DIRECTORS' REPORT DEAR SHAREHOLDERS, Your Directors have the pleasure of placing before you the 46th Annual Report with Audited Statement of Accounts for the year ended 31st March, 2015 STATE OF THE COMPANY'S AFFAIRS During the year 2014-15, your Company achieved a total revenue of Rs.1,09,754.16 lacs as compared to Rs.1,22,905.89 lacs in the previous year which reflects a decline of around 10.7%. Your company incurred loss during the year under review which was mainly due to hike in the price of raw materials, rising borrowing costs and other global factors. The net loss for the year under review was Rs. 10,257.12 lacs against profit of Rs.2100.34 lacs in the previous year. Further, the following events occurred during the financial year of the Company to which the financial statements relate. a. The Company has applied for restructuring of its debts to the Corporate Debt Restructuring Empowered Group (CDR Cell) and has received the provisional letter of approval via Letter No. BY.CDR (JKG) No. 954/2014-15 dated 23rd March, 2015 pursuant to the CDR package approved by the CDR empowered group. During the year under the review no transfer was made to any reserve. EXPANSION PROJECTS During the year under review major part of the Infra project of Rupees Seventy Eight Crores Seventy Six Lacs has been completed and out of it thirty four crores and seventy lacs has already been capitalized. The Company has also proposed to set up a railway siding of 2.5 Km and track of 3.6 Km at its plant location, work on which will start after receipt of approval from Railway Authorities. DIVIDEND The Board of Directors have not recommended any dividend for the Financial Year 2014-15 on Equity as well as 6% Non-cumulative, Non-convertible Redeemable Preference Shares. LISTING OF SHARES The Equity Shares of the Company are listed on the National Stock Exchange of India Limited and the BSE Limited, having nation wide terminal to facilitate easy and convenient trading nation wide. The Company has paid the annual Listing Fees to both the Stock Exchanges for the Financial Year 2015-16. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Puran Mal Agrawal retire by rotation at the ensuing Annual General Meeting and being eligible have offered himself for re-appointment. The Board consists of seven Directors at present consisting of one Executive and six Non- Executive Directors. During the year Mr. Suresh Kumar Agrawal, former Managing Director and Mr. Amit Mehta, former Nonexecutive Independent Director resigned w.e.f from 14th November, 2014 and 17th October, 2014 respectively. Consequently the Board appointed Mr. Saket Agrawal as the Managing Director of the Company w.e.f 14th November, 2014 subject to the approval of the members. Ms. Ruchi Garg, Company Secretary of the Company and Mr. Kamal Kumar Jain, Chief Financial Officer (Appointed on 18th February, 2015) of the Company were designated as Key Managerial Personnel in conformity of the provisions of the Companies Act, 2013 and the Rules framed there under. The Board of Directors met nine times during the year, the details of which are given in the Report of Corporate Governance attached with this Annual Report. Further Mr. Arvind Kumar Saraf, Non-executive Independent Director resigned from his office and Mr. Kapil Deo Pandey was appointed as an Additional Non-executive Independent Director w.e.f 17th June, 2015. The Company has received a declaration from all the Independent Directors of the Company that they meet the criteria of independence as provided in section 149(6) of the Companies Act, 2013 read with relevant Rules made thereunder and Listing Agreements with the Stock Exchanges. >- Performance Evaluation In order to align with the provisions of Section 178, Schedule IV and other applicable provisions of the Companies Act, 2013 read with Rules made thereunder, the provisions of the Listing Agreement entered by the Company with the Stock Exchanges and acting on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of MSP Steel & Power Ltd. has formulated criteria and policy to evaluate the performance of the Independent Directors and Non Independent Directors of the Company. The evaluation of all Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process was based on various aspects which, inter alia, included the level of participation in the Board Meetings, understanding of their roles and responsibilities, business of the Company along with the environment and effectiveness of their contribution. The Board approved the evaluation report as collated by the Nomination & Remuneration Committee of the Company. Policy on appointment & remuneration In terms with the provisions of the Section 178 and all other sections, if applicable, of the Companies Act, 2013 read with relevant Rules framed thereunder and Clause 49 of the Listing Agreement entered with the Stock Exchanges MSP Steel & Power Ltd. ('The Company') on the recommendation of the Nomination & Remuneration Committee of the Board laid down a policy for: • Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal. • The criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees. • Lay down criteria for evaluation of Directors (including both Executive and Non-executive Directors) and the Board. • Devise a policy on Board diversity. The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is attached as ANNEXURE-1 which forms part of this report >- Audit Committee The Board has reconstituted the Audit Committee as per the provisions of the Companies Act, 2013 and the Rules framed there under and the Listing Agreement entered with the Stock Exchanges. Due to the resignation of Mr. Arvind Corporate Social Responsibility The Company is well aware of its responsibility towards the Society & hence the Company has taken efforts to improve the living condition in the vicinity of its plant & surrounding areas. The Company continues its efforts towards the society & complies with Section 135 of the Act read with relevant Rules framed thereunder. The Board on the recommendation of CSR committee has formulated a policy on CSR to regulate the Company's activities, amount to be spent on CSR, etc. In terms with the Companies Act, 2013 read with the relevant Rules framed under it the Company has spent 2% of its average net profits of the preceding three financial years. The Annual Report on Corporate Social Responsibility is attached as ANNEXURE-2 which forms part of this report. AUDITORS Statutory Auditors The present Statutory Auditors of the Company M/s. Sunil Kumar Agrawal & Associates, Chartered Accountants shall hold office upto the conclusion of the ensuing Annual General Meeting of the Company and being eligible has expressed their willingness to be re-appointed. The said auditors have further furnished a certificate to the Company of their eligibility & consent under Section 