DIRECTORS, REPORT To The Members, Your Directors are pleased to present the 29th Annual Report together with the audited accounts of the Company for the year ended on March 31, 2015. Financial Performance The Gross Income for the year under review increased by 9.12% to Rs. 12994.51 millions as compared to Rs. 11908.27 million sin FY 2013-14. In terms of Number of wheels, the Company has achieved sale of 12.47 millions wheels rims against sale of 11.03 millions wheel rims during the previous year, showing the increase in sales of 13.06 % to previous year sales. Your Company managed to grew despite the turmoil in the automotive segment and your Company has now positioned itself to achieve bigger landmarks in FY2015-16. Your Company expects to see similar growth in current year as well. The Earnings before interest and depreciation (EBIDTA) increased to Rs. 1281.95 millions in FY 2014-15 from Rs. 1186.60 millions in 2013-14, registering a growth of 8.04%. The Depreciation and other amortization has decreased to Rs. 381.51 millions in FY2014-15 from Rs. 525.76 millions in FY2013-14. This is primarily due to new requirements of Companies Act 2013, wherein Company has technically reassessed the useful life of its Assets and depreciated these assets over the balance useful life of each asset. Profit before tax during the year under review has increased to Rs. 486.72 million from Rs. 251.62 million in FY 2013-14 recorded a growth of 93.43% .The profit after tax has also been increased to Rs. 394.04 millions from 243.30 millions, showing growth of 61.96%. Transfer of reserves Your Company proposes to transfer an amount of Rs. 243.30 million to the General Reserve. DIVIDEND Your Directors are pleased to recommend a dividend of Rs. 2.00 (i.e 20%) per equity share of Rs. 10/- each (last year 1.50 per equity share) for the year ended 31st March, 2015. The total cash outflow on account of the proposed dividend for the Current year will amount to Rs. 35.70 millions (including dividend Distribution Tax of Rs. 5.18 millions) as against Rs. 26.51 millions (including dividend distribution tax of Rs. 3.70 millions) in the previous year, which represents 9.06%of the Profit after Tax earned during the year. The dividend payout is subject to approval of members at the ensuing Annual General Meeting. During the year, the unclaimed dividend for the financial year 2006-07 was transferred to the Investor Education & Protection fund SHARE CAPITAL During the year under review, your Company has allotted 51000 equity shares of Rs. 10/- each, upon exercise of options by the option holder under "Steel Strips Wheels Limited, Deputy Managing Director, Employee Stock Option Scheme, 2013, consequently the issued and paid up Equity Share Capital of the Company increased from Rs. 152.08 millions (divided into 15208170 Equity Shares of Rs. 10/-each) to Rs. 152.59 millions (divided into 15259170 equity shares of Rs. 10/-each). EMPLOYEE STOCK OPTION SCHEME During the year under review, the company had introduced Employee Stock Option Scheme framed in Accordance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, titled "Steel Strips Wheels Limited-Employee Stock Option Scheme,2014" (hereinafter referred to as "ESOS 2014'), which was approved by the Board of Directors of the company and Subsequently by Shareholders of the company in their Extra Ordinary General Meeting held on 27.02.2015. In terms of the said scheme, the company had granted 1,50,000 Stock Options, exercisable into equivalent no. of equity shares of Rs. 10/-each to the employees of the company having designation of Manager and above. For the purpose of the said scheme, the "Manager" means Assistant Manager, Deputy Manager and Manager. The company had also introduced and implemented Employee Stock Option Scheme in previous financial year, duly approved by the shareholders of the company in their Annual General Meeting dated 30th September, 2013, titled as "Steel Strips Wheels Limited Deputy Managing Director, Employee Stock Options Scheme, 2013 (hereinafter referred to as "DMD ESOS 2013") under which Sh. Andra Veetil Unnikrishnan, Deputy Managing Director had been granted 51000 options exercisable into equivalent no. of equity shares of Rs. 10/- each, which he had fully exercised during the year under review and company has allotted 51000 equity shares of Rs. 10/- each on 19.01.2015. The necessary details regarding "DMD ESOS 2013" and "ESOS 2014" has been uploaded on the website of the company under the web-link: <http://www.sswlindia.com/pages/disclosureregardingesos.htm> The applicable disclosures as stipulated under SEBI (Share Based Employee Benefits) Regulations, 2014 and SEBI Circular No. CIR/CFD/POLICY CELL/2/2015 dated 16th June, 2015 and SEBI (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999 with regard to the Employees' Stock Option Schemes are provided in Annexure A to this Report. No employee has been issued share options during the year, equal to or exceeding 1 % of the issued capital of the Company at the time of grant. Both these Schemes are being implemented directly by the company not through the Trust. There is no change in both the aforementioned Employee Stock option Schemes (i.e "DMD ESOS 2013" and "ESOS 2014) and schemes are in compliance with the SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 respectively. The Company has received a certificate from the Auditors of the Company that the Schemes i.e "DMD ESOS 2013" and "ESOS 2014" have been implemented in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and Securities Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 respectively and the resolution passed by the members. The certificate would be placed at the Annual General Meeting for inspection by