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Directors Report of Prakash Industries Ltd.

Mar 31, 2015

Dear Shareholders,

The Directors present the 34th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2015.

FINANCIAL RESULTS

(Rs.in Crores)

For the year ended For the year ended 31st March, 2015 31st March, 2014

Net Sales & Other Income 2844.13 2,600.14

EBIDTA 417.62 379.18

Depreciation 95.79 115.06

Financial Expenses 60.73 57.83

Expenses Amortised 2.70 2.70

Profit before exceptional item and tax 258.40 203.59

Exceptional Item 249.06 -

Provision for Taxes - 32.42

Excess Tax Provision for Earlier

Years Written Back - 1.99

Profit after tax 9.34 173.16

Balance brought forward 23.71 16.29

33.05 189.45

Transfer to General Reserve - 150.00

Proposed Dividend - 13.45

Tax on Dividend - 2.29

Depreciation on transition to schedule II of the Companies Act, 2013 20.69 -

Carried over to next year 12.36 23.71

PERFORMANCE

During the year under review, the net sales revenue of the Company was Rs. 2844 crores as against Rs. 2600 crores in the previous year. The operating EBITDA for the year increased to Rs. 418 crores from Rs. 379 crores in the previous year indicating a growth of 10%. After providing for financial expenses, depreciation and expenses amortised, the Profit before exceptional item and tax was Rs. 258 crores during the year under review as against Rs. 204 crores in the previous year.

OPERATIONAL REVIEW

Your Directors are pleased to inform you that the performance of the Company has achieved all round growth during the year. The entire chain of integrated steel operations performed satisfactory and the Sponge Iron, Power, Steel melting shop and Ferro Alloys Division achieved highest ever capacity utilisation. Encouraged with the performance of the Ferro Alloys division, the Company further added new capacities in the division during the year. Also, during the year, the Company modernized its Steel Melting Shop by replacing some of the existing furnaces with more energy efficient furnaces, which has resulted in substantial cost savings and higher efficiency.

In the finished steel segment, the Company continued with its concerted efforts to expand its customer base by taking steps to enhance the awareness and accessibility of the products. Availability of iron ore has improved significantly during the year leading to correction in the iron ore prices, which resulted in substantial cost reduction in the operations. The operations of Captive coal mine were stable with uninterrupted production during the year, however, in terms of the order dated 24th September, 2014 passed by the Hon'ble Supreme Court cancelling the allotment of all captive coal mines allotted since 1993 and putting them under the auction route, the Chotia Coal Mine of the Company , which was operational for past more than eight years, was also cancelled . Rigid PVC Pipes division also performed satisfactory during the year.

FUTURE PROSPECTS

The Company has always focused on its approach to achieve full integration at all intermediary product levels throughout its chain of steel operations by augmenting and balancing its existing capacities. The Company has already taken up the implementation of an additional sponge iron Kiln, which is underway. The Company is modernizing further its steel melting shop by replacing some of the existing furnaces with higher capacity energy efficient furnaces. Modernisation of existing furnaces and addition of new furnaces is also underway in the Ferro Alloys Division. In addition, the company is also setting up Private Railway Siding at its Champa plant, which shall result in significant savings to the company in terms of freight cost, reduction in wastages and maintaining uninterrupted supplies of critical inputs like iron ore and coal. These expansion and cost reduction plans will make significant contribution to the profitability and long term sustainability of the business. Although, the Chotia coal mine was cancelled during the year in terms of the order of the Hon'ble Supreme Court, the Company is of the view that the improved availability of coal and softening of its prices worldwide shall make up for the loss to a reasonable extent in the times to come. With a stable and forward looking government, the infrastructure industry is expected to receive major spending in the coming years, which will lead to substantial boost for demand of steel products. As regards the status of the iron ore mines allotted to the Company in the states of Chhattisgarh and Orissa, the Company is making all its efforts to make these mines operational at the earliest.

ENVIRONMENT AND SOCIAL RESPONSIBILITY

The Company continues to focus on its approach to be exemplary, not only in terms of financial performance, but also by setting rich corporate social responsibility standards for itself. Your Company understands that all organizations operate in social environment and Corporate Social Responsibility (CSR) is the mode through which corporates can repay the obligations which the society has made by contributing the resources in its various forms as required for the efficient operation of the Business. We believe that organizations should make decisions based not only on financial factors, but also on the social and environmental consequences.

The Company strictly adheres to its policy to minimize the environmental impact that may be associated with any of its activities. The Company continuously aims at improving efficiency conserving natural resources and reducing waste and emissions by undertaking CDM (Clean Development Mechanism) projects and to evolve itself into an environment friendly organisation. Company has its Corporate Environment Policy to regulate environmental activities and an Environment Management System (EMS) to ensure optimal utilisation of the resources on one hand and minimising pollution on the other.

The Company is a firm believer that the growth and development of the community in and around its locations is prerequisite for its progress. The Company has adopted villages in the surrounding areas and it grants regular assistance to the educational and social institutions in these villages for the economic upliftment of the locals.

The Company also organizes non-formal educational programs in the surrounding areas on a regular basis. Company is continually involved in developing recreational and infrastructure facilities in its close vicinity.

CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE COMMITTEE

During the year, your directors have constituted the Corporate Social Responsibility and Governance Committee (CSR & G Committee) comprising Dr. S. L. Keswani, as Chairman and Shri K C Mehra, Shri Kanha Agarwal, Smt Purnima Gupta and Shri Vikram Agarwal as other members. The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.

The details of CSR activities during the year are given in the annexure to this report.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors (including non executive and independent Directors) individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and other Committees. The Independent Directors are regularly updated on industry and market trends, plant and process and operational performance of the Company through presentations in this regard. They are also periodically kept aware of the latest developments in the Corporate Governance, their duties as Directors and relevant laws.

DIRECTORS

The Company has received declarations from all the Independent Directors under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing agreement confirming that they meet the criteria of independence as prescribed. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

During the year Shri Pankaj Chaturvedi and Smt. Purnima Gupta joined the Board as Independent Directors and Shri Kanha Agarwal as Director of the Company w.e.f. 25 May, 2014. The members approved appointments of said Directors of the Company at the 33rd Annual General Meeting held on 24th September, 2014.

