Mar 31, 2014
Dear Members,
The Directors take immense pleasure in presenting this 19th Annual
Report together with the Consolidated Audited Accounts of the Company
for the Financial Year 2013-14 for the period ended on 31st March 2014.
Financial Results (Rs. Million).
Particulars 2013-14 2012-13
Sales & Other Income 5062.40 9299.63
Material Consumed 4714.25 8777.28
Changes in Inventory 0.09 4.95
Employee Benefits 4.66 7.21
Finance Cost 6.65 8.44
Depreciation 9.84 16.54
Other Expenses 46.68 60.07
Profit before Taxes 282.83 425.16
Taxes-Current Tax 0.04 0.73
- Deferred Tax (1.18) (2.40)
Profit After Taxes 283.98 426.82
Earnings per Share (Basic & Dilutive) 2.15 3.23
REVIEW OF OPERATIONS
During the year under review, the Company''s financial performance has
been adversely affected due to the non-availability of raw material,
increasing raw material costs and volatile foreign exchange. The
company took various initiatives to improve its profitability by
diversification which helped the Company to post a reasonable
performance for the year.
DIVIDEND
In order to augment resources for the expansion plans, your Directors
do not recommend distributing any dividend for the year ended 31st
March 2014.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS-21 on Consolidated
Financial Statements, the Audited Consolidated Financial Statements are
provided in the Annual Report.
SUBSIDIARY
In accordance with the general circular issued by the Ministry of
Corporate Affairs, Government of India, the Balance Sheet, Profit and
Loss Account and other documents of the Subsidiary Company is not being
attached with the Balance Sheet of the Company, However the financial
information of the subsidiary companies is disclosed in the Annual
Report in compliance with the said circular. The Company will make
available the Annual Accounts of the subsidiary company and the related
detailed information to any member of the Company who may be interested
in obtaining the same. The annual accounts of the Subsidiary Company
will also be kept open for inspection at the Registered Office of the
Company and that of the respective Subsidiary Company. The Consolidated
Financial Statements presented by the Company include the financial
results of its subsidiary Company. Details of subsidiary of the Company
are covered in Management''s Discussion and Analysis Report forming part
of the Annual Report.
EXPANSION PLANS
* Exploring Mining Opportunities & Securing Raw materials and
integrating backwards into mining of Iron Ore and Chrome Ore.
* Setting up a Beneficiated & Pelletizing plant with an installed
capacity of 12,00,000 TP A in Madhya Pradesh, India for exploiting the
mining operations & maximizing profits.
INTERNAL CONTROL SYSTEM
The Company has in place an adequate and appropriate system of internal
control, commensurate with its size and nature of business to ensure
efficacy of operations and compliance with applicable legislations.
The Company has comprehensive budgetary control system. The management
regularly reviews actual performance.
SOCIAL RESPONSIBILITY AND COMMUNITY DEVELOPMENT
Corporate Social Responsibility occupies a central position in
Companies activities and is an ongoing daily affair. Our Company''s
plant at Kottayi, Palakkad is a leading industrial unit in the region
and therefore the local community look towards the Company for social
support. Company continues to provide necessary support to economically
backward people of the adjoining villages through various community
development, education and healthcare programmes.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Your Company all the time strives towards the development of its
employees, to upgrade their skills and to boost the motivation levels
of its human resource through various mechanisms. For enhancing the
team spirit of the employees departmental quality circles and other
awareness programmes being organized from time to time. We were
successful in maintaining a healthy working environment and cordial
industrial relations throughout the year. The efforts put in by the
employees at all levels are highly commendable and have contributed
immensely to the excellent performance of the company. Your Company HR
team has been continuously striving for establishing a better and
congenial relationship with Workmen, Unions and all external agencies
resulting in achieving zero man days'' loss due to industrial unrest.
BOARD OF DIRECTORS
To appoint Directors in place of Mr. Vinod Bajoria (DIN: 02661406) and
Mr. Manish Kumar Mishra (DIN: 05173129) who retire by rotation at the
Annual General Meeting and being eligible have offered themselves for
re-appointment.
Mr. Madhav Rao, Mr. Dinesh Kesri & Mr. T.N. Sivakumar Independent
Director retire by rotation at the ensuing Annual General Meeting and
being eligible offers himself for reappointment.
The proposals regarding the appointment/reappointment of the aforesaid
Director are placed for your approval.
PARTICULARS UNDER SEC 217
None of the employees of the Company was in receipt of remuneration
above Rs. 2,00,000/- per month or Rs. 24,00,000/- per annum during the
year under review and as such there is no need to give a declaration
u/s 217 (2A) of the Companies Act, 1956.
CORPORATE GOVERNANCE
Corporate Governance Report as stipulated under Clause 49 of the
Listing Agreement with the Stock Exchanges in India, is presented in a
separate section forming part of this Annual Report.
