Mar 31, 2015
Dear Members,
The Directors are presenting the 27th Annual Report of your Company
and the Audited Financial Statements for the year ended 31st March
2015.
FINANCIAL RESULTS: (in lacs)
PARTICULARS 2014-15 2013-14
Revenue from Operations 20,919.27 35,736.44
Other Income 1,762.14 1,973.39
Total Revenue 122,681.41 37,709.83
Profit / (Loss) before tax 478.70 613.57
Less: Tax Expense 154.79 202.92
Less: Deferred Tax (0.37) 5.96
Profit / (Loss) after tax 324.28 404.69
HIGHLIGHTS OF COMPANY'S PERFORMANCE :
During the year under consideration total revenue were Rs. 22,681.41
Lacs as against Rs. 37,709.83 Lacs in the preceding financial year and
Profit After Tax was Rs. 324.28 Lacs as against Rs. 404.69 Lacs in the
preceding financial year.
The Company has not been able to perform well during the year due to
various factors like fluctuations in the exchange rate of US Dollar
vis-a-vis Indian Rupee steep decrease'in prites of Iron . and steel
products and volatile market conditions. However, the Company has been
able to improve the net profit margins for the financial year
2014-15,due to its cautious approach. The Management is of the view
that, in the coming years the ship breaking industry as well as Iron
and Steel sector .will be stable and with expected boost in the economy
the requirement of iron and steel will increase which will help the
Company to move towards its sustained path of growth.
DIVIDEND:
To consolidate the future position of the Company and support the fund
requirements, your Board of Directors regret their inability to
recommend any dividend for the year.
RESERVES:
The whole profit after tax has been transferred to P&L surplus. There
is no amount that has been proposed to be carried to any other
reserves.
LOANS, GUARANTEE & INVESTMENTS :
The particulars of loans, guarantees and' investments have been
disclosed in the financial statements.
DEPOSITS:
The Company has never accepted any deposit from the public falling
within the ambit of Section 73 of the Companies Act, 2013 and the
Companies (Acceptance of Deposits) Rules, 2014, Or under Chapter V of
the Act.
RELATED PARTY TRANSACTIONS :
The Audit Committee granted omnibus approval for the transactions
(which are repetitive in nature) and the same was reviewed by the Audit
Committee and the Board of Directors. There were no materially
significant transactions with Related Parties during the financial year
2014-15 which were in conflict with the interest of the Company.
Suitable disclosures as required under AS-18 ' have been made in Note
2.30 of the Notes to the financial statements.
The particulars of contract or arrangement entered into by the Company
with related parties referred to in sub-section (1) of section 188 of
the Companies Act, 2013, in prescribed Form No. AOC -2, is appended as
Annexure 1 to the Board's Report.
INTERNAL FINANCIAL CONTROLS:
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
A) Changes in Directors and Key Managerial Personnel (KMP)
During the year under review, Mrs. Neela Shah and Mr. Prashant Agrawal
resigned from the Directorship . of the Company w.e.f. 2nd June 2014.
Thereafter, the Board of the Company is duly constituted.
Mr. Rajeev Reniwal, will be retiring by rotation at the ensuing Annual
General Meeting and being eligible, seeks reappointment pursuant to
Section 152 of the Companies Act, 2013.
* Appointment and Resignation of KMP:
The Board of Directors at its meeting held on 30th March 2015 appointed
Mr. Rakesh Reniwal'as Chief Finance Officer (CFO).
Further, Mr. Rajeev Reniwal, Managing Director, was designated as a
KMP.
B) Declaration by an Independent Director(s) and re-appointment, if any
All the Independent Directors have provided the declaration of
Independence, as required pursuant to . Section 149(7) of the Companies
Act, 2013, stating that they meet the criteria of independence as
provided in sub-section (6)
PERFORMANCE EVALUATION OF THE BOARD:
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the Directors individually as well
as the evaluation of the working of its Audit, Nomination &
Remuneration and other Committees. The same is found to be
satisfactory.
At a separate meeting of Independent Directors, performance of
Non-Independent Directors, performance of the Board as a whole and
performance of the Chairman was evaluated, taking into account the
views of Executive Directors and Non-Executive Directors. The same was
discussed at the Board Meeting that followed the meeting of the
independent Directors, at which the performance of the Board, its
Committees and individual directors was* also discussed.
