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Directors Report of RMG Alloy Steel Ltd.

Mar 31, 2015

To,

The Members,

RMG Alloy Steel Limited,

The Directors are pleased to present the Thirty-Third Annual Report together with Audited Statement of Accounts of the Company for the year ended 31st March 2015.

I. FINANCIAL RESULTS

(Rs. in Lacs)

Particulars 2014-15 2013-14

Sales and other income 34533 41871

Profit/(Loss) before Interest, Depreciation and exceptional items 244 267

Interest and Financial charges 4988 4970

Depreciation and Amortization 1177 2228

Profit/ (Loss) before exceptional items and tax (5921) (6931)

Exceptional items 2259 3519

Profit/(Loss) before tax (3662) (3412)

OPERATIONS

Performance of Alloy Steel and Seamless Tubes of the Company was as under:

2014-15

Particulars Production Sales Gross Sales (Tones) (Qty M.T.) (Rs.in Lacs)

Steel 58183 59147 36980

Seamless pipes 11 11 1077

2013-14

Particulars Production Sales Gross Sales (Tones) (Qty M.T.) (Rs.in Lac)

Steel 75702 75844 45605

Seamless Pipes 419 873 902

The Company has lost production for 24 days in October 2014 due to breakdown in transformer. Entire steel industry is operating at 30-40% capacity.

The Company concentrates on niche market since our competitors manufacturing facilities are based on blast furnace which has low cost of production as compared to our facilities which is based on electrical furnace. The management concentrates on product mix which give more margin, some of the products are now approved by Original Equipment Manufacturers (OEM) and some of the OEM has recommended to their suppliers (forger companies) to buy products from the Company.

Value addition in Spheroidization will increase our tonnages from existing & new customers with higher contributions. Production of high margin & high value added category of steel is already started & will enhance our overall earnings. The Product known as AISI O-1 is used in the Pharma industry

The Company has appointed BOB Capital Markets Ltd to carry out viability study & to structure Corrective action plan (CAP) for the Company. The exercise is done to structure a viable rectification plan for the Company to overcome the current stress. As per the scheme, Rupee Term Loan of Rs. 145 Crores is approved by the consortium banks & Working capital limits will be reduced by Rs. 95 Crores.

II. DIRECTORS' RESPONSIBILITY STATEMENT

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

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 31st March 2015 and of the profit and loss of the company for that period;

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

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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

III. DISCLOSURE AS REQUIRED UNDER THE COMPANIES ACT 2013:

a. Mr. Atul Desai, Mr. Ashok Jain and Mrs. Amita Karia, the independent directors have given declaration that they meet the criteria of independent directors as provided in sub section 6 of Section 149 of the Companies act 2013.

b. Nomination and Remuneration committee (NRC) at their meeting held on 27th May 2014 approved and recommended policy relating to criteria for determining qualifications, positive attributes and independence of directors, the remuneration for the directors, key managerial personnel and other employees; the Board of directors approved the said policy as recommended by NRC at its meeting held on 27th May 2014.

c. NRC at their meeting held on 10th February, 2015 laid down criteria for the evaluation of Board of directors. Evaluation of directors consisted of two parts i.e. quantitative data and qualitative data. The instruments was so designed that only ticks is required with no provision for descriptions, name of the directors who has evaluated was not disclosed. Evaluation took place in March 2015 and the same was discussed by the Board of directors and took remedial action at its meeting held on 31st March 2015. (Rules 8 (4) under Chapter 9 of the Companies (Accounts) Rules, 2014)

d. Meeting of Board of directors were conducted five times during the financial year 2014-15, the details of which are given in the Corporate Governance Report.

e. The Company does not have any subsidiary company.

f. Ratio of remuneration of Mr. Shashank Chaturvedi, executive director who was upto 12th November 2014 to the median employee's remuneration and other details as may be prescribed - Section 197 (12)

(i) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year- 37.69 times

(ii) the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year- No increment during the year

(iii) the percentage increase in the median remuneration of employees in the financial year- No increment during the year

(iv) the number of permanent employees on the rolls of company- 501

(v) the explanation on the relationship between average increase in remuneration and company performance - No increment during the year

(vi) comparison of the remuneration of the Key Managerial Personnel against the performance of the company- Remuneration not linked to performance of the Company

(vii) 31/03/2014 31/03/2015 Variation

Market capitalization 28.19 29.49 1.30

P/E ratio -0.83 -0.81 0.02

Market price per share 2.6 2.72 0.12

EPS (3.65) (3.90) (0.25)