A certificate from Statutory Auditors of the Company, M/s Sunil Johri &
Associates, Chartered Accountants, confirming compliance with
conditions of Corporate Governance as stipulated under the aforesaid
Clause 49, is attached to Corporate Governance Report.
DEPOSITS
The Company has not accepted any fixed deposits during the period under
review.
AUDITORS AND AUDITORS REPORT
M/s. Sunil Johri & Associates, Chartered Accountants Auditors of the
company, hold office until the conclusion of the ensuing Annual General
Meeting and are eligible for reappointment.
The Company has received letters from M/S. Sunil Johri & Associates,
Chartered Accountants, to the effect that their appointment, if would
be within the prescribed limits under Section I41(3)(g) of the
Companies Act, 2013 and that they are not disqualified for
re-appointment.
The observations and comments given by the Auditors in their Report
read together with notes to accounts are self-explanatory and hence do
not call for any further comments.
COST AUDITORS
M/s Arindam & Associates, Cost & Management Accountants, Raipur, Cost
Auditors of the Company have been appointed as the Company''s Cost
Auditors for the Financial Year 2014-15.
DIRECTOR''S RESPONSIBILITY STATEMENT
In accordance with Section 217(2AA) of the Companies Act, 1956 the
Directors state that:-
i. In the preparation of the financial statements for the year ended
31st March, 2014, the applicable accounting standards have been
followed along with proper explanation relating to material departures,
if any;
ii. The Directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31st March, 2014 and of the profit of the Company
for the year under review;
iii. The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act. 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
iv. The Directors had prepared the financial statements for the year
ended 31st March, 2014, on a ''going concern'' basis.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The particulars as required to be disclosed pursuant to Section 217 (1)
(e) of the Companies Act,1956 read with Companies (Disclosures of
Particulars in the Report of Board of Directors) Rules 1988 are given
in Annexure : A forming part of this report.
ACKNOWLEDGEMENTS
The Directors would like to express their sincere appreciation of the
co-operation received from the Central Government, Government of Kerala
and Kerala Industrial Area Development Board. The Directors also wish
to place on record its appreciation for the commitment displayed by all
employees at all levels, resulting in the successful performance of the
Company during the year.
The Directors also take this opportunity to express its deep gratitude
for the continued co-operation and support received from its valued
shareholders.
The Directors express their special thanks to Mr. Vivek Agrawal,
Chairman & Managing Director of the Company, for his untiring efforts
for the progress of the Company.
For and on behalf of the Director
Dated : 31-05-2014
Place : Palakkad Sd/-
Vivek Agrawal
Chairman & Managing Director
Jun 30, 2013
Dear Shareholders,
The Directors take immense pleasure in presenting this 18th Annual
Report together with the Consolidated Audited Accounts of the Company
for the Financial Year 2012-13 for the period ended on 30th June 2013.
Financial Results (Rs. Million).
Particulars 12-13 11-12
Sales & Other 9299.63 10191.36
Income
Material Consumed 8777.28 9577.75
Changes in Inventory 4.95 (4.87)
Employee Benefits 7.21 5.19
Finance Cost 8.44 4.02
Depreciation 16.51 19.27
Other Expenses 60.07 179.10
Profit before Taxes 425.16 410.89
Taxes-Current Tax 0.73 0.66
-Deferred (2.40) (2.28)
Tax
Profit After Taxes 426.82 412.52
Earnings per Share 3.23 3.12
(Basic & Dilutive)
REVIEW OF OPERATIONS
During the year under review, the Company''s financial performance has
been adversely affected due to the non-availability of raw material,
increasing raw material costs, high bank interest rates and volatile
foreign exchange. The company took various initiatives to improve its
profitability by diversification which helped the Company to post a
reasonable performance for the year.
DIVIDEND
In order to augment resources for the expansion plans, your Directors
do not recommend distributing any dividend for the year ended 30th June
2013.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS-21 on Consolidated
Financial Statements, the Audited Consolidated Financial Statements are
provided in the Annual Report.
SUBSIDIARY
In accordance with the general circular issued by the Ministry of
Corporate Affairs, Government of India, the Balance Sheet, Profit and
Loss Account and other documents of the Subsidiary Company is not being
attached with the Balance Sheet of the Company. However the financial
information of the subsidiary companies is disclosed in the Annual
Report in compliance with the said circular. The Company will make
available the Annual Accounts of the subsidiary company and the related
detailed information to any member of the Company who may be interested
in obtaining the same. The annual accounts of the Subsidiary Company
will also be kept open for inspection at the Registered Office of the
Company and that of the respective Subsidiary Company. The Consolidated
Financial Statements presented by the Company include the financial
results of its subsidiary Company. Details of subsidiary of the Company
are covered in Management''s Discussion and Analysis Report forming part
of the Annual Report.
EXPANSION PLANS
- Exploring Mining Opportunities & Securing Raw materials and
integrating backwards into mining of Iron Ore and Chrome Ore.
