DIRECTORS' REPORT Dear Shareholders, Your Directors have pleasure in presenting their 29th Annual Report on the businesses and operations of your company together with audited statement of accounts for the year ended on 31st March, 2015 2. DIVIDEND: Your Directors are unable to recommend any dividend during the year under review in view of losses. 3. RESERVES: In view of the losses, your Board of Directors does not appropriate any amount to be transferred to General Reserves during the year under review. 4. STATE OF COMPANY'S AFFAIR: During the year under review, the sales and other income during the year decreased to Rs.9234.30 Lacs as compared to Rs. 10383.44 Lacs in the previous year. The Loss after tax during the year was Rs. 226.44 lacs as compared to a profit of Rs.22.71 lacs in the previous year. The company has incurred Losses in this year due to decreasing trend in the prices of steel and slows down in the economy. 5. CHANGE IN THE NATURE OF BUSINESS: There is no change in the nature of business in the year under review. 6. MATERIAL CHANGES & COMMITMENTS: No material changes and commitments have occurred after the close of the year till the date of this report, which affect the financial position of the company. 7. ORDERS: No significant or material orders were passed by the Regulators or courts or tribunals which impact the going concern status and company's operation in future. 8. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY: The company has an Internal Control System commensurate with the size, scale complexity of its operations. The company has formulated Internal Financial Control policy according to Sec 134(5)(e) of the Companies Act, 2013. 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 was observed. 9. DETAILS OF SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANY: The company does not have any subsidiary/ associate or Joint Venture. 10. FINANCIAL POSITION OF SUBSIDIARY/JV/ASSOCIATE COMPANY: As there is no subsidiary, joint venture or Associate Company, our company is not required to furnish any information regarding this. 11.DEPOSITS: The Company has not accepted any fixed deposit under Chapter V of the Companies Act, 2013 during the year under report. 12 . STATUTORY AUDITORS: M/s Pramod & Associates, Chartered Accountants, Jaipur retire and being eligible, offer themselves for reappointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for reappointment . The Board has appointed M/s G.K. Gupta & Co., Cost accountants as the cost auditors for conducting the audit of cost records of the Company for various segments for the financial year 2014-15. 13 . AUDITORS' REPORT: The observations of the Auditors have been suitably dealt within the notes on accounts. The Auditor's Report does not contain any qualification, reservation or adverse remark. 14 . SHARE CAPITAL: The paid up equity share capital as on 31st March 2015 was 45078000. During the year under review, the company has neither issued shares with differential voting rights, nor granted stock options and sweat equity. As on March 31, 2015, none of the Directors of the company hold any convertible instruments of the company. 15.EXTRACT OF ANNUAL RETURN: Extract of Annual Return of the Company as required by Companies Act, 2013 is annexed herewith as Annexure II to this Report. 16. PARTICULARS OF ENERGY CONSUMPTION ETC: a) CONSERVATION OF ENERGY: The information pursuant to sub-section 3(m) of section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is either nil or not applicable. However, the company is conscious about its responsibility to conserve energy, power and other energy resources wherever applicable. b) TECHNOLOGY ABSORPTION: Your Company has not imported any technology in the year under review. c) FOREIGN EXCHANGE EARNING & OUTGO: There was no inflow and outflow of Foreign Exchange during the year. 17. CORPORATE SOCIAL RESPONSIBILITY: The provisions of CSR are not applicable to the company for the Financial Year 2014-2015 as the company does not fall under the provisions of Section 135 of the Companies Act, 2013. 18.DIRECTORS: a) In accordance with the provisions of the Act and the Articles of Association of the Company, Smt Rajshree Patni, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible has offer herself for re-appointment. During the year under review the members approved the appointments of Smt. Rajshree Patni as an executive Non-Independent Director who is liable to retire by rotation and of Shri Sunil Kumar Jain, Shri Deepesh Jain, and Shri Mahendra Kumar Jain as Independent Directors who are not liable to retire by rotation. The members have also re-appointed Shri Harish Chand Jain as the Managing Director. b) 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. c) The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 4 9 of the Listing Agreements ("Clause 49") . The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and nonexecutive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. 19.NO. OF BOARD MEETINGS: Seven meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance. 20. AUDIT COMMITTEE: The Audit Committee comprises Independent Directors namely Shri Sunil Kumar Jain (Chairman), Shri Deepesh Jain and Shri Mahendra Kumar Jain as other members. All the recommendations made by the Audit Committee were accepted by the Board. 21.VIGIL MECHANISM/ WHISTLE BLOWER POLICY: The company has a vigil mechanism policy to deal with instance of fraud and mismanagement, if any. The detail of the policy is posted on the website of the company. 22. NOMINATION & REMUNERATION COMMITTEE: The Nomination & Remuneration Committee comprises Independent Directors namely Shri Deepesh Jain (Chairman), Shri Sunil Kumar Jain and Shri Mahendra Kumar Jain as other members. The policy of the committee is stated in the Report on Corporate Governance. 23. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED: There is no outstanding loan & guarantee at the year end as prescribed under section 186 of the Companies Act, 2013. The company has not made any investment during the year as prescribed under section 186 of the Companies Act, 2013. 24. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES: During the period under review, the Company had not entered into any material transaction with any of its related parties. None of the transactions with any of related parties were in conflict with the Company's interest. Attention of members is drawn to the disclosure of transactions with related parties set out in Note No. 36 of Financial Statements, forming part of the Annual Report. The related party transactions are entered into based on considerations of various business exigencies, such as synergy in operations, sectoral specialization and the Company's long-term strategy for sectoral investments, optimization of market share, profitability, legal requirements, liquidity and capital resources of subsidiaries and associates. All related party transactions are negotiated on an arm's length basis, and are intended to further the Company's interests. 26. SECRETARIAL AUDIT REPORT: As per the requirement of Section 204 (1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014, the Company has obtained a Certificate from Ms. Sneha Agarwal, Company Secretary in Whole time Practice, Confirming that the Company has complied with the provisions of the Companies Act, 2013 in the Financial Year 2014-2015 and a copy of the Secretarial Audit Report is annexed to this Report as Annexure- III. 27 . CORPORATE GOVERNANCE: The company is committed to maintain the highest standard of Corporate Governance and adhere to the Corporate Governance requirement set out by the SEBI. Corporate Governance Report as stipulated under Clause 4 9 of the Listing Agreement is set out as a separate Annexure-1 which forms 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. 28. RISK MANAGEMENT POLICY: Pursuant to the requirement of Clause 49 of the listing agreement, the company has a robust Enterprise Risk Management framework to identify, evaluate business risk & opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level. 29. DIRECTORS' RESPONSIBILITY STATEMENT: In accordance with the provisions of section 134 (3) (c) of the Companies Act, 2013 your Directors confirm that: a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, 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 losses of the Company for the year ended on that date; c) the Directors 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) the Directors have prepared the annual accounts on a Agoing 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. 30.MANAGEMENT DISCUSSION & ANYLYSIS REPORT: a) INDUSTRY STRUCTURE & DEVELOPMENT: Activities of your company come under the category of steel tube industry. With the increased activity in housing and agriculture, the future of the steel tube industry shall continue to remain encouraging. b) OPPORTUNITIES, THREATS RISK & CONCERNS: Presently major requirements of pipes in Rajasthan are being met through units situated outside Rajasthan. The pipes manufactured by the company would be able to compete effectively in the market as they would have a clear price advantage over the other outside suppliers because of lower transportation cost benefits applicable to the company. The company's product shall enjoy 4% price preference and 80% purchase preference in all Govt. & semi Govt, organisations of Rajasthan Govt. Steel Tube and pipe industry is expected to show good prospects in view of increased availability of H.R. Coils being basic raw material to manufacture M.S. Steel Tube. More units with similar facility may come up resulting in greater competition and lower price realization. Changed state Govt, policies may affect the profitability of the company. The steel tube industry is subject to market cycle and as constituent of the industry, your company is also exposed to these constituent. Rise in price of H.R. Coils, Zinc are also a matter of concern. c) SEGMENT: The operations of the company are covered in one segment only i.e. steel tube segment. d) OUTLOOK: Having regards to the prevailing circumstances your company visualizes a hopeful growth in the industry. e) INTERNAL CONTROL SYSTEM : Your company maintains an internal control system in different areas like purchases, billing for the jobs etc. Moreover there are internal auditors who make consistent monitoring to have proper and sufficient care for maintenance of adequate accounting records required for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. f) DEVELOPMENT: HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT : Your Board has nothing to report on the development in human resource as well industrial relations front which have a material bearing on the business of the company. g) DISCLOSURE BY THE MANAGEMENT: Your board has not received any disclosure by the management relating to any material, financial and commercial transactions where any of the managerial staff has personal interest that may have a potential conflict with the interest of the company at large. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 31. ACKNOWLEDGEMENTS: Your Directors are grateful to the Government authorities, financial institutions, bankers, business constituents for their continued co-operation and timely support to the company. Your Directors also express their deep appreciation for the devoted services by workers, staff and executives at all levels of operations in achieving the results for the year. Industrial relations continued to remain happy and cordial. For and on Behalf of the Board (HARISH CHAND JAIN) CHAIRMAN & MANAGING DIRECTOR DIN NO.: 01504391 (RAJSHREE PATNI) (DIRECTOR) DIN NO.:06934858 Dated: 30th July, 2015 Registered office: 404, Shekhawati Complex, Station Road, JAIPUR |