DIRECTORS' REPORT Dear Members, Your Directors are pleased to present the 54th Annual Report and the Audited Accounts of the Company for the Financial Year ended 31st March, 2015. The Highlights of the Financial performance for the year under review are as below DIVIDEND : Your Directors are pleased to recommend the Equity Dividend @ 40 % i.e. Rs. 4/- per share. The Dividend as recommended would involve an outflow of Rs. 94,00,000/-(Rupees Ninety Four Lacs only) towards Dividend and Rs. 19,13,650/- (Rupees Nineteen Lacs Thirteen Thousand Six Hundred and Fifty Only) towards Corporate Dividend Tax, resulting in a total outflow of Rs. 1,13,13,650/- (Rupees One Crore Thirteen Lacs Thirteen Thousand Six Hundred and Fifty Only).The dividend will be distributed to the shareholders whose names appear on the register of members as on record date. WORKING & FUTURE PROSPECTS : During the year under review, the turnover of the Company decreased from Rs. 406.94 Crores in 2013-14 to Rs. 334.77 Crores in 2014-15 representing a decline of 17.73 % this was due to uncertainty about cotton crop in the country. The profitability of the Company has also been affected as the profit of the Company has decreased from Rs. 12.27 Crores in 2013- 14 to Rs. 2.02 Crores in 2014 - 15. The Board of Directors are trying their best to improve the performance of the Company. Further, the Company has expanded its business to various new multi engineered products and has started various new divisions for the manufacturing & selling of the said new products. The working of both the Division of the Company is given as below: STEEL DIVISION : The Steel Division is concentrating in its core business of manufacturing Cotton Ginning and Pressing machineries which has a great potential to expand, considering the increasing cotton cultivation in India & abroad. The Company has successfully doing the business of manufacturing and selling of various types of Electrical Penal and pre-fabricated buildings and structures. The Company started its Electrical Panel Business Unit to fulfill existing demands of Electrical Panels from Cotton Ginning Customers and to expand its horizons and to cater the open market. The primary activities undertaken are Electrical Consultancy, Panel Manufacturing, Contracting (through outsourced team of professionals) & Electrical Trade. Further, the Company is now engaged in establishing a trade network across the Central India not only to route general panels but also the products of Companies with which it has tie-ups at an international level such as Chageover switches, Auto Transfer Switches, Digital Multi Meters, Special Relays etc. PLASTIC DIVISION (SUPERPACK) The sale / disposal of the Superpack Division is expected to complete at the earliest. However, the performance of the unit has improved during the year achieving the gross turnover of Rs. 141.94 crores in 2014- 15 against Rs. 129.38 crores during the Financial Year 2013-14. Shri Vinod Kumar Bajaj and Shri Ashish Bajaj are looking after the Superpack Division of the Company. Looking at the valuable experience and background of Shri Ashish Bajaj, the Board of Directors has re-appointed Shri Ashish Bajaj as CEO of Superpack Division for further period of One (1) year w.e.f. 20.03.2015, in compliance with provisions of Section 188 and other applicable provisions, if any, of the Companies Act, 2013 or any amendment or substitution thereof (including any statutory modification(s) or re-enactment for the time being in force) and the rules made thereunder, subject to approval of the shareholders at the ensuing Annual General Meeting. Further, Shri Ashish Bajaj, Chief Executive Officer of Superpack Division of the Company is solely responsible & liable for all the operations (including Day to Day operations), activities and all the compliances including Statutory & Labour compliances applicable to the Superpack Division of the Company from time to time and necessary forms / papers in relation thereof shall be filed with the concerned authorities. FOREIGN SUBSIDIARY : The Company has its 100% Foreign Subsidiary namely M/s BAJAJ CONEAGLE LLC, A Limited Liability Company having its office at Prattville, Alabama, USA. With the physical presence at USA, the Company is able to tap the US & International Market of Continental Products. CREDIT RATING: Your Directors are glad to inform that CRISIL has further reviewed and rated in respect of Bank facilities of the Company. EXTRACT OF ANNUAL RETURN: The extract of Annual Return, in format MGT -9, for the Financial Year 2014-15 has been enclosed with this report. AUDITORS AND AUDITORS' REPORT : M/s B. Chhawchharia & Co., Chartered Accountants, Nagpur retires at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letters from them to the effect that their re-appointment, if made would be within the prescribed limits under Section 141 of the Companies Act, 2013 and that they are not disqualified for the re-appointment. The observations made by the auditors read together with the relevant notes thereon, are self-explanatory and do not call any comments. COST AUDITORS AND COST AUDIT REPORT : M/s Rakesh Mishra & Co, Cost Accountants, was appointed as Cost Auditors of the Company to conduct the audit of Cost Accounts maintained by the Company. The Company has received the Cost Audit Report dated 25/07/2015 from the Cost Auditor for the Financial Year 2014-15. SECRETARIAL AUDITOR : The Board of Directors of the Company has appointed M/s. Siddharth Sipani & Associates, Practicing Company Secretary, to conduct Secretarial Audit for the Financial Year 2014 -15. The Secretarial Audit Report for the Financial Year ended March 31, 2015 is annexed herewith to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse mark. INTERNAL FINANCIAL CONTROLS : The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Particulars of loan, guarantee and investments covered Under Section 186 of the Companies Act, 2013 forms part of the Notes to the Financial Statements provided in this Annual Report. RELATED