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Directors Report of Kalyani Steels Ltd.

Mar 31, 2016

The Directors have pleasure in presenting the Forty-Third Annual Report on the business and operations of the Company and the
Audited Financial Statements for the year ended 31st March, 2016.

1. Financial Highlights (on stand-alone basis) :

(Rs, in Million)

2015-16 2014-15

Sales, Gross : 14,542.437 15,326.913

Excise Duty and Service Tax : 2,750.571 3,066.997

Sales, Net : 11,791.866 12,259.916

Other Operating Revenue : 12.796 10.149

Other Income : 26.573 23.259

Total Revenue : 11,831.235 12,293.324

Total Expenditure : 9,451.775 10,595.269

Finance Cost : 120.290 147.740

Depreciation & amortisation
expenses : 517.279 310.156

Profit before Tax : 1,741.891 1,240.159

Tax Expenses :

- Current Tax : 508.500 301.000

- Deferred Tax : 97.066 107.658

- Add / (Less) : Excess
Provision for Taxation

in earlier years : 0.532 (1.638)

Profit after Tax : 1,135.793 833.139


2. Dividend & Reserves

In view of the current global situation of the Steel Industry, considering most of the steel companies are making huge losses,
the Company likes to preserve its resources for highly turbulent times. As a result, the Directors do not recommend any Dividend
on Equity Shares for the financial year ended 31st March, 2016.

During the year under review, no transfer is proposed to the General Reserve. An amount of Rs, 5,257.322 Million is proposed to be
retained as ''Surplus in the Statement of Profit and Loss''.

3. The Year in Retrospect :

The major challenge during the year was dip in global demand and subsequent surge in cheap imports. The reduction in raw material
prices was not enough to set off the price difference between domestic and imported steel.

With this background, the Company achieved gross sales of Rs, 14,542 Million against Rs, 15,327 Million in the previous year.
However, Profits before Tax increased to Rs, 1,742 Million, against Rs, 1,240 Million in the previous year, representing growth of
40.48%. Clear focus on industry segments with critical application, targeted approach towards approvals with OEMs for niche
segment products with long term partnerships, along with service level improvements helped the Company to retain its prices and
margins.

4. State of Company''s Affairs

Discussion on the state of Company''s affairs has been covered as part of the Management Discussion and Analysis (MD&A). MD&A for
the year under review, as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented
in a separate section forming part of the Annual Report.

5. Corporate Governance

The Report on Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
is presented in a separate section forming part of the Annual Report.

The requisite certificate from Auditors of the Company viz. M/s. P. G. Bhagwat, Chartered Accountants, Pune confirming
compliance with conditions of Corporate Governance is attached to Report on Corporate Governance.

6. Fixed Deposits

The Company has not accepted any deposits from the public during the year.

7. Directors

The Board of Directors at its meeting held on 30th October, 2015 had re-appointed Mr.R.K. Goyal, as Managing Director of the
Company for the period of five years from 17th January, 2016 to 16th January, 2021.

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr.B.N. Kalyani, Chairman
and Mr.S.M. Kheny, Director of the Company, are retiring by rotation at the ensuing Annual General Meeting and being eligible,
have offered themselves for re-appointment.

These re-appointments form part of the Notice of the Annual General Meeting and the Resolutions are recommended for your
approval. Profiles of these Directors, are given in the Report on Corporate Governance.

The Company has received declarations from all Independent Directors that they meet the criteria of independence as laid down
under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.

7.1 Board Evaluation

Pursuant to provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the
evaluation of the working of its Committees. Performance evaluation has been carried out as per the Board Diversity and
Remuneration Policy.

7.2 Board Diversity and Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of
Directors, Senior Management and their remuneration. The Board Diversity and Remuneration Policy is available on the website of
the Company. (Web-link : http://www.kalyanisteels.com/ profile/code-of-conduct/board-diversity-remuneration-policy/)

7.3 Meetings of the Board

During the Financial Year 2015-16, six Board Meetings were convened and held, the details of which are given in the Corporate
Governance Report.

8. Directors'' Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013, with respect to Directors'' Responsibility
Statement, it is hereby confirmed that :

i) in the preparation of the annual accounts for the year ended 31st March, 2016, the applicable accounting standards have been
followed and that there are no material departures;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of
the profit of the Company for that period;

iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with
the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;

iv) the Directors have prepared the annual accounts for the year ended 31st March, 2016, on a going concern basis;

v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial
controls are adequate and were operating effectively; and

vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such
systems are adequate and operating effectively.

9. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo The information on conservation of
energy, technology absorption and foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the
Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure "A".

10. Corporate Social Responsibility

As a part of its initiatives under "Corporate Social Responsibility (CSR)'''', the Company has undertaken various activities in the
areas of education, health, water and sanitation. These activities are carried out in terms of Section 135 read with Schedule VII
of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014.

The details of CSR Activities undertaken by the Company are annexed herewith as Annexure "B". The CSR Policy is available on
Company''s website. (Web-link : http://www.kalyanisteels.com/profile/code-of-conduct/corporate- social-responsibility-csr/)

11. Related Party Transactions

All Related Party Transactions entered into by the Company during the financial year were in the ordinary course of business and
on an arm''s length basis. Particulars of material contracts / arrangements entered into by the Company with related parties
referred to Section 188(1) of the Companies Act, 2013, are provided in Form AOC-2, which is annexed herewith as Annexure "C".
Related party disclosures as per Accounting Standard 18 have been provided in Note ''36'' to the Financial Statements.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website. (Web-link :
http://www.kalyanisteels.com/profile/code-of-conduct/related- party-transactions-policy/)

12. Risk Management

The Company recognises that risk is an integral and unavoidable component of business and is committed to managing the risk in a
proactive and efficient manner. The Company as part of business strategy has in place a mechanism to identify, assess, monitor
risks and mitigate various risks with timely action. Risks were discussed at the meetings of the Risk Management Committee, Audit
Committee and the Board of Directors of the Company.

