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Directors Report of Welcast Steels Ltd.

Mar 31, 2017

The Directors have pleasure in presenting the Forty-Fifth Annual Report together with Audited Financial Statements of the Company for the financial year ended 31 st March 2017.

FINANCIAL HIGHLIGHT :

Rs. In Lacs

PARTICULARS

Standalone

Year ended 31st March 2017

Year ended 31st March 2016

Revenue from Operations (Net of Excise)

20,118.51

11,932.48

Add: Other Operating Income

14.18

30.33

Total Income from Operations (Net)

20,132.69

11,962.81

Add: Other Income

60.79

41.35

Total Income

20,193.48

12,004.16

Profit before Finance Cost, Depreciation & Amortization and Tax Expenses.

325.54

90.65

Less: Finance Cost

2.83

27.97

Less: Depreciation & Amortization

82.01

95.16

Profit Before tax

240.70

(32.48)

(i) Provision for Taxation (Current)

62.90

--

(ii) Taxes for earlier years

--

(2.17)

(iii) Provision for Taxation ( Deferred)

1.29

0.96

Total Tax (i ii iii)

64.19

(1.27)

Profit / (Loss) after Tax

176.51

(31.27)

Other Comprehensive Income

(8.27)

(12.89)

Total Comprehensive income/(Expenses)

168.24

(44.16)

The Company has adopted Indian Accounting Standards (Ind AS) from 1st April, 2016. The figures for the Year ended 31st March, 2016 are Ind AS compliant.

6. DIRECTORS:

Mrs. Khushali Samip Solanki, Director of the Company retiring by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment. A brief resume of Mrs. Khushali Samip Solanki is given as annexure to the notice.

7. NUMBEROF MEETINGS OF THE BOARD AND AUDIT COMMITTEE:

Four meetings of the Board of Directors and Audit Committee were held during the financial year. For further detail of the meetings, please refer to corporate governance report which forms part of this Annual Report.

8. AUDITORS:

M/s Dagliya & Co., Chartered Accountants, the Statutory Auditors of the Company retire at end of the ensuing 45th Annual General Meeting of the Company. As per Section 139 of the Companies Act, 2013 and rules made there under, they will not be eligible to be re-appointed as Statutory Auditors of the Company. The Board of Directors, in its meeting held on 22-05-2017, on the recommendation of Audit Committee has appointed M/s. Ganapathraj & Co., Chartered Accountants as Statutory Auditors of the Company for a period five years subject to the approval of members in 45th Annual General Meeting. If appointed in AGM, they will hold office for five years from the conclusion of ensuing Annual General Meeting till the conclusion of 50th Annual General Meeting.

The Company has received a certificate from the auditors to the effect that the appointment, if made, will be in accordance with the limits specified in Section 139 (1) of the Companies Act, 2013 and they are not disqualified for re-appointment of within the meaning of the Section 141 of the said Act and rules framed there under.

As required under Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

9. AUDITORS’REPORT AND NOTES ON ACCOUNTS:

The Board has duly reviewed the Statutory Auditors’ Report for the Financial Year ended 31st March, 2017. There were no qualifications/observations in the Report.

10. COST AUDITORS:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Audit records maintained by the Company are required to be audited by a Cost Accountant. On the recommendations of the Audit Committee, the Board of Directors of the Company have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as the Cost Auditors of the Company to audit the Cost Accounting Records of the Company for the Financial Year 2016-17. The Cost Auditor has filed the Cost Audit Report for the Financial Year ended 31 st March, 2016 with MCA within the stipulated time.

The Board of Directors of the Company have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as the Cost Auditors of the Company to audit the Cost Accounting Records of the Company for the Financial Year 2017-18. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the members of the Company for their ratification at the ensuing Annual General Meeting. Accordingly a Resolution seeking members’ ratification of the remuneration payable to M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, is included in the Notice convening the 45th Annual General Meeting.

11. INTERNAL CONTROL AND AUDIT:

Company has a proper and adequate system of Internal Control commensurate with its size and the nature of its operations to ensure that all assets are safeguarded and protected against loss from un-authorized use or disposition and all transactions are authorized, recorded and reported correctly. The Board of Directors at the recommendation of the Audit Committee appointed M/s. Rajesh Dudhara & Co, Chartered Accountants, Ahmedabad as Internal Auditors of the Company for financial year 2017-18.

Internal Auditors monitors and evaluates the efficacy and adequacy of internal Control System in the Company. Significant Audit Observation and corrective actions thereon are presented to the Audit Committee of the Board.

12. DEPOSITS:

The Company has not accepted any deposit from the public during the year under review within the meaning of Section 73(a) of the Companies Act, 2013.

13. INSURANCE:

The Company has taken adequate insurance coverage of all its Assets and Inventories against various calamities, viz. fire, floods, earthquake, cyclone, accidents etc.

14. CORPORATE GOVERNANCE:

In line with the Company’s commitment to good Corporate Governance Practices, your Company has complied with all the mandatory provisions of Corporate Governance as prescribed in Regulation 17 of SEBI Listing Regulations.

A separate report on Corporate Governance and Practicing Company Secretary''s Certificate thereon is included as part of the Annual Report.

15. MANAGEMENT DISCUSSION AND ANALYSIS (MDA):

MDA covering details of operations, Opportunities and Threats etc. for the year under review is given in a separate section included in this report and forms a part of this Annual Report.

16. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The additional information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo, stipulated under Section 134 (3)(m)of the Companies Act, 2013 read with the rule 8 to the Companies (Accounts) Rules, 2014 are provided as an Annexure - A to this report.

17. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (3) (c) of the Companies Act, 2013 your Directors hereby confirm that:

(i) In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

(ii) The Directors have selected such accounting policies and applied them consistently and made judgment 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 of the Company for that year.

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the Annual Accounts on a going concern basis.

(v) The Directors have laid down Internal Financial controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively and

(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

18. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company has neither given any loans, guarantees nor made any investments under section 186 of the Companies Act, 2013 during the financial year 2016 -17.

19. TRANSACTIONS WITH RELATED PARTIES:

All transactions entered with the related parties for the year under review were on arm''s length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Your directors draw attention of the members to para 6 of note No.28- significant accounting policies and notes to the financial statement which sets out material contracts / arrangements/ transactions with related parties on arms’ length basis. There are no materially significant Related Party Transactions made by the Company with the Promoters, Directors and Key Managerial Personnel, which may have a potential conflict with the interest of the Company at large.

The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions. All related party transactions including those which are repetitive in nature are reviewed by the Audit Committee on quarterly basis. The Board approved all the related party transactions that are recommended by the Audit Committee. The policy on Related Party Transactions as approved by the Board of Directors is available on the web site of the Company. (Web link-www.welcaststeels.com).

