DIRECTORS' REPORT Dear Shareholders, Your Directors are pleased to present the Thirty First Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended 31st March, 2015. STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK Kindly refer to "Management Discussion and Analysis Report' which forms part of the Annual Report. CHANGES IN THE NATURE OF BUSINESS There has been no change in the nature of business of the Company. DIVIDEND The Board in its meeting held on 14th February, 2015 had declared Interim Dividend of 100% i.e. Rs.2/- per share on face value of Rs.2/- per equity share aggregating to Rs.1310.68 Lacs. The said dividend was paid to the shareholders entitled thereto, on and after 25th February, 2015. The Board of the Company has not recommended any further dividend for the financial year 2014-15 and the Interim Dividend paid would be the final dividend for the Financial Year 2014-15. TRANSFER TO RESERVES During the year under review your Company has not transferred any amount to General Reserve. SCHEME OF ARRANGEMENT The Hon'ble Calcutta High Court vide its Order dated 24th March, 2014 has sanctioned the Scheme of Arrangement under the provisions of Section 391 to 394 of the Companies Act, 1956 for demerger of Aluminium Undertaking, Coated Metals and Mosquito Coil Undertakings, Steel Undertaking and Packaging Undertaking of Manaksia Limited on a going concern basis. The certified copy of the Order sanctioning the Scheme was received by the Company on 19th November, 2014 and the Company has duly filed the said Order with the Registrar of Companies, West Bengal, on 23rd November, 2014. The Scheme has become effective on and from the date of filing with the Registrar of Companies. SHARE CAPITAL The paid up Share Capital as at 31st March, 2015 stood at Rs. 1310.68 Lacs. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. DETAILS PERTAINING TO SHARES IN SUSPENSE ACCOUNT Details of shares held in the demat suspense account as required under Clause 5A I and 5A II of the Listing Agreement forms part of the Corporate Governance Report. OPERATIONS AND BUSINESS PERFORMANCE Kindly refer Management Discussion and Analysis Report, which forms part of the Annual Report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report. DETAILS RELATING TO MATERIAL VARIATIONS During the year under review there is no material variations as no prospectus or letter of offer has been issued. MATERIAL CHANGES AND COMMITMENTS, IF ANY, 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 There is no such material changes and commitments affecting the financial position of the company. EXTRACT OF ANNUAL RETRUN The extract of Annual Return as on 31st March, 2015 in the prescribed Form MGT-9, pursuant to Secti on 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 forms part of this Directors' Report and marked as Annexure- "A". CORPORATE GOVERNANCE REPORT Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Report on the Corporate Governance along with a certificate from the Auditors of the Company confirming compliance with the conditions of the Corporate Governance is annexed as Annexure-"B". NUMBER OF MEETINGS OF THE BOARD The details of numbers of meetings of Board held during the Financial Year 2014-15 forms part of the Corporate Governance Report. DIRECTORS' RESPONSIBILITY STATEMENT Directors of your Company, hereby confirm, pursuant to the provisions of Section 134 (3) (c) of the Companies Act, 2013, in respect of financial year under review : a) That in the preparation of the annual accounts for the year ended 31st March, 2015, all the applicable accounting standards prescribed by the Institute of Chartered Accountants of India have been followed along with proper explanations relating to material departures, if any; b) That the Directors have adopted such accounting policies and have applied them consistently and have made judgements and estimates in a reasonable and prudent manner so as to give a true and fair view of the state of affairs of the Company as at the end of the Financial Year 2014-15 and of the profit of the Company for the year ended 31st March, 2015; c) That the Directors have 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) That the annual accounts have been prepared on a going concern basis; e) That 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; f) That 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. DECLARATION BY INDEPENDENT DIRECTORS In order to align with the provisions of Companies Act, 2013 and the Listi ng Agreement your Company has appointed Mr Ajay Kumar Chakraborty, Dr Kali Kumar Chaudhuri and Mrs Smita Khaitan as Independent Directors of the Company for a term of 5 (Five) years in the Annual General Meeting of the Company held on 26th September 2014 and shall hold office upto the conclusion of the Annual General Meeting of the Company to be held in the calendar year 2019. The Company has received declarati ons from all the Independent Directors of the Company confirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. DIRECTORS & KEY MANAGERIAL PERSONNEL During the year under review Mr. Basant Kumar Agrawal, Managing Director and Mr Sushil Kumar