(viii) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration- No increment during the year

(ix) comparison of the each remuneration of the Key Managerial Personnel against the performance of the company- remuneration not related to performance of the Company

(x) the key parameters for any variable component of remuneration availed by the directors- no variable component of remuneration availed by the director

(xi) the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year- nil; and

(xii) affirmation that the remuneration is as per the remuneration policy of the company.

g. Details of arrangement entered into with Welspun Steel Limited under section 189 ( related party) is mention in form AOC-2 as mentioned below under Rule 8 (2) of the Companies (Accounts) Rules, 2014

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm's length basis – No such transactions.

2. Details of material contracts or arrangement or transactions at arm's length basis

(a) Name(s) of the related party and nature of relationship – Welspun Steel Limited

(b) Nature of contracts/arrangements/transactions – Purchase of DRI/ sponge iron lumps, sale of stores materials

(c) Duration of the contracts / arrangements/transactions – 01.04.2014-31.03.2015

(d) Salient terms of the contracts or arrangements or transactions including the value, if any:

Purchases of DRI/ sponge iron lumps from Welspun Steel Limited for Rs. 1253.37 lacs and sale of stores materials/spares for Rs. 1.28 lacs during the period from 01.04.2014-31.03.2015 are at a market price and on Arm's length basis.

All material transactions entered with the related party is carried out in the ordinary course of the business.

(e) Date(s) of approval by the Board, if any: Board of directors at their meeting held on 10.11.2014, 10.02.2015 and 28.05.2015 approved the said transactions;

(f) Amount paid as advances, if any: nil

i. Particulars of loans, guarantees or investments under section 186.

The Company has not made investment nor given loan or provide any guarantee for repayment of loan under section 186 of the act

j. Details of establishment of vigil mechanism for directors and employees Clause 49(II)(F) of Listing agreement.

The Company has a Whistle Blower Policy and Vigil Mechanism for its directors and employees and no persons has been denied access to the Audit Committee.

IV. Conservation of energy, technology absorption and foreign exchange earnings and outgo

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo required pursuant to Rule 8(3) of the Companies (Accounts) Rules, 2014 are reproduced herewith:

A. Conservation of Energy

(i) Steps taken or impact on conservation of energy.

- In ingot soaking pit hot charging practice adopted and heating cycles optimized. Impact : Natural Gas (fuel) consumption reduced from 120 m3 / ton to 100 m3 / ton.

- In walking hearth furnace modification done for stroke length change for input sizes of 150 mm & 198 mm. Impact : For 50 to 60 Round campaign natural gas consumption reduced from 90 m3 / ton to 75 m3 / ton.

(ii) Planned Capexes on following areas :

- Dust & fume extraction system to be provided with VVF drive.

- Vertical hydraulic (water) pumps to be changed to horizontal pumps.

- Capacitor bank replaced for improving power factor from 0.994 to 0.997.

B. Technology Absorption

i and ii

Efforts made towards technology absorption and the benefits derived therefrom

- Annealing furnaces added for development of hot die steel H11, H13.

- Producer Gas Plant commissioned for fuel cost reduction of Rs. 18 to 20 Lacs per month.

- Mechanization of round ingot grinding facility for product improvement has been done. iii. There is no import technology

iv. The expenditure incurred on Research and Development- nil

Foreign exchange earnings and Outgo-

Foreign exchange earnings

FOB value of exports Rs.87 Lacs ( nil)

Foreign exchange Outgo

Imports on CIF basis/expenditure in foreign currency : Rs. 2529 Lacs (Rs.3097 Lacs)

V. DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMP)

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. V S Iyer and Mr. Hanuman Kanodia, Directors of the Company retire by rotation at the 33rd Annual General Meeting and being eligible have offered themselves for reappointment. Mrs. Amita Karia is appointed as a woman independent director by the Board of directors at their meeting held on 31st March, 2015 for a period of two years.

Mr. Anuj Burakia has been appointed as an additional director by the Board of directors at its meeting held on 28th May 2015 and holds office upto the date of ensuing 33rd Annual General Meeting. The Company has received a Notice from a member proposing him as a director of the Company. He also has been appointed as a whole time director of the Company with effect from 29th July, 2015 by the Board of Directors.

Board has recommended re-appointment of the aforesaid retiring directors, appointment of woman Independent director and additional director/whole time director.

