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Directors Report of Sarda Energy & Minerals Ltd.

Mar 31, 2015

Dear Members,

The directors are pleased to present the 42nd Annual Report on business and operations of your Company for the financial year ended 31st March, 2015.

Financial Performance

(Rs. in crore)

Particulars Standalone Consolidated

2014-15 2013-14 2014-15 2013-14

Revenue from operations (Gross) 1,517 1,396 1,903 1,720

Less: Excise duty 138 125 143 129

Revenue from operations (Net) 1,379 1,271 1,760 1,591

Exports 175 182 175 182

EBIDTA 335 262 440 375

Depreciation 68 63 93 96

Finance cost (Net) 59 63 121 123

Exceptional item (including additional levy on 126 2 139 2 coal extracted)

Profit before tax 83 134 87 154

Provision for tax 27 44 31 47

Provision for tax related to previous year - 15 - 15

Net Profit 56 75 56 92

Review of performance

The financial year 2014-15 was challenging year due to slowdown in the global economy and resultant sharp fall in the commodity prices. Steel prices fell in the country without corresponding correction in the price of iron ore. The Supreme Court of India cancelled all the coal mine allocations made by the Government since 1993 through Screening Committee or Government dispensation route and also imposed additional levy @ Rs. 295/- per MT on the coal extracted from the mines since inception. The Gare Palma IV/7 coal mine operated by the Company has also been cancelled w.e.f. 1st April, 2015 and the Company had to pay additional levy of Rs. 143 Crore on the coal extracted from the mine. The Company has provided for the full liability, including Rs. 126 crore for earlier years, in the financial year 2014-15, adversely affecting the profitability and liquidity.

Government has started the process of reallocation of the coal mines through auction, which were cancelled due to Supreme Court order. In the first phase 23 operating coal mines were auctioned. Your company participated in the auction and offered a bid price which was comparable to the alternate sources in the longer run. Your Directors believe that operation of the mines at the price at which the auctions were concluded would not have been commercially sustainable. The Company would, however, continue to participate in coal mine auctions.

The pace of economic activity is yet to pick up. RBI continued to follow tight monetary policy with high interest rates to keep check on the inflation. Exports were also hit due to falling prices, relatively strong Rupee and slowdown in other economies.

However, in spite of these constraints and the challenging environment, the performance of your Company was satisfactory. This was achieved through a constant endeavor at all levels for excellence and cost control combined with a series of safety initiatives.

A detailed analysis of the performance is given in the Management Discussion and Analysis Report appended hereto.

No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company. Further, there was no change in the nature of the business of the Company.

Dividend

Your Directors have recommended a dividend of Rs. 3/- (i.e. 30%) per equity share (last year Rs. 3/- per equity share) for the financial year ended March 31, 2015. The dividend payout is subject to approval of members at the ensuing Annual General Meeting.

During the year, your Company has transferred the unpaid dividend amount in respect of the F.Y. 2006-07 to the Investor Education and Protection Fund.

During the year, no amount has been transferred to Reserves.

Subsidiaries / Controlled Entities / Joint Ventures

During the year, Natural Resources Energy Pvt. Ltd. became subsidiary of your Company. Further, your Company made fresh investments for acquiring 29.98% in Godawari Natural Resources Limited for participation in the auction of coal mines. A brief on the business operations of subsidiaries /controlled entities / joint ventures consolidated with SEML is given hereunder:

Subsidiaries

- Sarda Energy & Minerals Hongkong Ltd, Hongkong (SEMHKL), is a wholly owned subsidiary, functioning as global investment arm of your Company. During the year under review, the subsidiary reported a net profit of Rs. 10.83 crore as against Rs. 23.76 crore in the previous year. The company paid a dividend of USD 2 Million during the year. Last year also, the Company has paid a dividend of USD 3 Mn.

- Sarda Global Venture Pte. Ltd. Singapore (SGV), a wholly owned subsidiary, has acquired economic interest in coal mines in Indonesia but the mining project has not seen any progress during the year. The company is evaluating the various options for its stake in the coal mine in the best interest of all stake holders.

- Sarda Metals & Alloys Ltd. (SMAL), a wholly owned subsidiary is operating 2 x 33 MVA Ferro Alloys plant backed by 80 MW captive thermal power plant. In view of the better market conditions, the company had started production of ferro alloys from June but due to global down turn in commodities ferro alloys plant did not perform as expected. During the year, the operation of the plants and assets were badly affected by the HUDHUD Cyclone causing stoppage of production for around 27 days. The team restored operation in reasonably quick time. Due to adverse market condition and disruption in operations due to cyclone, inspite of fall in the interest burden, during the year, SMAL has reported a net profit of Rs. 3.80 crore against Rs. 6.89 crore reported in the previous year.

- Sarda Energy Ltd. (SEL), a wholly owned subsidiary was incorporated as an SPV to put-up 1320 MW super critical IPP thermal power project in Chhattisgarh. In view of inordinate delay in acquisition of land and delay in getting various approvals, the Company has decided to abandon the project. Accordingly the preliminary and pre-operative expenses of Rs. 11.98 crore incurred by the SPV has been written off and booked as expense during the year.

- Parvatiya Power Ltd. (PPL), is operating 4.8 MW Loharkhet Hydro Power Project in Bageshwar District of Uttarakhand since 2008. During the year 2014-15, the plant generated and supplied 203.42 lac KWh (previous year: 209.17 lac KWh) power achieving 48% capacity utilization factor. The Company has earned profit after tax of Rs. 2.87 crore as against Rs. 2.20 crore in the previous year. The Company is evaluating capacity enhancement in the project.

Your Company continues to hold 51% stake in PPL.

- Madhya Bharat Power Corporation Ltd. (MBPCL), is implementing the 96 MW Rongnichu Hydro Power Project near Gangtok in East Sikkim as a run-of-the-river scheme. Work on the project is progressing slower than expected due to poor geology. The project has faced time and cost overruns. The Company has applied for additional funding for cost overrun, which is under active consideration of the lenders. The Project has been successfully registered as a CDM Project with UNFCCC.

Consequent to additional equity infusion during the year, share of your Company as on 31st March, 2015 has gone up from 58.73% to 67.59%.

- Sarda Hydro Power Pvt. Ltd. (SHPPL) has been allotted 24 MW Kotaiveera and 9MW Ganeshpur Small Hydro Power Project in Chhattisgarh. Land acquisition and statutory approvals are in progress. Your Company holds 60% stake in SHPPL.

- Raipur Fabritech Pvt. Ltd. (RFPL) has been incorporated to undertake steel fabrication activities at the site of closed steel plant of your Company. The Company is also exploring possibility of developing a logistic park. The Company is yet to start operations. Your Company holds 52.38% stake in RFPL.

- Raipur Industrial Gases Pvt. Ltd. (RIGPL) has been incorporated to undertake activities related to production of industrial gases. The Company is yet to start operations. Your Company holds 51% stake in RFPL.

- Natural Resources Energy Pvt. Ltd. (NREPL) is an SPV to carry on the business of development of mines and minerals, generation and trading of power and infrastructure development. The company had participated in the recently concluded auction of coal mines as an SPV. NREPL has become subsidiary in the F.Y. 2014-15. The entire share capital of the company is held by SEML and its wholly owned subsidiary SMAL.

Controlled Entities

- Chhattisgarh Hydro Power LLP (CHP LLP) has been allotted four run-of-the river Small Hydro Power Projects in Chhattisgarh with a total generation capacity of 77 MW. The work on the first 24 MW Gullu hydro power project is progressing as per schedule and the project is expected to achieve the commercial operation in the next financial year. The project is entitled for CDM benefits. MOEF has conveyed Host Country Approval to the Project for CDM registration. The project is currently under validation stage.

All these projects are entitled for benefits in the form of subsidy from Ministry of New & Renewable Energy, Clean Development Mechanism as well as Renewable Energy Certificates. Your Company has made additional contribution of Rs. 1.61 crore during the year towards its share in the LLP and holds 60.95% stake in CHP LLP.

- Shri Ram Electricity LLP (SRELLP) was incorporated as a special purpose vehicle (SPV) for setting up a captive thermal power plant of 40 MW in the State of Chhattisgarh. In view of the cancellation of coal linkage for the power project, the LLP is reviewing its decision to implement the project. Your Company continues to hold 51% stake in SRELLP.

Joint Ventures

- Raipur Infrastructure Company Ltd. (RICL) operates a private Railway Siding in Mandhar, Raipur. During the year 2014-15 the Company has earned profit of Rs. 1.02 crore as against Rs. 2.76 crore in the previous year. In view of changed market scenario, the Company has dropped railway siding proposed in Odisha. An amount of Rs. 1.37 crore spent on the project has been written off during the year in view of the decision. Your Company holds one third share in the Joint Venture.

- Madanpur South Coal Co. Ltd. (MSCCL) was SPV for the Madanpur South coal block allotted to a consortium. The Supreme Court has cancelled all coal block allotments made by the Government through Screening Committee and govt. dispensation. The SPV holds certain assets, including land, acquired for the project. The SPV would be wound- up after disposal of these assets. The SPV has bought back part of the equity shares during the current year out of the surplus funds as permitted by the law. Your Company holds a 20.63% stake in the joint venture.

- Godawari Natural Resources Ltd. (GNRL) is an SPV for acquisition and development of mines and minerals, generation and trading of power and infrastructure development. SEML had participated in auction for acquisition of coal mine jointly with others through this SPV to meet the prescribed eligibility criteria. Your Company acquired 29.98% stake in GNRL during the year.

A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided as part of the Consolidated Financial Statements and hence not repeated here for the sake of brevity. The Policy for determining material subsidiaries as approved may be accessed on the Company's website www.seml.co.in under the head corporate governance/policies under the Investors' section.

