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Directors Report of Rathi Steel & Power Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 44th Annual Report together with the Audited Statement of Accounts of your company for the year ended 31st March, 2015.

1. FINANCIAL RESULTS

Particulars Year ended Year ended 31st March 31st March 2015 2014

Sales 66882.35 46553.09

EBITDA 696.68 (4377.42)

Interest 5040.18 4927.90

Depreciation 3186.63 891.68

Profit after Tax (PAT) (8239.23) (7433.67)

Dividend NIL NIL

2. OPERATIONAL REVIEW:

During the year under review, the Company has achieved sales turnover of Rs. 66882.35 lacs against previous year sales of Rs. 46553.09 Lacs. The Company has incurred loss of Rs. 8239.23 lacs against previous year loss of Rs.7433.67 lacs. Company expects to do better if there is an improvement in overall industrial scenario.

3. REFERENCE UNDER SECTION 15 AND OTHER APPLICABLE PROVISIONS OF CHAPTER III OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985.

Due to erosion of net worth of the company by more than 50% in the previous accounting year i.e. 12 months period ended on March 31,2014, as per the requirement of Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), a reference had been made with the Hon'ble BIFR by within the prescribed time.

Since, during the current 12 months period ended 31 March, 2015, the Company has suffered a net loss of Rs. 8239.23 lacs which has resulted in full erosion of net worth of the company, the company became a "Sick Industrial Company" under Section 3(1)(o) of the aforesaid Act. Consequently, necessary reference/registration is required to be obtained with the Hon'ble BIFR. The necessary recommendation of the Board for approval from the members of the company has been received to comply with the provisions of the SICA.

4. DIVIDEND

No dividend has been recommended.

5. CAPITAL

During the year under review, Company has increased authorized capital by creating 25000000 Redeemable Preference Shares of Rs. 10/- each, resulting into Authorised Capital of Rs.90,00,00,000/- divided 32000000 Equity Share of Rs.10/- each amounting to Rs.32,00,00,000/- and 58000000 redeemable shares of Rs.10/- each amounting to Rs.58,00,00,000/-.

During the year company has issued 12566748 Redeemable Preference Share of Rs.10/- each at a Premium of Rs.20/- per Share amounting to Rs.37,70,02,440/-.

6. DEMERGER PLAN

Orissa unit is an integrated steel manufacturing unit and with the complexities in the land acquisition, particularly of large chunks of land it will be very difficult to acquire land for setting up a new project. It has its own locational advantage in the sense near to raw materials sources, sufficient land and necessary approvals for further expansion.

In order to unlock the values of both the units and outside infusion of funds/sale/PE investment, hiving off/demerger of both the units is absolutely necessary.

Company plans to hive off the Orissa unit into a separate Company. Deliberation are on and decision will be taken after considering all the aspects.

7. Corporate Debt Restructuring

The debts of the Company were restructured under Corporate Debt Restructuring (CDR) mechanism in the year 2013-14. The Scheme has given relief to the Company and provided with the breathing space to further improve operational levels and improve the cash position. Due to delay in implementation of approved restructuring scheme Company could not start operations at Orissa unit nor was the implementation of setting up of rolling mill at Orissa and even its Ghaziabad unit is operating at lower than desired capacity utilization.

Keeping in mind the current business & economic outlook environment, the Company is in fresh discussions/negotiation with the lenders for its business restructuring plans and is in the process of finalizing fresh proposal for re-working of its debt obligations.

8. ECONOMIC SCENARIO AND OUTLOOK

The expected population growth, emerging new applications for steel and more sophisticated steel applications, the global steel market has a potential to grow by between 700 and 1000 million tonnes in the next 50 years. That is equivalent to a market that is 60% larger than that of today. We believe that between now and 2030, global use of steel will increase by as much as 400 million tons annually.

The world market for steel will reach $1.3 trillion in 2015, with production levels to reach 1,694.73 million tonnes whilst consumption will reach 1,545.50 million tonnes. The market has been declining over the past few years as a result of the large oversupply of steel that pressured prices downwards. The global recession that hit the commodities sector hard also contributed to the shrinking growth.

The steel market has been dominated by China, accounting for half of the global market. It is the largest and fastest growing producer and consumer of steel and it will retain its leading position. India, Taiwan, Iran, Japan, Mexico and South Korea are other countries exhibiting strong growth in terms of steel production and consumption. Global steeldemand over the next decade will mainly depend on the emerging economies. However, economic conditions for the global steel industry remain challenging.

The main factors that led to a previously significant increase in demand for steel are new infrastructure developments and the growing needs of the increasing middle class in the developing countries. The construction, automobile, and white goods industries will attract a high demand for steel over the next decade. The construction sector will be the key consumer of steel.

Financial year 2014-15 saw India emerge as a bright spark even as advanced and emerging economics grappled with uncertainty and slower growth. Cyclical macro parameters like inflation, current account deficit have improved during the year due to domestic as well as external factors. However, domestic steel producers witnessed subdued sales as increased imports from China and Russia resulted in sharp cut to steel prices in India over the past six months.

