Mar 31, 2015
The Directors are pleased to present the Ninth Annual Report and the
company's audited financial statement for the Financial Year ended
March 31, 2015.
FINANCIAL RESULTS
The company's financial performance for the year ended March 31, 2015
is summarized below:
Rs. in lakhs
Particulars 2014-15 2013-14
PROFIT BEFORE TAX 252.43 1463.14
Less: Current tax
Deferred tax (84.02) (48.26)
PROFIT FOR THE YEAR 336.45 1511.40
Add: Balance in Profit and
Loss Account 5532.24 4200.68
Sub-total 5868.69 5712.08
LESS: Appropriation
General Reserves
Proposed Dividend -- 69.21
Proposed Dividend on equity -- 84.51
Corporate Dividend
Tax - Preference -- 11.76
Corporate Dividend Tax Equity -- 14.36
Adjustment relating to Fixed
Assets -- ---
Total 5868.69 5532.24
DIVIDEND
The Board of Directors of the Company have not recommended any dividend
on the equity shares in view of financial health of the Company and the
need for conserving and sloughing back the funds in the business for
modernization /expansion activities.
OPERATIONAL REVIEW
Gross revenues decreased to Rs.28838.61 lacs, a short fall of around
18% against Rs.34158.44 lacs in the previous year due to sluggish
market conditions and effect of hudhud cyclone in the coastal area of
Andhra Pradesh. Profit before depreciation and taxation was Rs.537.97
lacs against Rs.1717.65 lacs in the previous year and the profit after
providing for depreciation and taxation of Rs.336.15 lacs against
Rs.1511.40 lacs in the previous year.
The Company is expecting bright prospectus for the Ferro Alloys
Products due to Government policies and encouragement to the
infrastructure project. Moreover, the Company tied up with Harsco for
recovery of Metal from the slag which is accumulated over years.
Harsco installed the required equipment adjacent to company's plant and
commenced its operations from December 2014 for recovery of Metal from
the slag. These operations are under stabilization and once it is
streamlined, the Company will derive the benefits by way of additional
income to the Company.
FIXED DEPOSITS
No fresh / renewal of deposits were accepted during the financial year
2014-15.
DIRECTORS' RESPONSIBILITY STATEMENT Section (5) 134
Your Directors confirm that :
- In the preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been
made from the same;
- They 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 profits of the
Company for that period;
- They 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;
- They have prepared the annual accounts on a going concern basis;
- They have laid down internal financial controls for the Company and
such internal financial controls are adequate and operating
effectively; and
- They have devised proper systems to ensure compliance with the
provisions of all applicable laws and such systems are adequate and
operating effectively.
The Company's Internal Auditors have conducted periodic audit to
provide reasonable assurance that the company's established policies
and procedures have been followed. The Audit Committee constituted by
the Board reviews the internal control and financial reporting issues
with Internal Auditors.
MANAGEMENT DISCUSSIONS AND ANALYSIS
a. Industry structure and developments
Steel is the most versatile material, which has made the progress in
every aspect on this earth possible. Numerous varieties of steel are
required with specific properties to suit different applications and to
get the most optimum usage. Hence, the basic constituent of steel is
Iron, in proportion of other elements in it, which gives each type of
steel certain specific properties. These elements known as Ferro Alloys
are added to molten iron to get the desired composition and properties.
Thus Ferro Alloys are important additives in the production of steel
and as such ferro alloys industry's growth and development is linked to
that of the steel industry.
The year witnessed a marked slowdown in global growth. Emerging markets
were characterized by a sharp fall in growth rates especially in China,
Europe and Japan continued to be under pressure through the year, while
US showed tepid signs of improvement.
The performance, during the year, of your Company may be analyzed from
the above impact.
The sales have come down to Rs.288 crore comparing to last year Rs.341
crore. Export sales have come down to Rs.14 crore against last year
Rs.35 crore.
b. Opportunities and Threats
The key end-user of Ferro chrome is stainless steel and alloy steel
industry with a share of 90% of Ferro chrome consumption. The growth
of stainless steel is predominantly driven by the growth in its end
user segments. The low consumption of stainless steel can be attributed
to
- Lack of awareness about its use and benefits
- Non-availability of skilled fabricators
- User developed production technology
This low per capita consumption of stainless steel in India presents
immense opportunities for growth in Indian Stainless Steel market. The
micro drivers for the growth of Indian stainless industry are-
- Per capita income growth
- Higher GDP growth
- Huge investment by Indian Government in infrastructure
- New stainless steel application identification
As every industry facing threats, ferro alloys industry is not barred
from this. Threats like substitution of products and importing at
cheaper rates.
c. Segment-wise or product-wise performance
The Company has only one segment Iron & steel, Ferro Alloys Products.
During the year, under review, the Company introduced the production of
Ferro Silicon, Silico Manganese . The overall production comparing last
year production was dropped due to Hudhud cyclone and other factors .
d. Outlook
The steel has recorded high growth rates in both production and
consumption over the past few years benefiting from soaring steel
demand in automobile and construction sectors before the recession.
Moreover, cost effective and highly efficient steel making technologies
have lifted the demand from US to the Middle Eastern and Asian
countries.
Stainless steel is the largest consumer of Ferro chrome and as such a
change in the dynamics of the stainless steel industry has impact of
Ferro chrome industry. According to ISSF and KMPG, the recent
significant improvement in global stainless steel consumption comes on
account of global economic recovery and strong end user demand.
