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Directors Report of Gangotri Iron & Steel Company Ltd.

Mar 31, 2014

Dear Members

The Directors have pleasure in presenting the 21st Annual Report of the Company, together with the Audited Accounts, for the year ended 31st March, 2014.

1. Financial Results

(Rs. in Crores) F.Y 2013-14 F.Y. 2012-13

Sales & Other Income (net) 67.22 89.02

Profit/(Loss) before Interest (11.00) 05.00 & Depreciation

Less: Interest & Other 17.77 03.69 Financial Charges

Less: Depreciation 02.83 02.83

Profit/(Loss) before tax and (21.70) (01.52) exceptional items

Add / (Less): Exceptional items - -

Profit/(Loss) before tax and after (21.70) (01.52) exceptional items

Less: Provision for Taxation

Less/(Add): Deferred Tax (0.04) (0.64)

Net Profit /(Loss) after Tax (1.72) (0.88)

Balance as per last year 03.75 04.25

Balance Carried Forward (13.56) 03.37

2. Operations & Future Prospects

The Company''s accounts were restructured by its Bankers towards the end of F.Y. 12-13. However, the finance provided to the Company was inadequate to maintain its scale of operations and the repayment obligations were extremely stringent. As a result, and due to the added impact of a continued global slowdown in the steel market and various other factors, Company''s manufacturing units were forced to temporarily suspend production from November, 2014 onwards. However, there has been a recent resurgence in the Construction sector fueled by reforms by the Central Government. Resultantly, there has been a sustainable spike in demand for TMT rebars which is expected to increase further in the near future.

Furthermore, there has been significant appreciation in the assets of the Company including its land & building and other fixed assets in the recent past resulting in a major boost to the overall valuation of the physical assets of the Company.

Therefore, despite having suffered operational bottlenecks in the past due to the prevalent economic conditions and under- financing, the Company, boosted by attractive valuations and a positive outlook for the industry, has decided on a complete overhaul of operations and finances in the F.Y. 2014-15. The following measures have been identified and put in process by the Company :-

1. Enhancement of borrowing limits of the Company to address the issue of under-financing. In this respect, the Company is already in discussions with Strategic Investors and has entered into a Memorandum of Understanding for raising investment for restart and revival of its manufacturing operations. As per the discussions and documented commitments by the investors, the Company is confident of being able to raise finance starting in the month of October, 2014. Accordingly, the Company also plans to gradually repay its overdue liabilities to its Bankers and ensure Standardization of its accounts in a phase-wise manner.

2. Expansion of production and modernization of units to meet the increasing demand for TMT Bars fueled by recent reforms in the Construction industry. The Company recognizes the need to constantly reduce costing by way of achieving economies of scale and modernization of its manufacturing facilities. Therefore, for better efficiencies, utilization of existing facilities, reduction in cost and to cater to upcoming surge in demand, the Company has decided to expand its production capacities starting F.Y. 2014-15.

Taking into consideration the provisions of the new Company''s Act 2013 and since some directors of the Company have expressed their wish to discontinue as Director in the Organization, it has also been decided to reconstitute the Board of Directors of the Company after infusion of funds as mentioned above.

3. Dividend

As the Company incurred loss during the year hence no dividend payment was considered.

4. Finance

During the year, the Company continued to avail credit facilities by way of overdrafts, cash credits, issuance of guarantees, including deferred payment guarantees and indemnities, negotiation and discounting of demand and/or usance bills and cheques and such other facilities from State Bank of India, Commercial Branch, Patliputra, Patna and other private bodies for the existing and Bihta unit.

6. Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Ankit Choudhary, Mr. Badri Pd. Agarwal and Mr. Amar Kumar Agarwal are retiring by rotation and being eligible offers themselves for re-appointment.

7. Directors'' Responsibility Statement

In compliance with section 217(2AA) of the Companies Act 1956, the Directors confirm that

a) in preparation of the Annual Accounts, for the year ended 31st March 2014, all the applicable accounting standards prescribed by the ICAI have been followed.

b) the Directors have adopted such accounting policies and have applied them consistently and have made judgments 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 and of the profit/loss of the Company for the year.

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) the Directors have prepared the annual accounts on a going concern basis.

