DIRECTORS' REPORT To THE MEMBERS, Your Directors have pleasure in presenting the forty fourth annual report of the Company together with the audited statement of accounts for the year ended 31st March, 2015. FINANCIAL, OPERATIONAL REVIEW & FUTURE PROSPECTS During the year ended 31st March, 2015, the Income of the Company by way of dividend, interest and other income stood up at Rs. 21.30 crore as compared to Rs. 21.60 crore during the previous year. Profit before interest, depreciation and tax stood at Rs. 4.24 crore as compared to Rs. 21.06 crore during previous year. Net Profit after tax stood at Rs. 6.09 crore as compared to Rs. 17.33 crore during the previous year. An amount of Rs. 1.22 crore was transferred to Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1934, during the financial year under review. Your Company holds significant investments in equity shares of steel manufacturing companies of O.P. Jindal group. The growth in Steel Sector in India is likely to sustain in coming years, therefore, the performance of the Investee Companies is also expected to improve in the ensuing years. The development in Architectural, Building and Construction sector being undertaken in India is also expected to give a further boost to the Steel industry and your Company is looking forward for a sustainable growth in its Investee Companies in the coming years which would enhance the shareholders' value. CONSOLIDATED ACCOUNTS In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report. SUBSIDIARY COMPANIES / JOINT VENTURES / ASSOCIATE COMPANIES As on 31st March, 2015, the Company had 5 direct and step down subsidiaries, namely (i) Jindal Steel & Alloys Ltd. (JSAL) (ii) Jindal Holdings Ltd.(JHL) (iii) Jindal Stainless(Mauritius) Ltd.(JSML) (iv)Massillon Stainless Inc. (MSI) -through JSML and (v) Brahmaputra Capital & Financial Services Ltd. A separate statement containing the salient features of financial statements of all subsidiary companies of your Company forms part of the consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays up to the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company. The Policy for determining material subsidiaries as approved may be accessed on the Company's website at the link: http://www.nalwasons.com/pdf/Policy%20for%20determining%20material%20subsidiaries-%20NSIL.pdf The Company does not have any joint venture or associate company. SHARE CAPITAL The paid up capital of the Company is Rs. 5,13,61,630/- divided into 51,36,163 equity shares of Rs. 10/- each. DIVIDEND The Directors have not recommended declaration of any dividend on equity shares for the year ended 31st March, 2015 in order to conserve the resources for future. TRANSFER TO RESERVES Your Company has transferred an amount of Rs. 608.95 lacs out of profit to the Reserves for the financial year 2014-15. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND There is no unclaimed and unpaid dividend remaining due with the Company. Hence, the Company has not transferred any amount to Investor Education and Protection Fund of Government of India during the year 2014-15 in pursuance to Section 124 of the Companies Act, 2013. EMPLOYEES STOCK OPTION SCHEME The Company has not granted any stock options during the Financial Year 2014-15. DIRECTORS AND KEY-MANAGERIAL PERSONNEL During the Financial Year 2014-15, the Board of Directors appointed Mr. Shailesh Goyal and Mrs. Vaishali Deshmukh as Additional Directors with effect from 25th March 2015. In terms of the provisions of Section 161 of the Companies Act, 2013, both Mr. Shailesh Goyal and Mrs. Vaishali Deshmukh shall hold office up to the date of the ensuing Annual General Meeting. The Company has received notice (s) under Section 160 of the Companies Act, 2013 from members signifying their candidature for appointment as Director. Necessary resolutions for the appointments of the aforesaid Directors will be placed before the shareholders for their approval. Mr. Mahender Kumar Goel, who retires by rotation at the ensuing Annual General Meeting under the provisions of the Companies Act, 2013 and being eligible, has offerd himself for re-appointment. Brief resumes of the above mentioned Directors, nature of their expertise in specific functional areas, details of Directorship in other companies and the membership / chairmanship of committees of the board, as stipulated under Clause 49 of the listing agreement with the stock exchanges and secretarial standard- 2 issued by the Institute of Company Secretaries of India are given in the Notice forming part of the Annual Report. The Company has also devised a Policy on Familiarization Programme for Independent Directors which aims to familiarize the Independent Directors with the Company, nature of the industry in which the Company operates, business operations of the Company etc. The said Policy may be accessed on the Company's website at the link: http://www.nalwasons.com/pdf/Policy%20on%20familiarisation%20programme%20for%20independent%20directors_NSIL.pdf BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company. The performance evaluation of the Independent Directors was carried out by the entire Board. The Directors expressed their satisfaction with the evaluation process. POLICY ON DIRECTORS, KMP & OTHER EMPLOYEES APPOINTMENT AND REMUNERATION Pursuant to the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors has approved the Remuneration Policy on the Recommendation of the Nomination and Remuneration Committee of the Company. The said policy is attached to this Report at Annexure - A. FIXED DEPOSIT The Company has not accepted any deposit from the public. Hence, no information is required to be appended to this report. PAYMENT OF LISTING FEE The equity shares of your Company are listed on BSE Limited, Mumbai (BSE) and National Stock Exchange of India Limited, Mumbai (NSE). The annual listing fee for the year 2015-16 has been paid to both the stock exchanges where the equity shares of your Company are listed. No shares of the Company were delisted during the financial year 2014-15. PARTICULARS REGARDING THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Since the Company is not engaged in any manufacturing activity, particulars under section 134(4)(I) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, regarding conservation of energy, technology absorption are not available. Foreign exchange earnings: Nil Foreign exchange outgo : Nil Nalwa Sons Investments Limited Annual Report 2014-15 PARTICULARS OF EMPLOYEES The information required under Section 197 (12) of the Act read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure - B. There were no emloyees covered under Rule 5(2) of the Companies (Appointmemt and Remuneration) Rules, 2014. RESERVE BANK OF INDIA GUIDELINES Your Company has duly complied with all applicable rules, regulations and guidelines issued by Reserve Bank of India for NBFCs from time to time. Pursuant to the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, issued by RBI, your Company is a Systematically Important Non-Deposit Taking Non-Banking Financial Company having an asset size of more than Rs. 100 crore. The Company falls in