141 of the Companies Act, 2013 and Rules made thereunder. Cost Auditor Pursuant to Section 148 and all other applicable provisions, if any, of the Companies Act, 2013 and Companies (Cost Records and Audit Rules), 2014 the Board of Directors had appointed Mr. Sambhu Banerjee as Cost Auditor of the Company to conduct Cost Audit for the financial year ending 31st March, 2016. Secretarial Auditor Pursuant to Section 204 of the Companies Act, 2013 read relevant Rules made thereunder, the company has appointed M/s. PS & Associates, Practicing Company Secretaries as the Secretarial Auditors of the Company to conduct Secretarial audit for the year ending 31st March, 2016. DIRECTORS REPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, your Directors hereby confirm 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 at the end of the financial year ended 31st March, 2015 and of the profit and loss of the Company for that period; (c) the directors had 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 had prepared the annual accounts on a going concern basis; (e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and (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. SUBSIDIARIES & ASSOCIATES As on date the Company has one wholly owned subsidiary named MSP Cement Ltd., one subsidiary named M/s. AA ESS Tradelinks Pvt. Ltd. and one joint venture named M/s. Madanpur South Coal Company Ltd. The Consolidated financial statements prepared by the Company include financial information of its subsidiaries and joint venture prepared in compliance with applicable Accounting Standards. MSP Group International Singapore (PTE) Limited which was the only foreign wholly owned subsidiary of the company was struck off during the year under review. Further a statement containing the salient feature of the financial statement of a company's subsidiaries and joint venture under the first proviso to sub-section (3) of Section 129 in the prescribed format in AOC-1 is attached as ANNEXURE-3 which forms part of this report. And the copies of financial statement including consolidated financial statement, audited accounts of each subsidiary and joint venture companies are open for inspection during the business hours at our corporate office. DISCLOSURES >- The Company has received from all its Independent Directors a declaration that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Act. >- During the year under review the Board met nine times on 24th April, 2014, 30th May, 2014; 14th August, 2014; 14th November, 2014; 10th December, 2014; 24th January, 2015; 11th February, 2015, 18th February, 2015 and 27th March, 2015. Further the attendance of the Directors are given in the Report of Corporate Governance section of this report. >- Subject to the provisions of Section 197 of the Companies Act, 2013, any director who is in receipt of any commission from the Company and who is a Managing or Whole-time Director of the company shall not be disqualified from receiving any remuneration or commission from subsidiary company of the Company. >- Whistle Blower/Vigil Mechanism Policy The Company has put up a Vigil Mechanism (Whistle Blower) Policy for directors and employees to report genuine concerns about the ethical behaviour or suspected/actual fraud or violation of Code of Conduct of the Company. The Contact details of the Chairman of Audit Committee is as follows: The Chairman (Audit Committee) MSP Steel & Power Limited 16/S, Block- A, New Alipore, Kolkata- 700 053 >- Familiarisation Programme for Independent Directors The Board of Directors through various programmes familiarise the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the company, etc. Brief details of such programmes are provided in Corporate Governance report attached to this Annual Report. >- Nomination & Remuneration Policy The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is attached as ANNEXURE- 1 which forms part of this report. >- Risk Management Policy The Board has formulated and implemented a risk management framework that includes identification of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company. Brief details about the policy are provided in Management Discussion & Analysis Report attached to this Annual Report. >- Particulars of Employees As on 31st March, 2015 there are no employee who is in receipt of remuneration in excess of Rs.60 lacs, if employed throughout the year or Rs.5 lacs per month, if employed for part of the financial year or received remuneration in excess of that drawn by the MD/WTD/Manager and holding 2% or more of Equity Share Capital of the Company as prescribed under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Disclosures pertaining to remuneration and other details as 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 attached as ANNEXURE-4 which forms part of this report. >- Secretarial Audit In terms of Section 204 of the Companies Act, 2013 along with the relevant Rules made thereunder the Company undergo a secretarial audit by M/s. PS & Associates, Practicing Company Secretaries. The secretarial audit report in form MR-3 is attached as ANNEXURE-5 which forms part of this report. >- Particulars of Loans, guarantees or investments under Section 186 of the Companies Act, 2013 Loans, guarantees or investments covered under Section 186 of the Companies Act, 2013 forms part of the notes to the financial statements provided in this Annual Report >- Management Discussion & Analysis Report As per Listing Agreement a report on Management Discussion & Analysis is attached with this report. >- Particulars of Contracts or arrangement with related parties The particulars of every contracts or arrangements entered into with the related parties as mentioned in Section 188 of the Companies Act, 2013 and its allied Rules are disclosed in Form No. AOC- 2 is attached as ANNEXURE- 6 which forms part of this report. >- Extracts of the Annual Return Details relating to the extracts of the Annual return in Form MGT-9 is attached as ANNEXURE-7 which forms part of this report CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is attached as ANNEXURE- 8 which forms part of this report. DEPOSITS During the year under review, your company had not accepted 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 Deposit) Rules, 2014. ACKNOWLEDGEMENTS Your directors wish to place on record their gratitude for the valuable guidance and support given by the Government of India, various State Government Departments, Financial Institutions, Banks and various Stake Holders such as Shareholders, Customers, Dealers, Suppliers and Investors during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff of the Company, resulting in the successful performance of the Company during the year. For and on behalf of the Board Puran Mal Agrawal Chairman
Date: August 14, 2015 Place: Kolkata |