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Directors Report of Godawari Power & Ispat Ltd.

Mar 31, 2015

To the Members,

The Directors have pleasure in presenting the 16th Annual Report on the business & operations of the Company together with the Standalone and Consolidated Audited Statement of Financial Accounts for the year ended 31st March 2015.

1. HIGHLIGHTS OF PERFORMANCE

- Consolidated income for the year increased by 15.07% to Rs. 2455.20 Crore as compared to Rs. 2133.60 Crore in F.Y 2013-14;

- Consolidated net sales for the year was Rs. 2394.98 Crore as compared to Rs. 2118.05 Crore in F.Y 2013-14, a growth of 13.07%;

- Consolidated profit after tax for the year was Rs. 70.73 Crore as compared to Rs. 69.97 Crore in F.Y.2013-14:

2. FINANCIAL RESULTS

Rs. in Crores

Particulars Standalone Consolidated 2014-15 2013-14 2014-15 2013-14

Gross Sales 2166.61 1732.47 2665.38 2349.87

Less: Excise duty/Sales tax/VAT 231.56 191.55 270.40 231.82

Net Sales Turnover 1935.05 1540.92 2394.98 2118.05

Operating expenses 1671.72 1329.01 2036.77 1770.81

Operating Profit. 263.33 211.91 358.21 347.24

Other Income 16.49 24.49 60.22 15.55

Total Revenue 1951.54 1565.41 2455.20 2133.60

Profit before Interest, Depreciation, Tax and Amortization 279.82 236.40 418.43 362.79

(EBIDTA)

Finance Costs 144.88 114.51 223.65 165.01

Depreciation and amortization expenses 65.82 66.68 118.18 105.49

Profit Before Taxation (PBT) 69.12 55.21 76.60 92.29

Taxation (including Deferred Tax) 7.01 (0.73) 5.87 22.32

Profit after Taxation (PAT) 62.11 55.94 70.73 69.97

Less: Minority Interest -- -- 4.47 10.94

Less: Share of Loss of associate company -- -- 0.05 1.19

Profit brought forward from previous year 358.53 316.78 377.54 357.30

Amount available for Appropriations 420.64 372.72 443.75 415.14

Appropriations

Proposed Final Dividend on Equity Shares 3.28 3.28 4.58 7.28

Interim Equity Dividend -- 4.91 -- 4.91

Corporate Dividend Tax 0.54 -- 0.78 2.91

Transfer to General Reserves -- 6.00 1.50 22.50

Adjustments for Fixed Assets where useful life as per Schedule-II 2.35 -- -- -- (Net of taxes)

Depreciation of those assets whose useful life is Nil (Net of taxes) -- -- 3.63 --

Total 6.17 14.19 10.49 37.60

Net Surplus 414.47 358.53 433.25 377.54

The financial year 2014-15 was a yet another challenging year due to continued slowdown in Indian Economy and more particularly in Industrial production and infrastructure growth due to lack of demand, stalled projects and broken corporate Balance Sheet. The Iron & Steel Industry went through a difficult period in view of supply constraints of raw material i.e. domestic Iron ore & coal on account of ban of iron ore mining in Orissa and supply of coal to non- regulated sectors by Coal India Ltd which kept the input cost at elevated level on one side and falling finished steel prices on account of cheap imports from China & CIS countries. In the above backdrop, the margin of the industry players contracted. The results of the operating performance of your Company in such challenging & adverse conditions are mentioned below:

Stand-alone Operations:

The performance of your Company during the year under review remained satisfactory under the prevailing circumstances and overall slowdown in demand growth. The highlights of the financial performance for the year are as under:

a) Net Sales Revenue increased by 25.58% to Rs. 1935.05 crores from Rs. 1540.92 crores recorded in previous year.

b) Operating Profit marginally decreased to 14.46% from 15.34 % achieved in previous year.

c) PBT increased by 25.19% to Rs. 69.12 crores from Rs. 55.21 crores and net profit after tax remained flat at Rs. 62.11 crores (Previous Year Rs. 55.94 Crores).

Consolidated Operations:

a) Net sales revenue during the FY 2014-15 increased by 13.07% to Rs. 2394.98 crores from Rs. 2118.05 crores recorded in previous year.

b) EBIDTA Margins increased by 4.26 % to Rs. 378.24 crores (Excluding net gain of Rs. 40.19 crores on sale of Current Investments by Subsidiary Company Hira Ferro Alloys Limited) from Rs. 362.79 crores during previous year, recording operating margin of 15.79 %.

c) PBT decreased to Rs. 76.60 crores from Rs. 92.29 crores. The consolidated PBT fell on account of higher interest & depreciation cost of new pellet plant and Solar Power plant during the year under review.

The detailed performance and financial review has been given in the Annexure to the Directors Report titled "Management Discussion and Analysis".

The paid up Equity Share Capital as on March 31, 2015 was Rs. 32.756 Crore. During the year under review, the Company has not issued any shares with differential voting rights nor granted stock options nor sweat equity. As on March 31, 2015, none of the Directors of the Company hold convertible instruments of the Company.

5. DEPOSITS

The Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

6. TRANSFER TO RESERVES

Your Company has not transferred any amount to the General Reserves Account during the Financial Year 2014-15, since the company is proposing a dividend of only 10% on the equity share capital of the company.

The Company had created 25% Debenture Redemption Reserve of Rs. 38.75 crores towards the redemption of outstanding Debentures of Rs. 155 crores as on 31.03.2014. However since the Debentures have been redeemed to the tune of Rs. 60.00 crores during the financial year 2014-15, an amount of Rs. 15.00 crores had been withdrawn from Debenture Redemption Reserve Account and transferred to General Reserve Account leaving a balance of Rs. 23.75 crores which is equivalent to 25% of the outstanding Debentures of Rs. 95 crores as on 31.03.2015 as prescribed under Section 71 of the Companies Act, 2013 read with Rule 7 of the Companies (Share Capital and Debenture) Rules 2014.

7. DIVIDEND

Your Directors have pleasure in recommending payment of final dividend @ 10% i.e. Re.1.00 per equity share for the year under review. The total outflow of funds on account of payment of dividend will be Rs. 3.82 crore as compared to Rs. 8.19 crore (25%) during the previous year including dividend tax. Upon approval, the dividend shall be paid to all those shareholders whose names appear in the register of members as on the record date i.e. 31st August, 2015 fixed for payment of dividend.

8. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of Section 125 of the Companies Act, 2013, relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from to time to time on due dates, to the Investor Education and Protection Fund.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on September 27, 2014 (date of last Annual General Meeting) on the Company's website (www. godawaripowerispat.com), as also on the Ministry of Corporate Affairs' website.

9. EXPANSION/NEW PROJECTS:

Expansion cum balancing Plan in Steel Melting (SMS) and Rolling Capacity:

The Company has during year under review slowed down the work on expansion cum balancing plan in steel melting shop and rolling mill in view of lower demand for steel products. However your Company is taking up appropriate steps to complete the project over next 12 months, by the demand conditions are expected to be improved.

Mining Projects:

Ari Dongri Iron Ore mines:

Your Company is in process of enhancing the capacity of Ari Dongri Iron Ore mines from 7,00,000 TPA to 14,00,000 TPA, for which Stage I &II forest approval from MoEF has been obtained and mining lease has been executed. The production in enhanced capacity is expected to be started in the current year.

Boria Tibu Iron Ore mines:

The Company has started mine development cum mining activities at Boria Tibu Iron Ore mines with capacity of 700000 TPA in Chhattisgarh and the developmental activities are going on smoothly. The Company has also stared production from this mine and gradually building up the production volumes.

The output from mines will be sufficient to meet the captive iron ore requirement of the Company's production capacities in Chhattisgarh.

Coal Mines:

The Company was allotted three Coal Blocks i.e. Nakia, Madanpur (North) & Madanpur (South) in the State of Chhattisgarh in consortium with other companies through JV Company, namely Chhattisgarh Captive Coal Mining Ltd. However, the said Coal Blocks could not start operations in view of pendency of certain administrative approvals and these Coal Blocks were de- allocated by the Ministry of Coal, which was, however, stayed by the Hon'ble High Court of Delhi and the matter has been sub-judice. The allocation of said Coal

Blocks stands cancelled by virtue of the Order dated September 24, 2014 passed by the Hon'ble Supreme Court. The Company has invested Rs. 6.31 crores in the equity capital of JV Company which has been utilised by JV Company for development of said coal blocks. No provision for impairment in value of Investments in JV Company has been made in view of likely realization of amount invested upon reimbursement of cost incurred by the Company from the future allocates of the said coal blocks. The JV Company is also in process of realization of current assets held by it and the amount is expected to be refunded to the shareholders in due course. Accordingly the provision for impairment in value of investment, if any, shall be made as and when the amount of actual loss is determined.

10. ALTERATION OF ARTICLES OF ASSOCIATION

Your Company has adopted new set of articles of association in line with the provisions of the Companies Act, 2013. The Shareholders of the Company in their Annual General Meeting held on 27th September, 2014 have accorded their approval for adoption a new set of Articles of Association of the Company by special resolution.

11. CHANGES IN NATURE OF BUSINESS:

The Company has been engaged in the business of manufacturing the trading of Iron Ore Pellets, Sponge Iron, Steel Billets, HB Wires and generation of Power. There is no change in the nature of Business of the Company during the Financial Year 2014-15.

12. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION:

There are no material changes and commitments affecting the financial position of the company occurred between the 01.04.2015 to the date of this report, except continued slowed down in steel demand and falling prices of finished products on account of pressure from cheaper imports.

13. CHANGES IN STATUS OF SUBSIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES:

None of the companies has either become Subsidiary of the Company other than the existing Subsidiaries or has ceased to be Subsidiary of the Company during the Financial Year 2014-15.

Your company has acquired 22,40,000 equity shares of Rs. 10 each of Chhattisgarh Ispat Bhumi Limited during the financial year and the total investments along with existing 5,70,000 equity shares of Rs. 10 each aggregated to 28,10,000 equity shares representing 35.36% of total equity of Chhattisgarh Ispat Bhumi Limited. Your

company also acquired 16,940 equity shares of Rs.10 each of Godawari Natural Resources Limited aggregating 33.88% and 2605000 equity shares of Rs. 10 each of Jagdamba Power and Alloys Limited aggregating 26.06%. Thus Chhattisgarh Ispat Bhumi Limited and Jagdamba Power and Alloys Limited have become Associate Companies and Godawari Natural Resources Limited has become Joint Venture Company during the year.

