Mar 31, 2023
The Board of Directors take pleasure in presenting the 50th Annual Report on business and operations of the Company for the financial year ended 31st March 2023. Your Company has completed 50 years of its successful journey this year.
Results of Operations |
(Rs. in crore) |
|||
Standalone |
Consolidated |
|||
2022-23 |
2021-22 |
2022-23 |
2021-22 |
|
Revenue from operations |
3,020 |
2,642 |
4,212 |
3,914 |
Exports |
214 |
122 |
987 |
1,002 |
Other Income |
87 |
75 |
49 |
50 |
EBIDTA |
929 |
953 |
1,109 |
1,406 |
Depreciation |
66 |
54 |
178 |
143 |
Finance cost |
16 |
22 |
124 |
147 |
Profit before tax |
847 |
877 |
807 |
1,116 |
Exceptional Item |
- |
- |
- |
8 |
Provision for tax |
209 |
217 |
202 |
300 |
Net Profit |
638 |
660 |
605 |
808 |
During the year, all the plants of the Company except sponge iron plant namely - pellet, Steel Billet, wire rod, HB wire, power and ferro alloys plant - achieved record production. Continuous modernization of plants and team spirit helped in achieving record operational performance. Sponge iron production was lower than previous year because of use of captive coal on commercial consideration.
During the year, major improvements in the plants included commissioning of 4 producer gas plant in pellet plant which helped in increasing the average daily production and campaign life. The Company also caried our modification in sponge iron plant as a result of which WHRB steam generation has increased from 88 TPH to 103 TPH resulting in availability of additional power. Better production/maintenance plan, focus on cost reduction and value-added product also contributed to improved performance. The performance includes effect of the 1st full year operations of the coal mine of the Company at Raigarh and 113 MW Hydropower Project in Sikkim.
Improved performance, full year operation of coal mine and better market conditions for coal helped in achieving record turnover and better profitability.
Successful bid for acquisition of SKS Power Generation (Chhattisgarh) Limited
Your Company has been declared as successful Resolution Applicant for acquisition of SKS Power Generation (Chhattisgarh) Limited which is having 600 MW Thermal power plant near to our coal mine. National Company Law Tribunal has heard the petition for approval of the Resolution plan and has reserved for order. Your directors believe that this acquisition will help the Company in achieving newer heights in the years to come.
There are no material changes and commitments affecting the financial position of the Company since close of the financial year. Further details on the performance of the Company and on the Company''s operations and financials are provided in the Management Discussion and Analysis and other sections, as annexed to this report. There was no change in the nature of the business of the Company during the year.
Change in Capital Structure / Buyback of shares
During 2022-23, the Company has bought back 811108 equity shares @ ?1,500/- per share resulting in an outflow of ? 121.67 crore in addition to expenses related to buyback and tax of ?28.20 crore thereon. Post buy- back, the paid-up capital of the Company is reduced to ?35.24 crore divided into 3,52,38,127 equity shares of ?10/- each. Post buyback, the holding of promoter/promoters group has increased from 72.50% to 72.64%.
The members have also approved split of equity shares of face value of ?10 (Ten) each to face value of ?1 (one) for which record date of 4th August 2023 is fixed.
To commemorate the 50th anniversary of the Company, the Board in its meeting held on 27th May 2023, has recommended a highest ever dividend of 150% (75% normal dividend and 75% Special dividend). The said dividend has been proposed to be paid post split of shares. The dividend recommended is subject to deduction of tax at applicable rate in applicable cases. The dividend payout shall result in cash outflow of ? 52.86 crore. Last year the Company had paid dividend @ 75%.
Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''SEBI Listing Regulations''), the Board of Directors of the Company has adopted a Dividend Distribution Policy (''Policy'') which aims to maintain a balance between profit retention and a fair, sustainable and consistent distribution of profit among its Members. The Dividend Distribution Policy is available at https://seml.co.in/Corporate%20Governance/SEML%20-%20Dividend%20Distribution%20Policy.pdf
Further, during the year, the Company has transferred the unpaid dividend amount of ?9.01 lakh in respect of the F.Y. 2014-15 to the Investor Education and Protection Fund. During the current year 2023-24, the Company has further transferred unpaid dividend of ?7.52 lakh in respect of F.Y. 2015-16 to the Investor Education and Protection Fund. During the year 2022-23, the interim dividend for F.Y. 2021-22 on equity shares which have been transferred to IEPF has also been remitted to IEPF.
Transfer to Reserves
The Board of Directors has decided to retain the entire amount of profit for Financial Year 2022-23 in the statement of profit and loss. Accordingly, no amount has been transferred to reserves.
Subsidiaries / Controlled Entities / Joint Ventures
During the year under review the Company has diluted its holding in Natural Resources Energy Private Limited and has converted it into a Subsidiary Joint Venture with 51% holding to jointly bid for iron ore and other mines. During the year, there was slight increase in investments in Chhattisgarh Hydro Power LLP and Shriram Electricity LLP.
A brief on the performance/business operations of subsidiaries/controlled entities/joint ventures consolidated with the Company is given hereunder.
> Sarda Energy & Minerals Hongkong Limited, Hongkong (SEMHKL), is a wholly owned subsidiary, functioning as global investment and trading arm of the Company. During the year under review, the subsidiary reported a net profit of ?1.10 crore as against profit of ? 4.87 crore in the previous year.
> Sarda Global Venture Pte. Limited, Singapore (SGV), a wholly owned subsidiary, is having JV with PT Unggul Jaya Indonesia, an Indorama group company, for coal mining in Indonesia under the name P.T. Tigadaya Minergy (PT TDM). During the year under review, the mining company in Indonesia has acquired 165 hectare land and is in the process of transferring land in the name of PT TDM. The coal extraction is expected from July-2023.
The subsidiary reported a net loss of ? 10.56 crore as against net loss of ?11.87 crore in the previous year. The loss consists mainly of impairment loss of investment in coal Mines ?5.35 crore and share of loss in associates ?5.13 crore.
> Sarda Global Trading DMCC, Dubai (SGT), a wholly owned subsidiary, has been incorporated in 2018 with the object of trading in metal ores, scrap and coal. During the year the subsidiary reported a net loss of ?1.43 crore as against net loss of ?8.75 crore in the previous year. The loss consists of mainly Mark to Market losses on investments.
> Sarda Metals & Alloys Limited (SMAL), a wholly owned subsidiary is operating 2 x 33 MVA and 1 x 36 MVA Ferro Alloys Furnaces backed by 80 MW captive thermal power plant. The Company is a leading manufacturer and exporter of Ferro Alloys enjoying Three Star Export House Status.
During the year, the company had successfully completed the installation of 3rd Furnace of 36 MVA under the expansion project at its existing facility at Vizianagaram. The plant has started production w.e.f. 22nd December, 2022. During the year, power generation was 452.71 MUs as compared to 462.50 MUs in the previous year. The ferro alloys production stood at 79,185 MTs as against 85,705 MTs in the previous year. Power generation and ferro alloys production both were down due to shutdown of power plant for major overhauling of power plant after 9 years of its commissioning. Shutdown, falling prices of ferro alloys, high coal prices and inventory losses affected financial performance badly. As a fallout of above the company reported a net loss of ?19.13 crore as against Net Profit of ?146.97 crore in previous year.
During the FY 2022-23, the company exported 76,242 MTs (including trading export of 3,476 MTs) ferro alloys valued ?772.19 crore (including trading export of ?51.16 Crore) against 80,896 MTs (including trading export of 3,118 MTs) in the previous year valued ?880.59 crore (including trading export of ?43.95 Crore).
With the operationalization of Furnace 3, the power plant is being run at near full capacity which has enabled the company to utilize its idle power capacity and optimize the overall cost.
> Sarda Energy Limited (SEL), a wholly owned subsidiary earned a net profit of ?5.43 crore as against net profit of ?7.69 crore in the previous year. The profit was mainly from share of profit from investment in Chhattisgarh Hydro Power LLP (Wholly owned subsidiary).
> Kalyani Coal Mining Private Limited (KCMPL), a wholly owned subsidiary has been incorporated in current year 2023-24 as a Special Purpose Vehicle for carrying out the Re-opening, Salvaging, Rehabilitation, Development and Operation of Kalyani Underground Mines, in the state of Chhattisgarh. Your Company was declared successful bidder for operation of the coal mine on revenue sharing basis. 4.5% of the revenue net of taxes shall be retained by South Eastern Coal Fields Limited. The company is yet to start its activities.
> Natural Resources Energy Private Limited (NREPL) has been converted into Subsidiary Joint Venture during the year with company holding 51% stake. The company has not carried out any business during the year under review. In the current year 2023-24, the company has been declared as the preferred bidder by Directorate of Geology and Mining, Government of Maharashtra for Surjagad 1 Iron Ore Block in the state of Maharashtra in the recent auction held for commercial iron ore blocks with 126.35% revenue share. The company is taking / shall take steps as per the instructions received / to be received from the Directorate of Geology and Mining, Government of Maharashtra.
> Chhattisgarh Hydro Power LLP (CHPLLP) is operating 24 MW Gullu Small Hydro Electric Project (SHP) and 24.9 MW Rehar SHP is under construction which is expected to be completed before end of next financial year. CHPLLP is committed to utilize the natural flow of rivers in the north eastern part of Chhattisgarh to develop eco-friendly- hydro power projects which will supply renewable energy to the grid and significantly contribute to the socio-economic development of this remote region. Other two projects are under different stage of clearances.
During the FY 2022-23, due to poor rainfall in the catchment area the Gullu SHP has generated and supplied 79 MU units (PY 105 MU units) and has earned post tax profit of ?24.74 crore (PY ?33.43 crore).
Your Company has 100% stake in the LLP (72% directly and 28% through its wholly owned subsidiary Sarda Energy Limited).
> Parvatiya Power Limited (PPL) is operating 4.8 MW Loharkhet Hydro Power project in Bageshwar district of Uttarakhand. It is planned to increase the capacity of the plant from 4.8 MW to 7.00 MW. The Government
of Uttarakhand has granted permission for capacity enhancement of the Plant during the year under review. Process of other approvals is going on.
The Company has supplied 22.12 MU power in the FY 2022-23 (Previous Year 25.66 MU) to the state grid. During the year 2022-23, the Company has earned post tax profit of ?2.92 crore (Previous Year ?3.89 crore). The plant has generated employment opportunities and promoted tourism in the remote area.
Your Company continues to hold 51% stake in PPL.
> Madhya Bharat Power Corporation Limited (MBPCL) is successfully operating 113 MW Rongnichu HEP in Sikkim since last two years. The company has firm selling arrangement for sale of power under 35 years long term PPA with the Chhattisgarh DISCOM. The company enjoys A /Stable rating from India Ratings & Research and A-/Stable from CARE Ratings.
The company has billed 393.22 MU (PY 286.04 MU) of power in the F.Y 2022-23 and reported ?251.76 crore (PY ? 194.18 crore) as revenue from operations. Based on provisional tariff, it has earned post tax profit of ? 4.49 crore. The determination of final tariff is in process.
The Company holds 84.65% stake in the company (76.43% directly and 8.22% through its wholly owned subsidiary Sarda Energy Limited).
> Sarda Hydro Power LLP (SHP LLP) has licenses for implementation of two small hydro projects. Survey works for 24.90 MW Kotaiveera SHP is under progress. The project is likely to enter construction phase in the next financial year.
The Company holds 60% stake in the LLP.
Hydro power and other renewable power will remain one of the focus areas of your company and we will continue to explore opportunities in the field of renewable energy.
> Shri Ram Electricity LLP (SRE LLP) was incorporated as a special purpose vehicle (SPV) for setting up a captive thermal power plant. In view of the changed power scenario and cancellation of coal linkage for the power project, the LLP has dropped the project. The Company continues to hold 51% stake in SRE LLP. The firm will be dissolved once coal allocation related matters are closed.
> Raipur Infrastructure Company Limited (RICL) was operating a leased Railway Siding in Mandhar, Raipur. The lease has expired. The company will be wound-up after closure of pending proceedings and getting refunds from Railways and the tax authorities. The Company holds one third share in the Joint Venture. During the year 2022-23 the company had achieved total comprehensive income of ?0.53 crore as against income of ?3.68 crore in the previous year. The comprehensive income was mainly on account of change in fair value of investments.
> Madanpur South Coal Company Limited (MSCCL), an SPV, was allotted Madanpur South Coal Block in consortium. The Supreme Court had cancelled all coal block allotments. Consequent to cancellation of coal block, there is no business left out in the company and no other activity has been planned in the Company.
During the year 2022-23, MSCCL reported comprehensive income of ?20.96 crore as against ?0.16 crore in the previous year. The Income is mainly on account of Compensation received from WRD Department, Government of Chhattisgarh on acquisition of 126.417 Hectares of Land.
MSCCL was holding land at Village Jaspur, Distt. Raigarh comprising of area of about 196.923 Hectares, out of which most of the land fell under the catchment area of Mahanadi River. The Government, has acquired 126.417 Hectares of Land and for which the Compensation was received by the Company. At present the Company is having balance land of about 71.220 Hectares in village Jashpur and it is expected that, WRD Department, Government of Chhattisgarh, will acquire some more land.
MSCCL would be wound-up after disposal of these assets. The Company holds 20.13% in MSCCL.
A report on the performance and financial position of each of the subsidiaries, associates and joint ventures as per the Companies Act, 2013 and their contribution to the overall performance of the Company during the period under report is provided as part of the Consolidated Financial Statements and hence not repeated here for the sake of brevity. The Policy for determining material subsidiaries as approved by the Board may be accessed on the Company''s website www.seml.co.in under the head policies under the Investors'' section.
Consolidated financial statements
The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable Accounting Standards.
In accordance with Section 136 of the Companies Act, 2013, the Audited financial statements, including the consolidated financial statements and related information of the Company and audited financial statements of each of its subsidiaries, are available on our website www.seml.co.in. These documents are also available for inspection.
In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Padam Kumar Jain, Wholetime Director & Chief Financial Officer of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.
Further, on the recommendation of the Nomination & Remuneration Committee, the Board of Directors of the Company, in its meeting held on 29th July 2023 , subject to the approval of the members of the Company, have appointed Mr. Amal Kumar Debnath (DIN : 02467548) and Mr. Binoy Sandip Parikh (DIN: 10060552) as Independent Directors for first term of 5 years w.e.f. 1st August 2023.
Necessary resolutions for the above re-appointment/appointments are being made a part of the Notice convening the ensuing general meeting. Brief profile of Mr. Padam Kumar Jain, Mr. Amal Kumar Debnath and Mr. Binoy Sandip Parikh, who are proposed to be re-appointed/appointed, nature of expertise, names of the companies in which they hold directorships, their shareholding in the Company and other relevant details are provided in the Corporate Governance Report forming part of the Annual Report.
During the year under review, the members approved the re-appointment of Mr. Pankaj Sarda, as Director liable to retire by rotation. The members also approved his re-appointment as Wholetime Director (designated as Jt. Managing Director) for a period five years w.e.f. 1st November 2022.
The Company has received the necessary declaration from Independent Directors who are part of Board confirming that;
a) he/she meets the criteria of Independence as laid out in Section 149(6) of the Companies Act, 2013 read with the Schedules, rules made there under and Regulation 25 of SEBI Listing Regulations, 2015; and
b) registered themselves with the Independent Directors'' Databank as per the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019.
In the opinion of the Board, there has been no change in the circumstances which may affect the status of Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board.
The Board has carried out an annual evaluation of effectiveness of its functioning, that of its committees and individual Directors in the manner specified by the Nomination & Remuneration Committee. The Board reviewed the performance of the individual Directors, committees of the Board and the Board as a whole.
A separate meeting of Independent Directors was also held to review the performance of Non-Independent Directors; and performance of the Chairperson of the Company, considering the views of Executive Directors and Non-Executive Directors. -
This was followed by a Board meeting that discussed the performance of the Board, its committees and individual Directors including independent Directors. During evaluation of the individual director, the concerned director was not present in the meeting. The performance of the Board and individual Directors was evaluated by the Board seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board seeking inputs from the Committee Members. Key criteria for performance evaluation are given in Annexure A to directors'' report.
Remuneration Policy for the Board and Senior Management
The Company follows a policy on remuneration of Directors, Key Managerial Personnel (KMP), Senior Management Personnel (SMP) and other employees of the Company. The policy is approved by the Nomination & Remuneration Committee of the Company. Remuneration Policy for Directors, Key Managerial Personnel and other employees is marked as Annexure B to directors'' report.
The Company, with the approval of Nomination & Remuneration Committee has adopted a policy on Board diversity and the recommendation of candidature for Board appointment will be based on merit that complements and expands the skills, experience and expertise of the Board as a whole, taking into account gender, age, professional experience and qualifications, cultural and educational background, and any other factors that the Board might consider relevant and applicable from time to time towards achieving a diverse Board. The criteria for determining Qualification, positive attributes and Independence of director is annexed as Annexure C to directors'' report.
Familiarization programmes for Board Members
The Familiarization program aims to provide insight to the Independent Directors to understand the business of the Company. Upon induction, the Independent Directors are familiarized with their roles, rights and responsibilities. The Company provides information to familiarize the Independent Directors with the strategy, operations and functions of the Company. The Board members are also taken to the sites of subsidiaries to understand and review their functions.
At various Board meetings, the Board members are provided with information/ presentations and are given the opportunity to interact with the Senior Management of the Company to help them to understand the Company''s strategy/policies, business model, operations, products, markets, organization structure, finance, human resources, technology, quality, facilities and risk management, changes in the regulatory environment applicable to the corporate sector and to the industry in which it operates and such other matters as may arise from time to time.
Quarterly presentations on operations made to the Board include information on business performance, operations, safety, market scenario, financial parameters, working capital management, fund flows, senior management change, major litigation, compliances, subsidiary information, donations, regulatory scenario, etc.
The policy on familiarization programmes for Independent Directors is posted on the website of the Company www.seml.co.in and can be accessed under the head corporate governance/ policies under the Investors'' section. The details of the familiarization program can be accessed on the Company''s website at https://seml.co.in/Corporate%20Governance/Familiarisation%20Programmes.pdf.
Directors'' Responsibility Statement
The directors state that:
a) in the preparation of the annual accounts for the year ended 31st March 2023, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2023 and of the profit of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a ''going concern'' basis;
e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Key Managerial Personnel
During the year, there was no change in the Key Managerial Personnel.