During the year 2017-18, the transactions of sale of material with the Holding Company i.e. AIA Engineering Limited may exceed threshold limit of Ten percent (10%) of the annual consolidated turnover of the company as per the audited financial statements for the year ended 31st March 2017. Pursuant to Regulation 23 of SEBI Listing Regulations, Company proposes to take the approval of members of the Company by way of Ordinary Resolution to be passed at the ensuing Annual General Meeting.

The details of the material Related Party transactions entered by the Company during the year under review are disclosed in Form AOC- 2 as Annexure - B to this Report.

20. RISK MANAGEMENT:

The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board’s Report.

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. Corporate Risk Evaluation and Management is an ongoing process within the Organization. The Company has a well-defined Risk Management framework to identify, monitor and minimizing/mitigating risks. The Risk Management framework has been developed and approved by the senior management in accordance with the business strategy. The key elements of the framework include:

- Risk Structure;

- Risk Portfolio;

- Risk Measuring & Monitoring and

- Risk Optimizing.

The implementation of the framework is supported through criteria for Risk assessment, Risk forms & MIS. The objectives and scope of Risk Management Committee broadly comprises of:

- Oversight of risk management performed by the executive management:

- Reviewing the Corporate Risk Management Policy and framework within the local legal requirements and SEBI Listing Regulations;

- Reviewing risks and evaluate treatment including initiating mitigation actions and ownerships as per a predefined cycle;

Defining framework for identification, assessment, monitoring, mitigation and reporting of risks.

21. SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under the Company has appointed M/s Tushar Vora & Associates, a firm of Company Secretaries in Practice (CP No 1745) to conduct the Secretarial Audit of the Company’s secretarial and related records for the year ended 31 st March 2017. The Secretarial Audit Report of the Company is annexed herewith as Annexure - C and forms an integral part of this report.

22. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The vigil mechanism of the Company which also incorporates a whistle blower policy in terms of the Regulations 22 of SEBI Listing Regulations may be accessed on the Company’s website. The company has nominated the Chief Financial Officer as the Chief Vigilance officer. Protected disclosures can be made by a whistle blower through e-mail or by anonymous letter addressed to the Chief Financial Officer.

23. NOMINATION AND REMUNERATION COMMITTEE:

The Board of Directors has framed a policy which lays down, a frame work in relation to remuneration of directors, Key Managerial Personnel and Senior Management of the Company. The Policy also lays down criteria for selection and appointment of Board members. The details of this policy may be accessed on the Company’s web site www.welcaststeels.com.

24. BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI Listing Regulations , a structured questionnaire was prepared after taking into consideration of the various aspects of the Board’s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

25. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTOR:

The Independent Directors have been updated with their roles, rights and responsibilities in the Company by specifying them in their appointment letter along with necessary documents, reports and internal policies to enable them to familiarize with the Company''s Procedures and practices. The Company has through presentations at regular intervals, familiarized and updated the Independent Directors with the strategy, operations and functions of the Company and Engineering Industry as a Whole. Site visits to plant location is organized for the Directors to enable them to understand the operations of the Company. The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at http://www.weicaststeeis.com/ new site /Corporate Governance. htmi.

26. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance for sexual harassment at work place and has adopted a policy on prevention, prohibition and redressal of sexual harassment at work place in line with the provisions of sexual harassment of Women at Work place (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the year under review, the Company has not received any complaint in this regard.

27. EXTRACT OF ANNUAL RETURNS:

The details forming part of the Annual Return in Form MGT-9 are annexed herewith as Annexure - D to this Report.

28. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment of Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company will be provided on request. In terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

Disclosures in respect of the Remuneration of the Managerial Personnel are given in Annexure “E”.

29. ENVIRONMENT, HEALTH AND SAFETY:

The Company is committed to health and safety of its employees, contractors and visitors. The Company is compliant with all Environment, Health and Safety (EHS) Regulations stipulated under the Water (Prevention and Control of Pollution), the Air (Prevention and Control of Pollution) Act, the Environment Protection Act and the Factories Act and Rules made there under. Our mandate is to go beyond compliance and we have made a considerable improvement.

30. ACKNOWLEDGMENTS:

Your Directors sincerely appreciate the high degree of professionalism, commitment and dedication displayed by employees. The Directors also wish to place on record their gratitude to the members for their continued support and confidence. Your Directors also have pleasure in placing on record their sincere appreciation for the continued co-operation and support extended to the Company by the Bankers, Canara Bank, and State Bank of India and various other Government authorities.

Place: Bengaluru For and on behalf of the Board of Directors

Date : 22-05-2017 Bhadresh K. Shah Debi Prasad Dhanuka

Director Director

(DIN.00058177) (DIN.000168198)


Mar 31, 2016

The Directors have pleasure in presenting the Forty-Fourth Annual Report together with Audited Financial Statements of the Company for the financial year ended 31 st March 2016.

FINANCIAL RESULTS:

_In Lacs

PARTICULARS

2015-16

2014-15

Gross Income

12,978.48

22,150.14

Less: Excise duty

1,015.67

1,814.22

Net Income

11,962.81

20,335.92

Profit before Interest and Depreciation.

76.59

240.45

Less: Interest

27.97

53.67

Profit before Depreciation

48.62

186.78

Depreciation for the year.

(Net of withdrawal from revaluation reserve)

88.49

177.35

Profit/(Loss) after Interest and Depreciation

(39.87)

9.43

Exceptional Items (Income)

(1.17)

18.73

Prior period adjustments (Expenses)

2.45

0

Prior Year’s Tax and Deferred Tax (income)

(4.23)

--

Provision for tax:

--

30.66

Profit/(Loss) for the year

(36.92)

(2.50)

1. PRODUCTION

During the year under review the Company produced 20,906 tons of Grinding Media as compared to 32,411 tons in the previous year. The production had to be curtailed during the year as the demand of Grinding Media had come down in the International Market due to recession.

2. SALES & PROSPECTS:

The Company sold 20,967 tons of Grinding Media during the year under review as against 32,589 tons in the previous year. There was a general recession in the Mining Industry which resulted in lower demand. However, the demand has picked up in the current year and the sales are expected to be fairly good.

3. DIVIDEND & RESERVES:

In view of the loss incurred by the Company during the year under report, your directors have not recommended any dividend for Financial Year 2015-16.

4. FINANCE:

The liquidity position of the Company remained satisfactory. Canara Bank and State Bank of India extended their full co-operation to the Company.

5. EMPLOYEES RELATIONS:

As reported in the last Annual General Meeting, the management and employee relations were strained due to illegal unrest created by the labour in the month of November 2014. The management is happy to report that with the conciliatory effort of the management and condescending attitude adopted by a section of employees considerable improvement in the relationship has been established. An agreement has also been signed with the new union settling the issue of increase in wages and other issues. The management is hopeful that rest of the employees will follow and avail benefits which have already been given to a section of workers.