Your Company has also not entered into any new Joint Venture nor terminated any existing Joint Venture during the Financial Year 2014-15. There is no Associate company to our company.

14. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARY AND JOINT VENTURE COMPANIES:

The performance and financial position of the company's subsidiaries namely, Ardent Steels Limited, Godawari Green Energy Limited, Hira Ferro Alloys Limited, Associate Companies namely Jagadamba Power & Alloys Limited, Chhattisgarh Ispat Bhumi Limited and Joint Venture Companies namely Raipur Infrastructure Company Limited for the Financial Year 2014-15 are given in ANNEXURE-01. The other subsidiaries namely Godawari Clinkers and Cement Limited, Godawari Energy Limited, Godawari Integrated Steels India Limited and Krishna Global Minerals Limited and the other Joint Venture and Associate Companies namely Godawari Natural Resources Limited and Chhattisgarh Captive Coal Mining Limited have not yet started their operations.

The Financial Statements of the Subsidiary Companies and Joint Venture for the Financial Year 2014-15 have been consolidated.

15. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 (12) read with Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the company is given in ANNEXURE-02. The Statement showing the names and other particulars of the employees of the company as required under Rule 5 (2 &3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not required to be furnished since none of the employees of the company has received remuneration in excess of the remuneration mentioned in the above mentioned Rule 5 (2) during the financial year 2014-15.

16. CHANGES IN DIRECTORS & KEY MANAGERIAL PERSONS:

None of the Directors or Key Managerial Persons has been appointed or resigned during the Financial Year 2014-15 except appointment of CA Sanjay Bothra as Chief Financial Officer of the Company with effect from 24.05.2014.

17. CONSTITUTION OF CSR COMMITTEE, CSR POLICY AND INITIATIVES:

The Board of Directors have constitutes a CSR Committee comprising of three directors including one Independent Director on 15.03.2014. The CSR Committee has formulated a CSR policy of the Company for undertaking the activities as specified in Schedule VII to the Companies Act, 2013. The Said policy has been approved and adopted by the Board of directors of the Company, the contents of which have been displayed on the company's website and also given in the Annual Report on CSR activities. (Web link: www.godawaripowerispat.com ) The Annual Report on CSR activities initiated and under taken by the Company during the Financial Year 2014-15 is annexed herewith as an ANNEXURE-03.

18. AUDIT COMMITTEE COMPOSITION:

The Board of Directors have constituted an Audit Committee comprising of four directors including three Independent Directors and one Non-Executive Director all having financial literacy.

19. DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013 based on the representations received from the operating management and Chief Financial Officer of the company:

a) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) That your Directors have selected such accounting policies and applied them consistently, and made judgment and estimates that 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 the financial year and of the profit of the company for that period;

c) That your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities;

d) That your Directors have prepared the annual accounts on a going concern basis;

e) That your Directors had laid down proper internal financial controls to be followed by the company and that such financial controls are adequate and were operating effectively.

f) That your Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

20. STATEMENT ON DECLARATION BY INDEPENDENT DIRECTOR:

All independent directors of the Company have given declarations as required under the provisions of section 149 (7) of the Companies Act, 2013 stating that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Clause 49(II) (B) of the Listing Agreement.

21. NUMBER OF MEETINGS OF BOARD:

During the year six Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report.

22. AUDITORS:

Statutory Auditors

M/s O.P. Singhania and Co., Chartered Accountants, Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible have offered themselves for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 141 (3) (g) of the Companies Act, 2013 and that they are not disqualified for re-appointment and also satisfies the criteria as mentioned under Section 141 and they have obtained peer review certificate as required under SEBI Guidelines for appointment of Statutory Auditors of listed companies.

Cost Auditors

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Record and Audit) Amendment Rules 2014 M/s Sanat Joshi & Associates has been appointed as cost auditors for conducting Cost Audit for the financial year 2014-15.

Internal Auditors

M/s. JDS & Co, Chartered Accountants were appointed as Internal Auditors for the FY 2014-15.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Jain Tuteja & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "ANNEXURE 04".

23. AUDITOR'S REPORTS

- Statutory Auditors

There are no qualifications, reservations, adverse remarks or disclaimers in the statutory Auditor's Report on the Financial Statements of the company for the financial year 2014-15 and hence does not require any explanations or comments.

- Secretarial Audit

There are no qualifications, reservations, adverse remarks or disclaimers in the Secretarial Auditor's Report on Secretarial and other applicable legal compliances to be made by the company for the financial year 2014-15 and hence does not require any explanations or comments.

24. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into by the Company during the financial year 2014-15 were on arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the company with promoters, directors, key managerial personnel or related parties which may have a potential conflict with the interest of the company at large.

25. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of Loans given and Investments made by the company as covered under the provisions of Section 186 of the Companies Act, 2013 are given in Standalone Financial Statements (Ref. Note 13 & 14). The company has not given any corporate guarantees to any other party.

26. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "ANNEXURE 05".

27. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulators/Courts which would impact the going concern status of the company and its future operations.

28. 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.

29. ENERGY CONSERVATION, 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 06".

30. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Board of Directors in its meeting held on 11.11.2014 approved and established 'Whistle Blower Policy' and 'Code of Conduct' for the directors & employees of the Company as required under the provisions of Sec. 177 of the Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its powers) Rules, 2014 and Clause-49 of the Listing Agreement.

The said Policy has been properly communicated to all the directors and employees of the Company through the respective departmental heads and the new employees shall be informed about the Vigil Policy by the Personnel Department at the time of their joining.

31. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an internal control system commensurate with the size and scale and complexity of its operations. The scope and authority of Internal Audit functions have been defined in the Internal Audit Charter to maintain its objectivity and independence, the Internal Audit functions reports to the Chairman of the Audit Committee of the Board.

The Internal Audit department monitors and evaluates the efficacy and adequacy of internal control system in the company, its compliance with operating system, accounting procedures and policies of the company and its subsidiaries. Based on the report of the Internal Auditors, process owners undertake corrective actions in their respective areas and thereby strengthen the control. Significant Audit observations and corrective actions, thereon are presented to the Audit Committee of the Board.

32. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY:

The Company has adopted a Risk Management Policy to identify and evaluate business risks associated with the operations and other activities of the Company and formulated risk mitigations strategies.

33. NOMINATION AND REMUNERATION POLICY.

Company's Policy on Directors appointment and Remuneration including criteria for determining qualification, positive attributes, independence of directors and other matters provided under section 178(3) of the Companies Act, 2013 is attached herewith as ANNEXURE 07.

34. ANNUAL EVALUATION OF BOARD, ETC.

The Nomination and Remuneration Committee has formulated criteria for evaluation of the performance of the each of the directors of the company. On the basis of said criteria, the Board and all its committees and directors have been evaluated by the Board of the directors.

35. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Work Place (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, Contractual, Temporary, Training) are covered under this Policy. However no complaints has been received during the year 2014-15.

36. CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forming an integral part of this Report is given as ANNEXURE 08.

37. ACKNOWLEDGEMENTS

The Board expresses its sincere gratitude to the shareholders, bankers, State and Central Government authorities and the valued customers for their continued support. The Board also wholeheartedly acknowledges and appreciates the dedicated efforts and commitment of all employees of the Company.

For and on behalf of Board of Directors

Place: Raipur

Date : 11.08.2015 CHAIRMAN


Mar 31, 2014

To the Members,

The Directors have pleasure in presenting the 15th Annual Report on the business & operations of the Company together with the Stand-alone and Consolidated Audited Financial Statements for the year ended 31st March 2014.

FINANCIAL RESULTS

RS in Crores

Particulars Standalone 2013-2014 2012-2013

Gross Sales 1725.47 2141.79

Less: Excise duty 184.55 30.16

Net Sales Turnover 1540.92 1911.63

Operating expenses 1329.01 1670.70

Operating Profit 211.91 240.93

Other Income 24.49 9.70

Total Revenue 1565.41 1921.33

Profit before Interest, Depreciation, Tax and Amortization 236.40 250.63

(EBIDTA)

Finance Costs 114.51 92.39

Depreciation and amortization expenses 66.68 52.27

Profit Before Taxation (PBT) 55.21 105.97

Taxation (including Deferred Tax) (0.73 ) 18.17 )

Profit after Taxation (PAT) 55.94 124.14

Less: Minority Interest - -

Less: Share of Loss of associate company - -

Profit brought forward from previous year 316.78 300.71

Less: Adjustment of deferred tax as per transitional provision - 52.93

Amount available for Appropriations 372.72 371.92

Appropriations

Proposed Final Dividend on Equity Shares 3.28 8.19

Interim Equity Dividend 4.91 -

Corporate Dividend Tax - 1.29

Transfer to General Reserves 6.00 15.00

Transfer to Debenture Redemption Reserve - 30.66

Total 14.19 55.14

Net Surplus 358.53 316.78

paticular consolidated

2013-14 2012-13 Gross sales 2349.87 2663.45

less: excise duty 231.82 306.74

NetSalesTurnover 2118.05 2356.71

Operating expenses 1770.81 2025.79

Operating Profit 347.24 330.93

OtherIncome 15.55 14.78

Total Revenue 2133.60 2371.49

Profit before Interest, Depreciation, Tax and Amortization (EBIDTA) 362.79 345.71

Finance Costs 165.01 121.06

Depreciation and amortization expenses 105.49 70.92

Profit Before Taxation (PBT) 92.29 153.73

Taxation (including Deferred Tax) 22.32 4.56

Profit after Taxation (PAT) 69.97 158.29

Less: Mi nority Interest 10.94 9.48

Less: Share of Loss of associate company 1.19 -

Profit brought forward from previous year 357.30 318.16

Less: Adjustment of deferred tax as per transitional provision - 52.93

Amount available for Appropriations 415.14 414.04

Appropriations

Proposed Final Dividend on Equity Shares 7.28 8.19

Interim Equity Dividend 4.91 -

Corporate Dividend Tax 2.91 1.39

Transfer to General Reserves 22.50 16.50

Transfer to Debenture Redemption Reserve - 30.66

Total 37.60 56.74

Net Surplus 377.54 357.30

REVIEW OF PERFORMANCE

The financial year 2013-14 was a yet another challenging year due to continued slowdown in Indian Economy and fall in Industrial production and infrastructure growth on account of high inflation, higher fiscal deficit, current account deficit and policy paralysis. Off late, Government of India recognized the problems and has taken certain initiatives to improve the situation and results of the same have started reflecting in headline indicators. The impacts of the same on corporate performance are expected to be felt from the current financia year onwards. In the backdrop of the slowdown in Industria and infrastructure growth, on account of general slowdown in

ndian economy, the demand growth of Steel was just 0.60% Due to fall in demand growth and increase in production capacity of large steel players, the prices of finished steel and ntermediate products dropped substantially impacting the performance of small & medium enterprises in the sector. The prices of finished steel fell by about 12-15% across product categories including intermediate products without meaningfu reduction in input cost.