8. Auditors

M/s. ARSK & Associates, Chartered Accountants, Auditors of the Company are retiring at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received a certificate to the effect that their re-appointment if made will be within the prescribed limit u/s.224 (1-B) of the Companies Act, 1956.

9. Depository System

As the members are aware, your Company''s shares are tradable compulsorily in electronic form and your Company has connectivity with both the depositories, i.e. National Securities Depository Limited (NSDL) & Central Depository Services (India) Limited (CDSL). Members are requested to avail the facility of dematerialisation of the Company''s shares on either of the Depositories as aforesaid, if not already done.

10. Public Deposit

The company has not invited /accepted any deposits from the public and as such there are no outstanding deposits, in terms of the Companies (Acceptance of Deposits) Rules, 1975.

11. Personnel

There is no employee in respect of whom particulars pursuant to Section 217(2A) of the Companies Act, 1956 are required to be given.

12. Conservation of Energy

The information relating to conservation of energy as required U/s. 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure-A to this Report. The Company has no figure to disclose in respect of technology absorption and /or foreign exchange earnings and outgo.

13. Social Welfare Activities

The Company organises mason''s meet from time to time at various centres.

14. Corporate Governance

Separate Report on Corporate Governance is annexed and marked "Annexure - B". The Auditors'' Certificate on compliance with the conditions of Corporate Governance is annexed and marked "Annexure - C".

15. Acknowledgement

Your Directors wish to place their sincere appreciation to the co-operation extended by the Bank, State Government, Electricity Board, Customers, Suppliers and Shareholders and solicit their continued support. The Directors also wish to place on record the dedicated service rendered by the Management, Staffs and Workers

For and on behalf of the Board

Place: Patna Sanjiv Kumar Choudhary Ankit Choudhary Date: 3rd September, Chairman Cum Director 2014 Managing Director


Mar 31, 2013

The Directors have pleasure in presenting the 20th Annual Report of the Company, together with the Audited Accounts, for the year ended 31st March, 2013.

1. Financial Results

(Rs. in Crores)

2012-2013 2011-2012

Sales & Other Income (net) 89.02 96.56

Profit/ (Loss) before Interest & Depreciation 05.00 9.48

Less: Interest & Other Financial Charges 3.69 9.56

Less: Depreciation 2.83 3.15

Profit/(Loss) before tax and exceptional items (1.52) (3.23)

Add / (Less): Exceptional items

Profit/ (Loss) before tax and after exceptional items (0.52) (3.23)

Less: Provision for Taxation

Less/ (Add): Deferred Tax (0.64) 1.07

Net Profit / (Loss) after Tax (0.88) (2.17)

Balance as per last year 4.25 6.42

Balance Carried Forward 3.37 4.25

2. Operations

In spite of global slowdown, the company has with its constant endeavor; successfully manage to reduce its costs as compare to previous year.

The Company implemented various latest technologies in the manufacturing process to control the Cost of Production and also planned to reduce the cost through increased automation and elimination of intermediary process by implementation of the latest technology of "Online Charging of Billets".

With commencement of above initiatives company making itself more competitive and strong in the market and thereby steadily towards earning profits in upcoming years.

3. Future Prospects

The Company has set a clear two pronged goal for its future business: Cost Reduction & Diversification. Work towards each of these goals has been initiated at full-swing and initial measures to this effect are already in place.

Now, that the rehabilitation cum enhancement proposal of the Company has been passed by the Bank, and the Company''s steel division has restarted production with much pomp and splendor, the focus has been shifted to reduction of cost vide optimum utilization of technology and infrastructure of the Company. Accordingly, the system of ''Online Charging of Billet'' has been isolated for immediate implementation by the Company. The projected date for commencement of this technology, which will result in added margins of 2-2.5% to the Company''s bottom-line, is, 30th September, 2013. The Company plans on further reducing costs via increased production through planned strategic tie-ups and brand building of the product.

Furthermore, the Gangotri group of Companies has embarked on its diversification intentions through its latest venture Gangotri Infocom Pvt. Ltd. Gangotri Infocom has planned and already proceeded with tying up with various Governmental departments for providing software based solutions for their existing challenges. The first project of the Company is already in process and is expected to be launched in 3rd quarter of FY 13-14.

The Company also plans on expanding its existing Iron & Steel manufacturing business by setting up additional furnace(s) and the recent technology of Ladle Refining.