- Setting up a Beneficiated & Pelletizing plant with an installed
capacity of 12, 00,000 TPA in Madhya Pradesh, India for exploiting the
mining operations & maximizing profits.
INTERNAL CONTROL SYSTEM
The Company has in place an adequate and appropriate system of internal
control, commensurate with its size and nature of business to ensure
efficacy of operations and compliance with applicable legislations. The
Company has comprehensive budgetary control system. The management
regularly reviews actual performance.
SOCIAL RESPONSIBILITY AND COMMUNITY DEVELOPMENT
Corporate Social Responsibility occupies a central position in
Companies activities and is an ongoing daily affair. Our Company''s
plant at Kottayi, Palakkad is a leading industrial unit in the region
and therefore the local community look towards the Company for social
support. Company continues to provide necessary support to
economically backward people of the adjoining villages through various
community development, education and healthcare programmes.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Your Company all the time strives towards the
development of its employees, to upgrade their skills and to boost the
motivation levels of its human resource through various mechanisms.
For enhancing the team spirit of the employees departmental quality
circles and other awareness programmes being organized from time to
time. We were successful in maintaining a healthy working environment
and cordial industrial relations throughout the year. The efforts put
in by the employees at all levels are highly commendable and have
contributed immensely to the excellent performance of the company. Your
Company HR team has been continuously striving for establishing a
better and congenial relationship with Workmen, Unions and all external
agencies resulting in achieving zero man days'' loss due to industrial
unrest.
BOARD OF DIRECTORS
Mr. V Manikandan, Independent Director retire by rotation at the
ensuing Annual General Meeting and being eligible offers himself for
reappointment.
Mr Manish Kumar Mishra Director retire by rotation at the ensuing
Annual General Meeting and being eligible offers himself for
reappointment.
The proposals regarding the appointment/re- appointment of the
aforesaid Director are placed for your approval.
PARTICULARS UNDER SEC 217
None of the employees of the Company was in receipt of remuneration
above Rs. 2,00,000/= per month or Rs. 24,00,000/= per annum during the
year under review and as such there is no need to give a declaration
u/s 217 (2A) of the Companies Act, 1956
CORPORATE GOVERNANCE
The Company has implemented all the mandatory provisions of Clause 49
of the Listing Agreement relating to the Corporate Governance. The
Annual Report contains a separate Section for the same.
As required under the said provisions, the Company has obtained the
Certificate from the Auditors of the Company which is annexed to forms
part of the Annual Report.
The Management Discussion and Analysis Report forms part of the Annual
Report.
DEPOSITS
The Company has not accepted any fixed deposits during the period under
review.
AUDITORS AND AUDITORS REPORT
M/s. Sunil Johri & Associates, Chartered Accountants Auditors of the
company, hold office until the conclusion of the ensuing Annual General
Meeting and are eligible for reappointment.
The Company has received letters from M/S. Sunil Johri & Associates,
Chartered Accountants, to the effect that their appointment, if made
would be within the prescribed limits under Section 224(1B) of the
Companies Act, 1956 and that they are not disqualified for such
appointment within the meaning of Section 226 of the Companies
act,1956.
The observation and comments given by auditors in this report read
together with notes to Accounts are self explanatory and hence do not
call for any further comments under Section 217 of the Companies
Act,1956.
DIRECTOR''S RESPONSIBILITY STATEMENT
In accordance with Section 217(2AA) of the Companies Act, 1956 the
Directors state that:- i. In the preparation of the Annual Accounts,
all applicable Accounting Standards have been followed and proper
explanations relating to material departures, if any have been
furnished.
ii. Accounting policies as listed in notes to the financial statements
have been made so as to give a true and fair view of the state of
affairs of the Company for the Financial Year 2012-13 for the period
ended on 30th June,2013 and of the Profit of the Company for the
Accounting Year ended on that day
iii. Proper and sufficient care for the maintenance of adequate
accounting records has been taken in accordance with the provisions of
this Act so as to safeguard the assets of the Company and to prevent
and detect fraud and other irregularities and
iv. The Annual Accounts have been prepared on a going concern basis.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The particulars as required to be disclosed pursuant to Section 217 (1)
(e) of the Companies Act,1956 read with Companies (Disclosures of
Particulars in the Report of Board of Directors) Rules 1988 are given
in Annexure: A forming part of this report.
ACKNOWLEDGEMENTS
Your directors acknowledge the assistance and goodwill received from
the concerned departments of the State and Central Governments,
Financial Institutions, Banks, Customers, Selling Agents, Dealers,
Distributors, employees at all levels and the Shareholders.
For, Southern Ispat & Energy Limited
Sd/- Sd/-
Date: 17/10/2013 Vivek Agarwal Vinod Bajoria
Place: Palakkad Chairman & Managing
Director Director
Jun 30, 2011
Dear Shareholders,
The Directors take immense pleasure in presenting this 16th Annual
Report together with the consolidated audited accounts of the Company
for the financial year 2010-11 for the period ended on 30th June 2011.
