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Directors Report of Mahabir Metallex Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended 31st March, 2015.

Financial Results

The summarized financial results of your Company are given in the table below:

(Figures in Rs.)

Particulars F.Y 2014-15 F.Y 2013-14

1. Operative & Other Income 95,036,173.00 -

2. Depreciation 531,107.00 -

3. Profit/loss before tax 936,806.00 160,891.00

4. Profit after tax 668,593.00 110,170.00

5. Add previous year's balance (2,108,108.00) (2,218,278.00)

6. Balance carried to balance sheet (1,439,515.00) (2,108,108.00)

Dividend

Keeping in view the performance we are unable to recommend dividend for the year under review.

Overview

The improvement has been achieved by the Company during the financial year. The Company earned its income mainly from marketing and distribution of steel products. The Company continues to reducing cost of borrowings, finding new markets, etc. We extended our geographical reach to the end users.

Management's Discussion and Analysis Report

Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 52 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

Deposits

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Accordingly, there are no unclaimed or unpaid deposits lying with the Company for the year under review.

Details of significant and Material Orders passed by the Regulators, Courts and Tribunal No significant and material order has been passed by the Regulators, Courts and Tribunals impacting the going concern status and Company's operations in future.

Change in the nature of business, if any

There was no Change in the nature of business of the Company during the Financial Year ended March 31, 2015.

Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report There are no material changes and commitments, affecting the financial position of the Company occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report other than those disclosed in the financial statements.

Directors Responsibility Statement

Pursuant to the Section 134 (1) (c) of the Companies Act, 2013, the Directors to the best of their knowledge hereby state and confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures.

b) 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 end the of the financial year and of the profits of the Company for the period.

c) 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 of the Company and for preventing and detecting fraud and other irregularities.

d) The annual accounts have been prepared on a going concern basis.

e) The internal financial controls to be followed by the Company were laid down and such internal financial controls were adequate and were operating effectively; and

f) 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.

Explanations or Comments by the Board on every Qualification, Reservation or Adverse Remark Pursuant to the observation of the Secretarial Auditor, regarding non-payment of Stamp duty, your Company has filed the application for the same.

Listing

Your Company has made a public issue of 39,00,000 equity shares of Rs.10/- each and listed its securities on SME Platform of BSE Limited, having nationwide terminals. The Company has paid Annual listing fees for the financial year 2014-15 and 2015-16 to the BSE Limited and custodian fees to NSDL and CDSL.

Corporate Governance

Your Company upholds the standards of governance and is compliant with the Corporate Governance provisions as stipulated in Clause 52 of the Listing Agreement in both letter and spirit during the period under review. Your Company lays strong emphasis on transparency, disclosure and independent supervision to increase various stakeholders' value.

The Company has complied with the Corporate Governance as stipulated under Clause 52 of the SME Listing Agreement with Stock Exchange.

A separate section on Corporate Governance, along with certificate from Statutory Auditors confirming compliance with the requirements of Clause 52 of the SME Listing Agreement with the BSE Limited (BSE), are annexed as Annexure "F" and forming part of the Annual Report.

Particulars of Contracts and Arrangements with Related Parties Pursuant to the provisions of Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of all contracts / arrangements / transactions entered into by the Company with related parties during the financial year are in the ordinary course of business and on arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on related party transactions and materiality of related party transactions.

Your Directors draw attention of the members to Note 23 to the Financial Statement which sets out related party disclosures. The particulars of contracts and arrangements entered into by the company with related parties referred to in Section 188 in Form AOC-2 is attached herewith as Annexure-B.

Details in respect of adequacy of Internal Financial Controls with reference to the Financial Statements The Company has a robust and comprehensive Internal Financial Control System commensurate with the size, scale and complexity of its operations. The objective of these procedures is to ensure efficient use and protection of the Company's resources, accuracy in financial reporting and procedures. The system encompasses the major processes to ensure reliability of financial reporting, compliance with the policies, procedures, laws and regulations safeguarding assets and economical and efficient use of resources. The policies and procedures adopted by the company ensure the orderly and efficient conduct of its business and adherence to the company's policies, prevention and detection of frauds and errors, accuracy and completeness of the records and timely preparation of reliable financial information.

The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board and to the Managing Director.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

Directors and Key Managerial Personnel

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Manoj Gupta, retire by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment.

The details of directors being recommended for appointment / re-appointment as required in clause 52 of the SME Listing Agreement are contained in the Notice convening the ensuing Annual General Meeting of the Company.

Appropriate resolution(s) seeking your approval to the appointment / re-appointment of Directors are also included in the Notice.

Declaration by Independent Director(s)

All the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149 (6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 52 of Listing Agreement, the Board has carried out an annual evaluation of its own performance, the Directors individually as well as the evaluation of the working of various Committees. The Independent Directors also carried out the evaluation of the Chairman and the Non-Independent Directors, the details of which covered in the Corporate Governance Report.