The disciplinary action taken against the workmen who indulged in mis-conduct and who precipitated the issue is pending in the honorable labour court.

6. DIRECTORS:

Mr. Bhadresh K. Shah, Director of the Company retiring by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. A brief resume of Mr. Bhadresh K. Shah is given as annexure to the notice.

7. NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE:

Four meetings of the Board of Directors and Audit Committee were held during the financial year. For further detail of the meetings, please refer to corporate governance report which forms part of this Annual Report.

8. AUDITORS:

The Statutory Auditors M/s. Dagliya & Co, Chartered Accountants (FRN 000671S) Statutory Auditors of the Company will hold office till the conclusion of the forty-fifth Annual General Meeting subject to ratification for their appointment at every Annual General Meeting.

The Company has received a certificate from the auditors to the effect that the appointment, if made, will be in accordance with the limits specified in Section 139 (1) of the Companies Act, 2013 and they are not disqualified for re-appointment of within the meaning of the Section 141 of the said Act and rules framed there under.

As required under SEBI Listing Regulations, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

9. AUDITORS’REPORT AND NOTES ON ACCOUNTS:

The Board has duly reviewed the Statutory Auditors’ Report on the Accounts. The observations and comments, appearing in the Auditors'' Report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors under Section 134(2) of the Companies Act, 2013.

10. COST AUDITORS:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Audit records maintained by the Company are required to be audited by a Cost Accountant. On the recommendations of the Audit Committee, the Board of Directors of the Company have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmadabad as the Cost Auditors of the Company to audit the Cost Accounting Records of the Company for the Financial Year 2015-16.

The Cost Auditor has filed the Cost Audit Report for the Financial Year ended 31st March, 2015 with MCA within the stipulated time.

The Board of Directors of the Company have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmadabad as the Cost Auditors of the Company to audit the Cost Accounting Records of the Company for the Financial Year 2016-17. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the members of the Company for their ratification at the ensuing Annual General Meeting. Accordingly a Resolution seeking members’ ratification of the remuneration payable to M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmadabad, is included in the Notice convening the 44th Annual General Meeting.

11. INTERNAL CONTROL AND AUDIT:

Company has a proper and adequate system of Internal Control commensurate with its size and the nature of its operations to ensure that all assets are safeguarded and protected against loss from un-authorized use or disposition and all transactions are authorized, recorded and reported correctly.

The Board of Directors at the recommendation of the Audit Committee appointed M/s. Rajesh Dudhara & Co, Chartered Accountants, Ahmadabad as Internal Auditors of the Company for financial year 2016-17.

Internal Auditors monitors and evaluates the efficacy and adequacy of internal Control System in the Company. Significant Audit Observation and corrective actions thereon are presented to the Audit Committee of the Board.

12. DEPOSITS:

The Company has not accepted any deposit from the public during the year under review within the meaning of Section 73(a) of the Companies Act, 2013.

13. INSURANCE:

The Company has taken adequate insurance coverage of all its Assets and Inventories against various calamities, viz. fire, floods, earthquake, cyclone, accidents etc.

14. CORPORATE GOVERNANCE:

In line with the Company’s commitment to good Corporate Governance Practices, your Company has complied with all the mandatory provisions of Corporate Governance as prescribed in Regulation 17 to 27 of SEBI Listing Regulations.

A separate report on Corporate Governance and Practicing Company Secretary''s Certificate thereon is included as part of the Annual Report.

15. MANAGEMENT DISCUSSION AND ANALYSIS:

MDA covering details of operations, Opportunities and Threats etc. for the year under review is given in a separate section included in this report and forms a part of this Annual Report.

16. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The additional information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo, stipulated under Section 134 (3)(m) of the Companies Act, 2013 read with the rule 8 to the Companies (Accounts) Rules, 2014 are provided as an Annexure - Ato this report.

17. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (3) (c) of the Companies Act, 2013 your Directors hereby confirm that:

(i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

(ii) The Directors have selected such accounting policies and applied them consistently and made judgment 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 loss of the Company for that year.

(iii) The Directors have taken proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the Annual Accounts on a going concern basis.

(v) The Directors have laid down Internal Financial controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively and

(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

18. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company has neither given any loans, guarantees nor made any investments under section 186 of the Companies Act, 2013 during the financial year 2015 -16.

19. TRANSACTIONS WITH RELATED PARTIES:

All transactions entered with the related parties for the year under review were on arm''s length basis and in the ordinary course of business and that the provisions of section 188 of the Companies Act, 2013 are not attracted. Your directors draw attention of the members to note No.6 to the financial statement which sets out material contracts / arrangements/ transactions with related parties on arms'' length basis. There are no materially significant Related Party Transactions made by the Company with the Promoters, Directors and Key Managerial Personnel, which may have a potential conflict with the interest of the Company at large.

The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions. All related party transactions including those which are repetitive in nature are reviewed by the Audit Committee on quarterly basis. The Board approved all the related party transactions that are recommended by the Audit Committee. The policy on Related Party Transactions as approved by the Board of Directors is available on the web site of the Company. (Web link-www.welcaststeels.com).

During the year under review, the transactions of sale of material with the Holding Company i.e. AIA Engineering Limited has exceeded ten percent (10%) of the annual consolidated turnover of the company as per the audited financial statements for the year ended 31st March 2016. Pursuant to Regulation 23 of SEBI Listing Regulations, Company proposes to take the approval of members of the Company by way of an Ordinary Resolution to be passed at the ensuing Annual General Meeting.

The details of the material Related Party transactions entered by the Company during the year under review are disclosed in Form AOC -2 as Annexure - B to this Report.

20. RISK MANAGEMENT:

During the year, the Board of Directors has re-constituted a Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board''s Report.

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. Corporate Risk Evaluation and Management is an ongoing process within the Organization. The Company has a well-defined Risk Management framework to identify, monitor and minimizing/mitigating risks.

The Risk Management framework has been developed and approved by the senior management in accordance with the business strategy.

The key elements of the framework include:

- Risk Structure;

- Risk Portfolio;

- Risk Measuring & Monitoring and

- Risk Optimizing.

The implementation of the framework is supported through criteria for Risk assessment, Risk forms & M IS.

The objectives and scope of Risk Management Committee broadly comprises of:

- Oversight of risk management performed by the executive management:

- Reviewing the Corporate Risk Management Policy and framework within the local legal requirements and Listing Regulations;

- Reviewing risks and evaluate treatment including initiating mitigation actions and ownerships as per a predefined cycle;

Defining framework for identification, assessment, monitoring, mitigation and reporting of risks.

21. SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under the Company has appointed M/s Tushar Vora & Associates, a firm of Company Secretaries in Practice (CP No 1745) to conduct the Secretarial Audit of the Company’s secretarial and related records for the year ended 31st March 2016. The Secretarial Audit Report of the Company is annexed herewith as Annexure - C and forms an integral part of this report.

22. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The vigil mechanism of the Company which also incorporates a whistle blower policy in terms of the Regulations 22 of SEBI Listing Regulations, may be accessed on the Company’s website. The company has nominated the Chief Financial Officer as the Chief Vigilance officer. Protected disclosures can be made by a whistle blower through e-mail or by anonymous letter addressed to the Chief Financial Officer.

23. NOMINATION AND REMUNERATION COMMITTEE:

The Board of Directors has framed a policy which lays down, a frame work in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The Policy also lays down criteria for selection and appointment of Board members. The details of this policy is stated in the Corporate Governance Report.

24. BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI Listing Regulations, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board’s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

25. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTOR:

The Independent Directors have been updated with their roles, rights and responsibilities in the Company by specifying in their appointment letter along with necessary documents, reports and internal policies to enable them to familiarize with the Company’s Procedures and practices. The Company has through presentations at regular intervals, familiarized and updated the Independent Directors with the strategy, operations and functions of the Company and Engineering Industry as a Whole. Site visits to plant location is organized for the Directors to enable them to understand the operations of the Company. The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at http://www.welcaststeels.com/newsite/CorporateGovernance.html.

26. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance for sexual harassment at work place and has adopted a policy on prevention, prohibition and redressal of sexual harassment at work place in line with the provisions of sexual harassment of Women at Work place (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the year under review, the Company has not received any complaint in this regard.

27. EXTRACTOFANNUALRETURNS:

The details forming part of the Annual Return in Form MGT-9 are annexed herewith as Annexure - D to this Report.

28. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment of Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company will be provided on request. In terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

Disclosures in respect of the Remuneration of the Managerial Personnel are given in Annexure “E”.

29. ENVIRONMENT, HEALTH AND SAFETY:

The Company is committed to health and safety of its employees, contractors and visitors. The Company is compliant with all Environment, Health and Safety (EHS) Regulations stipulated under the Water (Prevention and Control of Pollution), the Air (Prevention and Control of Pollution) Act, the Environment Protection Act and the Factories Act and Rules made there under. Our mandate is to go beyond compliance and we have made a considerable improvement.

30. ACKNOWLEDGMENT:

Your Directors sincerely appreciate the high degree of professionalism, commitment and dedication displayed by employees. The Directors also wish to place on record their gratitude to the members for their continued support and confidence. Your Directors also have pleasure in placing on record their sincere appreciation for the continued co-operation and support extended to the Company by the Bankers, Canara Bank, and State Bank of India and various other Government authorities.

Place: Bengaluru For and on behalf of the Board of Directors

Date : 20-05-2016 VINOD NARAIN

Chairman (DIN.00058280)


Mar 31, 2015

The Directors have pleasure in presenting the Forty-Third Annual Report together with Audited Financial Statements of the Company for the Financial Year ended 31st March 2015.

FINANCIAL RESULTS

PARTICULARS 2014-15 2013-14

Gross Income 22,150.14 25,876.49

Less: Excise duty 1,814.22 2,085.65

Net Income 20,335.92 23,790.84

Profit before Interest and Depreciation. 240.45 651.28

Less: Interest 53.67 62.38

Profit before Depreciation 186.78 588.90 Depreciation for the year.

(Net of withdrawal from revaluation reserve) 177.35 146.66

Profit after Interest and Depreciation 9.43 442.24

Exceptional Items- Income 18.73 0

Prior period adjustments - Expenses 0 3.42

Provision for tax: 30.66 140.84

Profit for the year (2.50) 297.98

Less:-Depreciation on Revaluation Reserve 1.42 0

Total (1.08) 297.98

Balance profit for earlier years 2598.99 2388.34

Profit available for appropriation 2597.91 2686.32

Transfer to General Reserve 0 50.00

Dividend on equity shares 12.76 31.91

Tax on proposed dividend 2.60 5.42

Balance to be carried forward a sum of 2582.55 2598.99

Earnings per equity share of Rs.10/- each (0.39) 46.70

1. PRODUCTION

During the year under review the Company produced 32,411 tons of Grinding Media as compared to 38,340 tons in the previous year. The production is low due to labour unrest and strike by the workmen during the year under review.

2. SALES & PROSPECTS

The Company sold 32,589 tons of Grinding Media during the year under review as against 38,143 tons in the previous year. The sales were affected due to lower production during the year under review. Since the labour unrest has continued in the current year, the sales are likely to be adversely affected in this year also. There are indications of recession in the Ore Mining Industry, which is the major consumer of our products, and this could result in further decline in sales at our end.

3. DIVIDEND & RESERVES.

Keeping the interest of stakeholders in view your Directors are pleased to recommend a dividend of 20 % of (Rs. 2/- per equity share), even though there is no distributable profit in the year under review. The total cash outflow on account of dividend on equity shares for the financial year 2014-15 would be Rs.15.35 lacs including dividend distribution tax.

4. FINANCE

The liquidity position of the Company remained satisfactory. Canara Bank and State Bank of India extended their full co-operation to the Company.

5. EMPLOYEES RELATIONS

The workmen had resorted to illegal strike in the month of November / December 2014 on the issue of disciplinary action taken Against a workman. Since then the relationship with the employees union has remained strained as the union has adopted a confrontal attitude under the guidance of anew union leader. The Charter of demands put up by the union in the month of January 2015 after the expiry of the previous Agreement on 31st December 2014isyettobe negotiated. However the management is taking all steps to bring normalcy working.

6. DIRECTORS:

Mr. Vinod Narain, Director of the Company retiring by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. A brief resume of Mr. Vinod Narain is given as annexure to the notice Further, Section 149 of the Companies Act, 2013 read with rules made thereunder and Clause 49 of the Listing Agreement as amended from time to time, lays down that every listed company shall have at least one woman director.

The Board of Directors appointed Mrs. KomalS.Majamudar (DIN.06956344)as An Additional Director (Woman) on 28th March 2015 to hold the Office of the Director upto the ensuing Annual General Meeting of the members of the Company.

However, due to personal reasons, Mrs.Komal S.Majmudar (DIN.06956344) resigned as an Additional Director of the Company with effect from 1st April 2015.