4. Management Discussion and Analysis

Business Segment-wise Performance

The company''s operation comprises of M.S. Bar and M.S. Billet that falls under one segment. Hence, Segment wise operational performance is not applicable.

Outlook

The world as well as national economy is passing through recession. However, average GDP growth rate of Bihar has been magnificent i.e. 10 percent as above approx which is providing positive hope for the Company. The Company is taking all necessary steps to reap the benefits of the fast growth of the State.

Risks and Concerns

Due to global slowdown and fierce competition in the steel industry there is pressure on maintain once of the profitability of the Company. Bihar is one of the fastest growing state in the area of Infrastructural development which is bound to increase the demand of steel in the state. Taking in view the various infrastructural projects taken up by Government of Bihar, the Company is prepared to fulfil all the necessities of the growing demand of steel. Thus, increasing market share and participating in the industrial development of the state.

Internal Control Systems and their Adequacy

There exists an internal audit system during the year under review, which needs to be strengthened for being commensurate with the size and nature of business.

Human Resource Development / Industrial Relations

The Company has been taking various initiatives for HR development, a process that will continue in the coming years. Your Company organizes Architects and Masons meets on a regular basis in various areas where it markets its products. These meets are very well attended and have resulted in better demand for its products apart from popularizing its brand image.

The Company has also made arrangement with Shri Ravi Kishan, a very popular movie and TV personality to act as its brand ambassador.

5. Dividend

As the Company incurred loss during the year hence no dividend payment was considered.

6. Finance

During the year, the Company continued to avail credit facilities by way of overdrafts, cash credits, issuance of guarantees, including deferred payment guarantees and indemnities, negotiation and discounting of demand and/or usance bills and cheques and such other facilities from State Bank of India, Commercial Branch, Patliputra, Patna and other private bodies for the existing and Bihta unit.

7. Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Debabrata Benerjee and Mr. Narendra Jaiswal are retiring by rotation and being eligible offers themselves for re-appointment.

8. Directors'' Responsibility Statement

In compliance with section 217(2AA) of the Companies Act 1956, the Directors confirm that

a) in preparation of the Annual Accounts, for the year ended 31st March 2013, all the applicable accounting standards prescribed by the ICAI have been followed.

b) the Directors have adopted such accounting policies and have applied them consistently and have made judgments 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 and of the profit/loss of the Company for the year.

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) the Directors have prepared the annual accounts on a going concern basis.

9. Auditors

M/s. ARSK & Associates, Chartered Accountants, Auditors of the Company are retiring at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received a certificate to the effect that their re-appointment if made will be within the prescribed limit u/s.224 (1- B) of the Companies Act, 1956.

10. Depository System

As the members are aware, your Company''s shares are tradable compulsorily in electronic form and your Company has connectivity with both the depositories, i.e. National Securities Depository Limited (NSDL) & Central Depository Services (India) Limited (CDSL). Members are requested to avail the facility of dematerialisation of the Company''s shares on either of the Depositories as aforesaid, if not already done.

11. Public Deposit

The company has not invited /accepted any deposits from the public and as such there are no outstanding deposits, in terms of the Companies (Acceptance of Deposits) Rules, 1975.

12. Personnel

There is no employee in respect of whom particulars pursuant to Section 217(2 A) of the Companies Act, 1956 are required to be given.

13. Conservation of Energy

The information relating to conservation of energy as required U/s. 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure-A to this Report. The Company has no figure to disclose in respect of technology absorption and /or foreign exchange earnings and outgo.

14. Social Welfare Activities

The Company organises mason''s meet from time to time at various centres.

15. Corporate Governance

Separate Report on Corporate Governance is annexed and marked "Annexure - B". The Auditors'' Certificate on compliance with the conditions of Corporate Governance is annexed and marked "Annexure — C".

16. Acknowledgement

Your Directors wish to place their sincere appreciation to the co-operation extended by the Bank, State Government, Electricity Board, Customers, Suppliers and Shareholders and solicit their continued support. The Directors also wish to place on record the dedicated service rendered by the Management, Staffs and Workers.

For and on behalf of the Board

Sanjiv Kumar Choudhary Ankit Choudhary

Chairman cum Managing Director Director

Place: Patna

Date: 4th September, 2013


Mar 31, 2012

The Directors have pleasure in presenting the 19th Annual Report of the Company, together with the Audited Accounts, for the year ended 31st March, 2012.

