DIRECTORS' REPORT TO THE MEMBERS, Your Directors have pleasure in presenting the 16th Annual Report and the Audited Financial Statements for the Financial Year ended March 31, 2015. State of the Company's Affairs : During the year under review, the total revenue of the company was Rs. 1577.63 crores as against previous figure Rs. 1262.75 crores which is 24.94 % more than the last year, and Profit before depreciation and taxes recorded at Rs. 59.78 crores as against previous figure Rs. 54.11 crores. The manufacturing sales were Rs.755.99 Crores in the current year and Rs.714.97 Crores in the previous year. The trading sales during the year amounted to Rs. 816.83 Crores compared to Rs. 601.93 Crores in the previous year. The increase in revenue is attributed to the increase in trading activity undertaken by the company and the amalgamation of Simhadri Power Limited with the company. With the merger, the sales of Simhadri Power Limited are also reflected in the turnover. Performance and financial position of each of the subsidiaries, associates and joint venture : Report on the performance and financial position of each of the subsidiaries, associates and joint venture companies of the Company is prepared and same is enclosed as Annexure -1 to this Report. Number of Meetings of the Board of Directors ; During the year ended March 31, 2015, Six Board Meetings were held. The dates on which the Board meetings were held are May 29, 2014, July 22, 2014, August 12, 2014, November 14, 2014, December 03, 2014 and February 9, 2015. Directors Responsibility Statement as required under Section 134 of the Companies Act, 2013 Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to the Directors' Responsibility Statement, the Board of Directors of the Company hereby confirms: i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed; ii) 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 and fair view of the state of affairs of the Company as at March 31, 2015 and of Profit and Loss Account of the Company for that period; iii) that 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; iv) that the Directors have prepared the Annual Accounts for the Financial Year ended March 31, 2015 on a going concern basis; v) that the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and vi) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Statement on Declaration given by Independent Directors under Sub-Section (6) of Section 149 The independent directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section(6). Particulars of Loans, Guarantees or Investments under Section 186 The details of Loans, Guarantees, Investments given during the Financial Year ended on March 31, 2015 are NIL and the same is given in the prescribed format in Annexure - 2 in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014. Particulars of Contracts or Arrangements with Related Parties Referred to in Sub-Section (1) of Section 188 There were no materially significant related party transactions entered by the company during the year with the promoters , directors, key managerial personnel or other persons which may have a potential conflict with the interest of the company and the related party transactions that were entered during the financial year, if any, were in ordinary course of business of the company. The policy on related party transactions as approved by the board of directors is hosted on the website of the company. The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 are prepared in Form No. AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same is enclosed as Annexure - 3 to this Report. Transfer of Amount to Reserves The Company doesn't propose to transfer any amount to the general reserve for the Financial Year ended 31st March, 2015. Dividend To conserve the resources for funding the expansion plans, the Board of Directors do not recommend any Dividend for the financial year ended March 31, 2015. Share Capital During the period under review the Authorised capital of the Company increased from 233,00,00,000 to Rs. 332,00,00,000 consequent to the amalgamation of Simhadri Power Limited with the Company and there is no change in the paid up capital of the Company. As on 31st March, 2015, the allotment of equity shares to the shareholders of GSAL and Simhadri Power Limited, Rs. 24,03,48,115 continues to be pending awaiting the clearances from statutory bodies and has been shown under Equity Share Capital suspense account in the financial statements. However 59,82,720 Equity Shares were allotted to the Share Holders of GSAL (India) Limited on 9th May, 2015. The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. Extracts of Annual Return The Extracts of Annual Return is prepared in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 and the same is enclosed as Annexure - 4 to this Report. The conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to provisions of Section 134(3)(m) of the Companies Act, 2013 (Act) read with the Companies (Accounts) Rules, 2014. Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is prepared and the same is enclosed as Annexure - 5 to this Report. Risk Management Committee The board of directors has formed a risk management committee to identify, evaluate, mitigate and monitor the risks associated with the business carried by the company. The committee reviews the risk management plan and ensures its effectiveness. A mechanism has been put in place which will be reviewed on regular intervals. Corporate Social Responsibility Committee Corporate Social Responsibility is commitment of the Company to improve the quality of life of the workforce and their families and also the community and society at large. The Company believes in undertaking business in such a way that it leads to overall development of all stakeholders and Society. The Company has been pursuing CSR activities long before they were made mandatory under the companies act 2013. A Report on Corporate Social Responsibility (CSR) Policy and Activities as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is appended to this annual report as Annexure - 6 and link to the CSR policy is available at the website <http://seil.co.in>. Directors The following persons were appointed as Additional Director of the Company during the year under report: S.No Name of the Director Date of Appointment 1 Mr. B. Ramesh Kumar 09.02.2015 2 Ms. Sujata Chattopadhyay 27.03.2015 Proposed Appointments: The following appointments to the Board are proposed: Approval of the shareholders is being sought for the appointment of Mr. Bavineni Suresh as Director of the Company, who retire by rotation at the ensuing Annual General Meeting of the Company and being eligible offer himself for re-appointment in accordance with the provisions of the Companies Act and pursuant to Articles of Association of the Company. Your Board recommends his re- appointment. Approval of the shareholders is being sought for the appointment of Mr. Veeramachaneni Venkata Krishna Rao as Director of the Company, who retire by rotation at the ensuing Annual General Meeting of the Company and being eligible offer himself for re-appointment in accordance with the provisions of the Companies Act and pursuant to Articles of Association of the Company. Your Board recommends his re- appointment. Mr. B. Ramesh Kumar was inducted as Additional Director (designated as Joint Managing Director) on the Board. As per the provisions of Section 161 of the Companies Act, 2013, he holds office only up to the date of the Annual General Meeting of the Company. Approval of the Shareholders is being sought for his appointment as Director and Joint Managing Director in the ensuing Annual General Meeting. Being eligible, the Board recommends his appointment. In terms of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors can hold office for a term of up to five (5) consecutive years on the Board of Directors of your Company and are not liable to retire by rotation. Accordingly, Ms. Sujata Chattopadhyay was appointed as Additional and Independent Directors of your Company up to 5 (five) consecutive years up to on 29.09.2020. Appropriate resolutions for the appointment/ re-appointment of Directors are being placed before you for your approval at the ensuing Annual General Meeting. The brief resume of the aforesaid Directors and other information have been detailed in the Notice. Your Directors recommend their appointment/reappointment as Directors of your Company. Mechanism for Evaluation of Board Evaluation of all Board members is done on an annual basis. The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors. In addition to greater board accountability, evaluation of board members helps in ; a. More effective board process b. Better collobaration and communication c. Greater clarity with regard to members roles and responsibilities d. Improved chairman - managing directors and board relations The evaluation process covers the following aspects - Self evaluation of directors - Evaluation of the performance and effectiveness of the board - Evaluation of the performance and effectiveness of the committees - Feedback from the non executive directors to the chairman - Feedback on management support to the board. A) Criteria for evaluation of Board of Directors as a whole These include broadly like the frequency of meetings; the length of meetings, the administration of meeting, the number of committees and their roles; the flow of information to board members and between board members; The quality and quantity of information; and the Disclosure of Information to the stakeholders. B) Criteria for evaluation of the Individual Directors These include broadly like ability to contribute and monitor corporate governance practices, ability to contribute by introducing best practices to address top management issues, participation in long term strategic planning, Commitment to the fulfillment of director obligations and fiduciary responsibilities, Guiding strategy, Monitoring management performance and development, Statutory compliance & Corporate governance, Attendance and contribution at Board /Committee meetings; Time spent by each of the member; and Core competencies. C) Familiarisation Programme for Independent Directors On appointment of the Independent Directors, they will be asked to get familiarised about the Company's operations and businesses. An Interaction with the key executives of the Company is also facilitated to make them more familiar with the operations carried by the company. Detailed presentations on the business of the company are also made to the Directors. Direct meetings with the Chairman and the Managing Director are further facilitated for the new appointee to familiarize him/her about the Company/its businesses and the group practices as the case may be. Details of Directors or Key Managerial Personnel Who Were Appointed or have resigned during the Year The shareholders of the Company have re-appointed Mr. Siva Prasad Chivukula, Mr. Kodali Krishna Rao, Mr. Venkatanarayana Reddy Godi and Mr. Ramineni Ramachandra Rao as Independent Directors for a period of 5 years and appointed with effect from 31st December 2014. Mr. B. Ramesh Kumar has been appointed as Additional Director (designated as Joint Managing Director and Ms. Sujata Chattopadhyay has been appointed as additional Non Executive Independent Directors