The following three persons are the Key Managerial Personnel of the Company as per the provisions of Section 203 of the Companies Act, 2013.

i) Shri M.L. Pareek, Chief Executive Officer

ii) Shri P.L. Gupta, Chief Financial Officer

iii) Shri Manoj Aggarwal, Company Secretary

Pursuant to Section 134(3)(q) read with Rule 5 of Companies (appointment and Remuneration of Managerial Personnel) Rules 2014, the Remuneration and other details of Key Managerial Personnel and other Employees for the year ended 31st March, 2015 are annexed to this report.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Shri M.L. Pareek retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment.

BOARD COMMITTEES

All Committees of the Board of Directors are constituted and rechristened, wherever needed, in line with the provisions of the Companies Act, 2013 and Clause 49 of the amended Listing Agreement with the Stock Exchanges.

FIXED DEPOSITS

Company has not accepted any deposits during the year under review.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

b) 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 March 31, 2015 and of the profit of the Company for the year ended on that date;

c) 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;

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

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

f ) 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

AUDITORS & AUDITORS REPORTS

i) Statutory Auditors

The observations made by the Statutory Auditors in their report for the financial year ended 31st March 2015 read with the explanatory notes therein are self- explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. The Auditors' Report does not contain any qualification, reservation or adverse remark.

M/s Chaturvedi and Partners, Chartered Accountants, were appointed as Auditors of the Company for tenure of three years i.e. from the conclusion of 33rd Annual General Meeting till the conclusion of the 36th Annual General Meeting to be held in the year 2017 of the Company. However, this appointment is subject to ratification by members at every Annual General Meeting held after appointment during their tenure of office. The Auditors have confirmed their eligibility and qualification under Section 141 of Companies Act 2013 and therefore, their ratification for appointment as Statutory Auditors for the year 2015-16 is being sought from the Members of the Company at the ensuing Annual General Meeting.

ii) Secretarial Auditor

The Board had appointed Ms. Reetika Gupta, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith as annexure to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

iii) Cost Auditor

The Board had appointed, subject to ratification of the remuneration payable to the cost auditor by the shareholders in the 33rd Annual General Meeting, M/s. Rashit & Associates Cost and Management Accountants, to conduct the audit of the cost accounting records for financial year 2014-15. The Cost Audit Report for financial year 2013-2014 for audit of Cost accounting records has been duly filed with the Ministry of Corporate Affairs.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial Statements

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on arms' length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of Company at large. All related party transactions are placed before the Audit Committee and given in the notes annexed to and forming part of this Financial Statement. The approved policy on related party transactions is also available on the website of the Company www.prakash.com.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY The Company has a Vigil Mechanism and Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism and Whistle Blower Policy are available on the website of the Company.

REMUNERATION POLICY

On the recommendation of Nomination & Remuneration Committee, the Board has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The details of the Remuneration Policy are available on the website of the Company.

RISK MANAGEMENT

As a policy the Company has identified key risk concern/areas. The assessment of each risk area has been done on quarterly basis. Following are the concern areas of the Company:

Market Related Risk: related to mainly demand, realisation and redundancy of the product.

Production related Risk: related to mainly availability of inputs, accident or break down in the plant and rejection of material by the customers.

Human Resources Risk includes the risk of labour unrest, high employee turnover ratio and lower productivity due to dissatisfaction of employees.

Revenue Risk: adverse exchange rate movement.

The Board and the Audit Committee takes note of the Risk management of the Company in every quarter.

The Risk Assessment is also discussed in the Management Discussion and Analysis attached to this report.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013. Extract of the Annual Return for the financial year ended 31st March, 2015 made under the provisions of Section 92(3) of the Act is attached as annexure to this report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Annual Report.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as annexure to this Report.

Your Directors state that during the year under review, there was no case filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 134 of the Companies Act, 2013 read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988, a statement showing the information relating to the Conservation of Energy, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo is enclosed as annexure to this report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally.

The Report on corporate governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Clause 49, is attached to the Report on corporate governance.

APPRECIATION

Your Directors wish to place on record their gratitude for the valuable guidance and support rendered by the Government of India, various State Government departments, Financial Institutions, Banks and various stakeholders, such as, shareholders, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Company's success. The Directors look forward to their continued support in future.

By Order of the Board

Place : New Delhi P. L.Gupta Vikram Agarwal

Dated : 25th May, 2015 Whole-time Director Managing Director




Mar 31, 2014

Dear Shareholders,

The Directors present the 33rd Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2014.

FINANCIAL RESULTS (Rs. in Crores) For the year ended For the year ended 31st March, 2014 31st March, 2013

Net Sales & Other Income 2,600.14 2,513.37 EBIDTA 379.18 328.68 Depreciation 115.06 103.67 Financial Expenses 57.83 55.33 Expenses Amortised 2.70 2.70

Profit before tax 203.59 166.98

Provision for Taxes 32.42 2.09 Excess Tax Provision for Earlier Years Written Back 1.99 - Profit after tax 173.16 164.89 Balance brought forward 16.29 17.14

189.45 182.03

Transfer to General Reserve 150.00 150.00 Proposed Dividend 13.45 13.45 Tax on Dividend 2.29 2.29 Carried over to next year 23.71 16.29

PERFORMANCE

During the year under review, the Company has achieved net sales revenue of Rs. 2,600 crores as against Rs. 2,513 crores in the previous year. The operating EBITDA for the year stood at Rs 379 crores as compared to Rs. 329 crores of previous year showing a growth of 15%. After providing for interest, depreciation and tax, the net profit of the Company stands at Rs. 173 crores during the year under review.

DIVIDEND

The Board has recommended dividend of 10% i.e. Rs. 1 per equity share on 13,44,88,514 equity shares of Rs 10 each of the Company for the year ended 31st March, 2014, subject to the approval of the Members at the ensuing Annual General Meeting.

