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Directors Report of Srikalahasthi Pipes Ltd.

Mar 31, 2018

Dear Shareholders,

The Directors take pleasure in presenting the 26th Annual Report of the Company together with the Audited financial statements for the Financial Year ended 31st March, 2018.

STATE OF COMPANY’S AFFAIRS:

FINANCIAL HIGHLIGHTS

INR in Lakhs

Particulars

2017-18

2016-17

Revenue from operations

1,50,598.02

1,20,340.14

Other income

3,555.90

3,046.91

Total Revenue

1,54,153.92

1,23,387.05

Earning Before Interest, Depreciation, Taxation & Amortisation (EBITDA)

27,926.41

26,739.99

Finance Costs

4,288.18

3,929.16

Depreciation

3,544.82

3,688.50

Profit/(Loss) Before Taxation

20,093.41

19,122.34

Less: Tax including Deferred Tax

5,353.26

5,099.12

Profit/(Loss) After Taxation

14,740.15

14,023.22

DIVIDEND:

Your Company has consistent track record of dividend payment. Your Directors have recommended a dividend of INR 6.0 (60%) per equity share of INR 10/- each for the financial year ended 31st March, 2018 (previous year INR 6.00 per share) amounting to INR 3375.59 lakhs (including INR 591.36 lakhs towards dividend distribution tax). The dividend payout is subject to approval of members at the ensuing Annual General Meeting.

RESERVES :

During the year under review, the Company proposes to transfer INR 5,000 lakhs to the General Reserve.

REVIEW OF OPERATIONS:

Your Directors are pleased to inform that with the increase of production enhancement facilities commissioned in the last quarter of FY 2016-17, your Company has achieved higher Ductile Iron Pipes production of 2,75,047 MT during the year under review, thereby achieving 90% of the installed capacity.

Your Directors have great pleasure in informing you that your Company continues to play a pivotal role in the nation building movement by contributing to water supply and infrastructure development in the country, which have been the principal areas of focus of the Government. During the FY 2017-18, your company’s Ductile Iron Pipes of about 6,900 KM have been used across the country for transportation of potable water and sewerage under its brand name “SRIPIPES” for various prestigious projects across the country.

Production at a glance:

Product

2017-18

2016-17

% of Change

Ductile Iron Pipes (MT)

2,75,047

2,28,152

20.55

Liquid metal from MBF (MT)

2,76,501

2,38,806

15.78

LAM Coke (MT)

1,66,003

1,65,410

0.36

Cement (MT)

93,699

96,800

(3.20)

FY2017-18 was a challenging year for the Company in terms of volatility in the global coal prices throughout the year, besides increase in the prices of iron ore, ferro silicon and almost all other raw materials. However, with improved volumes and the continued thrust given for improving operational efficiencies and cost control, your Company was successful to a certain extent in insulating its margins.

During the year under review your Company demonstrated a relatively better performance, in spite of the challenges thrown by global and domestic raw material markets. The sales volume achieved during the year is at 2,75,484 MT, up by about 20% vis-a-vis FY2016-17, thereby increasing its market share particularly in southern and western states in general. Your Company reported INR 1505.98 Crores as revenue from operations, INR 279.26 Crores as EBITDA and profit after tax of INR 147.34 Crores.

Debt Equity Ratio 2014 - 2018:

The continued surplus cash generation improved the funds availability of the Company resulting in lower dependence on borrowings. With the QIP issue at a decent premium and the improved internal accruals, the Company is comfortably placed to fund its future capital expenditure for expansions and diversification.

FUTURE PROSPECTS:

During the year under review, your Company gradually started establishing the expected benefits from the capacity expansion facilities completed in Ductile Iron Pipe Plant and Mini Blast Furnace and also from the cost reduction projects like Pulverized Coal Injection and captive oxygen plant. With this, your Company is expecting to reach close to its full capacity in the FY 2018-19, besides achieving desired cost reduction benefits.

The Project of installation of additional coke oven battery along with additional boiler in the Captive Power Plant taken up by the Company during the year under review is in the advanced stage of completion and is expected to be in place during the first half of 2018-19. Post commissioning of 4th battery, the Company will be in a position to produce higher quantum of LAM Coke in excess of its captive consumption and this opens up a new avenue for your Company for sale of coke depending on market demand, apart from giving the company opportunity to revamp other batteries without affecting the coke production required for captive use. This apart, captive power generation is also expected to go up, which enhances selfreliance in meeting the power requirements and reduces dependency on grid power to a greater extent.

As a further measure of cost reduction initiatives and as part of backward integration to achieve self-reliance in sourcing of major and critical raw/ essential materials, the Board of directors of your company after reevaluating the viability of the Ferro alloys project, has approved a CAPEX of INR 55 Crores for setting up 2 Nos. 9 MVA furnaces to produce Ferro Silicon and Silicon Manganese, where 50% production of the Ferro Silicon will be consumed internally for captive use, the balance quantity of Ferro Silicon and entire quantity of Silicon Manganese shall be sold in domestic and export markets. This additional facility would help your Company in achieving higher revenues, in addition to maintaining lower cost of production. This facility will be commissioned during the FY2019-20.

The Board of directors of our Company has also approved a CAPEX of INR 70 Cores towards installation of additional Annealing Furnace, establishing 1200 mm dia production facilities and other balancing infrastructure in Ductile Iron Pipe Plant, which will facilitate cost reduction, product expansion, besides increased volumes. These projects would be funded out of internal accruals.

Given the Government’s focus on infrastructural projects in the country, huge investments in water infrastructure development, improving sanitation coverage in the country, water conservation schemes and increasing number of housing units are expected to drive growth for Ductile Iron Pipes in the domestic market. With the major initiatives already undertaken by the Government in this space like Smart Cities Mission, Pradhan Mantri Awas Yojana or Housing for all by 2022 Mission, Heritage City Development and Augmentation Yojana, JNNURM, Swatch Bharat Mission etc., your Company’s order book position continues to be comfortable and the Company is optimistic of maintaining its growth.

CREDIT RATING:

With the continuous improvement in the financial-risk profile of the Company and considering long and satisfactory track record of operations, CARE Limited upgraded its rating for the Company’s long term borrowing programmes from “CARE A ; Stable (A Plus)” to CARE AA-; Stable (Double A Minus) and reaffirmed CARE A1 (A One Plus) rating for the short term facilities including Commercial Paper. While the rating CARE AA- indicates high degree of safety regarding timely servicing of financial obligations carrying very low credit risk, rating CARE A1 rating indicates very strong degree of safety regarding timely payment of financial obligations carrying lowest credit risk.

GOODS AND SERVICES TAX (GST):

The introduction of Goods and Services Tax (GST) by unifying a large number of central and state taxes into a single tax is a very significant move in the field of indirect tax reforms in India, which would mitigate cascading or double taxation in a major way and pave the way for a common national market.

Your Company was successful in transition to GST scenario by carrying out appropriate changes to the business process & IT systems as per the GST framework. Your Company has passed on the benefit accrued on implementation of GST to the customers.

CHANGES IN DIRECTORS/KEY MANAGERIAL PERSONNEL:

Andhra Pradesh Industrial Development Corporation (APIDC), Hyderabad has withdrawn its nominee Shri Kartikeya Misra, IAS with effect from 4th July, 2017 and nominated Shri Sidharth Jain Fouzdar on the Board of Directors of your Company with effect from 10th August, 2017 and on his resignation appointed Shri Solomon Arokia Raj, IAS with effect from 28th April, 2018.

During the year under review Mr. K. Raghuram, Company Secretary has resigned with effect from 31st August, 2017 and in his place Mr. G. Kodanda Pani, Dy. General Manager - Finance who has been associated with the Company for the last several years, who is also a member of Institute of Company Secretaries of India has been appointed as Company Secretary with effect from 27th September, 2017.

Your Directors place on record their appreciation for the active participation and valuable services rendered to the Company by Shri Kartikeya Misra, IAS, Shri Sidharth Jain Fouzdar, IAS and Shri K. Raghuram, Company Secretary in their respective capacities.

Upon the recommendation of Nomination and Remuneration Committee, the Board has approved the appointment of Shri V. Poyyamozhi as Whole-time Director of the Company for a period of five years commencing from 10th August, 2017 and the same has been approved by the shareholders at the Annual General Meeting of the Company held on 27th September, 2017.

Upon the recommendation of the Nomination and Remuneration Committee, the Board has approved the appointment of Ms. Priya Manjari Todi as Additional Director of the Company with effect from 31st January, 2018 and she will hold office up to the conclusion of ensuing Annual General Meeting of the Company. Your Company has received a notice under Section 160 of the Companies Act, 2013 from a shareholder of the Company, signifying his intention to propose the name of Ms. Priya Manjari Todi, for appointment as a Director of your Company. Brief profile of Ms. Priya Manjari Todi is given in the notice of the Annual General Meeting, for the persual of the shareholders.

Shri V. Poyyamozhi retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The Company has received declarations from the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under SEBI’s Listing Regulations, 2015.

The board of directors of your company confirms that plans are in place for orderly succession for appointment to the board of directors and senior Management and they are reviewed every year.

CORPORATE GOVERNANCE:

Your Company is committed to maintain the highest standards of Corporate Governance requirements set out by SEBI and strives to ensure that corporate governance guidelines and best practices are followed in letter and spirit and believes in accurate and timely disclosure of information regarding financials, performance as well as the leadership and governance of the Company.

The report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 forms an integral part of Directors Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

INTERNAL FINANCIAL CONTROLS & ADEQUECY:

The Company has adequate and effective Internal Financial Controls (IFC) framework, commensurate with its size, scale and complexity of operations. The Company has laid down certain guidelines, processes and structures, which enable implementation of appropriate internal financial controls across the organisation. Such internal financial controls encompasses policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of business, including adherence to its policies, safeguarding of its assets, prevention and detection of frauds and errors, timely preparation of reliable financial information, compliance with all applicable laws. Appropriate review and control mechanisms are built in place to ensure that such control systems are adequate and are operating effectively. The controls, based on the prevailing business conditions and processes have been tested during the year and no reportable material weakness in the design or operating effectiveness was observed. The framework on Internal Financial Controls over Financial Reporting has been reviewed by the internal and external auditors.

The Company has, in all material respects, an adequate internal financial controls system and such internal financial controls were operating effectively based on the internal control criteria established by the Company considering the essential components of internal control stated in the guidance note on audit of internal control over financial reporting issued by the Institute of Chartered Accountants of India.

The Audit committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvements wherever needed to strengthen the same.

MANAGEMENT DISCUSSION AND ANALYSIS:

In terms of the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), discussion on state of Company’s affairs has been covered as part of the Management Discussion and Analysis (MDA) in a separate section vide Annexure II to this Report.

RISK MANAGEMENT POLICY :

Company’s Risk Management Policies are formulated in such a way that the Company can respond swiftly to the risks and implement necessary mitigation activities. A prudent risk management framework has been developed, such that cautious approach is undertaken to identify and analyze internal and external risks and minimize its impact on operations. The Company’s Risk Management framework protects and adds value to the organization and its stakeholders with the objective to establish a risk intelligence framework for managing objectively expected risk exposures so as to maintain financial stability of your Company.

A robust Risk Management Framework supports your Company’s business strategy and operations. Risk Management Framework is constantly updated for new and emerging risks emanating from business expansion and interests. The risks are evaluated, quantified & prioritized and mitigation plans are reviewed & monitored at various stages. The major risks connected with the business, their likely bearing on the performance of the Company and their mitigation are covered under Risks and Concerns Section of the Management Discussion and Analysis.

NOMINATION & REMUNERATION POLICY:

The Board periodically evaluates the need for change in its composition and size. The policy of the Company on the appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel, including criteria for determining qualifications, positive attributes, independence of a director and other matters as required under sub-section (3) of Section 178 of the Companies Act, 2013 are formulated by the Nomination and Remuneration Committee. The Policy is available in the company’s website at www.srikalahasthipipes.com.

The Nomination and Remuneration Committee of the Company is in compliance with the provisions of Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and the terms of reference to the Committee are :-

a. To guide the Board in relation to appointment, retention and removal of Directors, Key Managerial Personnel and Senior Management.

b. To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board.

c. To recommend to the Board on remuneration payable to the Directors and Key Managerial Personnel.

d. To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES :

Your Company believes that Corporate Social Responsibility (CSR) plays a major role in the inclusive development of the nation through continuous and purposeful engagement with society around. The Company is well on its course to execute its CSR initiatives to meet the pressing needs towards empowering women and children living in and around the location, where it operates and beyond. Company’s CSR efforts are directed towards enabling an ideal scenario where women and girls have access to quality education, healthcare and livelihood skills to build their own destinies while taking vital decisions in their families and society at large.

The Board has adopted a Corporate Social Responsibility Policy (CSR Policy), Rules, 2014 in accordance with Schedule VII of the Companies Act, 2013. The Report on CSR activities as required under Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 read with section 134(3) and 135(2) of the Companies Act, 2013 is at Annexure III to this Report.

During the FY2017-18, the Company has spent about INR 3.63 Crores as against INR 3.58 Crores to have been spent during the year under review, towards various CSR activities which are covered in detail in the Report on CSR, which forms part of this report. The Company is following a systematic process to ensure that meaningful and measurable outcome is delivered from its CSR initiatives, which are relevant and impactful and meet the intent of the law and the CSR Policy.

WHISTLE BLOWER MECHANISM (POLICY) :

The Company has a vigil mechanism named Whistle Blower Policy / Vigil Mechanism to deal with instance of fraud and mismanagement, if any. Details of the same are given in the Corporate Governance Report. During the year under review, the Company has not received any complaints under the said mechanism. The Whistle Blower Policy of the Company has been displayed on the Company’s website at www.srikalahasthipipes.com

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has in place a Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. The Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. During the year 2017-18, no complaints were received by the ICC.

EVALUATION OF PERFORMANCE OF BOARD MEMBERS :

During the year, a formal process for annual evaluation of performance of Board, its committees and directors individually was carried out as per the criteria laid down by the Nomination and Remuneration Committee, pursuant to the provisions of the Companies Act, 2013 and SEBI LODR. The criteria for evaluation of board and its committees were based on the structure, composition, board-management relationship, effectiveness in terms of roles and responsibilities and processes encompassing the information flow and functioning. The guiding standards for the assessment of performance of directors (including the independent directors) were, their attendance and participation at board meetings, sharing of their relevant domain expertise, their strategic inputs and demonstration towards governance compliances.

The evaluation was carried out through a structured methodology approved by the Nomination and Remuneration Committee after ensuring that the aspects under each of the laid down criteria are comprehensive and commensurate with the size of the board and the Company. The Nomination and Remuneration Committee, reviews and makes recommendation to the board, from time to time, for ensuring an optimum composition of the Board and its Committees, induction of directors into the Board, participation on the Board effectiveness and evaluation process. The outcome of the evaluation also forms the basis for the Nomination and Remuneration Committee while considering re-appointment of Directors and appointment in various Committee(s) of the Board.