Auditors and Auditors'' Report
Statutory Auditors
At the Annual General Meeting for the financial year 2018-19 held on 21st September 2019, M/s. O.P. Singhania & Co., Chartered Accountants, Raipur were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting (AGM) to be held in the calendar year 2024.
The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any
further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark. During the year under review, the Auditors did not report any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules, 2014, the cost audit records maintained by the Company, in respect of various manufacturing activities are required to be audited.
The cost audit report for the financial year 2021-22 was filed with the Ministry of Corporate Affairs. M/s. S.N. & Co., Cost and Management Accountants, were appointed as the Company''s Cost Auditor.
The Board of Directors has, on the recommendation of the Audit Committee, appointed M/s. S.N. & Co., Cost and Management Accountants, to audit the cost accounts of the Company on a remuneration not exceeding ? 2.00 lakh plus applicable taxes and out of pocket expenses for the year 2023-24.
As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors for 2023-24 is being placed before the members in the ensuing annual general meeting for approval.
Secretarial Auditor
The Board has appointed M/s. S.G. Kankani & Associates, Practicing Company Secretaries, to conduct Secretarial Audit for the financial year 2022-23. The Secretarial Audit Report for the financial year ended 31st March 2023 is annexed herewith marked as Annexure D to this Report.
In view of pendency of delisting application at Calcutta Stock Exchange, the Company has stopped sending information to Calcutta Stock Exchange. Further, in terms of requirement of regulation 24A of SEBI Listing Regulations, the Secretarial Audit Report, for the financial year ended 31st March 2023, in respect of Sarda Metals & Alloys Limited and Madhya Bharat Power Corporation Limited, the material subsidiaries of the Company, is annexed to this report, marked as Annexure E and Annexure F respectively.
Corporate Social Responsibility (CSR)
With the objective of sustainable development and continual improvement, the Company adopts a voluntary and proactive approach to CSR to connect with the society by creating a sense of belonging. The Company continues its endeavour to improve the lives of people and provide opportunities for their holistic development through initiatives in the areas of Health, Education, Arts, Culture & Heritage, Rural development, etc. The Company strives for sustainable development programs in partnership with the community.
The Company''s CSR initiatives usually involve setting the foundation of various programs at a small scale to learn from on-ground realities, getting feedback from community and then putting an enhanced sustainable model to ensure maximum benefit to the community. The Company''s focus has been upliftment of underprivileged in the society by providing quality education, training and healthcare. The Company also supports the NGOs working for such cause. During the year, the Company''s spending on CSR has been more than the statutorily required.
Members are requested to refer the Corporate Governance Report forming part of this annual report for the composition of the CSR Committee. The CSR policy of the Company is available on the website of the Company - www.seml.co.in - under the head policies under the Investors'' section. The annual report on the CSR activities is annexed as Annexure G to this report.
Corporate Governance
Pursuant to the Listing Regulations, Corporate Governance Report along with the Auditors'' Certificate regarding compliance of conditions of Corporate Governance is made a part of the Annual Report.
Business Responsibility & Sustainability Report
The Company is committed to pursue its business objectives sustainably, ethically, transparently and with accountability to all its stakeholders. The Company believes in ensuring environmental well-being with a long-term perspective as well as demonstrating responsible behaviour while adding value to the society and the community. In accordance with Regulation 34(2)(f) of the SEBI Listing Regulations, the Securities and Exchange Board of India (''SEBI''), in May 2021, introduced new sustainability related reporting requirements to be reported in the specific format of Business Responsibility and Sustainability Report (''BRSR''). Further, SEBI has mandated top 1,000 listed companies, based on market capitalization, to transit from Business Responsibility Report to BRSR from FY 2022-23 onwards. Accordingly, we present our first BRSR for 2022-23.
Board/Committees/Vigil Mechanism
The details of the composition of Board of Directors, Corporate Social Responsibility Committee, Audit Committee, other committees of the Board, meetings of the board and committees and attendance of directors at the Board and committee meetings and implementation of Vigil Mechanism are given in the Corporate Governance Report forming part of this Annual Report.
Particulars of Loans given, Investments made, Guarantees given and Securities provided
Particulars of loans given, investments made and guarantees given are given in note no. 3, 4(a), 7, 11(a), 39, 55 to the standalone financial statements. The Company, in its capacity of promoter, has pledged shares of Sarda Metals & Alloys Limited and Madhya Bharat Power Corporation Limited with the lenders of respective companies for loans granted to them by the lenders. The details of pledged shares are given as part of the financial statements. The loans and the guarantees given are utilized by the recipients for their business purposes. Members are requested to refer the notes for details, which are not repeated here for the sake of brevity.
Contracts and Arrangements with Related Parties
During the year under review, all related party transactions entered into by the Company, were approved by the Audit Committee and were at arm''s length and in the ordinary course of business to further the business interests of the Company. Prior approval of Audit Committee is obtained for related party transactions.
The Company did not have any contracts or arrangements with related parties in terms of Section 188(1) of the Act. Also, there were no material related party contracts entered into by the Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for financial year 2022-23 and hence does not form part of this report. Details of related party transactions entered into by the Company, in terms of Ind AS-24 have been disclosed in the notes to the standalone / consolidated financial statements forming part of this Report.
In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions and the same can be accessed on the Company''s website - www.seml.co.in - under Policies under Investors'' section.
Internal Financial Control
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure H to this Report.
Annual Return
The Annual Return of the Company as on 31st March 2023 is available at https://seml.co.in/Corporate%20Governance/Annual_Return_2022_23.pdf
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is annexed herewith as Annexure I to this Report.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure J to this report.
Risk Management
The Risk Management Committee has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company''s enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, accident, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.
A Risk Management Policy and a Hedging Policy as approved by the Board of Directors is in place. The Company monitors and manages the risks and uncertainties that can impact its ability to achieve its strategic objectives.
General
The directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review -
1. Details relating to deposits covered under Chapter V of the Act;
2. Issue of equity shares with differential rights as to dividend, voting or otherwise;
3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
The directors further confirm that -
a) Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries;
b) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future;
c) The Company is required to maintain cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and such accounts and records are made and maintained;
d) The Company has in place proper systems to ensure compliance with the provisions of the applicable secretarial standards issued by The Institute of Company Secretaries of India and such systems are adequate and operating effectively;
e) Under the Insolvency and Bankruptcy Code 2016, no applications were made during the financial year 2022-23 by or against the Company and there are no proceedings pending as at the end of the financial year.
f) The Company has not made any one-time settlement with any of its lenders.
g) The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 [14 of 2013].
Furthermore, the directors also state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The disclosures/information/details disclosed/given elsewhere in the annual report have not been repeated again in the directors'' report for the sake of brevity. Members are requested to refer relevant sections for the information. All policies/disclosures required to be disclosed on the website are available under the Investors''section on the website of the Company at www.seml.co.in.
Acknowledgement
With the support of the stakeholders, the Company has successfully completed 50 years. The Directors thank the customers, vendors, dealers, investors, business associates and bankers for their continued support in this journey. The Directors place on record the appreciation of the contribution made by employees at all levels. The directors place on record their gratitude for the valuable guidance and support received from various Government departments, and other regulatory authorities and agencies and look forward to their continued support in future.
On behalf of the Board of Directors (K.K. Sarda)
Raipur Chairman & Managing Director
29th July, 2023 DIN: 00008170
Mar 31, 2018
The directors take pleasure in presenting the 45th Annual Report on business and operations of your Company for the financial year ended 31st March, 2018.
Financial Performance (Rs. in crore)
Particulars |
Standalone |
Consolidated |
||
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
Revenue from operations |
1,515 |
1,147 |
2,217 |
1,571 |
Exports |
68 |
20 |
622 |
221 |
EBIDTA |
361 |
207 |
472 |
284 |
Depreciation |
49 |
47 |
73 |
69 |
Finance cost (Net) |
36 |
42 |
97 |
94 |
Exceptional item - (income) /expense |
8 |
(44) |
8 |
(28) |
Profit before tax |
268 |
162 |
294 |
150 |
Provision for tax |
80 |
31 |
90 |
23 |
Net Profit |
188 |
131 |
206 |
127 |
Review of performance
The year 2017 was marked by a number of key structural initiatives to build strength across macro-economic parameters for sustainable growth in the future. The growth in the first half of the year suffered despite global tailwinds. However, the weakness seen at the beginning of 2017, seems to have bottomed out as 2018 set in. Currently, the economy seems to be on the path to recovery, with indicators of industrial production, stock market index, auto sales and exports having shown some uptick. We believe that India''s economic outlook remains promising and is expected to strengthen further in FY 18-19. However, the signs of green shoots should not be taken for granted as downside risks remain.
The year gone by has been historic in terms of achievements. During the year your Company achieved highest ever iron ore, Pellet, Billet, wire rod, ferro alloys and hydro power production, highest ever export and also highest ever revenue and profit. The production of other products were also in line with previous year. During the year, the Company had undertaken replacement of second turbine with a new energy efficient turbine which got completed in March 2018. The Company also operated its iron ore mine for the full year. Your Company fulfilled all its financial obligations on time. The Debt-Equity ratio of your Company as on 31st March, 2018 stood at 0.10:1 as against 0.16:1 in the previous year.
During the year, your Company at standalone levels, exported 8,578 MTs of ferro alloys as against 3,532 MTs in previous year. Your Company also exported 2,705 Mts of Wire Rod for the first time. During the year, your Company for the first time, exported 15,195 MTs of iron ore pellets through merchant exporter.
Stakeholders are requested to refer the detailed analysis of the performance given in the Management Discussion and Analysis Report appended hereto.
No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company. Further, there was no change in the nature of the business of the Company during the year.
Dividend
Your Directors are pleased to recommend dividend of Rs.5/- (i.e. 50%) per equity share for the financial year 2017-18 which is also highest ever dividend declared by the Company (last yearRs. 4/- per equity share). The dividend if approved by the shareholders in the ensuing Annual General Meeting will be paid as per the applicable provisions.
During the year, your Company has transferred the unpaid dividend amount in respect of the F.Y. 2009-10 to the Investor Education and Protection Fund.
During the year, a sum of Rs.1,043 lakh has been transferred to General Reserves from Debenture Redemption Reserve on account of full redemption of the Non-convertible Debentures issued by the Company.
Subsidiaries / Controlled Entities / Joint Ventures
During the year, your Company exited from one of the Joint Ventures - Godawari Natural Resources Limited, which was formed for acquisition of mines. No mines were acquired in the company. During the year, due to allotment to another promoter company towards its commitment in the project cost, there is a slight reduction of 2.92% in the stake of the Company in Madhya Bharat Power Corporation Limited.
A brief on the performance/business operations of subsidiaries/controlled entities/joint ventures consolidated with your Company is given hereunder:
Subsidiaries
- Sarda Energy & Minerals Hongkong Limited, Hongkong (SEMHKL), is a wholly owned subsidiary, functioning as global investment arm of your Company. During the year under review, the subsidiary reported a net profit of Rs. 14.27 crore as against net profit of Rs.25.64 crore in the previous year. The company has paid a dividend of USD 2.25 Mn during the year (Pr. Year NIL).
- Sarda Global Venture Pte. Limited Singapore (SGV), a wholly owned subsidiary, has acquired economic interest in coal mines in Indonesia. The company has entered into a JV with Indorama group for the coal mine in Indonesia. The mining activities have started. During the year under review the venture extracted 1,23,656 MTs of coal. The subsidiary reported a net loss of Rs.1.63 crore as against net profit of '' 0.90 crore in the previous year
- Sarda Global Trading DMCC, Dubai (SGT), a wholly owned subsidiary, has been incorporated in March, 2018 with the object of trading in metals ores and firewood. The Company is yet to start its activities. Your Company has paid the initial capital in SGT during the current financial year (2018-19).
- Sarda Metals & Alloys Limited (SMAL), a wholly owned subsidiary is operating 2 x 33 MVA Ferro Alloys plant backed by 80 MW captive thermal power plant. During the year, power generation was 499.37 MU as compared to 488.89 MU in the previous year. The ferro alloys production stood at 83,760 MTs as against 61,578 MTs in the previous year. The company is not able to utilise its power generation capacity at full level due to poor demand and uneconomical price of power in open market. The annual power supply contract with Telangana Discom expired in May, 2017. The company is planning to increase the capacity of Ferro alloys plant to utilise the surplus power capacity. This will further inprove operating and financial performance of the company.
However the Company achieved growth of 126% in the exports achieving export of 75,650 MTs against 33,468 MTs in the previous year. The Company is a recognized Two Star Export House.
During the year on the back of excellent operating performance, the company turned around and reported a net profit of '' 16.59 crore as agaisnt loss of Rs.17.75 crore in P.Y.
- Sarda Energy Limited (SEL), a wholly owned subsidiary was incorporated as an SPV to put-up 1,320 MW super critical IPP thermal power project in Chhattisgarh. As reported earlier, the company has abandoned the project. The funds lying idle with the Company have been invested in Madhya Bharat Power Corporation Limited as part of promoters'' contribution. During the year under review, the subsidiary reported a net profit of '' 0.20 crore as against net profit of Rs.0.92 crore in the previous year.
- Parvatiya Power Limited (PPL) is operating 4.8 MW Loharkhet Hydro Power project in Bageshwar district of Uttarakhand. The Plant is set up on River Sarju. The Company has supplied 182.67 lakh KWh (Previous Year 190.98 lakh KWh) to the state grid. The variation in generation was mainly because of delayed monsoon. The plant enjoys debt free operations since financial year 2017-18 post repayment of entire term loan availed for construction of the project. It is proposed to enhance the capacity of the Plant by setting up an additional unit of 2.5 MW. This will improve the generation of power during the rainy season.
During the year, the Company has earned profit after tax of Rs.5.22 crore (Previous Year Rs.3.22 crore). During the year, the Company has made investment in M/s Sarda Dairy & Food Products Limited resulting into increase its holding from 18.06% to 19.90%. Your Company continues to hold 51% stake in PPL.
- Madhya Bharat Power Corporation Limited (MBPCL) is implementing 96 MW (2X48) Rongnichu HEP near Gangtok in East Sikkim. It is a run of the river scheme based on the River Rongnichu . It is a CDM registered project. The construction works of the project are consistently progressing ahead. 92% excavation works of critical underground tunnel is complete and concrete lining is under progress. Lining works of surge shaft has been completed. Substantial excavation works of Barrage and Power House Complex is complete and concreting works are under progress. Construction of transmission line works has commenced and shall be completed in the next financial year. Delivery of electro-mechanical equipments have started. The projected is expected to be commissioned in FY 2019-20.
Your Company has infused Rs.107.10 crore in MBPCL during the year under review. The balance amount of the equity to be infused by your Company in the project is Rs.10.93 crore. Your Company holds 77.96% stake in the project (65.67% directly and 12.29% through its wholly owned subsidiary Sarda Energy Limited) as compared to 80.87 % in the previous financial year.
- Sarda Hydro Power Private Limited (SHPPL), has been allotted 24 MW Kotaiveera and 9 MW Ganeshpur small hydro projects in the state of Chhattisgarh. The projects are in clearance stage. Your Company continues to hold 60% stake in this Company. Several NOCs have been obtained for 24 MW Kotaiveera SHP and survey works for forest land acquisition has started.
- Raipur Fabritech Private Limited (RFPL) has been incorporated to undertake steel fabrication activities at the site of closed steel plant of your Company. The company is yet to start operations. Your Company holds 52.38% stake in RFPL. Your Company is considering dissolution of this company.
- Raipur Industrial Gases Private Limited (RIGPL) has been incorporated to undertake activities related to production of industrial gases. The Company is yet to start operations. Your Company holds 51% stake in RFPL. Your Company is considering dissolution of this company.
- Natural Resources Energy Private Limited (NREPL) is an SPV to carry on the business of development of mines and minerals, generation and trading of power and infrastructure development. The company had participated in the auction of coal mines as an SPV. The entire share capital of the company is held by SEML and its wholly owned subsidiary SMAL.
Controlled Entities
- Chhattisgarh Hydro Power LLP (CHPLLP), Chhattisgarh Hydro Power LLP (CHPLLP) is pioneer in the state of Chhattisgarh in implementation of Hydro Power projects under IPP route. The firm has been allotted four run of river scheme small hydel power projects with total installed capacity of 77 MW.
The first 24 MW project at Gullu was synchronized with state power grid on 31.03.2017 and has achieved commercial production in July, 2017. The firm has signed long term power purchase agreement with Chhattisgarh State Power Distribution Company Limited for a period of 35 years for supply of power from the project. During the first year of its operation, the Plant has generated 553.92 lakh units post commercial production and has earned the profit of Rs.4.62 crore. The Plant has contributed to the socio-economic development of the remote area on account of improved irrigation from storage and regulated release of water, promotion of tourism, creation of job opportunities and improvement in the local access roads. Your Company holds 60% stake in the LLP.
The second 24 MW Rehar project has obtained first stage forest clearance and various NOCs from CREDA, TEC, Tourism Dept., Gram Panchayat, WRD & Collector. Forest and private land acquisition is under progress. The firm expects to start work on the project during the current year.
- Shri Ram Electricity LLP (SRELLP) was incorporated as a special purpose vehicle (SPV) for setting up a captive thermal power plant of 40 MW in the State of Chhattisgarh. In view of the cancellation of coal linkage for the power project, the LLP has dropped the project. The entity reported a net profit of Rs.0.08 crore in line with the previous year. Your Company continues to hold 51% stake in SRELLP. The firm will be dissolved once coal allocation related matters are closed.
Joint Ventures
- Raipur Infrastructure Company Limited (RICL) was operating a private Railway Siding in Mandhar, Raipur. The lease agreement of the siding was vaild upto 31.03.2018. The company had applied for extension of lease. However railway has turned down request of the company for renewal of the lease agreement in view of requirement of loopline at the station. Necessary impairment in asset value has been recognized in the June 2018 quarter. During the year 2017-18 the Company had earned net profit of Rs.3.76 crore as against Rs.0.77 crore in the previous year. The company is pursuing with the Railways for getting refund of Rs.5 crore deposited as security for siding at Odisha. Your Company holds one third share in the Joint Venture.