Mr. Sanjay Kukreja, AVP (Commercial) has been appointed as a CFO by the Board of Directors at its meeting held on 10th February 2015.

Mr. Nilesh Javker has been appointed as a Company secretary and compliance officer of the Company w.e.f 27th May 2015.

VI. AUDIT COMMITTEE

The Audit Committee consists of the following 4 Non-Executive Directors

a. Mr. Atul Desai - Chairman, independent

b. Mr. Abhishek Mandawewala - Member

c. Mr. Ashok Jain - Member, independent

d. Mrs. Amita Karia - Member, independent

VII. DEPOSITS

The Company has not accepted any deposit within the meaning of the Chapter V to Companies Act 2013. Further, no amount on account of principal or interest on deposit was outstanding as at the end of the year under report.

VIII. AUDITORS

Your Company's Auditors, M/s. Chaturvedi & Shah, Chartered Accountants were re-appointed for the period of three years till the conclusion of 35th Annual General meeting by the members at 32nd Annual General Meeting of the Company held on 29th September 2014. Members are requested to ratify their appointment from the conclusion of 33rd Annual General Meeting to the conclusion of 34th Annual General Meeting.

IX. CORPORATE GOVERNANCE

A separate report on Corporate Governance is annexed hereto as a part of this Report. Management Discussion and Analysis Statement is separately given in the Annual Report. A certificate from the Mr. A. L. Makhija, Practising Company Secretary regarding compliance of conditions of Corporate Governance as prescribed under Clause 49 of the Listing Agreement is attached to this report.

X. AUDITORS' REPORT

References drawn by the Auditors' in their report are self-explanatory.

Please refer to Auditors' Observations/ qualifications and in relation thereto the Board of directors' state as under:

i) We refer to Note no. 1 (a) of "Annexure to Independent Auditor's Report" stating that the Company is in the process of updating its fixed asset register showing full particulars including quantitative details and situation of fixed assets and state that fixed asset register is being updated showing full particulars including quantitative details and situation of fixed assets.

XI. SECRETARIAL AUDIT REPORT

A Secretarial Audit Report given by Mr. A L Makhija, a practising company secretary is herewith annexed. As regard observation of the Report, we state that- i. The Company was in search for executive director after the resignation of Mr. Shashank Chaturvedi, the executive director with effect from 12th November 2014 and the Board of directors at their meeting held on 8th July 2015 has appointed Mr. Anuj Burakia as a whole time director and Occupier under the Factories Act, 1948 with effect from 29th July, 2015. .

ii. The Company has appointed Mr. Nilesh Javker as the Company Secretary and Compliance officer w.e.f 27th May 2015.

XII. RISK MANAGEMENT POLICY

Board of Directors at their meeting held on 10th February 2015 considered and approved risk management policy and identified the major risk in severe competition in finished goods from local as well as international market

XIII. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTOR (CLAUSE 49 OF LISTING AGREEMENT)

The details of familiarization program (for independent directors) is disclosed on the Company's website and a web link thereto is http://www.rmgalloysteel.com/userfiles/file/RMG%20Familiarisation% 20policy.pdf

XIV. CODE OF CONDUCT

The Company has Code of Conduct for Board members and senior management personnel. A copy of the Code has been put on the Company's website for information of all the members of the Board and management personnel.

All Board members and senior management personnel have affirmed compliance of the same.

XV. PARTICULARS OF EMPLOYEES

Details of the every employee of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is herewith attached.

XVI.ACKNOWLEDGEMENT

Your Directors take this opportunity to express gratitude for valuable assistance and co-operation extended to the Company by Financial Institutions, Commercial Banks and other authorities. Your directors also wish to place on record their sincere appreciation of the dedicated services, hard work, solidarity and profuse support by all the employees of the Company.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Mumbai, Abhishek Mandawewala Ashok Jain

Date: 8-07-2015 Director Director


Mar 31, 2014

Dear Members,

The Directors present their 32nd Annual Report together with Audited Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS

(Rs. in Lacs)

Year ended Year ended 31-03-2014 31-03-2013

Sales & Other Income 41871 35686 Profit / (Loss) before interest, depreciation and exceptional items 267 (2253)

Interest and Financial Charges 4970 4850

Depreciation and Amortization 2228 2227 Profit / (Loss) before exceptional items and tax (6931) (9330)