The performance of every Director was evaluated by the Nomination and Remuneration Committee. The performance evaluation of the Independent Directors was carried out by the entire Board. Further, the performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors.

From the evaluations of the Board, it was observed that the Board and its committees are functioning efficiently and that the performance of every director continues to be effective and demonstrates the level of commitment towards the affairs of the Company.

The Independent Directors of the Company held a separate meeting without the attendance of Non Independent Directors and evaluated the performance of non-independent directors and the board as a whole and Chairman of the Company. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

FAMILIARISATION PROGRAMME :

The Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarise with the Company’s procedures and practices. Periodic presentations are made at the Board Meetings, Committee Meetings and Independent Directors Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved.

NUMBER OF MEETINGS OF THE BOARD:

The details of the number of Meetings of the Board held during the Financial Year 2017-18 are given in the Corporate Governance Report which forms part of this report.

RELATED PARTY TRANSACTIONS:

All transactions entered into with Related Parties during the year were in the ordinary course of business and on an arm’s length basis. The Company has formulated a policy on “Related Party Transactions” and the process of dealing with such transactions, which are in line with the provisions of the Companies Act, 2013 and SEBI LODR. The same is available on the website of the Company www.srikalahasthipipes.com

Prior omnibus approvals from the Audit Committee are obtained for transactions which are repetitive and also normal in nature. Further, disclosures on related party contracts and arrangements are made to the Audit Committee and the Board on a quarterly basis.

During the year under review, there were no material related party transactions under regulation 23 (4) of SEBI LODR entered into by the Company, which necessitates approval of shareholders. Particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013, in the prescribed Form AOC - 2, are provided at Annexure IV to this report and the related party disclosures as per Ind AS-24 have been provided in Note - 43 to the financial statement.

PARTICULARS OF EMPLOYEES:

The statement containing particulars of employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. However, in terms of Section 136 of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

The ratio of the remuneration of each Director to the median employee’s remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is forming part of this report vide Annexure V.

QUALIFIED INSTITUTIONS PLACEMENT :

The shareholders of the Company had approved to raise funds upto INR 250 Crores by way of Qualified Institutions Placement (QIP) in order to cater to the business purposes, including repayment of long term and short term debt, to fund the organic and inorganic growth of the Company, to meet working capital requirements of the Company and for general corporate purposes. Your Company has successfully raised INR 250 Crores through its Qualified Institutional Placement (QIP) in the month of December, 2017, which saw participation by some reputed institutional investors. The company has issued 69,34,812 equity shares of face value of INR 10/- per equity share at INR 360.50, including a premium of INR 350.50 per share. This is an important milestone in the corporate journey of your Company and the response to this QIP issue is a testimony to the Company’s growth oriented financial performance and the confidence reposed by the investors in the business model of your Company. Pending utilization of proceeds of QIP for the intended purposes, the un-utilized funds are now parked in mutual funds and fixed deposit with banks.

Energy conservation, technology absorption and foreign exchange earnings and outgo:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure VI and forms part of this report.

OTHER DISCLOSURES:

Particulars of information forming part of the Board’s Report pursuant to Section 134 of the Companies Act, 2013 and relevant Rules thereof, not covered elsewhere in the report due to non applicability are given hereunder :-

1. There are no qualifications, reservations or adverse remarks or disclaimer made by the Statutory Auditors in their report or by the practicing Company Secretary in the Secretarial Audit Report.

2. The Company, as per its policy, has granted loans to employees aggregating INR 13.07 lakhs during the year ended 31st March, 2018.

3. Particulars of Loans or investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statement provided in this Annual Report. These loans are primarily granted for effective utilization of surplus funds available with the Company.

4. There are no material changes or commitments occurring after 31st March, 2018, which may affect the financial position of the Company or may require disclosure.

5. During the year under review, there has been no change in the nature of business of the Company.

6. The Company did not have any subsidiaries, joint ventures and associate companies, which have ceased during the year.

7. The Company has not accepted deposits under Chapter V of the Companies Act, 2013.

8. The Company has not received any such orders from Regulators, Courts or Tribunals during the year, which may impact the going concern status or the Company’s operations in future.

STATUTORY AUDITORS:

At the 25th Annual General Meeting (AGM) held on 27th September, 2017 M/s. Lodha& Co., Chartered Accountants (Firm Reg. No. 301051E), were appointed as Statutory Auditors of the Company for a term of five years (subject to ratification by shareholders at every AGM, if required, under the prevailing law at that time) to hold office from the conclusion of 25th Annual General Meeting till the conclusion of 30th Annual General Meeting of the Company. Accordingly, the appointment of M/s. Lodha & Co is placed for your ratification in the ensuring AGM of the Company.

Further, the Notes on financial statements 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:

In compliance with the provisions of Section 148(2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit), Amendment Rules 2014, your Company is required to get its cost accounting records audited by a Cost Auditor in Practice. Accordingly, the Board at its meeting held on 28th April, 2018, has on the recommendation of the Audit Committee, appointed M/s. Narasimhamurthy & Co, Cost Accountants to conduct the audit of the cost accounting records of the Company for FY 2018- 19 on a remuneration of INR 1.40 lakhs plus taxes as applicable and reimbursement of actual travel and out of pocket expenses. The remuneration is subject to the ratification of the Members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is accordingly placed for your ratification. The Cost Audit Report of the Company for the Financial Year ended 31 March, 2017 was filed in XBRL mode with the Ministry of Corporate Affairs within the stipulated due date.

SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules thereunder, Mr. S. Chidambaram, Company Secretary in Practice was appointed to conduct the secretarial audit of the Company for the FY 2017-18. The secretarial audit report confirming compliance by Practicing Company Secretary to the applicable provisions of the Companies Act, 2013, SEBI LODR Regulations, 2015 and other applicable laws is appended at Annexure VII to this report and it does not contain any qualification, reservation or adverse remark.

GREEN INITIATIVE :

In support of “Green Initiative” taken by the Ministry of Corporate Affairs (“MCA”) in the Corporate Governance” by allowing service of documents by a Company to its Members through electronic mode, the Company will continue to send various communications and documents like notice calling general meetings, audited financial statements, directors’ report, auditor’s report etc., in electronic form, to the email address provided by the Members to the Depositories or to the Company.

Our Company impresses upon its shareholders to contribute to this green initiative in full measure by registering their e-mail addresses, in respect of electronic holdings with the Depository through their concerned Depository Participant. Members who hold shares in physical form are requested to take necessary steps for registering the same with the company so that they can also become a part of the initiative and contribute to the Green Movement.

ANNEXURES TO THE BOARD’S REPORT :

1. Corporate Governance Report is enclosed vide Annexure - I.

2. Pursuant to Regulation 34 of Listing Regulations 2015, Management Discussion and Analysis Report is enclosed vide Annexure - II.

3. Pursuant to Section 135 (4) (a) of the Companies Act, 2013 read with Rule 8 (1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the annual report on CSR activities in the prescribed format, forming part of the Director’s Report is enclosed vide Annexure - III

4. Pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8 (2) of Companies (Accounts) Rules, 2014, particulars of contracts or arrangements with related parties in the prescribed Form AOC-2, forming part of Directors’ Report is enclosed vide Annexure - IV.

5. Disclosure under Section 197 (12) read with Rule 5(1) of the Companies (Appointment and remuneration of managerial personnel) Rules, 2014 is enclosed vide Annexure - V.

6. Pursuant to Section 134 (3) (m) of the Companies Act, 2013, information relating to Conservation of Energy, Technology absorption and foreign exchange earnings and outgo is enclosed vide Annexure -VI.

7. Pursuant to Section 204 (1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and remuneration of managerial personnel) Rules, 2014, the Secretarial Audit Report is enclosed vide Annexure - VII.

8. Pursuant to Section 134 (3) (a) of the Companies Act, 2013, the extract of the Annual Return as provided under sub section (3) of Section 92 is enclosed vide Annexure - VIII.

DIRECTORS RESPONSIBILITY STATEMENT:

The Board of Directors of the Company confirms that:

i. In the preparation of annual accounts, the applicable accounting standards have been followed and there has been no material departure.

ii. The selected accounting policies were applied consistently and the Directors 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, 2018 and of the profit of the company for the financial year ended 31st March 2018.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The annual accounts have been prepared on a going concern basis.

v. Sufficient internal financial controls have been laid down and such internal financial controls are adequate and were operating effectively,

vi. Proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS:

Your Directors place on record their appreciation for all levels of employees for their hard work, dedication, commitment and solidarity. Your Directors also acknowledge contributions of Bankers, Statutory Auditors, Cost Auditors, Secretarial Auditors and Internal Auditors and are grateful for their consistent support and cooperation. Your Directors also wish to thank all the shareholders, business partners and other stakeholders for reposing their faith, trust and confidence in your Company.

Your Directors also place on record their sincere appreciation for the valuable guidance received from Shri Mayank Kejriwal, Managing Director and for his constructive contribution in shaping the progressive growth of your Company.

For and on behalf of the Board of Directors

Date: 28th April, 2018. G. Maruthi Rao

Place: Chennai Chairman

DIN : 0083950


Mar 31, 2017

Dear Shareholders,

The Directors take pleasure in presenting the 25th Annual Report of the Company together with the audited financial statements for the Financial Year ended 31 st March, 201 7.

FINANCIAL RESULTS:

Rs. in Lakhs

Particulars

2016-17

2015-16

Gross revenue from operations

1,20,340.14

1,17,767.07

Net revenue from operations

1,17,786.66

1,14,561.26

Other income

3,046.91

1,993.17

Total revenue

1,23,387.05

1,19,760.24

Earnings Before Interest, Depreciation, Taxation & Amortization (EBITDA)

26,739.99

28,667.12

Finance costs

3,929.16

4,249.61

Depreciation

3,688.50

3,466.77

Profit/(Loss) Before Taxation

19,122.33

20,950.74

Less: Tax including deferred tax

5,099.12

5,418.69

Profit/(Loss) After Taxation

14,023.21

15,532.06

Profit brought forward from previous year

10,950.38

2,797.09

Prior period adjustment — Taxation

---

---

Amount available for appropriation

24,973.59

18,343.28

Appropriations are made as under :

-General reserve

5,000.00

5,000.00

-Proposed dividend including tax thereon

2,874.33

2,392.90

Balance carried forward to next year

17,099.26

10,950.38

DIVIDEND:

Your Directors have recommended a dividend of Rs.6/- (60%) per equity share of Rs.10/- each for the financial year ended 31st March, 2017 (previous year Rs.5/- per share) amounting to Rs.2874.33 lakhs (including Rs.488.49 lakhs towards dividend tax). The dividend payout is subject to approval of members at the ensuing Annual General Meeting.

Your Company delivered steady performance, in a rather challenging year, which has seen multifold increase in the prices of coking coal during the 4th quarter of the FY 2016-17 and partial rise in the prices of iron ore culminated together resulted in higher cost of production, whereby leading to slight dip in the pre-tax profit of your Company at Rs.191.22 Crores compared to Rs.209.51 Crores registered in the FY 2015-16.

Debt Equity Ratio 2013 - 2017:

The sustained internal cash accruals improved the funds position of the Company resulting in lower utilization of working capital facilities, leading to reduced finance cost. The company is well positioned to fund its CAPEX for diversification and expansion programs.

Your company continues to maintain a healthy debt equity ratio of 0.19:1.

FUTURE PROSPECTS:

During the year under review, your Company has successfully completed capital expenditure programme, which was initiated in the FY 2015-16 entailing an investment of Rs.100 Crores towards installation of Pulverized Coal Injection (PCI) and Bell Less Top equipment facilities in MBF, capacity expansion of DI Pipe Plant, which includes installation of new spinning machine and additional finishing line. These facilities are commissioned during 3rd / 4th quarter of the FY 2016-17, and the Company will be reaping the full benefits from the facilities in terms of increased production of liquid metal and DI Pipes coupled with reduction in coke consumption from the Financial Year 2017-18 onwards.

Further, to be self-sufficient in meeting the coke and power requirements, the Company has taken up the project of installation of additional Coke Oven battery along with additional boiler in the Captive Power Plant at an investment of Rs.65 crores, which is expected to be in place in this financial year. This investment will yield perennial benefit to the Company in terms of uninterrupted availability of Coke and power. This apart, post commissioning of dedicated Captive Oxygen Plant, the cost of production will come down further.

During the year under review there is a steep increase in the prices of Metallurgical Coal due to global demand and supply mismatch and other external factors. However, at present, the prices started declining, which will reduce the pressure on cost of production.

As regards setting up of Ferro Alloys Unit, as the Govt. of Andhra Pradesh has not extended power subsidy of Rs.1.50 per unit, the Company has deferred setting up of Ferro Alloys unit, as it is not viable to take up the Project in the absence of power subsidy. However, the Company is seriously pursuing with the Andhra Pradesh Government to reconsider extension of power subsidy to enable the Company to take up the Project.

Further, upcoming ambitious water supply projects, Amaravathi Capital Development Projects and infrastructure projects in 100 Smart Cities and 500 other Cities under AMRUT (Atal Mission for Rejuvenation and Urban Transformation) of Central Government and use of Ductile Iron Pipe in the non conventional sector like irrigation schemes etc., will ensure regular business and the company is hopeful of maintaining its growth.

CREDIT RATING:

CARE Limited maintained its rating for the Company''s borrowing programmes with the rating as "CARE A (Single A Plus)" for long term bank facilities and A1 (A One Plus)"for the short term facilities. These ratings indicate adequate degree of safety regarding timely servicing of financial obligations carrying very low credit risk and very strong degree of safety regarding timely payment of financial obligations and carries lowest credit risk. Further, Infomerics Valuation and Rating Pvt. Ltd. has rated "IVR AA/Stable Outlook ( Pronounced IVR Double A with Stable Outlook)" for the long term borrowing programmes of the Company upto Rs.200 Crores.

DIRECTORS/KEY MANAGERIAL PERSONNEL:

Andhra Pradesh Industrial Development Corporation (APIDC), Hyderabad has withdrawn its nominee Shri Shamsher Singh Rawat, IAS with effect from 4th June, 2016 and nominated Shri B. Sreedhar, IAS on the Board of Directors of your Company with effect from 29th August, 2016 and on his resignation appointed Mr. Kartikeya Misra, IAS with effect from 1st December, 2016.

During the year under review Mr. A. R. Surana, Chief Financial Officer has resigned with effect from 19th September, 2016 and in his place Mr. N. Sivalai Senthilnathan has been appointed as Chief Financial Officer of the Company with effect from 1st December, 2016.

Your Directors place on record their appreciation for the active participation and valuable services rendered to the Company by Shri Shamsher Singh Rawat, IAS and Shri B.Sreedhar, IAS and Shri A. R. Surana in their respective capacities.