Agrawal, Whole-time Director of the Company have resigned from the Directorship of the Company with effect from conclusion of Board Meeti ng held on 23rd November, 2014. The Board in its meeting held on 23rd November, 2014, based on the recommendation of Nomination & Remuneration Committee, has changed the terms of appointment of Mr. Suresh Kumar Agrawal by changing his designation from Whole-time Director to Managing Director of the Company subject to the approval of shareholders in the ensuing Annual General Meeting of the Company. The Board in its meeting held on 23rd November, 2014 based on the recommendation of Nomination & Remuneration Committee has changed the terms of appointment including remuneration of Mr. Mahabir Prasad Agrawal by changing his designation from Non-Executive Director to Whole-time Director of the Company for a period of 3 years, subject to the approval of shareholders in the ensuing Annual General Meeting of the Company. The Board in its meeting held on 23rd November, 2014 has approved change in terms of appointment of Mr. Sunil Kumar Agrawal by changing his designation from Whole-time Director to Non-Executive Director of the Company. The Board in its meeti ng held on 23rd November, 2014 based on the recommendation of Nominati on & Remuneration Committee has appointed Mr. Basudeo Agrawal as Additional Director of the Company designated as Whole-time Director of the Company for a period of 3 years subject to the approval of shareholders in the ensuing Annual General Meeting of the Company. The Board in its meeting held on 23rd November, 2014 based on the recommendation of Nomination & Remuneration Committee has appointed Mr Vineet Agrawal and Mr. Varun Agrawal as Additional Directors of the Company. During the year under review, Mr. Anubhav Maheshwari has resigned as Company Secretary of the Company and Mr. Raj Kumar Banthia has been appointed as Company Secretary of the Company. In accordance with the provisions of Section 152(6) of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Sunil Kumar Agrawal, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The brief Resume/ Profile of the Directors recommended by the Board for appointment/ re-appointment forms part of Notice convening the 31st Annual General Meeting. STATUTORY AUDITORS & AUDITORS' REPORT At the 30th Annual General Meeting held on 26th September, 2014 the members approved appointment of Messers SRB & Associates, Chartered Accountants, (Registration No. 310009E) to hold office from the conclusion of the 30th Annual General Meeting until the conclusion of the 33rd Annual General Meeting, (subject to ratification of the appointment by the members, at every Annual General Meeting held after the 30th Annual General Meeting) on such remuneration as may be fixed by the Board, apart from reimbursement of out of pocket expenses as may be incurred by them for the purpose of audit. In accordance with Section 139 of the Act, members are requested to ratify the appointment of the Auditors to hold office from the conclusion of the 31st Annual General Meeting till the conclusion of the 32nd Annual General Meeting. There are no observations (including any qualification, reservation, adverse remarks or disclaimer) of the Auditors in their Audit Report that may call for any explanation from the Directors. The specific notes forming part of the accounts referred to in Auditor's Report are self-explanatory and give complete information. SECRETARIAL AUDITORS Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Vinod Kothari & Company, Practising Company Secretaries to conduct Secretarial Audit of the Company for the Financial Year 2014-15. The Secretarial Audit Report for the Financial Year ended 31st March, 2015, forms part of the Directors Report and annexed as Annexure-"C". The Secretarial Auditors Report addressed to the shareholders of the Company, does not contain any qualification. COST AUDITORS Pursuant to Section 148 of the Companies Act, 2013, in terms of the Central Government's approval, the Board of Directors on the recommendation of the Audit Committee appointed M/s. B Mukhopadhyay & Co, Cost Accountants, B-20, Amaravati, Sodepur, Kolkata- 700 110, as the Cost Auditors for the Aluminium and Steel Products manufactured by the Company during the Financial Year 2014-15. The Cost Audit Report for the financial year 2013-14, in respect of Aluminium and Steel Products was duly approved by the Board of Directors within the time stipulated under the Companies Act, 2013 and relevant rules made thereunder. However, there was delay in submission of the Cost Audit Report in the requisite forms with the Ministry of Corporate Affairs (MCA) due to difficulty arising in understanding the modalities for filing the Form. The Hon'ble Calcutta High Court vide its Order dated 24th March, 2014 had sancti oned the Scheme of Arrangement for demerger of Aluminium Undertaking, Coated Metals and Mosquito Coil Undertakings, Steel Undertaking and Packaging Undertaking of Manaksia Limited on a going concern basis. After the said Scheme being effective the provisions of Section 148 and Cost Audit Rules are not applicable on your