1. Financial Results (Rs. in Lacs)

2011-2012 2010-2011

Sales & Other Income (net) 9516.85 19105.72

Profit/(Loss) before Interest & Depreciation 947.03 1344.18

Less : Interest & Other Financial Charges 956.18 879.23

Less : Depreciation 314.72 341.84

Profit/(Loss) before tax and exceptional items (323.87) 123.11

Add /(Less): Exceptional items - -

Profit/(Loss) before tax and after exceptional items (323.87) 123.11

Less: Provision for Taxation - 25.16

Less/(Add): Deferred Tax (106.96) 51.05

Net Profit /(Loss) after Tax (216.91) 46.90

Balance as per last year 641.71 594.81

Balance Carried Forward 424.80 641.71

2. Operations

During the year under review the total revenue has decreased by 50%, compared to previous year ended on 31.03.2011.

Due to slowdown in the steel market, production was temporarily suspended during certain period in the financial year 2011- 2012.

3. Future Prospects

The State of Bihar is experiencing a continuous and resounding growth phase. Huge emphasis is being laid upon growth of infrastructure in the state and therefore being the leading TMT manufacturer, both in terms of volume and quantity, we expect record-breaking demand for our product. It is pertinent to mention that our product CISCO Thermex Fe500 QST Bars is the most demanded TMT brand in the fastest growing state in country.

Furthermore, the enhancement cum restructuring of loan of the Company has been principally agreed to by our Banker and is currently under process for final sanction. Added capital will lead to better realization on finished goods as well as purchase of quality raw material at reasonable rates, thus increasing the bottom-line of the Company. Techno- Economic Viability (TEV) study to this effect was conducted by D&B Consultant on instruction of the Banker, wherein it was concluded that manufacturing unit of the Company represented a substantial potential for growth and profitability. An enhancement in the Banking arrangement is therefore expected to be received shortly

5. Dividend

As the Company incurred loss during the year hence no dividend payment was considered.

6. Finance

During the year, the Company continued to avail credit facilities by way of overdrafts, cash credits, issuance of guarantees. including deferred payment guarantees and indemnities, negotiation and discounting of demand and/or usance bills and cheques and such other facilities from State Bank of India, Commercial Branch, Patliputra, Patna and other private bodies for the existing and Bihta unit.

7. Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Aditya Dalmiya and Mr. Ashok Agarwal are retiring by rotation and being eligible offers themselves for re-appointment.

8. Directors' Responsibility Statement

In compliance with section 217(2AA) of the Companies Act 1956, the Directors confirm that

a) in preparation of the Annual Accounts, for the year ended 31 st March 2012, all the applicable accounting standards prescribed by the ICAI have been followed.

b) the Directors have adopted such accounting policies and have applied them consistently and have made judgments 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 and of the profit/loss of the Company for the year.

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) the Directors have prepared the annual accounts on a going concern basis.

9. Auditors

M/s. ARSK & Associates, Chartered Accountants, Auditors of the Company are retiring at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received a certificate to the effect that their re-appointment if made will be within the prescribed limit u/s.224 (1-B) of the Companies Act, 1956.

10. Depository System

As the members are aware, your Company's shares are tradable compulsorily in electronic form and your Company has connectivity with both the depositories, i.e. National Securities Depository Limited (NSDL) & Central Depository Services (India) Limited (CDSL). Members are requested to avail the facility of dematerialisation of the Company's shares on either of the Depositories as aforesaid, if not already done.

11. Public Deposit

The company has not invited /accepted any deposits from the public and as such there are no outstanding deposits, in terms of the Companies (Acceptance of Deposits) Rules, 1975.

12. Personnel

There is no employee in respect of whom particulars pursuant to Section 217(2A) of the Companies Act, 1956 are required to be given.

13. Conservation of Energy

The information relating to conservation of energy as required U/s. 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure-A to this Report. The Company has no figure to disclose in respect of technology absorption and /or foreign exchange earnings and outgo.

14. Social Welfare Activities

The Company organises mason's meet from time to time at various centres.

15. Corporate Governance

Separate Report on Corporate Governance is annexed and marked "Annexure - B". The Auditors' Certificate on compliance with the conditions of Corporate Governance is annexed and marked "Annexure - C".

