DIRECTOR’S REPORT Dear Shareholders The Board of Directors of your Company takes pleasure in presenting 29th Annual Report and audited accounts of your Company for the financial year ended 31st March, 2015 1. Results Of Operations And The State Of Company’s Affairs Your company achieved sales of Rs. 1,170 cr. in 2014-15 (as against Rs. 1077 Cr. in 2013-14) in domestic and export markets, thereby registering a growth of 9% over the previous year whereas the profit after tax has increased by 56% in comparison of year 2013-14.This year saw the commissioning of new Auto Tube plant having the capacity around 30,000 mtpa. Further, the board has decided to expand its structure division and hopeful that the expansion would be completed by the end of Financial Year 2015- 16. The shifting of focus from regular products to high engineering products is expected to contribute significantly to your Company’s future growth. 2.Transfer To General Reserves Out of the total profit for the financial year 2014-15, an amount of Rs. 5.00 Crore is proposed to be transferred to the General Reserve. 3. Dividends The Board has distributed interim dividend @ 37.5% i.e., Rs 0.75 Per Equity Share during the year and further has recommend a Final Dividend of 37.5% i.e., Rs 0.75 Per Equity Share of Rs 2 each for the financial year 2014-15. The Final Dividend, if approved at the ensuing annual general meeting, will be paid to those shareholders whose names appear on the register of members of the company as on the book closure date. The total dividend including Interim Dividend on the equity shares would involve an outflow of Rs. 3.30 Cr. toward dividend and Rs 0.66 Cr. toward dividend distribution tax. 4.Corporate Governance And Additional Information To Shareholders The company is committed to maintain high standards of corporate governance. A separate report on corporate governance, pursuant to clause 49 of the listing agreement with the stock exchange(s), auditors’ certificate on its compliance, including the management discussion and analysis, and shareholders’ information forms a part of this report. Details of the depository system and listing of shares and Registrar & Share Transfer Agent are given in the section Shareholder information, which forms a part of the Corporate Governance Report. 5. Conservation Of Energy, Technology Absorption, Foreign Exchange Earnings And Outgo Details of conservation of energy, technology absorption, foreign exchange earnings and outgo undertaken by the Company along with the information in are given in Annexure ‘A’ to the Directors’ Report. 6. Directors And Key Management Personnel During the year, Mr. Anurag Agrawal has resigned from Directorship of company w.e.f. 11.10.2014 and the Company has appointed Mr. Ishwar Chand Agasti w.e.f. 30.09.2014 as Independent Director. In order to fulfill the statutory requirement and representation of women in top position, the Board has appointed Mrs. Kiran Garg Appointed as additional director of the company w.e.f. 01.04.2015. Mr. R.C Garg, Director of the company retire by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment. 7. Statutory Auditors The Company ratifies the appointment of M/s. Sanjeev Anand & Associates, Chartered Accountant (Firm Reg. no. No.: 007171C), as the Statutory Auditors of the Company to hold office from the conclusion of this meeting until the conclusion of next Annual General Meeting. 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 re–appointment. 8. Secretarial Auditor The Board has appointed M/s Ravi S Sharma & Associates, Practicing Company Secretary (FCS – 7336), 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 marked as Annexure ‘B’ to this Report. 9. Auditor’s Reports The Statutory Auditor’s Report to the Shareholders together with Accounts for the year ended 31st March, 2015 and notes thereon are attached, which are self explanatory. The observations of Statutory Auditors and Secretarial Auditors in their report, read with the relevant Notes to Accounts are self explanatory and therefore, do not require any further explanation. 10. Public Deposits Your Company has not invited or accepted any fixed deposits during the year as per the provisions of Section 73(2) of the Companies Act, 2013, and the rules made there under and as such, no amount of principal or interest was outstanding on the date of the Balance Sheet. 11. 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 was observed. 12 .Subsidiaries/Joint Ventures/ Associate Companies M/s Masterji Metalloys Private Limited has become a wholly owned subsidiary of the Company w.e.f. 31.03.2015. A separate section on the performance and financial position of the subsidiary company in Form AOC- I is part of the report and is annexed herewith as Annexure ‘C’. 13.Independent Directors Declaration The Board of the Company consists of Mr. Vijender Kr. Tyagi, Mr. Ishwar C Agasti, Mr. Rahul Goel and Dr. Kiran Garg as independent Directors. These Directors have confirmed that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the Rules there under. Every Independent Director, at the first meeting of the Board in which he participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he meets the criteria of independence as provided under law. 14. Risk Management Policy In compliance with the requirement of the Companies Act, 2013 the Company has put in place Risk Minimization and Assessment Procedures. In order to effectively and efficiently manage risk and address challenges, the Company has formulated Risk Management Policy. The objective of any risk identification and assessment process is to evaluate the combination of likelihood and level of negative impacts from an event. The three main components of risk assessment are business risk, service/operational risk and external risk .The Company manages the risk in line with current risk management best practices. This facilitates the achievement of our objectives, operational effectiveness and efficiency, protection of people and assets, informed decision-making and compliance with applicable laws and regulations. 