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Directors Report of Steelco Gujarat Ltd.

Mar 31, 2014

Dear members,

The Directors have pleasure in presenting the Twenty Fourth Annual Report of your Company together with the Audited Statements of Accounts for the year ended 31st March 2014.

1. FINANCIAL HIGHLIGHTS

(Rs. in Lacs) Current Year Previous Year Ended 31.03.14 Ended 31.03.13

Sales / Other Income (Net of Excise Duty) 52962.19 54474.56 Profit before Depreciation & Interest 2036.78 2511.36 Depreciation 444.72 473.00 Profit / (Loss) before Interest & Financial Charges 1592.06 2038.36 Interest & Financial Charges 1963.76 2021.33 Profit / (Loss) after Interest & Financial Charges (371.70) 17.03 Excess Provision written back - - Net Profit / (Loss) before Tax (371.70) 17.03 Tax - - Net Profit / (Loss) after Tax (371.70) 17.03

2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares of the Company in view of carried forward losses.

3. REVIEW OF OPERATIONS

During the year under review, the Company has made a net loss of Rs. 372 Lakhs on turnover of 82,176 MT Valuing Rs. 52,962 Lakhs against a net profit of Rs. 17 Lakhs on turnover of 88,901 MT valuing Rs. 54,475 Lakhs in the previous year. The Company has made a Cash Profit of Rs. 73 Lakhs for the year ended 31st March 2014 as against a Cash profit of Rs. 490 Lakhs in the previous year. This can be mainly attributed to lower capacity utilization by 8% in terms of quantity and 3% in terms of Value due to erratic supply of H.R. Steel coils from its main supplier and non compatibility of material arranged from alternate sources.

4. CORPORATE DEBT RESTRUCTURING

The Corporate Debt Restructuring (CDR) Cell vide Letter of Approval No. BY. CDR (ATR) No. 322/2012-13 dated 27-06-2012 had approved restructuring of debts and the same has been implemented except scheme of Capex, which are being reviewed. The scheme shall continue till March 2021.

5. ALLOTMENT OF PREFERENCE SHARES

During the year, your Company has allotted 7% 3486200 Cumulative Redeemable Preference Shares of Rs. 10/- each to the promoters, M/s Spica Investments Limited towards their contribution under CDR Scheme.

6. BOARD OF DIRECTORS

During the year under review, Shri R. P. Chandaria, founder director of the company, passed away on 13th October 2013. Your Board of Directors at its meeting held on 15th November, 2013 placed on record its appreciation for invaluable contributions made by him as a member of the Board.

During the year under review, the Company has appointed Shri S. S. Ranjan as an independent director, Mr. Jiban Goswami as Nominee director as required under approved CDR Scheme and Mr. Vimal Chandaria, promoter director as Additional Director in view of sad demise of Mr. R. P. Chandaria.

Mr. N. M. Mohnot, Managing Director of your Company has been relieved from his services on 14th August, 2014 and Dr. R. S. Mamak, Non Executive Vice Chairman has been appointed as Executive Vice Chairman from 14th August, 2014.

Your directors Mr. M. Lodha, Mr. J. Mehra & Mr. S. S. Ranjan, fulfils the condition for their appointment as specified in the Act and the listing agreement. Hence, the Board recommends appointment of aforesaid existing Directors as Independent Directors in terms of Section 149 and 152 of the Companies Act, 2013.

7. AUDITORS

M/s. Mukesh M. Shah & Co., Chartered Accountants, Ahmedabad, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a written certificate from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limit under section 141 of the Companies Act, 2013.

8. AUDITORS OBSERVATION

Note No. 35 relating to preparation of financial statements on Going Concern Basis, in spite of substantial erosion of net worth, is self explanatory as regards the observation made by the auditors in their report.

9. COST AUDITORS

Your Directors have appointed M/s. A. G. Tulsian & Co., Cost Accountants, Ahmedabad, as Cost Auditors in compliance with the Companies (Cost Accounting Records) Rules, 2011. The Cost Auditors has filed the cost audit reports for the financial year ended on March 31, 2013 on August 16, 2013 within the due date .

10. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, the Directors confirm: -

i. That in the preparation of the annual accounts, applicable Accounting Standards have been followed along with proper explanations relating to material departures;

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

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

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

11. PARTICULARS OF EMPLOYEES

The particulars of employees as required under section 217 (2A) of the Companies Act, 1956. read with the Companies (Particulars of Employees) Rules, 1975 are set out below:

Notes:

(1) Remuneration includes Salary, Allowances, and Contribution to retiral benefits and monetary value of perquisites at cost to the company.

(2) Aforesaid Director does not hold by himself or along with his spouse and dependent children, or through any company, any share of the company.

(3) Aforesaid Director''s services are of contractual nature.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure ‘A'', forming part of this report.

13. CORPORATE GOVERNANCE

Your Company is compliant of all mandatory requirements pursuant to Clause 49 of Listing Agreement. A separate report on Corporate Governance compliance and a Management Discussion and Analysis Report as stipulated by the clause 49 of the Listing Agreement forms part of the Annual Report along with the required certificate from the Practicing Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated by the revised clause 49 of the Listing Agreement. The detailed Operational Performance of the Company has been comprehensively discussed in the Management Discussion and Analysis Report, which forms part of Directors'' Report.

14. DAMAGES DUE TO FLOOD

During the year, operations at your Palej works were affected for 10 days due to flood in September 2013. Since your company was fully insured with insurers, there was no adverse effect because of flood including loss of profits. The surveyors have assessed the losses of material damage and loss of profits and these have been considered into accounts. The claim amount is been received by the Company.

15. MINIMUM PUBLIC SHAREHOLDING

The company had received notice from SEBI for non compliance of the requirement of clause 40A regarding minimum public shareholding. In terms of CDR requirement, the promoters'' shareholding was fully pledged with the consortium members of the bank hence it could be de-pledged in April 2014. Subsequent to that the promoters have fully liquidated the excess Equity Shares by way of sale under OFS Scheme on 30th June, 2014 and 6th August, 2014, as per the prescribed SEBI guidelines.

16. ACKNOWLEDGEMENT

Your directors take this opportunity to express their appreciation for the co-operation and assistance received from the Government of India, Government of Gujarat, Financial Institutions, the Company''s Bankers, Electricity Companies, Palej Gram-Panchayat, other Government Agencies, Customers, Suppliers and Investors. Your Directors express gratitude to the investors for their confidence reposed in the Company and co-operation, and especially to the employees for their dedicated service and support.

For and behalf of the Board of Directors

Place : Mumbai Dr. R.S. Mamak Date : 14th August 2014 Executive Vice Chairman


Mar 31, 2013

To The Members,

The Directors have pleasure in presenting the Twenty Third Annual Report of your Company together with the Audited Statements of Accounts for the year ended 31st March 2013.

1. FINANCIAL HIGHLIGHTS

(Rs.in Lacs)

Current Year Previous Year Ended 31.03.13 Ended 31.03.12

Sales / Other Income (Net of Excise Duty) 54,474.76 47,121.33

Profit before Depreciation & Interest 2,511.36 736.16

Depreciation 473.00 1,242.98

Profit / (Loss) before Interest & Financial Charges 2,038.36 (506.82)

Interest & Financial Charges 2,021.33 2,363.77

Profit / (Loss) after Interest & Financial Charges 17.03 (2,870.59) Excess Provision written back

Net Profit / (Loss) before Tax 17.03 (2,870.59) Tax

Net Profit / (Loss) after Tax 17.03 (2,870.59)



2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares of the Company in view of carried forward losses.

3. REVIEW OF OPERATIONS

During the year under review, the Company has made a net profit of" 17 Lacs on turnover of 88,901 MT Valuing " 54,475 Lacs against a net loss of" 2,871 Lacs on turnover of 77,114 MT valuing " 47,121 Lacs in the previous year. The Company has made Cash Profit of" 490 Lacs for the year ended 31st March 2013 as against a Cash loss of" 1,628 Lacs in the previous year. This can be mainly attributed to improved capacity utilization, selection of appropriate product mix and cost efficiency during the year as follows:-

(i) Selection of appropriate product mix resulted into better sales realization per MT.

(ii) The Company has improved its turnover by 15% resulting into efficient utilization of equipments and reduction in costs.