On expiry of the present term of Shri Mayank Kejriwal, Managing Director of the Company, upon the recommendation of Nomination and Remuneration Committee, the Board has approved his re-appointment for a period of five years commencing from 1st May, 2017, subject to approval of shareholders in the ensuing Annual General Meeting of the Company.

Shri G.S. Rathi retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The Company has received declarations from the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Listing Regulations, 2015.

The board of directors of your company confirms that plans are in place for orderly succession for appointment to the board of directors and senior management and they are reviewed every year.

CORPORATE GOVERNANCE:

Your Company strongly believes that Corporate Governance is creation and enhancing long-term sustainable value for the stakeholders through ethically driven business process. In your Company, Corporate governance is a value-based framework to manage the affairs of the Company in a fair and transparent manner. We consider it as our core responsibility to disclose timely and accurate information regarding our financials and performance.

Your Company complies with the Securities and Exchange Board of India (SEBI)''s guidelines on corporate governance. The Corporate governance report for the financial year 2016-17 and the auditors'' Certificate on Corporate Governance as stipulated under regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are annexed vide Annexure I and forms part of this report.

INTERNAL FINANCIAL CONTROLS & ADEQUECY:

The Company has proper and adequate internal control systems in place to safeguard assets and protect against loss from any unauthorized use or disposition. The system authorizes, records and reports transactions and ensures recorded data are reliable to prepare financial information and to maintain accountability of assets. The Company''s internal controls are supplemented by an extensive programme of internal audits, review by management and documented policies, guidelines and procedures.

The Company has developed a robust Internal Financial Controls framework by revisiting and refining process notes, flowcharts and control matrices across finance and other operating functions. The internal financial controls were also reviewed by an independent auditor and found to be adequate and operating effectively for ensuring accuracy and completeness of the accounting records. No reportable material weaknesses were observed.

The Audit committee of the Board of Directors, Statutory Auditors and the Business heads are periodically apprised of the internal audit findings and corrective actions taken. Internal Audit plays a key role in providing assurance on internal financial controls to the Board of Directors. Significant internal audit observations and the responses of the management are presented to the Audit committee of the Board for its suggestions followed by corrective actions.

The Audit committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvements wherever needed to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism.

MANAGEMENT DISCUSSION AND ANALYSIS:

Discussion on state of Company''s affairs has been covered as part of the Management Discussion and Analysis (MDA). MDA for the year under review, as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section vide Annexure II to this Report.

RISK MANAGEMENT POLICY :

The Company''s robust risk management framework identifies and evaluates business risks and opportunities. The Company recognizes that these risks need to be managed and mitigated to protect its stakeholders'' interest, to achieve its business objectives and enable sustainable growth. The risk framework is aimed at effectively mitigating the operational risks in Company''s various businesses through effective control measures. Risk management is implanted in our critical business activities, functions and processes. The risks are reviewed for the change in the nature and extent since the last assessment. It also provides easing measures for risks and future action plans.The elements of risk associated with the business that may likely to have a bearing on the performance of the Company and the focused initiatives taken by the Company for mitigation of risks are covered under Risks & Concern Section of Management Discussion & Analysis.

NOMINATION & REMUNERATION POLICY:

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel and their remuneration. The Policy is available in the company''s website at www.srikalahasthipipes.com.

Company''s Nomination and Remuneration Policy is in compliance with the provisions of Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Committee shall guide the Board :

a) In relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management.

b) In evaluating the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board.

c) In formulating the criteria for determining qualifications, positive attributes and independence of a director.

d) In recommending to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.

CORPORATE SOCIAL RESPONSIBILITY POLICY:

The Board has adopted a Corporate Social Responsibility Policy (CSR Policy), in accordance with Schedule VII of the Companies Act, 2013 and a report on CSR activities/initiatives, which include the contents of the CSR Policy, composition of the Committee and other details as required to be provided in Annual Report on CSR in accordance with Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy), Rules, 2014 are disclosed as Annexure III to this Report.

During the FY 2016-17, the amount spent by the Company towards CSR initiatives is lower than the limits prescribed under Companies Act, 2013. To facilitate maximum benefit to the community, the CSR initiatives of the Company by and large involve setting the foundation of various programs at a small scale to learn from on-ground realities, getting feedback from community and then implement an enhanced sustainable model. For this reason, during the year, the Company''s spend on the CSR activities has been less than the limits prescribed under Companies Act, 2013. With new initiatives that may be considered in future, going forward the Company will Endeavour to spend on CSR activities in accordance with the prescribed limits.

WHISTLE BLOWER MECHANISM (POLICY):

The Company has in place Whistle Blower Policy, wherein the Employees/Directors/Stakeholders of the Company are free to report any unethical or improper activity, actual or suspected fraud or violation of the Company''s Code of Conduct. This mechanism safeguards against victimization of employees, who report under the said mechanism. During the year under review, the Company has not received any complaints under the said mechanism. The Whistle Blower Policy of the Company has been displayed on the Company''s website at www.srikalahasthipipes.com

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company''s Prevention of Sexual Harassment Policy is in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) was set up to redress complaints received regarding sexual harassment. During the year 2016-17, no complaints were received by the ICC.

EVALUATION OF PERFORMANCE OF BOARD MEMBERS:

Pursuant to the provisions of the Companies Act,

2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. Performance evaluation has been carried out as per the Nomination and Remuneration Policy.

While evaluating the performance of the Non- Executive Directors, the following parameters have been considered: (a) Attendance at meetings of the Board and Committees thereof, (b) Participation in Board and Committee meetings, (c) Contribution to strategic decision making, (d) Review of risk assessment and risk mitigation, (e) Review of financial statements, business performance. (f) Contribution to the enhancement of brand image of the Company. While evaluating the performance of the Managing Director and Whole-time Director, appropriate benchmarks set as per industry standards, were considered.

From the evaluations of the Board, it was observed that the Board and its committees are functioning efficiently and that the performance of every director continues to be effective and demonstrates the level of commitment expected by the Company.

FAMILIARISATION PROGRAMME:

The Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarize with the Company''s procedures and practices. Periodic presentations are made at the Board Meetings, Committee Meetings and Independent Directors Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved.

NUMBER OF MEETINGS OF THE BOARD:

The details of the number of Meetings of the Board held during the Financial Year 2016-17 are given in the Corporate Governance Report which forms part of this report.

RELATED PARTY TRANSACTIONS:

As per the provisions of Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has established a Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions. The Policy on Related Party Transactions as approved by the Board of Directors is available on the website of the Company at www.srikalahasthipipes.com.

All contracts or arrangements entered into by the Company with Related Parties have been done at arm''s length and are in the ordinary course of business. All Related Party Transactions are placed before the Audit Committee for review. Pursuant to Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of transactions entered by the Company with the related parties referred to in Section 188(1) of the Companies Act, 2013 are given by way of Annexure IV to this report. Related Party disclosures as per Ind AS-24 have been provided in Note—42 to the financial statements.

PARTICULARS OF EMPLOYEES:

The statement containing particulars of employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. However, in terms of Section 136 of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

The ratio of the remuneration of each Director to the median employee''s remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is forming part of this report vide Annexure V.

ISSUE OF FURTHER SECURITIES:

In order to cater to the business purposes, including but not limited to repayment of long term and short term debt, to fund the organic and inorganic growth of the Company, to meet working capital requirements of the Company and for general corporate purposes, the Board at its meeting held on 29th April, 2017 has approved the proposal for raising funds upto Rs.250 Crores or its equivalent in any foreign currency through Public or private placement by way of Qualified Institutions Placement (QIP) or through any other permissible mode.

STATUTORY INFORMATION:

Information as per Companies (Accounts) Rules, 2014 related to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure - VI attached hereto and forms part of this report.

OTHER INFORMATION:

Particulars of information forming part of the Board''s Report pursuant to Section 134 of the Companies Act, 2013 and relevant Rules thereof, not covered elsewhere in the report due to non applicability are given hereunder :-

1. There are no qualifications, reservations or adverse remarks or disclaimer made by the Statutory Auditors in their report or by the practicing Company Secretary in the Secretarial Audit Report.

2. The Company, as per its policy, has granted loans to employees aggregating Rs.13.52 lakhs during the year ended 31st March, 2017.

3. Particulars of Loans or investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statement provided in this Annual Report. These loans are primarily granted for effective utilization of surplus funds available with the Company.

4. Particulars of the amounts proposed to be carried to reserves have been covered as part of the financial performance of the Company at the beginning of the Report.

5. There are no material changes or commitments occurring after 31st March, 2017, which may affect the financial position of the Company or may require disclosure.

6. During the year under review, there has been no change in the nature of business of the Company.

7. The Company did not have any subsidiaries, joint ventures and associates companies, which have ceased during the year.

8. The Company has not accepted deposits under Chapter V of the Companies Act, 2013.

9. The Company has not received any such orders from Regulators, Courts or Tribunals during the year, which may impact the going concern status or the Company''s operations in future.

STATUTORY AUDITORS:

At the 24th Annual General Meeting held on 29th August, 2016 M/s. K R Bapuji & Co., Chartered Accountants (Firm Registration No: 000395S), Hyderabad were appointed as Statutory Auditors of the Company to hold office till the conclusion of the 25th Annual General Meeting to be held in the year 2017. The Auditors'' Report does not contain any qualification, reservation or adverse remark.

Pursuant to the provisions of the Companies Act, 2013, the existing Auditors can continue to be the Auditors of the Company only till the conclusion of the ensuing 25th Annual General Meeting. The Board of Directors, on the recommendation of the Audit Committee has appointed M/s. Lodha & Co., Chartered Accountants (Firm Reg. No. 301051E) as Statutory Auditors of the Company for a term of five years from the conclusion of 25th Annual General Meeting till the conclusion of 30th Annual General Meeting of the Company to be held in the FY 2022-23. In this regard, the Company has received a certificate from the auditors to the effect that if they are appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. Appointment of M/s. Lodha & Co., Chartered Accountants (Firm Reg. No. 301051E) as Statutory Auditors of the Company will be placed before the members for their approval in the ensuing Annual General Meeting of the Company and thereafter every year for ratification till conclusion of their term.

COST AUDITORS:

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s.Narasimhamurthy & Co., Cost Accountants, Hyderabad as Cost Auditors to audit the cost accounts of the Company for the Financial Year 2016-17. As required under the Companies Act, 2013, a resolution seeking Member''s approval for the remuneration payable to the Cost Auditors forms part of the Notice convening the Annual General Meeting. The Cost Audit report for the Financial Year 2015-16 was filed with the Ministry of Corporate Affairs within in the stipulated due date.

SECRETARIAL AUDITORS:

The Board has appointed Mr.S.Chidambaram, Company Secretary in Practice, Hyderabad to conduct Secretarial Audit for the Financial Year 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2017 is provided at Annexure VII to this report. The Secretarial Audit Report is self explanatory and does not contain any qualification, reservation or adverse remark.

GREEN INITIATIVE:

In order to maintain the planet Earth evergreen, the Ministry of Corporate Affairs ("MCA") has taken a "Green Initiative in the Corporate Governance" by allowing paperless compliances by the companies. Accordingly, as per the Company''s "GO GREEN" initiative, the Company shall send intimations and documents, including Notice of General Meetings and Annual Report of the Company, in electronic form to Email ID of the shareholders registered with Company, instead of physical mode.

Shareholders who are yet to register their E-mail addresses are requested to take necessary steps for registering the same so that they can also become a part of the initiative and contribute towards a Greener environment. However physical copies can be sent upon a request made to the Company.

ANNEXURES TO THE BOARD''S REPORT :

1. Corporate Governance Report is enclosed vide Annexure — I.

2. Pursuant to Regulation 34 of Listing Regulations 2015, Management Discussion and Analysis Report is enclosed vide Annexure — II.

3. Pursuant to Section 135 (4) (a) of the Companies Act, 2013 read with Rule 8 (1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the annual report on CSR activities in the prescribed format, forming part of the Director''s Report is enclosed vide Annexure — III.

4. Pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8 (2) of Companies (Accounts) Rules, 2014, particulars of contracts or arrangements with related parties in the prescribed Form AOC-2, forming part of Directors'' Report is enclosed vide Annexure — IV.

5. Disclosure under Section 197 (12) read with Rule 5(1) of the Companies (Appointment and remuneration of managerial personnel) Rules, 2014 is enclosed vide Annexure — V.

6. Pursuant to Section 134 (3) (m) of the Companies Act, 2013, information relating to Conservation of Energy, Technology absorption and foreign exchange earnings and outgo is enclosed vide Annexure —VI.

7. Pursuant to Section 204 (1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and remuneration of managerial personnel) Rules, 2014, the Secretarial Audit Report is enclosed vide Annexure — VII.

8. Pursuant to Section 134 (3) (a) of the Companies Act, 2013, the extract of the Annual Return as provided under sub section (3) of Section 92 is enclosed vide Annexure — VIII.

DIRECTORS'' RESPONSIBILITY STATEMENT:

The Board of Directors of the Company confirms that:

i) In the preparation of annual accounts, the applicable accounting standards have been followed and there has been no material departure.

ii) The selected accounting policies were applied consistently and the Directors 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, 2017.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The annual accounts have been prepared on a going concern basis.

v) Sufficient internal financial controls have been laid down and such internal financial controls are adequate and were operating effectively, and

vi) Proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS:

Your Directors would like to express their sincere appreciation for the commitment displayed by all executives, staff and workers of the Company resulting in the successful performance of the Company during the year. The Board also takes this opportunity to express its gratitude for the continued co-operation and support received from its valued shareholders. The Directors also express their special thanks to Shri Mayank Kejriwal, Managing Director, for his untiring efforts for the progress of the Company.

For and on behalf of the Board of Directors

Place: Chennai.

Date: 12th May, 2017 G.Maruthi Rao

Chairman

DIN 00083950


Mar 31, 2016

The Directors have great pleasure in presenting the 24th Annual Report of the Company together with the Audited accounts for the
Financial Year ended 31st March, 2016.

FINANCIAL RESULTS: Rs. in Lakhs

Particulars 2015-16 2014-15

Gross revenue from operations 1,17,767.06 1,12,304.37

Net revenue from operations 1,14,561.25 1,08,355.08

Other income 1,733.03 866.03

Total Revenue 1,16,294.28 1,09,221.11

Earnings Before Interest,
Taxes, Depreciation &
Amortization (EBITDA) 28,381.48 19,427.99

Finance Costs 4,204.59 4,369.37

Depreciation 2,708.84 3,116.90

Profit/(Loss) Before Taxation 21,468.05 11,941.72

Less: Tax including Deferred Tax 5,587.80 3,724.96

Profit/(Loss) After Taxation 15,880.25 8,216.76

Profit Brought Forward from
Previous Year 2,797.09 1,016.07

Amount available for
Appropriation 18,677.34 9,232.83
Appropriations are made as under :

-General Reserve 5,000.00 5,000.00

-Proposed Dividend
including tax thereon 2,392.90 1,435.74

Balance Carried Forward
to Next Year 11,284.43 2,797.09


DIVIDEND:

Your Directors have recommended a dividend of Rs.5.00 (50%) per equity share of Rs.10/- each for the financial year ended 31st
March, 2016 (previous year Rs.3.00 per share) amounting to Rs.2392.90 lakhs (including Rs.404.75 lakhs towards dividend tax). The
dividend payout is subject to approval of members at the ensuing Annual General Meeting.