15. Change In The Nature Of Business In pursuance to Rule 8(5) of Companies (Accounts) Rules, 2014, there is no change in the nature of business of Company. 16. Material Orders In pursuance to Rule 8(5) (vii) of Companies (Accounts) Rules, 2014, No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future. 17. Particulars Of Loans Given, Investments Made, Guarantees Given And Securities Provided Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the financial statements. 18. Familiarisation Programme For Board Members The Board members are provided with necessary documents, reports and internal policies to enable them to familiarise with the Company’s procedures and practices. Periodic presentations are made at the Board and Board Committee Meetings, on business and performance updates of the Company. The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at the link https://www. goodlucksteel.com. 19. The Policy On Related Party Transactions All Contracts/transactions/arrangements entered into by the Company during the financial year with the Related Parties were in ordinary course of business and on an arm’s length basis. However, in view of the applicability of Clause 49 of the Listing Agreement, all Related Party Transactions are approved by the Audit Committee. Omnibus approval is obtained for un-foreseen transactions. Subsequently on a quarterly basis the transactions are presented to the Audit Committee, specifying the nature, value and terms and conditions of the same. The Company has made transactions with related parties pursuant to Section 188 of Companies Act, 2013. The particulars of material contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the Form AOC-2 is annexed herewith as Annexure ‘D’. The Company has formulated a policy on materiality of related party transactions and also on dealing with Related Party Transactions which has been uploaded on the Company’s website at the weblink: https://www.goodlucksteel.com. 20. Policy On Appointment and Remuneration To Be Paid To Directors, Key Managerial Personnel (KMP) And Other Employees And Criteria Formulated By The Committee For Determining Qualification, Attributes, Independence Of A Director The Board has adopted a policy, on Remuneration to be paid to Directors, Key Managerial Personnel and other employees and Criteria for Appointment of Directors. The objective of the policy is to define the criteria for qualification, qualities and characteristics for the Board as a whole and to ensure that Executive/Non-Executive Directors and Key Managerial Personnel are sufficiently compensated for their performance. Policy on appointment of Directors The Composition and strength of the Board of Directors (“the Board”) of the Company is subject to the provisions of the Companies Act, 2013, Listing Agreements and Articles of the Association of the Company. The Nomination and Remuneration Committee is responsible for evaluating the qualifications of each candidate to be appointed as Director on the Board In general, it is expected from a Director to possess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations or other disciplines related to the Company’s business or in the area of his expertise and to have ample experience and a proven record of professional success, leadership and the highest level of personal and professional ethics, integrity and values. Remuneration Policy Non-Executive Independent Directors may receive sitting fees for attending the Meeting of the Board and Committees thereof. The Executive Directors and other employees are paid remuneration by way of salary, perquisites, allowances and variable pay. Perquisites and retirement benefits are paid as per the Company policy. The remuneration of Executive Directors, as recommended by the Nomination and Remuneration Committee, is approved and further recommended by Board of Directors to the Members for approval. Remuneration and annual pay of Executive Directors and employees is determined keeping in view the industry benchmark and the relative performance of the Company. Criteria For Determining Qualifications, Positive Attributes & Independence Of Director A director shall possess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, operations or other disciplines related to the company’s business or in the area of his expertise. A director shall be a person of integrity, who possesses relevant expertise and experience and who shall uphold ethical standards of integrity and probity; act objectively and constructively; exercise his responsibilities in a bona-fide manner in the interest of the company; devote sufficient time and attention to his professional obligations for informed and balanced decision making; and assist the company in implementing the best corporate governance practices. Directors should be free to present their view point independently, Company has also adopted to conduct the separate meeting of the independent Directors, which will ensure that the independent directors of the Company can review the performance of the Board and Chairman. Moreover the Directors should meet the other requirements of the Companies Act, 2013 and Clause 49 of the Listing Agreement concerning independence of directors. A complete Remuneration Policy is available Company’s website at the weblink: https://www.goodlucksteel.com. 21. Evaluation of the Board’s Performance In compliance with the Companies Act, 2013, and Clause 49 of the Listing Agreement, during the year, the Board adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation to evaluate the performance of individual directors including the Board Chairman. The evaluation of Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors. 