Company. FRAUD REPORTING There was no fraud reported by the Auditors of the Company to the Audit Committee or the Board of Directors during the year under review. PARTICUALARS OF LOANS, GUARANTEES OR INVESTMENTS The Company has not given any loans, made any investments or given any guarantee during the financial year 2014-15 as stipulated under Section 186 of Companies Act, 2013. PARTICULARS OF CONTRACT OR ARRANGEMENTS WITH RELATED PARTIES All transactions entered into with Related Parties for the year under review were on arm's length basis and in the ordinary course of business and that the provisions of Section 188 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are not attracted. Thus, disclosure in Form AOC-2 is not required. Further there are no materially significant related party transactions during the year under review made by the Company with Promoters, Directors or Key Managerial Personnel or other Designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are approved by the Audit Committee prior to the transaction. Related Party Transactions of repetitive nature are approved by the Audit Committee on omnibus basis for one financial year at a time. All omnibus approvals are reviewed by the Audit Committee on a quarterly basis. The policy on Related Party Transactions as approved by the Board of Directors of the Company may be accessed on the Company's website www.manaksia.com and the weblink thereto DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The details required pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo forms part of this Directors Report and marked as Annexure-"D". RISK MANAGEMENT Risk Management is the process of identification, assessment and prioritization of risks followed by coordinated efforts to minimize, monitor and mitigate the probability and/or impact of unfortunate events or to maximize the realisation of opportunities. The Company has structured Risk Management Policy, designed to safeguard the organization from various risks through adequate and timely actions. The Company manages, monitors and reports on its risks and uncertainties that can impact its ability to achieve its objectives. The major risks have been identified by the Company and its mitigation process/ measures have been formulated. AUDIT COMMITTEE The Company pursuant to the requirement of the provisions of Section 177 of the Companies Act, 2013 read with Clause 49 of the Listing Agreement has in place Audit Committee comprising of 4 (Four) members, Mr. Ajay Kumar Chakraborty - Independent Director (Chairman), Dr. Kali Kumar Chaudhuri - Independent Director, Mrs. Smita Khaitan - Independent Director and Mr. Mahabir Prasad Agrawal - Executive Director. The detailed terms of reference of the Committee is provided in the Corporate Governance Report. The Board has accepted all the recommendations made by the Audit Committee. NOMINATION & REMUNERATION COMMITTEE As required by the provisions of Section 178(1) of the Companies Act, 2013 read with Clause 49 of the Listing Agreement the Company has in place the Nomination & Remuneration Committee comprising of 4 (Four) Directors, Mr. Ajay Kumar Chakraborty - Independent Director (Chairman), Dr Kali Kumar Chaudhuri - Independent Director, Mrs. Smita Khaitan - Independent Director and Mr. Sunil Kumar Agrawal - Nonexecutive Director. The detailed terms of reference of the Committee is provided in the Corporate Governance Report. The Company pursuant to provisions of Secti on 178 of the Companies Act, 2013 and Clause 49 of the Listi ng Agreement and upon recommendati on of Nominati on & Remuneration committee has devised a policy on Remunerati on of Directors and Key Managerial Personnel. The said policy forms part of the Directors Report and marked as Annexure-"E". Familiarization programme undertaken for Independent Directors is provided at the following weblink: <http://www.manaksia.com/> management-team.php. STAKEHOLDERS RELATIONSHIP COMMITTEE As required by the provisions of Section 178(5) of the Companies Act, 2013 read with the provisions of Clause 49 of the Listing Agreement the Company has in place the Stakeholders Relationship Committee comprising of 3 (Three) members, Mrs. Smita Khaitan - Independent Director (Chairman), Mr. Suresh Kumar Agrawal - Managing Director and Mr. Mahabir Prasad Agrawal - Whole-time Director. CORPORATE SOCIAL RESPONSIBILITY The Corporate Social Responsibility (CSR) forms integral part of the way the Company conducts its business and is primarily concerned to provide social, environmental and economic benefits to the communities and geographies in which it operates. The CSR activities are inter-alia, focused on rural development including livestock development and health care . The details and areas of expenditure spent on CSR forms part of this report and marked as Annexure-"F". The Hon'ble Calcutta High Court, vide its order dated March 24, 2014 (certified copy received by the Company on November 19, 2014), has approved the Scheme of Arrangement between Manaksia Limited and Manaksia Steels Limited, Manaksia Industries Limited, Manaksia Coated Metals & Industries Limited and Manaksia Aluminium