OPERATIONAL REVIEW

Your Directors have pleasure in informing you that the performance of the integrated steel plant of the Company was satisfactory during the year with improved production volumes, turnover and profitability. Capacity additions were successfully implemented in the Ferro Alloys division and the Steel Melting Shop and these divisions have clocked record production levels during the year. This has contributed significantly both to the top-line and bottom-line and resulted in optimum utilization of power capacities. In the finished steel segment, particularly, in Wire Rods and TMT bars, the company has taken various steps to expand the distribution channel network to enhance the reach and visibility of the products. This has helped the company in achieving optimum level of production and capacity utilization in this segment. Correction in iron ore prices along with improved availability towards the later part of the year has made a visible impact towards cost reduction and improvement in the margins.

The operations of captive coal mine were stable with uninterrupted production. Rigid PVC Pipes division also performed satisfactory during the year. The company continues to focus on its commitment towards quality which has enabled it to create a niche in the market for its products.

FUTURE PROSPECTS

The long term vision of the company continues to grow both in steel and power businesses. In this direction the company has taken various initiatives towards further enhancement and balancing of capacities so as to reach the next level of integration. Towards this end, setting up of an additional sponge iron Kiln is underway and is expected to be commissioned by the end of this financial year. The company has also taken steps to expand capacity of its steel melting shop by setting up new furnaces and also replace some of the existing furnaces with higher capacity energy efficient furnaces. Ferro Alloys capacity is also being augmented further by adding new furnaces and introduction of new value added products. In order to meet the additional requirement of power, arising therefrom, the company proposes to take up implementation of the next phase of captive power plant towards the later part of the current financial year. As regards the captive iron ore mines allotted to the Company in the states of Chhattisgarh and Orissa, it is making all efforts to open the mines at the earliest, subsequent to which the Company shall not only become completely self reliant but also get insulated against any vagaries of the market.

The execution of the above expansion plans including the opening of the iron ore mines, together with the capacity additions already made by the Company during the year, shall contribute significantly to the Company’s turnover, profitability and operating margins and take the company to next level of operations with improved profitability and long term sustainability of the business.

ENVIRONMENT AND SOCIAL RESPONSIBILITY

As a part of its commitment to being a good corporate citizen and a community member, the company is committed to a strong set of environmental principles. The company has a policy to minimize the environmental impact that may be associated with any of its activities. The company constantly works with its clients, contractors and suppliers to improve efficiency, conserve natural resources and reduce waste and emissions. While the company continually works for the creation of new technologies that will reduce the impact on the environment and reliance on non- renewable natural resources, its projects are designed to meet global current environmental standards. Company has established a Corporate Environment Policy to regulate environmental activities and an Environment Management System (EMS) to ensure prevention of pollution and conservation of energy and natural resources.

The Company believes that good governance requires adherence to social responsibility aimed at creating value in the larger interest of the general public in and around its locations in the areas of health, education and welfare. The company conducts non-formal education programs in the areas around the plants. The company assists the local schools in the area by constructing class rooms, funding libraries, supplying science apparatus, computers and sports kits. Company organizes weekly health camps for conducting health checkups, detecting cancer, eye care, family planning and spreading awareness for AIDS. Company has installed deep water tube wells, rain water harvesting wells in the villages to meet the shortage of water in the nearby villages. Company has also developed recreational and infrastructure facilities in the surrounding areas by renovating public spaces, temples, recreational parks, roads, shelter sheds and markets.

CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE COMMITTEE

During the year, your directors have constituted the Corporate Social Responsibility and Governance Committee (CSR&G Committee) comprising Dr. S. L. Keswani, as Chairman and Shri K C Mehra, Shri Kanha Agarwal, Smt Purnima Gupta and Shri Vikram Agarwal as other members. The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.

DIRECTORS

In accordance with the provisions of section 152 of the Companies Act, 2013, Shri P.L. Gupta is liable to retire by rotation at the ensuing Annual General Meeting. Being eligible for re-appointment, he offers himself for re-appointment.

Pursuant to the provisions of section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, Shri Y.N. Chugh and Shri M.R. Agarwal were appointed as additional Directors designated as Independent Directors w.e.f. 14th November, 2013 and Shri Pankaj Chaturvedi and Smt. Purnima Gupta were appointed as additional Directors designated as Independent Directors not liable to retire by rotation and Shri Kanha Agarwal was appointed as additional Director designated as a Director laible to retire by rotation w.e.f. 28th May, 2014 by the Board of Directors and hold office upto the date of the ensuing Annual General Meeting.

In terms of the Articles of Association of the Company, Shri K. C. Mehra and Dr. S. L. Keswani, Directors retire at the ensuing Annual General Meeting. The Company has received requisite notices in writing from members proposing Shri K. C. Mehra and Dr. S. L. Keswani for appointment as Independent Directors to hold office for next 5 (Five) consecutive years.

Notice in terms of Section 160 of the Companies Act, 2013 have been received from members proposing their names to be Directors of the Company.

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

Their appointment as Directors is to be approved by the members in the ensuing Annual General Meeting. Dr. Ram K. Vepa, Shri Manish Bahl, Shri Piyoosh Goyal and Shri Vipul Agarwal have resigned from the Board during the year.

FIXED DEPOSITS

Company has not accepted any deposits during the year under review.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

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

ii) That the Directors have selected such accounting policies and applied them consistently and made judgements 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 or loss of the Company for the year under review;

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

iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2014 on a Rs.going concernRs. basis.

AUDITORS

M/s Chaturvedi and Partners, Auditors of the Company, retire at the forthcoming Annual General Meeting, and being eligible, offer themselves for reappointment. The Company has received a certificate from the Auditors to the effect that their re-appointment, if made, would be within the limit prescribed under Section 224 (1B) of the Companies Act, 1956. Your Directors recommend their re-appointment as Auditors of the Company.

COST AUDITORS

M/s Rakshit & Associates were appointed as Cost Auditors for auditing the Cost Accounts of the Company for the financial year 2013-14.

The Cost Audit reports are required to be filed within 180 days from the end of financial year. The Cost Audit reports for the financial year ended 31st March, 2014 will be filed in due course.

In terms of the Companies (Cost Audit Report) Rules 2011, as amended, the cost audit report for the financial year ended 31st March, 2013 has been duly filed with the cost audit branch of the Ministry of Corporate Affairs. In terms of the Companies (Cost Accounting Records) Rules 2011, as amended, the Compliance Report for the financial year ended 31st March, 2013 as applicable has been duly filed.

AUDITORS'' OBSERVATIONS

As regards Auditors'' observations in their Report, the relevant Notes on the Accounts are self-explanatory.