BOARD MEETINGS:
During the year under review, the Company has conducted 15 (Fifteen)
Board Meetings. Details are covered in Corporate Governance Report.
EXTRACT OF ANNUAL RETURN :
In accordance with Section 134(3)(a) and as provided under sub-section
(3) of Section 92 of the Companies Act, 2013 an extract of the annual
return in form no. MGT-9 is appended as Annexure 2 of the Board's
Report.
CORPORATE GOVERNANCE :
A separate section on Corporate Governance forming part of the
Directors' Report and a Certificate from the Auditors is included in
the Annual Report. Annexure - 3 is attached herewith.
AUDITORS:
M/s. P. D. Goplani & Associates, Chartered Accountants, Bhavnagar,
having ICAI Firm Registration No. 118023W being eligible offer
themselves for re-appointment. If re-appointed, it will be within the
prescribed limits specified in Section 139 ofthe Companies Act, 2013.
Members are requested to appoint the auditors and to fix their
remuneration.
The Auditors in their report dated May 29, 2015 have opined that
provision for gratuity and long term employee benefits as per AS-15 has
not been made. In this connection, the Board would like to clarify that
the Co. has no employee in continuous service of 5 years Ar more.
Hence, the provisions pertaining to gratuity are not applicable to the
Company.
Apart from this the report is self-explanatory.
SECRETARIAL AUDIT:
The Board of Directors have appointed Mr. Dilip Bharadiya, Proprietor
of M/s. Dilip Bharadiya & Associates, Practising Company Secretaries,
Mumbai, to conduct Secretarial Audit for the financial year 2014-15, as
required under Section 204 of the Companies Act, 2013 and the rules
framed thereunder. The Secretarial Audit Report for the financial year
2014-15 forms part of the Directors' Report as Annexure 4.
The Auditor has raised observations pertaining to delay in filing of
forms in time. The management of the Company has assured that the
Company will take adequate steps to streamline work and . adhere with
time guideline provided under various acts, statutes, regulations.
MATERIAL CHANGES AND COMMITMENTS:
There are no material changes having taken place affecting the
financial position of the Company . from the date of closure of
financial year till the signing of Accounts.
DIRECTORS'RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of
Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation ofthe annual accounts, the applicable accounting
standards had - been followed along with proper explanation relating to
material departures;
. (ii) the Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit and
loss of the Company for that period;
(iii) the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets ofthe Company and
for preventing and detecting fraud and other irregularities;
(iv) the Directors had prepared the annual accounts.on a going concern
basis;
(v) the Directors, further state that they have laid down internal
financial controls to be followed by the Company and that such internal
financial controls are adequate and were operating effectively;
(vi) the Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION ETC. & FOREIGN EXCHANGE
EARNINGS AND OUTGOINGS :
The information as required under Section 134(3)(m) of The Companies
Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014
with respect to conservation of energy, technology absorption and
foreign exchange earnings is given below:
A. Conservation of energy:
(i) the steps taken or impact on conservation of energy;
The Company acknowledges the importance of energy conservation in
decreasing the deleterious effects of global warming and climate
change. The Company has made efforts to minimize energy costs. Company
is engaged in Ship Breaking and trading in metal scrap, coals,
aluminium foil & other industrial inouts. No significant power
consumption is required in ship breaking industry as major portion is
production process consisting of non mechanical processes. However,
industrial gases are used in ship dismantling activities and the
Company has taken various measures to control the consumption of fuel
and energy.
(i i) the steps taken by the Company for utilising alternate sources of
energy;
Company is engaged in Ship Breaking and trading in metal scrap, coals,
aluminum foil & other industrial inouts. No significant power
consumption is required in ship breaking industry as major portion in
production process consist of non mechanical processes. However,
industrial gases are used in ship dismantling activities and the
Company has taken various measures to control the consumption of fuel
and energy. Hence, the ' Company has not made any investment towards
any alternate source of energy.
(ill) the capital investment on energy conservation equipments;
The Company is taking adequate steps to conserve energy though no such
capital' investment has been made.
B. Technology absorption:
The Company's operations do not require significant absorption of
technology.
C. Foreign exchange earnings and Outgo:
Current Year Previous Year
Foreign Exchange Earnings and Outgo 847718101 409247000
CORPORATE RESPONSIBILITY STATEMENT (CSR):
the provisions of Section 135 of the Companies Act, 2013 regarding
Corporate Social Responsibility are not applicable as the Company is
not falling under the said parameters.