Risks and concerns
The global economic climate continues to be volatile, uncertain and
prone to geo-political risks. The marked slowdown in global markets is
expected to continue in 2015. The divergence in developed market growth
as a result of the US recovery is expected to add to the volatility in
the currency markets. In this global backdrop, India is expected to
perform better, aided by improving macroeconomic fundamentals. However,
execution of the reform and kick starting the investment cycle will be
the key determinants of India's economic performance. Currently
inflation is benign, upside pressures on inflation from the vagaries of
monsoon or sudden changes in the rupee, could have a significant
bearing on inflation.
e. Internal control systems and their adequacy
Internal control is an essential part of corporate governance and any
weakness or inadequacy can have a greater impact on the profit of the
Company. The Company remains committed in its endeavor to ensure an
effective internal control environment that provides assurance on the
efficiency and effectiveness of operations, reliability of financial
reporting, statutory compliance and security of assets.
The Company has a well established and robust internal control systems
and processes in place to ensure smooth functioning of the operations.
f. Discussion financial performance with respect to operational
performance
The production during the year has dropped due to Hudhud cyclone and
sluggish market conditions. The input costs raw material, freights and
other overheads increased, whereas prices of Finished Goods not
increased commensurate with the input costs. The finance cost Rs.724.66
lacs slightly increased comparing last year's Rs.694.93 lacs .
g. Material development in Human Resources /Industrial front,
including number of people employed Your company is value based
organization with a culture that promotes empowerment and freedom. In a
challenging and competitive environment, the organization believes
people are key to success.
Research and Development
Your Company continues to derive sustainable benefit from the tradition
of Research & Development and many such innovation has helped
significantly to develop for better product with cost effective.
Technology Absorption
The Company maintains interaction with experts globally which has
facilitated for better management. Periodical up gradation of
Technology and new developments in the industry.
Environment, Safety, Health and Energy Conservation
Your Company has a vision of being 'Zero' accident plant. This has been
achieved through a combination of training and hardware up gradation
leveraging core technology concepts and safety standards.
Corporate Governance
Your Company is renowned for exemplary governance standards over the
years and continue to lay a strong emphasis on transparency,
accountability and integrity.
Your Company has in place all the statutory committees required under
the law. Details of Board committees along with their terms of
reference, composition and meetings of the Board and Committees held
during the year are provided in the Corporate Governance Report. The
requisite certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance is attached to
this report Annexure 'A'.
Corporate Social Responsibility (CSR)
During the year, your Company has adopted new policies and amended
existing policies such as Policy on related Party transaction, CSR
Policy and Whistle Blower Policy in line with the new governance
requirements. The Company has established a vigil mechanism for
Managing Director/Whole-time Directors and employees to report their
genuine concerns and details are given in the Corporate Governance
Report attached to this report Annexure 'B'.
The Company has identified neighboring villages in and around
Ravivalasa for solutions for developing infrastructure viz., Road,
drinking water supply, quality education, providing computers and
addressing poverty, hunger and malnutrition.
During the year, the Company has spent Rs.78.58 lakhs [around 2.71% of
the average net profits of last three financial years ] on CSR
activities is annexed herewith to this report - Annexure 'C'.
Risk Management
During the year, your Directors have constituted a Risk Management
Committee which has been entrusted with the responsibility to assist
the Board in overseeing and approving company's enterprise wise risk
management framework and risk that the organization faces. The
strategic, financial, liquidity, legal, regulatory and other risks have
been identified and assessed and there is an adequate risk management
infrastructure in place capable of addressing those risks.
Secretarial Auditor
During the year, Secretarial Audit was carried out by Sri Ramaswamy K,
Company Secretary in Practice, the Secretarial Auditor of the Company
for the financial year 2014-15. There were no qualification,
reservation or adverse remarks given by the Secretarial Auditor and the
report is appended to this report - Annexure 'D'.
Extract of Annual Return
The extract of annual return in Form MGT 9, as required under Section
92(3) and rule 12 of the Companies [Management and Administration]
Rules, 2014, is appended to this report - Annexure 'E'.
Related Party Transactions
In line with requirements of the Companies Act, 2013 and listing
agreement, proper reporting, approval and disclosure process are in
place for all transactions between related parties and the Company. All
transactions entered were in ordinary course of the business and on
arm's length basis. No material related party transactions i.e.
transactions exceeding ten percent of the annual consolidated turnover
as per the last audited financial statements were entered during the
year. Accordingly, related party transactions, as required under
section 134(3)(h) of the Companies Act, 2013, in Form AOC 2 is not
applicable.
Board of Directors and Key Managerial Personnel
During the year, the Board appointed Sri Chikali Nagarju as Whole-time
Director and Smt Sarita Boorugu as an Additional Director with effect
from 13.11.2014 and 17.06.2015 respectively. Smt Sarita Boorugu hold
office up to the date of forthcoming AGM and being eligible, offered
herself to be appointed as Director.
The Independent Directors have given the certificate of Independence to
your Company stating that they meet the criteria of independence as
mentioned under Section 149, 161 of the Companies Act, 2013.
The details of training and familiarization programmes and annual board
evaluation process for directors have been provided under the Corporate
Governance Report.
Statutory Auditors
M/s Nekkanti Srinivasu & Company [Firm Regn No. 008801S] were appointed
as Statutory Auditors by the members for three years and hold office
till the conclusion of the ensuing AGM and are eligible for
re-appointment. They have confirmed their eligibility to the effect
that their re-appointment, if made, would be within the prescribed
limits under the Act and that they are not disqualified for
re-appointment.