16. Acknowledgement

Your Directors wish to place their sincere appreciation to the co-operation extended by the Bank, State Government. Electricity Board, Customers, Suppliers and Shareholders and solicit their continued support. The Directors also wish to place on record the dedicated service rendered by the Management, Staffs and Workers.

For and on behalf of the Board

Place : Patna Sanjiv Kumar Choudhary Aditya Dalmiya

Date :3rd September, 2012 Chairman-cum-Managing Director Director


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the 18th Annual Report of the Company, together with the Audited Accounts, for the year ended 31st March, 2011.

1. Financial Results (Rs. in Lacs)

2010-2011 2009-2010

Sales & Other Income (net) 19105.72 17085.98

Profit before Interest & Depreciation 1344.18 1534.92

Less: Interest & Other Financial Charges 879.23 825.63

Less: Depreciation 341.84 350.86

Profit before tax and exceptional items 123.11 358.43

Add /(Less): Exceptional items - 0.44

Profit before tax and after exceptional items 123.11 358.87

Less: Provision for Taxation (25.16) (60.99)

Less: Deferred Tax (51.05) (101.22)

Net Profit after Tax 46.90 196.66

Balance as per last year 594.81 398.15

Balance Carried Forward 641.71 594.81

2. Operations

During the year under review the total income have increased by 12%, compared to previous year ended on 31.03.2010.

3. Future Prospects

Due to general slackness in the market more particularly for steel resulted in poor demand of the products. The input cost particularly financial cost became unbearable and as such the Company could not perform well during the year. The Company is hopeful that the various steps taken by the Government of Bihar for economic and infrastructural development shall increase the demand of Company's product.

4. Management Discussion and Analysis

Business Segment-wise Performance

The company's operation comprises of M.S.Bar and M.S.Billet that falls under one segment. Hence Segment wise operational performance is not applicable.

Outlook

The industry is passing through negative cyclical swings on account of excessive capacity and competition. The Company is taking necessary steps to restructure its working and the organization hopes to commence regular production soon.

Risks and Concerns

In view of the sharp expansion in capacity of similar products fierce competition is likely to continue affecting the profitability of the Company. However in view of ambitious programme taken by the Government of Bihar, improvement of law and order situation and indication of overall economic improvement, the demand is likely to improve in Bihar, although the profitability is likely to remain tight due to increased cost of raw materials and extreme competitiveness in the market.

Internal Control Systems and their Adequacy

There exists an internal audit system during the year under review, which needs to be strengthened for being commensurate with the size and nature of business.

Human Resource Development/ Industrial Relations

The Company has been taking various initiatives for HR development, a process that will continue in the coming years. Your Company organizes Architects and Masons meets on a regular basis in various areas where it markets its products. These meets are very well attended and have resulted in better demand for its products apart from popularizing its brand image.

The Company has also made arrangement with Shri Ravi Kishan, a very popular movie and TV personality to act as it's brand ambassador.

5. Dividend

In order to conserve resources of the Company, no dividend has been declared for the financial year under review.

6. Finance

During the year, the Company continued to avail credit facilities by way of overdrafts, cash credits, issuance of guarantees. including deferred payment guarantees and indemnities, negotiation and discounting of demand and/or usance bills and cheques and such other facilities from State Bank of India, Commercial Branch, Patliputra, Patna and other private bodies for the existing and Bihta unit.

7. Sub-division of equity shares

The Company has sub-divided it's equity share of face value of Rs. 10/- each into 2 equity shares of face value of Rs. 51- each w.e.f. 01.11.2010.

8. Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Debabrata Banerjee and Mr. Narendra Kumar Jaiswal are retiring by rotation and being eligible offers themselves for re-appointment.

9. Directors' Responsibility Statement

In compliance with section 217(2AA) of the Companies Act 1956, the Directors confirm that

a) in preparation of the Annual Accounts, for the year ended 31st March 2011, all the applicable accounting standards prescribed by the ICAI have been followed.

b) the Directors have adopted such accounting policies and have applied them consistently and have made judgments 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 and of the profit of the Company for the year.

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) the Directors have prepared the annual accounts on a going concern basis.

10. Auditors

M/s. ARSK & Associates, Chartered Accountants, Auditors of the Company are retiring at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received a certificate to the effect that their re-appointment if made will be within the prescribed limit u/s.224 (1 -B) of the Companies Act, 1956.