Stand-alone Operations:

The performance of your Company during the year under review remained satisfactory under the prevailing circumstances

and overall slowdown in demand growth coupled with increase production volumes. The highlights of the financial performance for the year are as under:

a) Net Sales Revenue decreased by 19.39% to Rs 1540.92 crores from Rs 1911.63 crores recorded in previous year. The fall in net sales was on account of fall in selling prices to the extent of about 15% as compared to last year due to decrease in demand and increase in production volumes of large Integrated Steel Producers which put the downward pressure on finished steel prices

b) Operating Profit margin improved to 13.04 % from 12.60% achieved in previous year despite fall in selling prices of finished products. The improvement in margins was on account of higher contribution from increased production volumes of Pellets and sponge iron

c) PBT decreased toRs 55.21 crores fromRs 105.97 crores. The fall in PBTwason account of higher interests depreciation cost on account of capitalization of new pellet plant.

Consolidated Operations:

a) Net sales revenue during the FY 2013-14 decreased to Rs 2118.05 crores from Rs 2356.71 crores recorded in previous year. The reduction in net sales was on account of fall in sales realization despite overall increase in production volumes of Iron Ore Pellets.

b) EBIDTA Margins increased by 4.94% to Rs 362.79 crores from Rs 345.71 crores during previous year, recording healthy operating margin of 17.13% on account of higher operating profit recorded by M/s Ardent Steel Limited and contribution from solar power subsidiary

c) PBT decreased to Rs 92.29 crores from Rs 153.73 crores. The consolidated PBT also fell on account of higher interest & depreciation cost because of commissioning of new pellet plant and Solar Power plant during the year under review.

The detailed performance and financial review has been given in the Annexure to the Directors Report titled "Management Discussion and Analysis"

EXPANSION/NEW PROJECTS

Pellet Plant:

Your Directors are pleased to inform that the new pellet plant for expansion of pellet manufacturing capacity by 1.20 MTPA has been successfully commissioned in July, 2013 and started commercial operations from September, 2013, seven months ahead of scheduled date of commencement of commercial operations. The new pellet plant has been fully stabilized and is operating satisfactorily. The Company has invested Rs 424.82 crores towards implementation of said pellet plant. The pellet capacity of the Company has thus increased to 1.80 million tons per annum on stand-alone basis and 2.40 million tons

per annum on consolidated basis including pellet capacity in subsidiary Company

Expansion cum balancing Plan in Steel Melting (SMS) and Rolling Capacity:

Your Company is presently operating a steel melting capacity of 4,00,000 MT and Rolling Mill Capacity of 1,00,000 MT per annum. Your Company has undertaken an expansion cum modernization and balancing plan for improvement in capacity utilization in Steel Melting Shop (SMS) and enhancing capacity of Rolling Mill by setting up a new rolling mill with installed capacity of 3,00,000 TPA. The Company proposes to set up certain balancing equipment in SMS to improve the operating efficiency, capacity utilization and product range. Your Company also proposes to set up a new rolling mill to enhance the steel rolling mill capacity to 4,00,000 TPA matching the Steel melting shop in order to produce value added products to improve the operating margins. The cost of expansion project is envisaged to be around Rs 200 crores and is expected to be completed by September, 2015. The project shall be funded by nternal accruals from existing operations and raising of fresh debt. The overall debt gearing will remain at existing level in view of repayment of existing debt.

Solar Power Plant:

Your Company has achieved distinction of being the first Company in India to set up 50 MW Solar Thermal Power plant within record time. The solar power plant taken up by your Company under Jawaharlal Nehru National Solar Mission of Government of India has been successfully commissioned on 19th June, 2013, within the stipulated time and ahead of all other 6 similar projects awarded by the Government. The project has been set up under an SPV namely Godawari Green Energy Limited, a 100% subsidiary of your Company The operations of solar power project have been stabilized and the plant is now operating smoothly. The SPV has invested Rs 875 crores for setting up the said project which has been funded through debt & equity. The subsidiary Company has raised a debt of Rs 625 crores from Banks for part funding the project and your Company has contributed equity capital of Rs 194 Crores by subscribing to the equity capital of SPV byRs 145 crores and additionally contributed Rs 49 crores by way of 9% Optionally Convertible Cumulative Preference Shares (OCCPS) and the balance amount of Rs 56 crores has been raised by private placement of 9% OCCPS to a Strategic Investor. Each OCCPS shall be convertible into one equity share ofRs 10/- each at a premium of Rs 90/- per share any time after one year from the date of COD at the discretion of investor. On fully diluted basis the equity of your Company shall be 77.60%

Mining Projects:

Ari Dongri Iron Ore mines:

The Company has mined 3,26,358 tonnes of iron ore from its

Ari Dongri iron ore mines during the financial year as compared to 6,93,358 tonnes during the previous year. Your Company is in process of enhancing the capacity of Ari Dongri Iron Ore mines from 7,00,000 TPA to 12,00,000 TPA, for which Stage I forest approval from MoEF has been obtained and Environmenta approval is awaited. The Company is pursuing the matter and is hopeful of getting the approval in a couple of months

Boria Tibu Iron Ore mines:

The Company has started mine development cum mining activities at Boria Tibu Iron Ore mines in Chhattisgarh and the developmental activities are expected to be completed by September, 2014. The regular mining operations are expected to be started from October, 2014.

Coal Mines:

Your Company was allotted coal mines in Chhattisgarh by Ministry of Coal, with reserves of 243 million tons in consortium with four other companies. Your Company has taken effective steps for development of the mines as per regulatory requirement and was awaiting forest approval In the meantime, the Ministry of Coal, has de-allocated the coal mines. In order to protect it''s interest, the Company has obtained the status quo order from Hon''ble High Court of Delh and the matter is currently subjudice.

DIVIDEND RECOMMENDED

In view of satisfactory performance, the Board of Directors of your Company declared and paid interim dividend @15% (i.e. Rs 1.50 per equity share of Rs 10/- each) to the shareholders in March, 2014. In addition to the above, your Directors have pleasure in recommending payment of final dividend @ 10% i.e. Re.1.00 per equity share for the year under review, thereby taking the total dividend payment to 25% i.e. Rs 2.50 per share (previous year 25% i.e. Rs 2.50 per share) which is 14.64% of the net profit of the Company during the year. The total outflow of funds on account of payment of dividend will be Rs 8.19 crore as compared to Rs 9.48 crore during the previous year including dividend tax. No dividend tax is payable during the current financial year in view of the dividend tax paid by the subsidiary Company. Upon approval, the dividend shall be paid to all those shareholders whose names appear in the register of members as on the record date i.e. 19th September, 2014 fixed for payment of dividend

FINANCIAL SUMMARY:

During the year, your Company has raised funds of Rs 318.45 crores by way of Term Loans/Corporate Loans to augment the funds requirement for normal capital expenditure and long term working capital requirement. Your Company has further refinanced high cost debt of Rs 50 crores. Your Company is continuously making efforts to bring down the cost of funding The Company has been able maintain a comfortable long term debt equity ratio of 1.17:1 (previous year 1.12:1) as on 31st

March, 2014 on stand-alone basis. The Company is regular in making payment of instalment of term loan and interest on loans including debentures.

Your Company is further looking to refinance the high cost debt during the current year including the debt in subsidiary Company to bring down cost of funding

TRANSFER TO RESERVES

The Company has transferred Rs 6.00 crores to General Reserve from the surplus balance in the statement of Profit and loss account.

REDEMPTION OF DEBENTURES AND REVERSAL OF DEBENTURE REDEMPTION RESERVE:

During the financial year the Company has redeemed 500 Nos. of Series-A 12% Redeemable Non-Convertible Debentures of Rs 10 lacs each and transferred Rs 17.91 crores from Debenture Redemption Reserve to General Reserve

PARTICULARS OF EMPLOYEES

None of the employees of the Company was in receipt of remuneration in excess of limits prescribed under section 217(2A) of the Companies Act, 1956 read with Rule 5 of Companies (Particulars of Employees) Rules, 1975. Hence, the particulars as required under said Rules are not applicable.

DIRECTORS

Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, Ms. Bhavna G. Desai was appointed as an Additional Director w.e.f. 9th August, 2014 and she shall hold office up to the date of the ensuing Annual General Meeting. The Company has received notice in writing from a member proposing Ms. Bhavna G. Desai for appointment as an Independent Director. The appointment of Ms. Bhavna G. Desai as Independent Director on the Board of Company shall fulfill the requirements of section 149(1) of the Companies Act, 2013 regarding appointment of a Woman Director on the Board of the Company

During the year under review Shri Siddharth Agrawal resigned from the Directorship of the Company with effect from 09.11.2013 to enable himself to concentrate in the operations of the subsidiary Company''s 50 MW Solar Thermal Power Plant. The Board places on record deep sense of appreciation for the services rendered by the resigning Director.

Shri Dinesh Gandhi resigned as Whole Time Director of the Company with effect from 09.11.2013 to join the Board of the Company''s subsidiary M/s Godawari Green Energy Limited as Executive Director & CFO. However he continues to remain on the Board of the Company as a Non-executive Director.