- Madanpur South Coal Company Limited (MSCCL), a SPV was allotted Madanpur South Coal Block in consortium. The Supreme Court had cancelled all coal block allotments. During the FY 2017-18, MSCCL has received compensation of Rs.3.38 Crore towards cost for Geological Reports from the Coal Controller. Since no further business activity is planned, MSCCL has utilized part of these funds to buyback part of the equity shares. All the JV partners, except M/s
Akashya Ispat Udyog Private Limited. (AIUPL), have tendered the shares against the above buyback in proportion to their respective shareholding in MSCCL. Due to non-tendering of shares by AIUPL, the stake of your Company has reduced from 20.63% as on 31.03.2017 to 20.13% as on 31.03.2018. MSCCL still holds certain assets, including land, acquired for the project. MSCCL would be wound-up after disposal of these assets.
A report on the performance and financial position of each of the subsidiaries, associates and joint ventures as per the Companies Act, 2013 and their contribution to the overall performance of the Company during the period under report is provided as part of the Consolidated Financial Statements and hence not repeated here for the sake of brevity. The Policy for determining material subsidiaries as approved by the Board may be accessed on the Company''s website www.seml.co.in. under the head corporate governance/policies under the Investors'' section.
Consolidated financial statements
The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable Accounting Standards.
In accordance with Section 136 of the Companies Act, 2013, the Audited financial statements, including the consolidated financial statements and related information of the Company and audited financial statements of each of its subsidiaries, are available on our website www.seml.co.in. These documents are also available for inspection during business hours at our registered office.
ESOP Scheme
Your Company treats its human capital as the most valued asset and as a gesture of its feeling, your Company has implemented SEML ESOP Scheme 2012 for the employees and directors of your Company and its subsidiaries. During the year 2017-18, 18,837 ESOPs were exercised. As on 31st March, 2018, no options remain outstanding.
The disclosures required to be made in the Directors'' Report in respect of the aforesaid ESOP Scheme, are contained in Annexure A forming part of the Directors'' Report.
Directors
In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Padam Kumar Jain, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. Mr. Padam Kumar Jain also holds the office of Chief Financial Officer.
Brief profile of Mr. Padam Kumar Jain, who is proposed to be appointed / re-appointed, nature of his expertise in specific functional areas, names of the companies in which he holds directorships and his shareholding in the Company is provided in the Corporate Governance Report forming part of the Annual Report.
During the year under review, the members approved the re-appointment of Mr. Pankaj Sarda as Director liable to retire by rotation. Further, the members also approved re-appointment of Mr. Pankaj Sarda as Whole-time Director for a term of five year w.e.f. 1st November, 2017, liable to retire by rotation. The Board of Directors of the Company, on the recommendation of the Nomination & Remuneration Committee, in its meeting held on 04.11.2017, approved the elevation of Mr. Pankaj Sarda, to the position of Jt. Managing Director w.e.f. 04.11.2017 for the remaining of his term without any change in other terms and conditions of his appointment.
Your Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act and the Listing Regulations.
Pursuant to the provisions of the Companies Act and the Listing Regulations, the Board of Directors ("Board") has carried out an annual evaluation of its own performance, and that of its Committees and individual Directors. The performance of the Board and individual Directors was evaluated by the Board seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board seeking inputs from the Committee Members. The Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual Directors. A separate meeting of Independent Directors was also held to review the performance of Non-Independent Directors; performance of the Board as a whole and performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors. The evaluation of Independent Directors was carried out without the presence of concerned Director. This was followed by a Board meeting that discussed the performance of the Board, its Committees and individual Directors. Key criteria''s for performance evaluation are given in Annexure B to directors'' report.
Your Company follows a policy on remuneration of Directors, Key Managerial Personnel (KMP), Senior Management Personnel (SMP) and other employees of the Company. The policy is approved by the Nomination & Remuneration Committee of the Company. Remuneration Policy for Directors, Key Managerial Personnel and other employees marked as Annexure C to directors'' report.
Your Company with the approval of Nomination & Remuneration Committee has adopted a policy on Board diversity and the recommendation of candidature for Board appointment will be based on merit that complements and expands the skills, experience and expertise of the Board as a whole, taking into account gender, age, professional experience and qualifications, cultural and educational background, and any other factors that the Board might consider relevant and applicable from time to time towards achieving a diverse Board. The criteria for determining Qualification, positive attributes and Independence of director is enclosed as Annexure D to directors'' report.
Familiarization programmes for Board Members
The Familiarization program aims to provide insight to the Independent Directors to understand the business of the Company. Upon induction, the Independent Directors are familiarized with their roles, rights and responsibilities. Your Company provides information to familiarize the Independent Directors with the strategy, operations and functions of the Company. The Board members are also taken to the sites of subsidiaries to understand and review their functions.
At various Board meetings during the year, the Board members are provided with information/ presentations and are given the opportunity to interact with the Senior Management of your Company to help them to understand the Company''s strategy/policies, business model, operations, products, markets, organization structure, finance, human resources, technology, quality, facilities and risk management, changes in the regulatory environment applicable to the corporate sector and to the industry in which it operates and such other matters as may arise from time to time.
Quarterly presentations on operations made to the Board include information on business performance, operations, safety, market scenario, financial parameters, working capital management, fund flows, senior management change, major litigation, compliances, subsidiary information, donations, regulatory scenario, etc.
The policy on familiarization programmes for Independent Directors is posted on the website of the Company www. seml.co.in. and can be accessed under the head corporate governance/policies under the Investors'' section.
Directors'' Responsibility Statement
Your Directors state that:
a) in the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the profit of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a ''going concern'' basis;
e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Key managerial personnel
During the year, there was no change in the Key Managerial Personnel.
Auditors and Auditors'' Report
Statutory Auditors
At the Annual General Meeting for the financial year 2013-14 held on 29th September, 2014, M/s. O.P. Singhania & Co., Chartered Accountants, Raipur were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting (AGM) to be held in the calendar year 2019.
In terms of the provisions relating to statutory auditors forming part of the Companies Amendment Act, 2017, notified on May 7, 2018, ratification of appointment of Statutory Auditors at every AGM is no more a legal requirement. Accordingly, the Notice convening the ensuing AGM does not carry any resolution on ratification of appointment of Statutory Auditors. However, M/s. O.P. Singhania & Co., Statutory Auditors, have confirmed that they are eligible to continue as Statutory Auditors of the Company for the Financial Year ending 31st March, 2019 and accordingly M/s. O.P. Singhania & Co. will continue to be the Statutory Auditors of the Company for Financial Year ending 31st March, 2019.
The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark.
Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules, 2014, the cost audit records maintained by the Company, in respect of various manufacturing activities are required to be audited.
The cost audit report for the financial year 2016-17 was filed with the Ministry of Corporate Affairs. M/s. S.N. & Co., Cost and Management Accountants, were appointed as the Company''s Cost Auditor.
Your Directors have, on the recommendation of the Audit Committee, appointed M/s. S.N. & Co., Cost and Management Accountants, to audit the cost accounts of the Company on a remuneration of '' 1.60 lakh for the year 2017-18.
As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors:
i) for 2017-18 has been ratified by the members in the Annual General Meeting held on 28.09.2017.
ii) for 2018-19 is being placed before the members in the ensuing annual general meeting for ratification.
Secretarial Auditor
The Board has appointed S.G. Kankani & Associates, Practicing Company Secretaries, to conduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended 31st March, 2018 is annexed herewith marked as Annexure E to this Report.
With reference to the comment of the secretarial auditors regarding non-submission of information to Calcutta Stock Exchange, your Directors wish to inform that the Company had complied with all requirements for delisting of its shares from Calcutta Stock Exchange (CSE) in February, 2004. The delisting application is still pending on the part of CSE. In view of the pendency of delisting application, the Company has stopped sending any information to the Calcutta Stock Exchange and has also reported the matter to SEBI.
With reference to the comment of the Secretarial Auditor regarding delay in submission of Financial Results for the Financial Year ended 31st March, 2017 with BSE Limited & National Stock Exchange of India Limited, your Directors wish to inform that the Board Meeting of the Company was convened on 30th May, 2017 for approval of the Financial Results. However, for want of quorum, the meeting was adjourned and the adjourned meeting was held after seven days i.e. on 6th June, 2017, as per the provisions of the Companies Act, 2013. As a result, the above delay occurred.
Corporate Social Responsibility (CSR)
With the objective of sustainable development and continual improvement, your Company adopts a voluntary and proactive approach to CSR to connect with the society by creating a sense of belonging. Your Company strives for sustainable development programs in partnership with the community.
Members are requested to refer the Corporate Governance Report forming part of this annual report for the composition of the CSR Committee. The CSR policy of the Company is available on the website of the Company - www.seml.co.in under the head corporate governance/policies under the Investors'' section. The annual report on the CSR activities is annexed as Annexure F to this report.
The Company''s CSR initiatives usually involve setting the foundation of various programs at a small scale to learn from on-ground realities, getting feedback from community and then putting an enhanced sustainable model to ensure maximum benefit to the community. During the year, the Company''s spend on the CSR activities has been marginally less than the required amount. The amount spent on CSR fell slightly short of the required spending due to ongoing CSR activities where some activities were under completion as at the end of the year for which the funds were to be released after completion. Accordingly, the amount short spent shall be spent during the year 2018-19.
Corporate Governance
Pursuant to the Listing Regulations, Corporate Governance Report along with the Auditors'' Certificate regarding compliance of conditions of Corporate Governance is made a part of the Annual Report.
Disclosures
Board/Committees/Vigil Mechanism
The Board of Directors met 6 (six) times during the financial year 2017-18. The details of the composition of Board of Directors, Corporate Social Responsibility Committee, Audit Committee, other committees of the Board, meetings of the board and committees and attendance of directors at the Board and committee meetings and implementation of Vigil Mechanism are given in the Corporate Governance Report forming part of this Annual Report.
Particulars of Loans given, Investments made, Guarantees given and Securities provided
Particulars of loans given, investments made and guarantees given are given in note no. 11, 44, 3 and 39 to the standalone financial statements. The Company, in its capacity of promoter, has pledged 51% of its holding in Sarda Metals & Alloys Limited, and 60% of its holding in MBPCL with the lenders for loans granted to the respective companies by the lenders. The loans and the guarantees given are utilized by the recipients for their business purposes. Members are requested to refer the notes for details which are not repeated here for the sake of brevity.
Contracts and Arrangements with Related Parties
During the year, the Company did not have any contracts or arrangements with related parties in terms of Section 188 (1) of the Act. Also, there were no material related party contracts entered into by the Company and all contracts were at arm''s length and in ordinary course of business.
Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act along with the justification for entering into such contracts or arrangements in Form AOC-2 does not form part of the report.
The Policy on materiality of related party transaction and dealing with related party transactions as approved by the Board may be accessed on the Company''s website - www.seml.co.in. under the head corporate governance/policies under Investor'' section.
Internal Financial Control
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure G to this Report.
Extract of Annual Return
Extract of Annual Return of the Company is annexed herewith as Annexure H to this report.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is annexed herewith as Annexure I to this Report.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure J to this report.
Risk Management
The Risk Management Committee has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company''s enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, accident, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.
A Risk Management Policy approved by the Board of Director is in place. The Company monitors and manages the risks and uncertainties that can impact its ability to achieve its strategic objectives.
General
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employee Stock Options Scheme referred to in this Report.
4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.
6. The Company is required to maintain cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013 and such accounts and records are made and maintained.
7. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 [14 of 2013].
Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The disclosures/information/details disclosed/given elsewhere in the annual report have not been repeated again in the directors'' report for the sake of brevity. Members are requested to refer relevant sections for the information. All policies/disclosures required to be disclosed on the website are available under the Investors'' section on the website of the Company at www.seml.co.in.
Acknowledgement
Your Directors place on record their gratitude for the valuable guidance and support rendered by various Government departments, Financial Institutions, Banks and various stakeholders, such as, shareholders, surrounding societies, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Company''s success. The Directors look forward to their continued support in future.
On behalf of the Board of Directors
(K.K. Sarda)
Raipur Chairman & Managing Director
11th August, 2018 DIN: 00008170
Mar 31, 2017
Dear Members,
The directors take pleasure in presenting the 44th Annual Report on business and operations of your Company for the financial year ended 31st March, 2017.
Financial Performance (Rs.in crore)
Particulars |
Standalone |
Consolidated |
||
2016-17 |
2015-16 |
2016-17 |
2015-16 |
|
Revenue from operations (Gross) |
1,147 |
1,150 |
1,571 |
1,606 |
Exports |
20 |
84 |
221 |
171 |
EBIDTA |
207 |
162 |
285 |
227 |
Depreciation |
47 |
51 |
69 |
75 |
Finance cost (Net) |
42 |
56 |
94 |
112 |
Exceptional item (income)/expense |
(44) |
- |
(28) |
- |
Profit before tax |
162 |
55 |
150 |
40 |
Provision for tax |
31 |
18 |
23 |
27 |
Net Profit |
131 |
37 |
127 |
13 |
Other Comprehensive Income |
- |
1 |
1 |
1 |
Total Comprehensive Income |
131 |
38 |
128 |
14 |
Adoption of Ind AS
The financial statements for the year ended 31st March, 2017 along with restated financial statement for the year ended 31st March, 2016 are prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015.
Review of performance
The steel sector is going through a downturn and the year under review has been quite challenging. In spite of this, your Company has reported satisfactory performance through operational excellence and cost control measures with dedicated team work of its human resource.
Your Company has achieved highest ever production of iron ore pellet, sponge iron, wire rod and HB wire during the year. One generating unit of power plant was shut down from 15th December, 2016 for replacement of the Turbine with new energy efficient Turbine supplied by BHEL. Due to this, the production of power, steel billet and ferro alloys was marginally lower. The new turbine, commissioned in April, 2017, will give saving of about 12% in coal consumption. Excellent operating performance in spite of shutdown in the power plant helped the Company in achieving sales almost at par with the previous year. The operations of iron ore mine which were suspended in the previous year, resumed in the month of November, 2016 which also helped in improving the financial performance.
Your Company has fulfilled all its financial obligations on time. The Long term Debt-Equity ratio of your Company on 31st March, 2017 on standalone basis stood at 0.16:1 as against 0.23:1 in the previous year and on consolidated basis it stood at 0.74:1 as against 0.78:1 in the previous year. This is in spite of ongoing large capexes in the subsidiaries and controlled entities. Stakeholders are requested to refer the detailed analysis of the performance given in the Management Discussion and Analysis Report appended hereto.
The exceptional income of Rs.44 crore represents receipt of an amount of Rs.64 crore in an out of court settlement in an international arbitration and write off of Rs.20 crore on account of the unrealized value of coal mine assets after cancellation of coal mine allotment. Your Company has challenged the compensation amount approved by the Govt. of India. However, as a prudent business practice, the differential amount has been booked as expense. There was no change in the nature of the business of the Company.
Dividend
Your Directors have recommended highest ever dividend of Rs.4/- (i.e. 40%) per equity share for the financial year 2016-17 (last year Rs.2/- per equity share). The dividend if approved by the shareholders in the ensuing Annual General Meeting will be paid as per the applicable provisions.
During the year, your Company has transferred the unpaid dividend amount in respect of the F.Y. 2008-09 to the Investor Education and Protection Fund.
During the year, a sum of Rs.1,041 lakh has been transferred to General Reserves from Debenture Redemption Reserve on account of partial redemption of the Non-convertible Debentures issued by the Company.
Subsidiaries / Controlled Entities / Joint Ventures
During the year, there was no change in the subsidiaries. Your Company has, along with its Wholly Owned Subsidiary, increased its stake in Madhya Bharat Power Corporation Limited from 76.74% to 80.87%. There was a slight reduction in Companyâs holding in Chhattsgarh Hydro Power LLP from 60.92% in previous year to 60% in 2016-17. Brief on the performance/progress of the project /business operations of subsidiaries/controlled entities/joint ventures consolidated with SEML is given hereunder:
Subsidiaries
- Sarda Energy & Minerals Hongkong Limited, Hongkong (SEMHKL), is a wholly owned subsidiary, functioning as global investment arm of your Company. During the year under review, the subsidiary reported a net profit of Rs.25.64 crore as against net loss of Rs.5.63 crore in the previous year. The Company has not paid any dividend during the year (Pr. Year US$ 2.8 Mn).
- Sarda Global Venture Pte. Limited Singapore (SGV), a wholly owned subsidiary, holds economic interest in coal mines in Indonesia. During the current year, the Company has entered into a definitive joint venture agreement for operation of the mine with a local business group. All required approvals related to the agreement have been obtained. During the year under review, the subsidiary reported a net profit of Rs.0.90 crore as against loss of Rs.0.82 crore in the previous year.
- Sarda Metals & Alloys Limited (SMAL), a wholly owned subsidiary is operating 2 x 33 MVA Ferro Alloys plant backed by 80 MW captive thermal power plant. During the year, power generation was 488.89 MU as compared to 612.83 MU in the previous year. The ferro alloys production (including Mno Slag) stood at 61,578 MTs as against 49,955 MTs in the previous year. The power generation was lower than previous year because of poor demand and consequent back down by the state distribution companies with whom the Company had entered into supply agreement.
However the Company was successful in maintaining the growth rate in exports wherein it has achieved Exports of Rs.201 crore as against Rs.119 crore in the PY. The Company has also received Two Star Export House status from Director General of Foreign Trade, Ministry of Commerce & Industry, Government of India.
During the year Company reported loss of Rs.17.74 crore as against loss of Rs.3.82 crore in P.Y. mainly due to drastic reduction in power offiake by Telangana DISCOM and outage of one of the furnaces of the Company for almost 3 months. The Company plans to set-up power intensive industrial unit(s) in steel / ferro alloys for capative consumption of surplus power for long term sustainability.
- Sarda Energy Limited (SEL), a wholly owned subsidiary was incorporated as an SPV to put-up 1320 MW super critical IPP thermal power project in Chhattsgarh. As reported earlier, the Company has abandoned the project. The surplus funds lying with the Company were invested in Madhya Bharat Power Corporation Limited as part of promotersâ contribution. During the year under review, the subsidiary reported a net profit of Rs.0.92 crore as against net profit of Rs.4.16 crore in the previous year.
- Parvatiya Power Limited (PPL), is operating 4.8 MW Loharkhet Hydro Power project in Bageshwar district of Uttarakhand. The Company has supplied 190.98 lakh KWh (Previous Year 182.60 lakh KWh). The plant enjoys debt free operations post repayment of term loan availed for the project. During the year, the Company has earned profit after tax of Rs.4.55 crore. (Previous Year Rs.2.26 Crore). During the year, the Company has diluted its holding in Sarda Dairy & Food Products Limited from 42.78% to 18.06%. Your Company continues to hold 51% stake in PPL.
