To,
The Members
Your Company's Directors are pleased to present the 47th Annual Report of the Company
together with the Statement of Audited Accounts for the financial year ended 31st March,
2020.
FINANCIAL RESULTS
(Rs. in Lacs)
| Particulars |
Year ended 31.03.2020 |
Year ended 31.03.2019 |
| Revenue from Operations |
33047.41 |
45305.27 |
| Operating Expenses |
32657.01 |
43019.24 |
| Operating Profit before Interest, Tax, Depreciation & Amortization |
390.40 |
2286.03 |
| Depreciation & Amortization Expense |
762.86 |
763.57 |
| Finance Costs |
1349.70 |
1361.79 |
| Other Income |
202.78 |
219.29 |
| Profit/(Loss) before Exceptional & Extraordinary Items and Tax |
(1519.38) |
379.96 |
| Exceptional & Extraordinary Items |
- |
- |
| Profit/(Loss) before Tax |
(1519.38) |
379.96 |
| Tax Expense (including Deferred Tax) |
1701.85 |
124.11 |
| Profit/(Loss) for the year from Continuing Operations |
(3221.23) |
255.85 |
| Other Comprehensive Income |
44.36 |
- |
| Total Comprehensive Income for the year |
(3176.87) |
255.85 |
TRANSFER TO RESERVES
No amount has been transferred to the Reserves in view of losses incurred during the
year under review.
STATE OF COMPANY AFFAIRS / REVIEW OF OPERATIONS
The total revenue (including other income) of the Company during the year was Rs.332.50
crores as compared to Rs.455.25 crores in the previous year. The Company has incurred Loss
before Tax of Rs.15.19 crores for the year under review (previous year Profit before Tax
of Rs.3.80 crores). However, the Company has incurred Total Comprehensive Loss of Rs.31.77
crores for the year under review due to Deferred Tax & MAT adjustment of Rs.17.01
crores.
The year has been a challenging for most businesses across the globe. The
stainless-steel industry faced a number of challenges due to slowdown in economic growth
amidst global muted demand, geopolitical tensions and falling steel prices. These
macroeconomic headwinds and operational challenges have adversely affected the contours of
the business environment in which we operate. Further, the outbreak of COVID-19 pandemic
created an unprecedented socio-economic disruption across the globe. Uncertainty continues
to prevail in the COVID-19 environment.
There were no material changes and commitments affecting the financial position of the
Company which occurred between the end of the financial year to which these financial
statements relate and the date of this Report.
DIVIDEND
The Directors do not recommend any dividend for the year ended 31st March, 2020.
SHARE CAPITAL
The paid-up Equity Share Capital of your Company as on March 31, 2020 was Rs.19.08
crores. The Company has not issued shares with differential voting rights/Bonus Shares nor
has granted stock options/sweat equity and has not bought back any of its securities
during the year under review.
FIXED DEPOSITS
The Company has not accepted or renewed any deposits during the year. There are no
outstanding deposits as at 31st March, 2020.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:
a) in preparation of the annual accounts for the year ended March 31, 2020, the
applicable accounting standards have been followed along with proper explanation relating
to material departures, if any;
b) 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 as at March 31, 2020 and of the profit of the
Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a 'going concern' basis;
e) they have laid down internal financial controls to be followed by the Company and
that such internal financial controls are adequate and are operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
The Company has implemented procedures and adopted practices in conformity with the
Code of Corporate Governance as stipulated under Regulation 34 read with Schedule V(C) of
the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The
Company has implemented Code of Conduct for all its Executive Directors and Senior
Management Personnel, Non-Executive Non-Independent and Independent Directors, who have
affirmed compliance thereto. The said Code of Conduct has been posted on the website of
the Company.
The Management Discussion and Analysis Report and the Corporate Governance Report,
appearing elsewhere in this Annual Report, forms part of Directors Report. A certificate
from the Statutory Auditors of the Company certifying the compliance of conditions of
Corporate Governance is also annexed thereto.
CORPORATE SOCIAL RESPONSIBILITY
The provisions as prescribed under Section 135 of the Companies Act, 2013 with regard
to corporate social responsibility along with Rules made thereunder are not applicable to
the Company. The Corporate Social Responsibility Policy and the Committee shall be framed
and constituted as and when required.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Your Company has not directly or indirectly:
a) given any loan to any person or other body corporate other than usual advances
envisaged in a contract of supply of materials if any,
b) given any guarantee or provide security in connection with a loan to any other body
corporate or person; and
c) acquired by way of subscription purchase or otherwise, the securities of any other
body corporate exceeding sixty percent, of its paid-up share capital, free reserve and
securities premium account or one hundred percent of its free reserves and securities
premium account whichever is more.