SECRETARIAL AUDIT REPORT

As a measure of good corporate governance practice, the Board of Directors of the Company appointed Ms Reetika Gupta, Practising Company Secretary, to conduct the Secretarial Audit. The Secretarial Audit Report for the financial year ended March 31, 2014, is provided in the Annual Report.

The Secretarial Audit Report confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956 and 98 sections of the Companies Act, 2013 notified vide Ministry of Corporate Affairs Gazette Notification No. S.O. 2754(E) dated 12th September, 2013, the Securities Contracts (Regulation) Act, 1956, Depositories Act, 1996, the Foreign Exchange Management Act, 1999 to the extent applicable to Foreign Currency Convertible Bonds (FCCBs), all the Regulations and Guidelines of SEBI as applicable to the Company, including the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, the Securities and Listing Agreements with the Stock Exchanges and the Memorandum and Articles of Association of the Company.

PARTICULARS OF EMPLOYEES

As required by 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 employees are set out in the annexure Rs.ARs. to the DirectorsRs. report.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under 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, a statement showing the information relating to the Conservation of Energy, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo is enclosed as annexure Rs.BRs. to this report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally.

The Report on corporate governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Clause 49, is attached to the Report on corporate governance.

ACKNOWLEDGEMENT

Your Directors wish to place on record their gratitude for the valuable guidance and support rendered by the Government of India, various State Government departments, Financial Institutions, Banks and various stakeholders, such as, shareholders, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the CompanyRs.s success. The Directors look forward to their continued support in future.

By Order of the Board

Place : New Delhi P. L. Gupta Vikram Agarwal Dated : 28th May, 2014 Whole-time Director Managing Director


Mar 31, 2013

Dear Shareholders,

The Directors present the 32nd Annual Report together with tte Audited Statement of Accounts of the Company for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs.in Crores)

For the year ended For the year ended 31st March, 2013 31st March, 2012

Net Sales & Other Income 2,513.37 2,109.39

EBIDTA 32.68 368.14

Depreciation 103.67 75.55

Financial Expenses 55.33 13.86

Expenses Amortised 2.70 2.70

Profit before tax 16658 276.03

Provision for Taxes 2.09 7.87

Profit after tax 164.89 268.16

Balance brought forward 17.14 14.61

182.03 282.77

Transfer to General Reserve 15000 250.00

Proposed Dividend 13.45 13.45

Tax on Dividend 2.29 2.18

Carried over to next year 1629 17.14

PERFORMANCE

During the year under review, the Company has achieved net sales revenue of Rs. 2,513 crores as against Rs. 2,109 crores in the previous year. After providing for interest, depreciation and tax, the net profit of the Company stands at Rs. 165 crores during the year under review as against Rs. 268 crores of previous year.

DIVIDEND

The Board has recommended dividend of 10% i.e. Rs. 1 per equity share on 13,44,88,514 equity shares of Rs. 10 each of the Company for the year ended 31st March, 2013, subject to the approval of the Members at the ensuing Annual General Meeting.

OPERATIONAL REVIEW

Your Directors have pleasure in informing you that despite general slowdown in the economic conditions worldwide, the financial performance of the Company during the year has been reasonably satisfactory and stable. The operating margins were affected due to disruption in the supplies of Iron Ore from Odisha on account of restrictions imposed by the government and temporary closure of many mines. The Company had to source iron Ore of poor quality at higher prices, however since the begining of the current year the situation has gradually improved and is expected to become normal in near future. Both in the steel and power segments, the Company has achieved overall volume growth in production across the divisions'', which has resulted in Company achieving highest ever production levels and substantial growth in turnover. Further, the power . generation capacities commissioned during the last financial year, stabilized during the year and have been operating successfully. The additional Sponge Iron Kiln, which was set up in the later part of the last financial year, contributed significantly towards cost reduction and integration of capacities. During the later part of the year, the Company has successfully expanded its Ferro Alloys capacity by setting up additional furnaces, which shall result in optimum utilization of surplus power capacities. Captive coal mining operations have been satisfactory. Rigid PVC Pipes has registered impressive performance and has achieved record production during fte year. The Company''s continuous commitment towards quality has enabled it to create a niche in the market for its products.

FUTURE PROSPECTS

The Company is further expanding its Sponge Iron capacity by setting up an additional module, which is expected to be commissioned by the end of this financial year. The Company continues its efforts to completely integrate its operations and in this direction, additional capacities in Steel making and Power generation with Ferro Alloys are under implementation which will cater to the requirements of the finished Steel segment comprising of Wire Rod, TMT Bars and Structural resulting in optimum utilisation of the capacities for these products.

The Company has been allotted iron ore mines in the states of Chhattisgarh and Odisha, which are expected to be operational towards the end of the current financial year. Subsequent to the mines becoming operational, theself reliant quotient of the Company shall reach the optimal level, making the Company fully integrated.

In view of the expanded operations and improved supply situation of Iron Cre and Coal, both in terms of availability and pricing, performance of this year is expected to be much better.

ENVIRONMENT AND SOCIAL RESPONSIBILITY

Company believes that ft should not act as an isolated economic entity, rather as a part of the broader society As a responsible corporate citizen, our company makes all concerted efforts to protect the environment and also endeavours to act to the benefit of the society at large. Company ensures that it does not engage in any rjuanessadwhk^rx>seanydirectthreattotheen™m has established a Corporate Environment Policy to regulate environmental activities and through its Environment Management System (EMS), it ensures prevention of pollution, conservation of energy and natural resourosand recycling rfwaste products.

Company''s business initiatives contribute to the society and environment in such a way that it is a win-win situation for both the society and the company. Company has taken effective steps towards spreading education in the nearby villages through non- formal educatkmprogrammes, developing of engineering institution and assisting the schools by constructing class rooms, funding libraries, supplying science apparatus, computers and sports kits. Company organizes weekly health camps for conducting health checkups, detecting cancer, eye care, family planning and spreading awareness for AIDS. Company also provides financial assistance to the weaker section for undergoing major surgeries and distributes Tri Cycles, and wheel chairs to the disabled persons. Company has adopted a twofold strategy to counteract the shortage of water in its vicinity by installing deep water tube wells, rain water harvesting weljs in the villages and imparting training to the vfflagers to maintain these lube w^Rswhich will ensure perennial availability of potable water. Company also believes that its presence should add to the physical beauty of its surroundings. In this direction, Company has renovated public spaces, bathing ghats, temptes.Tecreational parks, roads.shettershedsandmarketsinthevillagesadjacerittotheplaiit.

