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Directors Report of Uttam Galva Steels Ltd.

Mar 31, 2015

The Members

The Directors have pleasure in presenting the 30th Annual Report on the business and operations of the Company, along with the Financial Statement for the Financial Year ended 31st March, 2015.

1. FINANCIAL RESULTS (Stand-alone & Consolidated) (Rs in Crore)

STAND-ALONE CONSOLIDATED PARTICULARS Year ended Year ended Year ended Year ended 31st March, 31st March, 31st March,31st March, 2015 2014 2015 2014

Turnover 7376.59 5754.56 8856.98 5758.64

PBITDA 530.94 552.90 543.18 557.98

Less : Interest 262.13 289.09 277.94 304.02

PBTDA 268.81 263.81 265.24 253.96

Less: Depreciation/ 223.94 214.82 225.15 215.70

Amortization

Add : Other 10.46 32.27 5.13 37.78 Income / Exceptional Items

PBT 55.34 81.26 45.22 76.04

Less: Provision for 24.60 45.94 25.45 46.37 taxation

PAT 30.74 35.32 19.77 29.67

2. FINANCIAL PERFORMANCE (Stand-alone & Consolidated):

During this year, your Company has achieved a turnover of Rs. 7376.59 Crore as against Rs. 5754.56 Crore in the previous year. Your Company posted Profit before Tax of Rs. 55.34 Crore as against Rs. 81.26 Crore in the previous year. The gross revenue has increased mainly on account of merchandise export and Profit before Tax has come down mainly due to falling steel prices and low demand.

Consolidated turnover of Rs. 8856.98 Crore has increased as against Rs. 5758.64 Crore in the previous year and Consolidated Profit before Tax has come down to Rs. 45.22 Crore as against Rs. 76.04 Crore in the previous year.

In view of the current steel scenario, the Board of Directors are of the opinion that Cash flow should be conserved and hence decided to plough back the entire profit earned by the Company and have not recommended any dividend.

Your Company has always emphasized on achieving operational excellence and continues to focus on customer satisfaction and delight. Backed by strong fundamentals and robust plans your Company is fully prepared to face current challenges and benefit from expected medium and long term growth in Indian economy.

3. OPERATIONS:

(i) Export Market:

The Indian Steel markets have witnessed a de-growth in the export segment. Steel Exports from Indian market dropped by 8.1% during the period under review whereas Import of the Steel surged by almost 71% due to sharper fall in international steel prices than domestic prices.

The exports volume was lower by 17 % during the year as compared to 2013-14, the prices being under incessant pressure especially in the second half of the year in the wake of increased low price supplies from China. During the year your Company has, however, increased its volume in some markets like Africa by 77% and has almost doubled the volume in Latin America compare to last year.

Your Company has serviced 148 countries since its entry into the export business and is recognized as quality supplier in both developed and emerging markets. Your Company has maintained its presence in the International Market in spite of the currency crises and change in regulations in some of the countries.

Your Company has been successful in negating the initiation of anti dumping laws for our products in Australia in 2014 which has consequently opened up this market. However, possible initiation for the same for US markets is a matter of concern in the future.

The global economy expanded during the financial year at a moderate and uneven pace. Legacies from the global financial crisis continue to weigh on growth. The economy is expected to grow 3.1 per cent in 2015 compared with an estimated growth of 2.6 per cent in 2014. Emerging and developing economies are expected to grow by 5.4 percent which is a positive trend in line with our expectation. This is expected to provide a wider base to our international business.

(ii) Domestic Market:

Growth rate of Indian Domestic steel consumption has improved to 3.1% in 2014-15 from 0.6% in 2013-14. With the construction sector, which accounts for about 60% of the total steel demand in India, is yet to witness an on-the-ground recovery, the automobile sector is expected to be the growth engine for domestic steel demand in the near term.

In the Original Equipment Manufacturer (OEM) market, the Company has been focusing on high growth, profitable and niche areas especially in the Home Appliances, Automotive, Construction and Electrical Equipment segments and has thus moved up the value chain in these markets.

Your Company has achieved a volume growth of 22.2% in the Appliance segment over the last fiscal and has made commendable gains in establishing the product for Refrigerators and Washing Machines components with majors like Whirlpool, Samsung, Videocon Group and Godrej. As a first mover advantage your Company has developed the VCM refrigerator Door for the first time in India as a substitution for their critical high value import requirements. Your Company has also been working constantly towards import substitution of other steel components required by Appliance manufacturers. Your Company has also been approved by Samsung and Whirlpool for their global supplies. For Vizi coolers and freezers, the products are firmly established with Bluestar, Voltas, Frigoglass and Western Refrigeration.

In the Automotive segment, your Company has achieved growth of 8% inspite of de-growth in this segment in the western markets. Your Company has not only been able to retain its market share but also increase the same in the two, three and four wheeler segments. Your Company's products are firmly established in western India and continue to cater to the requirements of Bajaj Auto, Mahindra

& Mahindra, Force Motors, Eicher and also vendors of TATA Motors, Bajaj Auto, General Motors, Piaggio, and others. Your Company is also a major supplier to reputed coach manufacturers like Tata Marcopolo, ACGL and Volvo.

In the building and construction segment your Company's products are well established with major Pre-Engineered Building (PEB) manufacturers like Tata Bluescope, Pennar, Everest, Interarch and Zamil and also major component manufacturers like Shakti Hormann and NCL Seccolor.

In the General Engineering segment the Company continues to be an established supplier to Godrej & Boyce, Karad Projects, Otis Elevators, Sudhir Gensets, Nucleus Satellite and vendors to Siemens.