- Madhya Bharat Power Corporation Limited (MBPCL), is implementing 96 MW (2X48) Rongnichu HEP near Gangtok in East Sikkim. It is a run of the river scheme, a CDM registered project. The construction works of the project are consistently progressing ahead. 84% excavation works of critical underground tunnel is complete and lining activities have started, in parallel. The financial closure for the revised project cost has been achieved during the year. The project is expected to be operational in the F.Y. 2018-19. The Company has reported loss during the year mainly on account of expenses which are not directly attributable to assets under construction and couldnât be capitalized as per prevailing accounting standards.
Your Company has infused Rs.30 crore in MBPCL during the year under review. Your Company holds 80.87% stake in the project (62.41% directly and 18.46% through its wholly owned subsidiary Sarda Energy Limited) as compared to 76.74 % in previous financial year.
- Sarda Hydro Power Private Limited (SHPPL), has been allotted 24 MW Kotaiveera and 9 MW Ganeshpur small hydro projects in the state of Chhattsgarh. The projects are in clearance stage. Your Company continues to hold 60% stake in this Company.
- Raipur Fabritech Private Limited (RFPL) has been incorporated to undertake steel fabrication activities at the site of closed steel plant of your Company. The Company is yet to start operations. Your Company holds 52.38% stake in RFPL. Your Company is considering dissolution of this Company.
- Raipur Industrial Gases Private Limited (RIGPL) has been incorporated to undertake activities related to production of industrial gases. The Company is yet to start operations. Your Company holds 51% stake in RIGPL. Your Company is considering dissolution of this Company.
- Natural Resources Energy Private Limited (NREPL) is an SPV to carry on the business of development of mines and minerals, generation and trading of power and infrastructure development. The entire share capital of the Company is held by SEML and its wholly owned subsidiary SMAL.
Controlled Entities
- Chhaffisgarh Hydro Power LLP (CHP LLP), is pioneer in the state of Chhattsgarh for implementation of Hydro Power projects under IPP route. The firm has been allotted four run of river scheme small hydel power projects with total installed capacity of 77 MW.
The first 24 MW project at Gullu has been synchronized with state power grid on 31.03.2017 and has started generating power. The project has achieved commercial production in the month of July, 2017. The firm has signed long term power purchase agreement with Chhattsgarh State Power Distribution Company Limited for supply of power from the Gullu project. The project has received part of MNRE subsidy for which it was eligible during construction phase. The plant will bring socio-economic development of the remote region. The LLP shall now augment the implementation of other allotted hydro projects. The Rehar 24 MW project has received first stage forest clearance and is expected to achieve financial closure during the current year.
During the year, the Company has infused a sum of Rs.23 crore in the LLP towards promotersâcontribution. Your Company holds 60% stake in the LLP.
- Shri Ram Electricity LLP (SRE LLP) was incorporated as a special purpose vehicle (SPV) for settng up a captive thermal power plant of 40 MW in the State of Chhattsgarh. In view of the cancellation of coal linkage for the power project, the LLP has dropped the project. During the year under review, the entity reported a net profit of Rs.0.08 crore at par with previous year. Your Company continues to hold 51% stake in SRELLP.
Joint Ventures
- Raipur Infrastructure Company Limited (RICL) operates a private Railway Siding in Mandhar, Raipur. During the year 2016-17 the Company has earned net profit of Rs.0.77 crore as against Rs.2.62 crore in the previous year. The Company is pursuing with the Railways for gettng refund of Rs.5 crore deposited as security for siding at Odisha, which project has been dropped by the Company. Your Company continues to holds one third share in the Joint Venture.
- Madanpur South Coal Company Limited (MSCCL), a SPV was allotted Madanpur South Coal Block in consortium. The allotment of coal block to the Company was cancelled pursuant to the Order of Honâble Supreme Court. During the current year the Company has received reimbursement of Rs.3.39 crore spent towards cost of purchase of G.R, which will be utilized for buyback of its equity shares. The Company does not have any business to pursue. Your Company holds a 20.63% stake in the joint venture.
- Godawari Natural Resources Limited (GNRL) is an SPV for acquisition and development of mines and minerals, generation and trading of power and infrastructure development. The Company remains invested in the JV for participating in auction for acquisition of coal mine jointly with others to meet the prescribed eligibility criteria. Your Company continues to hold 29.98% stake in GNRL.
A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided as part of the Consolidated Financial Statements and hence not repeated here for the sake of brevity. The Policy for determining material subsidiaries as approved by the Board may be accessed on the Companyâs website www.seml.co.in under the head corporate governance/policies under the Investorsâ section.
Consolidated financial statements
The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable Accounting Standards.
The financial statements and related information of the subsidiary companies are open for inspection by any member/ investor at the Registered Office of your Company and the subsidiary concerned and your Company will make available these documents/details upon request by any member of the Company who may be interested in obtaining the same.
In accordance with Section 136 of the Companies Act, 2013, the Audited financial statements, including the consolidated financial statements and related information of the Company and audited financial statements of each of its subsidiaries, are available on our website www.seml.co.in. These documents are also available for inspection during business hours at our registered office.
ESOP Scheme
Your Company treats its human capital as the most valued asset and as a gesture of its feeling, your Company has implemented SEML ESOP Scheme 2012 for the employees and directors of your Company and its subsidiaries. As on 31st March, 2017, out of total 3,33,360 options granted, 1,80,398 options have been exercised by the employees out of which 52,079 options were exercised during the F.Y. 2016-17. During 2016-17, 69,309 options have expired unexercised. As on 31st March, 2017, 26,464 options remain outstanding.
The disclosures required to be made in the Directorsâ Report in respect of the aforesaid ESOP Scheme, are contained in Annexure A forming part of the Directorsâ Report.
Directors
In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Pankaj Sarda, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for reappointment.
Brief profile of Mr. Pankaj Sarda, Director proposed to be re-appointed, nature of his expertise in specific functional areas, names of the companies in which he holds directorships and his shareholding in the Company is provided in the Corporate Governance Report forming part of the Annual Report.
During the year under review, the members approved the re-appointment of Mrs. Uma Sarda as Director liable to retire by rotation. Further, the members also approved appointment of Mr. P K Jain, CFO of the Company as Whole-time Director for a term of five year w.e.f. 1st June, 2016, liable to retire by rotation. Mr. P.K. Jain continues to act as CFO also.
Mr. G.D. Mundra, Wholetime Director resigned w.e.f. 1st April, 2016. The Board takes on record its deep appreciation of the services rendered Mr. G. D. Mundra in various capacities during his nearly 29 years long association with the Company/ group.
Your Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act and the Listing Regulations.
Pursuant to the provisions of the Companies Act and the Listing Regulations, the Board of Directors (âBoardâ) has carried out an annual evaluation of its own performance, and that of its Committees and individual Directors. The performance of the Board and individual Directors was evaluated by the Board seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board seeking inputs from the Committee Members. The Nomination and Remuneration Committee (âNRCâ) reviewed the performance of the individual Directors. A separate meeting of Independent Directors was also held to review the performance of Non-Independent Directors; performance of the Board as a whole and performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors. The evaluation of Independent Directors was carried out without the presence of concerned Director. This was followed by a Board meeting that discussed the performance of the Board, its Committees and individual Directors. Key criteriaâs for performance evaluation are given in Annexure B to directorsâ report.
Your Company follows a policy on remuneration of Directors, Key Managerial Personnel (KMP), Senior Management Personnel (SMP) and other employees of the Company. The policy is approved by the Nomination & Remuneration Committee of the Company. Remuneration Policy for Directors, Key Managerial Personnel and other employees is given as Annexure C to directorsâ report.
Your Company with the approval of Nomination & Remuneration Committee has adopted a policy on Board diversity and the recommendation of candidature for Board appointment will be based on merit that complements and expands the skills, experience and expertise of the Board as a whole, taking into account gender, age, professional experience and qualifications, cultural and educational background, and any other factors that the Board might consider relevant and applicable from time to time towards achieving a diverse Board. The criteria for determining Qualification, positive attributes and Independence of director is given in Annexure D to directorsâ report.
Familiarization programmes for Board Members
The Familiarization program aims to provide insight to the Independent Directors to understand the business of the Company. Upon induction, the Independent Directors are familiarized with their roles, rights and responsibilities. Your Company provides information to familiarize the Independent Directors with the strategy, operations and functions of the Company.
At various Board meetings during the year, the Board members are provided with information/ presentations and are given the opportunity to interact with the Senior Management of your Company to help them to understand the Companyâs strategy/policies, business model, operations, products, markets, organization structure, finance, human resources, technology, quality, facilities and risk management, changes in the regulatory environment applicable to the corporate sector and to the industry in which it operates and such other matters as may arise from time to time.
Quarterly presentations on operations made to the Board include information on business performance, operations, safety, market scenario, financial parameters, working capital management, fund flows, senior management change, major litigation, compliances, subsidiary information, regulatory scenario, etc.
The policy on familiarization programmes for Independent Directors is posted on the website of the Company www.seml.co.in and can be accessed under the head corporate governance/policies under the Investorsâ section.
Directorsâ Responsibility Statement
Your Directors state that:
a) in the preparation of the annual accounts for the year ended 31st March, 2017, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2017 and of the profit of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a âgoing concernâ basis;
e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Key managerial personnel
During the year under review, there was no change in the Key Managerial Personnel. Mr. Padam Kumar Jain has been elevated to the position of Wholetime Director w.e.f. 1st June, 2016. He also continues as the Chief Financial Officer of the Company.
Auditors and Auditorsâ Report Statutory Auditors
At the Annual General Meeting for the financial year 2013-14 held on 29th September, 2014, M/s. O.P. Singhania & Company, Chartered Accountants, Raipur were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting (AGM) to be held in the calendar year 2019. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the Auditors is required to be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s O.P. Singhania & Company, Chartered Accountants, Raipur, 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 re-appointed in the ensuing AGM, it would be in accordance with the provision of Section 141 of the Companies Act, 2013.
The Notes on financial statement referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments. The Auditorsâ Report does not contain any qualification, reservation or adverse remark.
Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules, 2014, the cost audit records maintained by the Company, in respect of various manufacturing activities are required to be audited.
The cost audit report for the financial year 2015-16 was filed with the Ministry of Corporate Affairs. M/s. S. N. & Company, Cost and Management Accountants, were appointed as the Companyâs Cost Auditor.
Your Directors have, on the recommendation of the Audit Committee, appointed M/s. S. N. & Company, Cost and Management Accountants, to audit the cost accounts of the Company on a remuneration of Rs.1.50 lakh for the year 2016-17.
As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors:
i) for 2016-17 has been ratified by the members in the Annual General Meeting held on 30.09.2016.
ii) for 2017-18 is being placed before the members in the ensuing annual general meeting for ratification.
Secretarial Auditors
The Board has appointed S. G. Kankani & Associates, Practicing Company Secretaries, to conduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report for the financial year ended 31st March, 2017 is given as Annexure E to this Report.
With reference to the comments of the secretarial auditors regarding non-submission of information to Calcutta Stock Exchange, your Directors wish to inform that the Company has applied for delisting of its shares from Calcutta Stock Exchanges in February, 2004. The delisting application is still pending. In view of the pendency of delisting application, the Company has stopped sending any information to the Calcutta Stock Exchange and has also reported the matter to SEBI.
Corporate Social Responsibility (CSR)
With the objective of sustainable development and continuous improvement, your Company adopts a voluntary and proactive approach to CSR to connect with the society by creating a sense of belonging. Your Company strives for sustainable development programs in partnership with the community.
Members are requested to refer the Corporate Governance Report forming part of this annual report for the composition of the CSR Committee. The CSR policy of the Company is available on the website of the Company - www.seml.co.in -under the head corporate governance/policies under the Investorsâ section. The annual report on the CSR activities is annexed as Annexure F to this report.
The Companyâs CSR initiatives usually involve seffing the foundation of various programs at a small scale to learn from onground realities, geffing feedback from community and then puffing an enhanced sustainable model to ensure maximum benefit to the community. During the year, the Companyâs spending on the CSR activities has been marginally less than the required amount. However, the amount short spent shall be spent during the year 2017-18.
Corporate Governance
Pursuant to the Listing Regulations, Corporate Governance Report along with the Auditorsâ Certificate regarding compliance of conditions of Corporate Governance is made a part of the Annual Report.
Disclosures
Board/Committees/Vigil Mechanism
The Board of Directors met 6 (six) times during the financial year 2016-17. The details of the composition of Board of Directors, Corporate Social Responsibility Committee, Audit Committee, other committees of the Board, meetings of the board and committees and attendance of directors at the Board and committee meetings and implementation of Vigil Mechanism are given in the Corporate Governance Report forming part of this Annual Report.
Particulars of Loans given, Investments made, Guarantees given and Securities provided
Particulars of loans given, investments made and guarantees given are given in note no. 3, 4 and 40 to the standalone financial statements. The Company, in its capacity of promoter, has pledged 51% of its holding in Sarda Metals & Alloys Limited., 100% of its holding in Parvatiya Power Limited and 60% of its holding in Madhya Bharat Power Corporation Limited with the lenders for loans granted to the respective companies by the lenders. The loans and the guarantees given are utilized by the recipients for their business purposes. Members are requested to refer the notes for details which are not repeated here for the sake of brevity.
Contracts and Arrangements with Related Parties
All contracts/arrangements/transactions entered by the Company during the financial year with the related parties were in the ordinary course of business and on an armâs length basis in the best interest of the Company. During the year the Company had not entered into any contract/arrangement /transaction with related party which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
The Policy on materiality of related party transaction and dealing with related party transactions as approved by the Board may be accessed on the Companyâs website - www.seml.co.in, under the head corporate governance/policies under Investorâ section.
Internal Financial Control
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure G to this Report.
Extract of Annual Return
Extract of Annual Return of the Company is annexed as Annexure H to this report.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is annexed herewith as Annexure I to the Directorsâ report.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure J to the Directorsâ report.
Risk Management
The Risk Management Committee has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Companyâs enterprise wide risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, accident, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.
A Risk Management Policy approved by the Board of Director is in place. The Company monitors and manages the risks and uncertainties that can impact its ability to achieve its strategic objectives.
General
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employee Stock Options Scheme referred to in this Report.
4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries, except sittng fees for attending Board/Committee Meetings.
5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.
Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The disclosures/information/details disclosed/given elsewhere in the annual report has not been repeated again in the directorsâreport for the sake of brevity. Members are requested to refer relevant sections for the information. All policies/ disclosures required to be disclosed on the website are available under the Investors section on the website of the Company.
Acknowledgement
Your Directors place on record their gratitude for the valuable guidance and support rendered by various Government departments, Financial Institutions, Banks and various stakeholders, such as, shareholders, surrounding societies, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Companyâs success. The Directors look forward to their continued support in future.
On behalf of the Board of Directors
(K. K. Sarda)
Raipur Chairman & Managing Director
5th August, 2017 DIN: 00008170
Mar 31, 2015
Dear Members,
The directors are pleased to present the 42nd Annual Report on
business and operations of your Company for the financial year ended
31st March, 2015.
Financial Performance
(Rs. in crore)
Particulars Standalone Consolidated
2014-15 2013-14 2014-15 2013-14
Revenue from
operations (Gross) 1,517 1,396 1,903 1,720
Less: Excise duty 138 125 143 129
Revenue from operations
(Net) 1,379 1,271 1,760 1,591
Exports 175 182 175 182
EBIDTA 335 262 440 375
Depreciation 68 63 93 96
Finance cost (Net) 59 63 121 123
Exceptional item (including
additional levy on 126 2 139 2
coal extracted)
Profit before tax 83 134 87 154
Provision for tax 27 44 31 47
Provision for tax related
to previous year - 15 - 15
Net Profit 56 75 56 92
Review of performance
The financial year 2014-15 was challenging year due to slowdown in the
global economy and resultant sharp fall in the commodity prices. Steel
prices fell in the country without corresponding correction in the
price of iron ore. The Supreme Court of India cancelled all the coal
mine allocations made by the Government since 1993 through Screening
Committee or Government dispensation route and also imposed additional
levy @ Rs. 295/- per MT on the coal extracted from the mines since
inception. The Gare Palma IV/7 coal mine operated by the Company has
also been cancelled w.e.f. 1st April, 2015 and the Company had to pay
additional levy of Rs. 143 Crore on the coal extracted from the mine. The
Company has provided for the full liability, including Rs. 126 crore for
earlier years, in the financial year 2014-15, adversely affecting the
profitability and liquidity.
Government has started the process of reallocation of the coal mines
through auction, which were cancelled due to Supreme Court order. In
the first phase 23 operating coal mines were auctioned. Your company
participated in the auction and offered a bid price which was
comparable to the alternate sources in the longer run. Your Directors
believe that operation of the mines at the price at which the auctions
were concluded would not have been commercially sustainable. The
Company would, however, continue to participate in coal mine auctions.
The pace of economic activity is yet to pick up. RBI continued to
follow tight monetary policy with high interest rates to keep check on
the inflation. Exports were also hit due to falling prices, relatively
strong Rupee and slowdown in other economies.
However, in spite of these constraints and the challenging environment,
the performance of your Company was satisfactory. This was achieved
through a constant endeavor at all levels for excellence and cost
control combined with a series of safety initiatives.
A detailed analysis of the performance is given in the Management
Discussion and Analysis Report appended hereto.
No material changes and commitments have occurred after the close of
the year till the date of this Report, which affect the financial
position of the Company. Further, there was no change in the nature of
the business of the Company.
Dividend
Your Directors have recommended a dividend of Rs. 3/- (i.e. 30%) per
equity share (last year Rs. 3/- per equity share) for the financial year
ended March 31, 2015. The dividend payout is subject to approval of
members at the ensuing Annual General Meeting.
During the year, your Company has transferred the unpaid dividend
amount in respect of the F.Y. 2006-07 to the Investor Education and
Protection Fund.
During the year, no amount has been transferred to Reserves.