AUDIT COMMITTEE:
The Audit Committee was reconstituted in accordance with the provisions
of Companies Act, 2013. The details pertaining to Audit Committee and
its composition are included in the Corporate Governance Report, which
forms part of this report.
NOMINATION AND REMUNERATION COMMITTEE:
The Company has constituted a Nomination and Remuneration Committee
pursuant to Section 178(1) of the Companies Act, 2013 and has defined
the policy on Director's appointment and payment of remuneration
including criteria for determining qualifications, positive attributes,
and independence of a Director. The Committee shall function in
accordance with the terms and reference of the policy. Policy of the
Company is enclosed herewith as Arjnexure 5.
VIGIL MECHANISM:
The Company has adopted a Whistle Blower Policy establishing vigil
mechanism, to provide a formal mechanism to the Directors and employees
to report their concerns about unethical behavior, actual or suspected
fraud or violation of the Company's Code of Conduct or ethics policy.
The Policy provides for adequate safeguards against victimization of
employees who avail of the mechanism and also provides for direct
access to the Chairman of the Audit Committee. It is affirmed that no
personnel of the Company has been denied access to the Audit Committee.
The policy of vigil mechanism is available on the Company's website.
STAKEHOLDER'S RELATIONSHIP COMMITTEE:
The details pertaining to composition .of the Committee is included in
the Corporate Governance Report, which forms part of this report. The
role of the Committee is explained in detail in the Corporate
Governance Report enclosed herewith.
PERFORMANCE OF EMPLOYEES:
A) The information required under Section 197 of the Act read with rule
5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are given below:
a. Details of the ratio of the remuneration of each Director to the
median employee's ~ remuneration and other details as required pursuant
to Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 The Company has not paid any
remuneration to the Directors of the Company and hence the information
is not furnished.
b. The percentage increase in remuneration of each Director, Chief
Executive Officer, Chief Financial Officer, Company Secretary in the
financial year:
No remuneration is paid to any Director of the Company. Further,
appointment of Chief Financial Officer, was done at the Board Meeting
held on 30th March 2015 and hence the information pertaining to
percentage increase in remuneration cannot be provided.
c. The percentage increase in the median remuneration of employees in
the financial year:
There is no increase in remuneration of employees. Hence, information
cannot be furnished.
d. The number of permanent employees on the rolls of Company: 11
e. The explanation on the relationship between average increase in
remuneration and Company performance:
There is no increase in remuneration of employee. Hence, information
cannot be furnished.
f. Comparison of the remuneration of the key managerial personnel
against the performance of the Company:
Appointment of key managerial personnel was done on 30th March 2015.
Since this information is for part of the year, the same is not
comparable.
g. Variations in the market capitalization of the Company, price
earnings ratio as at the closing date of the current financial year and
previous financial year:
Particulars March 31,2015 March 31,2014 % Change
Market
Capitalization 92195980 140001302 -34.15%
Price Earnings
Ratio 2.84 3.46 -17.92%
h. Percentage increase over decrease in the market quotations of the
shares of the Company in comparison to the rate at which the Company
came out with the last public offer:
During the financial year under review, the Company has not come out
with any public offer.
i. Average percentile increase already made in the salaries of
employees other than the managerial personnel in the last financial
year and its comparison with the percentile increase in the managerial
remuneration and justification thereof and point out if there are any
exceptional circumstances for increase in the managerial remuneration:
There is no increase in salaries of employees other than the managerial
personnel in the last-financial year. Further, no remuneration is paid
to managerial personnel so comparison cannot be made.
j. Comparison of each remuneration of the key managerial personnel
against the performance of the Company:
Appointment of key managerial personnel was done on 30th March 2015.
Since this information is for part of the year, the same is not
comparable.
k. The key parameters for any variable component of remuneration
availed by the directors:
No remuneration is paid to any Director of the Company.
l. The key parameters for any variable component of remuneration
availed by the directors:
Not applicable
m. Affirmation that the remuneration is as per the remuneration policy
of the Company:
No remuneration is being paid to Key Managerial Personnel.
B) Details of the every employee of the Company as required pursuant to
5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014
The Company has no such employee drawing remuneration more than
mentioned under Rule 5(2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
The Company does not have Subsidiary/Joint Ventures/Associate
Companies.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management Discussion and Analysis Report for the financial year under
review as stipulated in Clause 49 of the Listing Agreement entered into
with the Stock Exchanges is provided in Annexure - 6.