The Indian economy is in the midest of significant structural change and is expected to embark on a sustained economic growth cycle. According to World Bank,India is set to be the world's fastest growing major economy in the financial year 2015-16 at 7.5% and gradually move up to 8% in the next two financial years. However, this economic growth will depend on steady implementation of reforms aimed to improve productivity and competitiveness. Government initiatives like "Make in India" will stimulate manufacturing growth while its focus on infrastructure should revive the investment cycle. This should help India grow while being fiscally prudent.

Indian steel demand is expected to reflect improving macro- economic environment. Steel end use sectors are expected to perform better compared to previous financial year. Infrastructure projects like dedicated freight corridor etc. are gaining momentum and the steady decline in stalled projects coupled with hike in import duty should stimulate steel demand. However, steel prices are expected to remain under pressure from Chinese exports and increased domestic competitiveness.

9. CORPORATE SOCIAL RESPONSIBILITY

Even though the provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the company yet the Company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development.

10. BUSINESS RISK MANAGEMENT

Although the company has long been following the principle of risk minimization as is the norm in every industry, it has now become a compulsion.

Therefore, in accordance with clause 49 of the listing agreement the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the company.

The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

In today's challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: Regulations, competition, Business risk, Technology obsolescence, Investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk.

As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same

11. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of account and reporting financial statements. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company.

12. VIGIL MECHANISM / WHISTLE BLOWER POLICY

In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour the company has adopted a vigil mechanism policy. This policy is explained in corporate governance report and also posted on the website of company www.rathisteelandpower.com.

13. DIRECTORS & COMMITTEES

At the 43rd Annual General Meeting of the company held on 30th September, 2014 the company appointed the existing independent directors Shri S. K. Daga (DIN: 00208058) and Shri Dwarka Das Lakhotia (DIN: 00012380)) as independent directors under the companies Act, 2013 for 5 consecutive years for a term upto the conclusion of the 49th Annual General Meeting.

All independent directors have given declaration that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and clause 49 of listing agreement.

In accordance with the provisions of Companies Act, 2013 Shri Pradeep Kumar Rathi (DIN-00012596), Director retires by rotation and being eligible offers himself for re- appointment.

Ms Akanksha Garg was appointed as an Additional Director w.e.f. May 30, 2015 in accordance with the provisions of Section 161 of the Companies Act, 2013 and Article 99 of Article of Association of the Company. Pursuant to Section 161 of the Companies Act, 2013 the above director holds

office up to the date of the ensuing Annual General Meeting. In this regard the Company has received request in writing from a member of the company proposing Ms Akanksha Garg candidature for appointment as Director of the Company.

13.1. BOARD EVALUATION

Pursuant to the provisions of companies Act, 2013 and clause 49 of the Listing Agreement, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholder committee. The manner in which the evaluation has been carried out has been explained in Corporate Governance Report.

13.2. REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

13.3. MEETINGS

During the year twelve Board Meetings and one independent directors' meeting was held. The Details of which are given in Corporate Governance Report. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings.

13.4. AUDIT COMMITTEE

The company is having an audit committee comprising of the following directors:

Name Status Category

Shri Shree Kumar Chairman Non Executive & Daga Independent Director

Shri Dwarka Das Member Non Executive & Lakhotia Independent Director

Shri Prem Narain Member Executive Director Varshney

13.5 NOMINATION AND REMUNERATION COMMITTEE

The company is having a Nomination and Remuneration Committee comprising of the following directors:

Name Status Category

Shri Shree Kumar Chairman Non Executive & Daga Independent Director

Shri Dwarka Das Member Non Executive & Lakhotia Independent Director

Ms Akanksha Member Non-Executive Director Garg

14. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) that in preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made 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 loss of the Company for the year ended on that date;

c) that proper and sufficient care has been taken 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;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

15. RELATED PARTY TRANSACTIONS

None of the transactions with any of related parties were in conflict with the Company's interest. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements. All related party transactions are negotiated at an arms-length basis and are in the ordinary course of business. Therefore, the Provisions of Section 188(1) of the Companies Act, 2013 are not applicable. The Related Party Transactions Policy as approved by the Board is uploaded on the Company's website. The details of the transaction with the Related party are provided in the accompanying financial statements.

16. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

A detailed note on ongoing litigations/court orders has been provided in the Notes to account.

17. AUDITORS

17.1. STATUTORY AUDITORS

M/s M. Lal & Co, Chartered Accountants, who are the statutory auditors of the Company, hold office until the conclusion of the ensuing AGM and are eligible for re- appointment. Members of the Company at the AGM held on 30 September, 2014 had approved the appointment of M/s M. Lal & Co as the Statutory Auditors for a period of three financial years I.e., up to 31 March, 2017. As required by the provisions of the Companies Act, 2013, their appointment should be ratified by members each year at the AGM. Accordingly, requisite resolution forms part of the notice convening the AGM.

The Auditors' Report on Financial Statements of the Company for the Financial Year 2014-15 does not contain any qualification.

The observations of Statutory Auditors' and Notes to the Financial Statements are self-explanatory

17.2. COST AUDITORS

As per Section 148 of the Companies Act, 2013, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. In this connection, the Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of R. M. Bansal & Co., Cost Accountants as the cost auditors of the Company for the year ending 31 March, 2016, at a remuneration of Rs. 50,000/- plus out of pocket expenses.