DIRECTORS

In accordance with the provisions of section 256 of the Companies Act, 1956, Dr. Ram K. Vepa, Shri Manish Bahl and Shri Vipul Agarwal are liable to retire by rotation at the ensuing Annual General Meeting. Being eligible for reappointment, they offer themsetoes for re-appointment

FIXED DEPOSITS

Company has not accepted any deposits during the year under review.

DIRECTORS''RESPONSIBILITY STATEMENT

Pursuant to the requtenent under Section 217<2AA) of the Companies Act, 1956 with respect to Director''s Responsibility Staternent, it is hereby amfirrned:

i). That in the preparation of the annual accounts for the financial year ended 31" March, 2013, the applicable accounting standards havp been followed along with proper explanation relating to material departures;

ii) That the Directors have selected such accenting policies are) applied them consistentlyand made judgements and estimates that were reasonable and

1 prudent so as to give a true arid fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

if) That the Directors have taken proper and siifSciert rare for the maWenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding .he assets of the Company and for preventing and detecting fraud and other irregularities;

iv) That theDiectors have r/epar^trBacrourrts for the finance 31" March, 2013 on a ''going concern'' basis.

AUDITORS

M/s Chaturvedi and Partners, Auditors of the Company, retire at the forthcoming Annual General Meeting, and being eligible, offer themselves for reappointment. The Company has received a certificate from the Auditors to the effect that their reappointment, if made, would be within the timrt prescribed under Section 224 (IB) of the Companies Act, 1956. Your Directors recommend their re-appointment as Auditors of the Company.

COST AUDITORS

M/s Rakshit & Associates were appointed as Cost Auditors for auditing the Cost Accounts of the Company for the financial year 2012-13.

The Cost Audit reports are required to be filed within 18Q days from the end of financial year. The Cost Audit reports for fte financial year ended 31" March, 2013 win be filed fn due course.

In terms of the Companies (Cost Audit Report) Rules 2011, as amended, the cost audit report for the financial year ended March 31,2012 had been duty filed with the cost audit branch'' of the Ministry of Corporate Affairs. In terms of the Companies (Cost Accounting Records) Rules 2011, as amended, the CompBance Report for the financial year March 31,2012 as applicable had been dulyfited.

AUDITORS''OBSERVATIONS

As regards Auditors'' observations in their Report, the relevant Notes on the Accounts are self-explanatory.

PARTICULARS OF EMPLOYEES

As required by 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 employees are set out in the annexure ''A'' to the Directors''report.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of the Board of Qrectors) Rules, 1988, a statement showing the information relating to the Conservation of Energy, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo is enclosed as annexure ''B'' to this report.

CORPORATE GOVERNANCE

The significance of Corporate Governance has always been recognized by the Company, A separate report on Corporate Governance and Management Discussion and Analysis afongwrth a certificate from the Practising Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement of Stock Exchanges is attached and forms part of this Report.

ACKNOWLEDGEMENT

Your Directors take this opportunity to offer their sincere thanks to shareholders, various departments of Central and State Governments, Financial Institutions, Banks, Customers and Suppliers for their continued support and look forward to having the same support in all our future endeavours.

Your Directors place On record their sincere appreciation of toe dedicated and signrncant corrtritxitior) made^by offiGc»s, staff and wofkerscf lh<» Company at all levels and look forward to their continued support

By Order of the Board

Place: New Delhi Vikram Agarwal

Dated: 22nd May, 2013 Managing Director


Mar 31, 2012

The Directors present the 31 st Annual Report togethert with the Audited Statement of Accounts of the Company for the year ended 31 st March, 2012.

FINANCIAL RESULTS

(Rs. in Crores)

For the year ended For the year ended 31 st March, 2012 31 st March, 2011

Net Sales & Other Income 2,109.39 1,672.83

EBIDTA 368.14 349.25

Depreciation 75.56 67.26

Financial Expenses 13.86 5.69

Expenses Amortised 2.69 2.69

Profit before tax 276.03 273.61

Provision for Taxes 7.87 6.53

Profit after tax 268.16 267.08

Balance brought forward 14.61 13.16

282.77 280.24

Transfer to General Reserve 250.00 250.00

Proposed Dividend 13.45 13.45

Tax on Dividend 2.18 2.18

Carried over to next year 17.14 14.61

PERFORMANCE

During the year under review, the Company has achieved net sales revenue of Rs. 2,109 crores as against Rs. 1,673 crores in the previous year. After providing for interest, depreciation and tax, the net profit of the Company stands at Rs. 268 crores during the year under review.

DIVIDEND

The Board has recommended dividend of 10% i.e. Rs. 1 per equity share on 13,44,88,514 equity shares of Rs. 10 each of the Company for the year ended 31st March, 2012, subject to the approval of the Members at the ensuing Annual General Meeting.

OPERATIONAL REVIEW

Your Directors are pleased to inform you that the performance in all segments of the integrated steel plant of the Company has been quite satisfactory. During the year the Company has successfully commissioned a Sponge Iron kiln which has resulted in further integration of capacities and substantial cost reduction. Further the Company has made additions in its power generation capacities also. These capacity additions have helped the Company achieve highest ever production in the Sponge Iron and Power segments. In the steel segment the turnover has registered impressive growth resulting from stable demand and much higher realisation. Captive coal mining operations and production have been as per the targets. Rigid PVC Pipes has improved upon the performance and has achieved highest ever production during the year. The Company's products are strongly placed in the market due to their superior quality which gives them a distinct edge over competitors.

FUTURE PROSPECTS

The Company has undertaken further expansion in its Sponge Iron capacity and is setting up an additional module. In addition, the Company has also taken up expansion in its Steel Billet and Ferro Alloys capacity to reach the next level of integration and to captively utilise the surplus power generation arising out of the new capacity set up in this year.

