| Dear Members,
The Directors are presenting the 27th Annual Report of your Company
and the Audited Financial Statements for the year ended 31st March
2015.
FINANCIAL RESULTS: (in lacs)
PARTICULARS 2014-15 2013-14
Revenue from Operations 20,919.27 35,736.44
Other Income 1,762.14 1,973.39
Total Revenue 122,681.41 37,709.83
Profit / (Loss) before tax 478.70 613.57
Less: Tax Expense 154.79 202.92
Less: Deferred Tax (0.37) 5.96
Profit / (Loss) after tax 324.28 404.69
HIGHLIGHTS OF COMPANY'S PERFORMANCE :
During the year under consideration total revenue were Rs. 22,681.41
Lacs as against Rs. 37,709.83 Lacs in the preceding financial year and
Profit After Tax was Rs. 324.28 Lacs as against Rs. 404.69 Lacs in the
preceding financial year.
The Company has not been able to perform well during the year due to
various factors like fluctuations in the exchange rate of US Dollar
vis-a-vis Indian Rupee steep decrease'in prites of Iron . and steel
products and volatile market conditions. However, the Company has been
able to improve the net profit margins for the financial year
2014-15,due to its cautious approach. The Management is of the view
that, in the coming years the ship breaking industry as well as Iron
and Steel sector .will be stable and with expected boost in the economy
the requirement of iron and steel will increase which will help the
Company to move towards its sustained path of growth.
DIVIDEND:
To consolidate the future position of the Company and support the fund
requirements, your Board of Directors regret their inability to
recommend any dividend for the year.
RESERVES:
The whole profit after tax has been transferred to P&L surplus. There
is no amount that has been proposed to be carried to any other
reserves.
LOANS, GUARANTEE & INVESTMENTS :
The particulars of loans, guarantees and' investments have been
disclosed in the financial statements.
DEPOSITS:
The Company has never accepted any deposit from the public falling
within the ambit of Section 73 of the Companies Act, 2013 and the
Companies (Acceptance of Deposits) Rules, 2014, Or under Chapter V of
the Act.
RELATED PARTY TRANSACTIONS :
The Audit Committee granted omnibus approval for the transactions
(which are repetitive in nature) and the same was reviewed by the Audit
Committee and the Board of Directors. There were no materially
significant transactions with Related Parties during the financial year
2014-15 which were in conflict with the interest of the Company.
Suitable disclosures as required under AS-18 ' have been made in Note
2.30 of the Notes to the financial statements.
The particulars of contract or arrangement entered into by the Company
with related parties referred to in sub-section (1) of section 188 of
the Companies Act, 2013, in prescribed Form No. AOC -2, is appended as
Annexure 1 to the Board's Report.
INTERNAL FINANCIAL CONTROLS:
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
A) Changes in Directors and Key Managerial Personnel (KMP)
During the year under review, Mrs. Neela Shah and Mr. Prashant Agrawal
resigned from the Directorship . of the Company w.e.f. 2nd June 2014.
Thereafter, the Board of the Company is duly constituted.
Mr. Rajeev Reniwal, will be retiring by rotation at the ensuing Annual
General Meeting and being eligible, seeks reappointment pursuant to
Section 152 of the Companies Act, 2013.
* Appointment and Resignation of KMP:
The Board of Directors at its meeting held on 30th March 2015 appointed
Mr. Rakesh Reniwal'as Chief Finance Officer (CFO).
Further, Mr. Rajeev Reniwal, Managing Director, was designated as a
KMP.
B) Declaration by an Independent Director(s) and re-appointment, if any
All the Independent Directors have provided the declaration of
Independence, as required pursuant to . Section 149(7) of the Companies
Act, 2013, stating that they meet the criteria of independence as
provided in sub-section (6)
PERFORMANCE EVALUATION OF THE BOARD:
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the Directors individually as well
as the evaluation of the working of its Audit, Nomination &
Remuneration and other Committees. The same is found to be
satisfactory.
At a separate meeting of Independent Directors, performance of
Non-Independent Directors, performance of the Board as a whole and
performance of the Chairman was evaluated, taking into account the
views of Executive Directors and Non-Executive Directors. The same was
discussed at the Board Meeting that followed the meeting of the
independent Directors, at which the performance of the Board, its
Committees and individual directors was* also discussed.