R. M. Bansal & Co., Cost Accountants have vast experience in the field of cost audit and have conducted the audit of the cost records of the Company for the past several years.

17.3. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Ranjeet Verma & Associates. (CP No.: 7463, FCS: 6814), Company Secretaries to undertake the secretarial audit of the company. The Secretarial Audit Report is annexed herewith as 'Annexure 1'.

17.4. INTERNAL AUDITORS

M/s Rajiv S Agarwal & Co. Chartered Accountants performs the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time.

18. CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Secretarial Auditor confirming compliance forms an integral part of this Report.

19. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure 2".

20. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure 3".

21. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is as follows:

The Company has One Executive Director and one Managing Director, no sitting fees have been paid to any director during the year.

The particulars of the employees who are covered by the provisions contained in Rule 5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as "Annexure 4".

22. ACKNOWLEDGEMENTS

The company has been very well supported from all quarters and therefore your directors wish to place on record their sincere appreciation for the support and co-operation received from Central and State Governments, Bankers and others associated with the Company.

Your Directors wish to thank the banks, financial institutions, shareholders and business associates for their continued support and cooperation.

We look forward to receiving the continued patronage from all quarters to become a better and stronger company.

23. CAUTIONARY STATEMENT

The statements contained in the Board's Report and Management Discussion and Analysis contain certain statements relating to the future and therefore are forward looking within the meaning of applicable securities, laws and regulations.

Various factors such as economic conditions, changes in government regulations, tax regime, other statues, market forces and other associated and incidental factors may however lead to variation in actual results.

BY order of the Board For Rathi Steel And Power Limited

Sd/- Sd/- Prem Narain Varshney Pradeep Kumar Rathi (Whole Time Director) (Managing Director) DIN:00012709 DIN: 00012596

Place: New Delhi Date: 14/08/2015


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 43rd Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2014.

FINANCIAL RESULTS (Rs. In Lacs)

Particulars Year ended Year ended 31st March 31st March 2014 2013

Sales 46553.09 80843.18

EBITDA (4377.42) (8038.40)

Interest 4927.90 5320.88

Depreciation 891.68 2207.40

profit after Tax (PAT) (7433.67) (11004.82)

Dividend NIL NIL



DIVIDEND

Due to heavy losses, Directors regret their inability to declare any dividend.

CAPITAL

During the year the Company reclassified its Authorized Capital by creating 1,80,00,000 redeemable preference shares of Rs 10.00 each out of the then existing 5,00,00,000 equity shares of Rs 10.00 each. It further increased its Authorized capital by creating 1,50,00,000 redeemable preference shares of Rs 10.00 each, resulting into Authorized capital of Rs 65,00,00,000 divided into 3,20,00,000 equity shares of Rs 10 each amounting to Rs. 32,00,00,000 and 3,30,00,000 redeemable preference shares of Rs 10 each amounting to Rs 33,00,00,000.

During the year the Company issued 3,26,30,000 redeemable preference shares of Rs 10.00 each amounting to Rs 32,63,00,000.

PERFORMANCE REVIEW

The Gross sales for the financial year under review were Rs. 465 croreas against Rs.808 Crore for the previous financial year. The operational performance of the Company has been comprehensively covered in the Management Discussion and Analysis report.

FUTURE OUTLOOK :

Domestic steel demand to remain muted during FY2012–17 on account of a weak macroeconomic environment. The demand for longs is expected to increase by 19 million ton (MT) at a CAGR of 9 percent and for fats by 16 MT at a CAGR of 8 percent between FY2012 and FY2017. This is due to relatively weaker growth prospects of fats end-user industries (such as automotive and consumer durables) than those for longs.

The growth in the steel market is expected to be muted in the short term on account of poor growth in core consumer sectors such as infrastructure and construction. The demand is expected to rebound in the latter half of 2015 with growth in infrastructure as announced in the Twelfth Five-year Plan. Growth in the automobile and consumer durable sectors will also support demand growth in the long term.

The large steel players and new entrants have announced capacity addition of about 71 MTPA till 2017. Regulatory hurdles and land acquisition challenges remain the largest supply-side constraint for the Indian steel market. Mining bans in Karnataka and Goa and delays in the execution of announced capital projects can further constrain supplies.

With a stable Government in Centre and its thrust on infrastructure development, your company reasonably believes that the turbulent conditions during the year under review, which did not allow potential of the operations to be fully realized, will not be a lasting phenomenon.

CORPORATE DEBT RESTRUCTURING:

In the wake of adverse business environment and severe liquidity crunch, your company had applied for restructuring of its debts. We are happy to inform you that the restructuring proposal has since been approved and implemented by the banks.

PUBLIC DEPOSITS:

The Company has not invited any public deposit during the year. There is no overdue / unclaimed deposit.

DIRECTORS'':

In terms of Article 116 of the Article of Association of the Company Shri Prem Narain Varshney, Director of the company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. He has confirmed that he has not incurred any disQualification under section 164 of the Companies Act, 2013 and is eligible for reappointment as Director of the Company.