The Company is in the midst of a major expansion the Power Generation capacity and is implementing a total capacity of 625 MW in a phased manner. The first phase of 100 MW has been commissioned towards the end of the last fiscal year and the balance capacity shall be taken in a phased manner in due course of time.

The Company is planning to further improve upon the capacity utilization in the TMT division of the Company in the current financial year. The iron ore mines allotted to the Company are under advanced stages of clearances with the Government departments. With the mines becoming operational, the Company shall be fully self reliant in terms of raw material requirement. All these steps are expected to give further boost to the profitability of the Company in the coming year.

ENVIRONMENT AND SOCIAL RESPONSIBILITY

Company firmly believes that it should behave as a good corporate citizen, by recognizing its responsibility towards the society and the environment. It respects the expectations of the society and attempts to provide maximum contribution to the society while making profit. It recognises the importance of minimising the impact its business has on the environment and works hard to implement policies and procedures which have both immediate and long term positive effects on our environment.

As a responsible corporate citizen, the Company has taken effective measures in the areas of waste management, effective resource utilisation, pollution control and also initiated several waste reduction mechanisms. The plant has also implemented de-dusting system, fume extraction system, fog systems, electrostatic precipitators and coal dust injection system in its integrated steel plant to minimize pollution. The Company has developed thick green belts inside and around the plant for maintaining the ecological balance and to provide green and clean environment to its employees.

As a responsibility towards the society, the company is continually involved in various social efforts and initiatives for upliftment of the people in the areas around the plant like organising health camps, free medical aids, maintaining temples and recreational facilities, providing aid to educational institutions and adopting villages.

DIRECTORS

In accordance with the provisions of section 256 of the Companies Act, 1956, Shri Vikram Agarwal, Dr. S.L. Keswani and Shri K.C. Mehra are liable to retire by rotation at the ensuing Annual General Meeting. Being eligible for re-appointment, they offer themselves for re-appointment.

Shri P.L. Gupta and Shri M.L. Pareek were appointed as additional Directors designated as Whole-time Directors of the Company w.e.f. 7th November, 2011 and 4th August 2012 respectively by the Board of Directors and hold office upto the date of the ensuing Annual General Meeting. Notices in terms of Section 257 of the Companies Act, 1956 have been received from two members proposing their names to be Directors of the Company. Their appointment as Directors is to be approved by the members in the ensuing Annual General Meeting. Shri G.L. Mohta, Whole time Director, has resigned from the Board w.e.f. 25th July, 2012.

Shri V.P. Agarwal, Chairman and Managing Director has been redesignated as Chairman of the Company and Shri Vikram Agarwal, Joint Managing Director has been redesignated as Managing Director w.e.f. 29th May 2012. The terms of appointment of Shri Vikram Agarwal is also expiring and he is being re-appointed.

Appropriate resolutions for the re-appointment / appointment of the aforesaid Directors which the Board recommends are being moved at the ensuing Annual General Meeting for your approval.

FIXED DEPOSITS

Company has not accepted any deposits during the year under review.

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

ii) That the Directors have selected such accounting policies and applied them consistently and made judgements 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 or loss of the Company for the year under review;

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

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

AUDITORS

M/s Chaturvedi and Partners, Auditors of the Company, retire at the forthcoming Annual General Meeting, and being eligible, offer themselves for reappointment. The Company has received a certificate from the Auditors to the effect that their re-appointment, if made, would be within the limit prescribed under Section 224 (1B) of the Companies Act, 1956. Your Directors recommend their re-appointment as Auditors of the Company.

COST AUDITORS

M/s N.K. Jain and Associates were appointed as Cost Auditors for auditing the Cost Accounts of the Company for the financial year 2011-12.

The Cost Audit reports are required to be filed within 180 days from the end of financial year. The Cost Audit reports for the financial year ended 31st March, 2012 will be filed in due course.

AUDITORS' OBSERVATIONS

As regards Auditors' observations in their Report, the relevant Notes on the Accounts are self-explanatory.

PARTICULARS OF EMPLOYEES

As required by 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 employees are set out in the annexure 'A' to the Directors' report.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under 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, a statement showing the information relating to the Conservation of Energy, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo is enclosed as annexure 'B' to this report.

CORPORATE GOVERNANCE

The significance of Corporate Governance has always been recognized by the Company. A separate report on Corporate Governance and Management Discussion and Analysis alongwith a certificate from the Practising Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement of Stock Exchanges is attached and forms part of this Report.

ACKNOWLEDGEMENT

Your Directors take this opportunity to offer their sincere thanks to shareholders, various departments of Central and State Governments, Financial Institutions, Banks, Customers and Suppliers for their continued support and look forward to having the same support in all our future endeavours.

Your Directors place on record their sincere appreciation of the dedicated and significant contribution made by officers, staff and workers of the Company at all levels and look forward to their continued support.

By Order of the Board

Place : New Delhi V. P. Agarwal

Dated : 4 th August, 2012 Chairman


Mar 31, 2011

Dear Shareholders,

The Directors present the 30 th Annual Report togethert with the Audited Statement of Accounts of the Company for the year ended 31 st March, 2011.

FINANCIAL RESULTS

(Rs. in Crores) For the year ended For the year ended 31 st March, 2011 31 st March, 2010

Net Sales & Other Income 1,672.82 1,570.70

EBIDTA 349.26 360.15

Depreciation 67.25 56.79

Financial Expenses 5.70 25.49

Expenses Amortised 2.70 2.69

273.61 275.18

Liabilities written back - 21.38

Exceptional items - (23.31)

Profit before tax 273.61 273.25

Provision for Taxes 6.53 7.09

Profit after tax 267.08 266.16

Balance brought forward 13.16 7.00

280.24 273.16

Transfer to General Reserve 250.00 260.00

Proposed Dividend 13.45 -

Tax on Dividend 2.18 -

Carried over to next year 14.61 13.16

PERFORMANCE

During the year under review, the Company has achieved net revenue of Rs. 1,673 crores as against Rs.1,571 crores in the previous year. After providing for interest, depreciation and tax, the net profit of the Company stands at Rs. 267 crores during the year under review as against Rs. 266 crores in the previous year.