the category of a Core Investment Company (CIC) in terms of the Core Investment Companies (Reserve Bank) Directions, 2011. The Company would continue to carry on the business permitted to a CIC in terms of the Core Investment Companies (Reserve Bank) Directions, 2011. AUDITORS a) Statutory Auditor: The members of the Company had, at its AGM held on September 29, 2014 appointed M/s. N.C. Aggarwal & Co., as the Statutory Auditors of the Company for a period of three (3) consecutive years from the conclusion of the 43rd AGM to the conclusion of 46th AGM subject to the ratification of their appointment every year. They have confirmed that their appointment, if ratified, at the ensuing AGM will be within the limits prescribed under section 139 of the Companies Act, 2013 and that they are not disqualified for re-appointment under section 141 of the Companies Act, 2013. The Auditors' Report does not contain any qualification, reservation or adverse remark. b) Secretarial Auditor: The Board has appointed Mr. Rajesh Garg of M/s. Rajesh Garg & Co., Practicing Company Secretary (CP No - 4093) , to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended on March 31, 2015 is annexed herewith marked as Annexure - C to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. CORPORATE SOCIAL RESPONSIBILITY Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with CSR Rules, the Company has constituted CSR Committee and formulated CSR Policy. The Policy primarily rests on four broad categories: Environment, Health, Education and Community Development. Though the CSR Policy was formulated, the Company has not contributed to CSR activities as prescribed in CSR Policy. Despite rigorous efforts, management was not able to find suitable institution/organization through which CSR activities can be performed effectively to benefit the society at large. The Disclosure as per Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed to this Report at Annexure - D. The CSR Policy can be accessed on the Company's website at the link: http://www.nalwasons.com/pdf/CSR%20Policy-NSIL.pdf 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. SEXUAL HARASSMENT CASES 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. All the recommendations made by the Audit Committee during the financial year 2014-15 were accepted by the Board. STOCK EXCHANGES WHERE THE SHARES ARE LISTED National Stock Exchange of India Limited,: Exchange Plaza, 5th Floor, Plot No. C/1, G - Block, Bandra-Kurla Complex, Bandra (E),Mumbai - 400 051 BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure - E. NUMBER OF BOARD MEETINGS The Board of Directors met nine times during the financial year ended on 31st March, 2015. The details of Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report forming part of this Annual Report. DECLARATION OF INDEPENDENCE Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Clause 49 of the Listing Agreement. WHISTLE BLOWER POLICY / VIGIL MECHANISM Pursuant to the provisions of Section 177(9) read with Companies (Meetings of Board and its Powers) Rules, 2014 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has formulated a Vigil Mechanism namely, Whistle Blower Policy for directors, employees and business partners to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. The Whistle Blower Policy is posted on the website of the Company and can be accessed at the link: http://www.nalwasons.com/pdf/ Whistle%20Blower%20Policy.pdf PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY The particulars of loans, guarantees or investments by the Company under section 186 of the Companies Act, 2013 are stated in Notes to Accounts, forming part of this Annual Report. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company which may have a potential conflict with the interest of the Company at large and thus disclosure in Form AOC-2 is not required. The Board has formulated Policy on Related Party Transactions. The Policy on dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: http:// www.nalwasons.com/pdf/Policy%20on%20dealing%20with%20Related%20Party%20Transactions.pdf Your Directors draw attention of the members to Note - 15 to the financial statement which sets out related party disclosures. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY (OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE DIRECTORS REPORT) There have been 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 relate and the date of the report. RISK MANAGEMENT The Company has laid down procedures to inform Board members about the risk assessment and mitigation procedures. These procedures are periodically reviewed to ensure that executive management controls risk through means of a properly defined framework. The Company has also devised a Risk Management Policy for identification of elements of risks and procedures for reporting the same to the Board. THE CHANGE IN THE NATURE OF BUSINESS, IF ANY There has been no change in the nature of Company's business during the financial year ended on 31st March, 2015. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134 (3) (c) read with Section 134(5) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed that: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the Directors had 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 31st March, 2015 and of the profit and loss of the Company for the year ended on that date; (c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the Directors had prepared the annual accounts on a going concern basis; and (e) the Directors had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively. (f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. CORPORATE GOVERNANCE A separate section on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the stock exchanges, forms part of this Annual Report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report as required under the listing agreement with the stock exchanges forms part of this Annual Report. HUMAN RESOURCES The Company continues to put due emphasis on appropriate human resource development for its business. The employees of your Company and the Group fully identify with the Company's and Group's vision and business goals. E-VOTING PLATFORM In compliance with the provisions of Section 108 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, your Company is registered with CDSL for E-Voting services to set up an electronic platform to facilitate shareholders to cast vote in electronic form to exercise their right of voting at General Meetings /business to be transacted by means of voting through e-voting or poll or ballot paper as provided under the Companies Act, 2013. ACKNOWLEDGEMENT Your Directors would like to express their gratitude for the valuable assistance and co-operation received from shareholders, banks, government authorities, customers and vendors. Your Directors also wish to place on record their appreciation for the committed services of all the employees of the Company. For and on behalf of the Board of Directors Mahender Kumar Goel Executive Director & C.E.O. (DIN:00041866) Rajinder Parkash Jindal Director (DIN: 00004594) Place: Hisar Date : August 8, 2015 |