(iii) Financial Costs during the year of operations have reduced by " 343 Lacs due to the CDR implementation.

(iv) Forex losses reduced by " 175 Lacs to a bare minimum of" 2 Lacs during the year under review.

(v) Power cost has reduced by" 283 Lacs in view of purchase of power through Open Access by entering into an agreement with Indian Energy Exchange. (vi) Depreciation reduced by " 770 Lacs mainly on account of the Rolling Mills and other ancillary equipments fully depreciated during the year under review.

4. CORPORATE DEBT RESTRUCTURING

The Corporate Debt Restructuring (CDR) Cell vide Letter of Approval No. BY. CDR(ATR) No. 322/2012-13 dated 27-06-2012 has approved restructuring of debts. The sanctioned scheme has reduced the interest burden from the cut-off date i.e. 30-11-2011. The scheme shall continue till March 2021.

5. PREFERENCE SHARES APPLICATION MONEY

During the year, your Company has received promoters ''contribution of " 348.64 Lacs as per condition of CDR Scheme. The Company would proceed for allotment of Non Convertible Redeemable Preference Shares to the Promoters M/s Spica Investments Limited after obtaining requisite approvals including approval under the ECB from the Reserve Bank of India.

6. BOARD OF DIRECTORS

During the year under review Shri P. G. R. Prasad passed away on 16-11-2012. Your Board of Directors at its meeting held on 15-12-2012 placed on record its appreciation for invaluable contributions made by him as a member of the Audit Committee, Remuneration Committee and Shareholders/ Investors ''Grievance Committee.

As per Section 256 of the Companies Act, 1956, Dr. R. S. Mamak resigned from the office of Executive Vice Chairman w.e.f. 01-02-2013. However, at the request of the Board, he continues to be Non Executive Director as well as Non Executive Vice Chairman. Dr. R. S. Mamak and Mr. Rashmi Chandaria, Directors of the Company are liable to retire by rotation and being eligible offer themselves for re-appointment.

Your Directors appointed Mr. S.S. Ranjan as an additional director on 22nd May, 2013 pursuant to section 260 of the Companies Act, 1956 read with clause 43 of the Articles of Association to hold office upto the ensuing Annual General Meeting. The Company has received requisite notice pursuant to section 257 of the Companies Act, 1956 proposing his candidature for appointment as a retiring director at the ensuing Annual General Meeting.

7. AUDITORS

M/s. Mukesh M. Shah & Co., Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a written certificate from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limit under section 224 (1B) of the Companies Act, 1956.

8. AUDITORS OBSERVATION

Note No. 34 relating to preparation of financial statements on Going Concern basis, inspite of substantial eroson of net worth is self explanatory as regards the observation made by the auditors in paragraph No. 5 of their report.

9. COST AUDITORS

Your Directors have appointed M/s. A. G. Tulsian & Co., Cost Accountants, as Cost Auditors in compliance with the Companies (Cost Accounting Records) Rules, 2011.

10. DIRECTORS ''RESPONSIBILITY STATEMENT

Pursuant to the requirements of section 217(2AA) of the Companies Act, 1956, with respect to Directors''Responsibility Statement, the Directors confirm: -

i. That in the preparation of the annual accounts, applicable Accounting Standards have been followed along with proper explanations relating to material departures;

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

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

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

11. PARTICULARS OF EMPLOYEES

The particulars of employees as required under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are set out below:

Notes:

(1) Remuneration includes Salary, Allowances and Contribution to retiral benefits and monetary value of perquisites at cost to the Company.

(2) Aforesaid Director does not hold by himself or along with his spouse and dependent children, or through any company, any share of the Company.

(3) Aforesaid Directors'' services are of contractual nature.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure A‘ ,'' forming part of this report.

13. CORPORATE GOVERNANCE

Your Company is compliant of all mandatory requirements pursuant to Clause 49 of Listing Agreement. A separate report on Corporate Governance compliance and Management Discussion and Analysis Report as stipulated by the Clause 49 of the Listing Agreement forms part of the Annual Report along with the required certificate from the Practicing Company Secretary regarding compliance of the conditions of Corporate Governance as stipulated by the revised Clause 49 of the Listing Agreement. The detailed Operational Performance of the Company has been comprehensively discussed in the Management Discussion and Analysis Report, which forms part of Directors''Report.