members. MANUFACTURING CAPACITY Total installed capacity of the company comprising of Jamshedpur, Dappar and Chennai Plant at present is 16 million wheel rims. During the year, the Board of Directors of your company has approved to set up a specially designed Hot rolling mill (HRM) at Seraikela, State of Jharkhand, for rolling of profile bar under the backward integration policy of the company. Profile bar is the raw material for side ring/ lock ring, requiring for the Truck Wheel Rim. Presently the company is sourcing the profile bars from outside source. With the commissioning of this mill, the company expects substantial saving in its Raw material purchase cost. Production is expected to start by end of third quarter of 2016. The company expects to consume 75% of its production In-House and the remaining shall be sold to others Wheels manufacturers in the first 2 years. The total cost for setting up this Hot rolling mill is approx. 55.00 crore. The said cost will be funded through internal accruals and partly by Foreign Currency Term Loan. CORPORATE GOVERNANCE The company is firmly committed to the principles of Good Corporate Governance and believes that statutory compliances and transparency are necessary to enhance the shareholder value. A separate section on Corporate Governance forming part of the Board Report and a Certificate from the Company’s auditors, confirming the compliance with the Listing Agreement, are included in the Annual Report. MANAGEMENT DISCUSSION AND ANALYSIS Management Discussion and analysis report for the year under review, as stipulated under Clause 49 of the Listing agreement with stock exchanges, is presented in a separate section forming part of the Annual Report. HEALTH,SAFETY AND ENVIRONMENT PROTECTION Our Company has complied with all the applicable health & Safety standards, environment laws and labour laws and has been taking all necessary measures to protect the environment and provide workers a safe work environment. Our Company is committed for continual improvement in Health & Safety as well as Environmental performance by involving all the employees to provide a Safety & healthy work environment to all its employees. HUMAN RESOURCES DEVELOPMENT The Company has continuously adopted structures that help in attracting best external talent and promote internal talent to take higher roles and responsibilities. Your Companys people centric focus is providing an open work environment fostering continuous improvement and development among the employees of the company. Your Company provides a holistic environment where employees get opportunities to realize their potential. Company's performance driven culture helps and motivates employees to excel in their respective are as and progress within the organization. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on Prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed there under. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary trainees) are covered under this policy. During the financial year 2014-15, the Company has not received any complaint on sexual harassment. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL The Board consists of Executive and non-executive directors including independent directors who have wide and varied experience in the field of business, finance, education, industry, commerce and administration. Based on the recommendation of Nomination and Remuneration Committee, Ms. Jaspreet Takhar has been appointed as an additional Director of the company w.e.f 30.03.2015, in the category of Independent Director to broad base the Board of Directors and to comply with the requirement of Clause No. 49 of the Listing agreement and Companies Act, 2013. She will hold the office upto the date of forthcoming Annual General Meeting of the company and is eligible for appointment as Director. The Company has received a notice in writing from a member signifying her candidature for the office of the Director of the Company. Your Directors propose to appoint her as an Independent Director w.e.f 30.03.2015 to 30.09.2017. Her period of office shall not be liable to determination by retirement of directors by rotation. She has submitted a declaration to the Board that she met the criteria of independence as provided under section 149 (6) of the Companies Act, 2013 and clause 49 of the Listing agreement. In the opinion of the Board, she has fulfilled the conditions specified under the Companies Act, 2013 and Rules framed there under and under the listing agreement for her appointment as an Independent Director and that she is independent of the Management. Sh. Dheeraj Garg, was re-appointed as Managing Director of the company by the Shareholders in their Extra ordinary General Meeting held on 24.03.2010 for the period of five years w.e.f 1st June 2010 to 31st May, 2015. The Board of Directors in their meeting held on 24th April, 2015 has, subject to the approval of shareholder, re-appointed Sh. Dheeraj Garg as Managing Director for a period of five years w.e.f 1st June, 2015 to 31st May, 2020. The term of his office shall be liable to determination by retirement of directors by rotation. Further the Board of directors of your company has also, subject to the approval of shareholders, appointed Sh. Manohar Lal Jain as an Executive Director of the company for the period of five years w.e.f. Ist July, 2015 to 30th June, 2020. The terms of his office shall be liable to determination by retirement of directors by rotation. Before his appointment as Executive Director, Sh. Manohar Lal Jain was acting as Non-Executive Director of the company. Tata Steel Limited has nominated Mr. Chanakya Chaudhary as its nominee Director on the Board of the company w.e.f 05.11.2014 in place of Sh. Rajeev