13. Statutory Auditors and Auditor''s Report

At the 41st Annual General Meeting held on 5th September, 2014, M/s P.G. Bhagwat, Chartered Accountants, Pune were appointed as
Auditors of the Company, to hold office for the period of three years i.e. from the conclusion of 41st Annual General Meeting
till the conclusion of the 44th Annual General Meeting to be held in 2017 and the said appointment is subject to ratification by
the members at every Annual General Meeting in terms of First Proviso to Section 139 of the Companies Act, 2013.

The Company has received letter from M/s P.G. Bhagwat, Chartered Accountants, to the effect that their re-appointment, if made,
would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for
re-appointment.

The Directors recommend ratification of their appointment from the conclusion of ensuing Annual General Meeting till the
conclusion of the 44th Annual General Meeting to be held in 2017.

The Notes on Financial Statements referred to in the Auditor''s Report are self-explanatory and hence do not call for any further
comments. The Auditor''s Report does not contain any qualification, reservation, adverse remark or disclaimer.

14. Cost Auditors

Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the
cost audit record maintained by the Company is required to be audited. Your Directors had, on the recommendation of the Audit
Committee, appointed M/s S.R. Bhargave & Co., Cost Accountants, Pune for conducting the cost audit of the Company for Financial
Year 2016-17.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be ratified by the
members of the Company. Accordingly, resolution seeking members'' ratification for remuneration to be paid to Cost Auditors is
included at Item No.7 of the Notice convening Annual General Meeting.

15. Secretarial Audit

Pursuant to provisions of Section 204 of the Companies Act, 2013, the Board had appointed M/s SVD & Associates, Company
Secretaries, Pune, to undertake Secretarial Audit of the Company for the Financial Year 2015-16. The Secretarial Audit Report for
the Financial Year ended 31st March, 2016 is annexed herewith as Annexure "D". The Secretarial Audit Report does not contain any
qualification, reservation, adverse remark or disclaimer.

16. Particulars of Employees and related Disclosures

The information required pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, as amended, has been provided in Annexure "E".

17. Extract of the Annual Return

An extract of the Annual Return of the Company, pursuant to the Section 92(3) of the Companies Act, 2013, in Form MGT-9 is
annexed hereto as Annexure "F".

18. Whistle Blower Policy

The Company has vigil mechanism named ''Whistle Blower Policy'', wherein the employees / directors can report the instances of
unethical behavior, actual or suspected fraud or any violation of the Code of Conduct and / or laws applicable to the Company and
seek redressal. This mechanism provides appropriate protection to the genuine Whistle Blower, who avail of the mechanism. During
the year under review, the Company has not received any complaint under the said mechanism. The ''Whistle Blower Policy'' as
approved by the Board is uploaded on the Company''s website. (Web-link :
http://www.kalyanisteels.com/profile/code-of-conduct/whistle-blower/)

19. Particulars of Loans, Guarantees or Investments

Particulars of Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013 form part of the notes to
the Financial Statements provided in this Annual Report.

20. Internal Financial Controls

The Company has in place adequate internal financial controls with reference to the Financial Statements. During the year, such
controls were tested and no reportable material weakness was observed in the design or implementation.

21. Material Changes and Commitments, if any affecting Financial Position of the Company

There are no adverse material changes or commitments occurring after 31st March, 2016, which may affect the financial position of
the Company or may require disclosure.

22. Significant and Material Orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status
and Company''s operations in future.

23. Familiarisation Programme

The details of programmes for familiarisation of Independent Directors with the Company are put up on website of the Company.
(Web-link : http://www.kalyanisteels.com/profile/code-of-conduct/terms-of- the-appointment-of-
independent-directors-of-kalyani-steels-limited/)

24. Names of companies which have become / ceased to be Subsidiaries, Joint Ventures or Associate Companies during the year

During the year, Lord Ganesha Minerals Private Limited became a subsidiary of the Company.

A statement containing the salient features of the financial statement of the subsidiaries and associates / joint ventures in the
prescribed format AOC-1 is annexed hereto as Annexure "G".

The Policy for determining ''Material'' subsidiaries has been displayed on the Company''s website. (Web-link :
http://www.kalyanisteels.com/profile/code-of-conduct/policy-on- material-subsidiary/)

25. Consolidated Financial Statements

The Consolidated Financial Statements, pursuant to Section 129 of the Companies Act, 2013 are attached to the Standalone
Financial Statements of the Company.

26. Obligation of Company under The Sexual Harassment of Women at Workplace (Prevention, Prohibition And Redressal) Act, 2013

In terms of provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the
Company has formulated a Policy to prevent Sexual Harassment of Women at Workplace. During the year under review, there were no
cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

27. Acknowledgement

The Directors would like to express their sincere appreciation of the co-operation received from the Central Government,
Government of Maharashtra, Government of Karnataka, Karnataka Industrial Area Development Board, Financial Institutions and the
Bankers. The Directors also wish to place on record its appreciation for the commitment displayed by all employees at all levels,
resulting in the successful performance of the Company during the year.

The Directors also take this opportunity to express its deep gratitude for the continued co-operation and support received from
its valued shareholders.