REVIEW of OPERATIONS:

Your Company is associated in the nation building activity of water supply and infrastructure development. During the FY 2015-16,
your company''s Ductile Iron Pipes of about 5,500 KM have been used across the country for transportation of potable water and
sewerage under its brand name "SRIPIPES". The Govt. of Andhra Pradesh has declared your company as "Public Utility Services Unit"
as a special case.

Your Directors are pleased to inform that your company achieved robust performance during the year under review in terms of
operational and financial performance.

operational performance highlights at a glance:

Product 2015-16 2014-15 % of

Production in MT Increase

Ductile Iron Pipes 2,25,465 1,69,500 33

Liquid metal from MBF 2,59,120 2,18,206 19

Cement 87,359 85,770 2

During the year under review, the company has successfully achieved 100% of its rated capacity of Ductile Iron Pipe Plant
established through capital expenditure programme undertaken in the FY 2014-15. This has resulted in increased production of
Ductile Iron Pipes by about 55,965 MT registering an increase of about 33% over FY 2014-15. The Ductile Iron Pipes revenue grew
by 19.48% to Rs.995.08 Crores from Rs.832.86 Crores in FY 2014-15, which has significantly improved the performance of the
company.

Besides significant increase in the volumes of Ductile Iron Pipes, in its constant endeavour to remain low cost manufacturer,
your Company has undertaken various cost reduction measures during the year under review such as reduction of coke consumption in
MBF, HSD oil in Ductile Iron Pipe Plant. The continued favorable trend in the prices of major raw materials viz. iron ore, coal
facilitated the Company in maintaining the lower cost of production.


Pre-tax Profit (2012 -2016):

The improved internal cash accruals helped your Company to prepay the Term Loans borrowed from Indusind Bank Limited in March,
2016 and Kotak Mahindra Bank Limited in April, 2016 amounting to Rs.47 crores, and the company funded its CAPEX program during
the year under review from internal accruals.

Debt Equity Ratio 2012 – 2016:

Your company is maintaining a healthy debt equity ratio of 0.35:1.

The operational efficiencies and lower finance cost improved the overall performance thus achieving pre-tax profit of Rs.214.68
Crores in the FY 2015-16 as against Rs.119.42 Crores reported in the FY 2014-15.


FUTURE PROSPECTS:

During the year under review, your Company has initiated yet another capital expenditure programme entailing an investment of
Rs.100 Crores towards up- gradation /modification of Blast Furnace which includes installation of Pulverized Coal Injection (PCI)
and Bell Less Top equipment facilities, capacity expansion of DI Pipe Plant which includes installation of new spinning machine
and additional finishing line. These facilities are likely to be commissioned during 3rd quarter of the FY 2016-17.

Upon the successful completion of CAPEX Programme of Rs.100 cores under implementation, the production capacity of Ductile Iron
Pipes shall increase from 2,25,000 TPA to 3,00,000 TPA. Besides measures to increase volumes, the cost saving measures like
Pulverized Coal Injection facility in MBF and fuel saving measures in Ductile Iron Pipe Plant would help the Company to remain
low cost manufacturer and thus have competitive edge in the industry.

Your Company is exploring the viability of putting up a double walled corrugated pipe plant to meet the growing demand of pipes
required for sewerage and drainage.

As a further measure of cost reduction initiatives and as part of its constant attempt to achieve self-reliance in sourcing major
and critical raw/essential materials, your Company has planned to set up a Ferro Alloys Plant with an outlay of Rs.55 Crores to
meet the requirement of Ferro Silicon, Silico Manganese and Ferro Manganese in domestic and overseas markets, besides catering
captive requirement of the Company. This additional facility would help the Company in achieving higher revenues, in addition to
maintaining lower cost of production. This facility will be commissioned during second quarter of 2017-18. This project would be
funded out of internal accruals.

The Company bagged orders worth Rs.1151 Cores for supply of pipes to various water supply projects of Telangana Government
establishing a comfortable order book.

Further, upcoming ambitious water supply projects, Amaravathi Capital Development Projects and infrastructure projects in 100
Smart Cities and 500 other Cities under AMRUT (Atal Mission for Rejuvenation and Urban Transformation) of Central Govt and use of
Ductile Iron Pipe in the non conventional sector like irrigation schemes etc., will ensure regular business and the company is
hopeful of maintaining its growth.

CREDIT RATING:

Your Company has been rated with the rating as "CARE A (Single A Plus)" for long term bank facilities. This indicates adequate
degree of safety regarding timely servicing of financial obligations and carry very low credit risk. The rating assigned for
short term facilities is "CARE A1 (A One Plus)" and indicates having very strong degree of safety regarding timely payment of
financial obligations and carries lowest credit risk.

DIRECTORS/KEY MANAGERIAL PERSONNEL:

Andhra Pradesh Industrial Development Corporation (APIDC), Hyderabad has withdrawn its nominee Shri J S Venkateswara Prasad, IAS,
with effect from 10th December, 2015 and nominated Shri Shamsher Singh Rawat, IAS on the Board of Directors of your Company with
effect from 4th February, 2016.

Your Directors place on record their appreciation for the active participation and valuable services rendered to the Company by
Mr.J. S. Venkateswara Prasad, IAS in his capacity as Director.

Shareholders at the last Annual General Meeting approved the appointment of Ms.S.Hemamalini as Independent Director (under non
executive cadre) and Mr. Gouri Shankar Rathi as Whole Time Director on the Board of Directors of the Company with effect from
25th July, 2015 for a period of 5 years.

Shri S.Y.Rajagopalan and Shri G.S.Rathi retire by rotation at the ensuing Annual General Meeting and being eligible, offer
themselves for re-appointment.

The Company has received declarations from the Independent Directors of the Company confirming that they meet with the criteria
of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Listing Regulations,
2015.

During the year under review Mr. A R Surana, CFO & Company Secretary has resigned from the position of Company Secretary and
continues to be the CFO of the company. Mr. Manoj K Shah has been appointed as Company Secretary of the Company and on his
resignation, Mr. K Raghuram has been appointed as Company Secretary w.e.f. 4.2.2016.

The Board of Directors of your company confirms that plans are in place for orderly succession for appointment to the Board of
Directors and senior Management and they are reviewed year on year.


CORPORATE GOVERNANCE:

Corporate governance is an ethically driven business process that is committed to values aimed at enhancing an organization''s
brand and reputation. This is ensured by taking ethical business decisions and conducting business with a firm commitment to
values, while meeting stakeholders'' expectations. It is imperative that your company''s affairs are managed in a fair and
transparent manner. This is vital to gain and retain the trust of the stakeholders.

Your Company complies with the Securities and Exchange Board of India (SEBI) guidelines on corporate governance. The Corporate
governance report for the financial year 2015-16 and the auditors'' Certificate on Corporate Governance as stipulated under
regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are annexed vide Annexure I and forms
part of this report.

INTERNAL FINANCIAL CONTROLS & ADEQUECY:

Your Company has an effective internal financial control and risk management system, which are constantly assessed and
strengthened with new/ revised standard operating procedures. The Company''s internal control system is commensurate with its
size, scale and complexity of operations. The internal audit is carried out by M/s Chaturvedi & Co., a reputed firm of Chartered
Accountants in Chennai. The main thrust of internal audit is to test and review controls, appraisal of risks and business
processes, besides benchmarking controls with best practices in the industry.

The Company has developed a strong two tier internal control framework comprising entity level controls and process level
controls. The entity level controls of the Company include elements such as code of conduct, whistle blower policy, management
review & MIS and strong internal audit mechanism. The process level controls have been ensured by implementing appropriate checks
and balances to ensure adherence to Company''s policies and procedures, efficiency in operations and also reduce the risk of
frauds.

The Audit committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and
suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part
of the control mechanism.

The Audit committee of the Board of Directors, Statutory Auditors and the Business heads are periodically appraised of the
internal audit findings and corrective actions taken. Audit plays a key role in providing

assurance to the Board of Directors. Significant internal audit observations and the responses of the management are presented to
the Audit committee of the Board for its suggestions followed by corrective actions.

MANAGEMENT DISCUSSION AND ANALYSIS:

Please refer to the Management Discussion and Analysis section appearing in Annexure II to this Report.

RISK MANAGEMENT POLICY :

The Company has a framework of identifying, prioritizing and mitigating risks which may impact attainment of short term and
long-term business goals of the company. The risk management framework is interwoven with the strategic planning and deployment
and capital project evaluation process of the Company. The process aims to analyse the external and internal environment and
manage economic, financial, market, operational, compliance and sustainability risks and capitalizes opportunities for business
success. The Company already identified the key risks which may affect the business goals and periodically revisits the relevance
of the identified risks and progress of the mitigation plans undertaken. In order to strengthen the governance framework, the
Company has in place a well defined Risk Management Policy which can be accessed at the website of the Company at www.
srikalahasthipipes.com, which ensures sustainable business growth with stability and promotes a pro- active approach in
reporting, evaluating and resolving risks associated with the business. The elements of risk associated with the business, which
may likely to have a bearing on the performance of the Company and the focused initiatives taken by the Company for mitigation of
risks is covered elsewhere under Risk Management Section in the Annual Report.

NOMINATION & REMUNERATION POLICY:

The Board of Directors of your Company has put in place a policy which lays down a framework in relation to remuneration of
Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and
appointment of Board Members. The Policy is available in the company''s website at www.srikalahasthipipes.com.

Nomination and Remuneration Committee constituted by the Board is in line with the provisions of Section 178 of the Companies
Act, 2013 read along with the applicable rules thereto and Regulation 19 of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. The Committee shall guide the Board :


a) In relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management.

b) In evaluating the performance of the members of the Board and provide necessary report to the Board for further evaluation of
the Board.

c) In formulating the criteria for determining qualifications, positive attributes and independence of a director.

d) In recommending to the Board on remuneration payable to the Directors, Key Managerial Personnel and Senior Management.

CORPORATE SOCIAL RESPONSIBILITY POLICY:

The Board has adopted a Corporate Social Responsibility Policy (CSR Policy), in accordance with Schedule VII of the Companies
Act, 2013 and a report on CSR activities/initiatives, which include the contents of the CSR Policy, composition of the Committee
and other details as required to be provided in Annual Report on CSR in accordance with Section 135 of the Companies Act, 2013
read with Rule 8 of the Companies (Corporate Social Responsibility Policy), Rules, 2014 are disclosed in Annexure III to this
Report.

During the year under review the amount spent by your Company for CSR activities remained lower than 2% of average net profits of
last three years. As FY 2014-15 and 2015-16 being initial years of implementation of CSR Policy, the Company has been evaluating
various focus areas for its CSR activities in the areas of village development, education, health, sanitation, poverty
eradication and livelihood generation. As the ground work for effective implementation of CSR activities has already taken place,
the Company would see improved action and corresponding spend on CSR in the coming years.

WHISTLE BLOWER MECHANISM (POLICY) :

Vigil Mechanism called ''Whistle Blower Policy'' established by the Company for the Directors, Employees and all the Stakeholders
of the Company to report concerns about unethical behavior, actual or suspected fraud or violation of the company''s code of
conduct or ethics policy is in line with the provisions of Section 177(9) of the Companies Act, 2013 read with its respective
rules and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. It provides for adequate
safeguards against victimization of employees who avail of the mechanism and also provide for direct access to the Chairperson of
the Audit Committee. The guidelines are meant for all members of the Organization from the day they join and

are designed to ensure that they may raise any specific concern on integrity, value adherence without fear of being punished for
raising that concern. The Whistle Blower Policy is available in the Company''s website at www.srikalahasthipipes.com.

This Policy covers malpractices and events which have taken place / suspected to have taken place, misappropriation of monies,
manipulations, negligence causing danger to public health and safety, misuse or abuse of authority, fraud or suspected fraud,
violation of company rules, and other matters or activity by which the Company''s interest is affected and formally reported by
whistle blowers concerning its employees. The Company has not received any complaint under this Policy during the FY 2015-16.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has in place a Prevention of Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) was set up to redress
complaints received regarding sexual harassment. During the year 2015-16, there were no complaints received by the ICC.

EVALUATION OF PERFORMANCE OF BOARD MEMBERS:

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandates that the Board shall monitor and review the
Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its
own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013, states that the
performance evaluation of independent directors shall be done by the entire Board of Directors, excluding the director being
evaluated. The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework as
suggested by Nomination & Remuneration Committee adopted by the Board. The Board approved the evaluation results as collated by
the nomination and remuneration committee.

The review includes:

(a) Comparing the performance of the Board with the requirements of its Charter;

(b) Examination of the Board''s interaction with management;


(c) The nature of information provided to the Board by management; and

(d) Management''s performance in assisting the Board to meet its objectives.

A similar review is conducted for each Committee by the Board with the aim of assessing the performance of each Committee and
identifying areas where improvements can be made.

Based upon the results of these evaluations, it was observed that the board and its committees are operating effectively and that
the individual director''s performance continues to be effective and demonstrates the level of commitment expected by the Company.

NUMBER OF MEETINGS OF THE BOARD:

The details of the number of Meetings of the Board held during the Financial Year 2015-16 are given in the Corporate Governance
Report which forms part of this report.

RELATED PARTY TRANSACTIONS:

As per the provisions of Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company
has established a Policy on materiality of Related Party Transactions and on dealing with Related Party Transactions. The Policy
on Related Party Transactions as approved by the Board of Directors is available on the website of the Company at www.
srikalahasthipipes.com. All transactions entered with Related Parties for the year under review were on arm''s length basis and in
the ordinary course of business. All Related Party Transactions are placed before the Audit Committee and the Board for
approval. Omnibus approval was granted by the Audit Committee on yearly basis for transactions which are repetitive in nature.
Also, approval of shareholders has been obtained for material related party transactions to be entered into with related parties
before the transaction took place. A statement giving details of all Related Party Transactions are placed before the Audit
Committee and the Board for review and ratification on a quarterly basis. Further as required by the provisions of Section 134
(3)(h) read with rule 8(2) of the Companies Act, 2013 disclosure of particulars of contracts / arrangements entered into by the
Company with related parties referred to in Section 188(1) of the Companies Act, 2013 are given by way of Annexure IV to this
report.

EMPLOYEES:

Your Directors are happy to inform you that a four year long term settlement till May 2019 with the workmen has been concluded
and wish to place on record their appreciation for the committed services rendered by the employees of your Company at all levels
during the year under review and for their co-operation in maintaining cordial relations.