COST AUDIT:
As per Section 148 of the Act, the Company is required to have the
audit of its cost records conducted by a Cost Accountant in practice.
The Board of Directors of the Company has approved the appointment of
Mr. Sonu-Sobhraj Kewlani, Partnership firm M/s Kewlani & Associates,
having Registration No. 101593 as the cost auditors of the Company to
conduct cost audits pertaining to relevant products prescribed under
the Companies (Cost Records and Audit) Rules, 2014 as amended from time
to time for the year ending March 31, 2016, at a remuneration of Rs.
40,000/- p.a. and, have vast experience in the field of cost audit and
have conducted the audit of the cost records of the Company for the
past several years under the provisions of the erstwhile Companies Act,
1956.
RISK MANAGEMENT:
The Board of the Company has formed a Risk Management Committee on 30th
March 2015 to frame, implement and monitor the risk management plan for
the Company. The Committee is responsible for reviewing the risk
management plan and ensuring its effectiveness. The audit committee has
* additional oversight in the area of financial risks and controls.
Policy to manage risk is also placed on the website of the Company.
During the year, risk analysis and assessment was conducted and the
details of the same are covered in the Management Discussion and
Analysis Report of the Company.
FAMILIARIZATION PROGRAMME:
As per Clause 49 of the Listing Agreement entered into with the stock
exchange, Corporate Governance Report with Auditors' Certificate
thereon and Management Discussion and Analysis are attached, which form
part of this report. Details of the familiarization programme of the
Independent Directors are available on the website of the Company.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
Your Directors state that during the year under review, no case was
filed pursuant to the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
DETAILS OF VARIOUS PLANS:
During the financial year 2014-15, ship breaking unit at Alang Ship
Breaking Yard and Trading Unit have not been able to perform well
during the year due to various factors like fluctuations in the
exchange rate of US Dollar vis-a-vis Indian Rupee and steep decrease in
prices of Iron and Steel products and volatile market conditions. The
management is of the view that, in the coming years the ship breaking
industry will be stable and with expected boost in the economy the
requirement of Iron and Steel will increase which will help the Company
to move towards its sustained path of growth.
Overall, since the prices of Iron and Steel having been reasonably
stabilized and the inventory levels of the Company and its market
position, both the segments of the Company, viz. Ship Breaking and
Trading, are expected to see major increase in terms of Gross Revenues
and Net profit Margins in the coming year.
The Company is hopeful that in the coming period the Company will
continue its ship breaking and trading activities and take It to the
level of extended growth and will contribute more to the overall growth
of the business of the Company and your Directors See a very positive
and bright future prospects ahead for the Company looking to the
prevailing upward trend in the Iron and Steel sector in India and
internationally.
The Company is hopeful that with the stabilizing the price for the old
ship in the international market and also sale prices of companies
products in the domestic .market; the Company will be able to improve
the turnover and also the profitability in the coming year.
ACKNOWLEDGEMENT:
Your Directors wish to place on record their appreciation for the
co-operation extended by all the employees, Bankers, financial
Institutions, various State and Central Government authorities and
stakeholders.
For and on Behalf of the Board of Directors,
INDUCTO STEELS LTD. V
Sd/- $d/-
Rajeev Shantisarup Reniwai Sweety Reniwal
Managing Director Director
(DIN 00034264) (DIN 00041853)
Place: Mumbai
Date: 25th August 2015
Mar 31, 2012
To, The Members of Inducto Steels Limited
The Directors are pleased to present the 24th Annual Report of the
Company together with the Audited Annual Accounts of the Company for
the year ended 31st March, 2012.
Financial Results: (Rs in Lacs)
2011-12 2010-11
Sales & Other Income 10316.84 6,965.35
Profit/(Loss) before Tax 633.62 554.25
Provision for Tax (205.75) (175.44)
Adjustment for deferred tax 1.25 (3.83)
Profit after tax 426.62 374.98
Balance Profit from Last Year 1012.83 804.96
Transfer to General Reserve (50.00) (50.00)
Profit Available for Appropriation 1389.45 1129.94
Proposed Dividend (120.52) (100.43)
Dividend Distribution Tax thereon 19.55 (16.68)
Balance of Profit Carried to
Balance Sheet 1249.38 1012.83
Earning Per Share (Face Value Rs. 10/-)
- Basic and Diluted 10.62 9.33
Keeping in view the good market potential, the company carried out its
Ship Breaking activities on a full scale during the year and that is
reflected in the increase in the Gross Revenues. In spite of heavy
fluctuation in the prices of old ship in the international market and
also heavy dollar exchange rate fluctuations, your company has been
able to optimize the market situation and have achieved increase in
Gross Revenues. Your Directors are hopeful that there will be even more
improvement in sales and profit margin in the coming year.
