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Directors Report of Inducto Steel Ltd.

Mar 31, 2015

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


Mar 31, 2012

To, The Members of Inducto Steels Limited

The Directors are pleased to present the 24th Annual Report of the Company together with the Audited Annual Accounts of the Company for the year ended 31st March, 2012.

Financial Results: (Rs in Lacs)

2011-12 2010-11

Sales & Other Income 10316.84 6,965.35

Profit/(Loss) before Tax 633.62 554.25

Provision for Tax (205.75) (175.44)

Adjustment for deferred tax 1.25 (3.83)

Profit after tax 426.62 374.98

Balance Profit from Last Year 1012.83 804.96

Transfer to General Reserve (50.00) (50.00)

Profit Available for Appropriation 1389.45 1129.94

Proposed Dividend (120.52) (100.43)

Dividend Distribution Tax thereon 19.55 (16.68)

Balance of Profit Carried to Balance Sheet 1249.38 1012.83

Earning Per Share (Face Value Rs. 10/-)

- Basic and Diluted 10.62 9.33

Keeping in view the good market potential, the company carried out its Ship Breaking activities on a full scale during the year and that is reflected in the increase in the Gross Revenues. In spite of heavy fluctuation in the prices of old ship in the international market and also heavy dollar exchange rate fluctuations, your company has been able to optimize the market situation and have achieved increase in Gross Revenues. Your Directors are hopeful that there will be even more improvement in sales and profit margin in the coming year.

Dividend

The Directors recommend a Dividend of 30% (Rs. 3.00 per share) on the Equity Share for the Financial Year ended March 31, 2012 for approval by the Members.

Prospects for the coming year

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.

Management Discussion and analysis

Provided in Annexure - B forming part of this report Directors' Responsibility Statement

Provided in Annexure - C forming part of this report

Corporate Governance

Your Company has been practicing the principles of good Corporate Governance. In addition to basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity. The report on the Corporate Governance is attached (Annexure D) herewith. Board of Directors

In accordance with the provisions of the Companies Act, 1956, read with the Articles of Association of the Company, Mr. Rajeev Reniwal and Mrs. Sweety Reniwal retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. Necessary resolutions are being placed before the shareholders for approval.

Auditor's Observation/qualification.

The observation/qualification of the auditors are based on the facts stated in the schedules of notes and members are requested to refer to the Note no. 2.29 forming part of Financial Statements and notes 1.2 (a) to (j) of notes on accounts, which are self explanatory and does not require any further clarification/reply.

Auditors

M/s. Jain Seth & Co., Chartered Accountants, the Statutory Auditors of the Company retires at the ensuing Annual General Meeting. However, the company has not received their confirmation of their willingness to be re-appointed. The company has received confirmation and their eligibility and willingness to accept office from M/s. RD. Goplani & Associates, Chartered Accountants, if appointed. They have given a certificate to the effect that the appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. Your Directors recommend their appointment.

Members are requested to re-appoint M/s. RD. Goplani & Associates, Chartered Accountants, as Statutory Auditors of the Company for the period commencing from ensuing Annual General Meeting until the conclusion of next Annual General Meeting and fix their remuneration.

Particulars of Employees

Pursuant to Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, your Company has no person in its employment drawing salary within the monetary ceiling prescribed under Section 217(2A) of the Companies Act, 1956.

Conservation of Energy, Technology Absorption and Foreign Exchange Earning and outgo:

In accordance with the provisions of section 217 (1) (e) of the Companies Act, 1956, the required information relating to conservation of energy, technology absorption and foreign exchange earning and outgo is annexed (Annexure A) hereto which is forming part of this report.

Acknowledgement

Your Directors wish to place on record their appreciation for the continued support from the Shareholders, Investors, Customers, Suppliers and Bankers. Your Directors place on record their appreciation of the consistent contribution made by employees at all levels through their hard work, dedication, solidarity, cooperation and acknowledge that their support has enabled the Company to achieve new heights of success.

By Order of the Board

Sd/-

Rajeev Reniwal Director

Place: Mumbai Date : 16/08/2012

 
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