Continuous effort has been made in establishing the "Uttam Suraksha" GC (Galvanised Corrugated Roofing Sheets) brand firmly in the Construction segment and increasing its penetration in rural and urban areas. It is recognised as one of the major Brands in its segment in Domestic Markets like Maharashtra, Madhya Pradesh, Gujarat, Andhra Pradesh, Karnataka, Chattisgarh etc.

In line with surge in demand for Color Coated Roofing products your Company has launched an exclusive range of products under the brand name "UTTAM TARANG", which will provide greater value and benefits to the rural consumer. However, sales have been lower than expected due to cheap imports from China.

5. CORPORATE GOVERNANCE:

Your Company is committed to principles of good corporate governance. The Board of Directors ensures that the Company is in compliance with all the applicable provisions of the Clause 49 (as amended) of the Listing Agreement pertaining to Corporate Governance. A detailed report on Corporate Governance along with a certificate from the Auditors confirming compliance is annexed hereto and forms part of the Directors' Report as 'Annexure V'.

6. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company has constituted the Corporate Social Responsibility (CSR) Committee as per the requirement of the Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended time to time, under the Chairmanship of Shri G S Sawhney and two other members namely Shri Anuj R Miglani and Shri O P Gahrotra. The Committee has framed the Corporate Social Responsibility Policy of the Company which is placed on the Company's website. A detailed report on the CSR activities as required under section 135 of the Companies Act, 2013, is annexed hereto as 'Annexure I' and forms part of the Directors' Report as CSR Report.

Your Company has retained collective focus on the various areas of rural infrastructure development that impact people, environment and the society at large. Founded on the philosophy that society is not just another stakeholder in its business, but the prime purpose of it, the Company, across its various operations is committed to making a positive contribution.

7. RISK MANAGEMENT POLICY:

As required by Clause 49 of the Listing Agreement, the Company has framed the Risk Management Policy. The Main objective of this policy is to ensure sustainable business growth with stability and to promote proactive approach and to identifying, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes structured and disciplined approach to risk management in order to guide decisions on risk related issues.

Under the current challenging and competitive environment the strategy for mitigating inherent risk in accomplishing the growth plan of the Company is imperative. The Common risk interalia are regulatory risk, competition, financial risk, technology obsolescence, human resources risk, political risks, investments, retention of talents, expansion of facilities and product price risk.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

Shri Ankit Miglani (DIN 00444956) - Dy. Managing Director of the Company has conveyed his desire to devote most of his time and efforts to develop International Operations of the Company. Since he will be required to travel extensively out of India, he has requested the Company to relieve him from the responsibility of Dy. Managing Director effective from 1st April, 2015. However, he will continue to be Non-Executive Director on the Board of the Company.

Shri S G Tudekar (DIN 00138678) has resigned from the Board with effect from 27th October, 2014 due to expiry of his term as Whole Time Director. Shri P G Kakodkar (DIN 00027669) has resigned from the Board with effect from 30th May, 2014 due to his ill health. Your Directors wish to take this opportunity to express their gratitude and sincere appreciation for their immense and invaluable contribution to the Company during their tenures as Director on the Board.

Smt. Swarna Prabha Sukumar (DIN 01327918) has vacated the office of Nominee Director representing Life Insurance Corporation of India (LIC) on 3rd November, 2014 as LIC has withdrawn her nomination since all the outstanding dues together with the interest have been re-paid by the Company. The Board placed on record their sincere appreciation for her invaluable contribution to the Company during her tenure as Nominee Director on the Board.

The Board recommends appointment of Smt. Swarna Prabha Sukumar (DIN 01327918) as an Independent Director on the Board of the Company not liable to retire by rotation for 5 (five) consecutive years for a term upto 3rd November, 2019. Her appointment on the Board shall also fulfill the requirement of a Woman Director on the Board of the Company as required under the Companies Act, 2013 and clause 49 of the Listing Agreement.

The Independent directors have submitted the declaration of Independence, as required under sub-section (7) of Section 149 of the Companies Act, 2013 and clause 19 of the Listing Agreement with the Stock Exchanges stating that they meet the criteria of independence as provided therein. Pursuant to the provisions of the Section 152 of the Companies Act, 2013 and as per the Articles of Association of the Company, Shri Rajinder Miglani retires by rotation and being eligible has offered himself for reappointment. The Board of Directors recommend his reappointment.

None of the Directors of your Company is disqualified under Section 162 (2) of the Companies Act, 2013. As required by law, this position is also reflected in the Auditors' Report.

The following persons are Key Managerial Personnel of the Company:

Shri Anuj R Miglani : Managing Director

Shri G S Sawhney : Director (Finance) & Group CFO

Shri R Agrawal : President & Company Secretary

During the year there is no change in the role of the aforesaid KMP.

9. PERFORMANCE EVALUATION OF BOARD:

In Compliance with the Companies Act, 2013 and amended clause 49 of the Listing Agreement, a structured questionnaire was prepared after considering the various aspects of the Board functioning, composition of the Board/committees, culture, execution and performance of specific duties, obligation and governance.

10. REMUNERATION OF THE DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES: Your Company has framed a Remuneration Policy which lays down a framework in relation to the Directors, Key Managerial Personnel and Senior Management of the Company. The Policy also lays down the criteria for selection and appointment of Independent Directors. The details of the policy are explained in the Corporate Governance Report.

