DIRECTORS' REPORT To the Members, Your Directors are pleased to present the 27th Annual Report along with Audited Financial Statements of the Company for the year ended 31st March 2015. DIVIDEND Your Directors are pleased to recommend a dividend of Rs. 5/- (100 %) per equity share of Rs. 5/- each for the year ended 31st March, 2015. RESULTS OF OPERATIONS Revenue from Operations during the year was Rs. 1355.16 Crore against Rs. 1205.76 Crore in the previous year. Profit before tax for the year was Rs. 159.62 Crore as against Rs. 111.36 Crore in the previous year. Profit after tax and adjustments for the year was Rs. 122.56 Crore as against Rs. 97.11 Crore in the previous year. The operations during the year improved from last year primarily on account of imposition of anti-dumping duty on various international manufacturers and safeguard duty on imports . This provided an impetus to production and sales and is reflected in both sales and profit. Your Company has explored and been able to successfully develop new markets and gain new customers. However, this was abruptly hampered due to rapid fall in crude oil prices. Additionally, imports of cheap seamless pipes from other countries continued unabated. The previously envisaged level playing field for domestic industry did not fully materialize as safeguard duty levels were much lower than required. Your Company's inherent strength continues to be shielded from external risks by virtue of strong Balance Sheet and stringent cost rationalization policies. CONSOLIDATED FINANCIAL STATEMENTS In accordance with the Companies Act, 2013 and Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures, the Audited Consolidated Financial Statements are provided in the Annual Report. SUBSIDIARY COMPANIES Your Company, has four subsidiaries. During the year under review, Dev Drilling Pte. Ltd. ceased to be the associate company and became joint venture company. There has been no material change in the nature of business of subsidiary companies. Pursuant to the provisions of Section 129 (3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the subsidiaries, joint venture and associate companies is attached to the financial statements of the Company. DIRECTORS AND KEY MANAGERIAL PERSONNEL Shri D. P. Jindal, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. The Board of Directors has (a) appointed Shri D. P. Jindal as Whole Time Director, designated as Executive Chairman for a period of five years from 1st April, 2015, (b) re-appointed Shri Saket Jindal as Managing Director of the Company for a period of five years from 1st April, 2015 and (c) re-appointed Shri S.P. Raj as Whole Time Director of the Company for a period of five year from 1st October, 2015. The Board has also appionted Dr. Roma Kumar as Independent Director. Items seeking your approval on the above matters are included in the Notice convening the Annual General Meeting. Shri Naresh Chand Jain resigned as Director of company w.e.f. 24th July, 2015. The Board expressess its appreciation to Mr Jain for his valuable guidance as Director of the Company. All Independent Directors of the Company have given declaration 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. Mr. Ravi Gupta resigned as Chief Financial Officer of the Company w.e.f. 26th November, 2014. The Board has appointed Shri Ashok Soni as Chief Financial Officer of the Company w.e.f. 10th December 2014. BOARD MEETINGS During the year, 9 (Nine) Board meetings were held. The details of which are given in the Corporate Governance Report. BOARD EVALUATION The Board of Directors has carried out an Annual evaluation of its own performance, Board Committee and individual Directors pursuant to the provisions of the Act and under Clause 49 of the Listing Agreement. The performance of the Board was evaluated by the Board, after seeking inputs from all the Directors on the basis of the criteria such as Board composition and structures, effectiveness of Board processes, information and functioning etc. The performance of the Committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings etc. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Director on the basis of the criteria such as contribution of the Individual Director to the Board and Committee meetings. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The Company's policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of directors and other matters provided in Section 178(3) of the Companies Act, 2013 has been disclosed in the corporate governance report, which forms part of the Directors' Report. RISK MANAGEMENT Adequate measures have been adopted by the Company to anticipate, plan and mitigate the spectrum of risks it faces. All manufacturing sites are analyzed to minimize risks associated with protection of environment, safety of operation and health of people at work and monitored regularly with reference to statutory regulation and guidelines. Improving work place safety continued to be top priority at manufacturing site. The company's business operations are exposed to a variety of financial risks such as market risks (foreign exchange risk, internal rate risk and price risk). Liquidity risk etc. The Board of the Company has approved the Risk management Policy of the Company and authorized the Audit Committee to implement and monitor the risk management plan for the Company and also identify and mitigate various element of risks, if any, which in the opinion of the board may threaten the existence of the Company. 