The statement containing particulars of employees as required under Section 197 (12) of the Companies Act,

2013 read with Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014 forms part of this report. However, in terms of Section 136 of the Companies Act, 2013, the Annual Report excluding the
aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

The ratio of the remuneration of each Director to the median employee''s remuneration and other details in terms of sub-section 12
of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is forming part of this report vide Annexure V.

STATUTORY INFORMATION:

Information as per Companies (Accounts) Rules, 2014 related to conservation of energy, technology absorption, foreign exchange
earnings and outgo are given in Annexure - VI attached hereto and forms part of this report.

OTHER INFORMATION:

Particulars of information forming part of the Board''s Report pursuant to Section 134 of the Companies Act, 2013 and relevant
Rules thereof, not covered elsewhere in the report due to non applicability are given hereunder :- 1. There are no
qualifications, reservations or adverse remarks or disclaimer made by the Statutory Auditors in their report or by the practicing
Company Secretary in the Secretarial Audit Report. 2. The Company has granted loans aggregating Rs.13.56 lakhs during the year
ended 31st March, 2016. These primarily consist of loans to employees as per the policy of the Company. The closing balances of
these loans are disclosed under the schedule of Loans & Advances in the financial statements. The Company has not given any
guarantees or made any investments during the years, which would be covered by Section 186 of the Companies Act, 2013.


3. Discussion on state of Company''s affairs has been covered as part of the Management Discussion and Analysis.

4. Particulars of the amounts proposed to be carried to reserves have been covered as part of the financial performance of the
Company at the beginning of the Report.

5. There are no material changes or commitments occurring after 31st March, 2016, which may affect the financial position of the
Company or may require disclosure.

6. During the year under review, there has been no change in the nature of business of the Company.

7. The Company did not have any subsidiaries, joint ventures and associate companies, which have ceased during the year.

8. The Company has not accepted deposits under Chapter V of the Companies Act, 2013.

9. The Company has not received any such orders from Regulators, Courts or Tribunals during the year, which may impact the going
concern status or the Company''s operations in future.

STATUTORY AUDITORS:

At the Annual General Meeting held on 24th August, 2015, M/s. K R Bapuji & Co., Chartered Accountants (Registration No:
000395S),Hyderabad were appointed as statutory auditors of the Company to hold office till the conclusion of the 25th Annual
General Meeting to be held in the calendar year 2017. In terms of the first provision to Section 139 of the Companies Act, 2013,
the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment
of M/s. K R Bapuji & Co., Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the
shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are
reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

The Auditors'' Report addressed to the shareholders of the Company, does not contain any qualification.

COST AUDITORS:

The Company has appointed M/s.Narasimhamurthy & Co., Cost Accountants, Hyderabad, as Cost Auditors for conducting the audit of
cost accounts maintained by the Company for the financial year 2015-16. The Cost Audit Report for the previous financial year
2014- 15 was filed in Extensible Business Reporting Language (XBRL) mode within due date.

SECRETARIAL AUDITORS:

Mr. S Chidambaram, Company Secretary in Practice, Hyderabad, was appointed as Secretarial Auditor to conduct the Secretarial
Audit of the Company for the financial year 2015-16, as required under Section 204 of the Companies Act, 2013 and Rules made
there under. The Secretarial Audit Report for financial year 2015-16 issued by Mr.S.Chidambaram, Company Secretary in Practice
in form MR-3 is provided in Annexure-VII to the Board''s report. The Secretarial Auditor''s Report is self- explanatory and do not
call for any further comments.

GREEN INITIATIVE :

The Company started a sustainability initiative with the aim of going green and minimizing the impact on the environment.
Electronic copies of the Annual Report 2014-15 and Notice of the 23rd Annual General Meeting were sent to all members whose email
addresses are registered with the Company / Depository Participant(s).

Shareholders who are yet to register their E-mail addresses are requested to take necessary steps for registering the same so
that they can also become a part of the initiative and contribute towards a Greener environment. However physical copies can be
sent upon a request made to the Company.

ANNEXURES TO THE BOARD''S REPORT :

(i) Corporate Governance Report is enclosed vide Annexure – I.

(ii) Pursuant to Regulation 34 of Listing Regulations, 2015, Management Discussion and Analysis Report is enclosed vide Annexure
– II.

(iii) Pursuant to Section 135 (4) (a) of the Companies Act, 2013 read with Rule 8 (1) of the Companies (Corporate Social
Responsibility Policy) Rules, 2014, the annual report on CSR activities in the prescribed format, forming part of the Directors''
Report is enclosed vide Annexure - III.

(iv) Pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8 (2) of Companies (Accounts) Rules, 2014,
particulars of contracts or arrangements with related parties in the prescribed Form AOC-2, forming part of Directors'' Report is
enclosed vide Annexure – I V.

(v) Disclosure under Section 197 (12) read with Rule 5(1) of the Companies (Appointment and remuneration of managerial personnel)
Rules, 2014 is enclosed vide Annexure – V.

(vi) Pursuant to Section 134 (3) (m) of the Companies Act, 2013, information relating to Conservation of Energy, Technology
absorption and foreign exchange earnings and outgo is enclosed vide Annexure – VI.


(vii) Pursuant to Section 204 (1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and remuneration of
managerial personnel) Rules, 2014, the Secretarial Audit Report is enclosed vide Annexure – VII.

(viii) Pursuant to Section 134 (3) (a) of the Companies Act, 2013, the extract of the Annual Return as provided under sub section
(3) of Section 92 is enclosed vide Annexure – VIII.

DIRECTORS'' RESPONSIBILITY STATEMENT:

The Board of Directors of the Company confirms that:

i) In the preparation of annual accounts the

applicable accounting standards have been followed and there has been no material departure.

ii) The selected accounting policies were applied consistently and the Directors 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, 2016.

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities.

iv) The annual accounts have been prepared on a going concern basis.

v) Sufficient internal financial controls have been laid down and such internal financial controls are adequate and were
operating effectively, and

vi) Proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems were
adequate and operating effectively.

ACKNOWLEDGEMENTS:

Your Directors would like to place on record their sincere appreciation for the assistance and co-operation received from the
financial institutions, banks, Government authorities, customers, vendors and members of the Company during the year under
review. Your Directors also wish to express their gratitude on the dedicated and committed services of the employees at all
levels. The Company''s consistent growth was made possible by their hard work, solidarity, cooperation and support and look
forward to their continued support in the future.


for and on behalf of the Board of Directors

Place: Chennai.

Date: 9th May, 2016 R.K. Khanna Mayank Kejriwal

Director Managing Director

DIN 05180042 DIN 00065980


Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the 23rd Annual Report and Audited Accounts of your Company for the year ended 31st March, 2015.

FINANCIAL RESULTS: Rs. in Lakhs Rs. in Lakhs

Particulars 2014-15 2013-14

Gross revenue from operations 1,12,304.37 1,03,715.95

Net revenue from operations 1,08,355.08 98,939.56

Other income 866.03 726.37

Total Revenue 1,09,221.11 99,665.93

Earning Before Interest, Depreciation, Taxation & Amortisation (EBITDA) 19,427.99 12,425.54

Finance Costs 4,369.37 5,489.61

Depreciation 3,116.90 2,794.28

Profit Before Taxation 11,941.72 4,141.65

Less: Tax including Deferred Tax 3,643.60 271.62

Profit After Taxation 8,298.12 3,870.03

Profit Brought Forward from Previous Year 1,016.08 (155.46)

Prior Period Adjustment - Taxation (81.36) (0.67)

Amount available for Appropriation 9,232.83 3,713.90

Appropriations are made as under:

- General Reserve 5,000.00 2,000.00

- Proposed Dividend including tax thereon 1,435.74 697.82

Balance Carried Forward to Next Year 2,797.09 1,016.08

DIVIDEND

Your Directors are pleased to recommend a dividend @ Rs. 3.00 per share on the equity shares of the Company for the year ended 31st March, 2015 (Previous year Rs. 1.50 per Share). If approved, the dividend will absorb Rs. 1,435.74 lakhs (including Rs. 242.85 lakhs towards dividend tax).

review of operations

Your Directors are pleased to inform that the Company has achieved Gross operating revenue of Rs. 1,123.04 crores during the year under review as against Rs. 1,037.16 crores in the previous year, thus registering an increase of 8.29% in gross revenue.

The production of D.I. Pipes during the FY 2014-15 was higher at 1,69,500 MT as compared to 1,62,892 MT for the FY 2013-14.

The production of Mini Blast Furnace (MBF), producing liquid metal mainly for Ductile Iron Pipe Plant was higher during the FY 2014-15 by 10.18% at 2,18,206 MT compared to 1,98,036 MT for the FY 2013-14. The production of Low Ash Metallurgical Coke was higher in FY 2014-15 by 16.90% at 1,60,554 MT as against 1,37,339 MT in FY 2013-14. The power generation from 12 MW Waste Heat Recovery Based Captive Power Plant was also higher in FY 2014-15 by 4.20% at 919 lakh units as against 882 lakh units in the FY 2013-14. The production of Cement during the FY 2014-15 was higher by 27.26% at 85,770 MT compared to 67,396 MT in the previous year.

During the year under review, the company has successfully completed its capital expenditure programme of Rs. 100 Crs. to increase the production of Ductile Iron pipes by 50,000 TPA. The Company has also successfully commissioned and synchronized 132 KV sub- station, which has reduced power interruptions and substantially improved quality of power supplied from the grid, besides resulting in a marginal decrease in power tariff.

Company has undertaken cost reduction measures suchas reduction of coke consumption, CRC scrap, HSD oil, effective utilization of sinter plant in terms of capacity and consumption ratio and reduction of power cost by increased captive power generation. Further, favourable trend in the prices of major raw materials viz. iron ore, coal helped the Company in sustaining overall reduction of the input cost during the year.

Besides the reduced cost of production and improved operational efficiency, the lower finance cost, the growth in the volume of the Ductile Iron Pipes coupled with improved sales realization increased the pre-tax profit of your Company to Rs. 119.42 Crs. in the FY 2014-15 as against Rs. 41.42 Crs reported in the FY 2013-14.

FUTURE PROSPECTS

With the successful completion of capital expenditure program of Rs. 100 Crs. the company would start reaping the benefits of increased production from the current year. The company is exploring additional measure of cost reduction and value addition to remain competitive in the industry.

In spite of growing competition in the domestic market, your Company is maintaining a satisfactory order position for the FY 2015-16.

To be fully self sufficient in its power requirements, the company during FY 2015-16 is planning to increase the capacity of its coke oven plant thereby increasing its captive power generation from 12 MW to 18 MW.

Being the low cost producer of quality Ductile Iron Pipes in India, having excellent logistics and integrated facility coupled with cost control measures, rising demand of D.I. Pipes, both in domestic and export market, your company is optimistic of its bright future.

NAME CHANGE

In order to reflect the core business of the Company i.e. manufacture and supply of D.I. Pipes in its name and the Company being situated at the Temple Town of Srikalahasthi, the Company has been renamed as Srikalahasthi Pipes Limited with effect from 29th September, 2014, as approved by the shareholders.

Consequent to change in name, the branding of company''s products have been changed. Ductile Iron Pipes is branded as "Sripipes" and Cement is branded as "Srikalahasthi Gold Cement".

CREDIT RATING

Your Company has been rated as "CARE A (Single A)" for long term bank facilities. This indicates adequate degree of safety regarding timely servicing of financial obligations and carry low credit risk. The rating assigned for short term facilities is "CARE A1 (A One) and indicates having very strong degree of safety regarding timely payment of financial obligations and carries lowest risk.

DIRECTORS

IDBI Bank Limited has withdrawn its nominee Shri A. Joseph Kumar from the Board of Directors of the Company with effect from 9th September, 2014.

Andhra Pradesh Industrial Development Corporation (API DC), Hyderabad has withdrawn its nominee Smt Anita Rajendra, IAS with effect from 16th October, 2014 and nominated Shri J.S. Venkateswara Prasad, IAS on the Board of Directors of your Company with effect from 30th January, 2015.

Your Directors place on record their appreciation for the active participation and valuable services rendered to the Company by Shri A. Joseph Kumar and Smt. Anita Rajendra, IAS.

As recommended by the Nomination & Remuneration Committee, the Board of Directors has approved the appointment of Ms. S. Hemamalini as additional Director on the Board of Directors of the Company with effect from 17th March, 2015 and she will hold office up to the conclusion of ensuing Annual General Meeting.

Shri G.S. Rathi and Shri S.Y. Rajagopalan retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Pursuant to Section 149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of Ms. S. Hemamalini as Independent Director for a term of five consecutive years from the conclusion of this Annual General Meeting.

Details of the proposal for appointment of Ms. S. Hemamalini are mentioned in the explanatory statement under Section 102 of the Companies Act, 2013 of the Notice of the Annual General Meeting.

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

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. A report on Corporate Governance Practices, as stipulated under Clause 49 of the Listing Agreement, the Auditors'' Certificate on compliance of mandatory requirements thereof form part of the Annual Report.

INTERNAL FINANCIAL CONTROLS & ADEQUECY

The Company has developed a strong two tier internal control framework comprising entity level controls and process level controls. The entity level controls of the Company include elements such as code of conduct, whistle blower policy, management review & MIS and strong internal audit mechanism. The process level controls have been ensured by implementing appropriate checks and balances to ensure adherence to Company''s policies and procedures, efficiency in operations and also reduce the risk of frauds.

Regular management oversight and rigorous periodic testing of internal controls makes the internal controls environment strong at the Company. The Audit Committee along with the Management oversees results of the internal audit and review implementation on a regular basis.

MANAGEMENT DISCUSSION AND ANALYSIS

Please refer to the Management Discussion and Analysis section appearing elsewhere in the Annual Report.

RISK MANAGEMENT POLICY

The Company has in place a well defined Risk Management Policy, which ensures sustainable business growth with stability and promotes a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management and guides decisions on risk related issues. The elements of risk associated with the business, which may likely to have a bearing on the performance of the Company and the focused initiatives taken by the Company for mitigation of risks is covered elsewhere under Risk Management Section in the Annual Report.

NOMINATION & REMUNERATION POLICY

Company''s Nomination and Remuneration Policy is in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Clause 49 under the Listing Agreement. The Committee shall guide the Board:

a) In relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management.

b) In evaluating the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board.

c) In formulating the criteria for determining qualifications positive attributes and independence of a Director.

d) In recommending to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.

WHISTLE BLOWER MECHANISM (POLICY)

Section 177(9) of the Companies Act, 2013 read with its respective rules and Revised Clause 49 of the Listing Agreement provides for a mandatory requirement for all listed companies to establish a vigil mechanism called ''Whistle Blower Policy'' for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the company''s code of conduct or ethics policy.

In view of the above, the Company has established a vigil mechanism for the directors and employees to report genuine concerns or grievances in such manner as may be prescribed and provide for adequate safeguards against victimization of persons who use such mechanism and also make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases.