Financial Results (Rs. Million).
Particulars 10-11 09-10
Sales & Other Income 8058.48 3288.72
Direct Expenditure 7593.34 3141.68
Administrative &
Financial Expenditure 52.64 18.03
Depreciation 24.05 11.92
Profit before Taxes 388.45 117.09
Taxes-Current Tax 29.69 19.99
-Deferred Tax (6.60) 14.80
Profit After Taxes 365.36 82.30
Transfer to 46.10 10.63
General Reserves
Balance Carried
to Balance sheet 414.91 95.66
Earnings per Share
(Basic & Dilutive) 8.15 7.46
REVIEW OF OPERATIONS
The fiscal year that has just ended has been positive and encouraging
for your company and clear that we are on the right and intended path.
The domestic market was showing good support to the product
irrespective of the substantial reduction in the export to the advanced
countries. The company took various initiatives to improve its
profitability by diversification which helped the company to post an
impressive performance for the year.
EXPANSION PLANS
- Expanding existing facilities such that to raise the total Steel
production of the Company to 0.13 million TPA over the next few years
and provide the foundation to maintain high quality growth and enhance
value creation for its shareholders.
- As a part of its forward integration strategy, company is poised to
seize the opportunities in the Iron & Steel Industry (both for steel &
intermediary saleable products) through its Acquisition of Integrated
Steel Plant.
- Exploring mining opportunities & securing raw materials and
integrating backwards into mining of Iron Ore and Chrome Ore.
- Setting up a Beneficiated & Palletizing plant with an installed
capacity of 12, 00,000 TPA in Madhya Pradesh, India for exploiting the
mining operations & maximizing profits.
- Entering into Solar cells/ solar power plant equipments which aim to
manufacture " electricity from Sun & Sand".
- Company has opened three branches across the country to curb the
Indian steel demand.
- Your Company has also floated a 100% foreign subsidiary by name of
"SIEL FZE" in UAE to exploit the Global opportunities which in turns
boost the operations and maximize the wealth of shareholders.
INTERNAL CONTROL SYSTEM
The company has in place an adequate and appropriate system of internal
control, commensurate with its size and nature of business to ensure
efficacy of operations and compliance with applicable legislations. The
company has comprehensive budgetary control system. The management
regularly reviews actual performance.
SOCIAL RESPONSIBILITY AND COMMUNITY DEVELOPMENT
Corporate Social Responsibility occupies a central position in
Companies activities and is an ongoing daily affair. Our Company's
plant at Kottayi, Palakkad is a leading industrial unit in the region
and therefore the local community look towards the Company for social
support. Company continues to provide necessary support to
economically backward people of the adjoining villages through various
community development, education and healthcare programmes.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Your Company all the time strives towards the development of its
employees, to upgrade their skills and to boost the motivation levels
of its human resource through various mechanisms. For enhancing the
team spirit of the employees departmental quality circles and other
awareness programmes being organized from time to time. We were
successful in maintaining a healthy working environment and cordial
industrial relations throughout the year. The efforts put in by the
employees at all levels are highly commendable and have contributed
immensely to the excellent performance of the company. Your Company HR
team has been continuously striving for establishing a better and
congenial relationship with Workmen, Unions and all external agencies
resulting in achieving zero man days loss due to industrial unrest.
DIVIDEND
In order to augment resources for the expansion plans, your Directors,
do not recommend distributing any dividend for the year ended 30 June
2011.
BOARD OF DIRECTORS
Appointment/Retirement in Board
æk Mr. K K Agarwalla has given his unwillingness to continue on the
board w e f the date of ensuing Annual General Meeting. The Directors
included the resolution in the notice of Annual General Meeting
indicating the intention of the above director not to be re- appointed.
Your directors place on record their deep appreciation of the valuable
services rendered by Mr K K Agarwalla during his directorship.
* Mr. Umesh Kumar Sahu aged about 40 years is a graduate in Commerce
with vast experience in Steel Industry. He is specialised in erection,
installation and functioning of steel industries and have an enviable
record in this field. In addition to his general corporate experience,
his vast and rich experience, consistent with Production strategy will
provide operational excellence to the Company and a capability to drive
innovation. He has extensive advisory experience on issue of strategy,
driving performance improvement, change management, organisation
building and human capital development your company decides to include
the proposal for the appointment of Mr. Umesh Kumr Sahu as Director of
the company.
* Mr. T N Sivakumar is a B.E. Electrical & Electronics Engg. M.Sc
Engineering., in Applied Electronics & Servo Mechanism. He is having 34
years of vital industrial Experience. He is also a member of Member of
Institution of Engineers India, Member of Institution of Engineering
Technology London, Coimbatore productivity council, Coimbatore Dist.