The tenure of Shri Prem Narain Varshney Whole time Director of the Company also expired. It is proposed to reappoint him as Whole Time Director. Shri Prem Narain Varshney, aged 62 years and holds Post Graduate degree and associated with company since 1997. He has more than 36 years of experience in the feld of Human Resource Department and has a pivotal role in running the affairs of the Company. The Board of Directors/ Remuneration Committee of the Company at its Meeting held on August 14, 2014 reappointed Shri Prem Narain Varshney as a Whole Time Director for a period of Five (5) years with effect from 01/08/2014. The said reappointment is subject to the approval of the shareholders in general meeting.

Pursuant to section 149 and other applicable provision of the Companies Act, 2013, and as per Clause 49 of the Listing Agreement with stock Exchanges, the Board of Director seeking appointment of Shri S.K Daga and Shri Dwarka Das Lakhotia as Independent director for a term of 5 consecutive years. Details of the proposal for appointment of Shri S.K Daga and Shri Dwarka Das Lakhotia are mentioned in Explanatory statement under section 102 of the Companies Act, 2013.

The tenure of Shri Pradeep Kumar Rathi as Managing Director expired on 31stJuly 2014 and he is eligible to be reappointed as such. He being eligible and offers himself for re-appointment. Shri Pradeep Kumar Rathi is a promoter Director of the Company and associated with company for last 35 years. He is at the helm of the affairs and has a pivotal role in running the affairs of the Company. Hence the Board of Directors/Remuneration committee of the Company (the Board) at its meeting held on 14th August 2014 has, subject to the approval of members, re-appointed Shri Pradeep Kumar Rathi as Managing Director of the Company for a period of 5(five) years from the expiry of his present term.

The Board recommends the re-appointment of aforesaid directors by the shareholders at ensuing AGM.

AUDITORS AND AUDITORS'' REPORT:

M/s M.Lal& Co., Chartered Accountants hold office until the conclusion of the ensuing 43rd Annual General Meeting and are eligible for re-appointment. They have confirmed that their appointment, if made, would be in conformity with the limit prescribed under section 141 (3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.

The notes to the accounts referred to in by the Auditors are self explanatory and therefore do not calls for any further comment.

COST AUDITORS:

The Board of Directors had approved the appointments of Messrs R. M. Bansal & Co., Cost Accountants (Kanpur) to conduct the Cost Audit for the year ending on 31st March, 2014.

PARTICULARS OF EMPLOYEE(S):

During the year under review there was no employee falling under the terms of section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employee) Rules 1975.

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

As required under the provisions narrated under section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 the relevant data is attached and forming part of this report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of sub section 217(2AA) of the Companies Act, 1956 the Board of Directors confirms:

(i) That in preparations of the annual accounts for the financial year ended 31.03.2014 the applicable accounting standards had been followed along with proper explanations relating to material departure.

(ii) That the selected accounting policies were applied consistently and judgment and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2014 and of the profit or loss of the company for the year ended on that date.

(iii) That proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) That the annual accounts of your company have been prepared on going concern basis.

LISTING OF SHARES:

The Equity shares of the Company are presently listed with Bombay Stock Exchange Limited. The Company has made a request to de list its shares from Delhi Stock Exchange Limited.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a separate section titled "compliance report on corporate governance" has been included in this Annual Report along with a certificate of compliance from the Auditors and forming part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report for the year under review, as per clause 49 of the Listing Agreement with the Stock Exchange is presented in a separate section, forming part of Annual Report.

CHIEF FINANCIAL OFFICER:

As per the provision of section 203 (1) of the Companies Act, 2013 Shri Anil Kumar Gupta has been appointed as Chief Financial officer of the Company.

INDUSTRIAL RELATIONS:

The Company enjoys cordial industrial relations with the employees. The Board wishes to place on record its deep sense of appreciation of the contribution made by all the employees in ensuring high level of performance and growth during the year.

ACKNOWLEDGEMENT:

The Board of Directors take this opportunity to express its gratitude and appreciation to the Banks, Central and State Government Authorities, Regulatory Authorities Stock Exchange and the stake holders for the continued cooperation and assistance extended to the Company.

For Rathi Steel And Power Limited Sd/- Sd/- Prem Narain Varshney Pradeep Kumar Rathi Whole Time Director Managing Director DIN: 00012709 DIN: 00012596

Place: New Delhi Date: 14/08/2014


Mar 31, 2013

The Directors have pleasure in presenting the 42nd Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2013.

FINANCIAL RESULTS

(Rs. In Lacs)

Particulars Year ended Year ended 31st March 31st March 2013 (Rs. In 2012 (Rs. Lacs) In Lacs)

Sales 80843.18 93665.84

EBITDA (8038.40) 8276.42

Interest 5320.88 5003.43

Depreciation 2207.40 2255.73

Proft before Tax (PBT) (15566.67) 1017.26

Proft after Tax (PAT) (11004.82) 1238.00

Dividend and Dividend Tax NIL NIL



DIVIDEND

Due to heavy losses, Directors regret their inability to declare any dividend.

PERFORMANCE REVIEW

The sales for the fnancial year under review were Rs.808 Crore as against 937 Crore for the previous fnancial year. The operational performance of the Company has been comprehensively covered in the Management Discussion and Analysis report.