Consolidated financial statements

The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable Accounting Standards.

The annual accounts and related information of the subsidiary companies are open for inspection by any member/investor at the Registered Office of your Company and the subsidiary concerned and your Company will make available these documents/ details upon request by any member of the Company who may be interested in obtaining the same.

In accordance with Section 136 of the Companies Act, 2013, the Audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website www.seml.co.in. These documents are also available for inspection during business hours at our registered office in Nagpur, India.

ESOP Scheme

Your Company treats its human capital as the most valued asset and as a gesture of its feeling, your Company has implemented SEML ESOP Scheme 2012 for the employees and directors of your Company and its subsidiaries. As on 31st March, 2015, 2,22,240 options have been vested at a price of Rs. 125/- per share. Out of this 1,28,319 options have been exercised by the employees.

The disclosures required to be made in the Directors' Report in respect of the aforesaid ESOP Scheme, are contained in Annexure A forming part of the Directors' Report.

Directors

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Pankaj Sarda, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.

Further, in terms of the approval of the Board of Directors, it is proposed to re-appoint Mr. K.K. Sarda, as Chairman & Managing Director for a fresh term of five year w.e.f. 1st April, 2015. Necessary resolution for the same is taken for approval of the members in the general meeting.

Brief profile of the Directors proposed to be appointed / re-appointed, nature of their expertise in specific functional areas, names of the companies in which they hold directorships and shareholding are provided in the Corporate Governance Report forming part of the Annual Report.

During the year under review, the members approved the appointment of Mrs. Uma Sarda as a non-executive Non-Independent woman Director who is liable to retire by rotation and reappointments of Mr. A.K. Basu, Mr. C.K. Lakshminarayanan, Mr. G.S. Sahni, Mr. J. Balakrishnan. Mr. P.R. Tripathi and Mr. Rakesh Mehra, as Independent Directors who are not liable to retire by rotation.

Your Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.

Pursuant to the provisions of the Act and the corporate governance requirements as prescribed by SEBI under clause 49 of the Equity Listing Agreement, the Board of directors ("Board") has carried out an annual evaluation of its own performance, and that of its

Committees and individual directors. The performance of the Board and individual directors was evaluated by the Board seeking inputs from all the directors. The performance of the Committees was evaluated by the Board seeking inputs from the Committee Members. The Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors. A separate meeting of Independent Directors was also held to review the performance of Non-Independent directors; performance of the Board as a whole and performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors. The evaluation of Independent Directors was carried out without the presence of that director. This was followed by a Board meeting that discussed the performance of the Board, its Committees and individual directors. Key criteria's for performance evaluation are given in Annexure B to directors' report.

Your Company follows a policy on remuneration of Directors, Key Managerial Personnel (KMP), Senior Management Personnel (SMP) and other employees of the Company. The policy is approved by the Nomination & Remuneration Committee of the Company. Remuneration Policy for Directors, Key Managerial Personnel and other employees is annexed as Annexure C to directors' report.

Your Company with the approval of Nomination & Remuneration Committee has adopted a policy on Board diversity and the recommendation of candidature for Board appointment will be based on merit that complements and expands the skills, experience and expertise of the Board as a whole, taking into account gender, age, professional experience and qualifications, cultural and educational background, and any other factors that the Board might consider relevant and applicable from time to time towards achieving a diverse Board. The criteria for determining qualification, positive attributes and independence of director is enclosed as Annexure D to directors' report.

Familiarisation programmes for Board Members

Your Company provides information to familiarize the Independent Directors with the strategy, operations and functions of the Company. The Board members are provided with information/ presentations and are given the opportunity to interact with the Senior Management of your Company to help them to understand the Company's strategy, business model, operations, products, markets, organization structure, finance, human resources, technology, quality, facilities and risk management and such other matters as may arise from time to time.

The Directors get an opportunity to visit Company's plants, where plant heads appraise them of the operational and sustainability aspects of the plants to enable them to have full understanding on the activities of your Company and initiatives taken on safety, quality, CSR, sustainability etc. At various Board meetings during the year, presentations are made to the Board on safety, health and environment and sustainability issue, risk management, company policies, changes in the regulatory environment applicable to the corporate sector and to the industry in which it operates. Quarterly presentations on operations made to the Board include information on business performance, operations, safety, market scenario, financial parameters, working capital management, fund flows, senior management change, major litigation, compliances, subsidiary information, donations, regulatory scenario, etc.

The policy on familiarization programmes for Independent Directors is posted on the website of the Company www.seml.co.in and can be accessed under the head corporate governance/policies under the Investors' section.

Directors' Responsibility Statement

Your Directors state that:

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

b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date;

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

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

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

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

Key managerial personnel

During the year, the Board appointed Mr. Padam Kumar Jain as Chief Financial Officer and Mr. Manish Sethi as Company Secretary of the Company w.e.f. 14th August, 2014.

Auditors and Auditors' Report

Statutory Auditors

M/s. O.P. Singhania & Co., Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re- appointment.

The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

Cost Auditors

The Board has appointed the M/s. S.N. & Co., Cost & Management Accountants, as cost auditors for conducting the audit of cost records of the Company.

Secretarial Auditor

The Board has appointed S.G. Kankani & Associates, Practicing Company Secretaries, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure E to this Report. The Secretarial Audit Report is self explanatory and do not call for any further comments. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Corporate Social Responsibility (CSR)

With the objective of sustainable development and continual improvement, your Company adopts a voluntary and proactive approach to CSR to connect with the society by creating a sense of belonging.Your Company strives for sustainable development programs in partnership with the community.

Members are requested to refer the Corporate Governance Report forming part of this annual report for the composition of the CSR Committee. The CSR policy of the Company is available on the website of the Company - www.seml.co. in - under the head corporate governance/policies under the Investors' section. The annual report on the CSR activities is annexed as Annexure F to directors' report.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the stock exchanges, Corporate Governance Report along with the Auditors' Certificate regarding compliance of conditions of Corporate Governance is made a part of the Annual Report.

Disclosures

Board/Committees/Vigil Mechanism

The Board of Directors met 6 (six) times in the financial year 2014-15. The details of the composition of Board of Directors, Corporate Social Responsibility Committee, Audit Committee, other committees of the Board, meetings of the board and committees and attendance of directors at the Board and committee meetings and implementation of Vigil Mechanism are given in the Corporate Governance Report forming part of this Annual Report.

Particulars of Loans given, Investments made, Guarantees given and Securities provided

Particulars of loans given, investments made and guarantees given are given in note no. 13, 16, 37 and 44 to the standalone financial statements. The Company, in its capacity of promoter, has pledged its entire holding in Parvatiya Power Ltd. and 67.54% of its holding in MBPCL with the lenders for loans granted to them. The loans and the guarantees given are utilized by the recipients for their business purposes. Members are requested to refer the notes for details which are not repeated here for the sake of brevity.

Contracts and Arrangements with Related Parties

All contracts/arrangements/transactions entered by the Company during the financial year with the related parties were in the ordinary course of business and on an arm's length basis in the best interest of the Company. During the year the company had not entered into any contract/ arrangement /transaction with related party which could be considered material in accordance with the policy of the company on materiality of related party transactions.

The Policy on materiality of related party transaction and dealing with related party transactions as approved by the Board may be accessed on the Company's website - www.seml.co.in under the head corporate governance/policies under investors' section.

Internal Financial Control

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

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure G to this report.

Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith as Annexure H to this report.

Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is annexed herewith as Annexure I to this report.

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

Risk Management

During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, accident, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.

A Risk Management Policy was approved by the Committee. The Company monitors and manages the risks and uncertainties that can impact its ability to achieve its strategic objectives.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. I ssue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employee Stock Options Scheme referred to in this Report.

4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

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

The disclosures/information/details disclosed/given elsewhere in the annual report has not been repeated again in the directors' report for the sake of brevity. Members are requested to refer relevant sections for the information.

Acknowledgement

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

On behalf of the Board of Directors,

Raipur, 25th July, 2015 (K.K. Sarda)

Chairman & Managing Director DIN: 00008170


Mar 31, 2014

Dear Members,

The directors present the 41st Annual Report on business and operations of your Company for the fnancial year ended 31st March, 2014.

Financial performance

(Rs in Crore) Particulars Standalone Consolidated 2013-14 2012-13 2013-14 2012-13

Revenue from operations (Gross) 1,396 1,524 1,720 1,545

Less: excise duty 125 140 129 140

Revenue from operations (Net) 1,271 1,384 1,591 1,405

Export 182 120 182 120

EbiDta 260 287 373 338

Depreciation 63 64 96 69

Finance cost (Net) 63 63 123 69

profit before tax 134 160 154 200

Provision for current and deferred tax 44 35 47 38

Provision for deferred tax related to 15 -- 15 -- previous year

Net profit 75 125 92 162

Dividend

Your directors have recommend a dividend of Rs 3/- per equity share for the year ended 31st March, 2014. the dividend shall be paid after approval of the members at the annual general meeting.

During the year, your Company has transferred the unpaid dividend amount in respect of the F.Y. 2005-06 to the investor Education and Protection Fund established u/s 205C of the Companies act, 1956.

Operations

The fnancial year 2013-14 was a yet another challenging year due to slow down in Indian economy and industrial production and infrastructure growth on account of high infation, policy paralysis, political scenario, the ongoing European debt crisis and delayed receipt of permission for disposal of coal washery rejects. In spite of these constraints and the challenging environment, the performance of your Company was satisfactory. This was achieved through a constant endeavor at all levels for excellence combined with a series of safety initiatives.

For detailed analysis, members are requested to refer to the Management Discussion and analysis, forming part of this annual Report.