Cost Auditor
M/s Krishna Mohan Reddy, Cost Accountants carried out the cost audit
during the year. The Board of Directors have appointed M/s. Jithendra
Kumar & Company, Cost Accountants for the year 2015-16.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earning and Outgo
The particulars relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required under the
Act, is attached to this report - Annexure 'F'.
Human Resources
Your Company's human resources remained focused on reinforcing the key
thrust areas viz., building strong, talent and capabilities in the
Company, driving greater employee engagement and continuing focus on
progressive employee relation policies to develop them as future
leaders.
None of the employees is covered for disclosures, as required under
Section 197(12) of the Act read with Rule 5(2) and 5(3) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014.
Disclosures with respect to the remuneration of Directors and
employees, as required under Section 197 of Companies Act, 2013 and
Rule 5(1) Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, has been appended as annexure to the repor t.
Details of employees remuneration, as required under Section 197 of
Companies Act, 2013 and Rule 5(1) Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are available at the
Registered Office of the Company during working hours before 21 days of
AGM and shall be made available to any shareholder on request.
General
Your Directors state that no disclosure of reporting is required in
respect of the following items as there were no transactions on these
items during the year, under review:
a. Details relating to deposits covered under Chapter V of the Act
b. Issue of equity shares with differential rights as to dividend,
voting or otherwise
c. Issue of shares [including sweat equity shares] to employees of the
Company under any scheme
d. Neither the MD nor the whole-time Director of the Company receive
any remuneration or commission from any of subsidiaries
e. No significant or material orders were passed by the Regulators or
Courts or Tribunal which impact the going concern status and Company
operations in future.
Appreciation and Acknowledgement
Your Directors place on record their deep appreciation to employees, at
all levels, for their hard work, dedication and commitment.
Your Directors also like to acknowledge the excellent support and
co-operation your Company has been receiving from its bankers,
suppliers, stakeholders, investors, clients, vendors, Government and
Regulatory authorities.
For and on behalf of the Board of Directors
S. Gajendran
Bengaluru Chairman of the Meeting and Non Executive
Independent Director
August 14, 2015 DIN: 00250136
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the Eighth Annual Report and
Audited Accounts for the year ended March 31, 2014:
FINANCIAL RESULTS
(Rs. In Lakhs)
Particulars 2013-14 2012-13
Total Sales 34158.44 22313.26
Profit before Interest and Depreciation 2412.57 2074.10
Interest 694.93 639.56
Depreciation 254.51 251.27
Profit before tax 1463.14 1183.27
Income tax expenses
* Current Tax - -
* Deferred Tax (48.26) (0.94)
Profit after tax 1511.40 1184.21
Balance brought forward from previous years 4200.68 3179.83
Balance available for appropriations 5712.08 4364.04
Preference Dividend 69.21 69.21
Proposed Dividend on equity 84.51 70.43
Corporate Dividend tax - Preference 11.76 11.76
Corporate Dividend tax - Equity 14.36 11.97
Balance carried forward to Balance Sheet 5532.24 4200.68
DIVIDEND
The Board of Directors of your Company has recommended a dividend of
Rs.0.12 per equity shares of Rs.2/- each. The dividend, if approved at
the ensuing Annual General meeting, will be paid to those shareholders
whose names appear on the Register of Members as on the Book Closure
date.
OPERATIONS AND PERFORMANCE
The Company continued to be among well performed companies in High
Carbon Ferro Alloys in India with sales of Rs 34150.85 lakhs, Profit
after tax stood at Rs 1463.14 lakhs. The Company continue to focus for
improving margins through innovative product development, better
product mix, emphasis on branded products and control on cost.
Significant measures have been taken for simplification of process and
structures which will result in improvement in productivity and
efficiency across the organization.
Your Directors inform that Scheme of arrangement between the Company
and Ferro Division of Sri Vasavi Industries Limited is before the
Hon''ble High Court of Andhra Pradesh, Hyderabad.
REGULATORY ISSUES :
The company entered into a Trading Agreement with National Spot
Exchange Ltd ( NSEL) and sold Ferro chrome stocks through Trading
Platform . The company is having repurchase obligation for the stocks
sold through NSEL platform . However the exchange was suspended and
repurchase obligation could not be completed to the extent of 14243 mts
of Ferro Chrome as on the date of Balance sheet.
The company is of the opinion that the transactions with NSEL are
within the norms of required regulations and there would be no negative
effect on the financial of the company .
DIRECTOR
Consequent to resignation of Smt Sarita Boorugu, S/shri S Venkataraman,
Rajiv Saxena and K Mallikarjuna Rao ceased to be Directors w.e.f.
04.09.2013, 30.09.2013, 19.10.2013 and 28.10.2013 respectively.
Sri AVL Narasimham was appointed as Director in Casual Vacancy
consequent to the resignation of Sri S Venkatraman w.e.f. 13.11.2013.
Pursuant to Section 152 of the Companies Act, 2013 and Articles of
Association of the Company, Sri S Gajendran, retire by rotation and
being eligible, offers himself for re-appointment.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of provisions of Section 217 (2AA) of the Companies Act, 1956,
your Directors confirm that:
i. In the preparation of the annual accounts, the applicable
accounting standards have been followed, along with proper explanation
relating to material departures, wherever applicable.
ii. The Directors have selected such accounting policies and applied
them consistently and made judgements 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 the end of the accounting year and of the profit
of the Company for the period.
iii. The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
iv. The Directors have prepared the annual accounts on a going concern
basis.