Dividend
The Directors recommend a Dividend of 30% (Rs. 3.00 per share) on the
Equity Share for the Financial Year ended March 31, 2012 for approval
by the Members.
Prospects for the coming year
The Company is hopeful that with the stabilizing the price for the old
ship in the international market and also sale prices of companies
products in the domestic market; the company will be able to improve
the turnover and also the profitability in the coming year.
Management Discussion and analysis
Provided in Annexure - B forming part of this report Directors'
Responsibility Statement
Provided in Annexure - C forming part of this report
Corporate Governance
Your Company has been practicing the principles of good Corporate
Governance. In addition to basic governance issues, the Board lays
strong emphasis on transparency, accountability and integrity. The
report on the Corporate Governance is attached (Annexure D) herewith.
Board of Directors
In accordance with the provisions of the Companies Act, 1956, read with
the Articles of Association of the Company, Mr. Rajeev Reniwal and Mrs.
Sweety Reniwal retires by rotation at the ensuing Annual General
Meeting of the Company and being eligible, offer themselves for
re-appointment. Necessary resolutions are being placed before the
shareholders for approval.
Auditor's Observation/qualification.
The observation/qualification of the auditors are based on the facts
stated in the schedules of notes and members are requested to refer to
the Note no. 2.29 forming part of Financial Statements and notes 1.2
(a) to (j) of notes on accounts, which are self explanatory and does
not require any further clarification/reply.
Auditors
M/s. Jain Seth & Co., Chartered Accountants, the Statutory Auditors of
the Company retires at the ensuing Annual General Meeting. However, the
company has not received their confirmation of their willingness to be
re-appointed. The company has received confirmation and their
eligibility and willingness to accept office from M/s. RD. Goplani &
Associates, Chartered Accountants, if appointed. They have given a
certificate to the effect that the appointment, if made, would be
within the limits prescribed under Section 224(1B) of the Companies
Act, 1956. Your Directors recommend their appointment.
Members are requested to re-appoint M/s. RD. Goplani & Associates,
Chartered Accountants, as Statutory Auditors of the Company for the
period commencing from ensuing Annual General Meeting until the
conclusion of next Annual General Meeting and fix their remuneration.
Particulars of Employees
Pursuant to Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975 as amended, your
Company has no person in its employment drawing salary within the
monetary ceiling prescribed under Section 217(2A) of the Companies Act,
1956.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earning and outgo:
In accordance with the provisions of section 217 (1) (e) of the
Companies Act, 1956, the required information relating to conservation
of energy, technology absorption and foreign exchange earning and outgo
is annexed (Annexure A) hereto which is forming part of this report.
Acknowledgement
Your Directors wish to place on record their appreciation for the
continued support from the Shareholders, Investors, Customers,
Suppliers and Bankers. Your Directors place on record their
appreciation of the consistent contribution made by employees at all
levels through their hard work, dedication, solidarity, cooperation and
acknowledge that their support has enabled the Company to achieve new
heights of success.
By Order of the Board
Sd/-
Rajeev Reniwal
Director
Place: Mumbai
Date : 16/08/2012
Mar 31, 2010
The Directors are pleased to submit the 22nd Annual Report of the
Company together with the Audited Annual Accounts of the Company for
the year ended 31st March, 2010.
Performance: (Rs in Lacs)
2009-10 2008-09
Sales & Other Income 4524.59 2971.25
Profit/(Loss) before Tax 457.21 187.08
Provision for Tax 155.25 72.18
Fringe Benefit Tax 0.00 0.09
Adjustment for deferred tax 1.87 1.53
Profit after tax 300.08 113.27
Keeping in view the good market potential, the company carried out its
Ship Breaking activities on a full scale during the year and that is
reflected in the manifold increase in the Gross Revenues as well as in
Net Profit Margins also inspite of heavy fluctuation in the prices of
old ship in the international market and also heavy dollar exchange
rate fluctuations, coupled with corresponding fluctuations in sale
price of re-rollable scrap and old machineries etc, your company has
been able to optimize the market situation and have achieved manifold
increase in Net Profit Revenues. Your Directors are hopeful that since
the market has got stabilized, there will be even much more improvement
in sales and profit margin in the coming year. However, due to price
volatility of Ferrous and Non Ferrous metals in the international
market, the company preferred not to do any trading business activities
during the year.