In accordance with the provisions of section 152(6)(c) of the Companies Act, 2013 and the Company''s Articles of Association, Shri Abhishek Agrawal and Shri Vinod Pillai,

GODAWARI POWER & ISPAT LIMITED

Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Moreover pursuant to the provisions of SEBI Circular dated 17.04.2014 and pursuant to the provisions of Section 149 of the Companies Act, 2013, Shri Biswajit Choudhuri, Shri Shashi Kumar, Shri B.N. Ojha and Shri Harishankar Khandelwal, ndependent Directors of the Company shall be reappointed for a period of 5 years for a term up to the conclusion of the Annual General Meeting of the Company in the calendar year 2019. The Company has received requisite notices in writing from a member proposing Shri Biswajit Choudhuri, Shri Shash Kumar, Shri B.N. Ojha and Shri Harishankar Khandelwal for appointment as Independent Directors.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors based on the representation received from the operating management and CFO of the Company, confirm

a. That in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. That your Directors have selected such accounting policies and applied them consistently, and made judgment and estimates that 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 the financial year and of the profit of the company for that period;

c. That your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities; and

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

REAPPOINTMENT OF AUDITORS

M/sO.P. Singhaniaand Co., Chartered Accountants, Auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible have offered themselves for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 141 (3) (g) of the Companies Act, 2013 and that they are not disqualified for re-appointment and also satisfies the criteria as mentioned under Section 141 and they have obtained

peer review certificate as required under SEBI Guidelines for appointment of Statutory Auditors of listed companies.

AUDITOR''S REPORT

There are no qualifying remarks in the Auditor''s Report on the Accounts of the company for the financial year 2013-14 and hence does not require any clarification

BORROWING IN EXCESS OF PAID-UP CAPITAL AND FREE RESERVES:

As per the provisions of clause (c) of sub-section (1) of Section 180 of the Companies Act, 2013, the shareholders of the Company through postal Ballot held on 03rd January, 2014 have passed the Special Resolution empowering the Board of Directors of the Company to borrow any sum or sums of money in excess of the aggregate of the paid up share capital and free reserves of the Company not exceeding the limit of Rs 1500 crores.

Similarly, as per the provisions of clause (a) of sub-section (1) of Section 180 of the Companies Act, 2013, the shareholders of the Company through postal Ballot held on 03rd January, 2014 have passed the Special Resolution empowering the Board of Directors of the Company to create charge / mortgage / hypothecation on all or any of the the movable / immovable properties of the Company

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND CSR COMMITTEE

In accordance with the provisions of Section 135 of the Companies Act, 2013, the Board of Directors of the Company at their meeting held on 15th March, 2014 have constituted Corporate Social Responsibility (CSR) Committee consisting of three Directors out of which one Director is an Independent Director

The Composition of CSR Committee is as under

Name of Chairman /Member Category Designation

Mr.Shashi Kumar Member Independent (Chairman) Director

Mr.Abhishek Agrawal Member Executive Director

Mr.Vinod Pillai Member Executive Director

The said Committee has been entrusted with the responsibility of formulating and recommending 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

FIXED DEPOSITS

The Company has not accepted any fixed deposits from Public and is, therefore, not required to furnish information in respect of outstanding deposits under the Non Banking & Non financia Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposits) Rules 1975

RISK MANAGEMENT POLICY

Overview

GPIL is committed to managing risk to ensure its business objectives are achieved and to optimise the value of the Company and meet the expectations of its stakeholders. Risk oversight and management is an organisation-wide priority, in which all officers and employees of GPIL participate

The risk management issues are discussed in detail in the report of Management Discussion and Analysis. The Company has taken necessary steps for risk management and the system is being strengthened on a continuous basis

The Company analysis the risk well before in advance & take necessary steps towards deviation if any occurs between the budgeted output & the actual output.

The Company also made a Risk Management Committee in which company evaluates the risk & discuss in details the necessary actions to be taken to protect the assets of the Company and maximize the profits. The company last held its Risk Management committee meeting on 28.05.2013

SUBSIDIARY COMPANIES:

As required under the provisions of Accounting Standard (AS) 21, the financial statements of Accounts of the subsidiary Companies have been consolidated with the account of the Company and the Consolidated Statements of Accounts are presented with this report.

The Ministry of Corporate Affairs vide General Circular dated 8th February, 2011 have granted a general exemption for the non-applicability of Section 212 of the Companies Act, 1956 upon fulfillment of certain conditions and the Company has complied with all the conditions provided therein. The annua accounts of the subsidiary companies and the related detailed nformation will be made available to the shareholders/investors seeking such information from the Company, at any point of time. The accounts of the subsidiary Companies are also available for inspection at the registered office of the Company and that of subsidiary companies respectively. The Company shall also furnish hard copy of details of accounts of subsidiaries to any shareholder on demand

A statement containing the salient features of the Financia Statements of the Subsidiaries of the Company is provided in the Annual Report.

JOINT VENTURE COMPANIES:

Your Company has made investments in two other specia purpose joint venture Companies, namely Chhattisgarh Captive Coal Mining Limited (CCCML) and Raipur Infrastructure Company Limited (RICL) respectively for development of Coa mines and for setting up railway siding respectively for captive use. The accounts of RICL (JV Company) has been consolidated

CCCML is still in the project stage. The Coal blocks allotted to the Company, has been de-allocated by Ministry of Coal and based on the petition filed by the Subsidiary Company, the Hon''ble High Court of Delhi has granted order for maintaining status quo. Your Company has so far invested a sum of Rs 5.94 crores towards development of coal block in CCCML. Pending final decision of High Court, the Company has not made any provision for loss of the investment of the Company in CCCML.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided in Annexure I to this Report.

COST AUDIT

The Central Government has approved the appointment of the M/s Sanat Joshi & Associates as cost auditors for conducting Cost Audit for the financial year 2013-14 for Steel Division of the Company. The due date for filing the Cost Audit Report for the financial year ended 31st March, 2014 is 30th September, 2014. The Company is in process of Complying with the requirement.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from time to time on due dates, to the Investor Education and Protection Fund

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on September 28, 2013 (date of last Annual General Meeting) on the Company''s website (www. godawaripowerispat.com), as also on the Ministry of Corporate Affairs'' website

ACKNOWLEGEMENTS

The Board expresses its sincere gratitude to the shareholders, bankers, State and Central Government authorities and the valued customers for their continued support. The Board also wholeheartedly acknowledges and appreciates the dedicated efforts and commitment of all employees of the Company.

For and on behalf of Board of Directors Place: Raipur Date: 09.08.2014 Chairman


Mar 31, 2013

The directors have pleasure in presenting the 14th Annual Report on the business & operations of the Company together with the standalone and Consolidated Audited statement of financial Accounts for the year ended 31st march 2013.

Financial Results Rs. in Crore

Particulars Standalone Consolidated 2012-13 2011-12 2012-13 2011-12

Gross Sales 2160.02 1919.53 2685.34 2290.88

less: excise duty & taxes 248.39 187.97 328.63 230.45

Net Sales Turnover 1911.63 1731.56 2356.71 2060.43

other Income 9.70 3.04 14.78 11.33

Total Revenue 1921.33 1734.60 2371.49 2071.76

Proft before Interest, Depreciation, Tax and Amortisation (EBIDTA) 250.63 237.75 345.71 293.10

finance Costs 92.39 86.85 121.06 115.83

depreciation and amortisation expenses 52.27 51.07 70.92 67.67

Proft Before Taxation (PBT) 105.97 99.83 153.73 109.60

Taxation (including deferred Tax) (18.17) 20.89 (4.56) 22.02

Proft after Taxation (PAT) 124.14 78.95 158.29 87.58

less: minority Interest __ __ 9.48 3.31

Proft brought forward from previous year 300.71 266.67 318.16 283.84

less: Adjustment of deferred tax as per transitional provision 52.93 __ 52.93 __

Amount Available for Appropriations 371.92 345.62 414.04 368.11 Appropriations

Proposed dividend on equity shares 8.19 7.94 8.19 7.94

Corporate dividend Tax 1.29 1.29 1.39 1.38

Transfer to General Reserves 15.00 14.92 16.50 16.42

Transfer to debenture Redemption Reserve 30.66 20.75 30.66 20.75

Reversal of share of proft of associate on account of non consolidation __ __ __ 3.46

Total 55.14 44.90 56.74 49.95

Net Surplus 316.78 300.72 357.30 318.16



Review of Performance

The fnancial year 2012-13 was a yet another challenging year due to slow down in Indian economy and industrial production and infrastructure growth on account of high infation, politica scenario and ongoing european debt crises. despite these constraints and the challenging environment, your Company has performed reasonably well and achieved all round growth in its operations and proftability. The highlights of the fnancia performance are as under:

Standalone Operations:

- Gross sales revenue increased by 12.53% to Rs.2,160.02 crore from Rs.1,91 9.53 crore recorded in previous year and crossed Rs.2000 crore mark.

- PbT increased to Rs.105.97 crore from Rs.99.83 crore and PAT increased from Rs.124.14 crore to Rs.78.95 crore.

Consolidated Operations:

- Gross sales revenue increased by 17.22% toRs.2685.34 crore from Rs.2290.88 crore recorded in previous year and crossed Rs.2500 crore mark.

- ebIdTA margins decreased by 1.54% to Rs.345.71 crore from Rs.306.96 crore during previous year.

- PbT increased tof153.73 crore from Rs.109.60 crore and PAT increased from Rs.158.29 crore to Rs.87.58 crore. during the year under review your Company has recorded overall volume growth in production of across the divisions, except sponge iron, due to constant efforts made by the Company to improve operating effciency, which has resulted into increase in gross sales revenue. The operating margins remained fat due to increase in input cost on standalone basis. The operating margins on consolidated basis however, improved due to higher volumes & improvement in operations in Iron ore Pelletisation plant of subsidiary Company in orissa. your Company is making constant efforts to improve operating effciency. The detailed performance and fnancial review has been given in the Annexure to the directors Report titled "management discussion and Analysis".

Dividend

In view of satisfactory performance and keeping in view of the funds requirement for pursuing the growth strategies of the Company, your directors have the pleasure in recommending payment of dividend @ Rs. 2.50 per share (previous year Rs. 2.50 per share), subject to the approval of shareholders in the Annual General Meeting. The total outfow of funds on account of payment of dividend (including dividend tax) will be Rs.9.48 crore (previous year Rs.9.23 crore). upon approval, the dividend shall be paid to all those shareholders whose names appear in the register of members as on the record date, i.e. 20.09.2013, fxed for payment of dividend.