The information required pursuant to Section 197 (12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect to remuneration to the Whole time directors and Key Managerial Personnel, is prepared separately forming part of

this report. No Employee of the Company has drawn remuneration of Rs. Five lacs per month or more in the year under review.

Having regard to the provisions of the first proviso of Section 136(1) of the Companies Act, 2013, the Annual Report is being sent to the Members of the Company excluding the aforesaid information. However, the said information is available for inspection at the Registered office of the Company before 21 days of the ensuing Annual General Meeting during business hours on working days.

11. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (5) of the Companies Act, 2013, the Directors confirm that:

i) In the preparation of the annual accounts, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures.

ii) Appropriate Accounting Policies have been selected and applied consistently. 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 and of the Profit and Loss Account for the Financial Year 2014-2015 have been made.

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 preventing & detecting fraud and other irregularities.

iv) The Annual Accounts have been prepared on a going concern basis.

v) The policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, prevention & detection of frauds/ errors, accuracy and completeness of the accounting records, and the timely preparation of reliable financial information (Internal Financial Controls), are adequate and were operating effectively.

vi) Proper systems are in place to ensure compliance of all laws applicable to the Company and that such systems are adequate and operating effectively.

12. STATUTORY AUDITORS AND THEIR REPORT:

M/s. Todarwal & Todarwal, Chartered Accountants (Registration No. 111009W) is proposed to be appointed, subject to approval of the Members, as Statutory Auditor of Company to hold office upto the conclusion of 31st Annual General Meeting in place of M/s. Prakkash Muni & Associates (Registration No. 111792W) who do not seek their reappointment at the ensuing Annual General Meeting.

M/s. Todarwal & Todarwal has furnished written consent and a certificate of their eligibility obtained as required under second proviso of Section 139(1) of the Companies Act, 2013 read with the rules made thereunder. In terms of the Listing Agreement, they have confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI.

Your Directors take this opportunity to express their deep sense of gratitude and sincere appreciation to Shri Prakkash Muni & his team for their valuable services rendered to the Company during their association as Statutory Auditor of the Company. Notes to the accounts as referred in the Auditor's Report are self-explanatory and does not contain any qualification and therefore, do not call for any further comments or explanations.

13. COST AUDITORS AND THEIR REPORT:

Your Board of Directors, on the recommendation of the Audit Committee has appointed M/s. Manisha & Associates, Cost Accountants as "Cost Auditors" to conduct Cost Audit for Steel and Power Bussiness of the Company for the Financial Year 2015-16 and has recommended their remuneration to the Shareholders for their ratification at the ensuing Annual General Meeting.

Pursuant to the provisions of Section 148 of the Companies Act, 2013, the Report on cost Audit for the Financial Year 2013-14 has been received and duly furnished to the Central Government within prescribed time.

14. SECRETARIAL AUDITORS AND THEIR REPORT:

Pursuant to the provisions of the Section 204 of the Companies, Act, 2013 read with the rules made thereunder, the Board has appointed M/s. JNG & Co., Practicing Company Secretaries, to carry out the Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report, is annexed hereto and part of the Director's Report as

an 'Annexure II'. The said report does not contain any adverse remark and hence does not call for any further comments.

15. DEPOSITS:

Your Company has not accepted Deposits from Public or Members under Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 for the year under review.

16. SUBSIDIARY & JOINT VENTURE COMPANIES: There are Seven wholly-owned Subsidiary Companies and one step down subsidiary of the Company namely (I) Uttam Galva Holdings Limited in Dubai, (II) Atlantis International Services Limited in British Virgin Islands, (III) Uttam Galva Steels Netherlands B.V. in Netherland, (IV) Neelraj International Trade Limited in British Virgin Islands, (V) Uttam Galva Steels BVI Limited in British Virgin Islands and (VI) Uttam Exports BVI Ltd. in British Virgin Islands (VII) Uttam Galva North America, Inc in USA and (VIII) Uttam Galva International, FZE (Step down Subsidiary) in Jebel Ali free zone in United Arab Emirates, the subsidiary of Uttam Galva Holdings Limited, Dubai.

During the year, the Company has incorporated two new foreign subsidiaries namely Uttam Exports BVI Ltd. in British Virgin Island & Uttam Galva North America, Inc in USA. One Step down subsidiary namely Uttam Galva International, FZE in Jebel Ali free zone in United Arab Emirates has become subsidiary of Uttam Galva Holdings Limited, i.e. wholly owned subsidiary of the Company. Uttam Galva Steels FZE which was incorporated in Ras Al Khaimah is no longer subsidiary of the Company. Apart from the aforesaid subsidiaries, your Company also has two Joint venture Companies namely, Texturing Technology Private Limited and Moira Madhujore Coal Limited. There is no change in status of the Joint venture Companies of the Company, during the year under review.

A separate statement containing the salient features of the Financial Statement for the financial year ended 31st March, 2015 of the aforesaid Subsidiaries Companies and Joint Venture Companies are included in the Annual Report as Form AOC-1 as an 'Annexure VI'. The Financial statements of the said Subsidiaries Companies and Joint Venture Companies are available for

inspection by the Shareholders at the Registered office of your Company. Your Company undertakes that the Financial statements of the Subsidiaries Companies and Joint Venture Companies shall be made available to the Shareholders of the Company on demand.

The consolidated financial statements of your Company for the financial year 2014-15, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and Listing Agreement as prescribed by the Securities and Exchange Board of India (SEBI). The consolidated financial statements have been prepared on the basis of audited financial statements of the Company, its subsidiaries and joint ventures.