OPERATIONAL REVIEW

Your Directors have pleasure to inform you that during the year under review the performance of the Integrated Steel Plant of the Company with capacities for Sponge Iron, Steel Melting, Ferro Alloys and Power Generation has been satisfactory. The Sponge iron production has registered an impressive growth largely due to capacity expansion which was completed in the later part of the previous financial year

The Wire Rod Division of the Company has continued to give impressive performance primarily due to strong positioning of the Company's product in the market. The Captive Coal mining operations have also performed exceedingly well during the year resulting into substantial cost reduction. Rigid PVC Pipes Division has further improved upon the performance and has achieved highest ever production during the year.

FUTURE PROSPECTS

The Company is further enhancing its sponge iron capacity by commissioning an additional module during the current financial year. The Company is in the midst of a major expansion in the Power generation capacity and is implementing a total capacity of 625 MW in a phased manner. The first phase of the project is getting

completed and is expected to be commissioned by the next quarter. The subsequent phases have been taken for implementation and will be completed in due course of time.

The Company has been making continous efforts to become self-reliant in iron ore supplies. In this direction, various steps have been taken so that the Company's iron ore mines may get started soon. The Company has firmed up plans to improve upon the capacity utilization in the Heavy Structural and TMT Divisions of the Company in the current financial year. These steps along with capacity addition in the Sponge Iron and Power generation are expected to improve upon the operating margins of the Company substantially in the current financial year.

ENVIRONMENT AND SOCIAL RESPONSIBILITY

Company has always been committed towards its employees and the society by providing them a green and clean environment. It is focussed to reduce the pollutants and their impact on the environment on a continuous basis through controls on process, resource consumption, technology and adoption of environmental safe practises in addition to compliance of all relevant and applicable environmental legislations and regulations. With safety, health and environment protection high on its corporate agenda, the company is committed to conducting business with a strong environment conscience, so as to ensure sustainable development, safe work places and improve the quality of life of its employees, customers and the community.

The Company believes in being proactive in achieving a balance between growth and social needs. The company has been continually supporting innumerable social and community initiatives, which has touched the lives of number of people positively in the surrounding areas by supporting environmental and health-care activities, family welfare, social, cultural and educational programmes, providing employment opportunities and recreational facilities.

SHARE CAPITAL

During the year under review, the equity share capital of the Company has increased by 1,27,94,800 equity shares of Rs. 10 each pursuant to conversion of Foreign Currency Convertible Bonds and equity warrants.

DIRECTORS

In accordance with the provisions of section 256 of the Companies Act, 1956, Shri Manish Bahl and Shri Piyoosh Goyal are liable to retire by rotation at the ensuing Annual General Meeting. They are eligible for re-appointment and offer themselves for re-appointment.

The terms of appointment of Shri V.P. Agarwal, Chairman and Managing Director and Shri G.L. Mohta and Shri Vipul Agarwal, Whole-time Directors is expiring and they are being re-appointed.

Appropriate resolutions for the re-appointment of the aforesaid Directors are being moved at the ensuing Annual General Meeting which the Board recommends for your approval.

DIVIDEND

The Board has recommended dividend @ 10% per Equity Share on the 13,44,88,514 Equity Shares of Rs.10 each of the Company for the year ended 31st March, 2011, subject to the approval of the Members at the ensuing Annual General Meeting.

FIXED DEPOSITS

Company has not accepted any deposits during the year under review.

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

ii) That the Directors have selected such accounting policies and applied them consistently and made judgements 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 or loss of the Company for the year under review;

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

iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2011 on a 'going concern' basis.

AUDITORS

M/s Chaturvedi and Partners, Auditors of the Company, retire at the forth coming Annual General Meeting, and being eligible, offer themselves for reappointment. The Company has received a Certificate from the Auditors to the effect that their re-appointment, if made, would be within the limit prescribed under Section 224 (1B) of the Companies Act, 1956. Your Directors recommend their re-appointment as Auditors of the Company.

AUDITORS' OBSERVATIONS

As regards Auditors' observations in their Report, the relevant Notes on the Accounts are self-explanatory.

PARTICULARS OF EMPLOYEES

As required by 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 employees are set out in the annexure to the Directors' report.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under 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, a statement showing the information relating to the Conservation of Energy, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo is enclosed and should be treated as a part of this report.

CORPORATE GOVERNANCE

The significance of Corporate Governance has always been recognized by the Company. A separate report on Corporate Governance and Management Discussion and Analysis alongwith a certificate from the Practising Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges is attached and forms part of this Report.

ACKNOWLEDGEMENT

Your Directors take this opportunity to offer their sincere thanks to shareholders, various departments of Central and State Governments, Financial Institutions, Banks, Customers and Suppliers for their continued support and look forward to having the same support in all our future endeavours.

Your Directors place on record their sincere appreciation of the dedicated and significant contribution made by officers, staff and workers of the Company at all levels and look forward to their continued support.

By Order of the Board

Place : New Delhi V. P. Agarwal

Dated : 30 th May, 2011 Chairman & Managing Director


Mar 31, 2010

The Directors present the 29th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2010.

FINANCIAL RESULTS

(Rs. in Crores)

For the year ended For the year ended 31st March, 2010 31st March, 2009

Net Sales 1,567.66 1,525.64

Other Income . 3.04 3.98

EBIDTA 360.15 304.31

Depreciation 56.79 42.48

Financial Expenses 25.49 60.50

Expenses Amortised 2.69 2.69

275.18 198.64

Liabilities written back 21.38 12.77

Exceptional items . (23.31) 6.64

Profit before tax 273.25 204.77

Provision for Taxes 7.09 0.61

Profit after tax 266.16 204.16

Balance brought forward 7.00 100.44

273.16 304.60

Transfer to General Reserve 260.00 280.99

Transfer to Debenture

redemption reserve - 16.61

Carried over to next year 13.16 7.00

PERFORMANCE

During the year under review, the Company has achieved net sales revenue of Rs.1568 crores as against Rs. 1526 crores in the previous year. The profit before depreciation and interest amounted to Rs.360 crores as against Rs.304 crores in the previous year. After providing for interest, depreciation and tax, the net profit of the Company (after exceptional items) stands at Rs.266 crores during the year under review as against Rs. 204 crores in the previous year.