Expansion/New Projects

Pellet Plant:

The expansion project for setting up pellet plant with an installed capacity of 1.2 mTPA is progressing ahead of schedule, and the project is expected to be commissioned in Q2fy13. The Company has incurred a cost of Rs.343.30 crore in implementation of project till 31st march, 2013, which has been partially funded by debt of USD 60 million and balance amount from internal accruals. The plant shall source the iron ore fnes from the existing captive iron ore mines in Chhattisgarh and also partial procurement from market.

Solar Power Plant:

your Company is setting up 50 mw solar thermal power project at village: noukh, dist: Jaiselmer, Rajasthan at a cost of Rs.795 crore under Jawaharlal Nehru Solar Mission of Government of India through a sPv Company m/s Godawari Green energy ltd (GGel), which is a wholly owned subsidiary of your Company. The project has been funded through debt equity ratio of 72:28. The project has been fully implemented and expected to be commissioned shortly and start commercial operation. The investment in the project has been almost completed. The subsidiary Company has raised a debt of Rs. 569 crore from Banks for part funding of the project and your Company has contributed equity funding of the project by subscribing to the equity capital of sPv by Rs.121 crore and additional contribution of Rs.49 crore by way of subscribing to 9% optionally Convertible Cumulative Preference shares (oCCPs) and the balance equity of Rs.56 crore has been raised by private placement of 9% oCCPs to a strategic Investor. each preference share shall be convertible into equity share of Rs. 10/- each at a premium of Rs.90/- per share. The oCCPs shall be convertible into equity shares of sPv any time after one year from the date of Cod at the discretion of investor.

Finance

during the year, your Company has raised funds of Rs.175 crore by way of Term loans to augment the funds requirement for normal capital expenditure and long term working capita requirement. Your Company has further refnanced high cost debt of Rs.60 crore. Your Company is continuously making efforts to bring down the cost of funding. The Company has been able maintain a comfortable long term debt equity ratio of 1:0.99 (previous year 1:0.65) as on 31st March, 2013, on standalone basis. Your Company is further looking to refnance the high cost debt during the current year including the debt in subsidiary Company to bring down cost of funding.

Issue of Share Warrants

Pursuant to the approval of the shareholders in the extra ordinary General meeting held on 25th June, 2012, your Company has issued 50,00,000 equity share warrants on preferentia basis to m/s hira Infra-Tek limited (hITl), a promoter group Company, at a price of Rs.130/- per share u/s 81(1A) of the Companies Act, 1956. Each warrant is convertible into one equity share of Rs.10/- each within a period of 18 months from the date of allotment.

during the year under review, hITl has exercised the right for conversion of 10,00,000 warrants into 10,00,000 equity shares of Rs.10/- each and the Company has allotted the same to hITl. The funds raised from the allotment of aforesaid warrants are being utilised for ongoing capital expenditure of the Company and its subsidiary Companies.

Alteration in Articles of Association of the Company

The shareholders of the Company at its extra ordinary Genera meeting held on 25th June, 2012, have approved the proposa for alteration in Articles of Association of the Company to empower the board of directors / Company to:

- serve the notices, reports, documents and other communication to shareholders in electronic mode.

- obtain postal ballots through electronic mode.

- Participate in General meeting(s) by the members through video conferencing and

- Participate in board meetings by the directors through video conferencing.

Fixed Deposits

The Company has not accepted any fxed deposits from Public and is, therefore, not required to furnish information in respect of outstanding deposits under the Non Banking & Non fnancia Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposits) Rules 1975.

Subsidiary Companies

As required under the provisions of Accounting standard (As) 21, the fnancial statements of Accounts of the subsidiary Companies have been consolidated in the Consolidated statements of Accounts presented with this report.

The ministry of Corporate Affairs vide General Circular no. 2/11 dated 8th february, 2011, have granted a general exemption for the non-applicability of section 212 of the Companies Act, 1956, upon fulflment of certain conditions and the Company has complied with all the conditions provided therein. The annual accounts of the subsidiary Companies and the related detailed information will be made available to the shareholders/ investors seeking such information from the Company, at any point of time. The accounts of the subsidiary Companies are also available for inspection at the registered offce of the Company and of subsidiary Companies respectively. The Company shall also furnish hard copy of details of accounts of subsidiaries to any shareholder on demand.

joint venture Companies

your Company has made investments in two other specia purpose joint venture Companies, namely Chhattisgarh Captive Coal mining limited (CCCml) and Raipur Infrastructure Company limited (RICl) respectively for development of Coa mines and for setting up railway siding respectively for captive use. The accounts of RICl (Jv Company) has been consolidated. CCCml is still in the project stage and awaiting approval of ministry of environment & forest (moef) for commencement of coal mining at captive coal mine allotted by ministry of Coal, Govt. of India. your Company has so far invested a sum of

Rs.5.94 crore towards development of coal block in CCCml.

Foreign exchange earnings and outgo

during the year under review your Company has used foreign currency of Rs.219.67 crore (previous year Rs.76.55 crore) towards import of capital goods, raw materials, components and traveling expenses etc. The Company has earned Rs.2.89 crore (previous year Rs.3.11 crore) in foreign currency from sale of voluntary emission Reduction Credits (veR Credits) & sale of Goods on fob value during the year.

Particulars of employees

none of the employees of the Company was in receipt of remuneration in excess of limits prescribed under section 217(2A) of the Companies Act, 1956.

Directors

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri Biswajit Choudhuri, shri shashi kumar and shri b. n. ojha, directors of the Company retire by rotation at the ensuing Annual General meeting and being eligible offer themselves for reappointment.

Directors'' responsibility statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors state:

a. That in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. That your directors have selected such accounting policies and applied them consistently, and made judgment and estimates that 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 the fnancial year and of the proft or loss of the Company for that period;

c. That your Directors have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

d. That your directors have prepared the annual accounts on a going concern basis.

Conservation of energy and technology absorption

Information on Conservation of energy, required to be disclosed under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (disclosure of Particulars in the Report of directors) Rules, 1988, are given in the annexure to this report.

Auditors

m/s o.P. singhania and Co., Chartered Accountants, the statutory auditors of the Company, hold offce until the conclusion of the forthcoming Annual General meeting and being eligible have offered themselves for re-appointment. The Company has received a certifcate from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956 and they have obtained peer review certifcate as required under sebI Guidelines for appointment of statutory Auditors of listed Companies.

Auditor''s report

There are no qualifying remarks in the Auditor''s Report on the Accounts of the Company for the fnancial year 2012-13 and hence does not require any clarifcation.

Cost Audit

The Central Government has approved the appointment of the m/s sanat Joshi & Associates as cost auditors for conducting Cost Audit for the fnancial year 2012-13 for Steel Division of the Company. The due date for fling the Cost Audit Report for the fnancial year ended 31st March, 2013 is 30th September, 2013.

Acknowledgements

The board expresses its sincere gratitude to the shareholders, bankers, state and Central Government authorities and the valued customers for their continued support. The board also wholeheartedly acknowledges and appreciates the dedicated efforts and commitment of all employees of the Company.



For and on behalf of board of directors

Place: Raipur

date: 28th may, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting 13th Annual Report on the business & operations of the Company together with the Standalone and Consolidated Audited Statement of Financial Accounts for the year ended 31st March, 2012.

Rs. in Crores

Particulars Standalone Consolidated

2011-12 2010-11 2011-12 2010-11

Gross Sales 1919.53 1031.31 2290.88 1234.62

Less: Excise duty & taxes 188.02 96.49 230.45 116.00

Net Sales Turnover 1731.50 934.82 2060.43 1118.62

Other Income 3.04 2.94 11.33 12.89

Total Revenue 1734.54 937.76 2071.76 1131.51

Profit before Interest, Depreciation and 237.75 196.36 293.10 247.79

Taxation (EBIDTA)

Interest 86.85 60.25 115.83 73.10

Depreciation 51.07 46.83 67.67 55.42

Profit Before Taxation (PBT) 99.83 89.28 109.60 119.27

Taxation (including Deferred Tax) 20.88 18.01 22.02 19.82

78.95 71.27 87.58 99.45

Less: Minority Interest -- -- 3.31 14.00

Share of Profits of Associates -- -- -- 0.42

Transfer on Amalgamation -- 9.60 -- (4.18)

Profit brought forward from previous year 266.67 210.30 283.84 228.92

Amount Available for Appropriations 345.62 291.17 368.11 310.61 Appropriations

Proposed Dividend on Equity Shares 7.94 7.94 7.94 8.51

Corporate Dividend Tax 1.29 1.32 1.38 1.51

Transfer to General Reserves 14.92 10.00 16.42 11.50

Transfer to Debenture Redemption Reserve 20.75 5.25 20.75 5.25

Reversal of share of profit of associate on -- -- 3.46 -- account of non consolidation.

TOTAL 44.90 24.51 49.95 26.77

Net Surplus 300.72 266.67 318.16 283.84

REVIEW OF PERFORMANCE

The financial year 2011-12 was a challenging year due to slow down in Indian Industrial production and infrastructure growth in India on account of high inflation, political scenario and ongoing European debt crisis. Despite these constraints and the challenging environment, your Company has performed reasonably and highlights of the performance are as under:

O Gross sales Revenue increased by 86% to Rs. 1919.53 crores from Rs. 1031.31 crores recorded in previous year.

O EBIDTA Margins increased to Rs. 237.75 crores from Rs. 196.36 crores during previous year.

O PBT Increased to Rs. 99.83 crores from Rs. 89.28crores.

During the year under review your Company has recorded overall volume growth in production across the divisions due to constant efforts made by the Company to improve operating efficiency, which has resulted into increase in gross sales revenue. The operating margin have declined during the year due to higher input cost on account of lower production volume from captive iron ore mines as compared to previous year on account of extended monsoon and other factors beyond the control of the Company. The operations of the captive iron ore mines have considerably improved during the last quarter of the fiscal year. Your Company is confident of improving the operating margin during current year.

The detailed performance and financial review has been given in the Annexure to the Directors Report titled "Management Discussion and Analysis".

