Dear Members,
Your Directors hereby present their 48th Annual Report and Audited Accounts
of the Company for the year ended 31st March, 2022.
FINANCIAL SUMMARY
|
|
Rs. in Lakhs |
| Particulars |
Year Ended 31.03.2022 |
Year Ended 31.03.2021 |
| Net Sales & Income from Operations |
18242 |
8724 |
| Operating Profit/(Loss) |
8058 |
(1717) |
| Finance Cost |
86 |
46 |
| Cash Profit/(Loss) |
7972 |
(1763) |
| Depreciation & Amortisation |
359 |
487 |
| Profit/(Loss) before Exceptional Items |
7613 |
(2250) |
| Exceptional Items |
137 |
6112 |
| Profit/(Loss) before Tax |
7750 |
3862 |
PERFORMANCE
During the year under review, the company achieved net sales of Rs. 18242 Lakhs as
against Rs. 8724 Lakhs in the previous year and resulting into net operational profit
before exceptional items of Rs. 7613 Lakhs against the net loss of Rs. 2250 Lakhs in the
previous year.
DIVIDEND
Due to the ongoing financial constraints in the Company, the Directors have not
recommended any dividend for the year under review.
BUSINESS TRANSFER AGREEMENT (BTA) / SLUMP SALE EXECUTION
Members will recall that, on 15th November 2020 the Business Transfer Agreement (BTA)
had been executed between M/s Arjas Steel Pvt. Ltd./ M/s Arjas Modern Steel Pvt. Ltd.
(Purchaser), Modern Steels Ltd. (Seller), Promoters (Mr. Krishan Kumar Goyal and Mr.
Aditya Goyal)
After the execution of the Business Transfer Agreement and Job Work Contract, the
company has given the operations of the plant to M/s Arjas Steel Pvt. Ltd. where they took
control of the plant and operated till 05.01.2022.
Pursuant to the execution of BTA the Properties of the Unit (the Land & Building of
the Plant and Staff Colony) in Mandi Gobindgarh, were transferred to Arjas Modern Steel
Pvt. (Buyer) and the Deeds of Conveyance were duly registered with the office of
Tehsildar, Mandi Gobindgarh, Punjab on 05th January 2022.
The Plant & Machinery of the unit and other current assets and liabilities were
also transferred to buyer under slump sale.
The slump sale was completed on 05.01.2022 and the intimation regarding the same was
given to Bombay Stock Exchange.
Lender
Punjab National Bank
It is informed to the Honble members that Punjab National Bank vide its letter dated
16.11.2021 has given its sanction letter for One Time Settlement (OTS) of the Debt of the
Company and accordingly on the due date the payment was made to the Bank. Further upon
payment, the Bank on 29.12.2021 issued a No Objection Certificate cum No Dues Certificate.
Accordingly, all the charges have been vacated from the Ministry of Corporate Affairs.
DEPOSITS
The Company has neither accepted nor invited any deposit from the public and hence
directives issued by Reserve Bank of India and the provisions of Chapter V (Acceptance of
deposits by Companies) of the Companies Act, 2013 and rules framed there under are not
applicable for the year under review.
TRANSFER TO RESERVES
Considering the financial position of the Company and requirements of regular funds for
operations, no amount has been transferred to the General Reserves of the Company during
Financial Year 2021-22.
SHARE CAPITAL
The paid up equity share capital is Rs. 14,40,00,000/- divided into 1,44,00,000 equity
shares of Rs. 10/- each and there was no change in capital structure during the financial
year 2021-22.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSIONS & ANALYSIS
A separate report on Corporate Governance and Management Discussions & Analysis is
attached herewith and forms part of this report.
CORPORATE SOCIAL RESPONSIBILITY
Your Company does not fall within the ambit of Section 135 of the Companies Act, 2013
read with Companies (Corporate Social Responsibility Policy) Rules, 2014.
DIRECTORS
Mr. Krishan Kumar Goyal, Chairman & Managing Director, (DIN: 00482035), shall
retire by rotation at the ensuing Annual General Meeting, and being eligible, offers
himself for re-appointment. In view of his considerable experience and expertise,
Directors of your Company recommends his reappointment as Director of Company.
KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 2(51), 203 of the Companies Act, 2013 read
with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr.
Krishan Kumar Goyal (Chairman & Managing Director), Mr. Suresh Kumar Puri *(Chief
Financial Officer) and Ms. Deepa **(Company Secretary & Compliance Officer) are the
Key Managerial Personnel of the Company.
*Mr. Divnain Singh Chowdhary ceased to be the Chief Financial Officer of Company w.e.f.
01.02.2022 and Mr. Suresh Kumar Puri was appointed as the Chief Financial Officer w.e.f.
25.07.2022.
**Ms. Anjali was appointed as Company Secretary & Compliance Officer of Company
from 05.05.2021, however she left the Company on 15.10.2021. Further, so as to fill the
vacancy Mr. Himanshu Kalra, was appointed as Company Secretary & Compliance Officer
from 16.10.2021 but due to some personal reasons, he left the Company on 08.01.2022.
Thereafter, Ms. Deepa has been appointed as Company Secretary & Compliance Officer
w.e.f. 14.02.2022.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received the necessary declaration from each Independent Director in
accordance with Section 149(7) of the Companies Act, 2013 read with the rules made
thereunder and Regulation 25 (8) of the SEBI (Listing Obligations and Disclosure
Requirements) (Amendment) Regulations, 2018, that they meet the criteria of independence
as laid out in Subsection (6) of Section 149 of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
The Board of your Company formed an opinion that the Independent Directors of our
Company are maintaining highest standard of integrity and possessing expertise, requisite
qualifications and relevant experience for performing their role as an Independent
Directors.
BOARD DIVERSITY AND REMUNERATION POLICY
In accordance with Para A of Part D and Regulation 19 of Listing Regulations, the Board
has framed Nomination & Remuneration Policy for appointment and remuneration of
Directors, Key managerial Personnel and Senior Management Employees, which includes the
criteria for determining qualification, positive attributes, independence of a Director
and other matters provided under sub-section 3 of section 178 of the Companies Act, 2013.
As on 31st March, 2022, the Board consists of four directors out of which one
is Executive Director, and three are Independent Directors.
The Board periodically evaluates the need for change in its composition and size.
We affirm that the remuneration paid to the Directors is as per the terms approved by
the Nomination and Remuneration Committee of the Company.
With reference to the provisions of Section 136(1) of the Companies Act, 2013,
information required under Section 197(2) read with rule 5(1) not forms part of this
report. Since, no person is employed who draws remuneration pursuant to the provision of
197(2) read with rule 5(2).
HUMAN RESOURCES
The Company is having motivated work force. Harmonious employee relations prevailed
throughout the year.
Your Directors place on record their appreciation for all employees for their hard work
and dedication.
BOARD MEETINGS
During the year under review, six Board Meetings were convened and held, the details of
which are given in the Corporate Governance Report forming part of this Report.
ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
In pursuance of Section 134 (3) (p) of the Companies Act, 2013 read with rules made
thereunder, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, the Board of Directors carried out the performance evaluation of the Board as a
whole, its Committees and individual directors. Led by the Nomination & Remuneration
Committee (‘NRC), the evaluation was carried out using individual questionnaires
covering composition of Board, conduct as per Company values & beliefs, contribution
towards development of strategy & business plan, risk management, receipt of regular
inputs and information, codes & policies for strengthening governance, functioning,
performance & structure of Board Committees, skill set, knowledge & expertise of
Directors, preparation & contribution at Board meetings, leadership etc.
As part of the evaluation process, the performance of Non Independent Directors, the
Chairman and the Board was conducted by the Independent Directors. The performance
evaluation of the respective Committees and that of Independent and Non Independent
Directors was done by the Board excluding the Director being evaluated.
RELATED PARTY TRANSACTIONS
All contracts or arrangements entered into by the Company with Related Parties have
been done at arms length and are in the ordinary course of business. Related Party
disclosures as per AS-18 have been provided in the Notes to the Financial Statements.
Further, no material related party transactions held during the financial year 2021-22.