14. ACKNOWLEDGEMENT

In consonance with established maxim that the Company is only as good as its people, your Company has put together a team of highly qualified and experienced professionals.

The success achieved by your Company and the progress made by it are due to the co-operation, efforts and commitment of all concerned with its affairs, including the Government of India, Government of Gujarat, Financial Institutions, Companys'' Bankers, Electricity Companies, Palej Gram-Panchayat, other Government Agencies, Customers, Suppliers and Investors. Your Directors express gratitude to the investors for their confidence reposed in the Company and co-operation, and especially to the employees for their dedicated service and support.

For and behalf of the Board of Directors

Place : Mumbai Dr. R.S. Mamak

Date : 22nd May, 2013 Vice Chairman


Mar 31, 2011

The Members,

The Directors have pleasure in presenting the Twenty- First Annual Report of your Company together with the Audited Statements of Accounts for the year ended 31st March 2011.

1. FINANCIAL HIGHLIGHTS

(Rs. in Lacs)

Current Previous Year Year Ended Ended 31.03.11 31.03.10

Sales/Other Income (Net of Excise Duty) 53800.88 47527.81

Profit before Depreciation, Interest & Financial Charges 3676.47 3668.86

Depreciation 1233.39 1174.66

Profit before Interest & Financial Charges 2443.08 2494.20

Interests Financial Charges 2110.73 1910.93

Profit after Interest & Financial Charges 332.35 583.27

Excess Provision written back - -

Net Profit / (Loss) before Tax 332.35 583.27

Tax 80.00 99.57

Net Profit / (Loss) after Tax 252.35 483.70

2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares of the Company in view of carried forward losses.

3. REVIEW OF OPERATIONS

Your Company continues to maintain the improved level of turnover and profitability achieved during last year. Current year has also ended with a cash profit of Rs. 1566 Lacs and net profit of Rs. 332 Lacs and turnover of 94932 MT Valuing Rs. 53801 Lacs against turnover of 96045 MT Valuing Rs. 47528 Lacs, Cash profit of Rs. 1758 Lacs and Net Profit of ? 583 Lacs of previous year. At the year end 1951 MT of material was at sea -port due to delay in arrival of designated vessels, which adversely affected the turnover by Rs. 994 Lacs & profit by ? 69 Lacs including incentive on export.

During the year, Company commissioned its narrow rolling mills complex, which is getting stabilized after initial teething troubles and hence, full benefit of the same would be available from the year 2011 -2012 onward. Facilities are planned to be utilized for production of special steel i.e High carbon and medium carbon, which would help to further improve the bottom line and turnover.

Your Company's thrust to develop special steel of high quality and value continued during the year which resulted into its emergence as a reliable source for its overseas customer to supply enamel grade steel.

The overall performance of your Company is satisfactory, keeping in view the delay in release of working capital by its bankers during last year and high volatility in the prices of its main raw material i.e. H.R. Coils.

4. REVALUATION OF ASSETS

During the year the company has revalued its assets, based on revaluation report as on 31.03.2011 by M/s Mott MacDonald Pvt. Ltd., India. Net value of Plant & machinery and Land & Building has increased by Rs. 9280.18 Lacs. Furniture & Fixtures, computers etc. were not revalued keeping in view their short life and nature of assets. Accordingly revaluation reserve has been created for Rs. 9280.18 Lacs

5. NON CONVERTABIUTY OF PREFERENCE SHARES INTO EQUITY SHARES

Your Company had issued 3,28,20,000 12.5% Cumulative Redeemable Preference Shares of Rs. 10/- each valuing Rs. 32,82,00,000/ - on private placement basis to SPICA Investments Ltd., promoter of the Company, on 29th September, 2008, with an option to convert into equity shares. SEBI vide its letter No. CFB/DCR/TODMS/4536/2011 dated 7th February, 2011 has not confirmed the conversion of Preference Shares into equity shares and hence M/s SPICA Investments Limited would continue to hold them as preference shares.