DIVIDEND

In view of Satisfactory performance and keeping in view of the funds requirement for pursuing the growth strategies of the Company, your directors have pleasure in recommending payment of dividend @ Rs. 2.50 per share (previous year Rs. 2.50 per share), subject to the approval of shareholders in the Annual General Meeting. The total outflow of funds on account of payment of dividend (including dividend tax) will be Rs. 9.23 crores (previous year Rs. 9.26 crores). Upon approval, the dividend shall be paid to all those shareholders whose names appear in the register of members as on the record date i.e. 22.09.2012 fixed for payment of dividend.

EXPANSION/NEW PROJECTS

Pellet Plant

Your Company's second pellet plant with an installed capacity of 1,200,000 TPA is under implementation and the project is expected to be commissioned in Q2FY2014. The plant shall source the iron ore fines from the existing captive iron ore mines in Chhattisgarh and also partial procurement from market.

Solar Power Plant

Your Company is setting up 50 MW solar thermal power project at cost of Rs. 800 crores approx, under Jawaharlal Nehru National Solar Mission of Government of India through a SPV Company M/s Godawari Green Energy Ltd (GGEL), which is a wholly owned subsidiary of your Company. The project is expected to be commissioned by April, 2013 and the implementation of the project is going on as per schedules. Your Company has tied up the entire debt requirement of Rs. 569 crores from banks and has contributed equity capital of Rs. 121 crores in the SPV.

FINANCE

During the year, your Company has raised funds of Rs. 80 crores by way of private placement of Non Convertible Debentures to augment the funds requirement for normal capital expenditure and long term working capital. The Company has been able to maintain a comfortable debt equity ratio of 1:0.89 as on 31st March, 2012.

Your Company has also tied up funding of Rs. 300 crores for financing the expansion in iron ore pelletisation capacity from 600000 TPA to 1800000 TPA by setting up new Iron Ore Pellet plant.

ISSUE OF SHARE WARRANTS

The Board of Directors of the Company has approved the proposal for issue of 50,00,000 equity share warrants on preferential basis to the Promoters & Promoters group at a price of Rs. 130/- per warrant or price determined as per SEBI (ICDR) Regulations, 2009, whichever is higher, subject to the approval of Shareholders of the Company u/s 81(1A) of the Companies Act, 1956. Each Warrant shall be convertible into one equity share of Rs. 10/- each within a period of 18 months from the date of allotment. The funds raised from the allotment of aforesaid warrant shall be used for ongoing capital expenditure of the Company and its Subsidiary Companies.

FIXED Deposits

The Company has not accepted any fixed deposits from Public and is, therefore, not required to furnish information in respect of outstanding deposits under the Non Banking & Non financial Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposits) Rules 1975.

subsidiary companies:

The information about the Subsidiary Companies are given in the annexure.

As required under the provisions of Accounting Standard (AS) 21, the financial statements of Accounts of the Subsidiary Companies have been consolidated in the Consolidated Statements of Accounts presented with this report.

The Ministry of Corporate Affairs vide General Circular No. 2/11 dated 8th February, 2011 have granted a general exemption for the non-applicability of Section 212 of the Companies Act, 1956 upon fulfillment of certain conditions and the Company has complied with all the conditions provided therein. The annual accounts of the subsidiary companies and the related detailed information will be made available to the shareholders/investors seeking such information from the Company, at any point of time. The accounts of the Subsidiary Companies are also available for inspection at the registered office of the Company and of subsidiary companies respectively. The Company shall also furnish hard copy of details of accounts of subsidiaries to any shareholder on demand.

JOINT Venture companies:

Your Company has made investments in two other special purpose joint venture Companies, namely Chhattisgarh Captive Coal Mining Limited (CCCML) and Raipur Infrastructure Company Limited (RICL) respectively for development of Coal mines and setting up railway siding respectively for captive use.

FOREIGN Exchange EARNINGS AND Outgo

During the year under review your Company has used foreign currency of Rs. 76.55 crores (previous year Rs. 23.49 crores) towards import of capital goods, raw materials, components and traveling expenses etc. The Company has earned Rs. 3.11 (previous year Rs. 0.67 crores) in foreign currency from sale of Voluntary Emission Reduction Credits (VER Credits) & Sale of Goods on FOB value during the year.

PARTICULARS OF EMPLOYEES

None of the employees of the Company was in receipt of remuneration in excess of limits prescribed under Section 217(2A) of the Companies Act, 1956.

DIRECTORS

Shri G. B. Desai, Chairman of the Company and an Independent Director has resigned from the directorship of the company with effect from 09.11.2011 due to personal reasons. The Board places on record its deep sense of appreciation for the services rendered and guidance given by the said director during the tenure of his office.

Shri Biswajit Choudhuri, Non Executive Independent Director of the Company has been appointed as the Chairman of the Company with effect from 09.11.2011 following the resignation of Shri G. B. Desai from the Board of the Company.

Shri Abhishek Agrawal has been appointed as Additional Whole Time Director on the Board of the Company with effect from 9th November, 2011. The Company has received notice under section 257 of the Companies Act, 1956 from shareholders proposing appointment of Shri Abhishek Agrawal as Director on the Board. The Board proposes to appoint him as Whole time Director on the Board of the Company in the ensuing Extra ordinary General Meeting Scheduled to be held on 25.06.2012.

Shri Dinesh Agrawal has resigned as Whole Time Director of the Company with effect from 09.11.2011. However, he will continue to be on the Board of the Company as a Non-Executive Director.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri Dinesh Agrawal and Shri Dinesh Kumar Gandhi, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors state:

a. That in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. That your 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 at the end of the financial year and of the profit or loss of the company for that period;

c. That your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities; and

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

CONSERVATION OF ENERGY AND TECHNOLOGY AB- SORPTION:

Information on Conservation of Energy, required to be disclosed under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988, are given in the annexure to this report.

AUDITORS

M/s O.P. Singhania and Co., Chartered Accountants, the statutory auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible have offered themselves for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956 and they have obtained peer review certificate as required under SEBI Guidelines for appointment of Statutory Auditors of listed companies.

AUDITOR'S REPORT

There are no qualifying remarks in the Auditor's Report on the Accounts of the company for the financial year 2011-12 and hence does not require any clarification.

ACKNOWLEDGEMENTS

The Board expresses its sincere gratitude to the shareholders, bankers, State and Central Government authorities and the valued customers for their continued support. The Board also wholeheartedly acknowledges and appreciates the dedicated efforts and commitment of all employees of the Company.

For and on behalf of Board of Directors

Place: Raipur Chairman

Date: 22nd May, 2012


Mar 31, 2011

To the members,

The Directors have pleasure in presenting 12th Annual Report on the business & operations of the Company together with the Standalone and Consolidated Audited Statement of Financial Accounts for the year ended March 31, 2011.

Financial Results

Rs. in Crores Particulars Standalone Consolidated

2010-11 2009-10 2010-11 2009-10

Gross Sales 1028.57 832.39 1232.06 886.80

Less: Excise duty & taxes 96.49 55.96 116.00 64.42

Net Sales Turnover 932.08 776.43 1116.05 822.38

Other Income 5.67 3.01 15.45 4.00

Total Revenue 937.75 779.44 1131.50 826.38

Profit before Interest, Depreciation and Taxation (EBIDTA) 196.36 125.63 247.79 134.51

Interest 60.25 32.04 73.10 33.72

Depreciation 46.83 31.62 55.42 34.15

Profit Before Taxation (PBT) 89.28 61.97 119.27 66.45

Taxation (including Deferred Tax) 18.01 10.57 19.82 10.62

Profit after Taxation (PAT) 71.27 51.40 99.45 56.03

Less: Minority Interest - - 14.00 -

Share of Profits of Associates - - 0.41 1.22

Transfer on Amalgamation 9.60 - 4.18 -

Profit brought forward from previous year 210.30 177.11 228.92 189.63

Amount Available for Appropriations 291.17 228.51 310.62 246.85

Appropriations

Proposed Dividend on Equity Shares 7.94 7.01 8.51 6.74

Corporate Dividend Tax 1.32 1.19 1.51 1.19

Transfer to General Reserves 10.00 10.00 11.50 10.00

Transfer to Debenture Redemption 5.25 - 5.25 - Reserve

Total 24.51 18.20 26.78 17.93

Amount carried to Balance Sheet 266.66 210.30 283.84 228.92

Merger of R.R. Ispat Ltd and Hira Industries Limited

The Hon'ble High Court of Chhattisgarh approved & confrmed the Scheme of Amalgamation of M/s RR Ispat Ltd (RRIL) and M/s Hira Industries Ltd (HIL) with your company during the year under review. The appointment date of the aforesaid Scheme of Amalgamation was April 1, 2010. Consequent upon the Scheme of Amalgamation becoming efective the financial statement of accounts presented herewith have been prepared after giving due efect of the aforesaid Scheme of Amalgamation and therefore the results to that extent are not comparable with the results of the previous year. Further pursuant to the said Scheme of Amalgamation 23,32,750 equity shares of erstwhile RRIL owned by your company have been cancelled and 11,25,000 equity shares of your company held by erstwhile RRIL have been transferred to a trust created in the name of GPIL Beneficiary Trust for the sole benefit of the Company. Your Company has allotted 36,86,440 equity shares of Rs.10/- each fully paid to the shareholders of erstwhile HIL and the same have been listed with BSE & NSE.

Consequent upon the aforesaid merger, M/s Hira Ferro Alloys Ltd. (HFAL), a company listed on BSE, MPSE, DSE & MSE and engaged in the business of manufacture of ferro alloys & captive power generation has become the subsidiary of your Company since the aggregate of the shareholding of your company together with the shares hitherto held by merged entities namely RRIL and HIL exceeded 51% of the total share capital of HFAL with efect from March 30, 2011 resulting in HFAL becoming subsidiary of your Company..

Review of Performance

During the fiscal 2011, your company has reported gross revenue of Rs.1028.57 crores as against Rs.832.39 crores in last fiscal, registering a growth of 24%. Your Company has earned Profit before tax of Rs.89.28 crores during the year under review as against Rs.61.97 crores during the previous year and net profit of Rs.71.27 crores as against Rs.51.40 crores during the previous year registering a growth of 38.66%. The silent features of the performance of your Company during the year under review are as under:

- Gross sales revenue up by 24% and turnover crosses over Rs.1,000 Crores

- The Iron Ore Mines achieved production volumes up by 58% to 330410 MT.