Subsidiaries / Controlled Entities / Joint Ventures
During the year, Natural Resources Energy Pvt. Ltd. became subsidiary
of your Company. Further, your Company made fresh investments for
acquiring 29.98% in Godawari Natural Resources Limited for
participation in the auction of coal mines. A brief on the business
operations of subsidiaries /controlled entities / joint ventures
consolidated with SEML is given hereunder:
Subsidiaries
- Sarda Energy & Minerals Hongkong Ltd, Hongkong (SEMHKL), is a
wholly owned subsidiary, functioning as global investment arm of your
Company. During the year under review, the subsidiary reported a net
profit of Rs. 10.83 crore as against Rs. 23.76 crore in the previous year.
The company paid a dividend of USD 2 Million during the year. Last year
also, the Company has paid a dividend of USD 3 Mn.
- Sarda Global Venture Pte. Ltd. Singapore (SGV), a wholly owned
subsidiary, has acquired economic interest in coal mines in Indonesia
but the mining project has not seen any progress during the year. The
company is evaluating the various options for its stake in the coal
mine in the best interest of all stake holders.
- Sarda Metals & Alloys Ltd. (SMAL), a wholly owned subsidiary is
operating 2 x 33 MVA Ferro Alloys plant backed by 80 MW captive thermal
power plant. In view of the better market conditions, the company had
started production of ferro alloys from June but due to global down
turn in commodities ferro alloys plant did not perform as expected.
During the year, the operation of the plants and assets were badly
affected by the HUDHUD Cyclone causing stoppage of production for
around 27 days. The team restored operation in reasonably quick time.
Due to adverse market condition and disruption in operations due to
cyclone, inspite of fall in the interest burden, during the year, SMAL
has reported a net profit of Rs. 3.80 crore against Rs. 6.89 crore reported
in the previous year.
- Sarda Energy Ltd. (SEL), a wholly owned subsidiary was incorporated
as an SPV to put-up 1320 MW super critical IPP thermal power project in
Chhattisgarh. In view of inordinate delay in acquisition of land and
delay in getting various approvals, the Company has decided to abandon
the project. Accordingly the preliminary and pre-operative expenses of
Rs. 11.98 crore incurred by the SPV has been written off and booked as
expense during the year.
- Parvatiya Power Ltd. (PPL), is operating 4.8 MW Loharkhet Hydro
Power Project in Bageshwar District of Uttarakhand since 2008. During
the year 2014-15, the plant generated and supplied 203.42 lac KWh
(previous year: 209.17 lac KWh) power achieving 48% capacity
utilization factor. The Company has earned profit after tax of Rs. 2.87
crore as against Rs. 2.20 crore in the previous year. The Company is
evaluating capacity enhancement in the project.
Your Company continues to hold 51% stake in PPL.
- Madhya Bharat Power Corporation Ltd. (MBPCL), is implementing the
96 MW Rongnichu Hydro Power Project near Gangtok in East Sikkim as a
run-of-the-river scheme. Work on the project is progressing slower than
expected due to poor geology. The project has faced time and cost
overruns. The Company has applied for additional funding for cost
overrun, which is under active consideration of the lenders. The
Project has been successfully registered as a CDM Project with UNFCCC.
Consequent to additional equity infusion during the year, share of your
Company as on 31st March, 2015 has gone up from 58.73% to 67.59%.
- Sarda Hydro Power Pvt. Ltd. (SHPPL) has been allotted 24 MW
Kotaiveera and 9MW Ganeshpur Small Hydro Power Project in Chhattisgarh.
Land acquisition and statutory approvals are in progress. Your Company
holds 60% stake in SHPPL.
- Raipur Fabritech Pvt. Ltd. (RFPL) has been incorporated to
undertake steel fabrication activities at the site of closed steel
plant of your Company. The Company is also exploring possibility of
developing a logistic park. The Company is yet to start operations.
Your Company holds 52.38% stake in RFPL.
- Raipur Industrial Gases Pvt. Ltd. (RIGPL) has been incorporated to
undertake activities related to production of industrial gases. The
Company is yet to start operations. Your Company holds 51% stake in
RFPL.
- Natural Resources Energy Pvt. Ltd. (NREPL) is an SPV to carry on
the business of development of mines and minerals, generation and
trading of power and infrastructure development. The company had
participated in the recently concluded auction of coal mines as an SPV.
NREPL has become subsidiary in the F.Y. 2014-15. The entire share
capital of the company is held by SEML and its wholly owned subsidiary
SMAL.
Controlled Entities
- Chhattisgarh Hydro Power LLP (CHP LLP) has been allotted four
run-of-the river Small Hydro Power Projects in Chhattisgarh with a
total generation capacity of 77 MW. The work on the first 24 MW Gullu
hydro power project is progressing as per schedule and the project is
expected to achieve the commercial operation in the next financial
year. The project is entitled for CDM benefits. MOEF has conveyed Host
Country Approval to the Project for CDM registration. The project is
currently under validation stage.
All these projects are entitled for benefits in the form of subsidy
from Ministry of New & Renewable Energy, Clean Development Mechanism as
well as Renewable Energy Certificates. Your Company has made additional
contribution of Rs. 1.61 crore during the year towards its share in the
LLP and holds 60.95% stake in CHP LLP.
- Shri Ram Electricity LLP (SRELLP) was incorporated as a special
purpose vehicle (SPV) for setting up a captive thermal power plant of
40 MW in the State of Chhattisgarh. In view of the cancellation of coal
linkage for the power project, the LLP is reviewing its decision to
implement the project. Your Company continues to hold 51% stake in
SRELLP.
Joint Ventures
- Raipur Infrastructure Company Ltd. (RICL) operates a private
Railway Siding in Mandhar, Raipur. During the year 2014-15 the Company
has earned profit of Rs. 1.02 crore as against Rs. 2.76 crore in the
previous year. In view of changed market scenario, the Company has
dropped railway siding proposed in Odisha. An amount of Rs. 1.37 crore
spent on the project has been written off during the year in view of
the decision. Your Company holds one third share in the Joint Venture.
- Madanpur South Coal Co. Ltd. (MSCCL) was SPV for the Madanpur South
coal block allotted to a consortium. The Supreme Court has cancelled
all coal block allotments made by the Government through Screening
Committee and govt. dispensation. The SPV holds certain assets,
including land, acquired for the project. The SPV would be wound- up
after disposal of these assets. The SPV has bought back part of the
equity shares during the current year out of the surplus funds as
permitted by the law. Your Company holds a 20.63% stake in the joint
venture.
- Godawari Natural Resources Ltd. (GNRL) is an SPV for acquisition
and development of mines and minerals, generation and trading of power
and infrastructure development. SEML had participated in auction for
acquisition of coal mine jointly with others through this SPV to meet
the prescribed eligibility criteria. Your Company acquired 29.98% stake
in GNRL during the year.
A report on the performance and financial position of each of the
subsidiaries, associates and joint venture companies as per the
Companies Act, 2013 is provided as part of the Consolidated Financial
Statements and hence not repeated here for the sake of brevity. The
Policy for determining material subsidiaries as approved may be
accessed on the Company's website www.seml.co.in under the head
corporate governance/policies under the Investors' section.
Consolidated financial statements
The consolidated financial statements presented by the Company include
financial information of its subsidiaries prepared in compliance with
applicable Accounting Standards.
The annual accounts and related information of the subsidiary companies
are open for inspection by any member/investor at the Registered Office
of your Company and the subsidiary concerned and your Company will make
available these documents/ details upon request by any member of the
Company who may be interested in obtaining the same.
In accordance with Section 136 of the Companies Act, 2013, the Audited
financial statements, including the consolidated financial statements
and related information of the Company and audited accounts of each of
its subsidiaries, are available on our website www.seml.co.in. These
documents are also available for inspection during business hours at
our registered office in Nagpur, India.
ESOP Scheme
Your Company treats its human capital as the most valued asset and as a
gesture of its feeling, your Company has implemented SEML ESOP Scheme
2012 for the employees and directors of your Company and its
subsidiaries. As on 31st March, 2015, 2,22,240 options have been vested
at a price of Rs. 125/- per share. Out of this 1,28,319 options have been
exercised by the employees.
The disclosures required to be made in the Directors' Report in respect
of the aforesaid ESOP Scheme, are contained in Annexure A forming part
of the Directors' Report.
Directors
In accordance with the provisions of the Act and the Articles of
Association of the Company, Mr. Pankaj Sarda, Director of the Company,
retire by rotation at the ensuing Annual General Meeting and being
eligible has offered himself for re-appointment.
Further, in terms of the approval of the Board of Directors, it is
proposed to re-appoint Mr. K.K. Sarda, as Chairman & Managing Director
for a fresh term of five year w.e.f. 1st April, 2015. Necessary
resolution for the same is taken for approval of the members in the
general meeting.
Brief profile of the Directors proposed to be appointed / re-appointed,
nature of their expertise in specific functional areas, names of the
companies in which they hold directorships and shareholding are
provided in the Corporate Governance Report forming part of the Annual
Report.
During the year under review, the members approved the appointment of
Mrs. Uma Sarda as a non-executive Non-Independent woman Director who is
liable to retire by rotation and reappointments of Mr. A.K. Basu, Mr.
C.K. Lakshminarayanan, Mr. G.S. Sahni, Mr. J. Balakrishnan. Mr. P.R.
Tripathi and Mr. Rakesh Mehra, as Independent Directors who are not
liable to retire by rotation.
Your Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as prescribed both under the Act and Clause 49 of the
Listing Agreement with the Stock Exchanges.
Pursuant to the provisions of the Act and the corporate governance
requirements as prescribed by SEBI under clause 49 of the Equity
Listing Agreement, the Board of directors ("Board") has carried out an
annual evaluation of its own performance, and that of its
Committees and individual directors. The performance of the Board and
individual directors was evaluated by the Board seeking inputs from all
the directors. The performance of the Committees was evaluated by the
Board seeking inputs from the Committee Members. The Nomination and
Remuneration Committee ("NRC") reviewed the performance of the
individual directors. A separate meeting of Independent Directors was
also held to review the performance of Non-Independent directors;
performance of the Board as a whole and performance of the Chairperson
of the Company, taking into account the views of Executive Directors
and Non-Executive Directors. The evaluation of Independent Directors
was carried out without the presence of that director. This was
followed by a Board meeting that discussed the performance of the
Board, its Committees and individual directors. Key criteria's for
performance evaluation are given in Annexure B to directors' report.
Your Company follows a policy on remuneration of Directors, Key
Managerial Personnel (KMP), Senior Management Personnel (SMP) and other
employees of the Company. The policy is approved by the Nomination &
Remuneration Committee of the Company. Remuneration Policy for
Directors, Key Managerial Personnel and other employees is annexed as
Annexure C to directors' report.
Your Company with the approval of Nomination & Remuneration Committee
has adopted a policy on Board diversity and the recommendation of
candidature for Board appointment will be based on merit that
complements and expands the skills, experience and expertise of the
Board as a whole, taking into account gender, age, professional
experience and qualifications, cultural and educational background, and
any other factors that the Board might consider relevant and applicable
from time to time towards achieving a diverse Board. The criteria for
determining qualification, positive attributes and independence of
director is enclosed as Annexure D to directors' report.
Familiarisation programmes for Board Members
Your Company provides information to familiarize the Independent
Directors with the strategy, operations and functions of the Company.
The Board members are provided with information/ presentations and are
given the opportunity to interact with the Senior Management of your
Company to help them to understand the Company's strategy, business
model, operations, products, markets, organization structure, finance,
human resources, technology, quality, facilities and risk management
and such other matters as may arise from time to time.
The Directors get an opportunity to visit Company's plants, where plant
heads appraise them of the operational and sustainability aspects of
the plants to enable them to have full understanding on the activities
of your Company and initiatives taken on safety, quality, CSR,
sustainability etc. At various Board meetings during the year,
presentations are made to the Board on safety, health and environment
and sustainability issue, risk management, company policies, changes in
the regulatory environment applicable to the corporate sector and to
the industry in which it operates. Quarterly presentations on
operations made to the Board include information on business
performance, operations, safety, market scenario, financial parameters,
working capital management, fund flows, senior management change, major
litigation, compliances, subsidiary information, donations, regulatory
scenario, etc.
The policy on familiarization programmes for Independent Directors is
posted on the website of the Company www.seml.co.in and can be accessed
under the head corporate governance/policies under the Investors'
section.
Directors' Responsibility Statement
Your Directors state that:
a) in the preparation of the annual accounts for the year ended March
31, 2015, the applicable accounting standards read with requirements
set out under Schedule III to the Act, have been followed and there are
no material departures from the same;
b) the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2015 and of the profit of the Company
for the year ended on that date;
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a 'going concern'
basis;
e) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
Key managerial personnel
During the year, the Board appointed Mr. Padam Kumar Jain as Chief
Financial Officer and Mr. Manish Sethi as Company Secretary of the
Company w.e.f. 14th August, 2014.
Auditors and Auditors' Report
Statutory Auditors
M/s. O.P. Singhania & Co., Chartered Accountants, Statutory Auditors of
the Company, hold office till the conclusion of the ensuing Annual
General Meeting and are eligible for re-appointment. They have
confirmed their eligibility to the effect that their re-appointment, if
made, would be within the prescribed limits under the Act and that they
are not disqualified for re- appointment.
The Notes on financial statement referred to in the Auditors' Report
are self-explanatory and do not call for any further comments. The
Auditors' Report does not contain any qualification, reservation or
adverse remark.
Cost Auditors
The Board has appointed the M/s. S.N. & Co., Cost & Management
Accountants, as cost auditors for conducting the audit of cost records
of the Company.
Secretarial Auditor
The Board has appointed S.G. Kankani & Associates, Practicing Company
Secretaries, to conduct Secretarial Audit for the financial year
2014-15. The Secretarial Audit Report for the financial year ended
March 31, 2015 is annexed herewith marked as Annexure E to this Report.
The Secretarial Audit Report is self explanatory and do not call for
any further comments. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
Corporate Social Responsibility (CSR)
With the objective of sustainable development and continual
improvement, your Company adopts a voluntary and proactive approach to
CSR to connect with the society by creating a sense of belonging.Your
Company strives for sustainable development programs in partnership
with the community.
Members are requested to refer the Corporate Governance Report forming
part of this annual report for the composition of the CSR Committee.
The CSR policy of the Company is available on the website of the
Company - www.seml.co. in - under the head corporate
governance/policies under the Investors' section. The annual report on
the CSR activities is annexed as Annexure F to directors' report.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the stock
exchanges, Corporate Governance Report along with the Auditors'
Certificate regarding compliance of conditions of Corporate Governance
is made a part of the Annual Report.
Disclosures
Board/Committees/Vigil Mechanism
The Board of Directors met 6 (six) times in the financial year 2014-15.
The details of the composition of Board of Directors, Corporate Social
Responsibility Committee, Audit Committee, other committees of the
Board, meetings of the board and committees and attendance of directors
at the Board and committee meetings and implementation of Vigil
Mechanism are given in the Corporate Governance Report forming part of
this Annual Report.
Particulars of Loans given, Investments made, Guarantees given and
Securities provided
Particulars of loans given, investments made and guarantees given are
given in note no. 13, 16, 37 and 44 to the standalone financial
statements. The Company, in its capacity of promoter, has pledged its
entire holding in Parvatiya Power Ltd. and 67.54% of its holding in
MBPCL with the lenders for loans granted to them. The loans and the
guarantees given are utilized by the recipients for their business
purposes. Members are requested to refer the notes for details which
are not repeated here for the sake of brevity.
Contracts and Arrangements with Related Parties
All contracts/arrangements/transactions entered by the Company during
the financial year with the related parties were in the ordinary course
of business and on an arm's length basis in the best interest of the
Company. During the year the company had not entered into any contract/
arrangement /transaction with related party which could be considered
material in accordance with the policy of the company on materiality of
related party transactions.
The Policy on materiality of related party transaction and dealing with
related party transactions as approved by the Board may be accessed on
the Company's website - www.seml.co.in under the head corporate
governance/policies under investors' section.
Internal Financial Control
The Company has in place adequate internal financial controls with
reference to financial statements. During the year, such controls were
tested and no reportable material weakness in the design or operation
were observed.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to be
disclosed under the Act, are provided in Annexure G to this report.
Extract of Annual Return
Extract of Annual Return of the Company is annexed herewith as Annexure
H to this report.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Act read with
Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, a statement showing the names and
other particulars of the employees drawing remuneration in excess of
the limits set out in the said rules is annexed herewith as Annexure I
to this report.
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
provided in Annexure J to this report.
Risk Management
During the year, your Directors have constituted a Risk Management
Committee which has been entrusted with the responsibility to assist
the Board in (a) Overseeing and approving the Company's enterprise wide
risk management framework; and (b) Overseeing that all the risks that
the organization faces such as strategic, financial, credit, market,
liquidity, accident, security, property, IT, legal, regulatory,
reputational and other risks have been identified and assessed and
there is an adequate risk management infrastructure in place capable of
addressing those risks.
A Risk Management Policy was approved by the Committee. The Company
monitors and manages the risks and uncertainties that can impact its
ability to achieve its strategic objectives.
General
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
3. I ssue of shares (including sweat equity shares) to employees of the
Company under any scheme save and except Employee Stock Options Scheme
referred to in this Report.
4. Neither the Managing Director nor the Whole-time Directors of the
Company receive any remuneration or commission from any of its
subsidiaries.
5. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company's
operations in future.
Your Directors further state that during the year under review, there
were no cases filed pursuant to the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The disclosures/information/details disclosed/given elsewhere in the
annual report has not been repeated again in the directors' report for
the sake of brevity. Members are requested to refer relevant sections
for the information.
Acknowledgement
Your Directors wish to place on record their gratitude for the valuable
guidance and support rendered by various Government departments,
Financial Institutions, Banks and various stakeholders, such as,
shareholders, surrounding societies, customers and suppliers, among
others. The Directors also commend the continuing commitment and
dedication of the employees at all levels, which has been critical for
the Company's success. The Directors look forward to their continued
support in future.
On behalf of the Board of Directors,
Raipur, 25th July, 2015 (K.K. Sarda)
Chairman & Managing Director
DIN: 00008170
Mar 31, 2014
Dear Members,
The directors present the 41st Annual Report on business and
operations of your Company for the fnancial year ended 31st March,
2014.