of the Company. Mr. V.S.Rakesh has been designated as Chief Financial Officer of the Company with Effect from 14.11.2014 pursuant to provisions of Section 203 of the Companies Act, 2013. Deposits The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013. Auditors and Auditors Report: At the Annual General Meeting held on December 31st 2014, M/s. Pavuluri & Co, Chartered Accountants (Firm Registration No. 012194S), Hyderabad, were appointed as Statutory Auditors of the Company to hold office for a period of Five years i.e., till the conclusion of the Annual General Meeting to be held in the calendar year 2019. In terms of the first proviso to Section 139 of the Companies Act, 2013 the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the said appointment of M/s. Pavuluri & Co, Chartered Accountants (Firm Registration No. 012194S), Hyderabad, as statutory auditors of the Company is placed for ratification by the Shareholders. As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from M/s. Pavuluri & Co, Chartered Accountants, to such appointment and also a certificate to the effect that their appointment, if made, would be in accordance with Section 139(1) of the Companies Act, 2013 and the rules made there under. The Board of Directors and the Committee thereof, recommend the appointment. Appropriate resolutions form part of the agenda at the ensuing Annual General Meeting. The Statutory Auditor's Report does not contain any qualifications, reservation or adverse remarks. This report form part of the Annual Report. Cost Auditors: The Products classified as "Steel and Electricity" manufactured by the Company are subjected to Cost Audit in terms of Sec. 148 of the Companies Act. 2013 read with the rules issued there under by the Central Government on 30th June 2014. Accordingly M/s.DZR & Co., Cost Accountants have been reappointed as the Cost Auditors for the year ending 31st March 2016. The Cost Audit Report for year ended 31st March 2014 was reviewed by the Audit Committee at its meeting held on 11.08.2014 and has been filed on 27.09.2014. The Cost Audit Report for Financial year ended 31st March 2015 was under process and will be filed before the due date. Internal Auditors The Board of Directors of the Company has appointed M/s Bhavani & Co., Chartered Accountants to conduct Internal Audit of the Company for the Financial Year ended 31st March, 2015. Corporate Governance A separate report on Corporate Governance is annexed as part of the Annual Report along with the Auditor's Certificate on its compliance. Management Discussion & Analysis The Management Discussion and Analysis Report highlighting the industry structure and developments, opportunities and threats, future outlook, risks and concerns etc. is furnished separately and forms part of this report Whistle Blower Policy/Vigil Mechanism Pursuant to the provisions of section 177 of the companies act, 2013 and the rules framed there under and pursuant to the applicable provision of clause 49 of the listing agreement entered with stock exchanges, the company has established a mechanism through which all stake holders can report the suspected frauds and genuine grievances to the appropriate authority. The Whistle blower policy which has been approved by the board of directors of the company has been hosted on the website of the company viz <http://seil.co.in>. Secretarial Auditor's Report As per the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed BSS & Associates Company Secretaries as Secretarial Auditors to conduct Secretarial audit of the company for the Financial year ended on March 31, 2015. Secretarial Audit Report issued by Mr. S.Srikanth, Partner of M/s BSS & Associates Company Secretaries in form MR-3 is enclosed as Annexure - 7 to this Annual Report. There are no qualifications in Secretarial Audit Report. Particulars of Employees A table containing the particulars in accordance with the provisions of Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure -8 to this Report. A statement containing the name of every employee employed throughout the financial year and in receipt of remuneration of Rs 60 lakh or more, or employed for part of the year and in receipt of Rs 5 lakh or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is enclosed as Annexure -9 to this Report. Insurance All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully insured. Material changes and commitments There are no Material changes and commitments in the business operations of the Company from the financial year ended 31st March, 2015 to the date of signing of the Director's Report. Policy on Sexual Harassment The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year ended 31st March, 2015, the Company has not received any Complaints pertaining to Sexual Harassment. Industrial Relations The company enjoyed cordial relations with its employees during the year under review and the Board appreciates the employees across the cadres for their dedicated service to the Company, and looks forward to their continued support and higher level of productivity for achieving the targets set for the future. Acknowledgement The Directors take this opportunity to place on record their sincere thanks to the Banks and Financial Institutions, Insurance Companies, Central and State Government Departments and the shareholders for their support and co-operation extended to the Company from time to time. Directors are pleased to record their appreciation of the sincere and dedicated services of the employees and workmen at all levels. For and on behalf of the Board of Directors B. SATISH KUMAR Chairman & Managing Director (DIN:00163676) Place: Hyderabad Date: August 28, 2015 |