BOARD MEETINGS:
During the year under review, the Company has conducted 15 (Fifteen)
Board Meetings. Details are covered in Corporate Governance Report.
EXTRACT OF ANNUAL RETURN :
In accordance with Section 134(3)(a) and as provided under sub-section
(3) of Section 92 of the Companies Act, 2013 an extract of the annual
return in form no. MGT-9 is appended as Annexure 2 of the Board's
Report.
CORPORATE GOVERNANCE :
A separate section on Corporate Governance forming part of the
Directors' Report and a Certificate from the Auditors is included in
the Annual Report. Annexure - 3 is attached herewith.
AUDITORS:
M/s. P. D. Goplani & Associates, Chartered Accountants, Bhavnagar,
having ICAI Firm Registration No. 118023W being eligible offer
themselves for re-appointment. If re-appointed, it will be within the
prescribed limits specified in Section 139 ofthe Companies Act, 2013.
Members are requested to appoint the auditors and to fix their
remuneration.
The Auditors in their report dated May 29, 2015 have opined that
provision for gratuity and long term employee benefits as per AS-15 has
not been made. In this connection, the Board would like to clarify that
the Co. has no employee in continuous service of 5 years Ar more.
Hence, the provisions pertaining to gratuity are not applicable to the
Company.
Apart from this the report is self-explanatory.
SECRETARIAL AUDIT:
The Board of Directors have appointed Mr. Dilip Bharadiya, Proprietor
of M/s. Dilip Bharadiya & Associates, Practising Company Secretaries,
Mumbai, to conduct Secretarial Audit for the financial year 2014-15, as
required under Section 204 of the Companies Act, 2013 and the rules
framed thereunder. The Secretarial Audit Report for the financial year
2014-15 forms part of the Directors' Report as Annexure 4.
The Auditor has raised observations pertaining to delay in filing of
forms in time. The management of the Company has assured that the
Company will take adequate steps to streamline work and . adhere with
time guideline provided under various acts, statutes, regulations.
MATERIAL CHANGES AND COMMITMENTS:
There are no material changes having taken place affecting the
financial position of the Company . from the date of closure of
financial year till the signing of Accounts.
DIRECTORS'RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of
Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation ofthe annual accounts, the applicable accounting
standards had - been followed along with proper explanation relating to
material departures;
. (ii) the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit and
loss of the Company for that period;
(iii) the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets ofthe Company and
for preventing and detecting fraud and other irregularities;
(iv) the Directors had prepared the annual accounts.on a going concern
basis;
(v) the Directors, further state that they have laid down internal
financial controls to be followed by the Company and that such internal
financial controls are adequate and were operating effectively;
(vi) the Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION ETC. & FOREIGN EXCHANGE
EARNINGS AND OUTGOINGS :
The information as required under Section 134(3)(m) of The Companies
Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014
with respect to conservation of energy, technology absorption and
foreign exchange earnings is given below:
A. Conservation of energy:
(i) the steps taken or impact on conservation of energy;
The Company acknowledges the importance of energy conservation in
decreasing the deleterious effects of global warming and climate
change. The Company has made efforts to minimize energy costs. Company
is engaged in Ship Breaking and trading in metal scrap, coals,
aluminium foil & other industrial inouts. No significant power
consumption is required in ship breaking industry as major portion is
production process consisting of non mechanical processes. However,
industrial gases are used in ship dismantling activities and the
Company has taken various measures to control the consumption of fuel
and energy.
(i i) the steps taken by the Company for utilising alternate sources of
energy;
Company is engaged in Ship Breaking and trading in metal scrap, coals,
aluminum foil & other industrial inouts. No significant power
consumption is required in ship breaking industry as major portion in
production process consist of non mechanical processes. However,
industrial gases are used in ship dismantling activities and the
Company has taken various measures to control the consumption of fuel
and energy. Hence, the ' Company has not made any investment towards
any alternate source of energy.
(ill) the capital investment on energy conservation equipments;
The Company is taking adequate steps to conserve energy though no such
capital' investment has been made.