Criteria for Evaluation of Directors

For the purpose of proper evaluation, the Directors of the Company have been divided in 3 (three) categories i.e. Independent, Non-Independent and Non-Executive and Executive.

The criteria for evaluation includes factors such as engagement, strategic planning and vision, team spirit and consensus building, effective leadership, domain knowledge, management qualities, team work abilities, result/achievements, understanding and awareness, motivation/ commitment/ diligence, integrity/ ethics/ value and openness/ receptivity.

Number of Meetings of the Board of Directors

During the Financial year 2014-15, the Board of Directors of the Company met 13 times on 27th April, 2014, 3rd July, 2014, 5th August, 2014, 30th August, 2014, 3rd September, 2014, 8th September, 2014, 25th September, 2014, 30th September, 2014, 25th October, 2014, 17th December, 2014, 18th December, 2014, 5th January, 2015 and 16th February, 2015.

During the Financial year 2014-15, meeting of the Audit Committee were held on 30th August, 2014. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under Companies Act, 2013.

Audit Committee

The Audit Committee comprises three Directors, of which two are Non-Executive and Independent Directors. The Chairman of the Committee is a Non-Executive Independent Director. Composition of the Audit Committee as on 31st March, 2015 is as under:

Name of the Director Category

Mr. Deepak Garg Non-Executive and Independent

(Chairman)

Mr. Pradeep Kumar Goel Non-Executive and Independent

Mr. Anju Gupta Managing Director

Remuneration and Compensation Committee

In adherence of Section 178(1) of the Companies Act, 2013, Composition of the Committee as on 31st March, 2015 is as under:

Name of the Director Category

Mr. Deepa Garg Non-Executive and Independent

(Chairman)

Mr. Manoj Gupta Non-Executive Director

Mr. Pradeep Kumar Goel Non-Executive and Independent

Details of establishment of Vigil Mechanism for Directors and Employees

In Compliance with the provision of Section 177(9) of the Companies Act, 2013 and Clause 52 of the listing Agreement, the Company has framed a vigil mechanism/Whistle Blower Policy to deal with the ethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy, if any.

In staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility.

The Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern. The Vigil Mechanism is adopted by the Board of Directors on their meeting held on August 30, 2014.

Auditors and Auditor's Report

A. Statutory Auditors: M/s VAPS & Co., Chartered Accountants, Auditors of the Company, retire at the conclusion of the forthcoming Annual General Meeting and they have offered themselves for re-appointment. The certificate to the effect that if appointed would be within the prescribed limit under Section 141 of the Companies Act, 2013 has been obtained from them.

The observations of Statutory Auditors in their reports on financials are self-explanatory and therefore, do not call for any further comments under Section 134 of the Companies Act, 2013.

B. Secretarial Auditors: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Board had appointed M/s Rashi Sehgal & Associates, Company Secretaries, to conduct Secretarial Audit for Financial Year 2014-15. The Secretarial Audit Report for the Financial Year ended on 31st March, 2015 is annexed herewith marked as Annexure "C" to this Report. The Secretarial Audit Report is self-explanatory and therefore, do not call for any further comments.

Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013 The company has given Loans/guarantee or provides security in connection with a loan to any other body corporate under Section 186 of the Companies Act, 2013 during the Financial Year 2014-15, which are given under respective head and the same is furnished in the notes to the Financial Statement.

Share Capital

The paid up equity share capital as on 31st March, 2015 was Rs. 104,294,000. The company has not issued shares with differential voting rights nor granted stock options nor sweat equity or bonus shares. The Company has made a public issue of 39,00,000 equity shares of face value of Rs. 10 each fully paid for cash at a price of Rs. 10 per Equity Share aggregating to Rs. 390.00 Lakhs Extract of the Annual Return The details forming part of the extract of the Annual Return in Form no. MGT-9 as required under Section 92 of the Companies Act, 2013 is annexed hereto as Annexure-"A" and forms part of the Director's Report.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo Information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 (3) (m) of Companies Act, 2013 read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014, is annexed hereto as Annexure "E", forming part of this Report.

Particulars of Employees and related disclosures

Details pursuant to Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 form part of this Annual Report and annexed herewith as Annexure "D".

Disclosure as per Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. No complaint has been received for sexual harassment of women at work place by the Company during the financial year 2014-15.

Transfer to Investor Education and Protection Fund

Pursuant to the provisions of Section 125 (2) (c) of the Companies Act, 2013, the Company is not required to transfer any amount, during the financial year 2014-15 to the Investor Education and Protection Fund.

Acknowledgements

The Board places on record its appreciation for the continued co-operation and support extended to the Company by customers, vendors, bankers, rating agencies, stock exchanges, depositories, auditors, legal advisors, consultants business associates, state government, local bodies and all the employees with whose help, co operation and hard work the Company is able to achieve the results.

The Board deeply acknowledges the trust and confidence placed by the customers of the Company and all its shareholders.

By the Order of the Board

Mahabir Metallex Limited

Place: New Delhi Anju Gupta

Date: 03.09.2015 Managing Director

 
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