Financial performance
(Rs in Crore)
Particulars Standalone Consolidated
2013-14 2012-13 2013-14 2012-13
Revenue from operations (Gross) 1,396 1,524 1,720 1,545
Less: excise duty 125 140 129 140
Revenue from operations (Net) 1,271 1,384 1,591 1,405
Export 182 120 182 120
EbiDta 260 287 373 338
Depreciation 63 64 96 69
Finance cost (Net) 63 63 123 69
profit before tax 134 160 154 200
Provision for current and deferred tax 44 35 47 38
Provision for deferred tax related to 15 -- 15 --
previous year
Net profit 75 125 92 162
Dividend
Your directors have recommend a dividend of Rs 3/- per equity share for
the year ended 31st March, 2014. the dividend shall be paid after
approval of the members at the annual general meeting.
During the year, your Company has transferred the unpaid dividend
amount in respect of the F.Y. 2005-06 to the investor Education and
Protection Fund established u/s 205C of the Companies act, 1956.
Operations
The fnancial year 2013-14 was a yet another challenging year due to
slow down in Indian economy and industrial production and
infrastructure growth on account of high infation, policy paralysis,
political scenario, the ongoing European debt crisis and delayed
receipt of permission for disposal of coal washery rejects. In spite of
these constraints and the challenging environment, the performance of
your Company was satisfactory. This was achieved through a constant
endeavor at all levels for excellence combined with a series of safety
initiatives.
For detailed analysis, members are requested to refer to the Management
Discussion and analysis, forming part of this annual Report.
Cost saving initiative
Your company initiated a drive in 2012-13, in all its activities, to
cut down controllable costs on the basis of innovation, discipline and
logical thinking. The drive has yielded good results in improving
energy effciency, reducing consumption of materials, more efficient
inventory management, optimising manpower, etc. These steps have
contributed significantly in maintaining the bottomline in these
challenging times. Encouraged by the success, cost reduction &
effciency improvement have been adopted as an operational philosophy.
in appreciation of the success achieved, your Directors have
recommended to spend a part of the savings on employee welfare and have
constituted a committee and framed rules for attaining this purpose.
Projects
Debottlenecking, Modernization & Expansion project
Your Company has achieved fnancial closure for itsRs. 550 crore project
for debottlenecking, modernisation & expansion of existing
manufacturing and mining facility. The project will be executed over
the next 2 years.
Pithead Thermal Power Plant
Your Company has received Environmental Clearance for its 350 MW
pithead thermal power plant, subject to receipt of Stage-1 forest
clearance and subsequently Stage 1 forest clearance has also been
received. Coal mining plan for enhanced capacity of coal mining has
been submitted to the concerned government authorities. Project
execution will be started after approval of the mining plan.
Controlled entities
Sarda Energy & Minerals Hongkong Ltd, Hongkong (SEMHKL), is a wholly
owned subsidiary, functioning as global investment arm of your Company.
During the year under review, the subsidiary reported a net profit of Rs.
23.76 crore.
Sarda Global Venture Pte. Ltd. Singapore (SGV), a wholly owned
subsidiary, has acquired economic interest in coal mines in Indonesia
but the mining project has not seen any progress during the year.
Sarda Metals & Alloys Ltd.(SMAL), a wholly owned subsidiary has
installed 2 x 33 MVA Ferro Alloys plant backed by 80 MW captive thermal
power plant. On commercial considerations during the FY 2013-14 the
Company operated only the power plant. In view of improvement in the
ferro allys market, SMAL has recently statrted ferro alloys
manufacturing facility. During the year, your Company has made
additional equity investment ofRs. 9.71 crore in the project. The project
has reported a net profit ofRs. 6.89 crore in its first full year of
operation and has met all its repayment commitments on time.
Sarda Energy Ltd. (SEL), a wholly owned subsidiary, has taken up the
project of 1320 MW super critical thermal power project in
Chhattisgarh. The Company has received stage 1 forest clearance.
Environmental clearance is awaited. The work on the project could not
see any progress during the period under review because the land
acquisition has been challenged in the High Court of Chhattisgarh. all
activities have been suspended until the decision of the Hon''ble High
Court of Chhattisgarh is pronounced in the matter.
Parvatiya Power Ltd. (PPL),is operating 4.8 MW Loharkhet Small Hydro
Power Project in Bageshwar District of Uttarakhand since 2008. During
the year 2013-14, the plant generated and supplied 209.17 lacs KWh
(previous year: 192.70 lacs KWh) power achieving 50% capacity
utilization factor. The Company has earned profit after tax of Rs. 2.20
crore as against Rs. 1.78 crore in the previous year. the Company is
exploring the possibility of capacity enhancement in the project.
Your Company continues to hold 51% stake in PPL.
Madhya Bharat Power Corporation Ltd. (MBPCL), is implementing the 96 MW
Rongnichu Hydro Power Project near Gangtok in East Sikkim as a
run-of-the-river scheme. Work on the project is progressing slower than
expected due to multiple factors. The project has faced time and cost
overruns. The Company has applied for additional funding for cost
overrun, which is under active consideration of the lenders. The
Project has been successfully registered as a CDM Project with UNFCCC.
No fresh equity investment was made during the year. Your Company
continues to hold 58.73% share in MbPCL.
- Chhattisgarh Hydro Power LLP has been allotted four runÂof-the river
Small Hydro Power Projects in Chhattisgarh with a total generation
capacity of 77 MW. The LLP has started work on first 24 MW Gullu Hydro
power project. The fnancial closure was achieved during the year. Civil
contract has been awarded and bids of Electro-Mechanical and
Hydro-Mechanical works are under evaluation. Work on the project is
progressing well as per schedule. The project is entitled for CDM
benefits; MOEF has conveyed Host Country Approval to the Project for CDM
registration. The project is currently under validation stage.
All these projects are entitled for benefits in the form of subsidy from
Ministry of New & Renewable Energy, Clean Development Mechanism as well
as Renewable Energy Certifcates. Your Company has made fresh
contribution of Rs 3.64 crore during the year towards its share in the
LLP and holds 60.92% stake in CHP LLP.
- Sarda Hydro Power Pvt. Ltd. (SHPPL) has been allotted 24 MW
Kotaiveera and 9MW Ganeshpur Small Hydro Power Project in Chhattisgarh.
Land Acquisition and statutory approvals are in progress. Your Company
holds 60% stake in SHPPL.
- Shri Ram Electricity LLP (SRELLP) was incorporated as a special
purpose vehicle (SPV) for setting up a captive thermal power plant of
40 MW in the State of Chhattisgarh. In view of the changed market
scenario for power projects in the country, the LLP is reviewing its
decision to implement the project. Your Company continues to hold 51%
stake in SRELLP.
- Raipur Fabritech Pvt. Ltd. (RFPL) has been incorporated to undertake
steel fabrication activities at the site of closed steel plant of your
Company. the Company is also exploring possibility of developing a
logistic park. Your Company holds 52.38% stake in RFPL.
- Raipur Industrial Gases Pvt. Ltd. (RIGPL) has been incorporated to
undertake activities related to production of industrial gases. The
Company is yet to start operations. Your Company holds 51% stake in
RFPL.
Joint ventures
- Raipur Infrastructure Company Ltd. (RICL) operates a private railway
siding in Mandhar, Raipur. During the year 2013Â14, the Company has
earned profit of Rs 2.76 crore as against Rs 1.37 crore in the previous
year. in view of changed market scenario, the Company is reviewing its
decision to develop railway siding in Odisha. Your Company holds one
third share in the Joint Venture.
- Madanpur South Coal Co. Ltd. (MSCCL) was allotted a coal block in
Madanpur area of District Korba of Chhattisgarh in consortium. However,
the government of India has de-allocated the coal block due to delay in
implementation. The implementation was delayed because the area was
classified by the government as No-Go area and not due to any other
reason on the part of the Company. the decision has been challenged in
the High Court and the court has stayed operation of the de-allocation.
Your Company holds a 20.63% stake in the joint venture.
Awards and appreciation
During the year, coal mines of your Company received the following
awards at the Annual Safety Fortnight conduction by South Eastern Coal
Fields Ltd.:
- Award in "Dust Suppression in OC working, CHP & Stock Yard" Â 1st
position
- Award in "Engineering Overall" Â 2nd position
- Prize and certifcate for Trade test, which is the first time
achievement since the beginning of the mines.
Your Company won the above awards among the three regions i.e. Raigarh,
Bilaspur and Jabalpur.
Environmental conservation
Your Company is committed to adopt best practices for protection of
environment. Special thrust is given on utilizing the waste generated
so that instead of damaging the environment, the same is used
effectively /purposefully. The impact of each production activity on
nature is closely monitored and corrective/preventive actions are taken
to minimize adverse impact. adequate budgetary support is provided for
environmental protection activities.
During the year following initiatives were taken in this direction:
Plant waste was utilized for making ECO bricks under the brand name
SARDA.
Replacement of old brick machine with cost effective & more productive
brick machine.
WHRB ash used for brick making instead of dumping outside land.
Water Sprinklers were provided near ash silo, raw material yard and
road side to control fugitive emission.
Road side paving was done.
Construction of new concrete road inside plant to avoid dust pollution.
Recyclable material was recovered from plant waste like Slag, Char &
Accretion and recycled in manufacturing process.
Manganese bearing waste was used to make sinter as a substitute of low
grade Mn Ore to conserve the natural resources.
Usage of Glass Fiber bags in gas cleaning unit to reduce chimney gas
emission and energy conservation.
Multi Clean Floor Sweeper machine was provided.
2,08,774 units were generated through Solar Power as compared to 82,746
units in the previous year
Extensive tree plantation has been done to enhance the green cover in
and around the plant area. During the year, around 8678 trees have
been planted.
In addition to the above, many energy saving projects are being taken
on a regular basis.
Corporate social responsibility
With the objective of sustainable development and continual
improvement, your Company adopts a voluntary and proactive approach to
CSR to connect with the society by creating a sense of belonging. Your
Company strives for sustainable development programs in partnership
with the community. A synopsis of the activities undertaken by your
Company in the areas of education, healthcare, art, culture & sports,
infrastructure and livelihood development is presented hereunder.
Education
Your Company believes that education cannot be viewed as an isolated
input but it needs to be viewed as a tool to improve the lives of the
community. Education plays an important role for taking up any
development activity. Key activities undertaken by your company in the
feld of education are:
- Adoption of 90 Single teacher schools in deep remote areas in
Chhattisgarh being run by Friends of Tribal Society. the Society is
running 46,966 schools across the country for basic education to the
deprived sections of the society and is also running community
development programme.
- Interest free fnancial assistance of Rs 10.35 crore to R. K. Sarda
Vidya Mandir, a state-of-the-art CBSE school owned and run by Bharatiya
Vidya Bhavan in Raipur. Your Company had also donated the land to the
trust for the school. in a very short span the school has become most
preferred school in Raipur.
- Contribution to the "Shiksha Deep Trust" as founder member for
providing scholarship to the poor meritorious students of the state.
- School Bus facility for the students and staff in villages in the
mines area
- Support to various schools/anganbadies, in the form of salaries of
teachers/staff, school bags to students, sports material to schools,
etc.
- Support to "Siltara Shikshan Samiti" for the improvement in education
quality
- Providing Industrial training and exposure to engineering, CA, CS &
management students
- Distribution of steel utensils for the mid day meal service in Govt.
schools
Healthcare:
Your Company treats healthcare as one of its priorities. To create
awareness amongst villagers on matters of health, hygiene and mother &
child healthcare, your Company is working with various
institutions/agencies to improve the health conditions in the villages.
Major healthcare activities undertaken are as under:
- Running two mobile dispensaries with free medicines and providing
services of two full time Doctors. During the year 44466 patients
benefitted from the mobile dispensaries
- Tied up with various specialized medical institutes & hospitals for
the treatment of underprivileged and critical patients for free
treatment.
- Organized Blood Donation Camp with Red Cross & CII-Young Indians,
collected 302 units of blood
- Organized Mother & Child Health Care awareness program at nearby
villages
- Organized No Tobacco Day camp & conducted an awareness programme on
oral cancer with CBCC -USA & Sanjeevani Cancer Hospital , Raipur.
- Organized various health awareness camps for the villagers
In addition your company regularly organises medical checkup camps Â
individually and in association with other organization in the
surrounding areas.
Infrastructure
Your Company is committed to set up essential services required for
sustainable development and as part thereof it has undertaken various
infrastructure development activities in and around its plant. Your
Company has carried out the work of deepening of ponds, construction of
roads at Mandhar, tanda and Gare villages, sanitation facility,
drainage system in Siltara, installation of street lights, tree guards,
etc. Your Company has also made drinking water available at Siltara and
Mandhar through hand pumps and through pipelines from its plant to the
nearby villages.
The fre brigade of your Company continues to play an important role in
controlling fre hazards in the nearby villages, industries and also in
the city of Raipur. During the year it attended 13 fre calls from
outside.
Art, Culture & Sports
Your Company promotes sports, arts and cultural activities of
communities close to its operations. Your Company has established
system to have regular dialogue with the villagers to assess the
requirements of village. Your Company is the sponsor of the Gondawana
Cup International Tennis Tournament organized by the Chhattisgarh State
Tennis Association under the Indian Tennis Federation in which players
from 12 countries participated. Other activities in this direction
included:
- Aided Mass Marriage Program at Raipur & Raigarh
- Established multipurpose stall for the devotees of Maa Bamleshwari at
Musra village on the occasion of Navratri
- Sponsored Patrika Cup Award Cricket Tournament of Raipur
- Sponsored ITF Tennis Tournament
- Contribution/support for local fairs and inter village Jasgeet
Pratiyogita
- Organized positive leadership development programme "Mouj Me Raho" by
Swami Anubhavanand Ji
- Sponsored Chakradhar Samaroh for the promotion of local art, culture
& dance
Livelihood
Your Company took initiative to keep the village environment clean and
healthy. Your Company has encouraged women to participate in mainstream
by promoting income generation activities for youth and women ensuring
their economic self-reliance. Key activities in this area are
summarized hereunder:
- Support for IT education
- Plantation of 5000 plants in project area & villages
- Watershed development through village pond deepening & beautifcation
work
- Organized Veterinary Camp
- Participated in Rojgar Mela to provide employment
- Organized Kisan Samaroh (farmer exhibition) for agriculture
development
Consolidated accounts
The consolidated fnancial statements presented by the Company include
fnancial information of its subsidiaries prepared in compliance with
applicable Accounting Standards. As permitted, your Company is not
attaching Annual Reports of its subsidiaries and has included
prescribed particulars in this annual Report.
The annual accounts and related information of the subsidiary companies
are open for inspection by any member/ investor at the Registered office
of your Company and the subsidiary concerned and your Company will make
available these documents/details upon request by any member of the
Company who may be interested in obtaining the same. The annual
accounts and related information of the subsidiary companies are also
available on your Company''s website.
Fixed deposits
Your Company has not accepted any fixed deposits within the meaning of
Section 58A of the Companies Act, 1956/ Section 73 of the Companies
Act, 2013, and the rules made there under, during the year under
review.
ESOP Scheme
Your Company treats its human capital as the most valued asset and as a
gesture of its feeling, your Company has implemented SEML ESOP Scheme
2012 for the employees and directors of your Company and its
subsidiaries. As on 31st March, 2014, 1,11,120 options have been
vested. Out of this 75,879 options have been exercised by the employees
during the year 2014-15.
The disclosures required to be made in the Directors'' Report in respect
of the aforesaid ESOP Scheme, in terms of the SEBI (ESOP Scheme)
Guidelines, 1999 are contained in Annexure "A" forming part of the
Directors'' Report.
Directors
Mr. Rakesh Mehra and Mr. A.K. Basu are retiring by rotation. However,
in view of the provisions of Section 149 of the newly enacted Companies
Act, 2013, the Company is required to appoint Independent Directors for
a period of 5 years. accordingly, it is proposed to reappoint all
existing independent directors for a period of 5 years.
The Board considered the independence of each of the independent
Directors in terms of Section 149 and Schedule IV to the Companies Act,
2013 and Clause 49 of the listing agreement and was of the view that
the proposed directors fulfll the criteria of independence as mentioned
in the above provisions and can be appointed as independent Directors.
in the opinion of the board all the proposed directors are the persons
of integrity and possess relevant expertise and experience. Keeping in
view the educational / professional Qualifications, working experience,
expertise in line with Company''s business, positive attributes, already
being on the Board of the Company and benefits that the Company will
derive with their appointment, the Board recommends their appointment
as Independent Directors of the Company to hold office for a term of five
consecutive years commencing from April 1, 2014. The Company has
received declaration in terms of Section 149(6) of the Companies act,
2013.
Further, as required under the Companies act, 2013 and the listing
agreement, your Company is required to have a woman director on its
board. Accordingly, the Board proposes the appointment of Mrs. Uma
Sarda as director on the Board of the Company for consideration and
approval of the members. The Company has received Specific notice from a
member of the Company under section 160 of the Companies Act, 2013,
along with a requisite security deposit proposing the appointment of
Mrs. Uma Sarda as Director.
As stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges, brief profle of the Directors proposed to be
appointed/re-appointed, nature of their expertise in Specific functional
areas, names of the companies in which they hold directorships and
shareholding are provided in the Corporate Governance Report forming
part of the annual Report.
Directors'' responsibility statement
Pursuant to the provisions of Section 217 (2aa) of the Companies act,
1956, your Directors state as under:
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation;
ii) that the directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the fnancial year and of the
profit of the Company for the year;
iii) that the directors have taken proper and suffcient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
iv) that the directors have prepared the annual accounts on a going
concern basis.
Cost Auditors
the Central Government had approved the appointment of M/s. S.G.
Kankani & Co., Cost accountants, as the Cost auditor of the Company for
audit of the cost accounting records of the steel and electricity
business of your Company for the fnancial year 2012-13. The Cost Audit
Report was fled by the Cost Auditors on 27th September, 2013.
M/s. S.G. Kankani & Co., Cost accountants, have been re-appointed as
the Cost auditors for conducting Cost audit for the fnancial year
2013-14. The Cost Audit Report will be fled within the stipulated
period of 180 days of the close of the fnancial year.
Statutory Auditors
M/s M.M. Jain & associates, Chartered accountants, (Firm registration
No. 112538W) Statutory auditors of the Company, will retire at the
conclusion of ensuing Annual General Meeting of the Company. They have
been statutory auditors of the Company since 1980. in order to uphold
the highest standards of corporate governance and spirit of the
Companies act, 2013, the board of Directors on the
suggestion/recommendation of audit Committee has decided for a change
in Statutory auditors of your Company.
