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DIRECTORS' REPORT AND MANAGEMENT DISCUSSION ANALYSIS
SHREE PRECOATED STEELS LIMITED
Your Directors have pleasure in presenting the Seventh Annual Report with the Audited Annual Accounts of the Company for the year ending 31st March, 2015.
Your Company has posted its best ever operational performance for the year under review. The commitment and untiring efforts of management, executives and staff at all the levels were instrumental in achieving these magnificent results.
Net revenue stood at Rs. 2612.31 lacs as compared to Rs. 366.33 for last year. The Company earned a Net profit after tax but before exceptional items of Rs. 543.19 lacs as compared to Rs. 8.46 lacs in the previous year.
In view of the carry forward losses incurred in the earlier years, the Board regrets its inability to declare any dividend for the year under review.
SHARE CAPITAL OF THE COMPANY:
The Paid up Equity Share Capital, as at 31st March, 2015 was Rs. 82,79,80,420/– divided into 8,27,98,042 Equity shares, having face value of Rs. 10/– each fully paid up.
During the year under review, the Company has not issued any shares with differential voting rights neither granted any stock options nor sweat equity.
SUBSIDIARIES & ASSOCIATE COMPANIES:
The Company does not have any Subsidiary or Associate Company.
BOARD OF DIRECTORS:
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Dhaval R. Ajmera, Director of the Company, retires by rotation and being eligible offers himself for re–appointment.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(7) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
DIRECTOR'S RESPONSIBILITY STATEMENT:
As required under the provision of Section 134 of the Companies Act 2013, your Directors state that:
(a) In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;
(b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the annual accounts on a going concern basis;
(e) The Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
KEY MANAGERIAL PERSONNEL :
During the year under review, the Company has appointed following persons as the Key Managerial Personnel as required under Section 203 of the Companies Act, 2013.
Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, the directors individually, as well as the evaluation of working of its Committees. At the meeting of the Board all relevant factors that are material for evaluating performance of individual Directors, the Board and its various committees were discussed in detail. A structured questionnaire each for evaluation of the Board, its various Committees and individual Directors was prepared and recommended to the Board by Nomination & Remuneration Committee for doing the required evaluation after taking into consideration
the input received from the Directors covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, execution and performance of specific duties, obligations and governance etc.
A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and non– independent Directors was also carried out by the Independent Directors at their separate meeting. The Directors expressed their satisfaction with the evaluation process.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS :
The details of the number of meetings of the Board held during the Financial Year 2014–15 forms a part of the Corporate Governance Report.
BOARD COMMITTEES :
The Company has the following statutory Committees of Board:
• Audit Committee
• Nomination & Remuneration Committee
• Stakeholders Relationship Committee
• Corporate Social Responsibility Committee
The composition of each of the above Committees, their respective role and responsibility is as detailed in the Report of Corporate Governance Report
REMUNERATION & NOMINATION POLICY :
The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy lays down the criteria for selection and appointment of Board Members. The details of the policy are explained in the Corporate Governance Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY :
The Company has a Vigil Mechanism / Whistle Blower policy to report genuine concerns, grievances, frauds and mismanagement, if any. The Vigil Mechanism /Whistle Blower policy has been posted on the website of the Company (www.spsl.com )
Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
There is no loan given, investment made, guarantee given or security provided by the Company to any entity covered under Section 186 of Companies Act, 2013.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were on the arm's length basis and were in ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Thus disclosure in form AOC–2 is not applicable. All Related Party Transactions are placed before the Audit Committee on quarterly basis specifying nature, value and terms and conditions of transactions. Prior approval of the Audit Committee is obtained for the transactions which are foreseen and repetitive in nature.
The policy on Related Party Transactions as approved by the Board is uploaded on Company's website www.spsl.com .
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT–9, as required under Section 92 of the Companies Act, 2013, is included in this Report as Annexure "A" and forms an integral part of this Report.