SOCIAL RESPONSIBILITY
As a Socially Responsible Corporate Citizen , the company has been
providing water supply to nearby Ravivalasa village and provided street
lamps. The Company constructed class room in MPP School at Ravivalasa.
Fixed PVC Wire nets to all rooms of Integrated Welfare Hostel complex
at Tekkali. Cleaning up of Vamsadara canal in the near by area and
provided Ghats for bathing purposes. The company contributed generously
to Chiccolu Chirudivvelu, (a scheme for education of poor students) at
Srikakulam. contribution made to Kabadi Tournament conducted by ZPH
School, Nandigam.
CORPORATE GOVERNANCE
Report on Corporate Governance and Certificate of Auditors of the
Company for the due Compliance of Code of Corporate Governance pursuant
to Clause 49 of the Listing Agreement forms part of this Report.
LISTING AT STOCK EXCHANGES
The equity shares of the Company continue to be listed on Bombay Stock
Exchange Limited and The National Stock Exchange of India Limited. The
annual listing fees for the year 2014-15 has been paid.
DISCLOSURE OF PARTICULARS
The information relating to Conservation of Energy, Technical
Absorption, Foreign Exchange Earnings and Outgo pursuant to Section
217(1)(e) of the Companies Act, 1956 read with Companies [Disclosure of
Particulars in the report of the Board of Directors] Rules, 1988 is
forming part of this repsort.
FIXED DEPOSIT
The Company has not invited / received any fixed deposits during the
period.
COST AUDIT
Sri Krishna Mohan Bojanapalli, Cost Accountant was appointed as the
Cost Auditor of the Company and their Audit Report on Cost Accounts of
the Company for the period ended March 31, 2014 will be filed within
the stipulated time limit.
AUDITORS
M/s Nekkanti Srinivasu & Company, Chartered Accountants, retire as
Auditors of the Company at the conclusion of this Annual general
Meeting and are eligible for re-appointment. Based on the
recommendation of the Audit Committee, the Board of Directors of the
Company have proposed the appointment of M/s Nekkanti Srinivasu &
Company, Chartered Accountants as the Auditors of the Company from the
Conclusion of the ensuing Annual General meeting till the conclusion of
next Annual General meeting. M/s Nekkanti Srinivasu & Company,
Chartered Accountants have expressed their willingness to act as
Auditors of the Company, if appointed, and have further confirmed that
the said appointment would be in conformity with the provisions of
Section 141 of the Companies Act, 2013.
INDUSTRIAL RELATIONS
During the year, under review, Industrial relations at the
Manufacturing complex remain cordial.
PARTICULARS OF EMPLOYEES
None of the employees is covered under Section 217 (2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975, as amended.
ACKNOWLEDGEMENT
Your Directors would like to place on record their sincere appreciation
of the service rendered by the Executives, Staff and Workers during the
year, under review. Your Directors also appreciate the support received
from Banks, Central and State government Authorities, Regulatory
Authorities, Customers, Suppliers, Shareholders and Investors at large
for their continued support and confidence.
On behalf of the Board of Directors
Dated : 29.05.2014 S Gajedran
Place : Bangalore Chairman of the Meeting
Non-Executive Independent Director
DIN:00250136
Mar 31, 2013
To the Members,
The Directors are pleased to present their Seventh Annual Report of
the Company together with the Audited Accounts for the year ended March
31, 2013.
FINANCIAL RESULTS (Rs. In Lakhs)
Particulars 2012-13 2011-12
Total income 22313.26 25067.89
Profit before interest and depreciation 2074.10 2675.07
Interest 639.56 635.39
Depreciation 251.27 260.69
Profit before tax 1183.27 1779.06
Provision for
- Current Tax
- Deferred Tax (0.94) 24.68
Profit after tax 1184.21 1754.38
Balance brought forward from previous year 3179.83 1577.27
Balance available for appropriations 4364.04 3331.65 Preference
Dividend 69.21 69.21 Proposed Dividend on equity 70.43 61.43 Corporate
Dividend Tax-Preference 11.76 11.23 Corporate Dividend Tax-Equity 11.97
9.96 Balance carried forward to Balance Sheet 4200.68 3179.85
DIVIDEND:
Your Directors are pleased to recommend a dividend of Re. 0.10 per
equity share of Rs.2/- each on 7,04,26,475. Equity shares for the year
ended March 31, 2013 for your consideration. The Dividend, if approved
at the ensuing Annual General Meeting, will be paid to those
shareholders whose names appear on the Register of Members of the
Company as on the Book Closure date.
REVIEW OF OPERATIONS AND PERFORMANCE:
Demand for Ferro Alloys is driven by steel industry, which consumes
about 90 % of Ferro alloys and accordingly the Prospects for Ferro
alloys industry is directly linked to the performance of steel industry
and its cycles. The emerging Economies like India and China are the
prime movers of the demand for steel and in turn for Ferro alloys.
Most Ferro Alloy producers in India are currently passing through a
difficult situation due to maximum availability of quality power
increase in power cost and declining profitability. Your company is no
exception to these phenomena. In view of above the Company could
achieve a production of 12424 MT of Ferro Alloys products as against
21572 MT during the previous year, a decrease of 42.40%. In order to
meet the gap between demand and supply, the company has chosen to
outsource Ferro Alloys from other manufacturers. The total income
including sales turnover of Ferro Alloys and steel products was Rs.
22323.26 lakhs during the year under review as compared to Rs.25067.89
lakhs during previous year. Your Company has registered a Net Profit
after tax of Rs.1184.21 lakhs against Rs. 1754.38 lakhs during the
previous year. As the power situation is improving in the current
financial year, the Company is confident of achieving a better
performance.