The Directors express their special thanks to Mr.B.N. Kalyani, Chairman of the Company, for his untiring efforts for the progress
of the Company.

for and on behalf of the Board of Directors

Place:Pune B.N. Kalyani

Date:24th May, 2016 Chairman


Mar 31, 2014

The Directors have pleasure in presenting the Forty-First Annual Report on the business and operations of the Company and the Audited Financial Statements for the year ended 31st March, 2014.

1. Financial Highlights : (Rs. in Million)

2013-14 2012-13

Sales, Gross : 13,959.037 10,114.257

Excise Duty : 2,825.172 2,108.450

Sales, Net : 11,133.865 8,005.807

Other Operating Revenue : 8.016 66.874

Sale of Services : 18.000 18.000

Revenue from Operations (Net) : 11,159.881 8,090.681

Other Income : 117.922 71.545

Total Revenue : 11,277.803 8,162.226

Total Expenditure : 9,873.626 7,324.433

Finance Cost : 170.023 224.844

Depreciation & amortisation expenses : 339.563 235.628

Profit before Tax : 894.591 377.321 Tax Expenses :

- Current Tax : 256.000 77.500

- Deferred Tax : 53.401 61.226

- Add / (Less): Excess provision for Taxation in earlier years : (0.678) (0.083) Profit after Tax : 585.868 238.678 Dividend on Equity Share Capital : 130.959 65.480

2. Dividend :

The Directors are pleased to recommend a dividend of Rs. 3/- per Equity Share of Rs. 5/- each (i.e. 60%) for the financial year ended 31st March, 2014.

3. The Year in Retrospect :

During the year under consideration, the Company was able to increase the operational levels and achieved gross sales of Rs. 13,959 Million against Rs. 10,114 Million in the previous year, representing growth of 38%. The Profits before Tax increased to Rs. 895 Million, against Rs. 377 Million in the previous year, representing growth of 137%. This was possible due to improvement in operational efficiencies and benefits derived from cost reduction initiatives undertaken by the Company.

4. Management Discussion and Analysis Report

Management Discussion and Analysis Report (MD&A) for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of this Annual Report.

5. Corporate Governance Report

Corporate Governance Report as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of this Annual Report.

A certificate from Statutory Auditors of the Company, M/s P.G. Bhagwat, Chartered Accountants, confirming compliance with conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to Corporate Governance Report.

6. Fixed Deposits :

During the year 2013-14, the Company transferred, five deposits aggregating to Rs. 88,000/- to Investor Education and Protection Fund (IEPF) as per requirement of law. As a result, as on 31st March, 2014, no deposits were outstanding with the Company. Presently, the Company does not accept / renew the deposits.

7. Directors :

Mr.B.N. Kalyani and Mr.C.G. Patankar Directors of the Company are retiring by rotation at the ensuing Annual General Meeting and being eligible, they offer themselves for re-appointment.

In view of Section 149 and other applicable provisions of the Companies Act, 2013, it is proposed to appoint Mr.Arun Pawar, Mr.B.B. Hattarki, Mr.M.U. Takale, Mr.S.M. Kheny and Mr.S.S. Vaidya, as an Independent Directors of the Company for the period of five years with effect from 5th September, 2014 to 4th September, 2019. All the Directors being eligible, offered themselves for appointment. In the opinion of the Board, all the Directors fulfill the conditions specified in the Companies Act, 2013 and rules made there under, for their appointment as an Independent Director of the Company.

These appointments form part of the Notice of the Annual General Meeting and the Resolutions are recommended for your approval. Profiles of these Directors, as required by the Corporate Governance Code (Clause 49 of the Listing Agreement), are given in the report on Corporate Governance.

8. Directors'' Responsibility Statement :

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that :

i) in the preparation of the financial statements for the year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit of the Company for the year under review;

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

iv) the Directors had prepared the financial statements for the year ended 31st March, 2014, on a ''going concern'' basis.

9. Auditors and Auditors'' Report :

M/s P.G. Bhagwat, Chartered Accountants, Pune, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letter from M/s P.G. Bhagwat, Chartered Accountants, to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.

The observations and comments given by the Auditors in their Report read together with notes to accounts are self-explanatory and hence do not call for any further comments.

10. Cost Auditors :

M/s S.R. Bhargave & Co., Cost Accountants, Pune, Cost Auditors of the Company have been re-appointed as the Company''s Cost Auditors for the Financial Year 2014-15.

11. Particulars of Employees :

As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors'' Report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and the Accounts is being sent to all Shareholders of the Company excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of said Annexure may write to the Company Secretary at the Registered Office of the Company.

12. Conservation of energy, technology absorption and foreign exchange earnings & outgo :

The information required under the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 and forming part of the Report is annexed hereto.

13. Quality and Safety :

Your Company accords high priority to quality, safety, training, development, health and environment. The Company endeavors to ensure continuous compliance and improvements in this regard.

14. Transfer of amounts to Investor Education and Protection Fund :

Pursuant to provisions of Section 205A(5) of the Companies Act, 1956, the dividend which remained unclaimed for a period of seven years has been transferred to the Investor Education and Protection Fund.

15. Acknowledgement :

The Directors would like to express their sincere appreciation of the co-operation received from the Central Government, Government of Maharashtra, Government of Karnataka, Karnataka Industrial Area Development Board, Financial Institutions and the Bankers. The Directors also wish to place on record its appreciation for the commitment displayed by all employees at all levels, resulting in the successful performance of the Company during the year.

The Directors also take this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders.

The Directors express their special thanks to Mr.B.N. Kalyani, Chairman of the Company, for his untiring efforts for the progress of the Company.

for and on behalf of the Board of Directors

Place:Pune B.N. Kalyani

Date:29th May, 2014 Chairman


Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting the Fortieth Annual Report on the business and operations of the Company and the Audited Financial Statements for the year ended 31st March, 2013.