Dividend
Taking into account the good performance, the Directors recommend a
Dividend of 20% (Rs. 2.00 per share) on the Equity Share for approval
by the Members. The total dividend, if approved by the Members at the
Annual General Meeting, would absorb Rs. 80,34,508/- out of profits for
the year. Dividend distribution tax payable amounting to Rs.
13,65,465/- has also been appropriated out of profits.
Prospects for the coming year
The Company is hopeful that with the stabilizing, the price for the old
ship in the international market and also sale prices of companyÃs
products in the domestic market, the company will be able to improve
the turnover and the profitability in the coming year.
Management Discussion and analysis
a) Overview
Last year, prices of old ships, Iron and Steel Products, which had seen
a sharp increase. However, the prices in Iron and steel industry got
stabilized comparatively during the year and the company could achieve
manifold increase in the net profit margins. Increase The same is
expected to remain so at least in the near future. The management is
exercising
caution in purchase of ships for breaking to optimize the profit margin
and minimize the possibilities of losses, if so happen.
Whenever, there is no immediate payment liability against old ship
purchased for breaking, the surplus funds available with the Company
are given as loan on short-term basis and also invested in the stock
market for earning interest/short term capital gain. The Company is
hopeful that the Company can earn reasonable return on this
loans/investment.
b) Segmental Review.
The Company is engaged in the ship breaking activities and value of
single purchase is very large. The company effect sale from above and
occasionally the company have surplus fund, which the company advance
to other companies and earn interest. However the income from such
activities are not substantial and the main activities of the Company
continue to be that of ship breaking only and there is no other
segmental business for the Company.
c) Review of operation
As has been stated in the out-look, due to boom in the availability of
old ships in the international market, the companyÃs ship breaking unit
at Alang Ship Breaking Yard, Bhavnagar is fully operational through out
the year and sales turnover in ship breaking activities has seen a
manifold increase. However due to heavy fluctuation in the rates of old
ships purchased for breaking, dollar-rupee rates and also sales price
of Iron and Steel products of the company, the profit margins could not
be achieved as desired. However, now the market has stabilized and
taking into account the inventory level of the company as at the
year-end, it is hoped that the turnover and the profitability will see
a considerable increase in the current financial year.
d) Financial Review and analysis
Performance
2009-10 2008-09
Gross Turnover 4010.94 1857.67
Net Turnover 4010.94 1857.67
Other income 513.65 1113.58
Total Expenditure 3996.73 2728.50
Operating Profit (PBIDT) 527.85 242.75
Interest 64.49 52.51
Gross Profit (PBDT) 463.36 190.24
Depreciation 6.15 3.16
Profit before tax & exceptional items 457.21 187.08
Exceptional Items 0.00 0.00
Profit before tax 457.21 187.02
Provision for current Tax 155.25 72.18
Provision for Fringe Benefit Tax 0.00 0.09
Profit after current tax 301.95 114.75
Deferred tax 1.87 1.53
Net Profit after total and Exceptional
items 300.08 113.22
e) Cash Flow Analysis
Sources of Cash 2009-10 2008-09
- Cash from operation 214.00 50.31
- Non-operating cash flow 17.11 56.51
- Increase in debts 1876.42 2902.23
- Decrease in cash and cash equivalents -
Uses of Cash
- Net capital expenditure 24.80 -
- Increase In Working Capital 1812.28 2960.28
- Increase in cash and cash equivalents. 270.46 48.77
f) Risk Management
The Company is exposed to the risk from the market fluctuations of
foreign exchange as well as the fluctuation in the price of iron and
steel. The CompanyÃs raw material is old ship, which is purchased from
the international market on credit ranging upto 180 days to 360 days.
Though the Company is not hedging or covering the foreign exchange
requirement, the Company is regularly monitoring the foreign exchange
movement and suitable remedial measures are taken as and when felt
necessary. Though the Company is employing such measures, the Company
is still exposed to the risk of any heavy foreign exchange fluctuation.