Cost saving initiative

Your company initiated a drive in 2012-13, in all its activities, to cut down controllable costs on the basis of innovation, discipline and logical thinking. The drive has yielded good results in improving energy effciency, reducing consumption of materials, more efficient inventory management, optimising manpower, etc. These steps have contributed significantly in maintaining the bottomline in these challenging times. Encouraged by the success, cost reduction & effciency improvement have been adopted as an operational philosophy. in appreciation of the success achieved, your Directors have recommended to spend a part of the savings on employee welfare and have constituted a committee and framed rules for attaining this purpose.

Projects

Debottlenecking, Modernization & Expansion project

Your Company has achieved fnancial closure for itsRs. 550 crore project for debottlenecking, modernisation & expansion of existing manufacturing and mining facility. The project will be executed over the next 2 years.

Pithead Thermal Power Plant

Your Company has received Environmental Clearance for its 350 MW pithead thermal power plant, subject to receipt of Stage-1 forest clearance and subsequently Stage 1 forest clearance has also been received. Coal mining plan for enhanced capacity of coal mining has been submitted to the concerned government authorities. Project execution will be started after approval of the mining plan.

Controlled entities

Sarda Energy & Minerals Hongkong Ltd, Hongkong (SEMHKL), is a wholly owned subsidiary, functioning as global investment arm of your Company. During the year under review, the subsidiary reported a net profit of Rs. 23.76 crore.

Sarda Global Venture Pte. Ltd. Singapore (SGV), a wholly owned subsidiary, has acquired economic interest in coal mines in Indonesia but the mining project has not seen any progress during the year.

Sarda Metals & Alloys Ltd.(SMAL), a wholly owned subsidiary has installed 2 x 33 MVA Ferro Alloys plant backed by 80 MW captive thermal power plant. On commercial considerations during the FY 2013-14 the Company operated only the power plant. In view of improvement in the ferro allys market, SMAL has recently statrted ferro alloys manufacturing facility. During the year, your Company has made additional equity investment ofRs. 9.71 crore in the project. The project has reported a net profit ofRs. 6.89 crore in its first full year of operation and has met all its repayment commitments on time.

Sarda Energy Ltd. (SEL), a wholly owned subsidiary, has taken up the project of 1320 MW super critical thermal power project in Chhattisgarh. The Company has received stage 1 forest clearance. Environmental clearance is awaited. The work on the project could not see any progress during the period under review because the land acquisition has been challenged in the High Court of Chhattisgarh. all activities have been suspended until the decision of the Hon''ble High Court of Chhattisgarh is pronounced in the matter.

Parvatiya Power Ltd. (PPL),is operating 4.8 MW Loharkhet Small Hydro Power Project in Bageshwar District of Uttarakhand since 2008. During the year 2013-14, the plant generated and supplied 209.17 lacs KWh (previous year: 192.70 lacs KWh) power achieving 50% capacity utilization factor. The Company has earned profit after tax of Rs. 2.20 crore as against Rs. 1.78 crore in the previous year. the Company is exploring the possibility of capacity enhancement in the project.

Your Company continues to hold 51% stake in PPL.

Madhya Bharat Power Corporation Ltd. (MBPCL), is implementing the 96 MW Rongnichu Hydro Power Project near Gangtok in East Sikkim as a run-of-the-river scheme. Work on the project is progressing slower than expected due to multiple factors. The project has faced time and cost overruns. The Company has applied for additional funding for cost overrun, which is under active consideration of the lenders. The Project has been successfully registered as a CDM Project with UNFCCC.

No fresh equity investment was made during the year. Your Company continues to hold 58.73% share in MbPCL.

- Chhattisgarh Hydro Power LLP has been allotted four run–of-the river Small Hydro Power Projects in Chhattisgarh with a total generation capacity of 77 MW. The LLP has started work on first 24 MW Gullu Hydro power project. The fnancial closure was achieved during the year. Civil contract has been awarded and bids of Electro-Mechanical and Hydro-Mechanical works are under evaluation. Work on the project is progressing well as per schedule. The project is entitled for CDM benefits; MOEF has conveyed Host Country Approval to the Project for CDM registration. The project is currently under validation stage.

All these projects are entitled for benefits in the form of subsidy from Ministry of New & Renewable Energy, Clean Development Mechanism as well as Renewable Energy Certifcates. Your Company has made fresh contribution of Rs 3.64 crore during the year towards its share in the LLP and holds 60.92% stake in CHP LLP.

- Sarda Hydro Power Pvt. Ltd. (SHPPL) has been allotted 24 MW Kotaiveera and 9MW Ganeshpur Small Hydro Power Project in Chhattisgarh. Land Acquisition and statutory approvals are in progress. Your Company holds 60% stake in SHPPL.

- Shri Ram Electricity LLP (SRELLP) was incorporated as a special purpose vehicle (SPV) for setting up a captive thermal power plant of 40 MW in the State of Chhattisgarh. In view of the changed market scenario for power projects in the country, the LLP is reviewing its decision to implement the project. Your Company continues to hold 51% stake in SRELLP.

- Raipur Fabritech Pvt. Ltd. (RFPL) has been incorporated to undertake steel fabrication activities at the site of closed steel plant of your Company. the Company is also exploring possibility of developing a logistic park. Your Company holds 52.38% stake in RFPL.

- Raipur Industrial Gases Pvt. Ltd. (RIGPL) has been incorporated to undertake activities related to production of industrial gases. The Company is yet to start operations. Your Company holds 51% stake in RFPL.

Joint ventures

- Raipur Infrastructure Company Ltd. (RICL) operates a private railway siding in Mandhar, Raipur. During the year 2013–14, the Company has earned profit of Rs 2.76 crore as against Rs 1.37 crore in the previous year. in view of changed market scenario, the Company is reviewing its decision to develop railway siding in Odisha. Your Company holds one third share in the Joint Venture.

- Madanpur South Coal Co. Ltd. (MSCCL) was allotted a coal block in Madanpur area of District Korba of Chhattisgarh in consortium. However, the government of India has de-allocated the coal block due to delay in implementation. The implementation was delayed because the area was classified by the government as No-Go area and not due to any other reason on the part of the Company. the decision has been challenged in the High Court and the court has stayed operation of the de-allocation. Your Company holds a 20.63% stake in the joint venture.

Awards and appreciation

During the year, coal mines of your Company received the following awards at the Annual Safety Fortnight conduction by South Eastern Coal Fields Ltd.:

- Award in "Dust Suppression in OC working, CHP & Stock Yard" – 1st position

- Award in "Engineering Overall" – 2nd position

- Prize and certifcate for Trade test, which is the first time achievement since the beginning of the mines.

Your Company won the above awards among the three regions i.e. Raigarh, Bilaspur and Jabalpur.

Environmental conservation

Your Company is committed to adopt best practices for protection of environment. Special thrust is given on utilizing the waste generated so that instead of damaging the environment, the same is used effectively /purposefully. The impact of each production activity on nature is closely monitored and corrective/preventive actions are taken to minimize adverse impact. adequate budgetary support is provided for environmental protection activities.

During the year following initiatives were taken in this direction:

Plant waste was utilized for making ECO bricks under the brand name SARDA.

Replacement of old brick machine with cost effective & more productive brick machine.

WHRB ash used for brick making instead of dumping outside land.

Water Sprinklers were provided near ash silo, raw material yard and road side to control fugitive emission.

Road side paving was done.

Construction of new concrete road inside plant to avoid dust pollution.

Recyclable material was recovered from plant waste like Slag, Char & Accretion and recycled in manufacturing process.

Manganese bearing waste was used to make sinter as a substitute of low grade Mn Ore to conserve the natural resources.

Usage of Glass Fiber bags in gas cleaning unit to reduce chimney gas emission and energy conservation.

Multi Clean Floor Sweeper machine was provided.

2,08,774 units were generated through Solar Power as compared to 82,746 units in the previous year

Extensive tree plantation has been done to enhance the green cover in and around the plant area. During the year, around 8678 trees have been planted.

In addition to the above, many energy saving projects are being taken on a regular basis.

Corporate social responsibility

With the objective of sustainable development and continual improvement, your Company adopts a voluntary and proactive approach to CSR to connect with the society by creating a sense of belonging. Your Company strives for sustainable development programs in partnership with the community. A synopsis of the activities undertaken by your Company in the areas of education, healthcare, art, culture & sports, infrastructure and livelihood development is presented hereunder.

Education

Your Company believes that education cannot be viewed as an isolated input but it needs to be viewed as a tool to improve the lives of the community. Education plays an important role for taking up any development activity. Key activities undertaken by your company in the feld of education are:

- Adoption of 90 Single teacher schools in deep remote areas in Chhattisgarh being run by Friends of Tribal Society. the Society is running 46,966 schools across the country for basic education to the deprived sections of the society and is also running community development programme.

- Interest free fnancial assistance of Rs 10.35 crore to R. K. Sarda Vidya Mandir, a state-of-the-art CBSE school owned and run by Bharatiya Vidya Bhavan in Raipur. Your Company had also donated the land to the trust for the school. in a very short span the school has become most preferred school in Raipur.

- Contribution to the "Shiksha Deep Trust" as founder member for providing scholarship to the poor meritorious students of the state.

- School Bus facility for the students and staff in villages in the mines area

- Support to various schools/anganbadies, in the form of salaries of teachers/staff, school bags to students, sports material to schools, etc.