The Board of Directors by its circular resolution dated 15-04-2015 appointed Mrs. Khushali Samip Solanki as an Additional Women Director to hold the office of the Director upto ensuing Annual General Meeting of the Company. Mrs. Khushali Samip Solanki is daughter of Mr. Bhadresh K. Shah, Promoter of AIA Engineering Limited, a Holding Company of Welcast Steels Limited. A brief resume of Mrs. Khushali Samip Solanki is also given as annexure to the Notice. The company has received a notice in writing from a member along with the requisite deposit as required pursuant to the provisions of section 160 of the Companies Act 2013 (the act) proposing her candidature for the office of the Director. The Board also recommended the appointment of Mrs. Khushali Samip Solanki as non-executive & non independent Director of the Company liable for retirement by rotation.

As required under Clause 49 of the Listing Agreement, the information on the particulars of the Directors proposed for appointment has been given in the notice of the Annual General Meeting.

7. NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE:

Four meetings of the Board of Directors and Audit Committee were held during the financial year. For further detail of the meetings, please refer to corporate governance report which forms part of this Annual Report.

8. AUDITORS

The Auditors M/s. Dagliya & Co, Chartered Accountants (FRN 000671S) Statutory Auditors of the Company will hold office till the conclusion of the forty-fifth Annual General Meeting subject to ratification for their appointment at every Annual General Meeting.

The Company has received a certificate from the auditor to the effect that the appointment, if made, will be in accordance within the limits specified in Section 139 (1) of the Companies Act, 2013. and they are not disqualified for re-appointment within the meaning of the Section 141 of the said Act and rules framed thereunder.

As required under Clause 49 of the Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

9. AUDITORS'REPORT AND NOTES ON ACCOUNTS:

The Board has duly reviewed the Statutory Auditors' Report on the Accounts. The observations and comments, appearing in The Auditors' Report are self-explanatory and do not call for any further explanation / clarification by the Board of Directors under Section 134(2)of the Companies Act, 2013.

10. COST AUDITORS:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Audit records maintained by the Company are required to be audited by a Cost Accountant. On the recommendations of the Audit Committee, the Board of Directors of the Company have appointed M/s. Kiran J.Mehta & Co., Cost Accountants, Ahmedabad as the Cost Auditors of the Company to audit the Cost Accounting Records of the Company for the Financial Year 2014-15.

The Cost Auditor has filed the Cost Audit Report for the Financial Year ended 31st March, 2014 with MCA within the stipulated time.

The Board of Directors of the Company have appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as the Cost Auditors of the Company to audit the Cost Accounting Records of the Company for the Financial Year 2015-16.As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the members of the Company for their ratification at the ensuing Annual General Meeting. Accordingly a Resolution seeking members' ratification of the remuneration payable to M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, is included in the Notice convening the 43rd Annual General Meeting.

11. INTERNAL CONTROL AND AUDIT:

Company has a proper and adequate system of Internal Control commensurate with its size and the nature of its operations to ensure that all assets are safeguarded and protected against loss from un-authorized use or disposition and all transactions are authorized, recorded and reported correctly.

The Board of Directors at the recommendation of the Audit Committee appointed M/s. Rajesh Dudhara & Co, Chartered Accountants, Ahmedabadas Internal Auditors of the Company for Financial Year 2015- 2016. Internal Auditors monitors and evaluates the efficacy and adequacy of Internal Control System in the Company. Significant Audit Observation and corrective actions thereon are Presented to the Audit Committee of the Board.

12. DEPOSITS

The Company has not accepted any deposit from the public during the year under review within the meaning of Section73 (a)of the Companies Act, 2013.

13. INSURANCE:

The Company has taken adequate insurance coverage of all its Assets and Inventories against various calamities, viz. fire, floods, earthquake, cyclone, accidents etc.

14. CORPORATE GOVERNANCE:

In line with the Company's commitment to good Corporate Governance Practices, your Company has complied with all the mandatory provisions of Corporate Governance as prescribed in Clause 49 of the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance and Practicing Company Secretary's Report thereon is included as part of the Annual Report.

15. MANAGEMENT DISCUSSION AND ANALYSIS

MDA covering details of operations, Opportunities and Threats etc. for the year under review is given as a separate section included in this report and form a part of this Annual Report.

16. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The additional information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo, stipulated under Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8 to the Companies (Accounts) Rules, 2014 are provided as an Annexure-'A' to this report.

17. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (3) (c)of the Companies Act, 2013 your Directors hereby confirm that:

(i) In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

(ii) The Directors have selected such accounting policies and applied them consistently and made judgement 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 loss of the Company for that period.

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The Directors have prepared the Annual Accounts on a going concern basis.

(v) The Directors have laid down Internal Financial controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively and

vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

18. PARTICULARS OF EMPLOYEES

No employee of the Company is drawing salary in excess of the limits specified under section 197 (12) of the Companies Act, 2013 read with the Companies Rule 5 (2) (i) (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

19. PARTICULARS OF LOANS,GUARANTEES AND INVESTMENTS:

The Company has neither given any loans, guarantees nor made any investments under section 186 of the Companies Act, 2013 during the financial year 2014-15.

20. TRANSACTIONS WITH RELATED PARTIES:

All transactions entered with the related parties for the year under review were on Arm's Length basis and in the ordinary course of business and that the provisions of section 188 of the Companies Act, 2013 are not attracted.

Your directors draw attention of the members to note No.7 to the financial statement which sets out material contracts / arrangements/ transactions with related parties on arms' length basis. There are no materially significant Related Party Transactions made by the Company with the Promoters, Directors and Key Managerial Persons, which may have a potential conflict with the interest of the Company at large.

The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions. All related party transactions including those which are repetitive in nature are reviewed by the Audit Committee on quarterly basis. The Board approved all the related party transactions that are recommended by the Audit Committee. The policy on Related Party Transactions as approved by the Board of Directors is available on the web site of the Company.

(Web link- www.welcaststeels.com).

During the year under review the transactions of sale and purchase of material with the Holding Company AIA Engineering Limited exceeded10% (ten percent) of the annual consolidated turnover of the company as per its last audited financial statements. Pursuant to clause49 of the Listing Agreement, Company proposes to take the approval of members of the Company by way of Special Resolution to be passed at the ensuing Annual General Meeting.

The details of the material Related Party transactions entered by the Company are disclosed in Form AOC - 2 are annexed to this Report.

21. RISK MANAGEMENT:

During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in

(a) Overseeing and approving the Company's enterprise wide risk management frame work;

(b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, liquidity, security, property, information technology, legal regulatory and other risks have been identified and assessed and there is an adequate risk management infra-structure in place capable of addressing those risks. A group risk management policy was reviewed and approved by the committee. The Company manages, monitors and reports on the principle risk and uncertainties that can impact its ability to achieve its strategic objectives. The company has introduced several improvements to internal controls with efficient management and optimal risk mitigation responses and assurance activities.

22. SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder the Company has appointed M/s Tushar Vora & Associates a Firm of Company Secretaries in Practice (CP No 1745) to conduct the Secretarial Audit of the Company's Secretarial and related records for the year ended 31st March, 2015. The Secretarial Audit Report of the Company is annexed herewith as Annexure - 'C' and forms An integral part of this report. As regards certain observations made by the secretarial auditors in their report please note that the Company is in the process of complying the same.

23. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The vigil mechanism of the Company which also incorporates a whistle blower policy in terms of the Listing Agreement may be accessed on the Company's website. The company has nominated the Chief Financial Officer as the Chief Vigilance Officer. Protected disclosures can be made by a whistle blower through e mail or by anonymous letter addressed to the Chief Financial Officer.

24. REMUNERATION AND NOMINATION COMMITTEE:

The Board of Directors has framed a policy which lays down a frame work in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The Policy also lays down criteria for selection and appointment of Board members. The details of this policy may be accessed on the Company's web site.

25. BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a structured questionnaire was prepared after taking into consideration various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non – Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

26. DIRECTORS & KEY MANAGERIAL PERSONNEL:

During the year under review the Company has appointed following persons as Director and Key Managerial Personnel.

a. Mrs. Komal Shaival Majmudaras Director

b. Mr. S.N Jethaliya as Company Secretary.

27. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL)ACT,2013:

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention and prohibition and redressal of sexual harassment at work place in line with the provisions of sexual harassment of Women at Work place (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. The Company has not received any complaint in this regard.

28. EXTRACT OF ANNUAL RETURNS:

The details forming part of the Annual Return in Form MGT-9 is Annexed here with as Annexure to this Report.

29. ENVIRONMENT,HEALTH AND SAFETY:

The Company is committed to health hands safety of its employees, contractors and visitors. The Company is compliant with all Environment, Health and Safety (EHS) Regulations stipulated under the Water(Prevention and Control of Pollution),The Air (Prevention and Control of Pollution) Act, the Environment Protection Act and the Factories Act and Rules made thereunder. Our mandate is to go beyond compliance and we have made a considerable improvement.

30. ACKNOWLEDGMENTS:

Your Directors sincerely appreciate the high degree of professionalism, commitment and dedication displayed by employees. The Directors also wish to place on record their gratitude to the members For their continued support and confidence. Your Directors also have pleasure to place on record their sincere appreciation for the continued co-operation and support extended to the Company by the Bankers Canara Bank and State Bank of India and various other Government authorities.

Place: Bengaluru For and on behalf of the Board of Directors

Date : 02-05-2015 VINOD NARAIN

Chairman (DIN.00082580)


Mar 31, 2013

The Directors present the Forty First Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2013.

FINANCIAL RESULTS

Rs.In Lacs

PARTICULARS 2012-13 2011-12

Gross Income 26525.82 23030.23

Less: Excise duty 2370.47 1300.40

Net Income 24155.35 21729.83

Profit before Interest and Depreciation. 685.72 686.54

Less: Interest 76.67 62.86

Profit before Depreciation 609.05 623.68

Depreciation for the year. (Net of withdrawal from revaluation reserve) 180.39 233.00

Profit after Interest and Depreciation 428.66 390.68

Provision for tax 144.76 124.50

Profit for the year 283.90 266.18

Prior period adjustments 0.99 3.66

Total 282.91 262.52

Balance profit for earlier years 2192.53 1989.67

Profit available for appropriation 2475.44 2252.19

Transfer to General Reserve 50.00 30.00

Dividend on equity shares 31.91 25.52

Tax on proposed dividend 5.18 4.14

Balance to be carried forward a sum of 2388.35 2192.53

Earnings per equity share of Rs..10/- each 44.33 41.00

1. PRODUCTION

During the year under review the Company produced 38,414 tons of Grinding Media as compared to 37,979 tons in the previous year.

2. SALES & PROSPECTS

The Company sold 39,218 tons of Grinding Media during the year under review as against 38,120 tons in the previous year. The sales revenue was higher at Rs.24,155 lacs as against Rs.21,729 lacs in the previous year, recording a jump of about 11%. The sales prospects for the current year are also encouraging.

3. DIVIDEND

Your Directors are pleased to recommend a dividend of 50% (Rs.5.00 per share), as compared to 40% (Rs.4.00 per share) in the previous year.

4. FINANCE

The liquidity position of the Company remained satisfactory. Canara Bank and State Bank of India extended their full co- operation to the Company.

5. SCIENTIFIC RESEARCH

The Global Mining Industry is facing tough competition and is on intensive drive to cut costs. This has thrown a big challenge for the company to develop and supply grinding materials with lowest possible wear rates for grinding different types of ores which could benefit the customers in reducing costs. The Research & Development section continues to work in this direction and has been successful in meeting the customer needs.

6. EMPLOYEE RELATIONS

The relationship with the employees remained cordial.

7. DIRECTORS :

Mr.Vinod Narain, Mr D.P. Dhanuka and Mr Pradip R.Shah retire by rotation and being eligible offer themselves for reappointment at the ensuing Annual General Meeting.

Mr. R. P. Agarwal expired on 6th April 2013. The Board in its meeting held on 4th May 2013 condoled the untimely demise and also conveyed heart-felt condolences to the bereaved family on behalf of the Company. The Board expresses its gratitude for the invaluable contribution by Mr. R. P. Agarwal towards the progress of the company during his tenure as Director. The Board requests the members to observe two minutes silence as a mark of respect to the departed soul.

8. AUDITORS :

The Statutory Auditors, M/S Dagliya & Co. hold office until the conclusion of this meeting and are eligible for reappointment. The company has received letter from M/S Dagliya & Co., to the effect that their reappointment , if made, would be within the limits specified under section 224 (1B) of the Companies Act 1956.

9. COST AUDITORS :

The Company has appointed M/S Kiran J. Mehta & Co Cost Accountants for conducting Cost Audit for the financial year 2012-13.

10. DEPOSITS:

The Company has not accepted any deposits from the public during the year under review within the meaning of section 58A of the Companies Act 1956

11. CORPORATE GOVERNANCE:

Pursuant to clause 49 of the listing agreement with stock exchanges, a separate section( Annexure III to the Directors'' report ) titled "Corporate Governance" has been included in this Annual Report along with a certificate from the practicing company secretary and a certificate from the Chief Executive officer and Chief Finance officer.

12. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on "Management Discussion and Analysis " (MDA) pursuant to clause 49 of the listing agreement is annexed as Annexure IV to the Directors report and forms integral part of this report.

13. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement of section 217 (2AA) of the Companies Act 1956, with respect to Directors'' responsibility statement, the Directors hereby confirm that:

i) in the preparation of the annual accounts for the financial year 2012-13, the applicable accounting standards have been followed and there are no material departure;

ii) they have 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 the profit of the Company for the financial year:

iii) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis.