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 stipulated under Section 134(3)(m) of the Companies Act, 2013 read with
Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as "ANNEXURE-A"
to this report.
RISK MANAGEMENT
The Company recognises that risk is an integral and unavoidable component of business
and is committed to managing the risk in a proactive and efficient manner. The Company has
formulated Risk Management Policy to identify and then manage threats/risks that could
have impact on the goals and objectives of the Company.
The Audit Committee of the Company periodically reviews and evaluates the adequacy of
risk management systems, keeps an eye on execution of risk management plan of the Company
and advises management on strengthening mitigating measures wherever required. The actual
identification, assessment and mitigation of risks is however done by the executives of
the Company.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Your Company is committed to highest standards of ethical, moral and legal business
conduct.
Accordingly, the Board of Directors have formulated Vigil Mechanism/Whistle Blower
Policy which provides a robust framework for dealing with genuine concerns &
grievances of Employees, Directors and Senior Executives.
Specifically, employees can raise concerns regarding any discrimination, harassment,
victimization, any other unfair practice being adopted against them or any instances of
fraud by or against your Company. During financial year 2021-22, no complaints were
received.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
Modern Steels Limited has aligned its current systems of internal financial control
with the requirement of Companies Act, 2013.
Modern Steels Limiteds internal controls are commensurate with its size and nature of
its operations. These have been designed to provide reasonable assurance with regard to
recording and providing reliable financial and operational information, complying with
applicable statutes, safeguarding assets from unauthorized use, executing transactions
with proper authorisation and ensuring compliance of corporate policies.
The management assessed the effectiveness of the Companys internal control over
financial reporting (as defined in Regulation 17 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015) as of 31st March, 2022. The
assessment involved selfreview and external audit.
M/s Aaryaa & Associates, the statutory auditors of Modern Steels Limited have
audited the financial statements including in this annual report and has issued an
attestation report on our internal control over financial reporting (as defined in Section
143). The Audit Committee reviews reports submitted by the management and audit reports
submitted by internal auditors and statutory auditors. Suggestions for improvement are
considered and the audit committee follows up on corrective action.
Based on its evaluations (as defined in Section 177 of Companies Act, 2013 and
Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015), the Audit Committee has concluded that, as of 31st March, 2022, the
internal financial controls were adequate and operating effectively.
COMMITTEES OF THE BOARD OF DIRECTORS
Your Company has the following Board Level Committees established by the Board in
compliance with the requirements of the business and relevant provisions of applicable
laws and statutes:
• Audit Committee
• Nomination & Remuneration Committee
• Stakeholders Relationship Committee
The details regarding composition, terms of reference, number of meetings held, etc. of
the above Committees are included in the Report of Corporate Governance, which forms parts
of this Report. There has been no instance where the board has not accepted recommendation
of Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship
Committee. Further, the provisions of Companies Act mandating constitution of Risk
Management Committee are not yet applicable to the Company.
AUDITORS Statutory Auditors
M/s. Aaryaa & Associates, Chartered Accountants, (Registration No. 015935N), were
appointed as Statutory Auditors of the Company at 45th Annual General Meeting for a period
of three years till the conclusion of the 48th Annual General Meeting to be held in the
year 2022 at a remuneration mutually agreed between the Board of Directors of the Company
and the Statutory Auditors, whose tenure is going to expire at this ensuing Annual General
Meeting.
The Board of Directors pursuant to Section 139 and 142 and other applicable provisions
of Companies Act, 2013, if any and the rules framed thereunder and subject to approval of
Shareholders approved appointment of M/s. APT& Co. LLP, Chartered Accountants as
Statutory Auditors of Company for a period of two (2) years to hold office from this
ensuing Annual General Meeting till the conclusion of the Annual General Meeting to be
held in the year 2024 at a remuneration mutually agreed between the Board of Directors of
the Company and the Statutory Auditors.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with rules
made thereunder, the Board of Directors had appointed M/s. Sanger & Associates,
Company Secretaries as Secretarial Auditor of the Company for the financial year 2021-22
for conducting the Secretarial Audit as required under the provisions of Companies Act,
2013.