M/s M.M. Jain & associates have maintained the highest level of
governance and substantially contributed in the efforts of the Company
towards strengthening the disclosures, internal controls, processes and
procedures in line with expanding size of operations. The Board places
on record its deep sense of appreciation for the services rendered and
guidance given by them as statutory auditors of the Company.
in terms of Section 139(2) of the Companies act, 2013, the board of
Directors of your Company, on the recommendation of the Audit
Committee, proposes the appointment of M/s. O.P. Singhania & Co.,
Chartered Accountants (FRN: 002172C) as the statutory auditors of the
Company for a period of five consecutive years from the conclusion of
the 41st Annual General Meeting up to the conclusion of the 46th Annual
General Meeting, subject to ratifcation at each Annual General Meeting.
M/s. O.P. Singhania & Co., has confirmed their eligibility and has given
consent for their appointment as Statutory auditor.
Necessary resolution for appointment of M/s. O.P. Singhania & Co., as
Statutory Auditors of your Company is being taken up through the Notice
of 41st annual General Meeting forming part of this annual Report.
Auditors'' report
The observations made in the Auditors'' Report, read with the relevant
notes thereon, are self-explanatory and do not call for any comments
under Section 217 of the Companies act, 1956.
Compliance under the Companies Act, 2013
The Companies Act, 2013 with Rules, notifed with effect from April 01,
2014 with substantial changes in requirement of law and compliance has
replaced the Companies Act, 1956. Your Company has taken steps to
comply with the requirements of the above act, as are applicable.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The statement giving details of conservation of energy, technology
absorption, foreign exchange earnings and outgo, in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is annexed and marked as annexure ''b'', forming
a part of this report.
Particulars of employees
The particulars of employees, as required under Section 217 (2A) read
with the Companies (Particulars of Employees) Rules, 1975, are given in
annexure ''C'' to this report.
Corporate governance
Pursuant to Clause 49 of the Listing Agreement with the stock
exchanges, Management Discussion and Analysis, Corporate Governance
Report and Auditors'' Certifcate regarding compliance of conditions of
Corporate Governance are made a part of the annual Report.
Acknowledgement
Your Directors wish to place on record their gratitude for the valuable
guidance and support rendered by various Government departments,
Financial institutions, banks and various stakeholders, such as,
shareholders, customers and suppliers, among others. the Directors also
commend the continuing commitment and dedication of the employees at
all levels, which has been critical for the Company''s success. The
Directors look forward to their continued support in future.
On behalf of the Board of Directors,
Place : Raipur (K.K. Sarda)
Dated : august 14, 2014 Chairman & Managing Director
Mar 31, 2012
The directors take pleasure in presenting the Thirty-Ninth Annual
Report on business and operations of your company for the financial
year ended 31st March, 2012.
Financial results
(Rs. in Lacs)
Particulars Standalone Consolidated
2011-12 2010-11 2011-12 2010-11
Revenue from
operations (gross) 1,19,667 95,575 1,20,474 96,205
Less: excise duty 9,649 7,101 9,649 7,101
Revenue from
operations (net) 1,10,018 88,474 1,10,825 89,104
Export 11,738 11,995 11,738 11,995
Ebidta 23,757 16,100 21,545 18,868
Depreciation 6,323 5,763 6,536 5,975
Finance cost (net) 4,497 1,807 3,429 762
Profit before tax 10,406 7,072 7,853 9,331
Provision for
taxation (1,034) 2,105 (960) 2,132
Net profit 11,440 4,967 8,813 7,199
Dividend
Your directors recommend a dividend of Rs.3/- per equity share for the
year ended 31st March, 2012. The total outgo on account of dividend
including tax thereon will be Rs.1,249.97 Lacs. The dividend shall be
paid after approval of the members at the annual general meeting.
During the year, your company has, consequent upon expiry of the
prescribed period, transferred the unpaid dividend amount in respect of
the F.Y. 2003-04 to the Investor Education and Protection Fund
established u/s 205C of the Companies Act, 1956.
Operations
During the year under review, all existing manufacturing facilities and
coal mine achieved record output. This could be achieved through
constant endeavor at all levels for excellence. The operations at iron
ore mines remained suspended due to law and order problems in the
surrounding area.
For detailed plant wise analysis, members are requested to refer to the
Management Discussion and Analysis, forming a part of Annual Report.
Projects
During the year, the Wire Drawing Mill, Coal Washery and 2nd Bricks
plant were commissioned at a total capital outlay Rs.4,163.93 Lacs.
Debottleneckina. Modernization & Expansion project
Your company has planned capital expenditure of Rs.550 crores for
debottlenecking, modernisation & expansion of existing manufacturing,
coal mining and coal washery to be executed over next 2 years. Union
Bank of India has appraised and sanctioned part debt funds for the
project. Balance amount is being syndicated from other member banks of
consortium.
Pithead Thermal Power Plant
Your company has acquired required land for the proposed 350 MW thermal
power plant at Kolam, Raigarh near its captive coal mines. Water
Resources Department, Government of Chhattisgarh has allocated required
quantity of water for the project. Environmental clearance is awaited.
The site work and release of orders for plant & machinery & other
facilities for the project will start after receipt of statutory
clearances. Coal mining plan is under preparation to meet coal
requirement of the project.
Mining projects Iron Ore
Your company has executed 4 Prospecting Licenses for iron ore in
Narayanpur district of Chhattisgarh. Your company is in process of
getting various statutory clearances.
Manganese Ore
The application for forest and environment clearance for manganese ore
mines of your company in Goa is awaiting State Government clearance,
pending finalization of Mining/Forest Policy of the State.
Your comapny received prior permission from Central Government under
Mines and Minerals (Development and Regulation) Act for one prospecting
license in Balaghat district, Madhya Pradesh.
Having completed the Reconnaissance, your company has moved three
applications for grant of Mn ore prospecting licenses in Miragpur area
(Madhya Pradesh), which are under consideration of the State
Government.
Coal
The work on the Indonesian coal mine under wholly owned subsidiary is
progressing steadily. Forest clearance has been received. Land
acquisition is going on.
Controlled entities
- Sarda Energy & Minerals Hongkong Ltd, Hongkong (SEMHKL), is a wholly
owned subsidiary, functioning as an investment arm of your company.
During the year under review the subsidiary has declared dividend
equivalent to Rs.26.66 crore (HK$ 39 per equity share), which is
reflected in dividend income of your company.
- Sarda Global Venture Pte. Ltd. Singapore (SGV), a wholly owned
subsidiary, has acquired economic interest in coal mines in Indonesia.
Land acquisition for mining is going on and mining is expected to
commence in 2013.
- Sarda Metals & Alloys Ltd.(SMAL), a wholly owned subsidiary, is
implementing a greenfield Ferro Alloys plant of 2 x 33 MVA capacity
backed by captive thermal power plant of 80 MW near Visakhapatnam. The
project is expected to be commissioned in this quarter.
- Sarda Energy Ltd. (SEL), a wholly owned subsidiary, has taken up the
project of 1,320 MW super critical thermal power project in
Chhattisgarh. Nearly half of the required land has already been
acquired by the company. Balance land is being acquired through
compulsory acquisition, which is expected to be over by the end of
current financial year. The public hearing for environmental clearance
has been completed and the environmental clearance is expected soon.
SEL expects to get coal linkage in the next allocation programme of the
Government of India.
- Parvatiya Power Ltd. (PPL), is operating 4.8 MW Loharkhet small hydro
power project in Bageshwar district of Uttarakhand. During 2011-12, the
plant generated and supplied record 21.79 Mn Kwh (previous year: 17.85
Mn Kwh) power. The company earned a profit after tax of Rs.200.76 Lacs
against Rs.101.25 Lacs earned in the previous year. Your company has 51%
stake in PPL.
- Madhya Bharat Power Corporation Ltd. (MBPCL), is implementing 96 MW
Rongnichu Hydro Power Project in East Sikkim near Gangtok, close to
National Highway NH-31A. Civil works are going on in full swing. The
contracts for electro-mechanical and hydro-mechanical works have also
been awarded. The company has applied for CDM benefits and validation
is in progress.
During the year, MBPCL issued 2,97,50,000 equity shares of Rs.10/- each
to the promoter companies to raise Rs.74.38 crore. Pursuant to fresh
investments, the stake of your company in MBPCL has gone up to 58.48%
from 52% in the previous year.
- Chhattisgarh Hydro Power LLP has been allotted following run -off-
the river type Hydro Power Projects in Chhattisgarh
1. 24 MW Gullu SHP 2. 24 MW Rehar SHP
3. 24 MW Mand SHP 4. 5 MW Jelha SHP
The LLP has started work on 24 MW Gullu and Rehar projects. The civil
works for 24 MW Gullu SHP has been awarded. Construction of approach
roads to project components is under progress. Construction of camp
area and dump areas are completed. The main civil contractors have
started mobilization of manpower and equipments.
Application for land acquisition for 24 MW Rehar SHP has been made.
Other statutory clearances are under progress.
All these projects are entitled for benefits in the form of subsidy
from Ministry of Non-Renewable Energy, Clean Development Mechanism as
well as Renewable Energy Certificates. Your company has 60.92% stake in
CHP LLP.
- Sarda Hydro Power Pvt. Ltd. (SHPPL) has been allotted 24 MW
Kotaiveera SHP and 9MW Ganeshpur Small Hydro Power Projects in
Chhattisgarh. Both the projects are in the process of obtaining
statutory clearances. Your company has 60% stake in SHPPL.
- Shri Ram Electricity LLP (SRELLP) has been incorporated as a special
purpose vehicle (SPV) for setting up a captive thermal power plant of
40 MW in the State of Chhattisgarh. The captive power plant has been
awarded coal linkage. Your company has 51% stake in SRELLP.
Techno-economic viability study is being carried out.
- Raipur Fabritech Pvt. Ltd. (RFPL) has been incorporated during the
year to undertake Steel fabrication activities at the site of closed
steel plant of your company. Your company holds 52.38% stake in RFPL.
- Raipur Industrial Gases Pvt. Ltd. (RIGPL) has been incorporated
during the year to undertake activities related to production of
industrial gases at the site of Raipur Gases Private Limited acquired
by your company in 2007. The company is yet to start its operations.
Your company holds 51% stake in RFPL.
Joint Ventures
- Raipur Infrastructure Company Ltd. operates a private railway siding
in Mandhar, Raipur. During the year 2011-12, the company has handled
total 179 rakes of different material as against 78 rakes handled
during the previous year and earned profit of Rs.137.76 lac as against Rs.
7.80 Lacs in the previous year.
RICL is also in the process of developing a private railway siding
allotted in Orissa. The process of approvals and land acquisition is
going on. The approval is expected shortly from Collector. Your company
holds one- third share in the joint venture.
- Madanpur South Coal Co. Ltd. has been allotted a coal block in
Madanpur area of Dist. Korba of Chhattisgarh in consortium. Most of the
clearances required have been obtained however, the forest clearance
was not granted by the Ministry of Environment and Forest, Government
of India, because the area was declared as "NO GO AREA".
A review meeting was called by The Ministry of Coal in January, 2012
where it was informed that the concept of "go-no go area" has been
dispensed off and the JV was advised to resubmit the proposal through
State Govt. The proposal has been resubmitted and is under active
consideration at state level. Your company holds 20.63% stake in the
joint venture.
Awards/Appreciation
During the year under review your company received the following
awards:
- Engineering Export Promotion Council (Western Region) "EEPC Star
Performer Award in the product group "ferro alloys" for its outstanding
export performance during FY 2009-10 when the country was reeling under
recession post-Lehman fiasco. Your company had received the award for
2008-09 also.
- Certificate of Merit from Chhattisgarh State Renewable Energy
Development Agency (CREDA), Dept. of Energy, Govt. of Chhattisgarh in
appreciation of the achievement in Energy Conservation at State Level
for the year 2011.
- Trophy for "General Safety Consciousness" in Annual Coal Mines Safety
Fortnight 2011 at South Eastern coalfields Limited, Bilaspur Region.
Consolidated accounts
Your company has prepared consolidated accounts after including figures
of the subsidiaries, joint ventures and associates, as per the
Accounting standard 21, 27 and 23 respectively.
Pursuant to the general exemption granted by the Central Government,
your company has not attached copies of the Balance Sheet and Profit
and Loss Account, Directors' Report and Auditors' Report of the
subsidiary companies for the financial year ended 31st March, 2012 and
other documents required to be attached to the Balance Sheet of your
company. However the other details, as required by the Central
Government while granting the said exemption, are disclosed in this
Report.
The annual accounts and related information of the subsidiary companies
are open for inspection by any member/ investor at the Registered
Office of your company and the subsidiary concerned and your company
will make available these documents/details upon request by any member
of the company who may be interested in obtaining the same. The annual
accounts and related information of the subsidiary companies are also
available on your company's website.
Fixed deposits
Your company has not accepted any fixed deposits within the meaning of
Section 58A of the Companies Act, 1956, and the rules made there under,
during the year under review.
Environmental Conservation
Your company believes in the philosophy of co-existence and co-creation
of Mother Nature and human activities. Impact of each production
activity on nature is closely monitored. Various corrective and
preventive measures are taken to overcome the environmental issues and
are supported with adequate budgetary measures. Your company is taking
a number of initiatives to minimise environmental issues.
In order to improve the environmental conditions water sprinklers and
de-dusting systems have been installed at various locations.
Oscillating monitor has been installed at raw material handling area.
Pneumatic conveying system has been installed at the pellet plant to
avoid dust pollution. New gas cleaning plant has been commissioned at
ferro alloys plant.
Extensive tree plantation has been done to enhance the green cover in
and around the plant area. Your company has also planted 1100 Neem
trees in the factory in association with Mahaveer International.
Plantation of approximately 8000 trees have been done at the mining
sites of your company.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) initiatives of your company owe
its genesis to its core values. Your company believes in extending
development support to the society around its operating units by
creating a sense of belongingness and welfare. Some of the initiatives
taken by your company are briefed hereunder:
Education:
In the field of education, your company continues to
- sponsor R. K. Sarda Vidya Mandir, a state-of-the-art CBSE school near
Raipur, in association with Bharatiya Vidya Bhavan for providing best
educational and sporting facilities to children at affordable price in
saddu village.
- support, in association with Friends of Tribal Society, 120 Single
teacher schools (Ekal Vidyalayas) in tribal areas of Chhattisgarh state
for the students from class-1 to 3.
- be associated with Shiksha Deep Trust for education development of
underprivileged. Main objective to this trust is to extend financial
assistance for higher education to meritorious & needy students.
Your company
- adopted Govt. ITI of Saragaon in Jangir, Champa of Chhattisgarh
State.
- has provided financial assistance and infrastructure facilities to
schools in the areas near its plant and mining sites.
- is providing dedicated, free school bus facility in 10 villages to
pickup & drop the students to respective schools which covers about
1400 students of 12 locations.
- has provided school kits (bags, etc) to needy poor students under
Dattak Putri Siksha Yojana - a scheme operated by the state government
in which an Individual/Organization adopt Girls for their education and
development under Public Private Partnership.
- conducted corporate culture training programmes in village schools to
develop the personality of village school students to promote moral
strength, behavioral improvement, improvement of hygienic, cleanliness,
Nashamukti i.e. avoidance of toxicants, etc. and fondness for societal
development.
Health:
Your company actively sponsors medical facilities, assisting in primary
healthcare across villages in and around the area of its operations.
During the year, the mobile dispensary van, managed by your company for
providing free medical check-up and medicines, served 49,354 patients
as against 37,427 patients in the previous year.
Your company also
- provides medical treatment to critical patients of tribal areas at
Multi specialty hospitals at company's expenses.
- promotes preventive health care through health check-up camps
- provides low cost and high quality medical assistance for the
economically underprivileged community at their door steps through
first aid centers.
- has adopted a cluster of villages near its iron ore mines for
providing health care facilities.
- provides financial assistance (directly and indirectly) to the
patients for medical treatment and also distributes basic medicines in
and around the areas of its operations.
In April, 2012, your company had organized a voluntary Blood Donation
camp in association with the Red Cross Society. In the camp, 613 units
of blood were collected in a single day which as per Red Cross Society
is the highest in Chhattisgarh.
Infrastructure Development:
The infrastructure facilities created by your company include roads,
electricity facilities, health centers, temples, schools, community
centers, bore wells for drinking water, hygiene and sanitation
facilities at various places. Your company has also set up water
harvesting system for enhanced irrigation facilities through increased
level of ground water & number of water sources and improved quality of
land through reduction in soil erosion.
Art, Culture & Sports:
Your company
- sponsors various sports at State and National level including the
local league matches.
- supports the local players, adopt them & sponsor the institutions for
the growth of tennis in the State.
- continues its support to State and District Associations for Tennis &
Cricket.
During the year, your company
- sponsored the Gondwana Cup Tennis tournament jointly with
Chhattisgarh State Tennis Association. This Grand Slam of
Chhattisgarh, an All India level Tennis Tournament was organized in
Chhattisgarh after a long interval of 30 years.
- supported the sports meet of students for volley ball tournament and
cricket tournaments and developed the play ground for the sport
promotion among village youth at various villages.
Your company supported various trusts, societies, communities,
organisations for various religious celebrations/ programmes, meetings,
awareness rallies, youth festivals, community works, Independence Day
celebrations, mass marriage programs supported by Government agencies
etc. Your company also supplied tarpaulin sheets for flood affected
people.
During the year, your company
- contributed by way of donation, land admeasuring about 3 acres to
Maheshwari Trust for constructing community centre.
- organized a session of Swami Anubhavanand on positive environment
building.
- contributed for the famous Chakradhar Samaroh '2011 at Raigarh.
Just and equitable society is a dream yet to be cherished in India.
Your company aims at doing so through integrating various strategies
especially women empowerment by enabling them to have access to incomes
and a greater share of wealth. Your company is working extensively to
contribute to improved livelihood for poor families in the cluster of
villages through enhanced and sustainable income-generating
opportunities.
Your company has organized free veterinary medical camp for the cattle
of surrounding villages near mine area and has contributed to
environmental up-gradation program by taking up social forestry & road
side plantations work.
Your company has also organized training for 20 local youths under
Indian Grain Storage Management & Research Institute (IGMRI) Hapud
(UP), a Central Govt. Enterprises under the Ministry of Food &
Consumer, working in the field of scientific grain storage management
in villages.
Directors
Mr. A. K. Basu, Mr. C. K. Lakshminarayanan and Mr. J. Balakrishnan,
Directors of your company, retire by rotation and being eligible, offer
themselves for reappointment. The brief resumes/details of Directors
who are to be appointed/reappointed are made a part of the Annual
Report.