6. BOARD OF DIRECTORS

During the year Company lost its founder Director and member Shri Shripal Sheth due to his sad and sudden demise on 26.12.2010. Your Board of Directors at their meeting held on 10.02.2011 took on record appreciation for invaluable contributions made by him in the growth of the Company and his services and guidance to the Company as a Chairman of the Audit Committee, Remuneration Committee and Shareholder's/ Investor's Grievance Committee.

As per Section 256 of the Companies Act, 1956 and Articles of Association of the Company, Mr. Rashmi Chandaria and Mr. " Mahendra Lodha, Directors of the Company are liable to retire by rotation and being eligible, offer themselves for re-appointment.

Your Directors at their meeting held on 30th May, 2011, have appointed Mr. Krishna Kumar M. Joshi as Additional Director as well as Managing Director w.e.f. 20th June, 2011. The Company has received requisite notice pursuant to Section 257 of the Companies Act, 1956 proposing his candidature as non retiring director.

7. AUDITORS

M/s. Mukesh M. Shah & Co., Chartered Accountants, Statutory Auditors of the company, hold office until the conclusion of the ensuing Annual General Meeting. The company received a written certificate from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limit under section 224 (1B) of the Companies Act, 1956.

8. AUDITORS' REPORT

Notes to the accounts as referred in Auditors' Report are self explanatory and therefore, do not call for any further comments or explanations.

9. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, the Directors confirm: -

a. That in the preparation of the accounts for the financial year ended 31st March, 2011, the applicable Accounting Standards have been followed and that there are no material departures;

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

c. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. That the Directors have prepared the accounts for the financial year ended 31st March, 2011 on a 'going concern' basis.

10. PARTICULARS OF EMPLOYEES

There was no employee drawing remuneration of X 60.00 Lacs p.a. or Rs. 5.00 Lacs p.m. or more for any part of the year and hence no particulars have been furnished as specified under section 217 (2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules, 1975.

11. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Statement pursuant to Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the statement Annexed (Annexure" A") hereto forming part of the report.

12. CORPORATE GOVERNANCE

Your Company has complied with the requirement of Clause 49 of the Listing Agreement with the Stock Exchanges. A detailed report on the Corporate Governance practices, the Auditors' Certificate on compliance of mandatory requirements thereof and Management Discussion and Analysis are given as an annexure to this report. The operational performance of the Company has been comprehensively discussed in the Management Discussion and Analysis Report, which forms part of Directors' Report.

13. APPRECIATION AND ACKNOWLEDGEMENT

Your Directors take this opportunity to express their appreciation for the co-operation and assistance received from the Government of India, Government of Gujarat, Financial Institutions, the Company's Bankers, Electricity Companies, Palej Gram Panchayat, other Government Agencies, Customers, Suppliers and Investors. Your Directors express their gratitude to the Investors' / Shareholders' during the year under review. The Directors also wish to place on record their appreciation of the devoted and dedicated services rendered by all employees of the Company.

For and behalf of the Board of Directors

Dr. R.S. Mamak Executive Vice-Chairman

Place Mumbai Date 30th May, 2011


Mar 31, 2010

The Directors have pleasure in presenting the Twentieth Annual Report of your company together with the Audited Statements of Accounts for the year ended 316t March 2010.

1. FINANCIAL HIGHLIGHTS

(Rs. in Crores)

Current Year Previous Year Ended 31.03.10 Ended 31.03.09

Sales/Other Income (Net of Excise Duty) 475.28 428.85

Profit before Depreciation, Interests Financial Charges 36.69 27.61

Depreciation 11.75 11.77

Profit before Interest & Financial Charges 24.94 15.84

Interest & Financial Charges 19.11 23.82

Profit after Interest & Financial Charges 5.83 (7.98) Excess Provision written back

Net Profit / (Loss) before Tax 5.83 (7.98)

Tax 1.00 0.10

Net Profit / (Loss) after Tax 4.83 (8.08)

2. DIVIDEND

Your Directors do not recommend any dividend on the equity shares of the company in view of carried forward losses.