Singhal. His period of office shall not be liable to determination by retirement of directors by rotation. During the year under review, Sh.Ajit Singh Chatha and Sh.Vijay Narayan Bedekar resigned as a Director of the company. Your Directors place on record their sincere appreciation for the valuable guidance and support provided by Sh. Rajeev Singhal, Sh.Ajit Singh Chatha and Sh. Vijay Narayan Bedekar during their tenure as Director, for the success of the company. Sh. Rajender Kumar Garg, Chairman of the Company will retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment for your approval. Pursuant to the provisions of Section 203 of the Act, which came into effect from April 1, 2014, the appointments of Sh. Dheeraj Garg, Managing Director, Sh. Andra Veetil Unnikrishnan, Deputy Managing Director, Sh. Naveen Sorot, Chief Financial Officer and Sh. Shaman Jindal, Company Secretary as key managerial personnel of the Company were formalized. DETAILS OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR The company is not having any subsidiary company, Joint Venture company or Associate Company. DEPOSITS FROM PUBLIC The company has not accepted any deposits from public and, as such, no amount on account of principal or interest on deposit from public was outstanding as on the date of this report. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. INTERNAL FINANCIAL CONTROL The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information's. AUDIT COMMITTEE AND OTHER COMMITTEES OF THE BOARD The details pertaining to composition of Audit Committee and other committees of the Board are included in the Corporate Governance Report, which forms part of this report. VIGILMECHANISM/WHISTLE BLOWER POLICY The company has vigil mechanism named "Whistle Blower Policy for Directors and employees to report their genuine concerns. The details of Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the company. (Website link:<http://www.sswlindia.com/pages/whistleblower.htm> NUMBER OF MEETINGS OF THE BOARD During the year, four Board Meetings were convened and held, details of which are given in the Corporate Governance Report that forms part of this Report. The Intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement of Section 134 (5) of the Companies Act, 2013, (hereinafter referred as "Act) and based on the representations, information and explanations received from the management, your directors hereby confirm that: - in the preparation of the annual Accounts for the financial year 2014-15, the applicable accounting standards have been followed and there are no material departures; - they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the financial year; - 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; - they have prepared the annual accounts on a going concern basis; - they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and - they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. DECLARATION BY INDEPENDENT DIRECTORS All Independent Directors of the Company, have submitted their declaration that they meet the criteria of Independence as provided in Sub Section (6) of Section 149 of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement. Further, there has been no change in the circumstances which may affect their status as an Independent Director during the year. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION Company's policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Companies Act, 2013, are covered under Corporate Governance Report which forms part of this Report. AUDITOR'S AND THEIR REPORT Auditors' Report is self explanatory and does not contain any qualification, reservations or adverse remarks or disclaimers , and therefore, needs no comments. M/s S.C.Dewan & Co. was appointed as Statutory Auditor of the Company by the Shareholders in their Annual General Meeting held on 30.09.2014 till the conclusion of the 31st Annual General Meeting of the Company to be held in the year 2017 (subject to the ratification of their appointment at every AGM). Your Directors request the members to ratify the appointment of M/s S.C.Dewan & Co, as Statutory Auditors of the Company, from the conclusion of this Annual General Meeting till the conclusion of Next General Meeting to be held on 2016. The Company has received a certificate from the Auditors to the effect that ratification of their re-appointment, if made, would be in accordance with the provisions of Section 141 of the Companies Act, 2013. 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. SECRETARIAL AUDITORS AND THEIR REPORT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Sushil K. Sikka, a practicing Company Secretary (Membership No. 4241 and CP No. 3582), a proprietor of S.K.Sikka & Associates, to undertake the Secretarial Audit of the Company and the Secretarial Audit Report is being attached with the Directors Report as an Annexure , which is self explanatory and does not contain any qualification, reservations or adverse remarks or disclaimers ,hence needs no comments. PARTICULARS OF LOANS, GUARANTEES OF INVESTMENTS There have been no loans, guarantees and investments under section 186 of the Companies Act, 2013 during the financial year 2014-15. PARTICULARS OF CONTRACTS OR ARRANGEMENT 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 related party transactions as approved by the Board is uploaded on the Company's Website. (website Link:<http://www.sswlindia.com/pages/relatedpartytransaction.htm>.) Disclosure as required under AS-18 have been made in Note-27 of the notes to the financial statements. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. MATERIAL CHANGES AND COMMITMENT, EFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE ENDOF FINANCIAL YEAR 2014-15AND THE DATE OF THIS REPORT No Material changes and Commitment, effecting the financial position of the company, has occurred between the end of the Financial year 2014-15 of the company and the date of this Report. THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO A Statement giving details of conservation of energy/technology absorption and foreign exchange earnings and outgo in terms of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 ,forms part of this report and is annexed herewith as Annexure-B. BUSINESS RISK MANAGEMENT Pursuant to the requirement of Clause 49 of the Listing agreement, the company has constituted a Risk Management Committee 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 Details of the Committee and its terms of reference are set up in the Corporate Governance Report forming part of this report. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy including identification of element of business risk and its mitigation plans has been covered in the management discussion and analysis, which forms part of this report. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES In compliance to Section 135 of the Companies Act, 2013, the company has constituted a Corporate Social Responsibility Committee and also framed a Corporate Social Responsibility Policy and the same is posted on the website of the company at <http://www.sswlindia.com/pages/csr-policy.htm> The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure C of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. BOARD EVALUATION The performance evaluation of the Board, its Committees and individual directors was conducted and the same was based on questionnaire and feedback from all the Directors on the Board as a whole, Committees and self-evaluation. Directors, who were designated, held separate discussions with each of the Directors of the Company and obtained their feedback on overall Board effectiveness as well as each of the other Directors. Based on the questionnaire and feedback, the performance of every director was evaluated in the meeting of the Nomination and Remuneration Committee (NRC). Ms. Jaspreet Takhar, additional director, being appointed on 30th March, 2015, was excluded from the process of evaluation. A separate meeting of the independent directors ("Annual ID meeting") was convened, which reviewed the performance of the Board (as a whole), the non-independent directors and the Chairman and the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. Post the Annual independent directors meeting, the collective feedback of each of the Independent Directors was discussed by the Chairman of the Nomination and Remuneration Committee with the Board's Chairman covering performance of the Board as a whole; performance of the non-independent directors and performance of the Board Chairman. Some of the key criteria for performance evaluation are as follows Performance evaluation of Directors: - Attendance at Board or committee meetings - Contribution at Board or Committee Meetings - Guidance/support to management outside Board/Committee meetings Performance evaluation of Board and Committees: - Degree of fulfillment of key responsibilities - Board Structure and composition - Establishment and delineation of responsibilities to committees - Effectiveness of Board processes, information and functioning - Board culture and dynamics - Quality of relationship between board and Management - Efficacy of communication with external stakeholders. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS The Company has practice of conducting familiarization program of the independent directors as detailed in the Corporate Governance Report which forms part of this report. EXTRACT OF THE ANNUAL RETURN In accordance with Section 134(3) (a) of the Companies Act, 2013, an extract of the Annual Return as provided under Sub-Section (3) of Section 92 of the Companies Act, 2013 is enclosed as Annexure-D in the prescribed form MGT-9 and forms part of this Report. PARTICULARS OF EMPLOYE ES The table containing the names and other particulars of employees in accordance with the provisions of Section 197 (12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure E to the this Report A statement containing the names of every employee employed throughout the financial year2014-15 and in receipt of remuneration of Rs. 60 lakh or more, or employed for part of the year and in receipt of Rs. 5.00 lacs or more a month under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure F to this report. INTERNAL CONTROL SYSTEMS Your Company has adequate internal control procedures commensurate with its size and nature of business. These internal policies ensure efficient use and protection of the assets and resources, compliances with policies and statutes and ensure reliability as well as promptness of financial and operational reports. INSURANCE All properties and insurable interests of your company including building and plant & machinery are adequately insured. PERSONNEL The company continued to have cordial relations with its employees. ACKNOWLEDGEMENT Your Directors wish to place on record their appreciation for the continued co-operation, the Company received from various departments of the Central and State Government, Bankers, Financial Institutions, Dealers and suppliers. The Board also wishes to place on record its gratitude to the valued Customers, members and investing public for their continued support and confidence reposed in the Company. It also acknowledges and appreciates the commitment, dedication and contribution of the Employees towards growth of the Company in all fields. For and on behalf of Board of Directors (RAJENDER KUMAR GARG) CHAIRMAN Place : New Delhi Dated : 01.08.2015 |