SHIFTING OF REGISTERED OFFICE:
The Company has shifted its registered office from "Vishnu Splendour",
D No.8-3-979/123456, Survey No. 41, 42, Flat No. 302, B Block,
Yellareddyguda, Hyderabad - 500 073 to Plot No. 18, Street No. 1, Sagar
Society, Road No. 2, Banjara Hills, Hyderabad 500 034 with effect from
07.04.2012.
DEPOSITORY SYSTEM:
The company''s shares are compulsorily tradable in electronic form. As
on 31.03.2013, 83.88% of the company''s total paid-up capital
representing 7, 04, 26,475 shares are in dematerialized form. In view
of the numerous advantages offered by the depository system, Members
holding shares in physical mode are advised to avail of the facility of
dematerialization on either of the depositories.
LISTING OF SHARES ON CONVERSION:
Approval for listing of 90,00,000 equity shares of Rs. 2/- each issued
to Promoters and Public on Preferential Allotment basis have been
accorded by both the Bombay and National Stock Exchanges where the
Company''s equity shares are listed.
DIRECTORS
Sri A.V.L. Narasimham ceased to be Director w.e.f. 12.11.2012
consequent to his resignation dated 21.09.2012.
Sri S.Venkataraman, was appointed as Director in casual vacancy
consequent to the resignation of Sri A V L Narasimham w.e.f.
12.11.2012.
In accordance with provisions of Section 256 of the Companies Act, 1956
and Articles of Association of the Company, Smt Sarita Boorugu and Sri
M V Bhaskara Rao, retire by rotation and being eligible, offers
themselves for re-appointment.
The Board places its record of appreciation for the valuable
contribution of out going Director and welcomes Sri S Venkataraman to
the Board of Directors.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217[2AA] of the Companies Act, 1956 and on the
basis of explanations given by the executives of the Company and also
subject to the disclosures in the Annual Accounts, your Directors
confirm as under:
i. That in the preparation of the annual accounts, the applicable
Accounting Standards have been followed along with proper explanations
relating to material departures.
ii. That the Directors had selected such accounting policies and
applied them consistently and made judgments and that 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 of the
Company for that period.
iii. That 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.
iv. That the Directors had prepared the Annual Accounts for the
financial year ended March 31, 2013 on going concern basis.
SOCIAL RESPONSIBILITY
As a Socially Responsible Corporate Citizen, the Company has been
providing water supply to the nearby village of Ravivalasa housing 2000
families and provided 5 beds to RIMS Hospital at Srikakulam. On the
development of the village infrastructure, your Company has supplied 50
loads of gravel for inner road development at Dharmaneelapuram Village
and also helped on formation of irrigation canals around
Dharmaneelapuram Village. In addition to that, your Company has
undertaken the maintenance of BC hostels at Tekkali and Polavaram
Village. To make the environment pollution free and to enhance the
efficacy of arresting emission of dust in the plant, the Company has
laid pipelines and installed water sprinkling system around the Plant.
FIXED DEPOSITS
During the year under review, your Company neither invited nor accepted
any fixed deposits from the public.
CORPORATE GOVERNANCE
Report on Corporate Governance and Certificate of Auditors of the
Company for the due Compliance of Code of Corporate Governance pursuant
to Clause 49 of the Listing Agreement forms part of this Report.
PERSONNEL RELATIONS
During the year under review, relationship with the employees continued
to remain cordial.
CONSERVATION OF ENERGY, TECHNICAL ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO.
The information relating to Conservation of Energy, Technical
Absorption, Foreign Exchange Earnings and Outgo pursuant to Section
217(1)(e) of the Companies Act, 1956 read with Companies [Disclosure of
Particulars in the Report of the Board of Directors] Rules, 1988, is
forming part of this report.
AUDITORS
The Auditors, M/s. S Venkatadri & Co, Chartered Accountants, retire at
the conclusion of the ensuing Annual General Meeting vide their letter
dated 17.07.2013, have expressed their inability to be considered for
appointment as Auditors of the Company for the financial year 2013-14.
M/s Nekkanti Srinivasu & Co., Chartered Accountants, (Membership
No.209453) have expressed their willingness to be considered for
appointment as Statutory Auditors.
They have confirmed that if appointed as Statutory Auditors of the
Company, such appointment will be within the prescribed limits under
Section 224(1B) of the Companies Act, 1956.
PARTICULARS OF EMPLOYEES
None of the employees is covered under Section 217 [2A] of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975 as amended.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank the Banks, Central and
State Government Authorities, Regulatory Authorities, Customers,
Suppliers, Shareholders and Investors at large for their continued
support to the Company and look forward to having the same support in
the years to come.
Your Directors would like to express their appreciation to all the
employees for their outstanding contribution to the operations of the
Company during the year, under review.
On behalf of the Board of Directors
Date : August 14, 2013 PRASHANT BOORUGU
Place : Bangalore MANAGING DIRECTOR
Mar 31, 2012
The Directors are pleased to present Sixth Annual Report together with
the Audited Accounts for the year ended March 31, 2012.