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 Companies Act, 2013 and corporate governance requirements as prescribed by SEBI under clause 49 of the listing Agreements. The performance of the Board was evaluated on the basis of the criteria such as the Board composition and structure, effectiveness of Board process, information and functioning etc. The performance of the committees was evaluated on the basis of the criteria such as the composition of the committees, effectiveness of committee meetings, etc. The Board and Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of individual director to the Board and committee meetings like preparedness on the issue to be discuss meaningful and constructive contribution and inputs in meetings, etc. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company. 22. Corporate Social Responsibility Initiatives In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR Activities forms part of this Report as Annexure ‘E’. The CSR Policy may be accessed on the Company’s website at the weblink: https://www. goodlucksteel.com. 23. Buy Back of Securities The Company has not bought back any of its securities during the year under review. 24. Vigil Mechanism The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. To maintain these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment. A Vigil (Whistle Blower) mechanism provides a channel to the employees and Directors to report to the management concerns about genuine concerns or grievances, unethical behavior, actual or suspected fraud or violation of the Codes of conduct or legal or regulatory requirements incorrect or misrepresentation of any financial statements and reports, etc. The detail vigil mechanism may be accessed on the Company’s website at the weblink: https:// www.goodlucksteel.com. 25. Extract Of Annual Return Pursuant to section 92(3) of the Companies Act, 2013 (‘the Act’) and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is attached as Annexure ‘F’. 26. Particulars Of Employees Particulars of employees and the ratio of the remuneration of each director to the median employee’s remuneration and other details in terms of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached herewith as Annexure ‘G’ which form part of this Report. 27. Payment of Listing Fees Annual listing fee for the year 2015-16 has been paid by the Company to BSE and NSE. 28. Material Changes And Commitments Affecting The Financial Position Of The Company After 31st March 2015 There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the company, to which the financial statements relates, i.e., 31st March, 2015 and the date of the report. 29. Directors Responsibility Statement As stipulated in Section 134(3) (c) of Companies Act, 2013, your Directors subscribe to the “Directors Responsibility statement” and confirm as under: a.) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures. b.) That 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 & fair view of the state of affairs of the Company at the end of Financial Year 2014-15 and of the Profit & Loss A/c of the Company for that period. c.) That the directors have taken proper and sufficient care of 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.) That the directors have prepared the annual accounts on a going concern basis. e.) The director, in case of a listed company , have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. 30. Appreciation Your Directors wish to thank and acknowledge with gratitude for assistance and co-operation received from the financial institutions, banks, government authorities, customer, vendors, and members during the year under review. Your directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the company. On behalf of the Board of Directors of the independent Directors, which will ensure that the independent directors of the Company can review the performance of the Board and Chairman. Moreover the Directors should meet the other requirements of the Companies Act, 2013 and Clause 49 of the Listing Agreement concerning independence of directors. A complete Remuneration Policy is available Company’s website at the weblink: https://www.goodlucksteel.com. 21. Evaluation of the Board’s Performance In compliance with the Companies Act, 2013, and Clause 49 of the Listing Agreement, during the year, the Board adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation to evaluate the performance of individual directors including the Board Chairman. The evaluation of Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors. 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 Companies Act, 2013 and corporate governance requirements as prescribed by SEBI under clause 49 of the listing Agreements. The performance of the Board was evaluated on the basis of the criteria such as the Board composition and structure, effectiveness of Board process, information and functioning etc. The performance of the committees was evaluated on the basis of the criteria such as the composition of the committees, effectiveness of committee meetings, etc. The Board and Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of individual director to the Board and committee meetings like preparedness on the issue to be discuss meaningful and constructive contribution and inputs in meetings, etc. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company. 22. Corporate Social Responsibility Initiatives In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR Activities forms part of this Report as Annexure ‘E’. The CSR Policy may be accessed on the Company’s website at the weblink: https://www. goodlucksteel.com. 23. Buy Back of Securities The Company has not bought back any of its securities during the year under review. 24. Vigil Mechanism The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. To maintain these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment. A Vigil (Whistle Blower) mechanism provides a channel to the employees and Directors to report to the management concerns about genuine concerns or grievances, unethical behavior, actual or suspected fraud or violation of the Codes of conduct or legal or regulatory requirements incorrect or misrepresentation of any financial statements and reports, etc. The detail vigil mechanism may be accessed on the Company’s website at the weblink: https:// M. C. GARG Chairman DATE: 23rd May, 2015 PLACE: GHAZIABAD |