Small Scale Industries Association, Engineering Export promotion
Council & Coimbatore Management Association. He has also worked for one
year as senior research fellow in the Council of Scientific and
industrial Research govt., of India. Your company decides to include
the proposal for the appointment of Mr. T N Sivakumar as Independent
Director of the company.
* Mr. Thiagaraja Iyer Venkatramani, Director retire by rotation at the
ensuing Annual General Meeting and being eligible offers himself for
reappointment.
The proposals regarding the appointment/re- appointment of the
aforesaid Director are placed for your approval.
PARTICULARS UNDER SEC 217
None of the employees of the Company was in receipt of remuneration
above Rs. 2,00,000/= per month or Rs. 24,00,000/= per annum during the
year under review and as such there is no need to give a declaration
u/s 217 (2A) of the Companies Act, 1956
CORPORATE GOVERNANCE
The Company has implemented all the mandatory provisions of Clause 49
of the Listing Agreement relating to the Corporate Governance. The
Annual Report contains a separate Section for the same.
As required under the said provisions, the Company has obtained the
Certificate from the Auditors of the Company which is annexed to forms
part of the Annual Report.
The Management Discussion and Analysis Report forms part of the Annual
Report.
DEPOSITS
The Company has not accepted any fixed deposits during the period under
review.
SHARE CAPITAL AND LISTING OF SHARES
During the year under review, your company issued 32,723,400 &
88,399,980'fully paid up under lying Equity shares of Rs.10 Each
through 1,090,780 &2,946,666 Global Depository Receipts on 4th August
2010 & 9th June 2011 respectively. These GDR's are listed in Luxembourg
Stock Exchange. The securities of the company are listed and traded in
compulsory dematerialized form on the Bombay Stock Exchange Limited and
the National Stock Exchange of India Limited.
SHARE WARRANTS
During the Year, Company has forfeited the share warrant money received
against Fifty Lacs Shares of Rs.10 each with a Premium of Rs.5 due to
the non receipt of remaining amount. The amount forfeited has been
transferred Capital Reserves.
AMALGAMATION
Your Directors decided in the interest of the company not to pursue
further for the proposed Amalgamation of Kerala Sponge Iron Limited
with your Company due to continuing delay in complying with technical
issues.
SUBSIDIARY
The Company also initiated the plans of controlling the business from
large spectrum by setting up a business office in Sharjah Airport
International Free Zone (SAIF ZONE) in Dubai, UAE through 100% wholly
owned subsidiary company in the name of SIEL FZE on 25th August 2010
for general trading activities of the Company.
In view of the general exemption granted by the Ministry of Corporate
Affairs from applicability of the provisions of Section 212 of the
Companies Act, 1956 (Act), the stand alone audited financial statements
of the subsidiary company is not attached to this report. As per the
general exemption, a statement containing brief financial details of
the company's subsidiary for the vear ended 31st March, 2011 is
included in the Annual Report. Copies of Annual Report of the
subsidiary companies and related information, will be made available
free of cost to the shareholders, on request. Annual Accounts of the
subsidiary company are available for inspection at registered office of
the company.
Audited Consolidated Financial Statements prepared in accordance with
prescribed accounting standards, form part of this Annual Report.
AUDITORS & AUDITORS REPORT
M/s. Sunil Johri & Associates, Chartered Accountants and M/s Mahadevan
& Sivarajan, Chartered Accountants Auditors of the company, hold office
until the conclusion of the ensuing Annual General Meeting and are
eligible for reappointment.
The Company has received letters from M/S. Sunil Johri & Associates,
Chartered Accountants and M/S. Mahadevan & Sivarajan.. Chartered
Accountants, to the effect that their appointment, if made would be
within the prescribed limits under 224(1B) of the Companies Act, 1956
and that they are not disqualified for such appointment within the
meaning of Section 226 of the Companies Act,1956.
The observation and comments given by auditors in this report read
together with notes to Accounts are self explanatory and hence do not
call for anv further comments under Section 217 of the Companies
Act,1956.
DIRECTOR'S RESPONSIBILITY STATEMENT
In accordance with Section 217(2AA) of the Companies Act, 1956 the
Directors state that:-
In the preparation of the Annual Accounts, all applicable Accounting
Standards have been followed and proper explanations relating to
material departures, if any have been furnished.
Accounting policies as listed in Schedule M & M-l to the financial
statements have been made so as to give a true and fair view of the
state of affairs of the Company for the financial year 2010-11 for the
period ended on 30th June,2011 and of the Profit of the Company for the
Accounting Year ended on that day.
Proper and sufficient care for the maintenance of adequate accounting
records has been taken in accordance with the provisions of this Act so
as to safeguard the assets of the Company and to prevent and detect
fraud and other irregularities and The Annual Accounts have been
prepared on a going concern basis.
