Your Directors take immense pleasure in presenting their 71st Board's Report of yourCompany along with the Balance Sheet Statement of Profit and Loss and Statement of CashFlow for the financial year ended March 31 2018.
During the year the Company has adopted the Indian Accounting Standards (Ind-AS) incompliance with the Companies (Indian Accounting Standards) Rules 2015. The highlights ofthe financial results for the year are given below:
| || || |
(Rs. In Lakhs)
| || |
|Particulars ||FY 2018 ||FY 2017 ||FY 2018 ||FY 2017 |
|Total Revenue ||72951.06 ||58230.82 ||72507.52 ||57696.64 |
|Total Expenses ||72432.66 ||55305.62 ||72193.26 ||55174.34 |
|PBIDT ||518.40 ||2925.20 ||314.26 ||2522.30 |
|Less: Finance Cost ||13709.44 ||11395.13 ||13957.53 ||11645.82 |
|PBDT ||(13191.04) ||(8469.93) ||(13643.27) ||(9123.52) |
|Less: Deprecation ||2562.51 ||2456.13 ||2612.34 ||2510.50 |
|Profit before tax ||(15753.55) ||(10926.06) ||(16255.61) ||(11634.02) |
|Tax Expenses Current Tax ||- ||- ||- || |
|Deferred Tax ||- ||(2195.28) ||(144.02) ||(2219.41) |
|Profit After tax ||(15753.55) ||(8730.78) ||(16111.59) ||(9414.61) |
|Proposed Dividend and tax thereon ||- ||- ||- ||- |
|Transfer to General Reserve ||- ||- ||- ||- |
|Earnings per share Basic ||(107.15) ||(59.38) ||(70.08) ||(72.49) |
|Diluted ||(107.15) ||(59.38) ||(70.08) ||(72.49) |
OPERATION AND OUTLOOK:
During the year under review demand for companies products showed an improvement andthus the sales and other receipts increased by 25% YOY to Rs. 72951.1 lakhs and Lossafter tax increased from Rs. (8440.7) lakhs to Rs.(14607.9) lakhs mainly due to reductionin the operating margins.
The production of finished Steel in the country during the year witnessed a growth of3.1% (Previous year 4.6%) over previous year and the import of finished steel registeredan increase of 3.5%. Finished Steel consumption in the country increased by 7.92% overprevious year. Introduction of Minimum import price during the last year by the Governmentof India resulted in reduction of imports and thus improved offtake of manufacturing flatsteel products from the Indian Manufacturers. This also helped steel manufactures makingflat products improve the profitability. Our product being in the long product segment didnot benefit out of this policy
The II power plant which became operational during the FY18 could not be operated tothe full capacity with the power demand and supply situation in Tamil Nadu easedsubstantially and the state became a power surplus. This situation of excess supply overdemand led to the underutilization of the enhanced capacity and mostly remaining unremunerative at the prices realizable at sales through Open Access. The operations of theSynthetic division showed reduction of about 21% over previous year.
The Company has incurred loss in the year under review. The Directors do not recommenddividend to its shareholders.
The detailed capital Structure of the Company as on 31-3-2018 is as follows:
a. Authorized Capital: The authorized share capital of the company is Rs.360000000/- (Rupees Thirty Six Crores only) divided in to 16000000 equity shares ofRs. 10/- each and 20000000 6% Non-Convertible Redeemable Preference Shares of Rs. 10/-each.
b. Issued Subscribed and Paid up: The paid-up share capital of the Company is Rs.235455281/- (Rupees Twenty Three Crores Fifty Four Lakhs Fifty Five Thousand TwoHundred Eighty One only) divided into 14478486 Equity shares of Rs. 10/- each 225293Equity Shares of Rs. 6/- each (Partly Paid-up) 296221 Equity Shares of Rs. 3/- each(Partly paid-up) and 8843000 6% Non-Convertible Redeemable Preference Shares of Rs. 10/-each.
TRANSFER TO RESERVES:
Your Company proposes not to transfer any sum to the general reserve of the Company.