FINANCIAL RESULTS (Rs. In Lakhs)
Particulars 2011-12 2010-11
Sales Income 25001.47 17398.52
Total income 25067.90 17436.53
Profit before interest and depreciation 2675.15 2525.83
Interest 635.39 297.26
Depreciation 260.69 224.80
Profit before tax 1779.07 2003.77
Provision for -
- Current Tax - 728.44
- Deferred Tax 24.68 (63.86)
Profit after tax 1754.39 1,339.19
Balance brought forward from previous year 1577.28 389.92
Balance available for appropriations 3331.67 1,729.11
Preference Dividend 69.21 69.21
Proposed Dividend on Equity 61.43 61.43
Corporate Dividend Tax - Preference 11.23 11.23
Corporate Dividend Tax - Equity 9.96 9.96
Balance carried forward to Balance Sheet 3179.84 1,577.28
DIVIDEND
Your Directors are pleased to recommend a dividend of 5% on equity
share of Rs.2/- each on 6,14,26,475 shares for the year ended March 31,
2012. The dividend, if approved at the ensuing Annual General Meeting,
will be paid to those shareholders whose names appear on the Register
of Members of the Company as on the Book Closure date.
REVIEW OF OPERATIONS AND PERFORMANCE
In the year, under review, the Company has achieved a production of
21572 MT of Ferro Alloys products as against 28057 MT during previous
year, decrease of 23.11% due to constraints in supply of Chrome Ore and
Power. Therefore, the Company has chosen outsourcing of the products so
as to meet the growing demand from the customers. With this strategy,
the Sale turnover of Ferro Alloys products increased to Rs.251 Crores as
compared to Rs.174 Crores during previous year, registering a growth of
43.76%. The Company has registered a Profit after tax of Rs.1754.39 lakhs
against Rs.1339.19 lakhs of previous year.
SUB DIVISION OF EQUITY SHARES
Your Company's equity shares of Rs.10/- each has been sub-divided into
Rs.2/- each w.e.f 04.11.2011.
CHANGE OF NAME
Your Company's name has been changed from 'Cronimet Alloys India
Limited' to "METKORE ALLOYS & INDUSTRIES LIMITED" w.e.f
11.01.2012.
SHIFTING OF REGISTERED OFFICE
Effective from 07.04.2012, the Registered Office of the Company has
been shifted from 'Vishnu Splendor', D No. 8-3-979/123456, Survey
No. 41, 42, Flat No. 302, 'B' Block, Yellareddyguda, Hyderabad -
500 073 to Plot No.18, Sagar Society, Street No.1, Road No.2, Banjara
Hills, Hyderabad - 500 034.
Directors
In accordance with provisions of the Companies Act, 1956 and Articles
of Association of the Company, Sri K Mallikarjuna Rao and Sri AVL
Narasimham, retire by rotation and being eligible, offers themselves
for re-appointment.
Directors Responsibility Statement
Pursuant to Section 217[2AA] of the Companies Act, 1956 and on the
basis of explanation given by the Executives of the Company and also
subject to the disclosures in the Annual Accounts, your Directors
confirm as under:
i. That in the preparation of the annual accounts, the applicable
Accounting Standards have been followed along with proper explanations
relating to material departures.
ii. That the Directors had selected such accounting policies and
applied them consistently and made judgments and that 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 of the
Company for that period.
iii. That 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.
iv. That the Directors had prepared the annual accounts for the
financial year ended March 31, 2012 on a going concern basis.
Social Responsibility
Your Company actively supports the corporate social responsibility in
the field of education, health, hygiene & sanitation, empowerment,
safety and community development programmes in the areas surrounding
the Company's project site. Your Company continues to make
significant contribution to promote sustainable livelihoods of people
living in and around its factory zones by providing educational
support, technical assistance, financial assistance, organizing medical
camps etc.,
Your Company also provides hygiene drinking water to nearby villages
covering 2000 houses and facilitates medical aid in times of emergency
including supply of beds to the hospital and recognizes protection and
management of environment and development of inter road as well
formation of the irrigation cannels as one of its highest priorities
and every effort is made to conserve and protect environment.
The Company continues to focus on maintenance and performance
improvement of related pollution control facilities like effluent
treatment plant and waste disposal facility at its manufacturing
locations.
Fixed Deposits
During the year under review, your Company neither invited nor accepted
any fixed deposits from the public.
Corporate Governance
Report on Corporate Governance and Certificate of Auditors of the
Company for the due compliance of code of Corporate Governance pursuant
to Clause 49 of the Listing Agreement is form part of this Report.
Conservation of Energy, Technical Absorption, Foreign Exchange Earnings
and outgo.
The information relating to Conservation of Energy, Technical
Absorption, Foreign Exchange earnings and outgo pursuant to Section
217(1)(e) Companies Act, 1956 read with Companies [Disclosure of
Particulars in the Report of the Board of Directors] Rules, 1988, is
forming part of this report.
Auditors
The Auditors, M/s. Venkatadri & Co., Chartered Accountants, retire at
the conclusion of the ensuing Annual General Meeting and being
eligible, offer themselves for re-appointment. They have confirmed
their willingness to act as Auditors of the Company for the financial
year 2012- 13 and confirmed that their re-appointment, if made, would
be within prescribed limits under Section 224 (1B) of the Companies
Act, 1956.
Particulars of Employees
None of the employee is covered under Section 217 [2A] of the Companies
Act, 1956, read with Companies (Particulars of Employees) Rules, 1975
as amended.
Acknowledgement
Your Directors take this opportunity to thank the State & Central
Government authorities, Banks, Regulatory Authorities, Customers,
Suppliers, Shareholders and Investors at large for their continued
support to the Company and look forward to having the same support in
the years to come.
Your Directors would like to express their appreciation to all the
employees for their outstanding contribution to the operation of the
Company during the year, under review.