The following accounting standards were not applicable to the company
during the year under review due to non-occurrence of events and
transactions covered under the scope of these accounting standards: -
AS- 7 Accounting for construction
AS -13 Accounting for amalgamation
AS - 23 Accounting for investments in associates in consolidated
financial statements
AS - 24 Discontinuing operation
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The particulars as required to be disclosed pursuant to Section 217 (1)
(e) of the Companies Act,1956 read with Companies ( Disclosures of
Particulars in the Report of Board of Directors) Rules 1988 are given
in Annexure to Directors report.
ACKNOWLEDGEMENTS
Your directors acknowledge the assistance and goodwill received from
the concerned departments of the State and Central Governments,
Financial Institutions, Banks, Customers, Selling Agents, Dealers,
Distributors, employees at all levels and the Shareholders.
For Southern Ispat & Energy Limited
Sd/- Sd/-
Vivek Agarwal E Sankaranarayana,
Chairman & Director
Managing Director
Date: 21/11/2011
Place: Palakkad.
Jun 30, 2010
The Directors take immense pleasure in presenting this 15th Annual
Report together with the audited accounts of the Company for the
financial year 2009-10 for the period of 15th Months ended 30,h June
2010.
Financial Results (Rs Million).
Particulars 09-10 08-09
Sales & Other Income 3288.71 392.61
Direct Expenditure 3141.68 368.06
Administrative &
Financial Expenditure 18.03 11.59
Depreciation 11.91 2.58
Profit before Taxes 117.09 10.37
Taxes - Current Tax 19.99 0.77
- Deferred Tax 14.80 2.23
- Fringe Benefit Tax NIL 0.02
Profit After Taxes 82.30 7.35
Transfer to General Reserves 10.62 NIL
Balance Carried to Balance sheet 71.67 7.35
Earnings per Share (Basic) 7.46 1.03
Earnings per Share (Dilutive) 6.60 1.03
REVIEW OF OPERATIONS
The fiscal year under review was an important year for the domestic
industry. The year started with signs showing the growth, amidst the
global slowdown that was still prevailing. The domestic market was
showing good support to the product irrespective of the substantial
reduction in the export to the advanced countries. The company took
various initiatives to improve its profitability by diversification
which helped the company to post an impressive performance for the
year.
EXPANSION PLANS
The proposal to takeover M/s. Kerala Sponge Iron Limited is on the
verge of completion and is expected to materialise during the next
financial year. Further expansion by doubling its production capacity
and installation of Power Plant in the new unit are to be completed
within a few months, which will enhance the profitability of your
Company and your Company will become an Integrated Steel Plant.
For securing raw material supplies, your company is examining proposals
for acquisition of equity stakes in Iron Ore mines in Chattarpur
district of Madhya Pradesh.
The companys proposed plan of acquiring of New-Tech Forge and Foundry
Ltd an Integrated Steel Plant with an Annual Capacity of 1,20,000 MT in
Gujarat is going according to its plan. This will enable the company to
have a fully owned subsidiary which is capable of producing all ranges
of product IB steel sector. This will enable the company to have a
fully owned subsidiary which is capable of producing all ranges of
product IB steel sector. It manufactures Sponge Iron, Billets, Round
Steel, Machine Flanges, Bearings, Gears, Crankshaft, connecting Rod,
Camshaft etc. It is the only integrated forging & foundry plant which
manufacturing Sponge Iron to alloy steel products. This will steer the
company towards meeting its strategic objectives of achieving
profitability through growth and customer satisfaction. The acquisition
will result in capacity expansion for SIEL of steel will go to 3 lakhs
tonne per annum. SIEL will expand its reach to Geographical area of
Gujarat with plant facility in Kutch and towards international market
as New- Tech Forge and Foundry Ltd already have presence in sale and
distribution level in international market.
The Company also initiated the plans of controlling the business from
large spectrum setup an wholly owned subsidiary company in Sharjah
Airport International Free Zone ( SAIF ZONE) in Dubai, UAE in the name
of Southern Ispat and Energy Ltd (FZE) on 25th August 2010.
Precisely the expansion plan is making the company to integrate its
operations & maximizes the profit and thus earning per Share (EPS).
INTERNAL CONTROL SYSTEM
The Company has adequate internal control systems which are evaluated
periodically by the Audit Committee and the systems are adequate
commensurating with the operations of the Companies.
SOCIAL RESPONSIBILITY AND COMMUNITY DEVELOPMENT
Corporate Social Responsibility occupies a central position in SIELs
activities and is an ongoing daily affair. Our Companys plant at
Kottayi, Palakkad is a leading industrial unit in the region and
therefore the local community look towards the Company for social
support.