17. ENVIRONMENT AND SOCIAL OBLIGATION:

The Company's plants comply with all norms set up for clean and better environment by the competent authorities. The Company undertakes regular checks / inspections including certification for the maintenance of the environment. The Company values environmental protection and safety as the major considerations in its functioning. The Company has adequate effluent Treatment Plants to prevent pollution. The Company is continuously endeavoring to improve the health and quality of life in the communities surrounding its industrial complexes.

18. DISCLOSURES UNDER THE COMPANIES ACT, 2013:

i. Extract of Annual Return :

The details containing the extract of the Annual return is enclosed in the Form MGT- 9 as an Annexure III' and forms part of this report.

ii) Particulars of Loans, Guarantee or Investment :

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. Kindly refer Note no. 13 of the stand-alone balance sheet.

iii) Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

Your Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum

possible savings of energy is achieved. No specific investment has been made for reduction in energy consumption by your Company as the impact of measures taken for conservation and optimum utilization of energy are not quantitative. Hence its impact on cost cannot be stated accurately.

The detailed information on Conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is annexed hereto as an 'Annexure IV' and forms part of this report.

iv) General Disclosures:

Your Directors state that no disclosures are required since as there were no transactions in respect of the following items during the year under review:

a. Significant and material orders passed by the Regulators or the Courts which would impact the going concern status of the Company and its future operations

b. Issue of Equity shares with differential rights as to dividend, voting or otherwise.

c. Issue of Shares (including sweat equity shares) to employees of the Company under any scheme.

d. Neither the Managing Director not the whole time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

19. ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation to the Central, State & Local Governments, Authorities, Regulatory Bodies, Financial Institutions, Banks, Customers and the Shareholders of the Company for their continued support and co-operation.

Your Directors also like to place on record their sincere appreciation for the total commitment, dedication and hard work put in by every member of the Uttam Galva Family. Your directors are deeply grateful to you Shareholders, for the confidence and trust reposed in us.

For and on behalf of the Board Place : Mumbai Rajinder Miglani Date: 22nd May, 2015 Chairman DIN:00286788


Mar 31, 2013

To, The Members

The Directors have pleasure in presenting the 28th Report on the business and operations of the Company, along with the Audited Statement of Accounts for the Financial Year ended 31st March, 2013.

1. FINANCIAL RESULTS (Stand-alone Basis):

(Rs. in Crores)

PARTICULARS Year ended Year ended 31st March, 31st March, 2013 2012

Gross Revenue from 6252.34 5475.38 Operations

Earning before Interest, 588.59 528.05 Tax, Depreciation and Amortization (EBIDTA)

Finance Cost 304.64 267.32

Depreciation 182.58 127.37

Profit Before Tax (PBT) 135.32 141.00

Provision for Tax 73.77 63.04

Profit After Tax (PAT) 61.55 77.96

2. OPERATIONS:

Your Company has achieved a turnover of Rs. 6252.34 Crores as against Rs. 5475.38 Crores in the previous year and at the same time your Company posted the Profit before Tax of Rs. 135.32 Crores as against Rs. 141.00 Crores in the previous year. The decline in the Profit before Tax was due to combined effect of higher Finance Cost and Depreciation cost incurred during the Year.

Your Company has envisaged the various projects and also looking for the expansion and the modernization of current projects. Consequently in view of the Capex requirement for proposed expansion projects of the Company, the Board of Directors are in opinion that Cash flow should be conserved and hence decided to plough back the entire profit earned by the Company and have not recommended any dividend.

3. EXPORTS:

Your Company has registered growth in exports volume by 18% and has added 3 more new countries -Martinique, Bahamas and Kyrgyzstan which makes now total list of countries serviced to 148. Your Company has maintained its presence in the International Market in spite of the Global slowdown and currency crises in some of the countries.

The Global Economic situation has shown signs of marginal growth in USA and Russia where your Company''s products are well established and recognized as quality supplier. The sales growth in these 2 countries are recorded as 28% and 16% respectively compared to last year. Growth in emerging market and developing economies is also showing double digit and positive trends in line with expectation. This is expected to provide wide base to our international business.

Your Company has been the recipient of 17 EEPC Awards from the Ministry of Commerce and Industry, Government of India for its outstanding exports performance.

4. DOMESTIC MARKET:

In the Original Equipment Manufacturer (OEM) market, the Company has been focusing on high growth, profitable and niche areas especially in the Home Appliances, Automotive, Construction and Electrical Equipment segments and has thus moved up the value chain in these markets.

Your Company has achieved a volume growth of 21% in the Appliance segment over the last fiscal and has made commendable gains in establishing the product for Refrigerators and Washing Machines components with majors like Whirlpool, Videocon Group, Samsung and Haier. For Vizi coolers and freezers the products are firmly established with Bluestar, Voltas, Frigoglass and Western Refrigeration.

In the Automotive segment, though volume growth has been marginal due to depressed markets in the west, your Company has achieved growth of 36% in value added products in this segment over the last fiscal. This has been achieved through an aggressive product development programme for special grades for automotive and electrical equipment industry.

Your Company has firmly established itself in the two and four wheeler (Passenger and Commercial) market in Western India and continues to cater to the requirements of Mahindra & Mahindra, Bajaj Auto, Force Motors, Eicher and also vendors of TATA Motors, Bajaj Auto, General Motors, Piaggio, and others.

In the General Engineering segment, the Company continues to be an established supplier to Godrej & Boyce, BHEL, Crompton Greaves and Hematic Motors.