FUTURE OUTLOOK / PROSPECTS:

The Indian economy has been impacted due to concerns in the developed economies. Unlike the situation post 2008, wherein the Indian economy witnessed considerable resilience to the global economic slowdown, and was able to recover strongly the impact this time is of higher magnitudes due to policy related issues.

Driven by policy log jam, the industrial sector was plagued by a slowdown in demand and consumption in 2012-13. World crude steel production for the 62 countries reporting to the World Steel Association was 132 MT in April 2013, an increase of 1.2% compared to April, 2012 and accounted for more than 98% of world crude steel production. The average capacity utilization ratio in 2012 was 78.8% compared to 80.7% in 2011.

With the steady decline in the domestic economy''s growth rate, the Indian steel industry''s pace of growth slowed down and in terms of all the performance indicators.

A report by Bank of America-Merrill Lynch suggests domestic steel outlook to remains weak with lesser possibility of turnaround in the current fnancial year. Offering a negative outlook, the report blames it on demand slowdown from key industries like construction, auto and infrastructure, keeping margins of steel frms under pressure. A fall in the value of the rupee has further complicated matters for the Reserve Bank to reduce policy rates, creating fear of delaying the process of economic recovery. The report also points out that while demand for steel products remains low; many delayed steel projects are due for commissioning during this fscal leading to overcapacity.

The Indian economy''s outlook for 2013-14 can be viewed as cautiously optimistic. It is expected that the domestic steel industry will continue to be under pressure over the short term. Domestic steel demand is expected to be muted and proft margins in fnancial year 2013-14 to remain broadly similar to the fnancial year 2013-14. This is mainly due to persistent high cost of steel production. Though the Steel demand was low in 2012-13 due to continuing economic crisis, however, spurt in demand is expected in 2014- 15.

The Government of India has planned to invest about Rs.56.32 lakh crore in infrastructure during the 12th Five Year Plan period 2012-17. This will augur well for the industry.

Your company reasonably believes that the turbulent conditions during the year under review, which did not allow the potential of the operations to be fully realized, will not be a lasting phenomenon.

CORPORATE DEBT RESTRUCTURING:

In the wake of adverse business environment and severe liquidity crunch, your Company has applied for restructuring of its debts. The Restructuring proposal has since been admitted in the CDR cell. Final Approval from CDR Empowered Group/CDR Cell is yet to be received.

PUBLIC DEPOSITS:

The Company has not invited any public deposit during the year. There is no overdue / unclaimed deposit.

DIRECTORS'':

In terms of Article 116 of the Articles of Association of the Company Shri Dwarka Das Lakhotia, Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. He has confrmed that he has not incurred any disqualifcation under section 274(1) (g) of the Companies Act, 1956 and is eligible for reappointment as Director of the Company.

AUDITORS AND AUDITORS'' REPORT:

M/s M. Lal & Co., Chartered Accountants hold offce until the conclusion of the ensuing 41st Annual General Meeting and are eligible for re-appointment. They have confrmed that their appointment, if made, would be in conformity with the limit prescribed under section 224 (1B) of the Companies Act, 1956. The Auditors'' observation in para 10 of the Annexure to the Auditor''s Report that the Company has incurred cash losses as at 31st March 2013 and accumulated losses of the Company at the end of the year are more than 50% of its net worth is self explanatory and does not require any further comments from the Directors.

With respect to Auditors observation under para 11 of the Annexure to the Auditors'' Report, your Directors wish to inform you that the delay in repayment of principal of Rs. 10.45 Crores, interest of Rs. 9.36 Crores and bills Crystallized Rs. 50.57 Crores for the period from 01.12.2012 to 31.03.2013 were due to severe liquidity crisis being faced by the Company on account of continued losses incurred during the year, further aggravated by the delay in receipt of expected cash fows on time.

COST AUDITORS:

The Board of Directors had approved the appointments of Messrs R.M.Bansal & Co., Cost Accountants (Kanpur) to conduct the Cost Audit for the year ending on 31st March, 2013.

PARTICUALRS OF EMPLOYEE(S):

During the year under review there was no employee falling under the terms of section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employee) Rules 1975.

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

As required under the provisions narrated under section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 the relevant data is attached and forming part of this report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the provisions of sub section 217(2AA) of the Companies Act, 1956 the Board of Directors confrms:

(i) That in preparations of the annual accounts for the fnancial year ended 31.03.2013 the applicable accounting standards had been followed along with proper explanations relating to material departure.

(ii) That the selected accounting policies were applied consistently and judgement and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2013 and of the proft or loss of the company for the year ended on that date.

(iii) That proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) That the annual accounts of your company have been prepared on going concern basis.

LISTING OF SHARES:

The Equity shares of the Company are presently listed with Mumbai Stock Exchange Limited. The Company has made a request to delist its shares from Delhi Stock Exchange Limited.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a separate section titled "compliance report on corporate governance" has been included in this Annual Report along with a certifcate of compliance from the Auditors and forming part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report for the year under review, as per clause 49 of the Listing Agreement with the Stock Exchange is presented in a separate section, forming part of Annual Report.

CHIEF FINANCIAL OFFICER:

Shri Atul Agarwal had been appointed as Chief Financial Offcer of the Company effective from 08-10-2012.