Exceptional items 3519 -

Profit/(loss) before tax (3412) (9330)

OPERATIONS

Performance of Alloy Steel and Seamless Tubes of the Company was as under: 2013-14

Particulars Production Sales Gross Sales (Tones) (Qty M.T) (Rs. in Lacs)

Steel 75702 75844 45605

Seamless pipes 419 873 902

2013-14

Particulars Production Sales Gross sales (Tones) (Qty M.T) (Rs. in Lac)

Steel 54045 54521 29011

Seamless pipes 6445 6186 6286

The Company''s operation has improved during the year inspite of lowering production of Seamless Tubes. The growth for the steel production is 38%. This performance is inspite of slow down in the Automobile and Oil & Gas sector. However, it is expected that market for both the above sectors are going to improve from the Financial Year 2014-15.

The Company has taken efforts for reducing Fuel cost of Rolling Mill by putting Producer Gas Plant. However, due to some litigation by another entities by the High Court, the Company could not start operation of Producer Gas Plant. The Company has also taken steps for updation of Furnace during the year by which the fuel consumption is reduced by 7 to 8%.

Since the utilization of Plant Equipments of pipe plant are very low, we have made some modification of various equipments by which it can be used for Pipe as well as Steel. This has not only reduced the operational costs for both but also gives the additional product range to the Steel.

The Company has also made continuous efforts to develop new markets by getting approval from domestic as well as global OEMs. During the year, the Company has got approvals from SKF, FAG & Allison Transmission etc.

We have also approached the Government of Gujarat for extension of VAT benefit for the period during which the plant was closed for the period from 1996-2006. The same has been accepted by the Government of Gujarat and granted extension of benefit for the closure period.

DIRECTORS

Mr. Nirmal Gangwal has resigned from the office of directorship of the Company with effect from 12th August 2013. Your directors appreciate Mr. Nirmal Gangwal for his services as member of the Board.

In accordance with the provisions of the Companies Act, 2013, Mr. Abhishek Mandawewala and Mr. Shashank Chaturvedi retire by rotation at 32nd Annual General Meeting and being eligible offered themselves for reappointment. Your directors recommend their appointments/ reappointments.

Board of Directors of the Company at their meeting held on 27th May 2014 has appointed Mr. Ashok Jain and Mr. Atul Desai as independent directors for a period of five years with effect from 27th May 2014 who in the opinion of the Board fulfils requirements as laid down under section 149(6) of the Companies act 2013. You are requested to approve their appointments at the Annual General Meeting.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your directors confirm that:

i. in the preparation of the annual accounts for the financial year ended March 31, 2014, all the applicable accounting standards had been followed along with proper explanations relating to material departures;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts for the financial year ended March 31, 2014 on a going concern basis.

AUDITORS

M/S. Chaturvedi & Shah hold office of Auditors until the conclusion of the 32nd Annual General Meeting. Members are requested to reappoint them for continuing in the office for a period of three years from conclusion this 32nd Annual General Meeting until conclusion of the 35th Annual General Meeting.

AUDITORS'' OBSERVATIONS

Reference drawn by the Auditors in their report are self explanatory:-

Please refer to Auditors'' Observations/ qualifications and in relation thereto the Board of directors'' state as under:

i) We refer to note 1(a) of "Annexure to Independent Auditor''s Report" stating that the Company is in the process of updating its fixed asset register showing full particulars including quantitative details and situation of fixed assets and state that fixed asset register is being updated showing full particulars including quantitative details and situation of fixed assets.

THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

In terms of the above rules, the Directors are pleased to give the particulars as prescribed therein in the Form A, which forms part of the Directors'' Report. Form B relating to research and technology absorption being nil is not attached.

Foreign exchange used and earning is mentioned below:

Used: Rs. 3096.56 lacs (Rs. 4275 Lacs)

Earning: Rs. Nil (Rs. 806 Lacs)

PARTICULARS OF EMPLOYEES

Information as per the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rule, 1975 as attached (Annexure B), forms part of this report.

COST AUDITOR

Due date of filing the cost audit report for the financial year 2013-14 as submitted by M/s. Kiran J. Mehta& Co., cost accountant, is 27th September 2014.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is annexed hereto as a part of this Report. Management Discussion and Analysis Statement is separately given in the Annual Report. A certificate from Mr. A L Makhija, Practising Company Secretary regarding compliance of conditions of Corporate Governance as prescribed under Clause 49 of the Listing Agreement is attached to this report.