11. Depository System

As the members are aware, your Company's shares are tradable compulsorily in electronic form and your Company has connectivity with both the depositories, i.e. National Securities Depository Limited (NSDL) & Central Depository Services (India) Limited (CDSL). Members are requested to avail the facility of dematerialisation of the Company's shares on either of the Depositories as aforesaid, if not already done.

12. Public Deposit

The company has not invited /accepted any deposits from the public and as such there are no outstanding deposits, in terms of the Companies (Acceptance of Deposits) Rules, 1975.

13. Personnel

There is no employee in respect of whom particulars pursuant to Section 217(2A) of the Companies Act, 1956 are required to be given.

14. Conservation of Energy

The information relating to conservation of energy as required U/s. 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure-A to this Report. The Company has no figure to disclose in respect of technology absorption and /or foreign exchange earning and outgo.

15. Social Welfare Activities

The Company organises mason's meet from time to time at various centers.

16. Corporate Governance

Separate Report on Corporate Governance is annexed and marked "Annexure - B". The Auditors' Certificate on compliance with the conditions of Corporate Governance is annexed and marked "Annexure - C".

17. Acknowledgement

Your Directors wish to place their sincere appreciation to the co-operation extended by the Bank, State Government. Electricity Board, Customers, Suppliers and Shareholders and solicit their continued support. The Directors also wish to place on record the dedicated service rendered by the Management, Staffs and Workers.

For and on behalf of the Board

Sanjiv Kumar Choudhary Aditya Dalmiya

Kolkata, 3rd

September, 2011 Managing Director Director




Mar 31, 2010

The Directors have pleasure in presenting the 17th Annual Report of the Company, together with the Audited Accounts, for the year ended 31 st March, 2010.

1. Financial Results (Rs. in Lacs)

2009-2010 2008-2009

Sales & Other Income (net) 17085.98 4967.41

Profit before Interest & Depreciation 1534.92 400.15

Less: Interest & Other Financial Charges 825.63 139.58

Less: Depreciation 350.86 80.63

Profit before tax and exceptional items 358.43 179.94

Add / (Less): Exceptional items 0.44 2.16

Profit before tax and after exceptional items 358.87 182.10

Less: Provision for Taxation (60.99) (21.49)

Less: Fringe Benefit Tax - (1.86)

Less: Deferred Tax (101.22) (54.40)

Net Profit after Tax 196.66 104.35

Balance as per last year 398.15 293.80

Balance Carried Forward 594.80 398.15

2. Operations

During the year under review the total income and profit after tax have increased by 244% and 88% respectively, compared to previous year ended on 31.03.2009. This was achieved due to operational efficiencies despite several adverse factors, particularly substantial increase in prices of inputs and enhanced competition.

3. Future Prospects

The product manufactured at the Bihta unit continues to be well received in the market as far as quality is concerned. The Company is hopeful that the various steps taken by the Government of Bihar for economic and infrastructural development will increase the demand of Companys product. The Company does not apprehend that it will face much problem in marketing its product despite serious competition although the profitability may get affected.

4. Management Discussion and Analysis

Business Segment - wise Performance

The companys operation comprises of M.S.Bar and M. S. Billet that falls under one segment. Hence Segment wise operational performance is not applicable.

Outlook

The steel industry is subject to cyclical swings on account of excessive capacity expansion and unpredictable demand swings. This sector was also affected due to global economic crisis and the market downturn began to level out in the second half of the financial year as business environment began to improve slowly. The Company has widened its marketing network and the products are being sold in some locations of Uttar Pradesh, in addition to the various areas of Bihar being served earlier.

Risks and Concerns

In view of the sharp expansion in capacity of similar products fierce competition is likely to continue affecting the profitability of the Company. However in view of ambitious programme taken by the Government of Bihar, improvement in law and order situation and indication of overall economic improvement, the demand is likely to improve in Bihar, although the profitability is likely to remain tight due to increased cost of raw materials and extreme competitiveness in the market.

Internal Control Systems and their Adequacy

There exists an internal audit system during the year under review, which needs to be strengthened for being commensurate with the size and nature of business.

Human Resource Development/ Industrial Relations

The Company has been taking various initiatives for HR development, a process that will continue in the coming years. Your Company organizes Architects and Masons meets on a regular basis in various areas where it markets its products. These meets are very well attended and have resulted in better demand for its products apart from popularizing its brand image.