INDUSTRIAL RELATIONS:

The Company enjoys cordial industrial relations with the employee. The Board wishes to place on record its deep sense of appreciation of the contribution made by all the employees in ensuring high level of performance and growth during the year.

ACKNOWLEDGEMENT:

The Board of Directors take this opportunity to express its gratitude and appreciation to the Banks, Central and State Government Authorities, Regulatory Authorities Stock Exchange and the stake holders for the continued cooperation and assistance extended to the Company.



For Rathi Steel And Power Limited

Sd/- Sd/-

Prem Narain Varshney Pradeep Kumar Rathi

Whole Time Director Managing Director



Place: New Delhi

Date: 04/09/2013


Mar 31, 2012

The Directors have pleasure in presenting the 41st Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2012.

FINANCIAL RESULTS

(Rs. In Lacs)

Particulars Year ended Year ended

31 st March 31 st March 2012 (Rs. 2011 (Rs. In Lacs) In Lacs)

Sales (Net of Excise) 93665.84 82464.01

EBITDA 8276.42 6742.55

Interest 5003.43 3633.31

Depreciation 2255.73 1973.80

Profit before Tax 1017.26 1135.44 (PBT)

Profit after Tax (PAT) 1238.00 1405.00

Dividend and Dividend Nil 109.52 Tax



DIVIDEND

Considering the requirement of funds in the operations of the company, Directors regret their inability to declare any dividend.

PERFORMANCE REVIEW

Net sales for the financial year under review were Rs. 937 crores as against 825 Crores for the previous financial year. The operational performance of the Company has been comprehensively covered in the Management Discussion and Analysis report.

FUTURE OUTLOOK

The world steel industry is a large one. According to the World Steel Association, world crude steel production was a record 1,527 million tons in 2011. However, despite its size, the steel industry remains relatively fragmented. The industry is highly cyclical and intensely competitive.

In 2011, world steel production is estimated to increase by 7.0% y-o-y, underpinned by growth in China and India. However, the growth of Organization for Economic Co-operation and Development economies is expected to be stagnant or modest at best. Global steel production is expected to grow by another 7.0% in 2012.

In early 2011, there were major concerns that the rapid growth of China's steel production was putting

pressure on international steel markets due to the impact of demand on key raw material inputs. Steel prices rallied in the first half of 2011 due to raw material cost escalation. The cost-push rally is because cost prices have been rising faster than the steel prices, thus squeezing the margins of steel players.

Chinese crude steel production in the first half of 2011 increased about 10% to reach 353 million tones and was expected to continue to increase at a moderate pace in the second half of 2011 in response to slower consumption growth in the country.

India represents the new growth frontier for global steelmakers. The Indian economy is better insulated from the global economy than other Asian countries because it does not rely heavily on exports to the developed market. However, in the globalized environment, no economy is completely decoupled from the world economy. In addition, GDP growth in

2010 and 2011 was hampered by the 13 consecutive interest rate hikes aimed at curbing inflation.

In an effort to curb inflation, policy- makers and regulators have adopted policies that slow down the real economic activity in the economy. Also all the macro-economic indicators point out the onset of overall economic slowdown of Indian economy which will have a profound impact on investment, growth of manufacturing and other sectors. Further, the uncertain global economic environment continues to pose serious challenges to the sustained growth of Indian economy.

However, economic fundamentals high savings and investment rates, demography, and a rapidly growing middle class remain strong in India, which will ensure a relatively stable economic performance for the country.

Fitch Ratings says that the outlook for the Indian Steel producers will remain stable in 2012, despite the risk of a slowdown in the growth of domestic steel demand. Fitch believes that demand for steel from automobile, white goods, construction and infrastructure sectors will continue to grow through 2012, albeit at a low rate of 6%-7%.

Steel demand has a high correlation with growth in GDP, which is showing signs of a slowdown. Fitch estimates its real GDP growth projections for India for FY13 at 7.5% due to higher domestic interest rates and a weaker global economy.

Nevertheless, there exists enormous potential in the economy for higher growth of domestic steel demand in medium and long term. In terms of actual steel usage India lags behind other major steel producing countries. In 2010 our per capita consumption of

steel was only 51.7 Kgs as against the world average of 202.7 kgs. A massive investment to the tune of $ 1 trillion dollars has been envisaged during the Twelfth five year plan in the infrastructure sector. Besides there is a greater emphasis on the growth of the Manufacturing Sector in the country. This augurs well for expansion of the base of steel consumption in the economy. A rough estimate of incremental demand for steel in the country works out approximately to 40 million tonnes in infrastructure alone. Hence, it is likely to raise intensity of steel consumption in the country measured in terms of steel consumption per unit of Gross Domestic Product (GDP). The National Steel Policy had set a production target 110 million tonnes to be achieved by 2019-20. The Indian steel industry may achieve double digit growth in consumption and surpass this production target by 2016-17 well ahead of the target date.

Government on its part has taken number of initiatives to boost the growth of real estate sector. Some of the measures taken include opening the doors for External Commercial Borrowing ("ECB") for specified low cost affordable housing projects which could potentially provide the much needed liquidity to the housing sector. Further, the interest to be paid on the ECB loan availed from the period July 2012 to June 2015 by the real estate developer is to be subjected to a lower rate of deduction of tax at source. Investment linked deduction is available for low cost affordable housing projects.