1. Financial Highlights :

(Rs. in Million) 2012-13 2011-12

Sales, Gross : 10,114.257 11,588.942

Excise Duty : 2,108.450 2,013.128

Sales, Net : 8,005.807 9,575.814

Other Operating Revenue : 66.874 192.651

Sale of Services : 18.000

Revenue from Operations (Net) : 8,090.681 9,768.465

Other Income : 71.545 218.030

Total Revenue : 8,162.226 9,986.495

Total Expenditure : 7,324.433 9,342.612

Finance Cost : 224.844 213.672

Depreciation & amortisation expenses : 235.628 260.568

Profit before exceptional items and tax : 377.321 169.643

Exceptional Item - Profit on Sale of Investment : 54.800

Profit before Tax : 377.321 224.443

Tax Expenses :

- Current Tax : 77.500 47.000

- Deferred Tax : 61.226 (42.742)

- Add / (Less) : Excess provision for Taxation in earlier years : (0.083) (0.179)

Profit after Tax : 238.678 220.364

Dividend on Equity Share Capital : 65.480 43.653



2. Dividend :

The Directors recommend a dividend of Rs. 1.50/- per Equity Share of Rs. 5/- each (i.e. 30%) for the year ended 31st March, 2013.

3. The Year in Retrospect :

On the backdrop of Iron Ore mining ban in the State of Karnataka, Odisha and Goa, adversely affecting the supply as well as cost of iron ore, the Company performed reasonably well during the year 2012-13. The Company achieved Profit before Tax of Rs. 377.321 Million during 2012-13, as compared to Rs. 224.443 Million in the previous year, representing a growth of 68%. This was possible due to improvement in operational efficiencies and cost reduction initiatives undertaken by the Company.

The members are aware of the Iron Ore mining ban imposed by the Hon''ble Supreme Court vide its Order dated 29th July, 2011 and 5th August, 2011, in the State of Karnataka. As a result of the mining ban, the iron ore production declined drastically in the State of Karnataka and the Company was required to operate at a lower capacity.

The Hon''ble Supreme Court later allowed NMDC Limited (NMDC) to mine 1 Million Tons of Iron Ore per month and sell it to steel plants through e-Auction. The Hon''ble Supreme Court also allowed selling 1.5 Million Tons of Iron Ore per month through e-Auction from the then existing stocks of 25 Million Tons in the State of Karnataka. However, subsequently a cap of 30 Million Tons per annum was put on the total production of Iron Ore from the State of Karnataka. The decision of selling Iron Ore through e-Auction and limiting the mining quantity in the State of Karnataka led to speculative prices, which in turn led to closure or lower capacity utilisation of steel plants in the State of Karnataka.

After closure of mines, the leases for Iron Ore mining had been categorised by the Hon''ble Supreme Court appointed Central Empowered Committee (CEC) as ''A'', ''B'' and C, based on the level of illegalities.

Category A Mines - It comprises of (a) working leases where there is no illegality / marginal illegality have been found and (b) non-working leases wherein no / marginal irregularities have been found. The number of such leases comes to 21 & 24 respectively.

Category B Mines - It comprises of (a) mining leases where illegal mining by the way of (i) mining pits outside the sanctioned lease areas have been found to be upto 10% of the lease areas and / or (ii) overburden / waste dumps outside the sanctioned lease areas have been found to be upto 15% of the lease areas and (b) leases falling on interstate boundary between Karnataka and Andhra Pradesh and for which survey sketches have not been finalised. The number of such leases in Category B comes to 72.

Category C Mines - It comprises of leases wherein (a) the illegal mining by way of (i) mining pits outside the sanctioned lease area have been found to be more than 10% of the lease area and / or (ii) overburden / waste dumps outside the sanctioned lease areas have been found to be more than 15% of the lease areas and / or (b) the leases found to be involved in flagrant violation of the Forest Conservation Act and / or found to be involved in illegal mining in other lease areas. The number of such leases comes to 49.

On 3rd September 2012, the Hon''ble Supreme Court allowed mining in 18 Category A'' mines and on 18th April, 2013, permitted reopening of remaining Category A'' mines (27 in number) and Category ''B'' mines (63 in number). Thus, 108 out of the 166 mines in Karnataka are allowed to resume operations after compliance of stringent conditions laid down by the Hon''ble Supreme Court, subject to cap of 30 Million Tons per annum, on the total production of Iron Ore in the State of Karnataka. The decision regarding remaining mines in Category ''B'' is pending and will be taken in due course by the Hon''ble Supreme Court. However, the Hon''ble Supreme Court cancelled 49 leases of Category C mines.

Although the Hon''ble Supreme Court took commendable steps in its decisions for clampdown on the illegal mining, Category A'' and ''B'' mines may take even two years of time for implementing all the ''Reclamation and Rehabilitation (R & R)'' Plans and opening of all the Category A'' and ''B'' mines.

In the given situation, the Company has no other option than to procure iron ore by participating in e-Auction conducted by Monitoring Committee. Due to short supply of iron ore, the prices of iron ore have become speculative and almost doubled, putting pressure on the operating margins of the Company.

4. Rolling Mill :

The Rolling Mill started its commercial production with effect from 28th March, 2013. The mill has capacity to roll 100,000 MTs of steel per annum. This will reduce reliance on outside rolling as well as achieve reduction in the rolling cost, inventory and the Company will be able to cater the customer needs faster.