The Company has not accepted any deposits in the Financial Year 2017-2018. However theBoard of Directors of the Company has been converted the unsecured loan amount of Rs.154357070.00 into Secured loan which the company had received before 01-04-2014 for thebusiness operation as per Section 58AA of the Companies Act1956.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
During the year under review details of Loans Guarantee and Investments covered underthe Provisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has a well-placed proper and adequate internal control system whichensures that all assets are safeguarded and protected and that the transactions areauthorized recorded and reported correctly. The Internal Financial Controls withreference to financial statements as designed and implemented by the Company are adequate.During the year under review no material or serious observation has been received fromthe Internal Auditors of the Company for inefficiency or inadequacy of such controls.
The Board of Directors has appointed M/s. Sunil Ahuja and Associates CharteredAccountants as the Internal Auditor of the Company. The Internal Auditors independentlyevaluate the adequacy of internal controls and concurrently audit the majority of thetransactions in value terms. Independence of the audit and compliance is ensured by directreporting of Internal Auditors to the Audit Committee of the Board. During the year theCompany continued to implement their suggestions and recommendations to improve thecontrol environment. Internal Auditors findings are discussed at half year basis andsuitable corrective actions taken as per the directions of Audit Committee on an ongoingbasis to improve efficiency in operations.
MATERIAL CHANGES AND COMMITMENTS:
There were no significant material changes and commitments affecting the financialposition of the Company which has occurred between the end of the Financial Year of theCompany to which the Financial Statement relate and the date of the report.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
As required under Section 135 of the Companies Act 2013 the CSR Policy was formulatedby the CSR Committee and thereafter approved by the Board. CSR Policy is available on theCompany's website http:// tulsyannec.co.in/pdf/CSR%20Policy.pdf.
During the last three financial years the Company's average net Profit after tax onStandalone basis is coming negative and hence the Company is not required to spend anymonies on CSR activities. The Annual Report on Corporate Social Responsibility is enclosedas 'Annexure-A'.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
In terms of provisions of Regulation 34 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafterreferred to as Listing Regulations) the Management Discussion and Analysis Report is givenunder separate section forming part of this annual report.
In accordance with Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Report on Corporate Governance along with thePractising Company Secretaries Certificate confirming compliance is attached and formspart of this Annual Report.
The information pertaining to the number of Board meetings held the constitution ofthe Audit Committee Remuneration Policy of the Company criteria under Section 178(3) ofthe Companies Act 2013 Related Party Transactions and the Vigil Mechanism under thevarious provisions of the Companies Act 2013 have been disclosed in the CorporateGovernance Report which forms part of this report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY:
None of the transactions with any of related parties were in conflict with theCompany's interest. The Company's major related party transactions are generally with itssubsidiaries.
During the year under review the contracts or arrangements with related partiesreferred to in section 188 of Companies Act 2013 have been on arm's length and inordinary course of business and they were not material in nature. Accordingly theparticulars of the transactions as prescribed in Form AOC - 2 of the rules prescribedunder Chapter IX relating to Accounts of Companies under the Companies Act 2013 are notrequired to be disclosed as they are not applicable. Whereas the Company has approved toenter into Related party transaction is annexed as 'Annexure-B'. The Policy ondealing with related party transactions as approved by the Board may be accessed on theCompany's website at: http://tulsyannec.co.in/pdf/Related%20Party%20Transactions%20Policy.pdf
The Company has developed and implemented a risk management policy for the Companyincluding identification therein of elements of risk if any which in the opinion of theBoard may threaten the existence of the Company. The Board and the Audit Committeeperiodically undertake a review of the major risks affecting the Company's business andsuggests steps to be taken to control and mitigate the same.
Web link of the Risk Management Policy adopted by the Company:http://tulsyannec.co.in/pdf/Risk%20Management%20 Policy.pdf
CONSERVATION OF ENERGY TECHNOLOGIES ABSORPTION AND FOREIGN EXCHANGE AND OUTGO:
Information as required to be given under Section 134(3)(m) read with rule 8(3) of theCompanies (Accounts) Rules 2014 is provided in 'Annexure-C' forming part of thisReport.
PARTICULARS OF EMPLOYEES:
The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofDirectors employees of your company is set out in 'Annexure-D' to this report.