You are well aware that your company is into the business of manufacturing of long products of mild steel and stainless steel. While the company's Endeavour has always been to maintain its position in long segment, it is also trying to increase its share in the value added products such as long products of special diameter and stainless steel products. During the year under review your company successfully completed the expansion of capacity of rolling mills at Ghaziabad to 175000 MTPAfrom 125000 MTPA.

PUBLIC DEPOSITS:

The Company has not invited any public deposit during the year. There is no overdue / unclaimed deposit.

DIRECTORS:

In terms of Article 116 of the Articles of Association of the Company, Shri Prem Narain Varshney and Shri Ranjit Khattar, Directors of the Company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment. They have confirmed that they have not incurred any disqualification under section 274(1) (g) of the Companies Act, 1956 and are eligible for

reappointment as Director of the Company.

AUDITORS AND AUDITORS' REPORT:

M/s M.Lal & Co., Chartered Accountants hold office until the conclusion of the ensuing 41st Annual General Meeting and are eligible for re-appointment. They have confirmed that their re-appointment, if made, would be in conformity with the limit prescribed under section 224(1 B) of the Companies Act, 1956. The notes to the accounts referred to in by the Auditors are self explanatory and therefore do not calls for any further comment.

COST AUDITORS:

The Board of Directors had approved the Re- appointments of M/s R.M.Bansal & Co., Cost Accountants (Kanpur) to conduct the Cost Audit for the year ended on 31st March, 2013.

PARTICUALRS OF EMPLOYEE(S):

During the year under review there was no employee falling under the terms of section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employee) Rules 1975.

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

As required under the provisions narrated under section 217(1 )(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 the relevant data is attached and forming part of this report.

DIRECTOR RESPONSIBILITY STATEMENT:

Pursuant to the provisions of sub section 217(2AA) of the Companies Act, 1956 the Board of Directors confirms:

(i) That in preparations of the annual accounts for the financial year ended 31.03.2012 the applicable accounting standards had been followed along with proper explanations relating to material departure.

(ii) That the selected accounting policies were applied consistently and judgment and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2012 and of the profit or loss of the company for the year ended on that date.

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

(iv) That the annual accounts of your company have been prepared on going concern basis.

LISTING OF SHARES:

The Equity shares of the Company are presently listed with Mumbai Stock Exchange Limited. The Company has made a request to delist its equity shares from Delhi Stock Exchange Limited.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a separate section titled "compliance report on corporate governance" has been included in this Annual Report along with a certificate of compliance from the Auditors and forming part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report for the year under review, as per clause 49 of the Listing Agreement with the Stock Exchange is presented in a separate section, forming part of Annual Report.

INDUSTRIAL RELATIONS:

The Company enjoys cordial industrial relations with the employee. The Board wishes to place on record its deep sense of appreciation of the contribution made by all the employees in ensuring high level of performance and growth during the year.

ACKNOWLEDGEMENT:

The Board of Directors take this opportunity to express its gratitude and appreciation to the Banks, Central and State Goverment Authorities, Regulatory Authorities Stock Exchange and the stake holders for the continued cooperation and assistance extended to the Company.

For Rathi Steel And Power Limited

Sd/- Sd/-

Prem Narain Varshney Pradeep Kumar Rathi

Whole Time Director Managing Director

Place: New Delhi

Date: 27/08/2012


Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the 40th Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2011.

FINANCIAL RESULTS

(Rs. In Lacs)

Particulars Year ended Year ended 31st march 31st march 2011 (Rs. 2010 (Rs. In Lacs) In Lacs)

Sales 84529.60 77898.52

EBITDA 6742.55 5264.10

Interest 3633.31 2828.10

Depreciation 1973.80 1815.48

Profit before Tax 1135.44 620.38 (PBT)

Profit after Tax (PAT) 1405.00 437.85

Dividend and Dividend 109.52 109.89 Tax

DIVIDEND

Keeping in view the future expansion plan and the need to conserve resources, your directors are pleased to recommend a dividend of Re. 0.30 per share on 3,13,08,111 Equity Shares for the year 2010-2011.

PERFORMANCE REVIEW

The Gross sales for the financial year under review were Rs. 845 crore as against 779 Crore for the previous financial year. The performance of the Company has been comprehensively covered in the Management Discussion and Analysis report.

FUTURE OUTLOOK

The Chinese and Indian economies have been the fastest economies. However, this has led to infationary pressures which have forced central bank to raise interest rates. China continues to drive the global steel industry with a production of approx. 630 million tons in 2010 which equates to approx. 45% of global Steel production. Chinese Steel demand continues to be driven by large capital expenditure and government infrastructure projects across the country. However, it is expected that the production growth for steel in the current decade will slow down, which should reduce raw material prices. The Indian economy grew at 8.6% in 2010-11 against 7.2% last year which shows a remarkable growth. The economy is likely to grow at over 8% over the next decade driven by the infrastructure (power, road, railways, ports etc.) and consumption (automobile, real estate etc.) sectors which will result in robust growth in demand for various iron and steel products.