The relations between the employees, workers and the management were satisfactory and an atmosphere of understanding prevailed throughout the year. The Company has also made arrangement with Shri Ravi Kishan, a very popular movie and TV personality to act as its brand ambassador.

5. Dividend

In order to conserve resources of the Company, no dividend has been declared for the financial year under review.

6. Finance

During the year, the Company continued to avail credit facilities by way of overdrafts, cash credits, issuance of guarantees. including deferred payment guarantees and indemnities, negotiation and discounting of demand and/or usance bills and cheques and such other facilities from State Bank of India, Commercial Branch, Patliputra, Patna and other private bodies for the existing and Bihta unit.

7. Rights Issue

In April 2009, the Company raised Rs. 571.97 Lacs through rights issue of 57,19,694 equity shares of Rs.10/- each for cash at a price of Rs.20/- each including a premium of Rs.10/- per equity share to the equity shareholders on rights basis in the ratio of 4 equity shares for every 5 equity shares held on record date i.e. 20.03.2009. The issue price for the equity share payable in two instalments: 50% on application & 50% on call within 12 months.

Pursuant to this the Company made first & final call of Rs. 10/- per share (comprising of Rs. 5/- per share towards equity capital and Rs. 5/- per share as premium) on each of 57,19,694 partly paid up equity shares and fixed 26.02.2010 as the record date for the same. On 08.05.2010 the company converted the entire 57,19,694 partly paid up equity shares into fully paid up equity shares of Rs. 10/- each after the first & final call money of Rs. 571.97 Lacs was received.

The net proceeds have been utilized for repayment of unsecured loan and for purchase of long term capital goods for the Bihta unit.

8. Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Sanjiv Kumar Choudhary and Mr. Aditya Dalmiya are retiring by rotation and being eligible offers themselves for re-appointment.

9. Directors Responsibility Statement

In compliance with section 217(2AA) of the Companies Act 1956, the Directors confirm that

a) in preparation of the Annual Accounts, for the year ended 31st March 2010, all the applicable accounting standards prescribed by the ICAI have been followed.

b) the Directors have adopted such accounting policies and have applied them consistently and have made judgments 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 and of the profit of the Company for the year.

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) the Directors have prepared the annual accounts on a going concern basis.

10. Auditors

M/s. ARSK & Associates, Chartered Accountants, Auditors of the Company are retiring at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received a certificate to the effect that their re-appointment if made will be within the prescribed limit u/s.224 (1-B) of the Companies Act, 1956.

11. Depository System

As the members are aware, your Companys shares are tradable compulsorily in electronic form and your Company has connectivity with both the depositories, i.e. National Securities Depository Limited (NSDL) & Central Depository Services (India) Limited (CDSL). Members are requested to avail the facility of dematerialisation of the Companys shares on either of the Depositories as aforesaid, if not already done.

12. Public Deposit

The company has not invited /accepted any deposits from the public and as such there are no outstanding deposits, in terms of the Companies (Acceptance of Deposits) Rules, 1975.

13. Personnel

There is no employee in respect of whom particulars pursuant to Section 217(2A) of the Companies Act, 1956 are required to be given.

14. Conservation of Energy

The information relating to conservation of energy as required U/s. 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure-A to this Report. The Company has no figure to disclose in respect of technology absorption and /or foreign exchange earning and outgo.

15. Social Welfare Activities

The Company organises masons meet from time to time at various centers and provides Personal Accident Cover to the masons attending the meeting under arrangement with Oriental Insurance Company and The New India Assurance Co. Ltd.

16. Corporate Governance

Separate Report on Corporate Governance is annexed and marked "Annexure - B". The Auditors Certificate on compliance with the conditions of Corporate Governance is annexed and marked "Annexure - C".

17. Acknowledgement

Your Directors wish to place their sincere appreciation to the co-operation extended by the Bank, State Government. Electricity Board, Customers, Suppliers and Shareholders and solicit their continued support. The Directors also wish to place on record the dedicated service rendered by the Management, Staffs and Workers.



For and on behalf of the Board

Sanjiv Kumar Choudhary Aditya Dalmiya



Kolkata, 1 st September, 2010 Managing Director Director

 
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