to compliance as perapplicable laws and regulations. The internal control system ascertains optimalutilisation of all resources and proper documentation of financial transactions. Thefunction also ensures strict adherence to compliance.
RELATED PARTY TRANSACTIONS
In terms of Section 188 of the Act read with rules framed thereunder and Regulation 23of the Listing Regulations your Company has in place Related Party Transactions Policyfor dealing with related party transactions. The policy may be accessed under theCorporate Governance section on the website of the Company at:http://narayanisteels.com/wp-content/uploads/2019/01/Policy-for-Related-Party-Transanction1.pdf.All the related party transactions that were entered and executed during the year underreview were on arm's length basis and in the ordinary course of business and withinpermissible framework of Section 188 of the Act and Rules made thereunder read withRegulation 23 of Listing Regulations. Your Company has already taken approval of theshareholder for the period of three years in the Annual General Meeting dated August 302017 to enter into the materially significant related party transactions i.e.transactions exceeding 10% of annual consolidated turnover as per the last auditedfinancial statement made by the Company during the year. The resolution passed by theMembers at 22nd AGM of the Company held on August 30 2017 for the approval of relatedparty transactions shall be effective till August 29 2020. A resolution seeking approvalof Members for a further period of 3 years after the expiry of the present period i.e.August 29 2020 forms part of the Notice of Annual General Meeting of the Company.
No Material Related Party Transactions i.e. transactions exceeding 10% of the annualconsolidated turnover as per the last audited financial statement were entered during theyear by your Company. Accordingly the disclosure of Related Party Transactions asrequired under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2 is notapplicable.
SUBSIDIARIES AND ASSOCIATE / JV COMPANIES
The Company does not have any Subsidiaries. The details of its subsidiary i.e. HariEquipments (P) Limited has been appended in Form MGT-9 forming part of this AnnualReport.
AUDITORS AND AUDITORS' REPORT
M/s. A C Bhuteria and Co. Chartered Accountants (ICAI Firm Registration No. 303105E)Kolkata were appointed as Statutory Auditors of your Company at the Annual GeneralMeeting of the Company held on September 252018for a term of four consecutive years fromthe conclusion of 23rd AGM till the conclusion of 27th AGM of the Company. The StatutoryAuditors have confirmed that they are not disqualified from continuing as the auditor ofthe Company. The Report given by the Auditors on the financial statement of the Companyforms part of this Report. There are no qualifications reservations or adverse remarksmade by the statutory auditors in their audit reports on the financial statements(Standalone and Consolidated) for the year ended March 31 2019.
Pursuant to the provisions of Section 138 of the Companies Act 2013 and rules madethereunder the Company has appointed M/s A Ramachandra Rao & Co. CharteredAccountants(FRN:02857S) as Internal Auditor of the Company to conduct Internal Audit ofrecords and documents of the Company for the financial year 2019-20.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed M/s ASN Associates as Secretarial Auditor of theCompany to conduct Secretarial Audit of records and documents of the Company for thefinancial year 2018-19. The Secretarial Audit Report confirms that the Company hasgenerally complied with the provisions of the Act Rules Regulations Guidelines etc. andthere were no secretarial audit qualification for the year under review. The SecretarialAudit Report is annexed as an Annexure to this report as Annexure and forms an integralpart of this report.
In terms of sub-section (1) of Section 148 of the Act read with Companies (Cost Recordsand Audit) Rules 2014 as amended from time to time the Company is required to maintainthe cost records and accordingly such accounts and records are made and maintained. M/s.A.S. Rao & Co. Cost Accountants (FRN:000326) were appointed as the Cost Auditors ofthe Company for auditing the cost records of the Company for the financial year 2018-19subject to ratification of remuneration by the shareholders of the Company in the 24th AGMof the Company. Accordingly an appropriate resolution seeking ratification of theremuneration for the financial year 2019-20 of M/s A.S. Rao & Co. Cost Accountants(FRN:000326) is included in the Notice convening the 24th AGM of the Company.
Your Directors wish to place on record their appreciation of the whole-heartedassistance and co-operation received by the Company from Members Customers DealersDistributors Bankers Financial Institutions Government & Other Agencies LocalBodies other Corporate Bodies and the Public and look forward to their support in comingyears. They express their gratitude to all the Shareholders of the Company for theconfidence reposed in the Management. Your Directors appreciate the sincere servicesrendered by the Employees at all levels. Thanks are also extended to our ProfessionalsAdvisors Well-wishers and Persons dealing with the Company.
| ||For and on behalf of the Board of Directors of |
| ||Narayani Steels Limited |
| ||Sunil Chaudhary |
|Place: Visakhapatnam ||Chairman & Managing Director |
|Date: August 27 2019 ||DIN: 00289479 |