RELATED PARTY TRANSACTIONS
The Company has formulated a policy on Related Party Transactions for the purpose of
identification and monitoring of such transactions.The said Policy on Related Party
Transactions as approved by the Board is uploaded on the Company's web-site.
There were no related party transactions entered into by the Company during the
financial year, which attracted the provisions of Section 188 of Companies Act, 2013.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Appointment
Based on recommendation of Nomination and Remuneration Committee, Mr. Kalpesh J. Parmar
was appointed as an Additional Director (Non-Executive Non-Independent) by the Board of
Directors effective from February 14, 2020 subject to approval of Members at ensuing
Annual General Meeting. A resolution seeking appointment of Mr. Kalpesh J. Parmar as
Director is provided at item no. 3 of notice of the 47th AGM of the Company. Members are
requested to consider and approve his appointment.
Cessation
During the year Mr. Pradeep Sharma, Director (Operations), resigned from the services
and as Director of the Company with effect from 13th November, 2019.
Your Directors wish to place on record their appreciation for his service and valuable
contribution made during his long association with the Company.
Re-appointments
Mr. Amal D. Dhru and Mr. Milan P. Shah were re-appointed as an Independent Directors at
the forty-sixth Annual General Meeting (AGM) held on September, 28, 2019 for a period of
five years from the conclusion of 46th AGM and upto the conclusion of the 51st AGM of the
Company in the calendar year 2024. Mr. Samir M. Parikh was also re-appointed as an
Independent Director in the said AGM for a period of 5 years w.e.f. 4th February, 2019 to
3rd February, 2024.
In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and
Rules made thereunder, Ms. Suchita Shah retires by rotation at the forthcoming Annual
General Meeting and being eligible offer herself for re-appointment. The Board recommends
her re-appointment.
Declaration by Independent Directors
The Company has received necessary declaration from each of the Independent Directors
under Section 149(7) of the Companies Act, 2013 that he/she meets the criteria of
independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)
(B) & Regulation 25 of the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015.
In terms of the Rule 6 of the Companies (Appointment and Qualification of Directors)
Rules, 2014, all Independent Directors of the Company have enrolled themselves on the
Independent Directors Databank.
Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of the SEBI
(Listing Obligations & Disclosure Requirements) Regulations, 2015, 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 Board Committees viz. Audit
Committee, Nomination & Remuneration Committee, Stakeholders' Relationship Committee.
The details of Board evaluation process have been provided under the Corporate Governance
Report.
Familiarization Program for Independent Directors
All Independent Directors are familiarized with your Company, their roles, rights and
responsibilities in your Company, nature of the industry in which your Company operates,
business model, strategy, operations and functions of your Company through its Executive
Directors and Senior Managerial Personnel.
In compliance with the requirements of SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015, the Company has put in place a familiarization program
for Independent Directors. The details of familiarization program are explained in the
Corporate Governance Report.
Remuneration Policy
The Board on the recommendation of the Nomination and Remuneration Committee had framed
a policy for selection and appointment of Directors, Senior Management and their
remuneration. The details of the Remuneration Policy form part of Corporate Governance
Report of this Annual Report.
Number of Meetings of the Board and its committees
During the year under review, 4 (four) meetings of the Board of Directors of the
Company were convened and held. The detailed information on the meeting of the Board and
its various Meetings are included in the Corporate Governance Report forming part of this
report. The Company has complied with the applicable Secretarial Standards issued by the
Institute of Company Secretaries of India.
Committees of the Board
The Board of Directors has the following Committees:
1. Audit Committee
2. Remuneration and Nomination Committee
3. Stakeholders' Relationship Committee
The details of the Committees along with their composition, number of meetings held and
attendance at the meetings are provided in the Corporate Governance Report.
Key Management Personnel
Pursuant to the provisions of Section 2(51) and Section 203 of the Companies Act, 2013
read with Rules framed thereunder, the following persons have been designated as Key
Management Personnel of the Company:
1. Mr. Ashok Malhotra, Chairman & Managing Director
2. Mr. Pradip Gupta, Chief Financial Officer (Retired on 31st December, 2019)
3. Mr. Nilesh Shah, Chief Financial Officer (appointed as CFO w.e.f. 30th June, 2020)
4. Mr. Deepak Nagar, GM (Legal) & Company Secretary.
AUDITORS AND AUDITORS' REPORT
Statutory Auditors
At the 46th AGM held on September 28, 2019, the Members approved the appointment of M/s
CNK & Associates LLP, Chartered Accountants (Firm Registration No. 101961W) as
Statutory Auditors of the Company to hold office for a period of five years from the
conclusion of that AGM untill the conclusion of the 51st AGM of the Company. In terms of
the provisions relating to statutory auditors forming part of the Companies Amendment Act,
2017, notified on May 7, 2018, ratification of appointment of Statutory Auditors at every
AGM is no more a legal requirement. Accordingly, the Notice convening the ensuing AGM does
not carry any resolution on ratification of appointment of Statutory Auditors.