5. Cost Reduction Initiatives :

- 33m2 Circular Sinter Plant commissioned on 4th March, 2013. This will enhance flexibility to use cheaper raw materials like iron ore fines instead of lumpy ore.

- Completed installation of Stoves on MBF - I.

- Completed installation of Coal Injection System.

The Company expects to achieve substantial cost savings, by taking these initiatives, thus improving margins.

6. Coke Oven along with DRI Plant :

Metallurgical Coke is one of the basic inputs of steel making process. At present Coke is purchased from domestic and international markets however, inconsistent quality and high prices continuously affect the Steel Industry. To reduce the cost and improve quality of Coke, the Company intends to set up Coke Oven along with DRI plant based on Coke Oven gas and a Pellet Plant. Details of the Project are being worked out.

7. Fixed Deposits :

As on 31st March, 2013, five Depositors having deposits aggregating to Rs. 88,000/- did not collect the amounts due. However, as of 24th May 2013, three deposits aggregating to Rs. 65,000/- were transferred to Investor Education and Protection Fund (IEPF) as per requirements of law. Presently, the Company does not accept / renew the deposits.

8. Directors :

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr.B.B. Hattarki, Mr.S.S. Vaidya and Mr.M.U. Takale Directors of the Company are retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

These appointments form part of the Notice of the Annual General Meeting and the Resolutions are recommended for your approval. Profiles of these Directors, as required by the Corporate Governance Code (Clause 49 of the Listing Agreement), are given in the report on Corporate Governance.

9. Directors'''''' Responsibility Statement :

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that :

i) in the preparation of the financial statements for the year ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for the year under review;

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

iv) the Directors had prepared the financial statements for the year ended 31st March, 2013, on a ''going concern'' basis.

10. Auditors and Auditors'' Report :

M/s. P. G. Bhagwat, Chartered Accountants, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letter from M/s. P. G. Bhagwat, Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1-B) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of Section 226 of the Companies Act, 1956.

The observations and comments given by the Auditors in their Report read together with notes to accounts are self-explanatory and hence do not call for any further comments under Section 217 of the Companies Act, 1956.

11. Particulars of Employees :

As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors'' Report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and the Accounts is being sent to all Shareholders of the Company excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of said Annexure may write to the Company Secretary at the Registered Office of the Company.

12. Conservation of energy, technology absorption and foreign exchange earnings & outgo :

The information required under the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 and forming part of the Report is annexed hereto.

13. Quality and Safety :

The Company accords high priority to quality, safety, training, development, health and environment. The Company endeavors to ensure continuous compliance and improvements in this regard.

14. Employees :

The Board of Directors wishes to place on record its appreciation for the exemplary dedication and contribution of the employees at all levels, to ensure that the Company continues to grow and excel.

Your Directors would like to place on record their appreciation of the co-operation received from the Central Government, Government of Maharashtra, Government of Karnataka, Karnataka Industrial Area Development Board, Financial Institutions and the Bankers.

The Directors express their special thanks to Mr.B.N. Kalyani, Chairman of the Company, for his untiring efforts for the progress of the Company.

for and on behalf of the Board of Directors Place:Pune B.N. Kalyani

Date:24th May, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting the Thirty-Ninth Annual Report on the business and operations of the Company and the Audited Financial Statements for the year ended 31st March, 2012.

1 Financial Highlights : (Rs in Million)

2011-12 2010-11

Sales, Gross : 11,715.871 14,187.255

Excise Duty : 2,013.128 2,076.978

Sales, Net : 9,702.743 12,110.277

Other Operating Revenue : 192.651 257.940

Revenue from Operations (Net) : 9,895.394 12,368.217

Other Income : 224.199 166.908

Total Revenue : 10,119.593 12,535.125

Total Expenditure : 9,387.332 11,351.332

Finance Cost : 302.050 203.306

Depreciation & amortization expenses : 260.568 294.762

Profit before exceptional items and tax : 169.643 685.725

Exceptional Item - Profit on Sale of Investment : 54.800 -

Profit before Tax : 224.443 685.725

Provision for Taxation : 4.079 138.687

Profit after Tax : 220.364 547.038

Dividend on Equity Share Capital : 43.653 87.306

2. Dividend :

The Directors recommend a dividend of Rs 1/- per Equity Share of Rs 5/- each (i.e. 20%) for the year ended 31st March, 2012.

3. The Year in Retrospect :

The year 2011-12 was a very challenging year for the Company. In the steel industry, cost is the main driver for competitiveness and the majority of the cost of production is contributed by raw materials, mainly iron ore and metallurgical coke. In order to ensure continuous and assured supply of iron ore, the Company had entered into long-term agreement with Mysore Minerals Limited (MML) for purchase of calibrated iron ore. By virtue of this Agreement, the iron ore extracted from Subbarayanhalli Iron Ore Mine (SIOM) of MML, was exclusively sold to the Company, catering the requirements of iron ore of the Company.

During the month of July, 2011, due to illegal mining and increasing environmental degradation in the State of Karnataka, the Hon'ble Supreme Court of India, vide its order dated 29th July, 2011, suspended the mining operations and transportation of iron ore in the Bellary District, in an area ad-measuring approximately 10,868 hectares of land, which accounts for 80% of Karnataka's iron ore production. Accordingly, the operations and transportation of iron ore from SIOM and other mines in the Bellary District was totally suspended.

As a result of mining ban, the iron ore production declined drastically in the Karnataka State and the Company was required to operate at very lower capacity. The Company along with other steel plants in the State of Karnataka, made lot of representations to the Hon'ble Supreme Court of India and related departments of Central and State Governments, for providing relief against ban and to restore iron ore availability as earlier.