This Policy covers malpractices and events which have taken place / suspected to have taken place, misappropriation of monies, manipulations, negligence causing danger to public health and safety, misuse or abuse of authority, fraud or suspected fraud, violation of company rules, and other matters or activity by which the Company''s interest is affected and formally reported by whistle blowers concerning its employees.

EVALUATION OF PERFORMANCE OF BOARD MEMBERS

The Nomination & Remuneration Committee has carried out performance evaluation of the Board, its Committees and its individual Directors on an annual basis. To assist in this process an independent advisor may be used.

The Nomination & Remuneration Committee conducts an annual review of the role of the Board, assess the performance of the Board over the previous 12 months and examine ways of assisting the Board in performing its duties more effectively.

The review includes:

a) Comparing the performance of the Board with the requirements of its Charter;

b) Examination of the Board''s interaction with management;

c) The nature of information provided to the Board by management; and

d) Management''s performance in assisting the Board to meet its objectives.

A similar review is conducted for each Committee by the Board with the aim of assessing the performance of each Committee and identifying areas where improvements can be made.

Based upon the results of these evaluations, it was observed that the board and its committees are operating effectively and that the individual directors'' performance continues to be effective and demonstrates the level of commitment expected by the Company.

EMPLOYEES

Your Directors wish to place on record their appreciation for the committed services rendered by the employees of your Company at all levels during the year under review and for their co-operation in maintaining cordial relations.

The statement containing particulars of employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. However, in terms of Section 136 of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

The ratio of the remuneration of each Director to the median employee''s remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is forming part of this report.

STATUTORY INFORMATION

Information as per Companies (Accounts) Rules, 2014 related to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-I attached hereto and forming part of this report.

OTHER INFORMATION

Particulars of information forming part of the Board''s Report pursuant to Section 134 of the Companies Act, 2013 and relevant Rules thereof, not covered elsewhere in the report are given hereunder:

1) There are no qualifications, reservations or adverse remarks or disclaimer made by the Statutory Auditors in their report or by the practicing Company Secretary in the Secretarial Audit Report.

2) The Company has not given any guarantees or made any investments during the years, which would be covered by Section 186 of the Companies Act, 2013.

3) Discussion on state of Company''s affairs has been covered as part of the Management Discussion and Analysis.

4) Particulars of the amounts proposed to be carried to reserves have been covered as part of the financial performance of the Company at the beginning of the Report.

5) There are no material changes or commitments occurring after 31st March, 2015, which may affect the financial position of the Company or may require disclosure.

6) During the year under review, there has been no change in the nature of business of the Company.

7) The Company did not have any subsidiaries, joint ventures and associates companies, which have ceased during the year.

8) The Company has not accepted deposits under Chapter V of the Companies Act, 2013.

9) The Company has not received any such orders from Regulators, Courts or Tribunals during the year, which may impact the going concern status or the Company''s operations in future.

10) During the year under review, there were no cases filed pursuant to Sexual Harassment of Women at Work place (Prevention, Prohibition and Redressal) Act, 2013.

AUDITORS

The Shareholders of the Company in the Annual General Meeting held on 27th September 2014 had approved appointment of M/s. K.R. Bapuji & Co., Chartered Accountants as Statutory Auditors of the Company for the FY 2014-15 and authorized the Board of Directors to fix their remuneration.

Pursuant to Sections 139, 141 and 142 of the Companies Act, 2013 and relevant rules prescribed there under, the Company has received certificate from the Statutory Auditors to the effect, inter alia, that they are not disqualified for ratification of appointment under the provisions of applicable laws, the appointment is as per the terms and the limits prescribed under the Companies Act, 2013 and no proceedings against them or any of their partners are pending with respect to matter of professional conduct.

The Auditors have also confirmed that they have subjected themselves to Peer Review, a process of Institute of Chartered Accountants of India (ICAI) for evaluating the quality of audit and attestation services and that they hold a valid certificate issued by the Peer Review Board of the ICAI.

The Auditors'' Report addressed to the shareholders of the Company, does not contain any qualification.

The Auditors, M/s. K.R. Bapuji & Co., Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re- appointment to hold office from the conclusion of the forthcoming Annual General Meeting till the conclusion of Twenty Fifth Annual General Meeting to be held in the year 2017, subject to ratification by shareholders at the ensuing Annual General Meeting.

COST AUDITORS

The Company has appointed M/s. Narasimhamurthy & Co., Cost Accountants, Hyderabad, as Cost Auditors and the Central Government has approved the appointment of M/s. Narasimhamurthy & Co., for conducting the audit of cost accounts maintained by the Company for the financial year 2014-15.

SECRETARIAL AUDIT

The Company has appointed Mr. S. Chidambaram, Company Secretary in Practice, Hyderabad as Secretarial Auditor for conducting the Secretarial Audit of the Company for the financial year 2014-15 and the Secretarial Audit Report issued by the Auditors is attached hereto and forming part of this Report as Annexure V.

GREEN INITIATIVE

The Ministry of Corporate Affairs has taken the Green Initiative in Corporate Governance by allowing paperless compliances by Companies through electronic mode.

Your Company supports the Green Initiative and has accordingly decided to send all communications to its shareholders to their respective e-mail IDs through electronic mode.

Your Company appeals to the shareholders, who are yet to register their E-mail addresses that you take necessary steps for registering the same so that you can also become a part of the initiative and contribute towards a Greener environment.

ANNEXURES TO THE BOARD''S REPORT

i) Pursuant to Section 134 (3) (m) of the Companies Act, 2013, information relating to Conservation of Energy, Technology absorption and foreign exchange earnings and outgo is enclosed vide Annexure - I.

ii) Pursuant to Section 134 (3) (a) of the Companies Act, 2013, the extract of the Annual Return as provided under sub section (3) of Section 92 of the Act in Form MGT-9 is enclosed vide Annexure - II.

iii) Pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8

(2) of Companies (Accounts) Rules, 2014, particulars of contracts or arrangements with related parties in the prescribed Form AOC-2, forming part of Directors'' Report is enclosed vide Annexure - III.

iv) Pursuant to Section 135 (4) (a) of the Companies Act, 2013 read with Rule 8 (1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the annual report on CSR activities in the prescribed format, forming part of the Director''s Report is enclosed vide Annexure - IV.

v) Disclosure under Section 197 (12) read with Rule 5(1) of the Companies (Appointment and remuneration of managerial personnel) Rules, 2014 is enclosed vide Annexure - V.

vi) Pursuant to Section 204 (1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and remuneration of managerial personnel) Rules, 2014, the Secretarial Audit Report is enclosed vide Annexure - VI.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company

confirms:

i) That in the preparation of annual accounts the applicable accounting standards have been followed and there has been no material departure.

ii) That the selected accounting policies were applied consistently and the Directors 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, 2015.

iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the annual accounts have been prepared on a going concern basis.

v) That sufficient internal financial controls have been laid down and such internal financial controls are adequate and were operating effectively; and

vi) That proper systems to ensure compliance with the provisions of all applicable laws have been devised and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to place on record their appreciation on dedication and commitment of employees at all levels, resulting in the successful performance of the Company during the year. Your Directors would also like to thank and express their gratitude for the support and co-operation received from employees of the Company, shareholders, customers, agents, suppliers, bankers, Government authorities and all the other business associates and the confidence reposed in its management.

For and on behalf of the Board of Directors

Place : Chennai G. Maruthi Rao Date : 30th April 2015 Chairman


Mar 31, 2014

Dear shareholders,

The Directors take pleasure in presenting the 22nd Annual Report and Audited Accounts of your Company for the year ended 31st March, 2014.

Financial results: rs. in lakhs Rs. in Lakhs

Particulars 2013 -14 20 12-13

Gross revenue from operations 1,03,715.95 89,762.13

Net revenue from operations 98,939.56 86,388.93

Other income 724.06 1,002.43

Total Revenue 99,663.62 87,391.36

Earning Before Interest, Depreciation, Taxation & Amortisation 12,425.54 6,127.57

Finance Costs 5,489.61 6,041.80

Depreciation 2,794.28 2,218.42

Profit/(Loss) Before Taxation 4,141.65 (2,132.65)

Less: Tax including Deferred Tax 271.62 (823.03)

Profit/(Loss) After Taxation 3,870.03 (1,309.62)

Profit/(Loss) Brought Forward from Previous Year (155.46) 1,154.16

Prior Period Adjustment – Taxation (0.67) -

Amount available for Appropriations 3,713.90 (155.46) Appropriations are made as under:

– General Reserve 2,000.00 -

– Proposed Dividend including tax thereon 697.82 -

Balance Carried Forward to Next Year 1,016.08 (155.46)

DiViDenD

Your Directors are pleased to recommend a dividend @ Rs. 1.50 per share on the equity shares of the Company for the year ended 31st March, 2014. If approved, the dividend will absorb Rs. 697.82 Lakhs (including Rs. 101.37 Lakhs towards dividend tax).

reVieW of operations

Your Directors are pleased to inform that Company crossed the Rs. 1000 Crores turnover mark and has achieved Gross operating revenue of Rs. 1,037.16 crores during the year under review as against Rs. 897.62 crores in the previous year, thus registering an increase of 16% in gross revenue.

The production of D.I. Pipes during the FY 2013-14 was higher at 1,62,892 MT as compared to 1,57,753 MT for the FY 2012-13.

The production of Mini Blast Furnace (MBF), producing liquid metal mainly for Ductile Iron Pipe Plant was higher during the FY 2013-14 by 10.82% at 1,98,036 MT compared to 1,78,707 MT for the FY 2012-13. The production of Low Ash Metallurgical Coke was higher in FY 2013-14 by 9.66% at 1,37,339 MT as against 1,25,239 MT in FY 2012-13 and the power generation in 12 MW – Waste Heat Recovery Based Captive Power Plant was also higher in FY 2013-14 by 37.38% at 882 lakh units as against 642 lakh units in FY 2012-13. The production of cement during the FY 2013-14 was marginally higher at 67,396 MT compared to 66,059 MT in the previous year.

Successful commissioning of Sinter Plant in the last quarter of the FY 2012-13, helped the Company during the year under review, in replacing high cost calibrated iron ore with iron ore fnes. Resultant reduction in coke consumption and the favourable coal prices movement culminated into overall reduction in input cost.

This apart, the improved availability of captive power generation, during the year under review, minimized the incidence of power purchase from power exchange and also reduced the dependence on generation of power by DG Sets, thus leading to signifcant lower power cost during the FY 2013-14 as compared to FY 2012-13.

With the hedging policy of the company in place for the year under review the company prevented its foreign exchange losses inspite of unfavourable fuctuation in rupee-dollar equation.

With moderate growth in the volumes of D.I. pipes during the year under review, coupled with reduced cost of molten metal and captive power, your Company has achieved a pre-tax Profit of Rs. 41.42 Crs in the FY 2013-14 as against a net loss of Rs. 21.32 Crs reported in the FY 2012-13.

future prospects

During the current year, the company has embarked an investment of Rs. 100 Crores by way of capital expenditure to improve the quality and production level of Ductile Iron Pipes. The company is adding certain balancing facilities which include enhancement of blowing capacity in MBF, additional induction furnace, new spinning machine with higher productivity, additional fnishing line and other process automation equipments. This will result in increased production of Ductile Iron Pipes by 50000 MT per annum.

This investment will also enable the company to enter into export market. The project is funded by term loan and internal accruals.

In spite of intense competition in the domestic market, the order position of your company is comfortable for FY 2014-15. Barring unforeseen circumstances, on completion of these investments in 2014, the company will start getting the benefits of higher production from last quarter of current financial year.

creDit rating

Your Company has been rated as "CARE A (Single A)" for long term bank facilities. This indicates adequate degree of safety regarding timely servicing of financial obligations and carry low credit risk. The rating assigned for short term facilities is "CARE A1 (A One) and indicates having very strong degree of safety regarding timely payment of financial obligations and carries lowest risk.

Directors

Andhra Pradesh Industrial Development Corporation (APIDC), Hyderabad nominated Smt. Anita Rajendra, IAS on the Board of Directors of your Company with effect from 5th August, 2013 in place of Shri K. Rajendra Prasad.

Shri L. Madhusudhan Rao, Shri G. Bhaskar Rao and Shri L. Sridhar resigned from the Directorship of the Company with effect from 3rd February, 2014.

Your Directors place on record their appreciation for the active participation and valuable services rendered to the Company by Shri K. Rajendra Prasad, Shri L. Madhusudhan Rao, Shri G. Bhaskar Rao and Shri L. Sridhar.

Shri S.Y. Rajagopalan retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Impending notifcation of section 149 and other applicable provisions of the Companies Act, 2013 your Directors are seeking appointment of Mr. G. Maruthi Rao and Mr. R.K. Khanna as Independent Directors for a term of five consecutive years from the conclusion of this Annual General Meeting.

Details of the proposal for appointment of Mr. G. Maruthi Rao and Mr. R.K. Khanna are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the Annual General Meeting.

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

corporate goVernance

Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. A report on Corporate Governance Practices, as stipulated under Clause 49 of the Listing Agreement, the Auditors'' Certifcate on compliance of mandatory requirements thereof form part of the Annual Report.

management Discussion anD analysis

Please refer to the Management Discussion and Analysis section appearing elsewhere.

employees

Your Directors wish to place on record their appreciation for the committed services rendered by the employees of your Company at all levels during the year under review and for their co-operation in maintaining cordial relations.

In terms of the provisions of Section 217(2A) of the Companies Act,1956, read with the Companies (Particulars of Employees) Rules,

1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors'' Report. However, having regard to the provisions of Section 219(1)(B)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Offce of the Company.

statutory information

Information as per Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 related to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-''A'' attached hereto and forming part of this report.

Directors responsiBility statement

The Board of Directors of the Company confrms:

i) That in the preparation of annual accounts the applicable accounting standards have been followed and there has been no material departure;

ii) That the selected accounting policies were applied consistently and the Directors 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 its Profit for the year ended on that date;

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

iv) That the annual accounts have been prepared on a going concern basis.

Auditors

The Auditors, M/s. K.R. Bapuji & Co., Chartered Accountants, retire at the conclusion of the for thcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

cost auditors

The Company has appointed M/s. Narasimhamurthy & Co., Cost Accountants, Hyderabad, as Cost Auditors and the Central Government has approved the appointment of M/s. Narasimhamurthy & Co., for conducting the audit of cost accounts maintained by the Company for the financial year 2013-14.

acknowledgements

Your Directors wish to convey their appreciation to all of the Company''s employees for their enormous personal efforts as well as their collective contribution to the Company''s performance. The Directors would also like to thank the employee unions, shareholders, customers, agents, suppliers, bankers, Government authorities and all the other business associates for the continuous support given by them to the Company and the confdence reposed in its management.

For and on behalf of the Board of Directors

Place: Chennai s.y. rajagopalan Mayank kejriwal Date: 3rd May, 2014 Director Managing Director


Mar 31, 2013

Dear Shareholders,

The Directors take pleasure in presenting the 21st Annual Report and Audited Accounts of your Company for the year ended 31st March, 2013.