The Company's Auditors, M/s. V. Parekh & Associates Chartered Accountants, Mumbai was appointed in the last Annual General Meeting for a period of five financial Years. They have confirmed their eligibility under section 141 of the Companies Act,2013 and the Rules framed thereunder for appointment as Statutory Auditors of the Company. 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. The Audit Committee recommends the ratification of appointment of M/s. V. Parekh & Associates for Financial Year 2015–2016 to the Board of Directors, subject to ratification at the ensuing Annual General Meeting of the Company.
Pursuant to provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, the company has appointed M/s. H P Sanghvi & Co. a Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure "B" and forms an integral part to this Report.
The Secretarial Auditor has observed that the Company has not appointed Company Secrtary during the period under consideration. Your Director state that inspite of best efforts, Company could not find suitable person having regard to it's financial position. However, the Company has selected Company Secretary but could not appoint due to pending membership with the institute and was appointed as soon as membership was obtained.
CORPORATE SOCIAL RESPONSIBILITY :
Pursuant to Section 135 of Companies Act, 2013 and the relevant rules, the Board has constituted the Corporate Social Responsibility (CSR) Committee ,under the Chairmanship of the Mr. Sanjay C. Ajmera, Managing Director. The other members of the Committee are Mr. Dhaval R. Ajmera and Mr. Jagdish Doshi. A detailed CSR Policy has also been framed which is placed on the Company's website. As a part of its initiative under CSR, the Company is in process of finalization of Trust to undertake projects in the area of education, livelihood, health, water, sanitation and any other option eligible as specified. These projects will be in accordance with Schedule VII of Companies Act, 2013.The details as per Rule 8 of (Corporate Social Responsibility) Rules, 2014 is annexed herewith in Annexure "C".
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant and material orders passed by the Regulators or Courts that would impact the going status of the Company and its future operations.
DEPOSITORY SERVICES :
The Company's Equity Shares have been admitted to the depository mechanism of the National Securities Depository Limited (NSDL) and also the Central Depository Services (India) Limited (CDSL). As a result the investors have an option to hold the shares of the Company in a dematerialized form in either of the two Depositories. The Company has been allotted ISIN No. INE318K01017.
Shareholders therefore are requested to take full benefit of the same and lodge their holdings with Depository Participants [DPs] with whom they have their Demat Accounts for getting their holdings in electronic form.
CODE OF CONDUCT:
Your Company is committed to conducting its business in accordance with the applicable laws, rules and regulations and highest standards of business ethics. In recognition thereof, the Board of Directors has implemented a Code of Conduct for adherence by the Directors, Senior Management Personnel and Employees of the Company. This will help in dealing with ethical issues and also foster a culture of accountability and integrity. The Code has been posted on the Company's website www.spsl.com . All the Board Members and Senior Management Personnel have confirmed compliance with the Code.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
The Company is committed to provide healthy environment to all employees of Shree Precoated Steels Ltd and does not tolerate any discrimination and/or harassment in any form. The Company has in place a Prevention of Sexual Harassment policy in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the Financial Year 2014–15,there were no complaints received by the Company.
PARTICULARS OF REMUNERATION TO DIRECTORS / EMPLOYEES:
The information relating to remuneration of Directors as required under Section 197(12) is given in Annexure ''D'' Information as required under the provisions of Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure "D" to the Directors' Report. As per the proviso to Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, no employees or Directors or Director's related posted and working outside India are drawing more than Rs. 6 million per financial year or Rs. 500,000 /– per month, is not applicable to the Company.
RISK MANAGEMENT :
The Audit Committee has also been delegated the responsibility for monitoring and reviewing risk management, assessment and minimization procedures, developing, implementing and monitoring the risk management plan and identifying, reviewing and mitigating all elements of risks which the Company may be exposed to. The Board also reviews the risk management assessment and minimization procedures.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Management's Discussion and Analysis Report for the year ended under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange include the following:–
The Management have rich experience of over four decades in the Steel related businesses and Real Estate business and have developed and established excellent business relationships in the Industry which can be helpful to the Company to form a strategic alliance with them in the future. The goodwill and expertise of the Company and Management is the greatest strength.