PARTY TRANSACTIONS : There were no materially significant Related Party Transactions ie. transaction of material nature, that may have potential conflict with the interest of Company at large. Transactions entered with the related parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the Financial Year 2014-15 were mainly in the ordinary course of business and on an arm's length basis. Prior approval of the Audit Committee is obtained by the Company before entering into the related party transaction as per the applicable provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. As per the provisionsof Section 188 of the Companies Act, 2013, approval of the Board of Directors is also obtained for entering into Related Party Transactions by the Company. During the year under review, the Company has not entered into any material contract, arrangement or transactions with related parties, as defined under Clause 49 of the Listing Agreement and Related Transaction Policy of the Company. The policy on Related Party Transaction as approved by the Board is uploaded on the Company's website. RELATED PARTY TRANSACTION POLICY Related Party Transaction Policy, as formulated by the Company defines the materiality of related party transactions and lays down the procedures of dealing with Related Party Transactions, that may have potential conflict with the interest of the Company at large. Transactions entered with related parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the Financial Year 2014-15 were mainly in the Ordinary Course of business and on an arm's length basis. Prior approval of the Audit Committee is obtained by the Company before entering into any Related Party Transaction as per the applicable provisions of the Companies Act 2013 CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES : All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy on materiality of Related Party Transactions and dealing with the related party transactions as approved by the Board may be accessed on the Company's website www.bajajngp.com Particulars of contracts or arrangements with Related Parties referred in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended to the Board Report. INDUSTRIAL RELATIONS : Industrial relations remained cordial during the year. Employees' competencies and skills were enhanced by exposing them to several internal and external training programs. Various measures were taken to improve motivation level of employees. DIRECTORS : During the year under review, the members/ shareholders of the Company approved the appointment/ re-designation of Dr. Mahendra Kumar Sharma (DIN 00519575) from Additional Director to Whole Time Director & Chief Executive Officer (CEO) of the Company for a period of Five (5) Years w.e.f 12th November, 2014. In accordance with Section 149 and other applicable provisions of the Companies Act, 2013, Dr. Panna Himmatlal Akhani (DIN: 07081637) was appointed as an Additional Director (Woman Director) of the Company & to hold the office upto the conclusion of ensuing Annual General Meeting and being eligible for as an Independent Woman Director for the term of Five (5) consecutive years upto the conclusion of 59th Annual General Meeting of the Company. None of the Independent Directors will retire at the ensuing Annual General Meeting of the Company. DECLARATION BY INDEPENDENT DIRECTORS : The Company has received necessary declarations from all the Independent Directors of the Company Under Section 149(7) of the Companies Act, 2013, confirming that they meet the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. BOARD EVALUATION : Clause 49 of the Listing Agreement mandates that the Board of Directors of the Company shall review the performance of the Independent Directors, Board Committee and other Individuals Directors including Executive and Non-Executive Directors of the Company. The Companies Act 2013 states that a formal annual evaluation needs to be made by the Board and Schedule IV of the Companies Act 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The evaluation of all the Directors and the Board as a whole was being conducted. None of the Independent Directors are due for re-appointment. CORPORATE GOVERNANCE : The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirement set out by SEBI. The Company has also implemented several best Corporate Governance Practices. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance. CORPORATE SOCIAL RESPONSIBILITY (CSR) The Company has framed Corporate Social Responsibility (CSR) Policy, as per the provisions of the Companies (CSR) Policy Rules, 2015 which inter-alia lays down the guidelines and mechanism for undertaking socially useful projects for welfare and sustainable development of the community at large. As per the provisions of Section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee comprising of Shri Deepak Batra (Chairman), Shri Alok Goenka & Shri Rajiv Ranka, as the members of the Committee. The Corporate Social Responsibility Committee assists the Board in fulfilling its duty towards the community and society at largeby assisting in identifying the activities and programmes that can be undertaken by the Company, in terms of the CSR policy of the Company. Details about the CSR policy is available on the website of the Company www.bajajngp.com AUDIT COMMITTEE : In terms of Section 177 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules , 2014, the Audit committee of the Board consist of Shri Deepak Batra, Chartered Accountant, Shri Rajiv Ranka and Shri Alok Goenka as a practice of good Corporate Governance. All the recommendations made by the Audit Committee were accepted by the Board. NOMINATION & REMUNERATION COMMITTEE : In terms of Section 178 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules , 2014, the Nomination & Remuneration Committee of the Board consist of Shri Deepak Batra, Chartered Accountant, Shri Rajiv Ranka and Shri Alok Goenka as a practice of good Corporate Governance. VIGIL MECHANISM