ACKNOWLEDGEMENT

The Board takes this opportunity to express its sincere appreciation for the excellent support and co-operation received from the Company''s customers, suppliers, bankers and the share holders for their consistent support to the Company. The directors also sincerely acknowledge the significant contributions made by all employees for their dedicated services to the Company.

For and on behalf of the Board of Directors

Abhishek Mandawewala Shashank Chaturvedi Director Executive Director

Place: Mumbai, Date: 27th May, 2014


Mar 31, 2013

The Directors present their 31st Annual Report together with Audited Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs. in Lacs)

Year ended Year ended 31-03-2013 31-03-2012

Sales & Other Income 35686 58712

Profit / (Loss) before interest, depreciation (2253) 741

Interest and Financial Charges 4850 4215

Depreciation and Amortization 2227 2227

Profit / (Loss) before tax (9330) (5701)

OPERATIONS

Performance of Alloy Steel and Seamless Tubes of the Company was as under:

2012-13

Particulars Production Sales Gross Sales (Tones) (in Qty.) (Rs.in Lacs)

Steel 54048 54521 29011

Seamless Pipes 6445 6186 6286



2011-12

Particulars Production Sales Gross sales (Tones) (in Qty.) (Rs in Lac)

Steel 96649 95768 53334

Seamless Pipes 11543 11494 10824

Steel & pipe division have not operated on full capacity in view of lack of demand in view of recession in steel market. Automobile , construction, infrastructure sectors have not fared well during the year which resulted into poor demand for steel. Losses incurred by the Company have eroded working capital of the Company. Power cost has increased due to less heat order. Given the sluggish demand and high production cost, the pressure on the profitability is expected to continue.

The Company however is constantly trying to develop new grades, new customers and get their approvals for the products of the Company from reputed manufacturers.

DIRECTORS

Since the last report, the following changes took place in the Board of Directors-

i. Resignation of Shri Rajesh R. Mandawewala w.e.f. 9th August 2012;

ii. Resignation of Shri.R.G.Sharma, Shri. Rajendra C. Saraf and Shri. Rishabh Saraf w.e.f. 07.02.2013

iii. Resignation of Shri Vijay Singh Bapna w.e.f. 1st April 2013

iv. Resignation of Shri Abhishek R. Mandawewala from the office of Executive Director w.e.f. 1st April 2013 but continues as a director of the Company

v. Appointment of Shri Shashank Chaturvedi, Shri. Ashok Jain, Shri V. S. Iyer and Shri Hanuman Kanodia as Additional directors.

Your directors appreciate Shri Rajesh R. Mandawewala, Shri.R.G.Sharma, Shri. Rajendra C.Saraf, Shri. Rishabh Saraf and Shri Vijay Singh Bapna for their services as members of the Board.

In accordance with the provisions of the Companies Act, 1956, Mr. Abhishek Mandawewala , Shri Atul Desai retire by rotation at 31st Annual General Meeting and being eligible offered themselves for reappointment.

Mr. Ashok Jain, Mr. Shashank Chaturvedi , Mr. V. S. Iyer , Mr. Hanuman Kanodia who have been appointed by the Board of Directors as Additional Directors under Section 260 of the Companies Act, 1956, hold office upto the conclusion of the 31st Annual General Meeting. Notice under Section 257 of the Companies Act, 1956 have been received from shareholders of the Company for their appointment as directors of the Company.

Your directors recommend their appointments/reappointments.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your directors confirm that:

i. in the preparation of the annual accounts for the financial year ended March 31, 2013, all the applicable accounting standards had been followed along with proper explanations relating to material departures;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts for the financial year ended March 31, 2013 on a going concern basis.

AUDITORS

M/S. Chaturvedi & Shah hold office of Auditors until the conclusion of the 31st Annual General Meeting. Members are requested to reappoint them for continuing in the office until conclusion of the next Annual General Meeting.

AUDITORS'' OBSERVATIONS

References drawn by the auditors'' in their report are self explanatory.

THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

In terms of the above rules, the Directors are pleased to give the particulars as prescribed therein in the Form A , which forms part of the Directors'' Report. Form B relating to research and technology absorption being nil is not attached.

PARTICULARS OF EMPLOYEES

There were no employees covered under the purview of section 217 (2A) of the Companies Act 1956 and the rules framed thereunder.