B. Technology absorption:
The Company's operations do not require significant absorption of
technology.
C. Foreign exchange earnings and Outgo:
Current Year Previous Year
Foreign Exchange Earnings and Outgo 847718101 409247000
CORPORATE RESPONSIBILITY STATEMENT (CSR):
the provisions of Section 135 of the Companies Act, 2013 regarding
Corporate Social Responsibility are not applicable as the Company is
not falling under the said parameters.
AUDIT COMMITTEE:
The Audit Committee was reconstituted in accordance with the provisions
of Companies Act, 2013. The details pertaining to Audit Committee and
its composition are included in the Corporate Governance Report, which
forms part of this report.
NOMINATION AND REMUNERATION COMMITTEE:
The Company has constituted a Nomination and Remuneration Committee
pursuant to Section 178(1) of the Companies Act, 2013 and has defined
the policy on Director's appointment and payment of remuneration
including criteria for determining qualifications, positive attributes,
and independence of a Director. The Committee shall function in
accordance with the terms and reference of the policy. Policy of the
Company is enclosed herewith as Arjnexure 5.
VIGIL MECHANISM:
The Company has adopted a Whistle Blower Policy establishing vigil
mechanism, to provide a formal mechanism to the Directors and employees
to report their concerns about unethical behavior, actual or suspected
fraud or violation of the Company's Code of Conduct or ethics policy.
The Policy provides for adequate safeguards against victimization of
employees who avail of the mechanism and also provides for direct
access to the Chairman of the Audit Committee. It is affirmed that no
personnel of the Company has been denied access to the Audit Committee.
The policy of vigil mechanism is available on the Company's website.
STAKEHOLDER'S RELATIONSHIP COMMITTEE:
The details pertaining to composition .of the Committee is included in
the Corporate Governance Report, which forms part of this report. The
role of the Committee is explained in detail in the Corporate
Governance Report enclosed herewith.
PERFORMANCE OF EMPLOYEES:
A) The information required under Section 197 of the Act read with rule
5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are given below:
a. Details of the ratio of the remuneration of each Director to the
median employee's ~ remuneration and other details as required pursuant
to Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 The Company has not paid any
remuneration to the Directors of the Company and hence the information
is not furnished.
b. The percentage increase in remuneration of each Director, Chief
Executive Officer, Chief Financial Officer, Company Secretary in the
financial year:
No remuneration is paid to any Director of the Company. Further,
appointment of Chief Financial Officer, was done at the Board Meeting
held on 30th March 2015 and hence the information pertaining to
percentage increase in remuneration cannot be provided.
c. The percentage increase in the median remuneration of employees in
the financial year:
There is no increase in remuneration of employees. Hence, information
cannot be furnished.
d. The number of permanent employees on the rolls of Company: 11
e. The explanation on the relationship between average increase in
remuneration and Company performance:
There is no increase in remuneration of employee. Hence, information
cannot be furnished.
f. Comparison of the remuneration of the key managerial personnel
against the performance of the Company:
Appointment of key managerial personnel was done on 30th March 2015.
Since this information is for part of the year, the same is not
comparable.
g. Variations in the market capitalization of the Company, price
earnings ratio as at the closing date of the current financial year and
previous financial year:
Particulars March 31,2015 March 31,2014 % Change
Market
Capitalization 92195980 140001302 -34.15%
Price Earnings
Ratio 2.84 3.46 -17.92%
h. Percentage increase over decrease in the market quotations of the
shares of the Company in comparison to the rate at which the Company
came out with the last public offer:
During the financial year under review, the Company has not come out
with any public offer.
i. Average percentile increase already made in the salaries of
employees other than the managerial personnel in the last financial
year and its comparison with the percentile increase in the managerial
remuneration and justification thereof and point out if there are any
exceptional circumstances for increase in the managerial remuneration:
There is no increase in salaries of employees other than the managerial
personnel in the last-financial year. Further, no remuneration is paid
to managerial personnel so comparison cannot be made.
j. Comparison of each remuneration of the key managerial personnel
against the performance of the Company:
Appointment of key managerial personnel was done on 30th March 2015.