- The pelletisation plant got established in second half of the year resulting into substantial improvement in performance and production volumes.

The detailed performance and financial review has been given in the Annexure to the Directors Report titled "Management Discussion and Analysis".

Dividend

The Board of Directors of your Company has recommended payment of dividend @ of Rs.2.50 per equity share, subject to the approval of shareholders in the Annual General Meeting (AGM), on the enhanced Equity Share capital of the Company. The total outfow of funds on account of Dividend including dividend tax will be Rs.9.26 crores. The dividend shall be paid, subject to the approval of shareholders in the ensuing AGM, to all those shareholders whose names appear in the register of members as on the record date i.e. August 22, 2011 fixed for the payment of dividend.

Expansion & Future Plans

Pellet Plant:

Your Company has successfully commissioned a pellet plant at the existing plant location at Raipur, Chhattisgarh with an installed capacity of 600000 TPA during Feb, 2010 and subsequently during the previous year the operations have been stabilised and the plant has reached an operating level of about 90% during the H2FY11. Your Company has also set up another Pellet Plant with an installed capacity of 600000 TPA in Keonjhar District in Orissa through a subsidiary Company M/s Ardent Steel Ltd, which has also started production during the year under review and has reached CUF of 50%. The project is expected to be commissioned in Q2FY12.

Looking at the success of above pellet plants and further growth potential in use of pellet in manufacturing of steel, the board of directors of your Company have decided to set up another pellet plant with an estimated investment of Rs 350 crores in Chhattisgarh. The plant is expected to source the iron ore fines from the exiting captive iron ore mines in Chhattisgarh and also partial procurement from the mines in Orissa. The project is expected to become operational in next 2 years.

Power Plant:

Your Company believes in the sustainable growth through environment protection and accordingly your Company has taken various initiatives towards generation of electricity through renewable energy sources. Your Company is already operating 42MW of power generation capacity through waste heat recovery process. The 20 MW Bio Mass (Rice husk based) has been commissioned in October 2010 and started commercial operation during the year under review.

Your Company has during previous year taken a major initiative towards generation of power through renewable energy sources by venturing into setting up a 50 MW solar thermal power plant under Jawaharlal Nehru Solar Mission of Government of India. Your Company was one of the seven successful bidders under a competitive bidding by Ministry of New & Renewable Energy (MNRE), Government of India, through NTPC Vidyut Vyapar Nigam Limited and your Company has been selected to set up a 50MW Solar Termal Power Plant in Rajasthan. Your Company is setting up aforesaid solar power project at cost of Rs 800 crores approx, through a SPV Company M/s Godawari Green Energy Ltd (GGEL), which is a wholly owned subsidiary of your Company. The project is proposed to be funded through debt equity ratio of 70:30.

Finance

In order to meet the funds requirement for normal capital expenditure, margin for working capital and general corporate purposes, during the year under review your Company has issued 1250, 12% Secured Redeemable Non-Convertible Debentures of Rs.10 lacs each aggregating to an amount of Rs.125.00 crores. The door to door tenure of debentures is 6 years and debentures are listed on BSE.

Fixed Deposits

The Company has not accepted any fixed deposits from Public and is therefore not required to furnish information in respect of outstanding deposits under the Non Banking & Non financial Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposits) Rules 1975.

Subsidiary Companies

The information about the subsidiary Companies are given in the annexure.

As required under the provisions of Accounting Standard (AS) 21, the financial statements of Accounts of the subsidiary companies have been consolidated in the Consolidated Statements of Accounts presented with this report.

The Ministry of Corporate Afairs vide General Circular No. 2/11 dated February 8, 2011 have granted a general exemption for the non- applicability of Section 212 of the Companies Act, 1956 upon fulfillment of certain conditions and the Company has complied with all the conditions provided therein. The annual accounts of the subsidiary companies and the related detailed information will be made available to the shareholders/investors seeking such information from the Company, at any point of time. The accounts of the subsidiary companies are also available for inspection at the registered ofice of the Company and of subsidiary companies respectively. The Company shall also furnish hard copy of details of accounts of subsidiaries to any shareholder on demand.

Joint Venture Companies

Your Company has made investments in two other special purpose joint venture Companies, namely Chhattisgarh Captive Coal Mining Limited (CCCML) and Raipur Infrastructure Company Limited (RICL) respectively for development of Coal mines and setting up railway siding respectively for captive use.

Foreign Exchange Earnings And Outgo

During the year under review your Company has used foreign currency of Rs.23.49 crore (previous year Rs.4.41 crore) towards import of capital goods, raw materials, components and traveling expenses etc. The Company has earned Rs.0.67 crore in foreign currency from sale of Voluntary Emission Reduction Credits (VER Credits) during the year.

Particulars Of Employees

None of the employees of the Company was in receipt of remuneration in excess of limits prescribed under Section 217(2A) of the Companies Act, 1956.

Directors

Shri Dinesh Agrawal and Shri Vinod Pillai, Non-Executive Directors on the Board of the Company have been appointed as Whole Time Directors with efect from June 1, 2011. Shri Dinesh Agrawal was the Managing Director and Shri Vinod Pillai was a senior executive of erstwhile M/s R. R. Ispat Ltd. which has since merged with your Company.

Shri Siddharth Agrawal has resigned as Whole Time Director of the Company with efect from August 6, 2011. However, he will continue to be on the Board of the Company as a Non-Executive Director.

Shri O.P. Agrawal, Vice Chairman of the Company and Shri N.P. Agrawal, Non Executive Director of the company have resigned from the directorship of the company with effect from August 6, 2011 due to their personal reasons. The Board places on record its deep sense of appreciation for the services rendered and guidance given by the said directors during their tenure of office.

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company Shri G. B. Desai and Shri Vinod Pillai, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Directors' Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors state:

That in the preparation of the annual accounts, the applicable accounting standards have been followed;

That your Directors have selected such accounting policies and applied them consistently, and made judgment and estimates that 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 the financial year and of the profit or loss of the company for that period;

That your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities; and That your Directors have prepared the annual accounts on a going concern basis.

Conservation of Energy and Technology Absorption

Information on Conservation of Energy, required to be disclosed under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988, are given in the annexure to this report.

Auditors

M/s O.P. Singhaniaand Co., Chartered Accountants, the statutory auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible have offered themselves for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956 and they have obtained peer review certificate as required under SEBI Guidelines for appointment of Statutory Auditors of listed companies.

Auditor's Report

There are no qualifying remarks in the Auditor's Report on the Accounts of the company for the financial year 2010-11 and hence does not require any clarification.

Acknowlegements

The Board expresses its sincere gratitude to the shareholders, bankers, State and Central Government authorities and the valued customers for their continued support. The Board also wholeheartedly acknowledges and appreciates the dedicated efforts and commitment of all employees of the Company.

For and on behalf of the Board of Directors

Date: August 6, 2011 Chairman

Place: Raipur






Mar 31, 2010

The Directors have pleasure in presenting 11th Annual Report on the business & operations of the Company together with the Standalone and Consolidated Audited Statement of Financial Accounts for the year ended 31st March 2010.

FINANCIAL RESULTS (Rs. in Crores)

Standalone Consolidated Particulars 2009-10 2008-09 2009-10 2008-09 iii

Net Sales Turnover 776.43 1035.54 822.38 1091.98

Other Income 3.01 10.40 4.00 11.41

Total Revenue 779.44 1045.94 826.38 1103.39

Profit before Interest,

Depreciation and 125.63 125.85 134.51 134.31

Taxation (EBIDTA)

Interest 32.04 34.17 33.72 35.60

Depreciation 31.62 26.42 34.15 28.48

Profit Before Taxation & Exceptional Items

Exceptional Items 0.00 0.00 0.00 0.00

Profit before Taxation JB 61.97 65.26 66.45 70.23

(PBT)

Taxation (including Deferred Tax) 10.57 7.90 10.62 8.77

Profit after Taxation (PAT) 51.40 57.36 56.03 61.46

Minority Interest - - 0.00 0.00

Share of Profits of - - 1.22 0.86 Associates

Profit after minority

interest & share of profit - - - -

of Associates

Profit brought forward 177.11 137.96 246.85 207.56

from previous year

Amount Available for 228.51 195.32 207.56 207.56 Appropriations Appropriations

Proposed Dividend on 7.01 7.01 6.74 6.74 Equity Shares

Corporate Dividend Tax 1.19 1.19 1.19 1.19

Transfer to General 10.000 10.00 10.00 10.00 Reserves

Total 18.20 18.20 17.93 17.93

Amount carried to 210.30 177.11 228.92 189.92

Balance Sheet

The fiscal year under review was a very crucial year after the global slowdown & re-emergence of the economics all across the globe. The year was also very crucial for the steel manufacturers especially domestic steel manufacturing, when the input prices climbed upward without corresponding increase in selling prices of finished products resulting into lower realizations.

In fiscal 2010, GPIL reported gross revenue of Rs. 832.39 crores, 28% less as compared to last fiscal. The fall was mainly because the difficult market conditions especially in the first half of the year which led to lower realization across the product range. DRI production during the year under review was 285833 MTs as compared to 279533 MTs during last year but the average realization for the year was Rs 13130as compared to Rs 15750 in the previous financial year, a fall of almost 17% which led to fall in revenue and profitability. Performance was affected by the difficult global economic and operating environment throughout the year but still with the onset of captive iron ore mining our EBITDA margins was increased from 12.15% to 16.18%, a significant jump of over 400 bps which if taken as indicator for next year gives very good signals of better performance for years to come along- with ramp of production in captive iron ore mines.

In 2009, power division contributed Rs. 129.07 crores to the revenue & Rs.75.54 crores to the EBITDA, remaining the most important division by the share of EBITDA for the year. Steel billets contribution to the Companys revenue is Rs.135.76 crores, a fall of 67.4% from last year owing to Companys strategy of sale of power in short term market, rather in consumption in Steel Billet Division. Wire Drawing (HB Wire) contributed Rs.221.04 crores to the top line, 25% lower than in 2009 again owing to fall in selling prices.

We believe that with our integrated business model, we can achieve the best returns in the industry over the cycle upon full ramp up of the production in captive iron mines and commencement of production in captive coal mine, which still awaits forest & environmental approval from Ministry of Environment & Forest.