Continuous effort has been made in establishing the ''Uttam Suraksha'' GC (Galvanised Corrugated Roofing Sheets) brand firmly in the Construction segment and increase its penetration in rural and urban areas. It is recognised as one of the major Brands in its segment in Domestic Markets like Maharashtra, Madhya Pradesh, Gujarat, Andhra Pradesh, Karnataka, Chattisgarh etc.

Your Company has launched the 5 Feet wide GC which is the Widest Width for Roofing and Cladding for the first time in India in December 2012. The profile provides more value and substantial savings to the consumer.

With high lending rates, slowdown in consumption, the industrial growth in the near future is expected to be sluggish. However, the Company''s special focus on niche areas and products will set the trend for high growth.

5. CORPORATE GOVERNANCE:

Your Company is committed to principles of good governance, and it firmly believes that good corporate governance is the adoption of best practices. The Board of Directors ensure that the Company is in compliances with all the applicable provisions of the Clause 49 (as amended) of the Listing Agreement pertaining to the Corporate Governance. A detailed report on Corporate Governance along with a certificate from the Auditors confirming the compliance is annexed hereto and forms part of the Directors'' Report as Annexure-III.

6. CORPORATE SOCIAL RESPONSIBILITY:

Your Company is socially committed not only in compliances of all the statutory laws and regulations but also actively participates in the improvement of quality of life of the people in the society. Your Company has a strong sense of community responsibility.

Your Company follows the policy which is more and more beneficial to the society at large by promoting and encouraging economic, social and educational development and also giving active support to local initiatives around it through upliftment in different areas.

Your Company has retained collective focus on the various areas of corporate sustainability that impact people, environment and the society at large. Founded on the philosophy that society is not just another stakeholder in its business, but the prime purpose of it, the Company, across its various operations is committed to making a positive contribution.

7. DIRECTORS:

Pursuant to the Companies Act, 1956 and as per the Articles of Association of the Company, Shri S P Talwar and Shri S T Parikh retire by rotation and being eligible have offered themselves for re-appointment. The Board of Directors recommends their re-appointment.

Shri A K Mahendru has resigned from the Board as a Whole time Director with effect from 24th May, 2013. The Board placed on record its sincere appreciation for his invaluable & immense contribution rendered during his tenure as Director on the Board of the Company.

Shri D L Rawal has joined the Board of your Company with effect from 24th May, 2013 as an Additional Director of the Company. In terms of Section 260 of the Companies Act, 1956, Shri D L Rawal would hold office only upto the forthcoming Annual General Meeting of the Company. The Company has received a notice under Section 257 of the Companies Act, 1956 along with the requisite fees proposing appointment of Shri D L Rawal as a Director of the Company at the said Annual General Meeting.

None of the Directors of your Company is disqualified under Section 274(l)(g) of the Companies Act, 1956. As required by law, this position is also reflected in the Auditors'' Report.

8. PARTICULARS OF EMPLOYEES U/S 217 (2A) OF THE COMPANIES ACT, 1956:

The Information required under Section 2l7(2A) of the Companies Act, l956 and the Rules there under, in respect of the employees of the Company, is provided in the Annexure - II.

9. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 2l 7(2AA) of the Companies (Amendment) Act, 2000, the Directors confirm that:

i) In the preparation of the annual accounts, the applicable Accounting Standards have been followed.

ii) Appropriate Accounting Policies have been selected and applied consistently. 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 Profit and Loss Account for the Financial Year 2012-2013 have been made.

iii) 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 preventing and detecting fraud and other irregularities.

iv) The Annual Accounts have been prepared on a going concern basis.

v) Proper systems are in place to ensure compliance of all laws applicable to the Company.

10. AUDITORS'' REPORT:

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

11. STATUTORY AUDITOR:

M/s. Prakkash Muni & Associates, Chartered Accountants, the retiring Auditor is eligible for re- appointment. The Company has received necessary certificates from the Auditor pursuant to Section 224(1 B) of the Companies Act, 1956, regarding their eligibility for re-appointment. Accordingly, the approval of the Shareholders for the re-appointment of M/s. Prakkash Muni & Associates, Chartered Accountants as Auditors of the Company is being sought at the ensuing Annual General Meeting. Your Board recommends the appointment of M/s. Prakkash Muni & Associates, Chartered Accountants as Auditors of the Company.

12. COST AUDITOR:

M/s. S. K. Agarwal & Associates, Cost Accountants (Membership No. 7880) has been re-appointed as Cost Auditors of the Company to audit the cost accounts for the year ended 31st March, 2013. Cost accounting records for the year ended 3lst March, 2013 were maintained as per the Companies (Cost Audit Report) Rules, 201 1. The Cost Auditor shall submit the report along with their observations and suggestions, and Annexure to the Central Government wihin stipulated time period.

13. FIXED DEPOSITS:

Your Company has not accepted deposits from Public under Section 58A of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975.

14. INSURANCE:

Your Company has taken adequate insurance cover for all its assets.

15. ISSUE OF SHARES TO QUALIFIED INSTITUTIONAL BUYERS:

During the year, your Company has issued and allotted 2,00,00,000 Equity Shares of Rs. 10/- each at Rs. 80/- each aggregating to Rs. 160 Crores to the Qualified Institutional Buyers through Qualified Institutional Placement after obtaining the requisite approvals from the Members, Reserve Bank of India, Stock Exchanges and Registrar of Companies, Maharashtra.

Your Company has complied with all the necessary compliances of Stock Exchanges, Reserve Bank of India and Registrar of Companies to give effect to the aforesaid issue of Shares and obtained all the necessary permissions.