Based on representations made, on 5 th August, 2011, the Hon'ble Supreme Court allowed NMDC Limited (NMDC) to operate its two mines to the extent of providing 1 (One) Million Tonne of iron ore per month and auctioning of stocks of iron ore of 25 (Twenty Five) Million Tonne, which were lying in the various mines and stockyards.

Since, NMDC was allowed to operate its two mines, the Company made reasonable efforts to get allocation of iron ore from NMDC. However, considering the long-term supply agreements of NMDC with its customers and limited production of iron ore, the Company got allocation on adhoc basis from NMDC.

Based on the suggestion of the Central Empowered Committee (CEC), the Hon'ble Supreme Court of India vide its order dated 26th August, 2011 extended the operation of order dated 29th July, 2011 to the leases in District Chitradurga and Tumkur, thereby consequently banning mining in District Chitradurga and Tumkur also, which accounts for balance 20% of Karnataka's iron ore production.

Thereafter the Hon'ble Supreme Court directed that the sale of iron ore should continue only through e-auction under the supervision of the Monitoring Committee set up by the Hon'ble Supreme Court. In the given situation, the Company had no other option than to procure iron ore by participating in e-auction conducted by Monitoring Committee. Due to short supply of iron ore, the prices of iron ore became speculative and almost doubled, putting pressure on the operating margins. Uncommon increase in prices of the iron ore, has adversely impacted the volumes and the margins of the Company.

4. Rolling Mill :

The Company's initiatives to increase rolling capacity by 100,000 MTs of steel per annum, at Hospet, by setting up of an additional Rolling Mill are in progress. The Company has incurred capex of Rs 481 Million till year end and the mill would be operational by September, 2012. This would facilitate reduction in cost, inventory and will cater to customer needs faster.

5. Cost Reduction Initiatives :

The initiatives taken by the Company towards cost reduction by installation of sinter plant, coal injection system and stoves on blast furnaces, are underway as scheduled. These installations are expected to be on stream by March, 2013, resulting in substantial cost savings, thus improving margins.

6. Fixed Deposits :

As on 31st March, 2012, deposits aggregating Rs 448,000/- ( 45 depositors) remained unclaimed. Out of these deposits, one deposit amounting to Rs 10,000/- was claimed and then repaid by the Company during the month of April, 2012. Presently, the Company does not accept / renew the deposits.

7. Directors :

Mr.Arun P. Pawar, who was appointed as an Additional Director on the Board, with effect from 25th October, 2011, holds office till the ensuing Annual General Meeting. Notice proposing appointment of Mr.Arun P. Pawar as Director having been received, the matter is included in the Notice for the ensuing Annual General Meeting.

Mr.C.G. Patankar, Executive Director completed his term on 31st March, 2012. He continues on the Board as Non-Executive Director.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr.Amit B. Kalyani, Mr.S.M. Kheny and Mr.C.G. Patankar Directors of the Company are retiring by rotation at the ensuing Annual General Meeting and being eligible, they offer themselves for re-appointment.

These appointments form part of the Notice of the Annual General Meeting and the Resolutions are recommended for your approval. Profiles of these Directors, as required by the Corporate Governance Code (Clause 49 of the Listing Agreement), are given in the report on Corporate Governance.

8. Directors' Responsibility Statement :

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that :

i) in the preparation of the financial statements for the year ended 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the year under review;

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

iv) the Directors had prepared the financial statements for the year ended 31st March, 2012, on a 'going concern' basis.

9. Auditors :

M/s Dalal and Shah, Chartered Accountants, Mumbai (Firm Registration No.102021W) are the present Statutory Auditors of the Company.

The Company has received a Special Notice from a member of the Company signifying his intention to propose the name of M/s P.G. Bhagwat, Chartered Accountants, Pune (Firm Registration No.101118W), as Statutory Auditors of the Company.

M/s P.G. Bhagwat, Chartered Accountants, Pune, have expressed their willingness to act as a Statutory Auditors of the Company.

You are requested to appoint of M/s P.G. Bhagwat, Chartered Accountants, Pune, as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting.

10. Particulars of Employees :

As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors' Report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and the Accounts is being sent to all Shareholders of the Company excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of said Annexure may write to the Company Secretary at the Registered Office of the Company.

11. Conservation of energy, technology absorption and foreign currency exchange earnings & outgo :

The information required under the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 and forming part of the Report is annexed hereto.

12. Quality and Safety :

Your Company accords high priority to quality, safety, training, development, health and environment. The Company endeavors to ensure continuous compliance and improvements in this regard.

13. Employees :

The Board of Directors wishes to place on record its appreciation for the exemplary dedication and contribution of the employees at all levels, to ensure that the Company continues to grow and excel.

Your Directors would like to place on record their appreciation of the co-operation received from the Central Government, Government of Maharashtra, Government of Karnataka, Karnataka Industrial Area Development Board, Financial Institutions and the Bankers.

The Directors express their special thanks to Mr.B.N. Kalyani, Chairman of the Company, for his untiring efforts for the progress of the Company.

for and on behalf of the Board of Directors

Place : Pune B.N. Kalyani

Date : 26th May, 2012 Chairman


Mar 31, 2011

Dear Shareholders,

The Directors have pleasure in presenting their Thirty-Eighth Annual Report on the business and operations of the Company and the Audited Accounts for the year ended 31st March, 2011.