14. COMPLIANCE CERTIFICATE

Pursuant to section 383A of the Companies Act 1956 and Companies (Compliance Certificate) Rules 2001, compliance certificate from Mr. Manjunatha Reddy, practicing Company Secretary for the financial year 2012-13 is attached as Annexure II to this Directors'' report.

15. PARTICULARS OF EMPLOYEES

No employee of the Company is drawing salary in excess of the limits specified under section 217(2A) of the Companies Act 1956 read with the Companies (Particulars of Employees) Rules 1975.

ACKNOWLEDGMENTS

Your Directors sincerely appreciate the high degree of professionalism, commitment and dedication displayed by employees at all levels. The Directors also wish to place on record their gratitude to the members for their continued support and confidence. Your Directors also have pleasure to place on record their sincere appreciation for the continued co-operation and support extended to the Company by the Bankers Canara Bank and State Bank of India and various other Government authorities.

Place : Bangalore For and on behalf of the Board of Directors

Date : 04-05-2013 VINOD NARAIN

Chairman


Mar 31, 2012

The Directors present the Fortieth Annual Report together with Audited Accounts of the Company for the year ended 31st March 2012

FINANCIAL RESULTS

Rs. In Lacs

PARTICULARS 2011-12 2010-11 Gross Income 23030.23 21751.30

Less: Excise duty 1300.40 1694.61

Net Income 21729.83 20056.69

Profit before Finance Cost and Depreciation. 686.54 720.93

Less: Finance Cost 62.86 62.83

Profit before Depreciation 623.68 658.10

Depreciation for the year (Net of withdrawal from revaluation reserve) 233.00 290.43

Profit after Finance Cost and Depreciation 390.68 367.67

Provision for tax 124.50 100.91

Profit for the year 266.18 266.76

Prior period adjustments 3.66 0.34

Total 262.52 266.42

Balance profit for earlier years 1989.67 1763.09

Profit available for appropriation 2252.19 2029.51

Transfer to General Reserve 30.00 25.00

Dividend on equity shares 25.52 12.76

Tax on proposed dividend 4.14 2.08

Balance to be carried forward a sum of 2192.53 1989.67

Earnings per equity share of Rs.10/- each 41 42

1. PRODUCTION

During the year under review, the Company produced 37,979 tons of Grinding Media as compared to 38,241 tons in the previous year.

2. SALES & PROSPECTS:

The Company sold 38,120 tons of Grinding Media during the year under review as against 38,379 tons in the previous year. However, the sales revenue was higher at the Rs.21,729 lacs as against Rs.20,056 lacs in the previous year. The order book for the current year is also comfortable and the inflow of further orders is quite encouraging.

3. DIVIDEND:

Keeping in view the long standing expectations of Shareholders and the circumstances permitting, your Directors are pleased to recommend a dividend of 40% (Rs.4.0 per share), as compared to 20% ( Rs.2.0 per share) in the previous year.

4. FINANCE

The liquidity position of the Company remained satisfactory. Canara Bank and State Bank of India extended their full co-operation to the Company.

5. SCIENTIFIC RESEARCH

The Research & Development section of the company remained busy in developing suitable grades of Grinding Media for Mining application. Inspite of tough competition, the company has improved its market share globally by introducing special grades of grinding media for specific applications.

6. EMPLOYEE RELATIONS

The relationship with the employees remained cordial.

The previous Wage Agreement has ended on 31st December, 2011 and the new Agreement is under negotiation. An amicable settlement is likely to be reached soon.

7. DIRECTORS:

Messrs Rajendra S. Shah, Sanjay Shailesh Majmudar and Bhadresh K. Shah retire by rotation and are eligible for re-appointment.

8. AUDITORS:

Messrs Dagliya & Company, Chartered Accountants, retire at this Annual General Meeting and are eligible for re-appointment.

9. COST AUDITORS:

In compliance with the Ministry of Corporate Affairs' order No. 52/26/CAB-2010 dated 3rd May 2011, the Board of Directors of the Company on the approval of the Central Government, has appointed M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as the Cost Auditors of the Company to audit the Cost Accounting Records of the Company for the Financial Year 2011 -2012.

The first Cost Audit Report for the Financial Year 2011-12 will be submitted to Central Government on or before 27th September 2012.

10. DEPOSITS:

The Company has not accepted any deposit from the public during the year under review, within the meaning of Section 58Aof the Companies Act, 1956.

11. INTERNAL CONTROL AND AUDIT:

Company has a proper and adequate system of Internal Control commensurate with its size and the nature of its operations to ensure that all assets are safeguarded and protected against loss from un-authorised use or disposition and those transactions are authorised, recorded and reported correctly.

During the year under review, Internal Audit of the Company has been carried out by M/s. Rajesh Dudhara & Co., Chartered Accountants, Ahmedabad.

12. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended 31st March 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the company for the year under review;

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2012 on a going concern basis.

13. COMPLIANCE CERTIFICATE:

Pursuant to Section 383 A of the Companies Act, 1956 and Companies (Compliance Certificate) Rules 2001, Compliance Certificate from Mr. Manjunath Reddy, Practicing Company Secretaries for the year ended 31st March 2012 is attached as Annexure II to this Directors' Report.

14. GENERAL:

i. Information required under section 217(2-A) of the Companies Act of 1956:-

Number of employees employed by the Company during the financial year under review drawing a remuneration in aggregate of not less than Rs. Sixty Lakhs per annum or Rs. Five Lakhs per month "NIL

ii. Particulars as required under listing agreement Clause 49 are furnished as Annexure-l to this report and form a part thereof.

iii. Certificate from a Company Secretary under proviso to section 383A of the Companies Act is attached as Annexure II to this report.

iv. The relevant notes on the accounts and accounting policy contained elsewhere in this Annual Report are self- explanatory with regard to the observations of the Auditors.

Place : Bangalore For and on behalf of the Board of Directors

Date : 15-05-2012 VINOD NARAIN

Chairman


Mar 31, 2011

Dear Members,

The Directors present the Thirty-Ninth Annual Report together with Audited Accounts of the Company for the year ended 31 st March 2011.

FINANCIAL RESULTS

Rs in Lakhs

PARTICULARS 2010-11 2009-10

Gross Income 21819.11 14705.15

Less: Excise duty 1694.61 1009.98

Net Income 20124.50 13695.17

Profit before Interest and Depreciation 720,93 661.63

Less: Interest 62.83 63.60

Profit before Depreciation 658.10 598.03

Depreciation for the year

(Net of withdrawal from revaluation reserve)290.43 362.75

Profit after Interest and Depreciation, 367.67 235.28

Provision for tax 100.91 112.43

Profit for the year 266.76 122.85

Taxation adjustments of earlier year - 4.40

Prior period adjustments 0.34 0.19

Total 266.42 127.44

Balance profit for earlier years 1763.11 1675.55

Profit available for appropriation 2029.53 1802.99

Transfer to General Reserve 25.00 25.00

Dividend on equity shares 12.76 12.76

Tax on proposed dividend 2.09 2.12

Balance to be carried forward a sum of 1989.68 1763.11

Earnings per equity share of Rs. 10/-each 41.75 19.97

PERFORMANCE HIGHLIGHTS

The members would be glad to note that the Company has shown appreciable all-round improvement in production, sales, turnover and profit during the year under review. The comparative charts, given hereunder, highlight the impressive performance.