Likewise, the Companys finished products are mainly re-rollable scrap
generated from ship breaking and the price of the same is linked to the
market rate for iron and steel. Any up and down in the price of the
iron and steel will affect the profitability of the Company. However
taking into account, the price fall already effected during the year
2009-10, further major down fall in the price of iron and steel is not
expected.
In addition to the above, the Company is also exposed to the risk of
fluctuation in the stock exchange as the Company has invested some of
its surplus funds in equity shares of Companies in order to earn
capital gain. However the Directors considering their past experience
in the line, is confident that the Company will not face any major set
back in this area.
Directors Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to the Directorsà Responsibility Statement, it
is hereby confirmed:
a) that in the preparation of Annual Accounts for the financial year
ended 31st March 2010, the applicable Accounting Standards had been
followed along with proper explanation relating to material departures;
b) that the Directors had selected such Accounting policies and applied
them 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 or loss of
the Company for the year under review;
c) that the Directors had 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 fraud and other irregularities;
d) that the Directors had prepared the accounts on a going concern
basis.
Board of Directors
During the year, Mr Hanmant Wagh and Mr Yusufali A Bhojani have
resigned as Directors of the Company. The Board wishes to place on
record its appreciation of the valuable services rendered by them
during their tenure as Directors. Ms Neela Shah and Mr Bhushanlal Behl
have joined the Board as Additional Directors and they hold office upto
the date of the ensuing Annual General Meeting. Notices have been
received under Section 257 of the Companies Act, 1956 from Members
proposing the appointment of Ms. Neela Shah and Mr. Bhushanlal Behl as
Directors.
In accordance with the provisions of the Companies Act, 1956, read with
the Articles of Association of the Company, Mr. Prashant Agarwal and
Mr. Yogesh Thakkar retires by rotation at the ensuing Annual General
Meeting of the Company and being eligible, offer themselves for
re-appointment.
Auditors Observation/qualification.
The observation/qualification of the auditors are based on the facts
stated in the schedules of notes and members are requested to refer to
the Note no. 2(a), 2(b) and 3(a) to 3(d) in the Schedule 15 forming
part of the accounts, which are self explanatory and does not require
any further clarification/reply.
Deposits
During the year under review, the Company did not accept any deposit
from the public within the meaning of Section 58A of the Companies Act,
1956 read with the Companies (Acceptance of Deposits) Rule, 1975 as
amended.
Auditors
M/s. Jain Seth & Co., Chartered Accountants, the Statutory Auditors of
the Company retires at the ensuing Annual General Meeting and has
confirmed their eligibility and willingness to accept office, if
re-appointed. They have given a certificate to the effect that the
re-appointment, if made, would be within the limits prescribed under
Section 224(1B) of the Companies Act, 1956. Your Directors recommend
their re-appointment.
Members are requested to re-appoint M/s. Jain Seth & Co., Chartered
Accountants, as Statutory Auditors of the Company for the period
commencing from ensuing Annual General Meeting until the conclusion of
next Annual General Meeting and fix their remuneration.
Particulars of Employees
Pursuant to Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975 as amended, your
Company has no person in its employment drawing salary within the
monetary ceiling prescribed under Section 217(2A) of the Companies Act,
1956.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earning and outgo:
In accordance with the provisions of section 217 (1) (e) of the
Companies Act, 1956, the required information relating to conservation
of energy, technology absorption and foreign exchange earning and outgo
is annexed hereto, which is forming part of this report.
Corporate Governance
Your Company has been practicing the principles of good Corporate
Governance. In addition to basic governance issues, the Board lays
strong emphasis on transparency, accountability and integrity. The
report on the Corporate Governance is attached herewith.
Listing of Shares
The Shares of the Company are listed at Bombay Stock Exchange Limited,
Mumbai & applicable listing fees have been paid within the prescribed
time limits.
Acknowledgement
Your Directors wish to place on record their appreciation for the
continued support from the Shareholders, Investors, Customers,
Suppliers and Bankers. Your Directors place on record their
appreciation of the consistent contribution made by employees at all
levels through their hard work, dedication, solidarity, and cooperation
and acknowledge that their support has enabled the Company to achieve
new heights of success.
For & on behalf of the Board of Directors
Sd/-
Place: Mumbai Rajeev Reniwal
Date : 20th August, 2010 Chairman & Managing Director
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