- Support to "Siltara Shikshan Samiti" for the improvement in education quality

- Providing Industrial training and exposure to engineering, CA, CS & management students

- Distribution of steel utensils for the mid day meal service in Govt. schools

Healthcare:

Your Company treats healthcare as one of its priorities. To create awareness amongst villagers on matters of health, hygiene and mother & child healthcare, your Company is working with various institutions/agencies to improve the health conditions in the villages. Major healthcare activities undertaken are as under:

- Running two mobile dispensaries with free medicines and providing services of two full time Doctors. During the year 44466 patients benefitted from the mobile dispensaries

- Tied up with various specialized medical institutes & hospitals for the treatment of underprivileged and critical patients for free treatment.

- Organized Blood Donation Camp with Red Cross & CII-Young Indians, collected 302 units of blood

- Organized Mother & Child Health Care awareness program at nearby villages

- Organized No Tobacco Day camp & conducted an awareness programme on oral cancer with CBCC -USA & Sanjeevani Cancer Hospital , Raipur.

- Organized various health awareness camps for the villagers

In addition your company regularly organises medical checkup camps – individually and in association with other organization in the surrounding areas.

Infrastructure

Your Company is committed to set up essential services required for sustainable development and as part thereof it has undertaken various infrastructure development activities in and around its plant. Your Company has carried out the work of deepening of ponds, construction of roads at Mandhar, tanda and Gare villages, sanitation facility, drainage system in Siltara, installation of street lights, tree guards, etc. Your Company has also made drinking water available at Siltara and Mandhar through hand pumps and through pipelines from its plant to the nearby villages.

The fre brigade of your Company continues to play an important role in controlling fre hazards in the nearby villages, industries and also in the city of Raipur. During the year it attended 13 fre calls from outside.

Art, Culture & Sports

Your Company promotes sports, arts and cultural activities of communities close to its operations. Your Company has established system to have regular dialogue with the villagers to assess the requirements of village. Your Company is the sponsor of the Gondawana Cup International Tennis Tournament organized by the Chhattisgarh State Tennis Association under the Indian Tennis Federation in which players from 12 countries participated. Other activities in this direction included:

- Aided Mass Marriage Program at Raipur & Raigarh

- Established multipurpose stall for the devotees of Maa Bamleshwari at Musra village on the occasion of Navratri

- Sponsored Patrika Cup Award Cricket Tournament of Raipur

- Sponsored ITF Tennis Tournament

- Contribution/support for local fairs and inter village Jasgeet Pratiyogita

- Organized positive leadership development programme "Mouj Me Raho" by Swami Anubhavanand Ji

- Sponsored Chakradhar Samaroh for the promotion of local art, culture & dance

Livelihood

Your Company took initiative to keep the village environment clean and healthy. Your Company has encouraged women to participate in mainstream by promoting income generation activities for youth and women ensuring their economic self-reliance. Key activities in this area are summarized hereunder:

- Support for IT education

- Plantation of 5000 plants in project area & villages

- Watershed development through village pond deepening & beautifcation work

- Organized Veterinary Camp

- Participated in Rojgar Mela to provide employment

- Organized Kisan Samaroh (farmer exhibition) for agriculture development

Consolidated accounts

The consolidated fnancial statements presented by the Company include fnancial information of its subsidiaries prepared in compliance with applicable Accounting Standards. As permitted, your Company is not attaching Annual Reports of its subsidiaries and has included prescribed particulars in this annual Report.

The annual accounts and related information of the subsidiary companies are open for inspection by any member/ investor at the Registered office of your Company and the subsidiary concerned and your Company will make available these documents/details upon request by any member of the Company who may be interested in obtaining the same. The annual accounts and related information of the subsidiary companies are also available on your Company''s website.

Fixed deposits

Your Company has not accepted any fixed deposits within the meaning of Section 58A of the Companies Act, 1956/ Section 73 of the Companies Act, 2013, and the rules made there under, during the year under review.

ESOP Scheme

Your Company treats its human capital as the most valued asset and as a gesture of its feeling, your Company has implemented SEML ESOP Scheme 2012 for the employees and directors of your Company and its subsidiaries. As on 31st March, 2014, 1,11,120 options have been vested. Out of this 75,879 options have been exercised by the employees during the year 2014-15.

The disclosures required to be made in the Directors'' Report in respect of the aforesaid ESOP Scheme, in terms of the SEBI (ESOP Scheme) Guidelines, 1999 are contained in Annexure "A" forming part of the Directors'' Report.

Directors

Mr. Rakesh Mehra and Mr. A.K. Basu are retiring by rotation. However, in view of the provisions of Section 149 of the newly enacted Companies Act, 2013, the Company is required to appoint Independent Directors for a period of 5 years. accordingly, it is proposed to reappoint all existing independent directors for a period of 5 years.

The Board considered the independence of each of the independent Directors in terms of Section 149 and Schedule IV to the Companies Act, 2013 and Clause 49 of the listing agreement and was of the view that the proposed directors fulfll the criteria of independence as mentioned in the above provisions and can be appointed as independent Directors. in the opinion of the board all the proposed directors are the persons of integrity and possess relevant expertise and experience. Keeping in view the educational / professional Qualifications, working experience, expertise in line with Company''s business, positive attributes, already being on the Board of the Company and benefits that the Company will derive with their appointment, the Board recommends their appointment as Independent Directors of the Company to hold office for a term of five consecutive years commencing from April 1, 2014. The Company has received declaration in terms of Section 149(6) of the Companies act, 2013.

Further, as required under the Companies act, 2013 and the listing agreement, your Company is required to have a woman director on its board. Accordingly, the Board proposes the appointment of Mrs. Uma Sarda as director on the Board of the Company for consideration and approval of the members. The Company has received Specific notice from a member of the Company under section 160 of the Companies Act, 2013, along with a requisite security deposit proposing the appointment of Mrs. Uma Sarda as Director.

As stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, brief profle of the Directors proposed to be appointed/re-appointed, nature of their expertise in Specific functional areas, names of the companies in which they hold directorships and shareholding are provided in the Corporate Governance Report forming part of the annual Report.

Directors'' responsibility statement

Pursuant to the provisions of Section 217 (2aa) of the Companies act, 1956, your Directors state as under:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation;

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

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

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

Cost Auditors

the Central Government had approved the appointment of M/s. S.G. Kankani & Co., Cost accountants, as the Cost auditor of the Company for audit of the cost accounting records of the steel and electricity business of your Company for the fnancial year 2012-13. The Cost Audit Report was fled by the Cost Auditors on 27th September, 2013.

M/s. S.G. Kankani & Co., Cost accountants, have been re-appointed as the Cost auditors for conducting Cost audit for the fnancial year 2013-14. The Cost Audit Report will be fled within the stipulated period of 180 days of the close of the fnancial year.

Statutory Auditors

M/s M.M. Jain & associates, Chartered accountants, (Firm registration No. 112538W) Statutory auditors of the Company, will retire at the conclusion of ensuing Annual General Meeting of the Company. They have been statutory auditors of the Company since 1980. in order to uphold the highest standards of corporate governance and spirit of the Companies act, 2013, the board of Directors on the suggestion/recommendation of audit Committee has decided for a change in Statutory auditors of your Company.

M/s M.M. Jain & associates have maintained the highest level of governance and substantially contributed in the efforts of the Company towards strengthening the disclosures, internal controls, processes and procedures in line with expanding size of operations. The Board places on record its deep sense of appreciation for the services rendered and guidance given by them as statutory auditors of the Company.

in terms of Section 139(2) of the Companies act, 2013, the board of Directors of your Company, on the recommendation of the Audit Committee, proposes the appointment of M/s. O.P. Singhania & Co., Chartered Accountants (FRN: 002172C) as the statutory auditors of the Company for a period of five consecutive years from the conclusion of the 41st Annual General Meeting up to the conclusion of the 46th Annual General Meeting, subject to ratifcation at each Annual General Meeting. M/s. O.P. Singhania & Co., has confirmed their eligibility and has given consent for their appointment as Statutory auditor.

Necessary resolution for appointment of M/s. O.P. Singhania & Co., as Statutory Auditors of your Company is being taken up through the Notice of 41st annual General Meeting forming part of this annual Report.

Auditors'' report

The observations made in the Auditors'' Report, read with the relevant notes thereon, are self-explanatory and do not call for any comments under Section 217 of the Companies act, 1956.

Compliance under the Companies Act, 2013

The Companies Act, 2013 with Rules, notifed with effect from April 01, 2014 with substantial changes in requirement of law and compliance has replaced the Companies Act, 1956. Your Company has taken steps to comply with the requirements of the above act, as are applicable.

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

The statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed and marked as annexure ''b'', forming a part of this report.

Particulars of employees

The particulars of employees, as required under Section 217 (2A) read with the Companies (Particulars of Employees) Rules, 1975, are given in annexure ''C'' to this report.

Corporate governance

Pursuant to Clause 49 of the Listing Agreement with the stock exchanges, Management Discussion and Analysis, Corporate Governance Report and Auditors'' Certifcate regarding compliance of conditions of Corporate Governance are made a part of the annual Report.

Acknowledgement

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

On behalf of the Board of Directors, Place : Raipur (K.K. Sarda) Dated : august 14, 2014 Chairman & Managing Director


Mar 31, 2012

The directors take pleasure in presenting the Thirty-Ninth Annual Report on business and operations of your company for the financial year ended 31st March, 2012.

Financial results

(Rs. in Lacs)

Particulars Standalone Consolidated

2011-12 2010-11 2011-12 2010-11

Revenue from operations (gross) 1,19,667 95,575 1,20,474 96,205

Less: excise duty 9,649 7,101 9,649 7,101

Revenue from operations (net) 1,10,018 88,474 1,10,825 89,104

Export 11,738 11,995 11,738 11,995

Ebidta 23,757 16,100 21,545 18,868

Depreciation 6,323 5,763 6,536 5,975

Finance cost (net) 4,497 1,807 3,429 762

Profit before tax 10,406 7,072 7,853 9,331

Provision for taxation (1,034) 2,105 (960) 2,132

Net profit 11,440 4,967 8,813 7,199

Dividend

Your directors recommend a dividend of Rs.3/- per equity share for the year ended 31st March, 2012. The total outgo on account of dividend including tax thereon will be Rs.1,249.97 Lacs. The dividend shall be paid after approval of the members at the annual general meeting.