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 were observed. DIRECTORS' RESPONSIBILITY STATEMENT As required under Section 134(5) of the Companies Act, 2013, your Directors state: (i) that in the preparation of the Annual Accounts for the year ended 31st March, 2015, the applicable accounting standards had been followed and there are no material departures; (ii) that the accounting policies selected and applied are consistent and the judgments and estimates made 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 financial year and of the profit of the Company for that period; (iii) that proper and sufficient care has been taken 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) that the Annual Accounts for the year ended 31st March, 2015 have been prepared on a going concern basis. (v) that the internal financial controls laid down by the Board and being followed by the company are adequate and were operating effectively. (vi) that the proper systems, devised by Directors to ensure compliance with the provisions of all applicable laws, were adequate and operating effectively. BUYBACK OF SHARES As decided by Board of Directors of the Company at its meeting held on 8th April, 2013, the buyback of its equity shares of Rs. 5/-each from the open market through stock exchanges for an amount upto Rs. 100 crore, and at a price not exceeding Rs. 300/- per share, payable in cash commenced on 14th May, 2013 and closed on 7th April, 2014. The Company has bought back total of 35,33,796 shares for Rs. 69.21 Crore at an average price of Rs. 195.85. All shares bought back were extinguished. The paid up capital of the Company after buyback is Rs. 33,49,98,130/- EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9 is annexed with this Report. AUDIT COMMITTEE The Audit Committee of the Company consists of Shri U. C. Agarwal, Chairman, Shri D. P. Jindal, Shri Sanjeev Rungta and Shri P. N. Vijay as its other members. The terms of reference are in conformity with the requirements of Section 177 of the Companies Act, 2013 and clause 49 of the Listing Agreement. VIGIL MECHANISM The Company has adopted a Whistle blower policy and has established the necessary vigil mechanism for Directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of conduct. The said policy has been disclosed on the Company's website under the web link <http://jindal.com/msl/pdf/Vigil-Mechanism-MSL.pdf> CORPORATE SOCIAL RESPONSIBILITY The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities, which has been approved by the Board. The CSR Policy may be accessed on the website of the Company. The Annual Report on CSR activities in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 is appended as Annexure to this Report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The particulars of loans, guarantees and investments have been disclosed in the standalone financial statements of the Company. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts/ arrangements/transactions entered into by the Company with the related parties during the year were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract/ arrangement/transaction with the related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. CORPORATE GOVERNANCE REPORT Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Corporate Governance Report along with Auditors' Certificate regarding compliance of conditions of Corporate Governance has been annexed as part of this Annual Report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT A detailed analysis of your company's performance is discussed in the Management Discussion and Analysis Report forms part of this Annual Report. INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTIONS, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has consitited an Internal Complaint Committee under Section 4 of the Sexual Harrassment of Women at Workplace (Prevention, Probhition and Redressal) Act, 2013. During the year no complaint was filed before the said Committee. AUDITORS M/s. Kanodia Sanyal & Associates, Chartered Accountants, the retiring Auditors, hold office until conclusion of the ensuing Annual General Meeting. The Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The observations of the Auditors are explained wherever necessary in the appropriate Notes on Accounts. The Auditors' Report does not contain any qualification, reservation or adverse remark. COST AUDIT In conformity with the Directives of the Central Government, the Company has appointed M/s R.J. Goel & Co. Cost Accountants as Cost Auditors under Section 148 of the Companies Act, 2013, for audit of cost records of the Company for the year ending 31st March, 2015. SECRETARIAL AUDIT The Board has appointed Mr. Namo Narain Agarwal, (FCS No. 234) Company Secretary in practice to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the year ended 31st March, 2015 is annexed herewith as an annexure to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. FIXED DEPOSITS The Company has not accepted any deposits from Public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the Balance Sheet. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information in accordance with the provisions of Section I34(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 is annexed hereto. PARTICULARS OF EMPLOYEES Disclosures pertaining to remuneration and other details as required under Section I97(I2) of the Companies Act, 20I3 read with Rule 5(I) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 20I4, forms part of this report. Particulars of employees, as required under Section I97(I2) of the Companies Act, 20I3 (Act) read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 20I4, forms part of this report. However, in pursuance of Section 136(1) of the Act, this report is being sent to the shareholders of the Company excluding the said information. The said information is available for inspection by the members of the Company at the registered office of the Company during working hours up to the date of the Annual General Meeting. Any member interested in obtaining such information may write to the Company Secretary at the Corporate office of the Company. ACKNOWLEDGEMENT Your Directors place on record their appreciation for the assistance and co-operation received from Central Government, State Government of Maharashtra and all other Government agencies, ONGCL, Oil India, other PSUs, Banks, Insurance Companies, Credit rating agencies and Stakeholders. Your Directors wish to place on record their deep sense of appreciation for the devoted contribution made by the employees at all levels. For and on behalf of the Board D.P. Jindal Executive Chairman Place: Gurgaon Dated: 5th August , 2015 |