OPERATIONAL REVIEW

Your Directors have pleasure to inform you that during the year under review the Company has achieved substantial growth with respect to physical performance in the entire chain of its integrated steel operations thereby achieving highest ever capacity utilization levels. This has helped the Company in significantly improving its operating margins despite a drop in the average selling prices during the year.

With its core operational areas being steel, mining and power, the performance of the Company is largely affected by the demand for steel in the country. The global economic crisis which shook the world in the previous year continued to have its after effects in the first half of the current year thereby affecting the demand and margins. However, in the second half of the year under review, the steel prices witnessed upturn, fuelled by revival of demand from higher spending on infrastructure and construction activities which enabled the Company to more than regain the margins which were eroded earlier.

During the year, the Wire Rod Division continued to be the star performer with its exceedingly encouraging performance. The Company successfully implemented its plan of more than doubling the capacity in the division by adding addtional capacity and also balancing the existing one.

The performance of the integrated steel plant of the Company at Champa with capacities for Sponge Iron, Steel Melting, Ferro Alloys and Power Generation has also been satisfactory. During the year, the company has taken a step forward in its objective to achieve complete integration in its entire product range in its steel operations by enhancing capacity in sponge iron division and also expanding its Steel Melting Capacity which has resuljed in significant savings in the raw material costs and has also enhanced the self reliance quotient of the Company. The captive Coal Mining Operations performed exceedingly well during the year and the Company has been awarded "Coal India Project Implementation Trophy" by the Mining Geological and Metallurgical Institute of India. This is for the first time that any Company in private sector has been awarded this Trophy. The Rigid PVC Pipe Division continued with improved performance throughout the year on account of firm demand.

FUTURE PROSPECTS

The Company has already initiated its plan to achieve full integration at all intermediary- product levels throughout its chain of steel operations to cater to the entire requirement of its finished steel segment. This plan is expected to be completed in the next two years.

Further, the Company is making its foray into the power sector in a big way by taking up an ambitious plan to set up 625 MW captive thermal power plant at its existing plant site at Champa. The first phase is expected to be commissioned in the current year and thereafter subsequent phases shall come up in a phased manner in the next three years. The Company is poised to be a major player in the merchant power business in the coming years.

The Company has always felt the need to be self reliant in iron ore supplies. In this direction, with its continuous efforts, it is expected that the Companys iron ore mines both in Chhattisgarh and Orissa will be operational in the current year which shall give a substantial boost to the Companys bottom line.

ENVIRONMENT AND SOCIAL RESPONSIBILITY

Company believes that an essential component of our corporate social responsibility is to care the community. The CJompany endeavors to make a positive contribution to the community by supporting a wide range of socio-economic, educational and health initiatives in the surrounding areas by undertaking free medical camps, non formal education programs, maintaining parks, temples, providing regular assistance to primary schools in the form of educational supplies such as computers, sports kits, laboratory apparatus and libraries.

The Company clearly understands its commitment to run an environment friendly and energy efficient business and evolve itself into an environment friendly organization. Recognizing its responsibility towards minimizing its impact on the environment, the Company has extended green activities to support environmentally conscious activities by reducing wastes, emissions and recycling. The Company has undertaken various CDM (Clean Development Mechanism) projects like installation of waste heat recovery boilers and plantation activities. Environmental monitoring is being done on a regular basis to ensure that the environmental parameters are within the prescribed norms of the State Pollution Control Board.

SHARE CAPITAL

During the year, the Company has issued 62,19,800 equity shares of Rs 10 each at a premium of Rs 160 each pursuant to conversion of Foreign Currency Convertible Bonds.

CONVERTIBLE WARRANTS

During the year, the Company has issued 1,00,00,000 warrants on preferential basis convertible into equity shares of Rs. 10 each at a premium of Rs. 71 per share on or before 3rd January, 2011.

FOREIGN CURRENCY CONVERTIBLE BONDS

The Company has issued Foreign Currency Convertible Bonds (FCCBs) in two tranches for an amount of Rs. 500 crores. The FCCBs issued in the first tranche in October, 2009 are convertible into equity shares of Rs. 10 each at a premium of Rs. 160 per share and the FCCBs issued in the second tranche in April 2010 are convertible into equity shares of Rs. 10 each at a premium of Rs. 225 per share.

DIRECTORS

In accordance with the provisions of section 256 of the Companies Act, 1956, Dr. Ram K. Vepa, Shri G.L. Mohta and Shri Vipul Agarwal are liable to retire by rotation at the ensuing Annual General Meeting. They are eligible for re- appointment and offer themselves for re-appointment.

DIVIDEND

After careful assessment of the funds required by the Company, your Directors have not recommended any dividend for the Financial Year ended 31st March, 2010.

FIXED DEPOSITS

Company has not accepted any deposits during the year under review.

DIRECTORS RESPONSIBILITY STATEMENT

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

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

ii) That the Directors have selected such accounting policies and applied them consistently and made judgements 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 or loss of the Company for the year under review;

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

iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2010 on a going concern basis.

AUDITORS

M/s Chaturvedi and Partners, Auditors of the Company, retire at the forth coming Annual General Meeting, and being eligible, offer themselves for reappointment. The Company has received a Certificate from the Auditors to the effect that their re-appointment, if made, would be within the limit prescribed under Section 224 (1B) of the Companies Act, 1956. As regards Auditors observations in their Report, the relevant notes on the accounts are self-explanatory.

PARTICULARS OF EMPLOYEES

As required by 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 employees are set out in the annexure to the Directors report.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under 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, a statement showing the information relating to the Conservation of Energy, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo is enclosed and should be treated as a part of this report.

CORPORATE GOVERNANCE

The significance of Corporate Governance has always been recognized by the Company. A separate report on Corporate Governance and Management Discussion and Analyses alongwith a certificate from the Practising Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges is attached and forms part of this Report.

ACKNOWLEDGEMENT

Your Directors take this opportunity to offer their sincere thanks to the various departments of Central and State Governments, Financial Institutions, Banks, Customers and Suppliers for their continued valuable assistance and support.

Your Directors also wish to place on record their sincere appreciation of the dedicated efforts by officers, staff and workers of the Company at all levels.

By Order of the Board

Place : New Delhi V. P. Agarwal

Dated : 28,th May, 2010 Chairman & Managing Director



 
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