During the year, your company has, consequent upon expiry of the prescribed period, transferred the unpaid dividend amount in respect of the F.Y. 2003-04 to the Investor Education and Protection Fund established u/s 205C of the Companies Act, 1956.

Operations

During the year under review, all existing manufacturing facilities and coal mine achieved record output. This could be achieved through constant endeavor at all levels for excellence. The operations at iron ore mines remained suspended due to law and order problems in the surrounding area.

For detailed plant wise analysis, members are requested to refer to the Management Discussion and Analysis, forming a part of Annual Report.

Projects

During the year, the Wire Drawing Mill, Coal Washery and 2nd Bricks plant were commissioned at a total capital outlay Rs.4,163.93 Lacs.

Debottleneckina. Modernization & Expansion project

Your company has planned capital expenditure of Rs.550 crores for debottlenecking, modernisation & expansion of existing manufacturing, coal mining and coal washery to be executed over next 2 years. Union Bank of India has appraised and sanctioned part debt funds for the project. Balance amount is being syndicated from other member banks of consortium.

Pithead Thermal Power Plant

Your company has acquired required land for the proposed 350 MW thermal power plant at Kolam, Raigarh near its captive coal mines. Water Resources Department, Government of Chhattisgarh has allocated required quantity of water for the project. Environmental clearance is awaited. The site work and release of orders for plant & machinery & other facilities for the project will start after receipt of statutory clearances. Coal mining plan is under preparation to meet coal requirement of the project.

Mining projects Iron Ore

Your company has executed 4 Prospecting Licenses for iron ore in Narayanpur district of Chhattisgarh. Your company is in process of getting various statutory clearances.

Manganese Ore

The application for forest and environment clearance for manganese ore mines of your company in Goa is awaiting State Government clearance, pending finalization of Mining/Forest Policy of the State.

Your comapny received prior permission from Central Government under Mines and Minerals (Development and Regulation) Act for one prospecting license in Balaghat district, Madhya Pradesh.

Having completed the Reconnaissance, your company has moved three applications for grant of Mn ore prospecting licenses in Miragpur area (Madhya Pradesh), which are under consideration of the State Government.

Coal

The work on the Indonesian coal mine under wholly owned subsidiary is progressing steadily. Forest clearance has been received. Land acquisition is going on.

Controlled entities

- Sarda Energy & Minerals Hongkong Ltd, Hongkong (SEMHKL), is a wholly owned subsidiary, functioning as an investment arm of your company. During the year under review the subsidiary has declared dividend equivalent to Rs.26.66 crore (HK$ 39 per equity share), which is reflected in dividend income of your company.

- Sarda Global Venture Pte. Ltd. Singapore (SGV), a wholly owned subsidiary, has acquired economic interest in coal mines in Indonesia. Land acquisition for mining is going on and mining is expected to commence in 2013.

- Sarda Metals & Alloys Ltd.(SMAL), a wholly owned subsidiary, is implementing a greenfield Ferro Alloys plant of 2 x 33 MVA capacity backed by captive thermal power plant of 80 MW near Visakhapatnam. The project is expected to be commissioned in this quarter.

- Sarda Energy Ltd. (SEL), a wholly owned subsidiary, has taken up the project of 1,320 MW super critical thermal power project in Chhattisgarh. Nearly half of the required land has already been acquired by the company. Balance land is being acquired through compulsory acquisition, which is expected to be over by the end of current financial year. The public hearing for environmental clearance has been completed and the environmental clearance is expected soon. SEL expects to get coal linkage in the next allocation programme of the Government of India.

- Parvatiya Power Ltd. (PPL), is operating 4.8 MW Loharkhet small hydro power project in Bageshwar district of Uttarakhand. During 2011-12, the plant generated and supplied record 21.79 Mn Kwh (previous year: 17.85 Mn Kwh) power. The company earned a profit after tax of Rs.200.76 Lacs against Rs.101.25 Lacs earned in the previous year. Your company has 51% stake in PPL.

- Madhya Bharat Power Corporation Ltd. (MBPCL), is implementing 96 MW Rongnichu Hydro Power Project in East Sikkim near Gangtok, close to National Highway NH-31A. Civil works are going on in full swing. The contracts for electro-mechanical and hydro-mechanical works have also been awarded. The company has applied for CDM benefits and validation is in progress.

During the year, MBPCL issued 2,97,50,000 equity shares of Rs.10/- each to the promoter companies to raise Rs.74.38 crore. Pursuant to fresh investments, the stake of your company in MBPCL has gone up to 58.48% from 52% in the previous year.

- Chhattisgarh Hydro Power LLP has been allotted following run -off- the river type Hydro Power Projects in Chhattisgarh

1. 24 MW Gullu SHP 2. 24 MW Rehar SHP

3. 24 MW Mand SHP 4. 5 MW Jelha SHP

The LLP has started work on 24 MW Gullu and Rehar projects. The civil works for 24 MW Gullu SHP has been awarded. Construction of approach roads to project components is under progress. Construction of camp area and dump areas are completed. The main civil contractors have started mobilization of manpower and equipments.

Application for land acquisition for 24 MW Rehar SHP has been made. Other statutory clearances are under progress.

All these projects are entitled for benefits in the form of subsidy from Ministry of Non-Renewable Energy, Clean Development Mechanism as well as Renewable Energy Certificates. Your company has 60.92% stake in CHP LLP.

- Sarda Hydro Power Pvt. Ltd. (SHPPL) has been allotted 24 MW Kotaiveera SHP and 9MW Ganeshpur Small Hydro Power Projects in Chhattisgarh. Both the projects are in the process of obtaining statutory clearances. Your company has 60% stake in SHPPL.

- Shri Ram Electricity LLP (SRELLP) has been incorporated as a special purpose vehicle (SPV) for setting up a captive thermal power plant of 40 MW in the State of Chhattisgarh. The captive power plant has been awarded coal linkage. Your company has 51% stake in SRELLP. Techno-economic viability study is being carried out.

- Raipur Fabritech Pvt. Ltd. (RFPL) has been incorporated during the year to undertake Steel fabrication activities at the site of closed steel plant of your company. Your company holds 52.38% stake in RFPL.

- Raipur Industrial Gases Pvt. Ltd. (RIGPL) has been incorporated during the year to undertake activities related to production of industrial gases at the site of Raipur Gases Private Limited acquired by your company in 2007. The company is yet to start its operations. Your company holds 51% stake in RFPL.

Joint Ventures

- Raipur Infrastructure Company Ltd. operates a private railway siding in Mandhar, Raipur. During the year 2011-12, the company has handled total 179 rakes of different material as against 78 rakes handled during the previous year and earned profit of Rs.137.76 lac as against Rs. 7.80 Lacs in the previous year.

RICL is also in the process of developing a private railway siding allotted in Orissa. The process of approvals and land acquisition is going on. The approval is expected shortly from Collector. Your company holds one- third share in the joint venture.

- Madanpur South Coal Co. Ltd. has been allotted a coal block in Madanpur area of Dist. Korba of Chhattisgarh in consortium. Most of the clearances required have been obtained however, the forest clearance was not granted by the Ministry of Environment and Forest, Government of India, because the area was declared as "NO GO AREA".

A review meeting was called by The Ministry of Coal in January, 2012 where it was informed that the concept of "go-no go area" has been dispensed off and the JV was advised to resubmit the proposal through State Govt. The proposal has been resubmitted and is under active consideration at state level. Your company holds 20.63% stake in the joint venture.

Awards/Appreciation

During the year under review your company received the following awards:

- Engineering Export Promotion Council (Western Region) "EEPC Star Performer Award in the product group "ferro alloys" for its outstanding export performance during FY 2009-10 when the country was reeling under recession post-Lehman fiasco. Your company had received the award for 2008-09 also.

- Certificate of Merit from Chhattisgarh State Renewable Energy Development Agency (CREDA), Dept. of Energy, Govt. of Chhattisgarh in appreciation of the achievement in Energy Conservation at State Level for the year 2011.

- Trophy for "General Safety Consciousness" in Annual Coal Mines Safety Fortnight 2011 at South Eastern coalfields Limited, Bilaspur Region.

Consolidated accounts

Your company has prepared consolidated accounts after including figures of the subsidiaries, joint ventures and associates, as per the Accounting standard 21, 27 and 23 respectively.

Pursuant to the general exemption granted by the Central Government, your company has not attached copies of the Balance Sheet and Profit and Loss Account, Directors' Report and Auditors' Report of the subsidiary companies for the financial year ended 31st March, 2012 and other documents required to be attached to the Balance Sheet of your company. However the other details, as required by the Central Government while granting the said exemption, are disclosed in this Report.

The annual accounts and related information of the subsidiary companies are open for inspection by any member/ investor at the Registered Office of your company and the subsidiary concerned and your company will make available these documents/details upon request by any member of the company who may be interested in obtaining the same. The annual accounts and related information of the subsidiary companies are also available on your company's website.

Fixed deposits

Your company has not accepted any fixed deposits within the meaning of Section 58A of the Companies Act, 1956, and the rules made there under, during the year under review.

Environmental Conservation

Your company believes in the philosophy of co-existence and co-creation of Mother Nature and human activities. Impact of each production activity on nature is closely monitored. Various corrective and preventive measures are taken to overcome the environmental issues and are supported with adequate budgetary measures. Your company is taking a number of initiatives to minimise environmental issues.