FINANCIAL RESULTS:

Rs. in Lakhs

Particulars 2012-13 2011-12

Gross revenue from operations 89,762.13 82,384.79

Net revenue from operations 86,388.93 78,700.02

Other income 1,002.43 842.12

Total Revenue 87,391.36 79,542.14

Earning Before Interest, Depreciation, Taxation & Amortisation (EBITDA) 6,127.57 7,368.64

Finance Costs 6,041.80 5,786.10

Depreciation 2,218.42 1,999.33

Profit/(Loss) Before Taxation (2,132.65) (416.79)

Less: Tax including Deferred Tax (823.03) (21.56)

Profit/(Loss) After Taxation (1,309.62) (395.23)

Profit Brought Forward from Previous Year 1,154.15 1,608.28

Prior Period Adjustment - Taxation (58.90)

Balance Carried Forward to Next Year (155.47) 1,154.15

DIVIDEND

In the absence of profits for the year, your Directors express their inability to recommend any dividend for the year ended 31st March, 2013.

REVIEW OF OPERATIONS

The Company achieved Gross operating revenue of Rs. 897.62 crores during the year under review as against Rs. 823.85 crores in the previous year, registering an increase of 8.95%.

The production of D. I. Pipes during the FY 2012-13 was higher by 7.70% at 1,57,753 MT when compared to 1,46,478 MT for the FY 2011-12.

The production of Mini Blast Furnace (MBF), producing liquid metal mainly for Ductile Iron Pipe Plant was marginally lower during the FY 2012-13 at 1,78,707 MT compared to 1,80,026 MT for the FY 2011-12. The production of Low Ash Metallurgical Coke was higher in FY 2012-13 by 16.2% at 1,25,239 MT as against 1,07,765 MT in FY 2011-12. However, the power generation in 12 MW - Waste Heat Recovery Based Captive Power Plant was slightly lower in FY 2012-13 at 642 lakh units as against 678 lakh units in FY 2011-12, due to shutdown of Power Plant for 25 days for synchronization of 3rd boiler and turbine overhauling.

Due to adverse power situation in the state, production of slag cement during the year under review was lower by 26.60% at 66,059 MT as against 90,000 MT in the FY 2011-12.

Procurement of calibrated iron ore through e-auction route at a higher cost continued till 3rd quarter of the year under review, resulting in significant increase in the input cost.

This apart, the power crisis in the State has further aggravated in the FY 2012-13, leading to shortage of power, on account of load/supply restrictions imposed by APSPDCL. This has forced your Company to purchase power from private power generation companies through Indian Energy Exchange (IEX) at a much higher cost compared to the cost of grid power. The power cost has been increased by about 28% in the State for HT Consumers from April, 2012.

Although, your Company has registered a moderate growth in the volumes of Dl pipes during the FY 2012-13, due to higher cost of iron ore, power and interest, the profitability of the Company was adversely affected.

FUTURE PROSPECTS

Installation of 3rd battery in Coke Oven Plant and additional Boiler in 12 MW Captive Power Plant has been successfully

commissioned during the year under review. Accordingly, the capacity of Coke Oven Plant has increased from 1,50,000 TPA to 2,25,000 TPA. Moreover, the additional boiler has resulted in full utilization of the capacity of 12 MW Captive Power Plant.

Further, the Sinter Plant project started in the year 2011-12 has been successfully commissioned in the last quarter of the year under review. With sinter, the requirement of high cost calibrated iron ore has been replaced with low cost iron ore fines in the current inventory by more than 80% and reduced coke consumption. This has increased the capacity of MBF to 2,75,000 TPA. All these factors together lead to improved working in the last quarter of FY 2012-13.

The power cost has been increased by about 24% in the State for HT Consumers from April, 2013. Installation of 132 KVA Sub-Station to synchronize the power requirements of the company was delayed, due to slow progress of APTRANSCO''s 220/132 KVA Substation. This is now expected to be commissioned by 2nd quarter of 2013-14, resulting to lower cost of power, besides improved quality.

Although there is intense competition in the domestic market, with the implementation of the above mentioned backward integration projects, your company''s profitability will improve during the FY 2013-14, barring unforeseen circumstances.

DIRECTORS

Shri R.K. Khanna was appointed as an additional Director on the Board of Directors of the Company from 9th February, 2013. He will hold office upto the conclusion of ensuing Annual General Meeting. The Company has received a notice from a member of the Company to appoint Shri R.K.Khanna as a Director, liable to retire by rotation.

Shri G. Bhaskara Rao and Shri Gouri Shankar Rathi retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. A report on Corporate Governance Practices, as stipulated under Clause 49 of the Listing Agreement, the Auditors'' Certificate on compliance of mandatory requirements thereof form part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS

Please refer to the Management Discussion and Analysis section appearing elsewhere.

EMPLOYEES

Your Directors wish to place on record their appreciation for the committed services rendered by the employees of your Company at all levels during the year under review and for their co-operation in maintaining cordial relations.

There are no employees who are in receipt of remuneration exceeding the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended.

STATUTORY INFORMATION

Information as per Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 related to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-A'' attached hereto and forming part of this report.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

That in the preparation of annual accounts the applicable accounting standards have been followed and there has been no material departure.

That the selected accounting policies were applied consistently and the Directors 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, 2013 and of the loss of the Company for the year ended on that date.

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

That the annual accounts have been prepared on a going concern basis.

AUDITORS'' REPORT

Regarding Auditors'' observation on use of short term funds for long term purposes, your Directors would like to inform that steps are being taken for converting short term loans into medium term loans.

AUDITORS

The Auditors, M/s. K.R. Bapuji & Co., Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

COST AUDITORS

The Company has appointed M/s.Narasimhamurthy & Co., Cost Accountants, Hyderabad, as Cost Auditors and the Central Government has approved the appointment of M/s. Narasimhamurthy & Co., for conducting the audit of cost accounts maintained by the Company for the financial year 2012-13.

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation for the assistance and co-operation received from the Financial Institutions, banks, Government authorities, customers, vendors and members during the year under review.

For and on behalf of the Board of Directors Place: Chennai L. Sridhar Mayank Kejriwal

Date: 6th May, 2013 Director Managing Director


Mar 31, 2012

The Directors take pleasure in presenting the 20th Annual Report and Audited Accounts of your Company for the year ended 31st March, 2012.

FINANCIAL RESULTS: Rs. in Lakhs

Particulars 2011-12 2010-11

Gross revenue from operations 82,384.79 75,129.73

Net revenue from operations 78,700.02 72,599.99

Other income 842.12 1,011.48

Total Revenue 79,542.14 73,611.47

Earning Before Interest, Depreciation, Taxation & Amortisation (EBITDA) 7,368.64 9,724.67

Finance Costs 5,786.10 2,268.54

Depreciation 1,999.33 1,871.61

Profit/(Loss) Before Taxation (416.79) 5,584.52

Less: Tax including Deferred Tax (21.56) 1,381.89

Profit/(Loss) After Taxation (395.23) 4,202.63

Profit Brought Forward from Previous Year 1,608.28 1,657.94

Prior Period Adjustment - Taxation (58.90) (59.08)

Amount available for Appropriation 1,154.15 5,801.49

Appropriations are made as under:

- General Reserve - 3,500.00

- Proposed Dividend including tax thereon - 693.21

Balance Carried Forward to Next Year 1,154.15 1,608.28

DIVIDEND

In the absence of profits for the year and the need to conserve the funds for operations, your Directors express their inability to recommend any dividend for the year ended 31st March, 2012.

REVIEW OF OPERATIONS

The Company achieved Gross operating revenue of Rs. 823.85 Crores during the year under review as against Rs. 751.30 Crores in the previous year, registering an increase of 9.66%.

The production of D.I. Pipes during the FY 2011-12 was higher by 8.70% when compared with the previous FY 2010-11.

The production of Mini Blast Furnace (MBF), producing liquid metal mainly for Ductile Iron Pipe Plant registered an increase of 23% at 1,80,026 MT for the FY 2011-12 compared to 1,46,285 MT in the FY 2010-11. Similarly the production of Low Ash Metallurgical Coke was higher in FY 2011-12 by 14.5% at 1,07,765 MT as against 94,092 MT in FY 2010-11 and the power generation in 12 MW - Waste Heat Recovery Based Captive Power Plant was higher in FY 2011-12 by 30.89% at 678 lakh units as against 518 lakh units in FY 2010-11.

Due to better demand, the production and sale of Cement during the year under review has seen a substantial rise, by about 47%.

Although, your Company has registered a moderate growth in the volumes during the FY 2011-12, the following external factors have affected the overall working of the Company.

Iron ore, which is one of the major inputs being used by your Company, has been sourced predominantly from National Mineral Development Corporation, from their mines at Hospet and Bellary to take advantage of logistical proximity, under long term contract arrangement with them. Pursuant to the order of the Apex Court, the contract with NMDC got annulled leaving the option of procuring the required Iron ore only through e-auction route. This has resulted in substantial rise of input cost of iron ore by about 25% and also non-availability of desired quality material when compared to the price and availability of material to similar units elsewhere in the country, thereby depriving level playing field to your Company.

Further, owing to demand-supply mismatch of electricity in the State, APSPDCL has imposed load/supply restrictions for all industrial units, starting from the 3rd quarter of the year under review, and your company being a continuous process industry these power restrictions has reduced the productivity, particularly of D.I. Pipe Plant, resulting in additional financial costs.

In spite of reasonable increase in the volumes of production by all the Divisions when compared to the earlier year 2010-11, for the reasons mentioned hereinabove and unprecedented depreciation of rupee against dollar have taken a toll on the profitability of your company during the year under review.

FUTURE PROSPECTS

Project for installation of additional battery in Coke Oven Plant and installation of Boiler in 12 MW Captive Power Plant, executed by your Company during the last financial year, is in the final stages of its completion and is expected to be commissioned during 2nd quarter of FY 2012-13. With this, the capacity of coke oven plant will increase to 225,000 TPA and 12 MW Captive Power Plant is expected to increase to the extent of its installed capacity. Further, the project of installation of 132 KV Sub-Station to synchronize the power requirements of the company is also under progress and is likely to be completed in line with the erection of APTRANSCO's 220/132 KV Substation at Chindepalli, which is expected to be commissioned by September, 2012.

During the year under review, your Company has started executing its project for setting up of Sinter Plant. The installation and erection work is going on in full stream and it is also expected to be commissioned during 2nd quarter of FY 2012-13. After the commissioning of Sinter plant, requirement of high cost calibrated iron ore will come down by 75%, as it will be replaced by low cost iron ore fines. This will result in improved performance from the 3rd quarter of current year.

The above capital expenditure would provide a competitive edge to your company on account of reduction in production cost in the coming years.

While the intense competition in domestic market may continue to influence selling prices, the Company's major thrust on cost reduction measures and implementation of above mentioned backward integration projects will support in protecting the bottom-line of your Company.

CREDIT RATING

Credit Analysis and Research Limited (CARE), a leading rating agency has reviewed and reaffirmed the long term rating as "CARE A " (Single A plus). This rating is applicable to facilities having tenure of more than one year. CARE A rating indicates adequate safety for timely servicing of debt obligations and carry low credit risk.

The rating for short term facilities has been reviewed and reaffirmed as "CARE A1 " (A One Plus), the highest rating in the category and indicates a strong capacity for timely payment of short term debt obligations and carry lowest credit risk.

DIRECTORS

Andhra Pradesh Industrial Development Corporation (APIDC), Hyderabad nominated Smt Nilam Sawhney, IAS on the Board of Directors of your Company with effect from 29th July, 2011 in place of Shri V. Nagi Reddy, IAS. Subsequently Shri K. Rajendra Prasad has been nominated by APIDC on the Board of Directors of your Company with effect from 27th April, 2012, in place of Smt Nilam Sawhney, IAS.

IDBI Bank nominated Shri A. Joseph Kumar on the Board of Directors of your Company with effect from 10th August, 2011 in place of Shri P.M. Suresh.

Your Directors place on record their appreciation for the active participation and valuable services rendered to the Company by Shri V. Nagi Reddy, Shri P.M. Suresh and Smt Nilam Sawhney.

Shri L. Sridhar and Shri L. Madhusudhan Rao retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

The present term of appointment of Shri Mayank Kejriwal as Managing Director of the Company shall expire on 29th April, 2012. The Board of Directors of the Company at its meeting held on 27th April, 2012 re-appointed Shri Mayank Kejriwal as Managing Director of the Company for a period of five years with effect from 30th April, 2012 at the same terms and conditions, subject to approval of the shareholders and other applicable provisions of the Companies Act, 1956.

CORPORATE GOVERNANCE

Your Company has fully complied with the requirements of Clause 49 of the Listing Agreement regarding Corporate Governance. A report on Corporate Governance Practices, the Auditors' Certificate on compliance of mandatory requirements thereof and Management Discussion and Analysis are given as annexure to this report.

MANAGEMENT DISCUSSION AND ANALYSIS

Please refer to the Management Discussion and Analysis section appearing elsewhere.

EMPLOYEES

Board of Directors expresses its appreciation for sincere efforts made by the employees of your Company at all levels during the year and for their co-operation in maintaining cordial relations.

There are no employees who are in receipt of remuneration exceeding the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended.

STATUTORY INFORMATION

Information as per Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 related to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-'A' attached hereto and forming part of this report.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

That in the preparation of annual accounts the applicable accounting standards have been followed and there has been no material departure.

That the selected accounting policies were applied consistently and the Directors 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, 2012 and of the loss of the Company for the year ended on that date.

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

That the annual accounts have been prepared on a going concern basis.

AUDITORS

The Auditors, M/s. K.R. Bapuji & Co., Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

COST AUDITORS

The Central Govt. vide Order No. F/S2/26/CAB/2010 has made cost audit of the cost records compulsory for industries such as Cement, Steel, tyres & tubes, paper, aluminum etc., in respect of each of the financial year commencing on or after 1st April, 2011.

Accordingly, to comply with the order of the Central Govt., the Board of Directors of your Company appointed M/s. Narasimhamurthy & Co., Cost Accountants, Hyderabad as Cost Auditors for conducting the audit of cost accounts maintained by the Company for the financial year 2011-12.

ACKNOWLEDGEMENTS

The Board of Directors thanks the Government Authorities, Financial Institutions, Banks, Customers, Vendors, Shareholders & Investors for their continued co-operation and support to your Company.