Since this information is for part of the year, the same is not
comparable.
k. The key parameters for any variable component of remuneration
availed by the directors:
No remuneration is paid to any Director of the Company.
l. The key parameters for any variable component of remuneration
availed by the directors:
Not applicable
m. Affirmation that the remuneration is as per the remuneration policy
of the Company:
No remuneration is being paid to Key Managerial Personnel.
B) Details of the every employee of the Company as required pursuant to
5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014
The Company has no such employee drawing remuneration more than
mentioned under Rule 5(2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
The Company does not have Subsidiary/Joint Ventures/Associate
Companies.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report for the financial year under
review as stipulated in Clause 49 of the Listing Agreement entered into
with the Stock Exchanges is provided in Annexure - 6.
COST AUDIT:
As per Section 148 of the Act, the Company is required to have the
audit of its cost records conducted by a Cost Accountant in practice.
The Board of Directors of the Company has approved the appointment of
Mr. Sonu-Sobhraj Kewlani, Partnership firm M/s Kewlani & Associates,
having Registration No. 101593 as the cost auditors of the Company to
conduct cost audits pertaining to relevant products prescribed under
the Companies (Cost Records and Audit) Rules, 2014 as amended from time
to time for the year ending March 31, 2016, at a remuneration of Rs.
40,000/- p.a. and, have vast experience in the field of cost audit and
have conducted the audit of the cost records of the Company for the
past several years under the provisions of the erstwhile Companies Act,
1956.
RISK MANAGEMENT:
The Board of the Company has formed a Risk Management Committee on 30th
March 2015 to frame, implement and monitor the risk management plan for
the Company. The Committee is responsible for reviewing the risk
management plan and ensuring its effectiveness. The audit committee has
* additional oversight in the area of financial risks and controls.
Policy to manage risk is also placed on the website of the Company.
During the year, risk analysis and assessment was conducted and the
details of the same are covered in the Management Discussion and
Analysis Report of the Company.
FAMILIARIZATION PROGRAMME:
As per Clause 49 of the Listing Agreement entered into with the stock
exchange, Corporate Governance Report with Auditors' Certificate
thereon and Management Discussion and Analysis are attached, which form
part of this report. Details of the familiarization programme of the
Independent Directors are available on the website of the Company.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
Your Directors state that during the year under review, no case was
filed pursuant to the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
DETAILS OF VARIOUS PLANS:
During the financial year 2014-15, ship breaking unit at Alang Ship
Breaking Yard and Trading Unit have not been able to perform well
during the year due to various factors like fluctuations in the
exchange rate of US Dollar vis-a-vis Indian Rupee and steep decrease in
prices of Iron and Steel products and volatile market conditions. The
management is of the view that, in the coming years the ship breaking
industry will be stable and with expected boost in the economy the
requirement of Iron and Steel will increase which will help the Company
to move towards its sustained path of growth.
Overall, since the prices of Iron and Steel having been reasonably
stabilized and the inventory levels of the Company and its market
position, both the segments of the Company, viz. Ship Breaking and
Trading, are expected to see major increase in terms of Gross Revenues
and Net profit Margins in the coming year.
The Company is hopeful that in the coming period the Company will
continue its ship breaking and trading activities and take It to the
level of extended growth and will contribute more to the overall growth
of the business of the Company and your Directors See a very positive
and bright future prospects ahead for the Company looking to the
prevailing upward trend in the Iron and Steel sector in India and
internationally.
The Company is hopeful that with the stabilizing the price for the old
ship in the international market and also sale prices of companies
products in the domestic .market; the Company will be able to improve
the turnover and also the profitability in the coming year.
ACKNOWLEDGEMENT:
Your Directors wish to place on record their appreciation for the
co-operation extended by all the employees, Bankers, financial
Institutions, various State and Central Government authorities and
stakeholders.
For and on Behalf of the Board of Directors,
INDUCTO STEELS LTD. V
Sd/- $d/-
Rajeev Shantisarup Reniwai Sweety Reniwal
Managing Director Director
(DIN 00034264) (DIN 00041853)
Place: Mumbai
Date: 25th August 2015
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