On behalf of the Board of Directors
Bangalore Prashant Boorugu S. Gajendran
August 14, 2012 Managing Director Director
Mar 31, 2010
The Directors are pleased to present their Fourth Annual Report of the
Company together with the Audited Accounts for the year ended March 31,
2010.
FINANCIAL RESULTS
(Rs. In Lakhs)
2009-10 2008-09
Sales Income 11,475.39 10,080.36
Total Income 11,522.79 10,101.64
Profit before interest and depreciation 1186.02 (85.49)
Interest 39.73 159.96
Depreciation 229.09 227.22
Profit before Tax 917.20 (472.13)
Provision for -
Current Tax 251.39 -
- Deferred Tax 72.35 (157.57)
Fringe Benefit Tax - 0.43
Profit after Tax 593.46 (314.99)
Balance brought forward from
previous year (42.14) 272.85
Balance available for
appropriations 551.32 (42.14)
Preference Dividend 138.42 -
Income-tax on Preference Dividend 22.99 -
Balance carried forward to Balance Sheet 389.91 (42.14)
REVIEW OF OPERATIONS AND PERFORMANCE
Your Directors are pleased to inform that the Company has put up a
steliar performance with a record production of 20,847.91 MT of Ferro
Alloys products as against 17,216.18 MT in the previous year, an
increase of 21.09% and this exemplary performance was accomplished
inspite of the remnants of global meltdown lingering on in the economy
for part of the year and shut down of one of the furnaces for four
months for relining. Sales of Ferro Alloys have touched 23,751.54 MT
during the year as against 15,555.43 MT in the previous year, an
increase of 52.69%. The turnover for the year has increased to Rs
11522.79 lakh registering a growth of 14% over 2008-09. Your Company is
back on a healthy sign by registering a Net Profit of Rs.593.46 lakh
against a loss of Rs.314.99 lakhs in the previous year.
DIVIDEND
Your Directors recommend Dividend of 8% on Preference Shares. .
Keeping in view the need to conserve resources to plough back the same
in the business for further expansions, your Directors do not recommend
any dividend for the year on equity shares.
SHIFTING OF REGISTERED OFFICE
Effective from 30.11.2009, the Registered Office of the Company has
been shifted from No. 6-3-866/1/G2, Greenlands, Begumpet, Hyderabad -
500 016 to Ravivalasa Village - 532 212 Tekkali Manda!, Srikakulam
District, Andhra Pradesh.
MANAGEMENT DISCUSSION AND ANALYSIS
Industry Siructure and Development:
The High Carbon Ferro Ciirome (HCFC) is one of the major ingredients in
the manufacture of stainless steel. The consumption of HCFC is directly
proportional to the consumption of stainless steel. Hence the demand
and supply of HCFC is decided based on the prospects of stainless steel
industry. The global stainiess steel market which is estimated at 20
million tones, is expected to grow at a steady pace of 10% p.a However,
the onset of Global economic meltdown from mid 2008 has seen the demand
for stainiess steel plummetted by around 7% with its consequential
impact on the demand and prices of HCFC . The second half of the year
2009-10 witnessed signs of recovery with the prices of HCFC on the
ascending mode.
FUTURE OUTLOOK:
After a sluggish three years period, the Company expects the demand for
HCFC to grow at steady pace in line with the demand for stainless
steel. As stainiess steei is linked to life style development across
globally, the consumption is expected to constantly rise. The
consumption of stainless steel in China has gone up by 25%. Though
there is an intermittent fluctuations in the HCFC prices, it is
expected to stabilize as
the gloomy atmosphere surrounding the global economy is over. As the
global demand for stainless steel is expected to touch 25- 28 million
tones by 2012, it will throw open vast opportunities for HCFC
manufacturers.
OPPORTUNITIES AND THREATS
Domestic demand for Ferro Chrome stood at about 0.54 Million MT during
the year 2009-10. A continuous demand for stainless steel in the
international market will throw significant opportunities to this
business. However, expansion of projects by existing players who are
having both mines, power plants and established in other regions of the
country may lead to negative impact. The procurement of raw material
and the existing monopolistic pricing is always considered a threat to
this industry in addition to frequent changes in power tariff.
EXPORT AND IMPORTS
During the year under review, your Company made exports worth
Rs.3618.29 lakhs and not had made any direct imports.
INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY
The Company has put in place a well developed internal control system
and an internal Audit system commensurate with its size and activities.
The periodical reports are securitized by the management and placed
before the Audit Committee along with its reply. The weaknesses pointed
out in the reports have been rectified and the suggestions for
improvement were implemented in letter and spirit.
HUMAN RESOURCE DEVELOPMENT
Your Company has given a high degree of importance in developing the
human capital and its continual improvement. The Management focuses on
safe work practices and procedures at all times.
Initiatives such as rewards for suggestions, quality circles etc., have
been taken up to involve the employees and take innovative ideas to
solve day to day work related problems.
Industrial relations with the Union and the employees were good and
harmonious. Your Company has implemented all employee welfare schemes
as per the Company policy and wage agreement. As on March 31, 2010, the
number of employees on the rolls of the Company stood at 231.
CAUTIONARY STATEMENT
The Management discussion and analysis report containing your companys
objectives, projections, estimates and expectation may constitute
certain statement, which are forward looking within the meaning of
applicable laws and regulations. Your companys operation may inter
alia be affected by the supply and demand situations, input pil^c -^d
the availability, changes in the government regulations, tax laws and
other factors.