16. LISTING OF SECURITIES:

The Company''s Equity Shares are listed on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). The Company''s Secured, Redeemable, Non-Convertible Debentures are listed on the Wholesale Debt Market (WDM) segment of the BSE.

The Company has paid the applicable listing fees for the Financial Year 2013-2014 to BSE and NSE.

17. DEMAT OF SECURITIES:

Nearly 84.81% of total Equity Share Capital is held in dematerialized form with NSDL/CDSL. While the Secured, Redeemable, Non-Convertible Debentures are entirely held in dematerialized form.

18. SUBSIDIARY & JOINT VENTURE COMPANY:

There are six wholly-owned subsidiary companies of the Company namely (I) Uttam Galva Holdings Limited in Dubai, (II) Atlantis International Services Limited in British Virgin Islands, (III) Uttam Galva Steels Netherlands B.V in Netherland, (IV) Neelraj International Trade Limited in British Virgin Islands and (V) Uttam Galva Steels BVI Limited in British Virgin Islands (VI) Uttam Galva Steels FZE in Ras Al Khaimah. Further, Uttam Galva Holdings Limited has incorporated a downstream wholly owned Subsidiary Company namely Ferro Zinc International FZE in Jebel Ali Free Zone in United Arab Emirates.

As per the terms of the General Circular no. 2/2011, a statement containing brief financials information for the financial year ended 31st March, 2013 of the aforesaid Subsidiaries are included in the Annual Report. Also the accounts of all the aforesaid companies are kept for inspection by any shareholders at the registered office of your Company. Your Company further undertakes that the Annual Accounts of the Subsidiary Companies and the related detailed information shall be made available to shareholders of the Company on demand.

Apart from the aforesaid subsidiaries, your Company also has two joint venture companies namely, Texturing Technology Private Limited and Moira Madhujore Coal Limited.

The Consolidated Audited Annual Accounts of your Company together with its subsidiaries and joint venture companies for the Financial Year 2012-2013 are being published pursuant to Clause 32 of the Listing Agreement.

19. DISCLOSURES:

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto (Annexure - I) and forms part of this report.

20. ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation to the Central, State & Local Governments, Authorities, Regulatory Bodies, Financial Institutions, Banks, Customers and the Shareholders of the Company for their continued support and co-operation.

Your Directors also place on record their sincere appreciation for the total commitment, dedication and hard work put in by every member of the Uttam Galva Family.

For and on behalf of the Board

Place : Mumbai Rajinder Miglani Date: 24th May, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting the Twenty Seventh Report on the business and operations of the Company, along with the Audited Statement of Accounts for the Financial Year ended 31st March, 2012.

1. FINANCIAL RESULTS (Stand-Alone Basis):

(Rs in Crores) Year Year PARTICULARS ended ended 31st March, 31st March,

2012 2011

Gross Revenue from Operations 5475.38 5329.84

Earning before Interest, Tax, 505.94 441.26 Depreciation andAmortisation ( EBITDA )

Finance Cost 245.21 212.24

Depreciation 127.37 119.41

Profit Before Tax ( PBT ) 141.00 113.54

Provision for Tax 63.04 36.77

Profit After Tax ( PAT ) 77.96 76.77

2. OPERATIONS:

Your Company has achieved a turnover of Rs 5475.38 Crores as against Rs 5329.84 Crores in the previous year and has recorded Profit before Tax of Rs 141.00 Crores as against Rs 113.54 Crores in the previous year.

Your Company has embarked on modernization and an expansion program of the existing facilities and it is also exploring various opportunities in the different business verticals in which it operates. In this endeavor, it is necessary to conserve the resources to meet investment opportunities, which your Board believes would enhance the shareholder's value in the long term. Accordingly, your Board has not recommended any dividend for the Financial Year 2011-2012.

3. CAPTIVE POWER PLANT:

During the year your Company has successfully commissioned its Captive Power Plant (CPP) having 2 x 30 MW capacity. The commercial production commenced w.e.f. 1st March, 2012. The CPP is running at full capacity and the steam and the power generated by CPP is consumed by Uttam Galva Steels Limited (UGSL) to the extent required while the balance power is sold.

4. EXPORTS:

Your Company now exports its products to 145 countries across the globe and continues to expand its reach. Your Company has maintained its presence in the International Market inspite of the Global slowdown. This year, your Company has serviced 240 export customers internationally in 62 countries.

The Global Economic situation has shown signs of revival in USA , Russia , and CIS countries. This has provided a marginal boost to international business. Your company has recorded a sales growth of 6% and has moved up the value chain with 28% growth in Construction and Engineering segments.

Your Company's exclusive marketing and sales arrangements with M/s. ArcelorMittal International for Africa, Middle East, Latin America, Russia and other CIS countries has yielded positive results and the benefits of the same will continue to accrue in the following years.

Your Company has been the recipient of 16 EEPC Awards (15th consecutive year) from the Ministry of Commerce and Industry, Government of India for its outstanding exports performance.

5. DOMESTIC MARKET:

The Company has focused on the Domestic Market for the last 4 years and has achieved leadership position. Domestic turnover has risen to 76% of the total sales volume in 2011-2012.

Continuous effort has been made in establishing the "Uttam Suraksha" GC (Galvanised Corrugated Roofing Sheets) brand firmly in the Construction segment and increase its penetration in rural and urban areas. It is recognised as one of the major Brands in its segment in Domestic Markets like Maharashtra, Madhya Pradesh, Gujarat, Andhra Pradesh, Karnataka, Chattisgarh etc. Your Company has achieved volume growth of 30% sales in this segment over last fiscal.