3. REVIEW OF OPERATIONS

During the year under review the company has exhibited turnaround with net profit of Rs. 583 Lacs on turnover of 96045 MT valuing Rs. 47528 Lacs against net loss of Rs. 798 Lacs on turnover of 77614 MT valuing Rs. 42885 Lacs in the previous year. Cash profit for the year ended 31 st March 2010 has also improved to Rs. 1758 Lacs as against Rs. 378 Lacs in the previous year, an increase of 365%. This is primarily attributed to higher capacity utilization during the year due to easing of :-

(i) Working Capital - The release of Term Loan of Rs. 20 Crores and fund based limit of Rs. 10 Crores by Companys bankers coupled with promoters contribution of Rs. 10 Crore during year 2008-2009 has improved the availability of working capital for operation of the company.

(ii) Raw Material - Availability of raw material used to be a major constraint in the past as domestic manufactures were not able to meet its requirement in time at competitive prices. To over come the same, company imported 18505 M.T. of H.R Steel coils during the year to meet part of its requirement.

4. OPTING FOR CONVERSION OF PREFERENCE SHARES INTO EQUITY SHARES BY THE PROMOTER

The company had issued 3,28,20,000 12.5% Cumulative Redeemable Preference Shares of Rs. 10 /- each valuing Rs. 32,82,00,000/- to SPICA Investment Ltd., Promoter of the company on 29th September, 2008, with an option to convert into equity shares mainly to finance the enhanced working capital requirement for the company and in compliance with direction of Consortium of Bankers to augment the financial resources to meet Long Term Working Capital and capital expenditure requirement of the company. SPICA Investment Ltd. has opted for conversion of the aforesaid preference shares into equity subject to the requisite formalities and approvals from the relevant authorities as they are already holding 78.26% equity of the company; the approvals are still awaited.

5. BOARD OF DIRECTORS

Your Directors appointed Mr. P. G. R. Prasad as an Additional Director (Independent Director) at their meeting held on 23rd February, 2010, pursuant to the provision of Section 260 of the Companies Act, 1956 and Clause no. 43 of the Articles of Association of the Company, to hold office upto ensuing Annual General Meeting. The company has received a notice in writing from the member of the company pursuant to Section 257 of the Companies Act, 1956 proposing candidature of Mr. P.G. R. Prasad as retiring Director at ensuring Annual General Meeting.

As per Section 256 of the Companies Act, 1956 and Articles of Association of the Company, Mr. R. P. Chandaria and Mr. J. Mehra, Directors of the company are liable to retire by rotation and being eligible offer themselves for re-appointment.

6. AUDITORS

M/s. Mukesh M. Shah & Co., Chartered Accountants, Statutory Auditors of the company, hold office until the conclusion of the ensuring Annual General Meeting. The company received a written certificate from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limit under section 224 (1B) of the Companies Act, 1956.

7. AUDITORS REPORT

Notes to the accounts as referred in Auditors Report are self explanatory and therefore, do not call for any further comments or explanations.

8. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of The Companies Act, 1956, with respect to Directors Responsibility Statement, the Directors confirm: -

i. That in the preparation of the annual accounts, applicable Accounting Standards have been followed along with proper explanations relating to material departures;

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

iii. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given in Annexure A, forming part of this report.

11. CORPORATE GOVERNANCE

The company is compliant of all mandatory requirements pursuant to Clause 49 of Listing Agreement. A separate report on Corporate Governance compliance and a Management Discussion and Analysis Report as stipulated by the Clause 49 of the Listing Agreement forms part of the Annual Report along with the required certificate from the Practicing company Secretary regarding compliance of the conditions of Corporate Governance as stipulated by the revised Clause 49 of the Listing Agreement.

The detailed operational performance of the company has been comprehensively discussed in the Management Discussion and Analysis Report, which forms part of Directors Report.

12. ACKNOWLEDGEMENT

In consonance with established maxim that the company is only as good as its people, your company has put together a team of highly qualified and experienced professionals.

The success achieved by your company and the progress made by it are due to the co-operation, efforts and commitment of all concerned with its affairs, including the Government of India, Government of Gujarat, Financial Institutions, the Companys Bankers, Electricity Companies, Palej Gram-Panchayat, other Government Agencies, Customers, Suppliers and Investors. Your Directors express gratitude to the investors for their confidence reposed in the company and co-operation, and especially to the employees for their dedicated service and support.

For and behalf of the Board of Directors

Place : Ahmedabad Dr. R.S. Mamak

Date : 09th August, 2010 Executive Vice-Chairman





 
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