Company Limited and their respective shareholders for demerger and transfer of undertakings of Manaksia Limited (Transferor Company) into the 4 (Four) Transferee Companies viz. Manaksia Steels Limited, Manaksia Industries Limited, Manaksia Coated Metals & Industries Limited and Manaksia Aluminium Company Limited under Sections 391 to 394 of the Companies Act, 1956. The Scheme became effective from 23rd November, 2014 with the appointed date of 1st October, 2013. All the manufacturing undertakings of the Company were transferred to the demerged companies from the appointed date of 1st October, 2013. Accordingly, during the year the Company had carried on only trading activities. Pursuant to such trading activities during the year 201415, the Company has generated a trading income of Rs. 64.11 lacs only. The Company spent Rs. 7.41 lacs towards its CSR activities. Out of the total budgeted amount of Rs. 45.16 Lacs, Rs. 37.75 Lacs remains unspent. Your Company would like to submit that this being the first year of structured implementation of CSR initiatives, considerable time was spent on deciding on the CSR projects and puffing systems in place to ensure effective implementation of CSR initiatives. Consequently, only a part of the year was available for implementation of CSR projects. Hence, the Company was unable to spend Rs. 37.75 Lacs out of the allocated amount of Rs. 45.16 Lacs during the FY 2014-2015. The Company is committed to the underlying intent of CSR and is optimistic of meeting its obligations under Section 135 of Companies Act, 2013 and thereby make a positive impact on the society. BOARD EVALUATION Pursuant to requirement of the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, the Nomination & Remuneration Committee of the Board has laid down the criteria for evaluation of the Executive Directors, Non-Executive Directors, Board as a Whole and the Committees of the Board, in a structured questionnaire form after taking into consideration various aspects of the Board functioning, composition of the Board and its Committees, culture, execution, diligence, integrity, awareness and performance of specific laws, duties, obligations and governance. The performance evaluation of the Board and its committees was carried out. The performance evaluation of the Independent Directors was also completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors in their separate meeting. The Board of Directors expressed their satisfaction with the evaluation process. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES During the year under review pursuant to the Scheme of Arrangement as sanctioned by the Hon'ble Calcutta High Court vide its Order dated 24th March, 2014, 4 (Four) Indian Subsidiary Companies and 2 (Two) Foreign Subsidiary Companies ceased to be Subsidiary Companies of your Company. During the year under review 4 (Four) wholly owned Indian Subsidiary Companies viz. Manaksia Aluminium Company Limited, Manaksia Coated Metals & Industries Limited, Manaksia Industries Limited and Manaksia Steels Limited have ceased to be subsidiary companies with the Scheme becoming effective. Further, 1 (One) wholly owned Foreign Subsidiary Company viz. Euroasian Ventures FZE and 1 (One) Step down Foreign Subsidiary Company viz. Euroasian Steels LLC have also ceased to be subsidiary companies with the Scheme becoming effective. Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the details containing salient features of the financial statement of subsidiary companies /associate companies/ joint ventures in Form AOC-1 forms part of this Annual Report. The details of performance of the Subsidiary Companies is as follows : Indian Subsidiaries : > Mark Steels Limited The Revenue of the Company for FY 2015 stood at Rs. 10787.71 Lacs (Previous Year: Rs. 8738.07 Lacs). During the year, the company had a net profit of Rs. 137.58 Lacs (Previous Year: Rs. 130.93 Lacs). > Manaksia Overseas Limited The company had a net loss of Rs. 0.30 Lacs in FY 2015 (Previous Year: net loss of Rs. 0.16 Lacs). > Manaksia Ferro Industries Limited The Revenue of the Company for FY 2015 stood at Rs. 3.00 Lacs (Previous Year: NIL). During the year, the company had a net loss of Rs. 0.19 Lacs (Previous Year: net loss of Rs. 0.18 Lacs). Foreign Subsidiaries : > MINL Limited The Revenue of the Company for the year ended 31st December 2014 stood at Naira 259914.91 Lacs (equivalent to Rs. 94514.51 Lacs). During the year ended 31st Deccember 2014, the company had a net profit of Naira 34380.61 Lacs (equivalent to Rs. 12502.04 Lacs). > Jebba Paper Mills Limited This Company is subsidiary of MINL Limited. The Revenue of the Company for the year ended 31st December 2014 stood at Naira 32049.50 Lacs (equivalent to Rs. 11654.36 Lacs). During the year ended 31st Deccember 2014, the company had a net profit of Naira 5234.42 Lacs (equivalent to Rs. 1903.42 Lacs). > Dynatech Industries Ghana Limited The Revenue of the Company for the year ended 31st December 2014 stood at CEDI 385.63 Lacs (equivalent to Rs. 7331.32 Lacs). During the year ended 31st Deccember 2014, the company had a net loss of CEDI 27.70 Lacs (equivalent to Rs. 526.66 Lacs). DEPOSITS The Company has neither accepted nor renewed any deposits during the Financial Year 2014-15 in terms of Chapter V of the Companies Act, 2013. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS The Company has not received any significant or material orders passed by any regulatory authority, court or tribunal which shall impact the going concern status and Company's operations in future. ADEQUACY OF INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls with reference to financial statements. To commensurate the internal financial control with its size, scale and complexities of its operations the Company on the recommendation of Audit Committee has appointed M/s. S K Agrawal & Company, Chartered Accountants, as Internal Auditor of the Company. The Audit Committee reviews the report submitted by the Internal Auditors. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems with regard to - 1. Systems have been laid to ensure that all transactions are executed in accordance with management's general and specific authorization. There are well-laid manuals for such general or specific authorization. 2. Systems and procedures exist to ensure that all transactions are recorded as necessary to permit preparation of financial statements in confirmity with generally accepted accounti ng principles or any other criteria applicable to such statements, and to maintain accountability for aspects and the timely preparation of reliable financial information. 3. Access to assets is permitted only in accordance with management's general and specific authorization. No assets of the Company are allowed to be used for personal purposes, except in accordance with terms of employment or except as specifically permitted. 4. The existing assets of the Company are verified/ checked at reasonable intervals and appropriate action is taken with respect to any differences, if any. 5. Proper systems are in place for prevention and detection of frauds and errors and for ensuring adherence to the Company's policies. WHISTLE BLOWER POLICY/ VIGIL MECHANISM In Compliance with the provisions of Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has framed a Whistle Blower Policy to establish a vigil mechanism for Directors and employees to report genuine concerns about actual or suspected unethical behavior, mal practice, wrongful conduct, discrimination, sexual harassment, fraud, violation of the Company polices including Code of Conduct without fear of reprisal/retaliati on. The Whistle Blower Policy/Vigil Mechanism has also been uploaded on Company's website www.manaksia.com DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITON & REDRESSAL) ACT 2013 There has been no such case filed or pending during the year under review. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES The disclosure pertaining to remuneration and other details as required under the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Directors Report and marked as Annexure-"G". During the period under review no employee of the Company drew remuneration in excess of the limits specified under the provisions of Section 197(12) of the Companies Act, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and hence no disclosure is required to be made in the Annual Report. CREDIT RATING After the implementation and execution of the Scheme of Arrangement as sanctioned by the Hon'ble Calcutta High Court vide its Order dated 24th March, 2014, the Company does not have any outstanding borrowings as on 31st March 2015. Accordingly, your Company was not required to obtain credit ratings from the concerned credit rating agencies. CONSOLIDATED FINANCIAL STATEMENT In compliance with the provisions of Companies Act 2013, and Listing Agreement with the Stock Exchanges, a consolidated financial statement of the Company and all its subsidiary companies is attached. The consolidated financial statements has been prepared in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and shows the financial resources, assets, liabilities, income, profits and other details of the Company and its subsidiary companies. ACKNOWLEDGEMENT Your Company continues its relentless focus on strengthening competition in all its businesses. It is the endeavour of your Company to deploy resources in a balanced manner so as to secure the interest of the shareholders in the best possible manner in the short, medium and long terms. Your Directors convey their grateful appreciation for the valuable patronage and co-operation received and goodwill enjoyed by the Company from its esteemed customers, commercial associates, banks, financial instituti ons, Government Authoriti es, other stakeholders and the media. Your Directors also wish to place on record their deep sense of appreciation to all the employees at all levels for their commendable teamwork, professionalism and enthusiastic contribution towards the working of the Company during the year under review. Your Directors look forward to the future with hope and conviction. For and on behalf of the Board of Directors Ajay Kumar Chakraborty Chairman DIN : 00133604 Place : Kolkata Date : 3rd August, 2015 |