A statement containing the salient features of the financial statement of theSubsidiaries in prescribed Form AOC-1 are given in 'Annexure-E' to this Board'sReport which shows the financial position of the Company. During the year under reviewwith a view to rationalising the group structure and with an object to concentrate on theprimary business of the Company holding in Cosmic Global Limited a wholly ownedsubsidiary of the Company was sold off.
The Policy for determining material subsidiaries as approved may be accessed on theCompany's website at following link: http://tulsyannec.co.in/pdf/Policy%20on%20Material%20Subsidiaries.pdf
EXTRACT OF ANNUAL RETURN:
As per the Companies Amendment Act 2017 the details of extract of Annual Return whichforms part of this report is posted on the Company's website www.tulsyannec.com
SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS:
No such significant and material order have been passed by any regulator/ court/tribunal against the Company which will impact the going concern status and Company'soperation in future.
REPORTING OF FRAUDS BY AUDITORS
During the year under review neither the statutory auditors nor the secretarialauditor has reported to the audit committee under Section 143 (12) of the Companies Act2013 any instances of fraud committed against the Company by its officers or employeesthe details of which would need to be mentioned in the Board's report.
a. Statutory Auditors & their Report
M/s. CNGSN & Associates LLP Chartered Accountants Chennai having LLP IdentityNumber: AAC-9402 having Firm ICAI Registration No: 004925S/S200036 was appointed asStatutory Auditors of the Company at the 70th AGM till the 74th Annual General Meetingsubject to ratification of their appointment at every annual general meeting.
First proviso to Section 139(1) of the Companies Act 2013 which requires yearlyratification of appointment of Statutory Auditors by the Shareholders in each AnnualGeneral Meeting has been omitted w.e.f. 7th May 2018. Accordingly the appointment ofStatutory Auditors is not required to be ratified at every Annual General Meeting TheAuditors' Report has contained one qualification as follows.
Qualification given by Statutory Auditor
The Company is continuously incurring loss and its net worth is totally eroded as at31st March 2018. The possible erosion in the carrying value of investments and therecovery of loans / Advances to the Subsidiaries and related parties is not presentlyascertainable and possible provision required if any is also not presently determinable.The Company's ability to continue as a going concern is depended upon the successfulimplementation to such business plans. The above indicates a significant uncertainty anddoubt about the Company's ability to continue as a going concern.
The company has shown improved performance in sale of steel during the year as comparedto the previous year and with the steel sector showing sign of recovery and buoyancy theTurnover and profitability would increase further during the Current FY. With respect tothe power division the sales during the last few months have shown improvement withincrease in the demand. Together the performance from current FY is expected to be betterthan what was witnessed in the last few years. Despite the losses incurred andunfavourable business circumstances the company is able to achieve reasonable levels ofCapacity utilization and is in a position to meet all its operational expenses from out ofoperations and is up to-date with the all obligations except the interest to the Banks.
The company has made a resolution proposal to the Banks which is under theirconsideration. Therefore all the uncertainties have been reasonably addressed withdefinite plan and proposal and therefore the Board firmly believes that the company wouldbe able to continue as a going concern.
b. Cost Auditor
The Board of Directors on the recommendation of the Audit Committee has approved thereappointment of Messrs Murthy & Co. LLP Cost Auditors of the Company for thefinancial year ending 31st March 2018 under section 148 of the Companies Act 2013 andrecommends ratification of his remuneration by the shareholders at the ensuing annualgeneral meeting. Further the Company has maintained the cost records as per the saidsection properly.
c. Secretarial Auditor
Pursuant to provisions of Section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany engaged the services of M/s M. Damodaran & Associates a firm of CompanySecretaries in practice Chennai to conduct the Secretarial Audit of the Company for the12 months period ended on 31st March 2018. The Secretarial Audit Report (in Form MR-3) isattached as Annexure-F' to this Report. The Secretarial Auditor's Report tothe shareholders contains some observations as mentioned below:
|Observations by Secretarial Auditors ||Our Reply |
|The Company has partially complied the Regulation 17(1) (a) 17(1)(b) and 19(1) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements ) Regulation 2015 during the period. ||The Board has made utmost effort for appointment of the Independent Director to comply with the Regulation 17(1)(a) 17(1)(b) and 19(1)of the SEBI(LODR) Regulations2015 but has not been able to appoint an Independent Director due to lack of suitability .c |
| ||Further the Board is putting necessary efforts to appoint an Independent Director in order to comply with the aforesaid provisions at earliest. |
|The Company has partially complied the Regulation 33 of Securities and Exchange Board of India (Listing Obligation Disclosure Regulation) 2015 during the period. ||This has been subsequently complied. |
d. Secretarial standards
The Company complies with all applicable secretarial standards issued by ICSI.