The Company has currently traded in Development rights and is exploring opportunities in real estate development and redevelopment projects. The company is focussing on projects related to trading of flats, development rights and investment in real estate, if right opportunity exists.
2. Future Outlook:
In order to utilize their expertise and knowledge of the Management, the Company is undertaking construction contracts, trading in flats, trading in Development rights and so on. The Company has earned its income during the year from such projects. The Company may also enter into venture of redevelopment projects, if sound opportunity persists.
The Company's Management has niche in real estate market since ages which is a boon to the Company and adds strength to the company's performance. Expansion and entering into the construction contracts are most likely arena of the year.
3. Risks and Concerns:
Your Company is continuously evolving and improving systems and measures to take care of all the risk exigencies involved in our business.
The Company has complied with the Corporate Governance requirements under the Company Act, 2013 and as stipulated as per Listing Agreement with the Stock Exchange. A separate section on Corporate Governance under Listing Agreement, along with a Certificate from Auditor's confirming the compliance is annexed and forms part of Annual Report.
INTERNAL CONTROL SYSTEMS:
The Company has adequate internal control systems and procedures in place for effective and smooth conduct of business and to meet exigencies of operation and growth. The key business processes have been documented. The transactions are recorded and reported in conformity with generally accepted accounting practices. The internal control systems and procedures ensure reliability of financial reporting, compliance with the Company's policies and practices, governmental regulations and statutes. Internal Audit is conducted by independent firm of auditors. Internal Auditors regularly check the adequacy of the system, their observations are reviewed by the management and remedial measures, as necessary, are taken. Internal Auditors report directly to the Chairman of the Audit Committee to maintain its objectivity and independence.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION:
The provisions of Section 134(3)(m) of the Companies Act, 2013, relating to conservation of energy and technologyabsorption are not applicable to the Company. However, the Company has been continuously and extensively using technology in its operations.
During the year, there were no foreign exchange earnings/ outgo.
MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF COMPANY
There were no material changes affecting the Company operations post 31st March, 2015 till the date of signing the Directors Report.
The Company has laid down well–structured procedures for monitoring the risk management plan and implementing the risk mitigation measures. The risks are broadly classified into strategic risks, operational risks, financial risks and statutory compliance risks. These risks are rated based on factors such as past year experience, probability of occurrence, probability of non–detection and its impact on business. The top management reviews the strategic risks, the risks with high probability and high impact every quarter and presents its report along with risk mitigation plan to the Board of Directors on half–yearly basis. The strategic risks are considered in shaping the annual budgets. Other risks are covered as part of internal audit process and presented to the Audit Committee every quarter. The risk ratings are revalidated with the top management as part of the internal audit process every quarter. The strategic risks are taken into consideration in the annual planning process and these risks together with their mitigation plan are subject to review by the management on a quarterly basis. The business processes risks and the related controls would be subjected to internal audit and reviewed on a quarterly basis. The overall re–assessment of risks at company level is carried out and presented to the Board on yearly basis for their review.
We are grateful to the Government of India, the Reserve Bank of India, the Securities and Exchange Board of India, the Stock Exchange, other regulatory authorities for their valuable guidance and support and wish to express our sincere appreciation for their continued co–operation and assistance. We look forward to their continued support in future. We wish to thank our investors, rating agencies, customers and all other business associates for their support.
Your Directors express their deep sense of appreciation for all the employees whose commitment, co–operation, active participation, dedication and professionalism has made the organization's growth possible. Finally, the Directors thank you for your continued trust and support.
For and on behalf of the Board
SANJAY C. AJMERA MANAGING DIRECTOR (DIN: 00012496)
DHAVAL R. AJMERA DIRECTOR (DIN: 00012504)
Date: 23rd July, 2015