DIRECTORS
Mr B V N Rao, Mr N V Varadarajulu, Mr N C Sarabeswaran, Mr U
Nareshkumar and Mr Prem Kumar Amar have tendered their resignation
w.e.f. 17.12.2009 and ceased to be Directors.
Pursuant to Section 262 of the Companies Act, 1956 and Article No. 111
of the Articles of Association, Mr Rajiv Saxena, Mr Harjith D. Bubber,
S. Gajendran, Mr Prashant Boorugu and Mr K Mallikarjuna Rao were
appointed as Directors w.e.f. 17.12.2009 in the casual vacancies caused
by the aforesaid resignations. Mr. Rajiv Saxena, Mr. S. Gajendran and
Mr. K. Mallikarjuna Rao hold office upto September 24, 2011 and Mr.
Harjit D. Bubber holds office upto September 28, 2012. However, it is
proposed to appoint Mr. Rajiv Saxena, Mr. Harjit D. Bubber, Mr. S.
Gajendran, and Mr. K. Mallikarjuna Rao as Directors at the ensuing
Annual General Meeting. Notices have been received from a member,
pursuant to Section 257 of the Companies Act, 1956, together with the
prescribed deposit, proposing the appointments of Mr. Rajiv Saxena, Mr.
Harjit D. Bubber, Mr. S. Gajendran, and Mr. K. Mallikarjuna Rao as
Directors.
Mr Prashant Boorugu, Managing Director ceased to be Director and
Managing Director of the Company with effect from 25.02.2010 consequent
to his resignation.
In terms of Section 260 of the Companies Act, 1956, Mr A V L Narasimham
and Mrs Sarita Boorugu were appointed as Additional Directors on the
Board with effect from 25.02.2010 and 10.08.2010 respectively. They
hold office until the date of the ensuing Annual General Meeting.
Notices have been received from a member, pursuant to Section 257 of
the Companies Act, 1956, together with the prescribed deposit,
proposing the appointments of Mr. A.V. L. Narasimham and Mrs. Sarita
Boorugu as Directors at the ensuing annual general meeting.
Suitable resolutions are being separately proposed for their
appointments as Directors of the Company.
As the Board consists of Directors in casual vacancy and Additional
Directors, there is no director who is liable to retire by rotation
under Section 256(1) of the Companies Act, 1956 and consequently, no
subject relating to appointment of Directors in place of those retiring
is placed in the ordinary business of the notice of the ensuing Annual
General Meeting
Your Board of Directors place on record, its appreciation of the
services of all the outgoing Directors.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217[2AA] of the Companies Act, 1956 and on the
basis of explanation given by the Executives of the Company and also
subject to the disclosures in the Annual Accounts, your Directors
confirm as under:
i. That in the preparation of the annual accounts, the applicable
Accounting Standards have been followed along with proper explanations
relating to material departures.
ii. That the Directors had selected such accounting policies and
applied them consistently and made judgments and that 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 of the
Company for that period.
iii. That 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.
iv. That the Directors had prepared the annual accounts for the
financial year ended March 31, 2010 on a going concern basis.
SOCIAL RESPONSIBILITY
Your Company actively supports the corporate social responsibility in
the field of education, health, hygiene & sanitation, empowerment and
community development programmes in the areas surrounding the companys
project site. Your Company continues to make significant contribution
to promote sustainable livelihoods of people living in and around its
factory zones by providing educational support, technical assistance,
financial assistance, organizing medical camps, etc., Your Company also
provides hygiene drinking water to nearby village and facilitates,
medical aid in times of emergency.
FIXED DEPOSITS
During the year under review, your Company neither invited nor accepted
any fixed deposits from the public.
CORPORATE GOVERNANCE
Report on Corporate Governance and Certificate of Auditors of the
Company for the due compliance of code of Corporate Governance pursuant
to Clause 49 of the Listing Agreement are attached and form part of
this Report.
PERSONNEL RELATIONS
During the year under review, relationship with the employees continued
to remain cordial.
CONSERVATION OF ENERGY, TECHNICAL ABSORPTION, FOREIGN EXCHANGE EARNINGS
AND OUTGO.,
The information relating to Conservation of Energy, Technical
Absorption, Foreign Exchange earnings and outgo pursuant to Section
217(1)(e) of the Companies Act, 1956 read with Companies [Disclosure of
Particulars in the Report of the Board of Directors] Rules, 1988, is
given in the Annexure forming part of this report.
AUDITORS
The Auditors, M/s. Venkatadri & Co, Chartered Accountants, retire at
the conclusion of the ensuing Annual General Meeting and being
eligible, offer themselves for re-appointment. They have confirmed
their willingness to act as Auditors of the Company for the financial
year 2010- 11 and confirmed that their re-appointment, if made, would
be within prescribed limits under Section 224 (1B) of the Companies
Act, 1956.
PARTICULARS OF EMPLOYEES
The Information required under Section 217 [2A] of the Companies Act,
1956, read with Companies (Particulars of Employees) Rules, 1975, is
given in Annexure forming part of this report.
ACKNOWLEDGEMENT
Your Directors acknowledge and express their grateful appreciation for
the co-operation and assistance received from Banks, Government
Authorities, Customers and Suppliers.
Your Directors wish to place on record their appreciation for the total
commitment shown by each and every employee of the Company.
Your Directors also thank the shareholders for the confidence reposed
by them in the management of the Company and for their continued
support and co-operation.
On behalf of the Board of Directors
Bangalore S Gajendran
August 10, 2010 Chairman of the Meeting