PERSONNEL & INDUSTRIAL RELATIONS:
Overall the industrial relations in all our manufacturing units had been harmonious aswell as cordial. Your Company strictly believes that maintaining cordial industrialrelations is the key to progress of the firm individuals management industry andnation.
DIRECTORS RESPONSIBILITY STATEMENT:
As required under section 134(3)(c) of the Companies Act 2013 your Directors statethat: a) In the preparation of the annual accounts the applicable Accounting Standardshave been followed along with proper explanation relating to material departures; b) Theyhave in selection of the accounting policies and applied them consistently madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the Company for that period; c) Proper and sufficient care has been taken forthe maintenance of adequate accounting records in accordance with the provisions of theAct for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) Annual accounts have been prepared on a going concern basis; e)Internal financial controls had been laid down and followed by the company and suchinternal financial controls are adequate and were operating effectively; and f) Propersystems to ensure compliance with the provisions of all applicable laws have been devisedand such systems were adequate and operating effectively.
WHISTLE BLOWER POLICY:
In terms of the Section 177(9) of Companies Act 2013 and rules framed thereunder theCompany has framed a Whistle Blower Policy /vigil mechanism with an objective ofencouraging the employees of the Company to raise any concern about Company's operationsand working environment. It provides a channel to the employees to report to themanagement concerns about unethical behavior actual or suspected fraud or violation ofany code of conduct or policy in force.
The details of the Vigil Mechanism Policy are explained in the Report on CorporateGovernance and also available on the website of the Company at following link:http://tulsyannec.co.in/pdf/Whistle-Blower-Policy.pdf
CHANGE IN THE NATURE OF BUSINESS:
The company has not changed nature of business in any way during the last financialyear 2017-2018.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
a. Change in Board Constitution
(i) Mr. Pondavakkam Tharmam Rangamani Non-executive Independent Director of theCompany resigned from the Board w.e.f December 14 2017.
(ii) Mr. Sanjay Tulsyan retires from office by rotation and being eligible has offeredhimself for re-appointment. Items seeking your approval on the above re-appointment areincluded in the Notice convening the Annual General Meeting. Brief resumes of theDirectors seeking appointment / reappointments from part of the Notice of the ensuringAnnual General Meeting.
b. Key Managerial Personnel
Mr. P Laxmidhar Prusty Company Secretary and Compliance officer of the Company hasresigned from the service of the Company effective from September 16 2018. Consequent toMr. P Laxmidhar Prusty's resignation the Board appointed Mr. Rakhal Panigrahi as CompanySecretary cum Compliance officer and KMP of the Company from 28th September 2017.
c. Number of Meetings of the Board and its Committee
The details of the meeting of the Board and its committees convened during thefinancial year 2017-2018 are given in the Corporate Governance Report which forms part ofthis Report.
d. Composition of the Audit Committee
The Board has constituted the Audit Committee which comprises of Mr. C Ramachandran(Chairman) Mr. Sanjay Agarwalla and Mrs. Preeti Garg as the members. Other details of theAudit Committee are listed in the Corporate Governance Report. The Audit Committee metFive times during the year.
e. Independent Directors Confirmation
The Independent Directors on the Company's Board have given their respectivedeclarations that they meet the criteria of Independence as provided in Section 149(6) andChapter IV of SEBI (Listing Obligations and disclosure Requirements) 2015. The Manner inwhich formal annual evaluation has been made by the Board of its own performance and thatof its own performance and that of its committees and individual directors are disclosedin the Report on Corporate Governance.