SIEL continues to provide necessary support to economically backward
people of the adjoining villages through various community development,
education and healthcare programmes.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Your Company all the time strives towards the development of its
employees, to upgrade their skills and to boost the motivation levels
of its human resource through various mechanisms. For enhancing the
team spirit of the employees departmental quality circles and other
awareness programmes being organized from time to time. We were
successful in maintaining a healthy working environment and cordial
industrial relations throughout the year. The efforts put in by the
employees at all levels are highly commendable and have contributed
immensely to the excellent performance of the company.
SIEL HR team has been continuously striving for establishing a better
and congenial relationship with Workmen, Unions and all external
agencies resulting in achieving zero man days loss due to industrial
unrest.
DIVIDEND
In order to augment resources for the expansion plans, your Directors,
do not recommend distributing any dividend for the year ended 3oth June
2010.
BOARD OF DIRECTORS
Mrs. Anusuya Devi Agarwal and Mrs. Richa Agarwal were given their
unwillingness to continue on the board w e f the date of ensuing Annual
General Meeting. The Directors included the resolution in the notice of
Annual General Meeting indicating the above directors not to be
re-appointed. Your directors place on record their deep appreciation of
the valuable services rendered by Mrs. Anusuya Devi Agarwal and Mrs
Richa Agarwal during their tenure as directors.
Mr. M Eswaran, an Independent Director whose sudden and untimely death
on 11th December 2009 has created a casual vacancy in the Board of
Directors. He has made invaluable contribution towards the progress of
the company. The Board held an un official meeting on 12.12.2010 to
condole the untimely death of Mr. M Eswaran and conveyed heart-felt
condolences to bereaved family. The casual vacancy created was filled
in the next Board Meeting held on 24th December 2009 by appointing Mr.
Thiagaraja Iyer Venkatramani.
Mr. Vivek Agarwal was appointed as Managing Director of the Company for
a period of 05 Years w e f 25-09-2006.
His tenure is going to be expiring on 24-09-2011.The Board after
considering his invaluable contribution towards growth of the company
has decided to review the terms and condition of appointment approved
in the Annual General Meeting held on 20-07-2007. Hence his term of
engagement as Managing Director is extended for another 05 Years w e f
27-12-2010 on a remuneration of Rs.50000/- per month Consolidated. Your
Company decided to include the proposal of extension of terms and
conditions of Mr. Vivek Agarwal, Managing Director in the notice of AGM
for your approval
Mr. Thiagara Iyer Venkatramani who was appointed by the Board of
Directors of your company in its meeting held on 24th December 2009 as
an Additional Director w.e.f 24th December 2010 in terms of the
Articles of Association of the Company, holds office upto the date of
the ensuing Annual General Meeting. Your Company has received a notice
under Section 257 of the Companies Act, 1956 from a shareholder of your
company, signifying his intention to propose the name of Mr. Thiagaraja
Iyer Venkatramani for appointment as Independent Director of your
company liable to retire by rotation.
Mr. R Sivaramakrishnan who was appointed by the Board of Directors of
your company in its meeting held on 22nd March 2010 as an Additional
Director w.e.f 22nd March 2010 in terms of the Articles of Association
of the Company, holds office upto the date of the ensuing Annual
General Meeting. Your Company has received a notice under Section 257
of the Companies Act, 1956 from a shareholder of your company,
signifying his intention to propose the name of Mr. R Sivaramakrishnan
for appointment as Independent Director of your company liable to
retire by rotation.
Mr. V Manikandan , Director retire by rotation at the ensuing Annual
General Meeting and being eligible offers himself for reappointment.
Other appointment/Change in Board
K K Agarwalla: Your Company also received notice under Section 257 of
the Companies Act from a shareholder of the company to appoint Mr. K K
Agarwalla the Executive Officer of the Company since 01st January 1999
as Whole time Director. Mr. K. K. Agarwalla, aged about 63 years, is
one of the founder promoter-Directors of the Company. Presently he is
the Executive Officer of the Company. He is well experienced in various
fields of steel industry.
Mr. Agarwalla was associated with Mr. Vivek Agarwal in setting up SIL,
which was then the first steel industry in Kerala to be listed with the
Stock Exchanges. Mr. Agarwalla has been assisting in day to day
operations of the Company to the CMD.. His experience and expertise are
being fully utilised for development of the Company.
Your company decides to include the proposal for the appointment of K K
Agarwalla as Whole Time Director under designation Executive Director
for a period of 05 years.
E Sankaranarayana : Your Company also received notice under Section 257
of the Companies Act, 1956 from a shareholder of the company to appoint
Mr. E Shankaranarayana as Director liable to retire by rotation. Mr. E.
Sankaranarayana is an energetic and experienced business stalwart aged
about 64 Years, who is a Science Graduate with Technical interest,
having experience of 40 years in steel industry. He is specialised in
erection, installation and functioning of steel industries and have an
enviable record in this field. He is inducted into the Board in view of
his track record to utilise his experience and capacities.The Board
decided to pay him Rs. 25000.00 per month Consolidated during the
tenure subject to approval of members by Special Resolution in the
ensuing Annual General Meeting
The proposals regarding the appointment/re-appointment of the aforesaid
Directors are placed for your approval.