COST AUDITOR

The Company has appointed M/S. Kiran J Mehta & Co, Cost Accountant as a Cost auditor of the Company. Due date of filing the cost audit report is 27th September 2013.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is annexed hereto as a part of this Report. Management Discussion and Analysis Statement is separately given in the Annual Report. A certificate from Ms. Mansi Damania, Practising Company Secretary regarding compliance of conditions of Corporate Governance as prescribed under Clause 49 of the Listing Agreement is attached to this report.

ACKNOWLEDGEMENT

The Board takes this opportunity to express its sincere appreciation for the excellent support and co-operation received from the Company''s customers, suppliers, bankers and the share holders for their consistent support to the Company.

The directors also sincerely acknowledge the significant contributions made by all employees for their dedicated services to the Company.

For and on behalf of the Board of Directors

Abhishek Mandawewala Shashank Chaturvedi

Director Executive Director

Place: Mumbai

Date : 30/05/2013


Mar 31, 2012

The Directors present their 30th Annual Report together with Audited Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS

(Rs. Lacs) Year ended Year ended 31-03-2012 31-03-2011

Sales & Other Income 58712 59741

Profit / (Loss) before interest and depreciation 741 181

Interest and Financial Charges 4215 3122

Depreciation and Amortization 2227 2313

Profit/ (Loss) before tax (5701) (5254)

Less : Fringe Benefit Tax - -

Profit/ (Loss) after Tax (5701) (5254)

Profit/ (Loss) brought forward from previous year (14140) (8886)

Balance carried to Balance Sheet (19841) (14140)

OPERATIONS

Performance of Alloy Steel and Seamless Tubes of the Company was as under:

2011-12 2010-11

Particulars Production Sales Gross Sales Production Sales Gross sales (Tones) (in Qty.) (Rs.in Lacs) (Tones) (in Qty.) (Rs.in Lac)

Steel 96649 95768 53334 109318 109524 56457

Seamless Pipes 11543 11494 10824 12366 12303 9100

Our main share is in automobile industry. There is a tough competition from companies with Blast Furnace route which has resulted in erosion of margin of profits.

Steel division has not performed well since steel input cost has gone up during the year and increased in input cost could not be passed on to customers in view of recession in steel market.

Cost of production of pipe was high due to frequent breakdown in pressure which resulted into increase in maintenance cost and loss of production

The Company has developed new grades in steel division and also rejections in pipes have been reduced.

DIRECTORS

Shri. Vijay Singh Bapna, Shri. Rajendra Saraf and Shri Abhishek Mandawewala, the directors of the Company retire by rotation at 30th Annual General Meeting and being eligible offered themselves for reappointment.

Your directors recommend their appointments/reappointments.

AUDITORS

M/S. Chaturvedi & Shah hold office of Auditors until the conclusion of the 30th Annual General Meeting. Members are requested to reappoint them for continuing in the office until conclusion of the next Annual General Meeting.

AUDITORS' OBSERVATIONS

References drawn by the auditors' in their report are self explanatory.

THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

In terms of the above rules, the Directors are pleased to give the particulars as prescribed therein in the Annexure, which forms part of the Directors' Report. Form B relating to research and technology absorption being nil is not attached.

Foreign exchange used and earning is mentioned below:

Used: Rs. 7476 lacs (Rs. 3176 Lacs)

Earning: Rs. 1847 Lacs (Rs. 724 Lacs)

CORPORATE GOVERNANCE

A separate report on Corporate Governance is annexed hereto as a part of this Report. Management Discussion and Analysis Statement is separately given in the Annual Report. A certificate from Shri A L Makhija, Practising Company Secretary regarding compliance of conditions of Corporate Governance as prescribed under Clause 49 of the Listing Agreement is attached to this report

PARTICULARS OF EMPLOYEES

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

DIRECTORS' RESPONSIBILITY STATEMENT

Sub-Section (2AA):

Your Directors state:

i. that in the preparation of the annual accounts, all the applicable accounting standards had been followed along with proper explanations relating to material departures;

ii. that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

iii. that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the directors had prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENT

The Board takes this opportunity to express its sincere appreciation for the excellent support and co-operation received from the Company's customers, suppliers, bankers and the share holders for their consistent support to the Company.

The directors also sincerely acknowledge the significant contributions made by all employees for their dedicated services to the Company.