India has acquired a central position on the global steel map with its giant steel mills, acquisition of global scale capacities by players, continuous modernization & up gradation of old plants, improving energy efficiency, and backward integration into global raw material sources. Global steel giants from across the world have shown interest in the industry due to its phenomenal performance. For instance - the crude steel production in India registered a year- on-year growth of 6.4% in 2010 and reached 66.8 Million Metric Tons.

Given its direct correlation to GDP growth, we expect the Indian steel industry to experience robust growth in the future. We believe the sector's long- term positive indicators will exceed its challenges. Indian steel industry plays a significant role in the country's economic growth. The major contribution directs the attention that steel is having a stronghold in the traditional sectors, such as infrastructure & constructions, automobile, transportation, industrial applications etc. Moreover, steel variant stainless steel is finding innovative applications due to its corrosion resistive property. According to Fitch Ratings also outlook for Indian steel producers is stable for 2011 in the agency`s published report. The stable outlook is supported by an expected increase in domestic steel demand during the year due to growth in automobiles, white goods and construction sectors coupled with the continuous thrust of the Indian government on infrastructure spending. Fitch expects India`s steel demand to grow at 7%-9% over the next two years.

The global stainless steel industry has been witnessing a steady growth for some time now. The quarter by quarter figures have indicated an upward movement in stainless steel production so far for the present financial year. As one of the leading countries catering to the demand for stainless steel, India expects its stainless steel industry to be growing by 10 percent this year. In spite of India's per capita consumption of Stainless Steel being at 1.1 kg, which is far below the developed world average of 15 kg, there are indications that with the government planning to develop the basic infrastructure considerably, that would be a key factor to increasing consumption. Besides, the growing middle class will support demand for fixed assets such as housing, white goods and automobiles all translating to demand for the product.

Your company manufactures long products. With increase in demand there is a growth in number of players and capacity too. The company's endeavour will be to maintain its position in long segment of steel products. Alongside the company also manufactures stainless steel products and has made serious efforts to increase the share of value added products in the total product mix which has not only resulted in increased volume of stainless steel rolled products, but also enabled the company to improve the operating margins.

Continuous R&D activities, relentless marketing efforts and strong emphasis on production of quality products have led to substantial increase in the share of stainless steel products as compared to previous year. Looking at the great potential in this segment, as the per capita consumption of stainless steel remains very low as compared to rest of the world, the company will not only strive to further improve the product mix by utilizing existing facilities, but also study option of expanding the capacities of stainless steel / alloy steel.

PUBLIC DEPOSITS:

The Company has not invited any public deposit during the year. There is no overdue / unclaimed deposit.

DIRECTORS:

In terms of Article 116 of the Articles of Association of the Company, Shri Shree Kumar Daga, Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. He has confirmed that he has not incurred any disqualification under section 274(1)(g) of the Companies Act, 1956 and is eligible for reappointment as Director of the Company.

AUDITORS AND AUDITOR'S REPORT:

M/s M.Lal & Co., Chartered Accountants hold office until the conclusion of the ensuing 40th Annual General Meeting and are eligible for re-appointment. They have confirmed that their appointment, if made, would be in conformity with the limit prescribed under section 224(1B) of the Companies Act, 1956. The notes to the accounts referred to in by the Auditors are self explanatory and therefore do not calls for any further comment.

COST AUDITORS:

The Board of Directors had approved the appointments of Messrs R.M.Bansal & Co., Cost Accountants, Kanpur to conduct the Cost Audit for the year ending on 31st March, 2012.

PARTICUALRS OF EMPLOYEES:

During the year under review there was no employee falling under the terms of section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employee) Rules 1975.

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

As required under the provisions narrated under section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 the relevant data is attached and forming part of this report.

DIRECTOR RESPONSIBILITY STATEMENT:

Pursuant to the provisions of sub section 217(2AA) of the Companies Act, 1956 the Board of Directors confirms:

(i) That in preparations of the annual accounts for the financial year ended 31.03.2011 the applicable accounting standards had been followed along with proper explanations relating to material departure.

(ii) That the selected accounting policies were applied consistently and judgement and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March 2011 and of the profit or loss of the company for the year ended on that date.

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

(iv) That the annual accounts of your company have been prepared on going concern basis.

LISTING OF SHARES:

The Equity shares of the Company are presently listed with Mumbai Stock Exchange Limited. The Company has made a request to delist its shares from Delhi Stock Exchange Limited.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a separate section titled "compliance report on corporate governance" has been included in this Annual Report along with a certificate of compliance from the Auditors and forming part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report for the year under review, as per clause 49 of the Listing Agreement with the Stock Exchange is presented in a separate section, forming part of Annual Report.

INDUSTRIAL RELATIONS:

The Company enjoys cordial industrial relations with the employee. The Board wishes to place on record its deep sense of appreciation of the contribution made by all the employees in ensuring high level of performance and growth during the year.

ACKNOWLEDGEMENT:

The Board of Directors take this opportunity to express its gratitude and appreciation to the Banks, Central and State Government Authorities, Regulatory Authorities Stock Exchange and the stake holders for the continued cooperation and assistance extended to the Company.

For Rathi Steel and Power Limited

Sd/- Sd/- Prem Narayan Varshney Pradeep Rathi Whole Time Director managing Director

Place : New Delhi Date : 23/08/2011

 
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