In the Original Equipment Manufacturer (OEM) market, the Company has been focusing on high growth and profitable segments such as Automotive and Appliances and has thus moved up the value chain in these markets.

Your Company has achieved volume growth of 9% in the Automotive segment over the last fiscal and firmly established itself in the two and four wheeler (Passenger and Commercial) market in western India. Your Company has been catering to the requirements of Mahindra & Mahindra, Force Motors, Eicher and vendors of TATA Motors, Bajaj Auto, General Motors, Piaggio, Volkswagen and others.

In the Appliance segment your Company has achieved volume growth of 60% over the last fiscal and has established itself as a supplier to BlueStar, Voltas, Samsung, Hitachi, Videocon group Companies, Whirlpool, Carrier and others.

In the General Engineering segment the Company has established itself as a major supplier to Otis, Godrej & Boyce, Crompton Greaves and Hematic Motors.

The demand drivers, which include rapid increase in urbanization, improved & growing per capita income level, increased availability of Bank Finances and need for improvement of public transport particularly in semi-urban & rural areas, are very encouraging for your Company.

6. MANAGEMENT DISCUSSION AND ANALYSIS:

Pursuant to Clause 49 (IV) (B) & (F) of the Listing Agreement your Directors wish to report as follows:

a) Industry Structure & Development

The demand for steel across the world is still lean but has picked up pace in the last quarter. In India demand is growing steadily in line with the economic growth. With increase in spend by the Government and Private Sector, on Infrastructure, Power, Capital Goods coupled with Positive Growth in demand from the consumer segments like Automotive and Appliances, the surge in demand for flat steel products in the domestic markets is expected to continue.

b) Opportunities & Threats

Your Company will continue to maintain & grow its presence in the Export Markets while retaining its focus on value added products in Domestic Market. Your Company is ready to cater to customers' stringent specifications and demands which will ultimately improve the Bottom-line. The overall presence in the Conventional, Construction & Infrastructure Segments will continue.

c) Segment - wise Performance

Since your Company operates only in one Segment, segment-wise or product-wise analysis of performance is not applicable.

d) Outlook

The domestic flat steel consumption in the relevant business segments is estimated to grow at 10-12%. The need, however, for value added and niche products is likely to surge and has been identified as major focus area for the Company.

The international market has also demonstrated positive trends. Though the growth in the Euro Area and US has been marginal, the same, however, in Latin American Countries, Middle East & Africa has been positive and encouraging and has been identified as a major opportunity area for the Company.

e) Risks and Concerns

Your Directors have put in place critical risk management framework across the Company. Your Company is continuously evolving and improving systems and measures to take care of all the risk exigencies involved in the business.

f) Internal Control Systems and their adequacy

Effective internal operational control systems and regular internal audit mechanisms to monitor and review the same under the overall control and supervision of the Audit Committee of Directors are in place and functioning well. Efforts for continued improvements are being consistently made in this regard.

All the certifications under ISO: 9001-2008, ISO: 14001-2004, ISO/TS 16949:2009 and OHSAS 18001-2007 for Quality Management, Environ- ment Management, Technical Specifications and Occupational Health & Safety Management respectively, are being maintained by the Company after periodical surveillance audits.

g) Discussion on Financial Performance with respect to Operational Performance

Your Company has achieved the highest ever Earning before Interest, Tax, Depreciation and Amortisation ( EBITDA ) Rs 505.94 Crores, which is an improvement of 11.1% over the Previous Year. Cost of Funds has gone up due to increase in Interest rates and therefore eroded the Operational Gains.

Though the Company is covered under Minimum Alternate Tax (MAT), yet the total Income Tax Provision is 45% as against the normal Income Tax rate of 33% due to Provision for higher Deferred Tax.

h) Material Development in Human Resources / Industrial Relations Front, including Number of People Employed

Implementation of healthy HRD practices for overall development of human resources, induction of professionally qualified & skilled manpower, conduct of regular internal & external training programmes are consistent & continuous processes followed by your Company. Presently, your Company employs more than 1500 employees. Your Company is proud of its healthy Industrial Relations record.

i) Material Financial and Commercial Transactions with related parties

There are no materially significant financial and commercial transactions with the related parties conflicting with the interest of the Company during the financial year under review. The Promoters and the Directors are not dealing in the Equity Shares of the Company.

7. CORPORATE GOVERNANCE:

Your Company has implemented all the mandatory requirements pursuant to Clause 49 (as amended) of the Listing Agreement. A detailed report on Corporate Governance along with a certificate from the Auditors confirming the compliance is annexed hereto and forms part of the Directors' Report as Annexure-III.

8. CORPORATE SOCIAL RESPONSIBILITY:

As a socially responsible Company, your Company has a strong sense of community responsibility.

As its operations have expanded, your Company has retained a collective focus on the various areas of corporate sustainability that impact people, environment and the society at large. Founded on the philosophy that society is not just another stakeholder in its business, but the prime purpose of it, the Company, across its various operations is committed to making a positive contribution.

As a policy, your Company promotes and encourages economic, social and educational development within its communities while providing active support to local initiatives for upliftment of society in general.

9. DIRECTORS:

Your Directors regret to inform about the sad and sudden demise of Dr. N. S Datar on 21st December, 2011. Your Directors wish to take this opportunity to express their gratitude and sincere appreciation to Dr. N. S. Datar for his immense & invaluable contribution to the Company during his tenure of 25 years as Director on the Board since inception of the Company.