Further, M/s. Sanger & Associates, Company Secretaries being eligible for
re-appointment expressed his willingness to act as Secretarial Auditor of Company for
Financial Year 2022-23, the Board of Directors on recommendation of Audit Committee
approved the re-appointment of M/s. Sanger & Associates as Secretarial Auditors of the
Company for Financial Year 2022-23.
AUDITORS REPORT Statutory Auditors Report
The Statutory Auditors of the Company M/s. Aaryaa & Associates, Chartered
Accountants, has submitted the Auditors Report on standalone financial statements for the
period ended March 31, 2022 which do not contain any qualification, reservation or adverse
remark or disclaimer. The notes to the accounts referred to in the auditors report are
self-explanatory and therefore, do not call for any further comments. The Auditors have
also not reported any matter under section 143(12) of the Companies Act, 2013. Secretarial
Auditors Report
The Secretarial Auditor M/s. Sanger & Associates, Company Secretaries has submitted
the Secretarial Audit Report for the Financial Year 2021-22 in Form No. MR-3 and forming
part of this Directors Report annexed as "ANNEXURE-B".
Secretarial Auditors Qualification in Secretarial Audit Report
The Company has generally complied with the provisions of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, except noncompliance with Regulation 33 and
Regulation 23 (9), wherein the filings to the Stock Exchange was not filed within the
stipulated time.
Managements Reply:
There was delay in filing to stock exchange because due to the tedious procedure of
completing Slump Sale of the Assets of the Company and the 2nd wave of COVID 19 Pandemic,
the finalization of the accounts got delayed and the company was unable to file the
quarterly results with in stipulated time limit. Further, all the fines levied by the BSE
for the Non-Compliances of the Regulation 33 have been deposited by the Company. Apart
from that, the Company has complied with all the applicable provisions of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
EXTRACT OF ANNUAL RETURN
In compliance with Section 92(3), Section 134(3)
(a) and Rule 12 of the Companies (Management and Administration) Rules, 2014 the
extract of the annual return in Form No. MGT-9 is available on the website of Company
www.modernsteels.com and also annexed as "ANNEXURE-C" forming part of
this report and also available on the website of the Company at www.modernsteels.com.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of Loans, Guarantees and Investments covered under Section 186 of the
Companies Act, 2013 for Financial Year 2021-22 forms part of the notes to the financial
statements provided in the Annual Report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANY
There are no adverse material changes or commitments occurring after 31st
March, 2022 till the date of this report, which may affect the financial position of the
Company.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts or
tribunals impacting the going concern status and Companys operations in future.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION,
PROHIBITION & REDRESSAL) ACT, 2013
Your Company has in place a policy on Prevention of Sexual Harassment at workplace.
This policy is in line with the requirements of The Sexual Harassment of Women at the
Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees are covered
under this Policy.
As per the said Policy, an Internal Complaints Committee is also in place to redress
complaints received regarding sexual harassment. No complaints were received during
financial year 2021-22.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company is compliant with the applicable Secretarial Standards (SS) viz. SS-1 &
SS-2 on Meetings of the Board of Directors and General Meetings respectively.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to requirements under Section 134(3)(c) of the Companies Act, 2013 with
respect to Directors Responsibility Statement, it is hereby confirmed that:
i) in the preparation of the annual accounts for the year ended 31st March,
2022, the applicable accounting standards have been followed along with proper explanation
relating to material departures, if any;
ii) 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 31st March, 2022 and of
the loss of the Company for the year ended on that date;
iii) 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;
iv) the Directors have prepared the annual accounts for the year ended 31st
March, 2022, on a ‘going concern basis;
v) 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;
vi) 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.
APPRECIATION
The Directors also wish to place on record its appreciation for the commitment
displayed by all employees at all levels during the year.
The Directors also take this opportunity to express its deep gratitude for the
continued co-operation and support received from its valued stakeholders.
|
By order of the Board of Directors |
|
For Modern Steels Limited |
|
Krishan Kumar Goyal |
| Place: Chandigarh |
Chairman and Managing Director |
| Dated: 27th August, |
2022 DIN: 00482035 |
+91-9892691696