In order to improve the environmental conditions water sprinklers and de-dusting systems have been installed at various locations. Oscillating monitor has been installed at raw material handling area. Pneumatic conveying system has been installed at the pellet plant to avoid dust pollution. New gas cleaning plant has been commissioned at ferro alloys plant.

Extensive tree plantation has been done to enhance the green cover in and around the plant area. Your company has also planted 1100 Neem trees in the factory in association with Mahaveer International. Plantation of approximately 8000 trees have been done at the mining sites of your company.

Corporate Social Responsibility

Corporate Social Responsibility (CSR) initiatives of your company owe its genesis to its core values. Your company believes in extending development support to the society around its operating units by creating a sense of belongingness and welfare. Some of the initiatives taken by your company are briefed hereunder:

Education:

In the field of education, your company continues to

- sponsor R. K. Sarda Vidya Mandir, a state-of-the-art CBSE school near Raipur, in association with Bharatiya Vidya Bhavan for providing best educational and sporting facilities to children at affordable price in saddu village.

- support, in association with Friends of Tribal Society, 120 Single teacher schools (Ekal Vidyalayas) in tribal areas of Chhattisgarh state for the students from class-1 to 3.

- be associated with Shiksha Deep Trust for education development of underprivileged. Main objective to this trust is to extend financial assistance for higher education to meritorious & needy students.

Your company

- adopted Govt. ITI of Saragaon in Jangir, Champa of Chhattisgarh State.

- has provided financial assistance and infrastructure facilities to schools in the areas near its plant and mining sites.

- is providing dedicated, free school bus facility in 10 villages to pickup & drop the students to respective schools which covers about 1400 students of 12 locations.

- has provided school kits (bags, etc) to needy poor students under Dattak Putri Siksha Yojana - a scheme operated by the state government in which an Individual/Organization adopt Girls for their education and development under Public Private Partnership.

- conducted corporate culture training programmes in village schools to develop the personality of village school students to promote moral strength, behavioral improvement, improvement of hygienic, cleanliness, Nashamukti i.e. avoidance of toxicants, etc. and fondness for societal development.

Health:

Your company actively sponsors medical facilities, assisting in primary healthcare across villages in and around the area of its operations. During the year, the mobile dispensary van, managed by your company for providing free medical check-up and medicines, served 49,354 patients as against 37,427 patients in the previous year.

Your company also

- provides medical treatment to critical patients of tribal areas at Multi specialty hospitals at company's expenses.

- promotes preventive health care through health check-up camps

- provides low cost and high quality medical assistance for the economically underprivileged community at their door steps through first aid centers.

- has adopted a cluster of villages near its iron ore mines for providing health care facilities.

- provides financial assistance (directly and indirectly) to the patients for medical treatment and also distributes basic medicines in and around the areas of its operations.

In April, 2012, your company had organized a voluntary Blood Donation camp in association with the Red Cross Society. In the camp, 613 units of blood were collected in a single day which as per Red Cross Society is the highest in Chhattisgarh.

Infrastructure Development:

The infrastructure facilities created by your company include roads, electricity facilities, health centers, temples, schools, community centers, bore wells for drinking water, hygiene and sanitation facilities at various places. Your company has also set up water harvesting system for enhanced irrigation facilities through increased level of ground water & number of water sources and improved quality of land through reduction in soil erosion.

Art, Culture & Sports:

Your company

- sponsors various sports at State and National level including the local league matches.

- supports the local players, adopt them & sponsor the institutions for the growth of tennis in the State.

- continues its support to State and District Associations for Tennis & Cricket.

During the year, your company

- sponsored the Gondwana Cup Tennis tournament jointly with Chhattisgarh State Tennis Association. This Grand Slam of Chhattisgarh, an All India level Tennis Tournament was organized in Chhattisgarh after a long interval of 30 years.

- supported the sports meet of students for volley ball tournament and cricket tournaments and developed the play ground for the sport promotion among village youth at various villages.

Your company supported various trusts, societies, communities, organisations for various religious celebrations/ programmes, meetings, awareness rallies, youth festivals, community works, Independence Day celebrations, mass marriage programs supported by Government agencies etc. Your company also supplied tarpaulin sheets for flood affected people.

During the year, your company

- contributed by way of donation, land admeasuring about 3 acres to Maheshwari Trust for constructing community centre.

- organized a session of Swami Anubhavanand on positive environment building.

- contributed for the famous Chakradhar Samaroh '2011 at Raigarh.

Just and equitable society is a dream yet to be cherished in India. Your company aims at doing so through integrating various strategies especially women empowerment by enabling them to have access to incomes and a greater share of wealth. Your company is working extensively to contribute to improved livelihood for poor families in the cluster of villages through enhanced and sustainable income-generating opportunities.

Your company has organized free veterinary medical camp for the cattle of surrounding villages near mine area and has contributed to environmental up-gradation program by taking up social forestry & road side plantations work.

Your company has also organized training for 20 local youths under Indian Grain Storage Management & Research Institute (IGMRI) Hapud (UP), a Central Govt. Enterprises under the Ministry of Food & Consumer, working in the field of scientific grain storage management in villages.

Directors

Mr. A. K. Basu, Mr. C. K. Lakshminarayanan and Mr. J. Balakrishnan, Directors of your company, retire by rotation and being eligible, offer themselves for reappointment. The brief resumes/details of Directors who are to be appointed/reappointed are made a part of the Annual Report.

Directors' responsibility statement

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors state as under:

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation;

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

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

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

Cost Auditors

The board of directors of your company has appointed M/s. S. G. Kankani & Co., Cost Accountants, as the Cost Auditor of the company for audit of the cost accounting records of the steel and electricity business of your company. The appointment of the auditor has been approved by the Central Government.

The audit report of the cost accounts for the year ended March 31, 2012, will be submitted to the Central Government in due course. This is the first year of audit of cost records.

Statutory Auditors

M/s. M. M. Jain & Associates, Chartered Accountants, the retiring statutory auditors of your company, hold office till the conclusion of the ensuing annual general meeting and are eligible for reappointment.

Your company has received a letter from the retiring auditors to the effect that their appointment as auditors for the year 2012-13, if made, would be within the limits under section 224 (1-B) of the Companies Act, 1956.

Auditors' Report

The observations made in the Auditors' Report, read with the relevant notes thereon, are self-explanatory and do not call for any comments under Section 217 of the Companies Act, 1956.

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

The statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed and marked as Annexure 'A', forming a part of this report.

Particulars of employees

The particulars of employees, as required under Section 217 (2A) read with the Companies (Particulars of Employees) Rules, 1975, are given in Annexure 'B' to this report.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the stock exchanges, Management Discussion and Analysis, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

Acknowledgement

Your Directors express their thanks and record appreciation for the co-operation they received from various government authorities, financial institutions, banks, suppliers and customers of your company. Your Directors place on record, their sincere appreciation for the devoted services rendered by the employees at all levels of your company and look forward to their continued support.

On behalf of the Board of Directors,

(K.K. Sarda)

Place : Raipur Chairman & Managing Director

Dated : July 28, 2012


Mar 31, 2011

Dear Shareholders,

We take pleasure in presenting the Thirty-Eighth Annual Report on business and operations of your Company for the fnancial year ended 31st March 2011.

Financial results

(Rs. in lacs)

Particulars Standalone Consolidated

2010-11 2009-10 2010-11 2009-10

Gross sales 94,603 55,592 95,245 56,080

Less: Excise duty 7,101 3,310 7,101 3,310

Net sales 87,502 52,282 88,144 52,770

Export 11,995 7,259 11,995 7,259

EBIDTA 13,703 8,402 15,289 15,930

Depreciation 5,763 3,880 5,975 4,093

Interest 1,519 1,272 472 32

Gain from Forex Fluctuation 653 4,470 479 4,303

Profit before tax 7,072 7,719 9,331 15,878

Provision for taxation 2,105 1,399 2,132 1,441

Net Profit 4,967 6,320 7,199 14,437

Appropriations:

Transfer to general reserve 1,500 1,500 1,500 1,500

Transfer to debenture redemption reserve 625 - 625 -

Dividend (including tax on dividend) 1,250 1,195 1,250 1,195

Balance carried over to next year 1,592 3,625 3,778 11,726

Dividend

Your Directors recommend a dividend of Rs.3/- per share (30%) for the year ended 31st March, 2011. The total outgo on account of Dividend including tax thereon will be Rs.1249.97 lacs. The dividend shall be paid after approval of the members in annual general meeting.

Operations

The capacity utilization increased in all the plants as compared to previous year. Additional power generation capacity of 20 MW became operational in December 2010. Wire Rod Mill also became operational during the year. This has helped in achieving higher generation of power and production of steel. The operation at the coal mines of the Company continues to be normal. Coal washery started operation during the current year. The operations at iron ore mines remained suspended due to law and order problems in the surrounding area.

A Core Asset Group has been formed to promote preventive maintenance practices which will improve availability of assets across operations. Health Safety & Environment and Fire Departments have performed consistently in terms achieving better than statutorily stipulated environmental norms.

Members are requested to refer to the Management

Discussion and Analysis, forming a part of this Annual Report for detailed analysis.

Projects

During the year, the Company spent Rs.7,664 lacs on expansion and new projects.

Wire Rod and Wire Drawing Mill

The 1.8 lac tones Wire Rod Mill at Siltara, Raipur, started commercial operations from 01.01.2011. Wire drawing facility commenced operation during the current year. This completes the integration of steel operations from mining to the finished steel for end user. This also gives the flexibility in deciding the product mix depending upon the market conditions.