f. Familiarization Programme for Independent Director
The Company has adopted policy for Familiarization Programme for Independent Directors.Web link of the familiarization policy adopted by the Company:http://tulsyannec.co.in/pdf/Familiarisation%20Programme%20for%20Independent%20Directors.pdf
g. Policy for Remuneration to Directors KMP & Other Senior Personnel
The Remuneration policy for the Directors/ KMP and other senior personnel is given inthe [Annexure G] to this Report. Web link of the policy for Remuneration toDirectors KMP & Senior Personnel adopted by the Company:http://tulsyannec.co.in/pdf/policy%20for%20 Remuneration%20to%20Directors%20and%20 KMP.pdf
h. Performance Evaluation
Pursuant to the provisions of Section 134 of the Companies Act 2013 read with ScheduleIV of the Act and also in line with Regulation 25 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Independent Directors of the Company met on13th February 2018 without the attendance of Non Independent Directors and Members ofManagement and reviewed the performance of Non-Independent Directors and the Board as awhole. They also reviewed the performance of the Chairperson The Board adopted a formalmechanism for evaluating its performance as well as that of its Committees and individualDirectors including the Chairman of the Board. The exercise was carried out through astructured evaluation process covering various aspects of the Board functioning such ascomposition of the Board & committees experience & competencies performance ofspecific duties & obligations contribution at the meetings and otherwise independentjudgment governance issues etc.
i. Green Initiatives:
Electronic copies of the Annual Report 2017-2018 along with Notice 71st Annual GeneralMeeting are sent to all members whose email addresses are registered with the Company /Depositary Participant(s). For members who have not registered their email addressphysical copies of the Annual Report 2017-2018 along with the Notice of the 71st AnnualGeneral Meeting are sent in the permitted mode. Members requiring physical copies can senda request to the Company. Further the soft copy of the Annual Report is also available onour website (www.tulsyannec.in)
j. Internal Complaints Committee
The Company has constituted an Internal Complaints Committee to prevent and prohibitany form of sexual harassment at workplace and provide redressal for woman employees asrequired under Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the year the members of Internal Complaints Committee met on20th Nov 2017 and noted that there was no event affecting any of the women employees onaccount of any sexual harassment at the work place.
k. Transfer to Investor Education and Protection Fund (IEPF)
During the year the Company has transferred a sum of ` 417700/- and ` 245460/- theunclaimed/ unpaid dividend amount pertaining to the Financial Year 2009-10 and 2010-11respectively to the Investor Education and Protection Fund (IEPF) in compliance withapplicable provisions of the Companies Act 2013. Further the unclaimed/ unpaid amountpertaining to the Financial Year 2010-11 is due for transfer to IEPF on 18th November2018.
Section 124(6) of the Companies Act 2013 read with the Investor Education andProtection Fund (Accounting Audit Transfer and Refund) Rules 2016 mandates companies totransfer shares against which dividends remain unpaid / unclaimed for a continuous periodof seven years to the IEPF. As per the Ministry of Corporate Affairs General Circular No.12/2017 dated 16.10.2017 the Company has transferred 71907 equity shares belonging to 553shareholders as on 31.10.2017 to Demat account of IEPF Authority. Further theunclaimed/unpaid shares pertaining to the Financial Year 2010-11 is due for transfer toIEPF on 18th November 2018.
l. Listing on stock exchanges
Our Company's shares were suspended for trading from 29th November 2016 due tonon-payment of applicable fine and presently we have paid all outstanding dues and alsocomplied all the provision with respect to Trading Suspension and awaiting for getting thein-principle approval from BSE for revocation of suspension of our Company's shares.
Your Directors wish to extend their sincerest appreciation to the investors bankerscustomers suppliers executives staff and workers at all levels for their continuousco-operation and assistance. Your Directors express their sincere gratitude to all theRegulatory Authorities such as the SEBI Stock Exchanges and other Central & StateGovernment authorities and agencies Registrars for their guidance and support.
Your Directors place on record their sincere appreciation for the continued supportfrom shareholders customers suppliers banks and financial institutions and otherbusiness associates.
For and on behalf of the Board of Directors For Tulsyan NEC Limited
|Place : Chennai ||Lalit Kumar Tulsyan |
|Date : 14-08-2018 ||Executive Chairman |
|Corporate Office: ||DIN: 00632823 |
|Apex Plaza I Floor New No. 77 || |
|(Old No. 3) Nungambakkam High Road || |
|Chennai - 600 034. || |