DIRECTOR’S REPORT Dear Members, Your Directors have pleasure in presenting their 35th Annual Report and the Statements of accounts of your Company for the financial year ended 31st March, 2015. PERFORMANCE REVIEW The highlights of the Company’s performance are as under: • Revenue from operation increased by 7% to Rs 16986.71 Lacs . • Exports increased by 74.67% to Rs 2225.10 Lacs. • Order book position as on 31st March 2015 stood at Rs 9271.8 Lacs. • Profit before tax reduced by 61.70% to Rs 107.41 Lacs. • Profit after tax reduced by 22.16% to Rs 119.34 Lacs. • Earning per share reduced by 22.26% to Rs 1.99. DIVIDEND Due to inadequate profit , your Directors have not recommended any dividend on equity shares for the year under review. FUTURE PROSPECTS India’s steel industry is passing through one of the most challenging phases. It has been impacted by sluggish domestic demand and dumping of Steel into India by steel surplus countries, primarily china, Russia, Japan & Korea and uncompetitive steel export due to stable Rupees .Though the market has down but your company has registered 7% growth in turnover and your management is quite confident that coming year will be more better. The massive investment around so many mega watt in power sector will be added in the coming year. It has already put in to the action plan and initial working has already started. This will give sufficient load for Fabrication work. The present Modi Government has placed area by encouraging to Indian Manufacturer through make in India project to associate for making Equipment in India. The opening of the strategic defense sector for private sector participation will help foreign original equipment manufacturers to enter into strategic partnerships with Indian companies and leverage the domestic markets and also aim at global business. Besides helping build domestic capabilities, this will bolster exports in the long term. In coming year, the huge investment will be introduced in Mining Industry and your Company is focusing on this area so that the Company can tie up for manufacturing of Equipment related to Coal Mining. MANAGEMENT DISCUSSION AND ANALYSIS REPORT As required under Clause 49 of the Listing Agreements with Stock Exchange, the Management Discussion and Analysis Report is enclosed as a part of this report. CORPORATE GOVERNANCE Your Company is renowned for exemplary governance standards since inception and continues to lay a strong emphasis on transparency, accountability and integrity. The Company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreements with the stock exchange are complied in its letter and spirit. 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. TRANSFER TO GENERAL RESERVE During the year under review, the company has transferred Rs 336.76 Lacs to the General reserve. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY There were no material changes and commitments affecting the financial position of the Company . SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company. INTERNAL FINANCIAL CONTROL The Company has an adequate system of internal controls to ensure that transactions are properly authorised, recorded and reported. The internal Control system is supplemented by well-documented policies, guidelines and procedures and reviews carried out by the Company’s internal audit function, which submits reports periodically to the Management and the Audit Committee of the Board. DEPOSITS During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter V – Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. AUDITORS STATUTORY AUDITORS M/s Taunk & Srikanth, Chartered Accountants, who are the Statutory Auditors of the Company will retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment , subject to the approval of shareholders. The Company has received letter from them to the effect that their re appointment , if made , would be within the prescribed limits and that they are not disqualified for reappointment . Members are requested to consider their reappointment on a remuneration to be decided by the Board or Committee thereof for the ensuring Financial Year i.e 2015-16. COST AUDITOR Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors Rules, 2014 and the Companies ( Cost Records and Audit ) Amendments Rules 2014 , the Company maintains the cost audit records in respect of its business. Your Board has, on the recommendation of the Audit Committee appointed M/s Arindam & Associates, Cost Accountants Raipur (C.G) as Cost auditors of the Company for FY 2016.The provisions also require that the remuneration of the Cost Auditors be ratified by the Shareholders. SECRETARIAL AUDITOR Pursuant to section 204 of the Companies Act , 2013 and the Companies (Appointment & Remuneration of managerial Personnel)Rules , 2014, Satish Batra & Associates ,Practicing Company Secretary was appointed to conduct the secretarial audit of the Company for FY 2014- 15. The Secretarial Audit Report for FY 2015 is attached as “ Annexure- I “. Basing on the consent received from Satish Batra & Associates ,Practicing Company Secretary and the recommendation of the Audit Committee, the Board has appointed Satish Batra & Associates ,Practicing Company Secretary, as Secretarial Auditor of the Company for FY 2015-16. BOARD RESPONSE ON AUDITORS QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE There are no qualifications, reservations or adverse remarks made by the statutory auditors in their report or by the Company Secretary in practice in the secretarial audit report. CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES Presently the Company’s shares are listed on the Bombay Stock Exchange Limited (BSE) . The delisting application is pending before delisting committee at Delhi Stock Exchange and the Company has voluntary delisted from Madhya Pradesh Stock Exchange on 08.01.2015. There are no changes in Capital Structure during the FY ended March 31,2015. EXTRACT OF THE ANNUAL RETURN The Details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as “Annexure-II”. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars as prescribed under section 134(3)(m) of the Companies Act, 2013, read with Rule 8 (3) of the Companies (Accounts)Rules 2014 are attached as “Annexure-III “. CORPORATE SOCIAL RESPONSIBILITY (CSR) As per Section 135 of the Companies Act, 2013, the Company has a Corporate Social Responsibility (CSR) Committee of its Board of Directors. The Committee comprises of Mr Kisan R Choksey (Chairman ), Mr Shailesh A Shah and Mr Ketan M Shah as Members. During the year under review, the Committee has not found any suitable project to initiate towards mandatory obligation as per Section 135 of the Companies Act 2013. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Act and the Articles of Association of the Company, Mr Arvind K Shah and Mr Shailesh A Shah, Directors of the Company, retire by rotation at the ensuring Annual General Meeting and being eligible have offered themselves for re-appointment. During the year under review, the members approved the appointment of Mrs Sangeeta K Shah as a Whole Time Director of the Company who is liable to retire by rotation and of Mr Hasmukhlal S Parikh, Mr Kisan R Choksey, Mr Rajendra A Shah, Mr Shivji R Shah and Ms Ushma khabaria as a Independent Directors who are not liable to retire by rotational. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other Individual Directors . During the year under review the Board has appointed Mr Avinash Hariharno as Chief Financial officer of the Company with effect from 1st June, 2015. The Company has received resignation from Ms Monalisa Patni from the office of Company Secretary on March 23, 2015 and the same has been accepted in Board of Directors Meeting held on May 28,2015. PARTICULARS OF REMUNERATION OF DIRECTORS, KMP & EMPLOYEES None of the employees covered under Section 197(12) of the Companies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with rules 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as “ Annexure-IV” which forms part of this report. MEETINGS OF THE BOARD Five meetings of the Board of Directors were held during the year. For further details , please refer report on Corporate Governance section of this Annual Report. AUDIT COMMITTEE As required under section 177 of the Companies Act ,2013 read with Clause 49 of the Listing Agreement with the Stock Exchange , the Board constituted an Audit Committee. Audit Committee of the Board comprises of four independent Directors namely Mr Kisan R Choksey, Chairman and Mr Hasmukhlal S Parikh, Mr Shivji R Shah and Mr Rajendra A Shah as Members . All the recommendations made by the Audit Committee were accepted by the Board. VIGIL MECHANISM Your Company has adopted a Vigil Mechanism to provide appropriate avenues to the employees to bring to the attention of the Management any issue which is perceived to be in violation of or in Conflict with the fundamental business principles of the Company. The Company has provided dedicated e-mail addresses for reporting such concerns . The employees are encouraged to raise any of their concerns by way of whistle blowing and none of the Employees have been denied access to the Audit Committee. Mr. Rajesh Shah is vigilance officer for effective implementation of the Policy. The Vigil Mechanism policy is available on the website of the Company www.simplexcastings.com NOMINATION AND REMUNERATION COMMITTEE The Nomination and Remuneration Committee comprises Mr Kisan R Choksey as the Chairman and Mr Hasmukhlal S Parikh and Mr. Rajendra A.Shah as Members of the Committee. Nomination and Remuneration Policy: The Board of Directors of your Company has, on the recommendation of the Nomination and Remuneration Committee, framed and adopted a policy for selection and appointment of Directors, senior Management and their remuneration .The contents of the policy are stated in the Corporate Governance Report. Board Evaluation: 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 the committees. The manner in which the evaluation was carried out has been explained in Corporate Governance Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loan ,Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 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 contracts/arrangements/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Your attention is drawn is to Related Party disclosures set out in Note No. 31 of the Financial Statements/Auditors Report. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company’s website at http:// www.simplexcastings.com/investors/information.php RISK MANAGEMENT POLICY The Company has in place comprehensive risk assessment and minimization procedures, which are reviewed by the Board periodically .The Company has been addressing various risks impacting the Company. DIRECTOR’S RESPONSIBILITY STATEMENT The Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that— (a) in the preparation of the annual accounts for the year ended March 31,2015, the applicable accounting standards have been followed and there are no material departures from the same ; (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 as at March 31, 2015 and of the profit and loss of the company for that period; (c) the Directors have 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 have prepared the annual accounts on a going concern basis; (e) the Directors 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) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. TRANSFER OF UNPAID OR UNCLAIMED DIVIDEND AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND : Pursuant to the provisions of the Companies Act , the declared dividends, which remained unpaid or unclaimed for a period of seven years, have been transferred by the Company to the Investor Education and protection Fund (IEPF) established by the central Government pursuant to the said Act. INDUSTRIAL RELATIONS The Company maintained healthy, cordial and harmonious industrial relations at all levels. Your Company recognizes its responsibility and continues to provide a safe working environment for women ,free from sexual Harassment and discrimination to boost their confident, morale and performance. ACKNOWLEDGEMENT Your Directors wish to express their appreciation for the continued co-operation of the Central and State Governments, bankers, financial institutions, customers, dealers and suppliers. The Directors also wish to thank all the employees for their contribution, support and continued co-operation throughout the year. For and on behalf of the Board of Directors Ketan M Shah Director Sangeeta K Shah Director Place: Mumbai Date: 03.08.2015 |