The Notes on financial statements referred to in the Auditor's Report are
self-explanatory and do not call for any further comments. The Auditor's Report does not
contain any qualification, reservation, adverse remark, or disclaimer.
No fraud has been reported by the Auditor under section 143(12) of the Companies Act,
2013 requiring disclosure in the Board's Report.
Internal Auditors
During the year under review, your Company has appointed M/s. Keyur Patel & Co.,
Chartered Accountants, Vadodara as Internal Auditors to carry out the Internal Audit of
various operational areas of the Company with effect from 14th February, 2020. The said
appointment was made in order to fill up the causal vacancy cuased by the resignation of
the erstwhile Internal Auditors of the Company, namely M/s Saurabh Shah & Co.,
Chartered Accoutants, Vadodara, on account of closure of their firm.
Cost Auditors
M/s. Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, the Cost Auditors of the
Company carried out the audit of cost records for steel Plant of the Company during the
year.
The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s
Kiran J. Mehta & Co., Cost Accountants, (Firm Registration Number 000025) as Cost
Auditor to audit the cost records of the Company for the financial year 2020-21. As
required under the Companies Act, 2013, a resolution seeking members' approval for the
remuneration payable to the Cost Auditor forms part of the Notice convening the Annual
General Meeting for their ratification.
The Cost Audit Report for the financial year 2018-19 was filed with the Ministry of
Corporate Affairs on 5th September, 2019.
Secretarial Auditor
In terms of the provisions of Section 204 of the Companies Act, 2013, Mr. Niraj
Trivedi, Practising Company Secretary, Vadodara, have been re-appointed by the Board as
Secretarial Auditor of the Company for the financial year 2020-21. The Secretarial Audit
Report as issued by the Secretarial Auditor in Form No. MR-3 for the financial year
2019-20 is annexed herewith as "Annexure-A" and forms integral part of this
Annual Report. The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark. The Company has complied with applicable Secretarial
Standard during the year.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as required under Section 134(3)(a) of the Companies Act,
2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014
forms part of this Report as "Annexure-B".
AUDIT COMMITTEE
During the year, the Board has accepted all recommendations of Audit Committee and
accordingly no disclosure is required to be made in respect of non-acceptance of the
recommendation of the Audit Committee by the Board.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Whistle Blower Policy to deal with instances of
fraud and mismanagement, if any. The details of the Whistle Blower Policy are explained in
the Corporate Governance Report and also posted on the website of the Company.
RISK MANAGEMENT POLICY
The Company has a Risk Management Policy to ensure appropriate risk management within
its systems and culture. The Board of Directors and the Audit Committee of the Company
periodically reviews the Risk Management Policy of the Company. The provisions relating to
Risk Management Committee are not applicable to the Company.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size, scale and
complexity of its operations. The scope of the audit activity is broadly guided by the
annual audit plan approved by the top management and audit committee. The Internal
Auditors routinely test these systems and significant audit observations, if any, and
follow up actions thereon are reported to the Audit Committee.
The Company has in place adequate internal financial controls with reference to
financial statements.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHNAGE EARNINGS &
OUTGO
The information on conservation of energy, technology absorption and foreign exchange
earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read
with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as
"Annexure-C" to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required under Rule 5(1) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 is attached as "Annexure-D" to this Report.
The statement showing the names and other particulars of the employees drawing
remuneration in excess of the limits set out under Section 197(12) of the Act read with
Rules 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, is annexed as "Annexure-E" to this Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators /Courts which would
impact the going concern status of the Company and its future operations.
SUBSIDIARY, JOINT VENTURES OR ASSOCIATE COMPANY
Honeyvick Enterprises Private Limited continues to be holding company, holding 55.12%
Equity Share Capital of the Company. The Company neither has any
subsidiary/associate/joint venture company nor any other company has become subsidiary/
Associate/Joint Venture company of the Company during the year.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted a
policy against sexual harassment in line with the provisions of Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed
thereunder.
During the year under review, the company has not received any complaint on sexual
harassment and hence no complaints remain pending as of March 31, 2020.
APPRECIATION
Your Directors thank the Banks, Financial Institutions, Shareholders, Customers and
Suppliers for their co-operation and support to the Company. The Directors express their
sincere appreciation for the dedication and commitment of all its employees.
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