PARTICULARS UNDER SEC 217
None of the employees of the Company was in receipt of remuneration
above Rs. 2,00,000/= per month or Rs. 24,00,000/= per annum during the
year under review and as such there is no need to give a declaration
u/s 217 (2A) of the Companies Act, 1956
CORPORATE GOVERNANCE
The Company has implemented all the mandatory provisions of Clause 49
of the Listing Agreement relating to the corporate governance. The
Annual Report contains a separate Section for the same.
As required under the said provisions, the Company has obtained the
Certificate from the Auditors of the Company which is annexed to forms
part of the Annual Report.
The Management Discussion and Analysis Report forms part of the Annual
Report.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with Section 217(2AA)of the Companies Act, 1956 the
Directors state that:-
In the preparation of the Annual Accounts, all applicable Accounting
Standards have been followed and proper explanations relating to
material departures, if any have been furnished.
Accounting policies as listed in Schedule L to the financial statements
have been made so as to give a true and fair view of the state of
affairs of the Company for the financial year 2009-10 for the period of
15 months ended as on 30th June,2010 and of the Profit of the Company
for the Accounting Year ended on that day
Proper and sufficient care for the maintenance of adequate accounting
records has been taken in accordance with the provisions of this Act so
as to safeguard the assets of the Company and to prevent and detect
fraud and other irregularities and
The Annual Accounts have been prepared on a going concern basis.
The following accounting standards were not applicable to the company
during the year under review due to non-occurrence of events and
transactions covered under the scope of these accounting standards: -
AS - 14 Accounting for amalgamation
AS - 21 Consolidated financial statements
AS - 23 Accounting for investments in associates in consolidated
financial statements
AS - 24 Discontinuing operation
AS - 7 Accounting for construction
AS - 11 Accounting for the effects of changes in Foreign Exchange rates
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The particulars as required to be disclosed pursuant to Section 217 (1)
(e) of the Companies Act,1956 read with Companies ( Disclosures of
Particulars in the Report of Board of Directors) Rules 1988 are given
in Annexure: A forming part of this report.
AUDITORS AND AUDITORS OBSERVATION
M/S. Sunil Johri & Associates, Chartered Accountants and M/S. Mahadevan
& Sivarajan, Chartered Accountants Auditors of the company, hold office
until the conclusion of the ensuing Annual General Meeting and are
eligible for reappointment.
The Company has received letters from M/S. Sunil Johri & Associates,
Chartered Accountants and M/S. Mahadevan & Sivarjan , Chartered
Accountants, to the effect that their appointment, if made would be
within the prescribed limits under 224(1B) of the Companies Act, 1956
and that they are not disqualified for such appointment within the
meaning of Section 226 of the Companies act,1956.
Reply to Auditors observation is given as addendum to the report as
required under Section 217 (3) of the Companies Act, 1956.
DEPOSITS
The Company has not accepted any fixed deposits during the period under
review.
SHARE WARRANTS
The Company during the Financial year 2009-2010 ended on 30th June 2010
issued 50 Lakhs Share Warrants of Rs.10 each at a premium of Rs.5 each
to 04 Allottees of Promotor Group on 22nd July 2009 and 01 Crore Share
warrants of Rs.10 each with a Premium of Rs.22 each to 15 Allottees of
Non Promoters both with an option to convert into one Equity Share of
Rs.10 each through preferential allotment as per SEBI Guidelines.
ISSUE OF GDR
Your company issued 32,723,400 fully paid up under lying Equity shares
of Rs.10 Each with an offer price of Rs.14.10 through 1,090,780 Global
Depository Receipts on 10th August 2010. These GDR are listed in
Luxembourg Stock Exchange .
TRADING PERMISSION IN NATIONAL STOCK EXCHANGE
Your Company got the trading permission to deal the existing paid up
capital in National Stock Exchange, Mumbai under the Symbol " SOUISPAT"
w e f 01-10- 2010 .
SIEL (FZE)
The Company also initiated the plans of controlling the business from
large spectrum setup a wholly owned subsidiary of Southern Ispat and
Energy Limited in Sharjah
Airport International Free Zone ( SAIF ZONE) in Dubai, UAE in the name
of Southern Ispat and Energy Ltd (FZE) on 25th August 2010 for general
trading activities of the company.
ACKNOWLEDGE MENTS
Your directors acknowledge the assistance and goodwill received from
the concerned departments of the State and Central Governments,
Financial Institutions, Banks, Customers, Selling Agents, Dealers,
Distributors, employees at all levels and the Shareholders.
For, Southern Ispat & Energy Limited
Vivek Agarwal Richa Agarwal
Chairman & Managing Director Director
Date: 27/11/2010
Place: Palakkad.