For and on behalf of the Board of Directors

Place: Chennai G. Maruthi Rao Mayank Kejriwal

Date: 27th April, 2012 Director Managing Director


Mar 31, 2011

The Directors take pleasure in presenting the 19th Annual Report and Audited Accounts of your Company for the year ended 31st March, 2011.

financiaL results

Particulars rs. in Lakhs

2010-11 2009-10

Gross Turnover 75,015.37 71,051.85

Net Turnover 72,485.63 69,057.96

Other income 324.66 71.93

Total Revenue 72,810.29 71,123.78

Earning Before Interest, Depreciation, Taxation & Amortisation (EBITDA) 8,923.50 12,654.05

Interest 1,467.37 2,061.82

Depreciation 1,871.61 1,794.60

Proft Before Taxation (PBT) 5,584.52 8,797.63

Less: Tax including Deferred Tax 1,381.89 3,003.66

Proft After Taxation (PAT) 4,202.63 5,793.97

Proft Brought Forward from Previous Year 1,657.94 1,143.80

Prior Period Adjustment – Taxation (59.08) 67.99

Debenture Redemption Reserve written back – 750.00

Amount available for Appropriation 5,801.49 7,755.76

Appropriations are made as under:–

– General Reserve 3,500.00 5,400.00

– Proposed Dividend including tax thereon 693.21 697.82

Balance Carried Forward to Next Year 1,608.28 1,657.94

DIVIDEND

Despite lower profts during the year, your Directors recommend to maintain the dividend at Rs. 1.50 (i.e.15%) per share on the equity shares of the Company for the year ended 31st March, 2011 as in the earlier year. If approved, the dividend will absorb Rs. 693.21 lakhs (including Rs. 96.76 lakhs towards dividend tax).

REVIEW OF OPERATIONS

The Company achieved Gross Sales of Rs. 750.15 Crores during the year under review as against Rs. 710.52 Crores in the previous year refecting an increase of 5.6%. However the quantity of D. I. Pipes sold during FY 2010-11 was lower by 9.72% at 1,35,246 MT as compared to 1,49,805 MT sold during FY 2009-10. The lower volume of sales coupled with increase in cost of inputs resulted in lower profts (PBT) for the year under review at Rs. 55.85 Crores as against Rs. 87.98 Crores earned during FY 2009-10.

During the frst quarter of the year under review, your Company took a planned shutdown of its Mini Blast Furnace (MBF) from 9th May 2010 to 27th June, 2010 for repairing the MBF and for installation of Hot Blast Stoves. Apart from this, chilling-in of MBF at the time of restart, took further three – four weeks time to stabilize the operations after the long shutdown. During this period of about two and half months, while there was no production of liquid metal/pig iron, the Ductile Iron Pipe Plant (DIP) was also under shut-down for some time for annual preventive maintenance and operated at a very low capacity, due to non availability of metal. Consequently, the production of all the Divisions during the financial year 2010-11 was lower compared to the production achieved during FY 2009-10.

The quantity of Low Ash Metallurgical Coke produced in the Coke Oven Plant was lower by 8.5% at 94,092 MT in FY 2010-11 as against 1,02,862 MT in FY 2009-10, due to shutdown of some ovens for major repair, which continued till July, 2010. Accordingly, the units of power generated, in the 12 MW – Waste Heat Recovery Based Captive power Plant of the Company, were marginally lower at 518 Lakh units during the year under review compared with 536 Lakh units in the preceding year.

The production of Mini Blast Furnace (MBF), producing liquid metal mainly for Ductile Iron Pipe Plant, was lower at 1,46,285 MT for the financial year 2010-11 compared to 1,58,503 MT in the previous year, refecting a decrease of about 8%. The production of D. I. Pipes during FY 2010-11 was lower by about 10% at 1,34,779 MT compared with 1,49,604 MT in the preceding year.

The production of Cement during FY 2010-11 was lower by about 10% at 61,384 MT compared to 68,476 MT in the previous year, due to curtailed operations, as the market for slag cement started improving from December, 2010.

Consequent to repair of Mini Blast Furnace (MBF) and installation of Hot Blast Stoves, as aforesaid, the manufacturing capacity of MBF for liquid metal/pig iron has gone up to 2,25,000 TPA. Similarly, with the installation of balancing equipments, the capacity of Ductile Iron Pipes Plant (DIP) also stands increased to 2,25,000 TPA.

future prospectS

Your Company has taken steps for cost reduction and expansion of capacities in Coke Oven, Power Generation, Liquid Metal and Ductile Iron Pipes. While, these steps will help in volume growth, the pressure on selling prices may continue, due to intense competition in the domestic market in view of further capacities being added by the existing players and new entrants.

The installation of Sinter Plant along with regular upgradation and addition of balancing equipments in the Ductile Iron Pipe Plant (DIP) will increase the capacity of Ductile Iron Pipes to 2,75,000 TPA by end of Financial Year 2011-12. To cater to the increased requirement of coke, your Company is in the process of installing additional Battery at its Coke Oven Plant, which is expected to be commissioned by December, 2011. With this, the capacity of the Coke Oven Plant will increase to 2,25,000 TPA. In addition, for effective utilization of higher quantum of waste heat generated from the Coke Oven Plant after expansion, it is planned to add one more boiler to increase the power generation in the existing Captive Power Plant.

As a further measure of cost reduction, the Company envisages to set up a Ferro Alloys Plant at a capital outlay of Rs. 40 Crores partly to cater to its captive requirement and to serve the growing demand of Ferro Silicon, to support the proftability of the Company.

The Company plans to fnance the above investments through internal accruals and Term Loans.

CREDIT RATING

Credit Analysis and Research Limited (CARE), a leading rating agency has reviewed and upgraded the rating to "CARE A+ (Single A plus) from CARE A (Single A). This rating is applicable to facilities having tenure of more than one year. CARE A+ rating indicates adequate safety for timely servicing of debt obligations and carry low credit risk.

The rating for short term facilities has been reviewed and reaffrmed as PR1+ (PR One Plus), the highest rating in the category and indicates a strong capacity for timely payment of short term debt obligations and carry lowest credit risk.

DIRECTORS

Andhra Pradesh Industrial Development Corporation (APIDC), Hyderabad nominated Shri V. Nagi Reddy, IAS on the Board of Directors of your Company with effect from 25th August, 2010 in place of Shri Vinod Kumar Agrawal, IAS. Your Directors place on record their appreciation for the active participation and valuable services rendered to the Company by Shri Vinod Kumar Agrawal.

Shri Gouri Shankar Rathi and Shri G. Maruthi Rao retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Shri S.Y. Rajagopalan was appointed as an additional Director on the Board of Directors of the Company from 7th May, 2011. He will hold offce upto the conclusion of ensuing Annual General Meeting. The Company has received a notice from a member of the Company to appoint Shri S.Y. Rajagopalan as a Director, liable to retire by rotation.

CORPORATE GOVERNANCE

Your Company has fully complied with the requirements of Clause 49 of the Listing Agreement regarding Corporate

Governance. A report on Corporate Governance Practices, the Auditors Certifcate on compliance of mandatory requirements thereof and Management Discussion and Analysis are given as annexure to this report.

MANAGEMENT DISCUSSION AND ANALYSIS

Please refer to the Management Discussion and Analysis section appearing elsewhere.

EMPLOYEES

Board of Directors expresses its appreciation for sincere efforts made by the employees of your Company at all levels during the year and their co-operation in maintaining cordial relations. Your Directors are pleased to inform that a long term Wage Settlement for a period of four years under Section 12 (3) of Industrial Disputes Act, 1947 was signed with the Unions of the workmen in November, 2010.

The information required under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, the report and accounts are being sent to all the shareholders of the Company excluding the above information. Those shareholders, who desire to obtain these particulars, would be provided the same upon receiving such request.

Statutory information

Information as per Companies (disclosure of particulars in the Report of Board of Directors) Rules, 1988 related to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-‘A attached hereto and forming part of this report.

Directors responsibility Statement

The Board of Directors of the Company confirms:

i) That in the preparation of annual accounts the applicable accounting standards have been followed and there has been no material departure.

ii) That the selected accounting policies were applied consistently and the Directors 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, 2011 and of the profts of the Company for the year ended on that date.

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

iv) That the annual accounts have been prepared on a going concern basis.

AUDITORS

The Auditors, M/s. K.R. Bapuji & Co., Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

COST AUDITORS

The Central Government vide its order dated 16th December, 2010 has directed the Company to conduct cost audit for its cement division. Accordingly, the Board of Directors of your Company appointed M/s. Narasimha Murthy & Co., Cost Accountants, Hyderabad, as Cost Auditors for the financial year 2010-11, which has been approved by the Central Government.

ACKNOWLEDGEMENTS

The Board of Directors thanks the Government Authorities, Financial Institutions, Banks, Customers, Vendors, Shareholders & Investors, for their continued co-operation and support to your Company.

For and on behalf of the Board of Directors

Place: Chennai G. maruthi rao mayank Kejriwal Date: 7th May, 2011 Director Managing Director


Mar 31, 2010

The Directors take pleasure in presenting the 18th Annual Report and Audited Accounts of your Company for the year ended 31st March, 2010.

FINANCIAL RESULTS

(Rs. in Lakhs) (Rs. in Lakhs) 2009-10 2008-09

Net Sales & Other Income 69,129.89 64,681.79

Profit before Depreciation & Tax 10,592.23 4,464.66

Depreciation 1,794.60 1,641.84

Profit before Taxation 8,797.63 2,822.82

Less: Provision for Taxation (Including Deferred Tax) 3,003.66 987.53

Profit after Tax 5,793.97 1,835.29

Profit brought Forward from Previous Year 1,143.80 1,242.48

Prior Period Adjustment 67.99 --

Debenture Redemption Reserve written back 750.00 -

Balance available for Appropriation 7,755.76 3,077.77 Appropriations are made as under:

- Debenture Redemption Reserve - 468.75

- General Reserve 5,400.00 1,000.00

- Proposed Dividend 596.45 397.64 -Dividend Tax 101.37 67.58

Balance Carried Forward to Next Year 1,657.94 1,143.80

DIVIDEND

Considering the improved profitability, your Directors are pleased to recommend a higher dividend @ Rs. 1.50 per share on the equity shares of the Company for the year ended 31st March, 2010, as against Rs. 1.00 per share in the previous year. If approved, the dividend will absorb Rs. 697.82 lakhs (including Rs. 101.37 lakhs towards dividend tax).

REVIEW OF OPERATIONS

During the year, the Company has sold 1,49,805 MT of D.I. pipes compared to previous years dispatches of 1,23,345 MT, registering an increase of 21.50% and the Sales (Gross) of the Company increased from Rs. 680.47 Crores in FY 2008-09 to Rs. 710.52 Crores in FY 2009-10. The profit (PBT) for the year, however, was considerably higher at Rs. 87.98 Crores as against Rs. 28.23 Crores reported in the previous year. The improved profitability is mainly attributable to higher volumes, reduced input costs, better sales realization and effective fund management resulting in lower interest expenses compared to last year.

The quantity of Low Ash Metallurgical Coke produced in the Coke Oven Plant was lower by 9% at 1,02,862 MT in FY 2009-10 as against 1,13,052 MT in FY 2008-09, due to shutdown of some ovens for major repair. The units of power generated in the 12 MW Waste Heat Recovery Based Captive Power Plant of the Company were also lower at 536 Lakh units during the year under review compared with 629 Lakh units in the preceding year due to reduced production of Coke Oven Plant.

The production of Mini Blast Furnace (MBF) producing liquid metal mainly for Ductile Iron Pipe Plant, for the year was higher at 1,58,503 MT compared with 1,48,433 MT in the previous year, reflecting an increase of about 7%.

The production of D.I. Pipes was higher by about 21% at 1,49,604 MT compared with 1,23,422 MT in the preceding year. The higher production is attributable to increased liquid metal availability from MBF and full-fledged operation of additional Induction Furnaces and Annealing Furnace installed during the previous year.

The production of Cement during the year was lower by 21% at 68,476 MT compared to 86,812 MT in the previous year, due to curtailed operations on account of sluggish market conditions prevailing during the year under review, particularly affecting the demand for slag cement.

As already reported in the previous year, the Company is in the process of repairing the Mini Blast Furnace along with installation of Hot Blast Stoves, which is expected to be commissioned by June, 2010 to increase the liquid metal capacity of the plant to 225,000 TPA. This, along with additional balancing equipments being installed in D.I. Pipe Plant, will increase the D.I. Pipes capacity also to 225,000 TPA.

FUTURE PROSPECTS

Given the trend of spiraling prices of iron ore and coal and also the upcoming capacities in the D.I. Pipes sector, the margins would be under pressure in the coming years. However, Company is adopting various cost reduction measures like installation of Hot Blast Stoves etc., to reduce the impact.

As a measure of further cost reduction, your Company also envisages to install a Sinter Plant, which along with balancing equipments being installed in Ductile Iron Pipe Plant will further increase the liquid metal and D.I. pipe capacity to 275,000 TPA by September, 2011. The Company plans to finance these investments through internal accruals and the Term Loans already sanctioned by the Banks. With all these developments on course, the future outlook for the performance of your Company appears to be positive.

DIRECTORS

Andhra Pradesh Industrial Development Corporation (APIDC), Hyderabad nominated Shri Vinod Kumar Agrawal, IAS on the Board of Directors of your Company with effect from 24th July, 2009 in place of Shri P. Rajeswara Rao. Your Directors place on record their appreciation for the active participation and valuable services rendered to the Company by Shri P. Rajeswara Rao.

Industrial Development Bank of India (IDBl), Chennai nominated Shri P.M.Suresh on the Board of Directors of your Company with effect from 19th April, 2010 in place of Shri D.R. Jawahar. Your Directors place on record their appreciation for the active participation and valuable services rendered to the Company by Shri D.R. Jawahar.

Shri L. Madhusudhan Rao and Shri G. Bhaskara Rao retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

CORPORATE GOVERNANCE

The Corporate Governance report is set out as Annexure to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

Please refer to the management discussion and analysis section appearing elsewhere.

PARTICULARS OF EMPLOYEES

Board of Directors express its appreciation for sincere efforts made by the employees of your Company at all levels during the year and their co-operation in maintaining cordial relations.

The information required under Section 217(2 A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, the report and accounts are being sent to all the shareholders of the Company excluding the above information. Those shareholders, who desire to obtain these particulars, would be provided the same upon receiving such request.

STATUTORY INFORMATION

Information as per Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 related to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-A attached hereto and forming part of this report.

DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms:

i) That in the preparation of annual accounts the applicable accounting standards have been followed and there has been no material departure.

ii) That the selected accounting policies were applied consistently and the Directors 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 2010 and of the profits of the Company for the year ended on that date.

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

iv) That the annual accounts have been prepared on a going concern basis.

AUDITORS REPORT

Regarding Auditors observation on remuneration to Managing Director, attention is invited to note 4 of schedule 17 of the accounts, which is self-explanatory.

AUDITORS

The Auditors, M/s. K.R. Bapuji & Co., Chartered Accountants, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

ACKNOWLEDGEMENTS

The Board of Directors thank the Government Authorities, Financial Institutions, Banks, Customers, Vendors, Shareholders & Investors for their continued co-operation and support to your Company.

For and on behalf of the Board of Directors

Place: Chennai L. Sridhar Mayank Kejriwal

Date: 28th April, 2010 Director Managing Director

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