The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics comprising Senior Executives of the Company. Protected disclosures can be made by a whistle blower through an email or letter. The Policy on vigil mechanism may be accessed on the Company's website at www.bajajngp.com 'INTERNAL COMPLAINTS COMMITTEE' UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL), ACT 2013 : The Company has in place the Internal Complaints Committee under the Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal), Act 2013. The primary objective of the said committee is to provide protection against sexual harassment of women at work place and for prevention and redressal of complaints of sexual harassment and for the matters connected therewith or incidental thereto. MANAGEMENT DISCUSSION AND ANALYSIS REPORT : A Management & Discussion Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement, is presented in a separate section forming part of the Annual Report. MEETINGS OF THE BOARD : The Board of Directors met Five (5) times during the Financial Year 2014-15, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act 2013. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION & PROTECTION FUND: The Dividends declared by the Company which remain unpaid / unclaimed for a period of Seven (7) years are required to transferred to the Investor Education & Protection Fund (IEPF) established by the Central Government pursuant to Section 124(5) of the Companies Act, 2013. The Members are requested to claim their unpaid / unclaimed Dividend, if any, declares and paid for the financial years , 2007-08, 2008-09, 2009-10, 2010-11, 2011-12, 2012-13 & 2013 -14. The unpaid/unclaimed balance of year 2007- 08 would be transferred to the Investor Education and Protection Fund Account in the current Financial Year by the Company. Members who have neither received nor encashed their Dividend Warrant(s) for the financial year 2007-08 to 2013-14, are requested to write to the Company, mentioning their Folio No. / DP ID & Client ID, for issuance of duplicate/ revalidated dividend warrant (s). CONSERVATION OF ENERGY : The Company lays great emphasis on savings in the cost of energy consumption. Achieving reduction in the per unit consumption of energy is an ongoing exercise in the Company. Effective measures have been taken to minimize the loss of energy as far as possible. TECHNOLOGY ABSORPTION : The technological developments on Ginning & Pressing Machinery has acted as an driving force in structural shift from old outdated to more productive advance machinery. The technology used by the Company is updated as a continuous exercise. The Company recognizes that focused initiative on the development of new multi engineered products would form the backbone of the Company's future business performance and profitability. Keeping this in view, the Company has increased its efforts in terms of development of new products. At present, the Company is working on various products under the able leadership of Shri Sunil Bajaj, Executive Director. Research and Development is a continuous phenomenon in the Company and due to which the Company is able to launch successfully various new products to trap the market throughout the year. FOREIGN EXCHANGE EARNINGS AND OUTGO : Details of foreign exchange earnings through exports and foreign exchange outgo on account of imports, expenditure on Traveling and other matters etc. are shown in the Notes No 13(a), 13(b) & 13(c) respectively of Notes on Accounts. To avoid repetition, the members are requested to refer to these Notes. LISTING OF SHARES : The Equity Shares of the Company are listed on the Bombay Stock Exchange Ltd, Delhi Stock Exchange Limited and the Calcutta Stock Exchange Limited. The Company has paid annual listing fees of the Stock Exchanges for the financial year 2014- 2015. There are no trading of Company's shares at Delhi Stock Exchange and the Calcutta Stock Exchange. DIRECTORS RESPONSIBILITY STATEMENT: The financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP). GAAP comprises mandatory Accounting Standards as prescribed Under Section 134(5) of the Companies Act, 2013 ('the Act'), read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act and guidelines issued by the Securities and Exchange Board of India (SEBI). There are no material departures from prescribed Accounting Standards in the adoption of these standards. The Directors confirm that: a) In the preparation of Annual Accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures and in compliance with the laws. b) The Directors 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 of the profit and loss of the Company for that period. c) The Directors have taken proper and sufficient care toward the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d) The Annual Accounts have been prepared on a going concern basis. e) The Directors have laid down internal financial controls, which are adequate and are operating effectively. f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively. GENERAL: Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review : • Details relating to Deposits covered Under Clause V of the Act; • Issue of Equity Shares with differential rights as to Dividend, Voting or otherwise; 33 • Issue of Shares (including Sweat Equity Shares) to Employees of the Company receive any scheme save and except ESOS referred to in this Report; • Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries; • No significant or material orders were passed by the Regulators or Court or Tribunals which impact the going concern status and Company's operations in future. ACKNOWLEDGEMENT : The Directors are grateful to the Bankers and Financial Institutions for their continued support, co-operation and assistance during the year. The Directors express their thanks for the sincere and dedicated efforts put in by the workers, staff and officers during the year. FOR AND ON BEHALF OF THE BOARD FOR BAJAJ STEEL INDUSTRIES LIMITED ROHIT BAJAJ CHAIRMAN & MANAGING DIRECTOR PLACE : NAGPUR DATED : 25/07/2015 |