Coal Washery

The 0.96 million tonne coal washery was commissioned in the current financial year. Washed coal will help in achieving higher production in the sponge iron plant of the Company. The middling and rejects generated in the washery will be used for power generation at proposed pithead Thermal Power Plant.

Pithead Thermal Power Plant

The Company has acquired sufficient land for the proposed thermal power project at Kolam, Raigarh near its captive coal mines. Water has already been allocated for the project. Public hearing has been successfully completed and now presentation at state level MoEF is awaited. TCE has been appointed as consultant for Design and Engineering activities for the project. Bids invited for the BTG package are being evaluated. The site work and release of orders for the projects will start after receipt of statutory clearances.

Mineral Resources Iron Ore

The Company has received prospecting license for iron ore over an area of 150 hect. in Narangsur area of

Chhattisgarh. Prospecting work is underway. In addition to this, Company has received grant order for prospecting licenses from Chhattisgarh Government for four areas.

Manganese Ore

Your Company has acquired Manganese Ore mines in Goa and steps are being taken to operationalise the mines. The mining lease has been registered in the name of the Company. Applications for seeking various clearances have been made and the environmental clearance and forest clearance is under process. The Company has also received 3 Prospecting Licenses in Balaghat, District of Madhya Pradesh. The prospecting work is underway.

Coal Mines

The Company has got interest in a coal mine in a Joint Venture (JV) and also interest in coal mines in Indonesia through a wholly owned subsidiary. These mines will ensure long-term sustainable and uninterrupted availability of fuel to the Company. The coal mine allotted in JV falls in the area classified as a NO GO AREA by the Ministry of Environment and Forest. A Group of Ministers is formed to resolve the issue. The work on the coal mine under Wholly Owned Subsidiary is progressing steadily. Forest clearance has been received. Land acquisition is going on.

Iron Ore Sizing and Screening plant

As informed in the last report, the second phase of the Iron Ore Sizing & Screening plant of 6.00 LTPA have been commissioned successfully on 31.08.2010. As Iron Ore mines operation remained suspended due to poor law & order in the mining area, the plant could not be operated at its fullest capacity. 63010 MT Iron ore fines were processed out of 76862 MT iron ore fines shifted from the mines. During the year under review, 29206 MT was dispatched to plant after screening & washing.

The product quality remained within the acceptable norms. However, to further improve the quality of the product, certain modifications are being carried out in the existing system. The modifications will be completed by the end of current financial year.

Subsidiary companies

During the year under review, your Company has made fresh investments in two entities - a private limited Company to undertake hydro power business and an LLP to undertake thermal power plant. Your Company has acquired majority control in these entities. Consequent to the above investments, the total no. of subsidiaries / controlled entities of the Company has gone up from 7 to 9. The Company has also infused further funds in the existing subsidiaries. A brief about the subsidiaries is given hereunder.

Sarda Energy & Minerals Hongkong Ltd, Hongkong (SEMHKL), a wholly owned subsidiary of SEML (Company), incorporated in the year 2007 as international trading and investment arm of the Company is performing well. During the year 2010-11, it posted a profit of HK$ 19.55 Million.

Sarda Global Ventures Pte. Ltd. Singapore (SGV), a wholly owned subsidiary of your Company has acquired economic interest in coal mines in Indonesia. The mining is expected to start in next year. However, the work on development of the mine has been slowed due to frequent changes in the mining law in Indonesia. The acquisition of land is going on.

Sarda Metals & Alloys Ltd.(SMAL), a wholly owned subsidiary, is implementing a Greenfield Ferro Alloys plant of 2 x 33 MVA capacity backed by captive thermal power plant of 80 MW near Visakhapatnam in the first phase. The work on the project is progressing as per schedule and the project will be commissioned in the frst quarter of FY 2012-13. The Company has achieved the financial closure for the total Project Cost of Rs 543 crores during the year at a debt equity ratio of 70:30.

Sarda Energy Ltd. (SEL), a wholly owned subsidiary, was incorporated as an SPV for taking up the installation and operation of the 1320 MW power plant in Chhattisgarh. The process of land acquisition has been accelerated. Part of the land has already been acquired by the Company. The land to be acquired through compulsory acquisition is under various stages of clearances/ notifications and acquisition of the land is expected to be completed during the current financial year. The Company has submitted draft Environment Impact Assessment report to CECB, Raipur for Public Hearing, which is expected in the current financial year. Based on the progress achieved, the Company expects to get coal linkage on priority by the end of the current fnancial year.

Parvatiya Power Ltd. (PPL), is operating a 4.8 MW Loharkhet Small hydro power plant in Uttarakhand. In the financial year 2010-11, its third year of commercial operation the plant has generated and supplied 17.85 MU (P.Y. 18.59 MU) to Uttarakhand Power Corporation Limited (UPCL). Inspite of unprecedented landslides and cloud bursts in the region, the Company has earned higher profits in the financial year 2010-11 as compared to immediately preceding financial year. The tariff rate for sale of power has been revised upward by the Uttarakhand Electricity Regulatory Commission and this has increased profitability.

Pursuant to the issue of additional equity shares, holding of your Company reduced from 54.41% to 51%.

Madhya Bharat Power Corporation Ltd. (MBPCL), is implementing 96 MW Rongnichu Hydro Power Project in East Sikkim on Rongnichu river near Gangtok. The project is close to National Highway. The year under review witnessed rapid development in the

implementation of the Project. The approach roads leading to major project components have been constructed. Manpower and equipments have been mobilized at the project site, construction of camps and infrastructural facilities is complete and civil construction work has commenced.

Orders have been placed for electro mechanical equipments also. The design consultancy contract for execution of 2 nos. 220KV GIS bays at Rangpo Pooling Station of Power Grid has been awarded to PGCIL. Other contracts are expected to be awarded shortly. Physical Model Tests of the proposed Barrage, Surface Desilting Chambers and Power Intake have been successfully completed by Irrigation Research Institute, Roorkee. Analysis of Mathematical Model has also been completed. Host Country Approval from the Indian DNA under CDM registration process has been received and validation is in progress.

The financial closure of the project has been achieved. To meet the requirements of funds, during the year under review, the Company has issued 1,65,00,000 equity shares of Rs. 10/- each at a premium of Rs. 10/- each to the promoter companies. The Company holds 52% stake in MBPCL.

Chhattisgarh Hydro Power LLP has been incorporated on 17.09.2010 by converting Chhattisgarh Hydro Power Pvt. Ltd. into LLP. The LLP has been allotted four run -off -the river type small Hydro Power Projects- Gullu SHP of 24MW, Rehar 1 SHP of 24 MW, Mand SHP of 24 MW and Jelha of 5 MW in Chhattisgarh State with a total capacity of 77 MW. These projects, being small hydro projects, will be eligible for RPO/REC benefits applicable to non-solar renewable energy projects.

All the statutory clearances for the Gullu project of 24 MW have been received. Land for the project has been acquired and possession of the land has been received.

Drilling works have been awarded and sanction of loan for the project has been obtained from the lenders. Detailed engineering and tender document preparation is under progress. Final forest clearance has been obtained from MoEF, Bhopal and handover of physical possession of land is under process. The project will be commissioned in the financial year 2014-15. Application has been made for Carbon credit benefit.

Detailed project report for the two other projects of total capacity of 48 MW have been submitted to Chhattisgarh Renewable Energy Development Agency. Techno - economic clearance for one project has been obtained and the techno-economic clearance for the other project is under process.

The fourth project of Jelha with 5 MW capacity is in the detailed survey and investigation stage.

During the year, the Company has made further investments to increase its stake in CHP LLP to 66.81% as against 60.92% in the previous year.

Sarda Hydro Power Pvt. Ltd. (SHPPL) has been allotted 24 MW Kotaiveera SHP and 9 MW Ganeshpur Small Hydro Power Projects in Chhattisgarh. The Detailed Project Report for 24 MW Kotaiveera SHP has been submitted to CREDA. The techno-economic clearance has been received. The topographical survey work has been completed. The Company is in the process of procuring statutory clearances for project implementation.

The Company has acquired 60% stake in SHPPL.

Shri Ram Electricity LLP (SRELLP) has been incorporated as a Special Purpose Vehicle (SPV) for setting up a Captive Thermal Power Plant. The captive power plant has been awarded coal linkage. The preliminary study has been done. TOR has been approved by MoEF, New Delhi in April, 2011 and EIA is under preparation. We have already purchased 19.04 Acres of Pvt. Land against 40 acres required.

The Company has acquired 51% stake in SRE LLP during the year.

Joint Ventures

Raipur Infrastructure Company Ltd. operates a private railway siding in Mandhar near the manufacturing facility of the Company and other joint venture partners for movement of the goods, which are transported through the railways. During the year 2010 - 11, the Company has handled a total of 78 rakes of different material. The total quantity handled was 273027 MTs.

Consequent upon commissioning of the private railway siding of SEML, the no. of rakes handled by the Company has reduced. In order to increase the operations, the Company has invited other private parties to utilize the facility.

The Company has also applied for another private railway siding in Orissa. The in-principal approval from Railways has been received and DPR has been submitted to Railways for approval. The approval of DPR from Railway is under process. For acquisition of private land the administrative approval from Govt. of Orissa for the purpose of 4 (1) Notification under L.A Act has been received on 14.03.2011. The acquisition of land required for railway siding is in progress.

The Company holds one-third share in the joint venture.

Madanpur South Coal Co. Ltd. has been allotted a coal block in Madanpur area of Dist. Korba of Chhattisgarh in consortium. Most of the clearances required have been obtained but in the meanwhile, the MoEF has declared the total Hasdev Arand Area, in which this mine falls, as NO GO AREA and has not considered any proposal of forest clearance. The matter is before GoM/Prime Minister's office for resolution.