IDBI Bank has withdrawn the nomination of Smt. Lalita Sharma as their Nominee Director from the Board with effect from 13th August, 2011 as all the outstanding dues together with the interest have been re-paid by the Company. Your Directors wish to take this opportunity to place on record their sincere appreciation and thanks to Smt. Lalita Sharma for her valuable guidance and support to the Company during her tenure as Director on the Board.

Shri O. P. Gahrotra has joined the Board of your Company with effect from 21st January, 2012 as an Additional Director of the Company. With his induction on the Board of Directors, your Company will be immensely benefited by his vast and diverse experience of more than 40 years. His brief profile is given in Report of Corporate Governance attached hereto.

Shri Rajinder Miglani and Shri P. G. Kakodkar retire by rotation and being eligible have offered themselves for re-appointment. The Board of Directors recommends their re-appointment.

10. PARTICULARS OF EMPLOYEES U/S 217 (2A) OF THE COMPANIES ACT, 1956:

The Information required under Section 217(2A) of the Companies Act, 1956 and the Rules there under, in respect of the employees of the Company, is provided in the Annexure - II.

11. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies (Amendment) Act, 2000, the Directors confirm that:

i) In the preparation of the annual accounts, the applicable Accounting Standards have been followed.

ii) Appropriate Accounting Policies have been selected and applied consistently. 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 Profit and Loss Account for the Financial Year 2011-2012 have been made.

iii) 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 preventing and detecting fraud and other irregularities.

iv) The Annual Accounts have been prepared on a going concern basis.

v) Proper systems are in place to ensure compliance of all laws applicable to the Company.

12. AUDITORS' REPORT:

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

13. STATUTORY AUDITOR:

M/s. Prakkash Muni & Associates, Chartered Accountants, the retiring Auditor is eligible for re-appointment. The Company has received necessary Certificates from the Auditor pursuant to Section 224(1 B) of the Companies Act, 1956, regarding their eligibility for re-appointment. Accordingly, the approval of the Shareholders for the re-appointment of

M/s. Prakkash Muni & Associates, Chartered Accountants as Auditor of the Company is being sought at the ensuing Annual General Meeting. Your Board recommends the appointment of M/s. Prakkash Muni & Associates, Chartered Accountant as Auditor of the Company.

14. COST AUDITOR:

As per the General Circular No. 15/2011 dated 11th April, 2011 and Order no. 52/26/CAB-2010 dated 3rd May, 2011 and modified Order dated 30th June,

2011 issued by Ministry of the Corporate Affairs, it has become mandatory to appoint Cost Auditor for conducting the cost audit of the Company.

M/s. S. K. Agrawal & Associates, Cost Accountant (Membership No. 7880) has been appointed as Cost Auditor of the Company to audit the cost accounts for the year ended 31st March, 2012. Cost accounting records for the year ended 31st March, 2012 were maintained as per the Companies (Cost Audit Report) Rules, 2011. The Cost Auditor shall submit the report along with their observations and suggestions, and Annexure to the Central Government within stipulated time period.

15. FIXED DEPOSITS:

Your Company has not accepted Deposits from Public under Section 58A of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975.

16. INSURANCE:

Your Company has taken adequate insurance cover for all its assets.

17. LISTING OF SECURITIES:

The Company's Equity Shares are Listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Company's Secured, Redeemable, Non-Convertible Debentures are listed on the Wholesale Debt Market (WDM) segment of the BSE.

The Company has paid the applicable listing fees for the Financial Year 2012-2013 to BSE and NSE.

18. DEMAT OF SECURITIES:

Nearly 95.68% of total Equity Share Capital is held in dematerialized form with NSDL/CDSL. The Secured, Redeemable, Non-Convertible Debentures are entirely held in Dematerialized Form.

19. SUBSIDIARY & JOINT VENTURE COMPANIES:

There are four wholly-owned Subsidiary Companies of the Company namely (I) Uttam Galva Holdings Limited in Dubai, (II) Atlantis International Services Limited in British Virgin Islands, (III) Uttam Galva

Steels Netherlands BV in Netherland and (IV) Neelraj International Trade Limited in British Virgin Island. Further, Uttam Galva Holdings Limited has incorporated a downstream wholly owned Subsidiary Company namely Ferro Zinc International FZE in Jebel Ali Free Zone in United Arab Emirates.

As per the terms of the General Circular no. 2/2011 of Ministry of Corporate Affairs, a statement containing brief financial information for the Financial Year ended 31st March, 2012 of the aforesaid Subsidiaries are included in the Annual Report. Also the accounts of all the aforesaid Companies are kept for inspection by any shareholders at the head office of your Company. Your Company further undertakes that the Annual Accounts of the Subsidiary Companies and the related detailed information shall be made available to shareholders of the Company on demand.

Apart from the aforesaid subsidiaries, your Company also has two joint venture Companies namely, Texturing Technology Private Limited and Moira Madhujore Coal Limited.

The Consolidated Audited Annual Accounts of your Company together with its subsidiaries and joint venture companies for the Financial Year 2011-2012 are being published pursuant to Clause 32 of the Listing Agreement.

20. DISCLOSURES:

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is annexed hereto (Annexure - I) and forms part of this report.

21. ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation to the Central, State & Local Governments, Authorities, Regulatory Bodies, Financial Institutions, Banks, Customers and the Shareholders of the Company for their continued support and co-operation.

Your Directors also place on record their sincere appreciation for the total commitment, dedication and hard work put in by every member of the Uttam Family.

For and on behalf of the Board

Rajinder Miglani

Chairman

Place : Mumbai

Date : 9th May, 2012

 
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