1. PRODUCTION

During the year under review the Company produced 38,241 tons of Grinding Media as compared to 29,865 tons in the previous year, an increase of 28%.

2. SALES & PROSPECTS

The Company sold 38,379 tons of Grinding Media during the year under review as against 29,404 tons in the previous year. The sales revenue was higher at Rs.20,124 lakhs as against Rs. 13,695 lakhs in the previous year recording a jump of 47%.The order book for the current year is also quite comfortable.

3. DIVIDEND

Your Directors are pleased to recommend a dividend of 20% (Rs.2.0 per share).

4. FINANCE

The liquidity position of the Company remained satisfactory. Canara Bank and State Bank of India extended their full co-operation to the Company.

5. SCIENTIFIC RESEARCH

The In-House Research & development Section of the Company has continued to focus its attention on innovation, quality improvement, waste elimination and pollution control. With its sustained efforts, new grades of products have been developed for mineral grinding operations which have been well received by the mining industry. The Company's products have now global presence and command a premium for its quality.

6. EMPLOYEE RELATIONS

The relationship with the employees remained cordial.

DIRECTORS

Messrs R.P.Agarwal, D.P.Dhanuka and Pradip R.Shah retire by rotation and are eligible for reappointment.

AUDITORS

Messrs Dagliya & Company, Chartered Accountants, retire at this Annual General Meeting and are eligible for reappointment.

DIRECTORS'RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect to Directors' Responsibility statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended 31st March 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the company for the year under review;

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2011 on a going concern basis.

GENERAL

1. Information required under section 217(2-A) of the Companies Act of 1956: -

Number of employees employed by the Company during the financial year under review drawing a remuneration in aggregate of not less than Rs. Sixty Lakhs per annum or Rs. Five Lakhs per month—NIL

2. Particulars as required under listing agreement Clause 49 are furnished as Annexure-I to this report and form a part thereof.

3. Certificate from a Company Secretary under proviso to section 383A of the Companies Act is attached asAnnexure II to this report.

4. The relevant notes on the accounts and accounting policy contained elsewhere in this Annual Report are self-explanatory with regard to the observations of the Auditors.

Place : Bangalore For and on behalf of the Board of Directors

Date: 05-05-2011 VINOD NARAIN

Chairman


Mar 31, 2010

The Directors present the Thirty-Eighth Annual Report together with Audited Accounts of the Company for the year ended 31st March 2010

FINANCIAL RESULTS

Rs in Lakhs

PARTICULARS 2009-10 2008-09

Gross Income 14705.15 20,117.36

Less: Excise duty 1009.98 1154.60

Net Income 13695.17 18962.76

Profit before Interest and Depreciation 661.63 883.93

Less: Interest 63.60 122.32

Profit before Depreciation 598.03 761.61

Depreciation for the year

(Net of withdrawal from revaluation reserve) 362.75 383.03

Profit after Interest and Depreciation 235.28 378.58

Provision for tax 112.43 134.10

Profit for the year 122.85 244.48

Taxation adjustments of earlier year 4.40 (16.27)

Prior period adjustments 0.19 (1.29)

TOTAL 127.44 226.92

Balance profit for earlier years 1675.55 1,488.56

Profit available for appropriation 1802.99 1715.48

Transfer to General Reserve 25.00 25.00

Dividend on equity shares 12.76 12.76

Tax on proposed dividend 2.12 2.17

Balance to be carried forward a sum of 1763.11 1,675.55

Earnings per equity share of Rs. 10/- each. 19.97 35.56

PERFORMANCE HIGHLIGHTS

Your Company continued to face the onslaught of global recession during the year under review. The manufacturing activities had to be scaled down due to constraint in demand. However, there was improvement in the last quarter of the year and normalcy was restored to some extent.

PRODUCTION

During the year under review the Company produced 29,865 tons of Grinding Media as compared to 33,409 tons in the previous year.

SALES & PROSPECTS

The Company sold 29,404 tons of Grinding Media during the year under review as against 34,032 tons in the previous year. The current year looks to be promising with good inflow of export orders. However, the power restrictions imposed by the government from time to time are a big setback in growth of the company. The in-house power generation cost being almost double of BESCOM supply renders it uneconomical for long term utilization.

DIVIDEND

Your Directors are pleased to recommend a dividend of 20% (Rs.2.0 per share).

FINANCE

The liquidity position of the Company remained satisfactory. Canara Bank and State Bank of India extended their full co-operation to the Company.

SCIENTIFIC RESEARCH

The unprecedented recession in the Industry has forced the company to look minutely into every element of cost and evolve methods to eliminate all wastages. At the same time, quality and innovation have been given utmost priority to improve its business share in the global market. The R&D section of the company continued to focus its attention in these areas, resulting in development of new chemical compositions for better wear resistance of grinding media and improved processes for cost reduction.

EMPLOYEE RELATIONS

During the financial year an amicable labour settlement was reached valid up to 31 st December, 2011.

DIRECTORS

Messrs Sanjay Shailesh Majmudar, Bhadresh K.Shah and Vinod Narain retire by rotation and are eligible for reappointment.

AUDITORS

Messrs Dagliya & Company, Chartered Accountants, retire at this Annual General Meeting and are eligible for reappointment.

DIRECTORS" RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility statement, it is hereby confirmed:

i) That in the preparation of the accounts for the financial year ended 31s March 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the company for the year under review;

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2010 on a going concern basis.

GENERAL

1. Information required under section 217(2-A) of the Companies Act of 1956: -

Number of employees employed by the Company during the financial year under review drawing a remuneration in aggregate of not less than Rs. Twenty Four Lakhs per annum or Rs.Two Lakhs per month—NIL

2. Particulars as required under listing agreement Clause 49 is furnished as Annexure-I to this report and form a part thereof.

3. Certificate from a Company Secretary under proviso to section 383A of the Companies Act is attached as Annexure II to this report.

4. The relevant notes on the accounts and accounting policy contained elsewhere in this Annual Report are self-explanatory with regard to the observations of the Auditors.

Place : Bangalore For and on behalf of the Board of Directors

Date : 20-05-2010 VINOD NARAIN

Chairman

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