1. Financial Highlights :

(Rs in Million)

2010-11 2009-10

Sales and Income from Operations : 14,192.528 11,677.765

Excise Duty : 2,076.978 1,321.235

Net Sales and Income from Operations : 12,115.550 10,356.530

Power generated, captively consumed : 252.667 218.940

Other Income : 157.597 88.733

Total Income : 12,525.814 10,664.203

Total Expenditure : 11,364.280 9,587.983

Interest : 180.902 263.798

Depreciation & Write offs : 294.762 311.386

Profit for the year : 685.870 501.036

Provision for Taxation : 162.896 68.278

Net Profit / (Loss) : 522.974 432.758

Dividend on Equity Share Capital : 87.306 54.566

2. Dividend :

Your Directors recommend a dividend of Rs 2/- per Equity Share of Rs 5/- each (40%) for the year ended 31st March, 2011.

3. The Year in Retrospect :

During the year under consideration, the Company was able to increase the operational levels and achieved gross sales of Rs14,187 Million against Rs11,535 Million in the previous year, representing growth of 23%. This was achieved by selling more of value added products as compared to previous year.

The Company was able to add new grades of steel into its product profile, to growing passenger car segment. Company has successfully developed free cutting steels (Leaded variants) for Export markets.

The change in the product mix and better realisation were primary drivers of the 37% increase in PBT.

4. Rolling Mill :

In order to reduce reliance on outside rolling as well as to achieve cost reduction, the Company has taken initiatives to increase rolling capacity at Hospet by setting up of an additional Rolling Mill. The estimated capex for the same is Rs 456 Million and the mill would roll additional 100,000 MTs of steel per annum. The mill is expected to be operational by year end. This would help in reducing the cost, inventory and will cater to customer needs faster.

5. Cost Reduction Initiatives :

To reduce manufacturing cost and enhance flexibility to use alternate raw materials like iron ore fines instead of lumpy ore, the Company has decided to undertake installation of sinter plant, coal injection system and stoves on blast furnaces. The total cost for these installations is estimated at approx. Rs 3,400 Million, out of which the Company's share will be Rs 1,418 Million. These installations are expected to be on stream in next two years. These would enable the Company to get substantial cost savings, thus improving margins.

6. Coke Oven Batteries Project and Power Plant :

Metallurgical Coke is one of the basic inputs of steel making process. At present Coke is required to be imported from various countries. To reduce the cost and uncertainty with regard to procurement of Coke, the Company intends to set up Coke Oven Batteries Project having a capacity to produce 240,000 MTs of Coke per annum.

The Company also intends to set up 12MW Power Plant by using flue gases generated by Coke Oven Batteries. The power generated will be captively used / exported to the grid.

The total cost for setting up Coke Oven Batteries Project and Power Plant is estimated at approx. Rs 2,000 Million.

7. Fixed Deposits :

As on 31st March, 2011, deposits aggregating Rs101,000/- ( 10 depositors) remained unclaimed. Out of these deposits, one deposit amounting to Rs 15,000/- was transferred to Investor Education and Protection Fund during the month of April, 2011. Presently, the Company does not accept / renew the deposits.

8. Directors :

The Board of Directors at its meeting held on 17th January, 2011, had co-opted Mr.R.K. Goyal, on the Board of the Company as an Additional Director and in the same meeting itself Mr.R.K. Goyal was appointed as a Managing Director of the Company for the period of five years from 17th January, 2011 to 16th January, 2016.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr.B.N. Kalyani and Mr.M.U. Takale, Directors of the Company are retiring by rotation at the ensuing Annual General Meeting and being eligible, they offer themselves for re-appointment.

These appointments form part of the Notice of the Annual General Meeting and the Resolutions are recommended for your approval. Profiles of these Directors, as required by the Corporate Governance Code (Clause 49 of the Listing Agreement), are given in the report on Corporate Governance.

9. Directors' Responsibility Statement :

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, your Directors confirm that :

i) in the preparation of the accounts for the financial year ended 31st March, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) accounting policies selected had been applied consistently and made judgments and estimates that were 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 the year under review;

iii) proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and;

iv) the annual accounts had been prepared, on a going concern basis.

10. Auditors :

You are requested to re-appoint the Auditors of the Company for the Current Year to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting.

11. Particulars of Employees :

As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors' Report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and the Accounts is being sent to all Shareholders of the Company excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of said Annexure may write to the Company Secretary at the Registered Office of the Company.

12. Conservation of energy, technology absorption and foreign currency exchange earnings & outgo :

The information required under the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 and forming part of the Report is annexed hereto.

13. Quality and Safety :

Your Company accords high priority to quality, safety, training, development, health and environment. The Company endeavors to ensure continuous compliance and improvements in this regard.

14. Employees :

The Board of Directors wishes to place on record its appreciation for the exemplary dedication and contribution of the employees at all levels, to ensure that the Company continues to grow and excel.

Your Directors would like to place on record their appreciation of the co-operation received from the Central Government, Government of Maharashtra, Government of Karnataka, Karnataka Industrial Area Development Board, Financial Institutions and the Bankers.

The Directors express their special thanks to Mr.B.N. Kalyani, Chairman of the Company, for his untiring efforts for the progress of the Company.

for and on behalf of the Board of Directors

B.N. Kalyani Chairman

Place : Pune Date : 25th May, 2011


Mar 31, 2010

The Directors have pleasure in presenting their Thirty-Seventh Annual Report on the business and operations of the Company and the Audited Accounts for the year ended 31st March, 2010.