DIVIDEND

The Board, subject to the shareholders approval in the AGM, recommended payment of dividend @ of Rs 2.50 per equity share on the Equity Share capital of the Company. The total outflow of funds on account of Dividend including dividend tax will be Rs.8.21 crore, which is same as in fiscal 2009. The dividend shall be paid, subject to the approval of shareholders in the ensuing AGM, to all those shareholders whose names

appear in the register of members as on the record date i.e. 16th September, 2010 fixed for the payment of dividend.

FIXED DEPOSITS

The Company has not accepted any fixed deposits from Public and is therefore not required to furnish information in respect of outstanding deposits under the Non Banking & Non financial Companies (Reserve Bank) Directions, 1966 and Companies (Acceptance of Deposits) Rules 1975.

EXPANSION & FUTURE PLANS

This year has been very significant at GPIL. We got all the mining clearance for our iron ore mine-Ari Dongri and so have started mining operations in May2010. We were able to mine 322352 MTs during the year. Our other iron ore mine- Boria Tibu has also received all the clearances and the Company expects it to commence production during the current year. With the commencement of captive iron ore mining, our dependence on iron ore purchases from open market has gone down substantially in the year under review and we look forward to be completely self sufficient from current year onwards. Thus we will be completely insulated from raw material (iron ore) price fluctuation.

Also, in the year under review, iron ore Pelletization plant with a capacity of 600000 MTPA at Siltara, Raipur have also started commercial production. This is very significant factor considering the iron ore price movement in the recent period. Our corporate philosophy has been to utilize the maximum of mineral resources and environment protection by utilization of waste products. Thus by utilizing the iron ore fines which were till now exported to China at significant lower value will now be utilized by us in making pellet which are directly usable in the Sponge Iron manufacturing. This has been a significant backward integration for us as we expect the feed rate of raw material to go down & thereby improvement in the efficiency of sponge irons production.

Your Company was among very few first to foresee the value of the fines which otherwise is being sold at no real value in export market, due to huge differential in pricing of iron fines & calibrated ore. With the successful commissioning of our pellet plant, we have seen other steel manufacturers putting up pellet plants for their captive use/merchant sale of pellets.

Your Company have taken 75% stake in Ardent Steel Limited which is also setting up 600000 MTPA pellet plant in Keonjhar District, in Orissa. The plants operations got delayed for unforeseen reason and the Company expects to start commercial operations during the first half of the current year. The 20 MW Bio-Mass Power plant under implementation is also

delayed due to delay in supply of equipment by the vendors is also expected to be commence operations very soon.

Now, since all earlier projects have been completed or either on the verge of being completed, we are evaluating various options to set the future course of action. We have signed various MOUs with the Chhattisgarh Government and are all set to move to next phase of expansion for which suitable location is being identified.

We are scouting for opportunities to set up a green field steel plant along with other allied steel facilities. We are also awaiting regulatory clearances & coal linkages allocation before we can start work on the 1200 MW power plant in our 100% the Subsidiary Company Godawari Energy Limited.

MERGER OF RR ISPAT LTD AND HIRA INDUSTRIES LIMITED

During the year under review the Board of Directors of your Company has approved a scheme of merger of 100% subsidiary Company M/s RR Ispat Ltd and another Company M/s Hira Industries Ltd, subject to the approval of the Honble High Court of Chhattisgarh. Appointed date of the proposed scheme is 1st April, 2010. The BSE and NSE have since approved the proposed scheme of merger and the same has been filed with Honble High Court for approval. The scheme is presently awaiting the approval of the High Court and the same will be effective upon the receipt of approval of High Court. The effect of the scheme in the financial statements of the Company shall be given upon the scheme becoming effective.

SUBSIDIARY/ASSOCIATE/JOINT VENTURE COMPANIES:

Ardent Steel Limited (ASL)

Your company has acquired 75% of the equity shares of M/s. Ardent Steel Limited, which is setting up an iron ore pelletisation plant in the State of Orissa. The project is expected to be commissioned and commercial operations are expected to commence during the first half of the current year.

RR Ispat Ltd (RRIL)

M/s. R. R. Ispat Ltd, is engaged in the rolling of billets manufactured by your Company into wire rods and further conversion of wire rods into wires has achieved net sales of Rs.216.02 crore (previous year Rs. 230.42crores) and net profit of Rs.4.29 crore (previous year Rs. 3.73crore) during the financial year 2009-10. The Company has taken up project for expansion cum modernization of the rolling mill which has been partially completed during the current year. Upon completion of Expansion Project, the installed capacity of rolling mill shall stand increased to 2,00,000 MTPA. During the year under review, the Company also increased the installed capacity of Wind Power Project from 1.20 MW to 2.70 MW p.a.

Godawari Energy Limited: (GEL)

M/s. Godawari Energy Limited has entered into an MOU on 17th September, 2008 with the Government of Chhattisgarh for setting up of 1200 MW capacity of Thermal Power Project. The Company is presently engaged in getting regulatory approvals and land acquisition process for setting up the power plant. The company has acquired around 130 acres of private land in Raigarh District of Chhattisgarh. The implementation of project shall be taken up upon the receipt of regulatory approvals and availability of fuel linkages.

Godawari Clinkers and Cement Limited (GCCL)

Your company has signed an MOU with Government of Chhattisgarh for setting-up of Cement Plant comprising of 2 million tons per annum capacity of Cement and 1 million ton per annum capacity of clinker along with captive Power Plant of 50 MW capacity through a subsidiary Company and accordingly promoted another 100% subsidiary Company in the name of M/s. Godawari Clinkers & Cement Limited. The Company has applied for grant of mining lease for lime stone mines in Chhattisgarh and approval of mining lease is awaited.

Krishna Global Minerals Limited (KGML)

Your company has acquired 100% of the equity shares of M/s. Krishna Global Minerals Limited for doing the business of exploration of mines and minerals, which is in the initial stage.

As required under the provisions of Accounting Standard (AS) 21, the financial statements of Accounts of the subsidiary Company have been consolidated in the Consolidated Statements of Accounts presented with this report.

As per Section 212 of the Companies Act, 1956, the financial statement of the accounts of the subsidiary Companies along-with Directors Report and Auditors Report thereon are required to be attached with the annual report. The Company has sought an exemption from the Ministry of Corporate Affairs, Government of India, for publication of financial statements of the subsidiary under section 212 of the Companies Act, 1956 and accordingly the financial statements of subsidiary Companies are not separately included in the annual report.

The annual accounts of the subsidiary Companies and the related detailed information will be made available to the shareholders/investors seeking such information from the Company, at any point of time. The accounts of the subsidiary Companies are also available for inspection at the registered office of the Company.

Hira Steels Limited: Associate Company

Hira Steels Limited, an Associate Company engaged in rolling of steel billets into wire rods and further conversion of wire rods into wires has achieved net sales turnover of Rs. 200.23 crores (previous year Rs. 293.23) with a net profit of Rs. 5.23 crore (previous year Rs. 3.68 crores). In compliance with provision of Accounting Standard (AS) 23, the Financial Statements of Accounts of the Company have been consolidated in the Consolidated Statements of Accounts your Company presented with this report.

JV Companies:

Your Company has made investments in two other special purpose joint venture Companies, namely Chhattisgarh Captive Coal Mining Limited (CCCML) and Raipur Infrastructure Company Limited (RICL) respectively for development of Coal mines and setting up railway siding respectively for captive use.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review your Company has used foreign currency of Rs.4.41 crore (previous year Rs.59.06 crore) towards import of capital goods, raw materials, components and traveling expenses etc. There was no earning in foreign exchange during the year.

PARTICULARS OF EMPLOYEES

None of the employees of the Company was in receipt of remuneration in excess of limits prescribed under Section 217(2A) of the Companies Act, 1956.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Shri Shashi Kumar, Shri B. N. Ojha and Shri Siddharth Agrawal, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment..

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors state:

a. That in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. That your Directors have selected such accounting policies and applied them consistently, and made judgment and estimates that 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 the financial year and of the profit or loss of the company for that period;

c. That your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities; and

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

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

Information on Conservation of Energy, required to be disclosed under Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988, are given in the annexure to this report.

CSR ACTIVITIES

Your company believes in the philosophy of "Serving Society through Industry" and we live every moment of life in harmony with nature to create value for ourselves, our stake holders and the society. Your company is committed to improve health and education awareness, conduct affairs of our company in a socially acceptable manner, understand supporting and developing the communities and the cultures within which we work, protect the environment and safety of the people connected with the company and the surroundings, enhance the value of the company through sustainable growth. Your company has adopted Educational Institutes like ITI under Public Private Partnership scheme of Govt, of India, Akansha school for mentally retarded students, Agrasen College for their upgradation. Donations in various Govt, schemes like "Dattak Putri Siksha Yojana". Another part of our CSR work for good health of people through blood donation camps, donation of Mobile Medical Unit for Helpage India, financial assistance provided to Gram Panchayat for purchasing Ambulance.

We for our environment by returning what we have consumed, by planting more than 20,000 plants in the surrounding region and in the plant premises. Following our vision in the field of sports, your company has extended due support by sponsoring sportsmen and women for participating in national tournament. At our mines, your company has campaigned for Cleanliness & Sanitation, Cleaning of Ponds, organized Exhibition on Environment Conservation and contributed to Gram Vikas Samiti for developing infrastructural facilities in the village along with safe drinking water to the nearby Villages.

AUDITORS

M/s O.R Singhania and Co., Chartered Accountants, the statutory auditors of the Company, hold office until the conclusion of the forthcoming Annual General Meeting and being eligible have offered themselves for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224 (1B) of the Companies Act, 1956 and they are in the process of obtaining peer review certificate as required under SEBI Guidelines for appointment of Statutory Auditors of listed companies.

AUDITORS REPORT

There are no qualifying remarks in the Auditors Report on the Accounts of the company for the financial year 2009-10 and hence does not require any clarification.,

ACKNOWLEGEMENTS

The Board expresses its sincere gratitude to the shareholders, bankers, State and Central Government authorities and the valued customers for their continued support. The Board also wholeheartedly acknowledges and appreciates the dedicated efforts and commitment of all employees of the Company.

Place: Raipur, For and on behalf of Board of Directors Date: 30th May, 2010 Chairman

 
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