The work would be put on fast track once the forest clearance is received from MoEF. Bank Guarantee submitted to MoC for Rs.43.62 crores in continuity of the previous one has been renewed from IDBI Bank and submitted to the MoC.

The Company holds 20.63% share for its share of 36 million tonnes of coal in the Joint Venture.

Awards/Appreciation

During the year, Engineering Export Promotion Council (Western Region) has conferred the "EEPC Star Performers Award in the Product Group (Ferro Alloys)" on your Company for its outstanding export performance during FY 2008-09.

The Company has also been awarded first prize, in the Best Open Plantation competition organized by Urla Industrial Association, in the category of Large Industries.

Consolidated accounts

Your Company has prepared consolidated accounts after including figures of the subsidiaries, joint ventures and associates, as per the Accounting standard 21, 27 and 23 respectively.

Pursuant to the exemption granted to the Company by the Central Government vide its circular No.51/12/2007- CL-III dated 8th February, 2011, the Company has not attached copies of the Balance Sheet and Profit and Loss Account, Directors' Report and Auditors' Report of the subsidiary companies for the financial year ended 31st March 2011 and other documents required to be attached under Section 212(1) of the Companies Act, 1956, to the Balance Sheet of the Company. However, the other details, as required by the Central Government while granting the said exemption, are disclosed in this Report.

The annual accounts and related information of the subsidiary companies are open for inspection by any member/investor at the Registered Office of the Company and the subsidiary concerned and the Company will make available these documents/details upon request by any member of the Company who may be interested in obtaining the same. The annual accounts and related information of the subsidiary Company are also available on the Company's website.

Fixed deposits

Your Company has not accepted any fixed deposits within the meaning of Section 58A of the Companies Act, 1956, and the rules made there under, during the year under review.

Environmental protection and pollution control

The Company has strong commitment towards environmental protection and preservation of ecological balance while pursuing its business objectives. The Company firmly believes in co-existence & co-creation of nature and human activities which is manifested in its continuous efforts towards development of cleaner production processes coupled with reduction in pollution levels. The Company meticulously monitors impact of its manufacturing activities on the environment and take corrective & preventive measures proactively backed by adequate budgetary provisions.

The stack emissions of all Stacks are continuously under the stipulated limits as given by CECB. The ESPs of all Boilers and Furnaces are maintained trouble free through surveillance and checks and special audits. Committed HSE team with technical teams, monitor the ESP performance round the clock on a check sheet and measurements of emissions and unburnt coal in boilers. This helps in deciding the cleaning need of ESPs and the execution is done.

Regular checking of bag filters is being done, and wherever any defective bag filter is found the same is replaced immediately. De-dusting Bag filters and cyclones have been installed at various locations to reduce pollution. Fugitive Emissions in and around the raw material yards is controlled through water mist dust agglomeration system. High pressure mist enhances the effectiveness of dedusting at a lower operating costs and better environment around.

A new waste conversion facility has been installed which will help in converting 100mt waste every day into Blocks/Bricks of various sizes. This is in addition to existing facility.

Extensive plantation has also been done to enhance the green buffer between the plants and the human habitations close by and thereby reduce the effect of any pollution. An intensified drive has been launched for large scale plantation in and around the factory, particularly in the newly developed Mandhar complex.

At the Iron Ore Screening and Sizing plant site, towards protecting the environment, 1000 saplings have been planted and the process continues. Water sprinkler system has also been planned to reduce dust pollution.

As a further step in the direction of ensuring of environment protection and pollution control, all plant heads have nominated energy and water managers to give a continuous focus on energy and water conservation.

Corporate social responsibility

The Company towards its responsibility to contribute to the welfare of the society has adopted a voluntary and proactive approach to connect with the society around its operating units by creating a sense of belonging and welfare, building a spirit of co-existence and harmony. The immediate society benefits from the organisation and forms its first line of development. The CSR activities of the group involves the approach of sustainability, scalability and synergy in its endeavor. We strive for sustainable development programs in partnership with the communities for larger impact.

The Company through a dedicated, committed, trained and skilled team secures and channelizes funds to serve a wider community by delivering developmental program that aims to fulfill overall development aspirations of the community.

Education:

In Education the Company endeavors to spark the desire for learning and knowledge at every stage. A number of initiatives have been undertaken in this direction and some of the important benchmarks achieved are:

Sponsored R. K. Sarda Vidya Mandir, a state-of-the-art CBSE school near Raipur, opened by Bharatiya Vidya Bhavan for providing best education to children. In addition to the land and donation, your Company has also extended interest free loan of Rs. 10 crores to the Institution so as to enable the Institution impart quality education at affordable price.

Founder member of Shiksha Deep Trust,

which has the main objective of provinding scholarship to meritorious & needy students. Supported 270 Ekal Vidyalayas of tribal students with FTS.

Infrastructure facilities, furniture and computer to schools of Siltara & Parastarai villages. Financial support to village schools for renovation and extension of school building.

Apart from the above, a full-fledged school in the Siltara industrial area, Raipur, has also been proposed with the aid of Ramakrishna Vivekananda Ashram, to cater to the educational needs of the children of industrial workers.

CSIDC has approved the allotment of 5 acres of land for the purpose. Besides, school at Khadgoan village (near the Company's captive iron ore mines) has been provided with new building, uniforms, books and other school support material.

Healthcare:

In Healthcare, the Company endeavors to render quality healthcare facilities to people living in villages. We recognize our responsibility to operate in harmony with our local communities. The Company actively sponsors medical facilities, assisting in primary healthcare across villages.

The Company operates Mobile dispensary vans which provide free medical checkup and medicines. During the year 37427 patients availed the benefit of the mobile dispensary vans maintained by the Company. The Company also provides medical treatment to critical patients of tribal area's at Multi specialty hospitals on Company's expenses. The Company promotes preventive health care through awareness programs and regular health checkup camps. The Company has set up first-aid facilities in the villages surrounding its mines & operating units, to provide low-cost and high-quality medical assistance for the economically underprivileged community. Apart from these initiatives, a cluster of villages have been adopted by the Company near its iron ore mines and provides these villages with health care on an annual basis.

During the year, the Company has also organized Blood Donation Camp in association with Confederation of Indian Industries Young India forum under which, Modern Blood Bank, Raipur has recorded highest ever collection of 205 No. units of blood in a single day in Raipur Chhattisgarh. The Hon'ble Governor of Chhattisgarh State, has awarded the certificate of recognition for this to the Company.

Company has provided drinking water facility at its plant and mining sites and has also undertaken works for supply of drinking water to the nominated points in the villages surrounding its plant site in addition to providing for sanitation facilities for the villagers.

Community development

Social welfare, to the Company, means much more than just providing education and health care facilities. The Company endeavors to set up essential services which form the foundation for sustainable development. Our interventions in the area of infrastructure development include basic infrastructure facilities, safe drinking water facilities, sanitation and hygiene and renewable sources of energy. The Company has undertaken the task of community development like one of its projects. Various activities have been done for the social welfare and community development, some of which are as under:

Infrastructure upgradation of villages by constructing approach roads, water tanks, stairs near pond, drainages, pipelines for supplying drinking water, potable water supply deepening of ponds, social forestry, school building & boundary wall, community hall construction, area lighting etc.

Promotion of sports by supporting State and District Games Associations for Tennis & Cricket.

Support to various trusts engaged in providing community services

Support to local associations for various religious functions/celebrations.

As part of community services, 2000 woolen blanket were distributed amongst the tribal residents of rural area, tree plantation were done, iron tree guards were donated for protection of trees/saplings, financial aid to siltara village panchayat for purchase of ambulance for use by the nearby villagers, financial support for mass marriages/local festivals, cleaning and de-siltation of water ponds at nearby villages, etc. The Company also organized skill development training for the village youths in association with the industrial training institutes. The Company also has plans to undertake watershed development and environmental up gradation programs including plantation in the coming years.

Directors

Mr. G.K. Chhanghani, Mr. Pankaj Sarda and Mr. Rakesh Mehra, Directors of your Company, retire by rotation and being eligible, offer themselves for reappointment. The brief resume/details of Directors who are to be appointed/ reappointed are made a part of the Annual Report.

Directors' responsibility statement

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors state as under:

i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation;

ii) that the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the fnancial year and of the profit of the Company for the year;

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

iv) that the Directors have prepared the Annual Accounts on a going concern basis.

Auditors

M/s. M.M. Jain & Associates, Chartered Accountants, the retiring auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received a letter from M/s. M.M. Jain & Associates, Chartered Accountants, Nagpur to the effect that their appointment as auditors for the year 2011-12, if made, would be within the limits under Section 224 (1-B) of the Companies Act, 1956.

Auditors' Report

The observations made in the Auditors' Report, read with the relevant notes thereon, are self-explanatory and do not call for any comments under Section 217 of the Companies Act, 1956.

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

The statement giving details of conservation of energy technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is annexed and marked as Annexure 'A, forming a part of this report.

Particulars of employees

The particulars of employees, as required under Section 217 (2A) read with the Companies (Particulars of Employees) Rules, 1975, are given in Annexure 'B' to this report.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the stock exchanges, a Management Discussion and Analysis, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report.

Acknowledgement

Your Directors express their thanks and record appreciation for the co-operation they received from various government authorities, financial institutions, banks, suppliers and customers of your Company. Your Directors place on record, their sincere appreciation for the devoted services rendered by the employees at all levels of your Company and look forward to their continued support.

On behalf of the Board of Directors,

Place: Mumbai (K.K. Sarda)

Dated: July 30, 2011 Chairman & Managing Director

 
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