1. Financial Highlights :

(Rs. in Million)

2009-10 2008-09

Sales and Income from Operations 11,683.473 11,791.746

Excise Duty 1,321.235 2,039.404

Net Sales and Income from Operations 10,362.238 9,752.342

Power generated, captively consumed 218.940 175.840

Other Income 83.025 - 210.853

Total Income 10,664.203 10,139.035

Total Expenditure 9,587.983 9,520.053

Interest 263.798 284.369

Depreciation & Write offs 311.386 320.014

Profit for the year : 501.036 14.599

Provision for Taxation : 68.278 (18.458)

Net Profit / (Loss) : 432.758 33.057

Dividend on Equity Share Capital 54.566 —

2. Dividend:

Your Directors recommend a dividend of Rs.1.25/- per Equity Share of Rs.5/- each (25%) for the year ended 31st March, 2010.

3. Scheme of Arrangement:

Your Directors are pleased to inform you that the Hon1>le High Court of Judicature at Bombay by its Order dated 12th March, 2010 had approved the Scheme of Arrangement between your Company, Chakrapani Investments & Trades Limited (Chakrapani), Surajmukhi Investment & Finance Limited (Surajmukhi), Gladiolla Investments Limited (Gladiolla) and Kalyani Investment Company Limited (Kalyani Investment).

As a result of the said Order, the Investment Division of your Company is transferred to and vested in Kalyani Investment and Chakrapani, Surajmukhi and Gladiolla, wholly owned subsidiaries of your Company are amalgamated with Kalyani Investment, with effect from 1st October, 2009, the "Appointed Date". The Scheme became effective on 31st March, 2010, on filing of the respective Orders by all the Companies with the Registrar of Companies, Pune (Maharashtra). On the Scheme becoming effective, the paid up Equity Share Capital of your Company is reduced to Rs.218,265,300/- divided into 43,653,060 Equity Shares of Rs.5/- each.

Your Directors appreciate the support provided by you to the Scheme of Arrangement.

4. The Year in Retrospect:

On the backdrop of disastrous 2008-09, which also had continued negative impact on the first six months of the current year, your Company performed reasonably well during the year 2009-10. Your Company was able to increase the operational levels and sold 184,329 MTs of Steel during the year 2009-10 as compared to 132,435 MTs in the year 2008-09, representing a growth of 39.18%.

Your Companys products were primarily targeted towards Heavy Commercial Vehicle and Medium Commercial Vehicle Segments. In view to diversify, the product mix, your Company had taken several initiatives by adding new products which were used in passenger cars and two wheeler industries. Various micro alloyed steel grade products

were also offered to the customers to replace high cost alloy steels. Apart from this your Company developed products for use in railways and defence sectors.

These initiatives taken by your Company in aiming newer market segments and diversifying customer base would continue, ensuring consistent and sustainable top line and bottom line growth over years to come.

5. Iron Ore and Coal Mines :

The Government of Karnataka has by its Notification, sanctioned grant of Mining Lease for a period of 30 years in favour of your Company for Iron Ore and Manganese Ore over an area of 179.70 hectares in Kumaraswamy Range, Sandur Taluka, Bellary District. However some companies have filed Special Leave Petition (SLP) before the Honble Supreme Court and the above Notification is subject to the final decision of the Honble Supreme Court in the SLP.

The Government of India, Ministry of Coal has also informed that your Company is a part of consortium amongst others for joint allocation in Behraband North Extension coking coal block. However, this allocation is challenged by some companies by filing Writ Petition in the Honble High Court of Madhya Pradesh and the Honble High Court of Delhi.

6. Fixed Deposits:

As on 31st March, 2010, deposits aggregating Rs.111,000/- (11 depositors) remained unclaimed.

7. Directors:

Mr.S.S. Hiremath, Director of the Company expired on 3rd July, 2009. The Directors place on record their sincere appreciation of the valuable contributions made by Mr.Hiremath during his long association with the Company.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr.B.B. Hattarki and Mr.S.S. Vaidya, Directors of the Company retire by rotation and being eligible, they offer themselves for re-appointment.

These appointments form part of the Notice of the Annual General Meeting and the Resolutions are recommended for your approval. Profiles of these Directors, as required by the Corporate Governance Code (Clause 49 of the Listing Agreement), are given in the report on Corporate Governance.

8. Directors Responsibility Statement:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, your Directors confirm that:

i) in the preparation of the accounts for the financial year ended 31st March, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii) accounting policies selected had been applied consistently and made judgments and estimates that were 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 the year under review;

iii) proper and sufficient care had been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and;

iv) the annual accounts had been prepared, on a going concern basis.

9. Auditors:

You are requested to re-appoint the Auditors of the Company for the Current Year to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting.

10. Particulars of Employees :

As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors Report. However, in terms of the provisions of Section 219(l)(b)(iv) of the Companies Act, 1956, the Report and the Accounts is being sent to all Shareholders of the Company excluding the aforesaid Annexure. Any

Shareholder interested in obtaining a copy of said Annexure may write to the Company Secretary at the Registered

Office of the Company.

11. Conservation of energy, technology absorption and foreign currency exchange earnings & outgo :

The information required under the provisions of Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 and forming part of the Report is annexed hereto.

12. Quality and Safety :

Your Company accords high priority to quality, safety, training, development, health and environment. The Company endeavors to ensure continuous compliance and improvements in this regard.

13. Employees:

The Board of Directors wishes to place on record its appreciation for the exemplary dedication and contribution of the employees at all levels, to ensure that the Company continues to grow and excel.

Your Directors would like to place on record their appreciation of the co-operation received from the Central Government, Government of Maharashtra, Government of Karnataka, Karnataka Industrial Area Development Board, Financial Institutions and the Bankers.

for and on behalf of the Board of Directors

Place : Pune B.N. Kalyani

Date : 24th May, 2010 Chairman

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