For and on behalf of the Board of Directors

Abhishek Mandawewala R.R.Mandawewala

Executive Director Director

Place: Mumbai

Date: 13.07.2012


Mar 31, 2010

The Directors present their 28th Annual Report together with Audited Accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS

(Rs. Lacs)

Year ended Year ended

31-03-2010 31-03-2009

Sales & Other Income 37314 29,332

Profit / (Loss) before interest, depreciation and Miscellaneous Expenses written off (553) (1,983)

Interest and Financial Charges 1494 1,207

Depreciation and Amortization 1888 1,474

Profit / (Loss) before Exceptional Items (3935) (4,664)

Exceptional items

Interest including Funded Interest waived as per rehabilitation scheme - 665

Principal waived as per

rehabilitation scheme - 474

Profit/ (Loss) after Exceptional Items (3935) (3,525)

Less: Fringe Benefit Tax - 7

Profit/ (Loss) after Tax (3935) (3,532)

Profit/ (Loss) brought forward

from previous year (4951) (8,224)

Adjustment on reduction of share capital - 6,805

Balance carried to Balance Sheet (8886) (4,951)

OPERATIONS

Performance of Alloy Steel and Seamless Tubes of the Company was as under:

2009-10 2008-09

Particulars Produc- Sales Gross Produc- Sales Gross

tion (in Qty.) Sales tion (in Qty.) Sales

(Tones) (Rs. in (Tones) (Rs. in

Lacs) Lacs)

Steel 83742* 84076 36337 54089 52574 29748

Trading in steel - - - - 1409 989

Seamless Pipes 5772 5982 3936 5513 3765 2461

* Includes 2972 MT processed by third parties.

Despite on-going recessionary situation in early FY 09-10 which has caused average realization of steel products lower by 17% over that of its preceding year, the organization has taken various steps which has resulted in 60% improvement in Sales Volume of Steel Products and 10% improvement in sales volume of Seamless Pipes in FY 09-10 over that of FY 08-09. Some of the noteworthy Plant

Improvements include Installation of Continuous DRI feeding system- which has brought in savings in manufacturing cost as well as stability in production, Outsourcing of smaller size rolled products to vendors -which has resulted in increased through-put of our rolling mill and recent Installation of LRF transformer which started showing results of reduced cycle time in steel thereby reducing the cost of steel making. Preventive Maintenance system has been further strengthened across all production processes which has resulted in increased production level of quality material.

By diversifying sales into Bearing, power, Defense and railway segments from hitherto Auto and General Engineering Segments, our product mix got a wider spread. We have also started developing niche products especially, high grade special steels (Creep Resistance Steel, Ball Bearing Steels, Low Phosphorous & Low Sulphur Nickel Chrome, Mo Steels & Round Ingots) to maximize sales & profitability. The newly installed heat-treatment furnace would aid in strengthening quality of these niche products.

In view of the above steps taken, the Company expects improvement in performance as compared to previous year.

DIRECTORS

Shri Rajendra C. Saraf, Shri Nirmal Gangwal and Shri Rishabh Saraf, the directors of the Company retire by rotation at 28th Annual General Meeting and being eligible offered themselves for reappointment.

Your directors recommend their appointments.

AUDITORS

M/s. Chaturvedi & Shah hold office of Auditors until the conclusion of the 28th Annual General Meeting. Members are requested to reappoint them for continuing in the office until conclusion of the next Annual General Meeting.

AUDITORS OBSERVATIONS

References drawn by the auditors in their report are self explanatory.

THE COMPANIES (DISCLOSURE OF PARTICULARS IN > THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

In terms of the above rules, the directors are pleased to give the particulars as prescribed therein in the Annexure, which forms part of the Directors Report.

PARTICULARS OF EMPLOYEES

Information as per Section 217(2A) of the Companies Act, 1956 read with Companies (particulars of employees) Rules 1975 forms part of this report.

DIRECTORS RESPONSIBILITY STATEMENT

i. that in the preparation of the annual accounts, all the applicable accounting standards had been followed

along with proper explanations relating to material departures;

ii. that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

iii. that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the directors had prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENT

The Board takes this opportunity to express its sincere appreciation for the excellent support and co-operation received from the Companys customers, suppliers, bankers, Government of Gujarat and the share holders for their consistent support to the Company. The directors also sincerely acknowledge the significant contributions made by all employees for their dedicated services to the Company.

For and on behalf of the Board of Directors

Director Director

Place : Mumbai

Date : May 21, 2010

 
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