Directors' responsibility statement
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, your Directors state as under:
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation;
ii) that the directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year and of the
profit of the company for the year;
iii) that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
iv) that the directors have prepared the annual accounts on a going
concern basis.
Cost Auditors
The board of directors of your company has appointed M/s. S. G. Kankani
& Co., Cost Accountants, as the Cost Auditor of the company for audit
of the cost accounting records of the steel and electricity business of
your company. The appointment of the auditor has been approved by the
Central Government.
The audit report of the cost accounts for the year ended March 31,
2012, will be submitted to the Central Government in due course. This
is the first year of audit of cost records.
Statutory Auditors
M/s. M. M. Jain & Associates, Chartered Accountants, the retiring
statutory auditors of your company, hold office till the conclusion of
the ensuing annual general meeting and are eligible for reappointment.
Your company has received a letter from the retiring auditors to the
effect that their appointment as auditors for the year 2012-13, if
made, would be within the limits under section 224 (1-B) of the
Companies Act, 1956.
Auditors' Report
The observations made in the Auditors' Report, read with the relevant
notes thereon, are self-explanatory and do not call for any comments
under Section 217 of the Companies Act, 1956.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The statement giving details of conservation of energy, technology
absorption, foreign exchange earnings and outgo, in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is annexed and marked as Annexure 'A', forming
a part of this report.
Particulars of employees
The particulars of employees, as required under Section 217 (2A) read
with the Companies (Particulars of Employees) Rules, 1975, are given in
Annexure 'B' to this report.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the stock
exchanges, Management Discussion and Analysis, Corporate Governance
Report and Auditors' Certificate regarding compliance of conditions of
Corporate Governance are made a part of the Annual Report.
Acknowledgement
Your Directors express their thanks and record appreciation for the
co-operation they received from various government authorities,
financial institutions, banks, suppliers and customers of your company.
Your Directors place on record, their sincere appreciation for the
devoted services rendered by the employees at all levels of your
company and look forward to their continued support.
On behalf of the Board of Directors,
(K.K. Sarda)
Place : Raipur Chairman & Managing Director
Dated : July 28, 2012
Mar 31, 2011
Dear Shareholders,
We take pleasure in presenting the Thirty-Eighth Annual Report on
business and operations of your Company for the fnancial year ended
31st March 2011.
Financial results
(Rs. in lacs)
Particulars Standalone Consolidated
2010-11 2009-10 2010-11 2009-10
Gross sales 94,603 55,592 95,245 56,080
Less: Excise duty 7,101 3,310 7,101 3,310
Net sales 87,502 52,282 88,144 52,770
Export 11,995 7,259 11,995 7,259
EBIDTA 13,703 8,402 15,289 15,930
Depreciation 5,763 3,880 5,975 4,093
Interest 1,519 1,272 472 32
Gain from Forex Fluctuation 653 4,470 479 4,303
Profit before tax 7,072 7,719 9,331 15,878
Provision for taxation 2,105 1,399 2,132 1,441
Net Profit 4,967 6,320 7,199 14,437
Appropriations:
Transfer to general reserve 1,500 1,500 1,500 1,500
Transfer to debenture
redemption reserve 625 - 625 -
Dividend (including tax
on dividend) 1,250 1,195 1,250 1,195
Balance carried over to
next year 1,592 3,625 3,778 11,726
Dividend
Your Directors recommend a dividend of Rs.3/- per share (30%) for the
year ended 31st March, 2011. The total outgo on account of Dividend
including tax thereon will be Rs.1249.97 lacs. The dividend shall be
paid after approval of the members in annual general meeting.
Operations
The capacity utilization increased in all the plants as compared to
previous year. Additional power generation capacity of 20 MW became
operational in December 2010. Wire Rod Mill also became operational
during the year. This has helped in achieving higher generation of
power and production of steel. The operation at the coal mines of the
Company continues to be normal. Coal washery started operation during
the current year. The operations at iron ore mines remained suspended
due to law and order problems in the surrounding area.
A Core Asset Group has been formed to promote preventive maintenance
practices which will improve availability of assets across operations.
Health Safety & Environment and Fire Departments have performed
consistently in terms achieving better than statutorily stipulated
environmental norms.
Members are requested to refer to the Management
Discussion and Analysis, forming a part of this Annual Report for
detailed analysis.
Projects
During the year, the Company spent Rs.7,664 lacs on expansion and new
projects.
Wire Rod and Wire Drawing Mill
The 1.8 lac tones Wire Rod Mill at Siltara, Raipur, started commercial
operations from 01.01.2011. Wire drawing facility commenced operation
during the current year. This completes the integration of steel
operations from mining to the finished steel for end user. This also
gives the flexibility in deciding the product mix depending upon the
market conditions.
Coal Washery
The 0.96 million tonne coal washery was commissioned in the current
financial year. Washed coal will help in achieving higher production in
the sponge iron plant of the Company. The middling and rejects
generated in the washery will be used for power generation at proposed
pithead Thermal Power Plant.
Pithead Thermal Power Plant
The Company has acquired sufficient land for the proposed thermal power
project at Kolam, Raigarh near its captive coal mines. Water has
already been allocated for the project. Public hearing has been
successfully completed and now presentation at state level MoEF is
awaited. TCE has been appointed as consultant for Design and
Engineering activities for the project. Bids invited for the BTG
package are being evaluated. The site work and release of orders for
the projects will start after receipt of statutory clearances.
Mineral Resources Iron Ore
The Company has received prospecting license for iron ore over an area
of 150 hect. in Narangsur area of
Chhattisgarh. Prospecting work is underway. In addition to this,
Company has received grant order for prospecting licenses from
Chhattisgarh Government for four areas.
Manganese Ore
Your Company has acquired Manganese Ore mines in Goa and steps are
being taken to operationalise the mines. The mining lease has been
registered in the name of the Company. Applications for seeking various
clearances have been made and the environmental clearance and forest
clearance is under process. The Company has also received 3 Prospecting
Licenses in Balaghat, District of Madhya Pradesh. The prospecting work
is underway.
Coal Mines
The Company has got interest in a coal mine in a Joint Venture (JV) and
also interest in coal mines in Indonesia through a wholly owned
subsidiary. These mines will ensure long-term sustainable and
uninterrupted availability of fuel to the Company. The coal mine
allotted in JV falls in the area classified as a NO GO AREA by the
Ministry of Environment and Forest. A Group of Ministers is formed to
resolve the issue. The work on the coal mine under Wholly Owned
Subsidiary is progressing steadily. Forest clearance has been received.
Land acquisition is going on.
Iron Ore Sizing and Screening plant
As informed in the last report, the second phase of the Iron Ore Sizing
& Screening plant of 6.00 LTPA have been commissioned successfully on
31.08.2010. As Iron Ore mines operation remained suspended due to poor
law & order in the mining area, the plant could not be operated at its
fullest capacity. 63010 MT Iron ore fines were processed out of 76862
MT iron ore fines shifted from the mines. During the year under review,
29206 MT was dispatched to plant after screening & washing.
The product quality remained within the acceptable norms. However, to
further improve the quality of the product, certain modifications are
being carried out in the existing system. The modifications will be
completed by the end of current financial year.
Subsidiary companies
During the year under review, your Company has made fresh investments
in two entities - a private limited Company to undertake hydro power
business and an LLP to undertake thermal power plant. Your Company has
acquired majority control in these entities. Consequent to the above
investments, the total no. of subsidiaries / controlled entities of the
Company has gone up from 7 to 9. The Company has also infused further
funds in the existing subsidiaries. A brief about the subsidiaries is
given hereunder.
Sarda Energy & Minerals Hongkong Ltd, Hongkong (SEMHKL), a wholly owned
subsidiary of SEML (Company), incorporated in the year 2007 as
international trading and investment arm of the Company is performing
well. During the year 2010-11, it posted a profit of HK$ 19.55 Million.
Sarda Global Ventures Pte. Ltd. Singapore (SGV), a wholly owned
subsidiary of your Company has acquired economic interest in coal mines
in Indonesia. The mining is expected to start in next year. However,
the work on development of the mine has been slowed due to frequent
changes in the mining law in Indonesia. The acquisition of land is
going on.
Sarda Metals & Alloys Ltd.(SMAL), a wholly owned subsidiary, is
implementing a Greenfield Ferro Alloys plant of 2 x 33 MVA capacity
backed by captive thermal power plant of 80 MW near Visakhapatnam in
the first phase. The work on the project is progressing as per schedule
and the project will be commissioned in the frst quarter of FY 2012-13.
The Company has achieved the financial closure for the total Project
Cost of Rs 543 crores during the year at a debt equity ratio of 70:30.
Sarda Energy Ltd. (SEL), a wholly owned subsidiary, was incorporated as
an SPV for taking up the installation and operation of the 1320 MW
power plant in Chhattisgarh. The process of land acquisition has been
accelerated. Part of the land has already been acquired by the Company.
The land to be acquired through compulsory acquisition is under various
stages of clearances/ notifications and acquisition of the land is
expected to be completed during the current financial year. The Company
has submitted draft Environment Impact Assessment report to CECB,
Raipur for Public Hearing, which is expected in the current financial
year. Based on the progress achieved, the Company expects to get coal
linkage on priority by the end of the current fnancial year.
Parvatiya Power Ltd. (PPL), is operating a 4.8 MW Loharkhet Small hydro
power plant in Uttarakhand. In the financial year 2010-11, its third
year of commercial operation the plant has generated and supplied 17.85
MU (P.Y. 18.59 MU) to Uttarakhand Power Corporation Limited (UPCL).
Inspite of unprecedented landslides and cloud bursts in the region, the
Company has earned higher profits in the financial year 2010-11 as
compared to immediately preceding financial year. The tariff rate for
sale of power has been revised upward by the Uttarakhand Electricity
Regulatory Commission and this has increased profitability.
Pursuant to the issue of additional equity shares, holding of your
Company reduced from 54.41% to 51%.
Madhya Bharat Power Corporation Ltd. (MBPCL), is implementing 96 MW
Rongnichu Hydro Power Project in East Sikkim on Rongnichu river near
Gangtok. The project is close to National Highway. The year under
review witnessed rapid development in the
implementation of the Project. The approach roads leading to major
project components have been constructed. Manpower and equipments have
been mobilized at the project site, construction of camps and
infrastructural facilities is complete and civil construction work has
commenced.
Orders have been placed for electro mechanical equipments also. The
design consultancy contract for execution of 2 nos. 220KV GIS bays at
Rangpo Pooling Station of Power Grid has been awarded to PGCIL. Other
contracts are expected to be awarded shortly. Physical Model Tests of
the proposed Barrage, Surface Desilting Chambers and Power Intake have
been successfully completed by Irrigation Research Institute, Roorkee.
Analysis of Mathematical Model has also been completed. Host Country
Approval from the Indian DNA under CDM registration process has been
received and validation is in progress.
The financial closure of the project has been achieved. To meet the
requirements of funds, during the year under review, the Company has
issued 1,65,00,000 equity shares of Rs. 10/- each at a premium of Rs.
10/- each to the promoter companies. The Company holds 52% stake in
MBPCL.
Chhattisgarh Hydro Power LLP has been incorporated on 17.09.2010 by
converting Chhattisgarh Hydro Power Pvt. Ltd. into LLP. The LLP has
been allotted four run -off -the river type small Hydro Power Projects-
Gullu SHP of 24MW, Rehar 1 SHP of 24 MW, Mand SHP of 24 MW and Jelha of
5 MW in Chhattisgarh State with a total capacity of 77 MW. These
projects, being small hydro projects, will be eligible for RPO/REC
benefits applicable to non-solar renewable energy projects.
All the statutory clearances for the Gullu project of 24 MW have been
received. Land for the project has been acquired and possession of the
land has been received.
Drilling works have been awarded and sanction of loan for the project
has been obtained from the lenders. Detailed engineering and tender
document preparation is under progress. Final forest clearance has been
obtained from MoEF, Bhopal and handover of physical possession of land
is under process. The project will be commissioned in the financial
year 2014-15. Application has been made for Carbon credit benefit.
Detailed project report for the two other projects of total capacity of
48 MW have been submitted to Chhattisgarh Renewable Energy Development
Agency. Techno - economic clearance for one project has been obtained
and the techno-economic clearance for the other project is under
process.
The fourth project of Jelha with 5 MW capacity is in the detailed
survey and investigation stage.
During the year, the Company has made further investments to increase
its stake in CHP LLP to 66.81% as against 60.92% in the previous year.
Sarda Hydro Power Pvt. Ltd. (SHPPL) has been allotted 24 MW Kotaiveera
SHP and 9 MW Ganeshpur Small Hydro Power Projects in Chhattisgarh. The
Detailed Project Report for 24 MW Kotaiveera SHP has been submitted to
CREDA. The techno-economic clearance has been received. The
topographical survey work has been completed. The Company is in the
process of procuring statutory clearances for project implementation.
The Company has acquired 60% stake in SHPPL.
Shri Ram Electricity LLP (SRELLP) has been incorporated as a Special
Purpose Vehicle (SPV) for setting up a Captive Thermal Power Plant. The
captive power plant has been awarded coal linkage. The preliminary
study has been done. TOR has been approved by MoEF, New Delhi in April,
2011 and EIA is under preparation. We have already purchased 19.04
Acres of Pvt. Land against 40 acres required.
The Company has acquired 51% stake in SRE LLP during the year.
Joint Ventures
Raipur Infrastructure Company Ltd. operates a private railway siding in
Mandhar near the manufacturing facility of the Company and other joint
venture partners for movement of the goods, which are transported
through the railways. During the year 2010 - 11, the Company has
handled a total of 78 rakes of different material. The total quantity
handled was 273027 MTs.
Consequent upon commissioning of the private railway siding of SEML,
the no. of rakes handled by the Company has reduced. In order to
increase the operations, the Company has invited other private parties
to utilize the facility.
The Company has also applied for another private railway siding in
Orissa. The in-principal approval from Railways has been received and
DPR has been submitted to Railways for approval. The approval of DPR
from Railway is under process. For acquisition of private land the
administrative approval from Govt. of Orissa for the purpose of 4 (1)
Notification under L.A Act has been received on 14.03.2011. The
acquisition of land required for railway siding is in progress.
The Company holds one-third share in the joint venture.
Madanpur South Coal Co. Ltd. has been allotted a coal block in Madanpur
area of Dist. Korba of Chhattisgarh in consortium. Most of the
clearances required have been obtained but in the meanwhile, the MoEF
has declared the total Hasdev Arand Area, in which this mine falls, as
NO GO AREA and has not considered any proposal of forest clearance. The
matter is before GoM/Prime Minister's office for resolution.
The work would be put on fast track once the forest clearance is
received from MoEF. Bank Guarantee submitted to MoC for Rs.43.62 crores
in continuity of the previous one has been renewed from IDBI Bank and
submitted to the MoC.
The Company holds 20.63% share for its share of 36 million tonnes of
coal in the Joint Venture.
Awards/Appreciation
During the year, Engineering Export Promotion Council (Western Region)
has conferred the "EEPC Star Performers Award in the Product Group
(Ferro Alloys)" on your Company for its outstanding export performance
during FY 2008-09.
The Company has also been awarded first prize, in the Best Open
Plantation competition organized by Urla Industrial Association, in the
category of Large Industries.
Consolidated accounts
Your Company has prepared consolidated accounts after including figures
of the subsidiaries, joint ventures and associates, as per the
Accounting standard 21, 27 and 23 respectively.
Pursuant to the exemption granted to the Company by the Central
Government vide its circular No.51/12/2007- CL-III dated 8th February,
2011, the Company has not attached copies of the Balance Sheet and
Profit and Loss Account, Directors' Report and Auditors' Report of the
subsidiary companies for the financial year ended 31st March 2011 and
other documents required to be attached under Section 212(1) of the
Companies Act, 1956, to the Balance Sheet of the Company. However, the
other details, as required by the Central Government while granting the
said exemption, are disclosed in this Report.
The annual accounts and related information of the subsidiary companies
are open for inspection by any member/investor at the Registered Office
of the Company and the subsidiary concerned and the Company will make
available these documents/details upon request by any member of the
Company who may be interested in obtaining the same. The annual
accounts and related information of the subsidiary Company are also
available on the Company's website.
Fixed deposits
Your Company has not accepted any fixed deposits within the meaning of
Section 58A of the Companies Act, 1956, and the rules made there under,
during the year under review.
Environmental protection and pollution control
The Company has strong commitment towards environmental protection and
preservation of ecological balance while pursuing its business
objectives. The Company firmly believes in co-existence & co-creation
of nature and human activities which is manifested in its continuous
efforts towards development of cleaner production processes coupled
with reduction in pollution levels. The Company meticulously monitors
impact of its manufacturing activities on the environment and take
corrective & preventive measures proactively backed by adequate
budgetary provisions.
The stack emissions of all Stacks are continuously under the stipulated
limits as given by CECB. The ESPs of all Boilers and Furnaces are
maintained trouble free through surveillance and checks and special
audits. Committed HSE team with technical teams, monitor the ESP
performance round the clock on a check sheet and measurements of
emissions and unburnt coal in boilers. This helps in deciding the
cleaning need of ESPs and the execution is done.
Regular checking of bag filters is being done, and wherever any
defective bag filter is found the same is replaced immediately.
De-dusting Bag filters and cyclones have been installed at various
locations to reduce pollution. Fugitive Emissions in and around the raw
material yards is controlled through water mist dust agglomeration
system. High pressure mist enhances the effectiveness of dedusting at a
lower operating costs and better environment around.
A new waste conversion facility has been installed which will help in
converting 100mt waste every day into Blocks/Bricks of various sizes.
This is in addition to existing facility.
Extensive plantation has also been done to enhance the green buffer
between the plants and the human habitations close by and thereby
reduce the effect of any pollution. An intensified drive has been
launched for large scale plantation in and around the factory,
particularly in the newly developed Mandhar complex.
At the Iron Ore Screening and Sizing plant site, towards protecting the
environment, 1000 saplings have been planted and the process continues.
Water sprinkler system has also been planned to reduce dust pollution.
As a further step in the direction of ensuring of environment
protection and pollution control, all plant heads have nominated energy
and water managers to give a continuous focus on energy and water
conservation.
Corporate social responsibility
The Company towards its responsibility to contribute to the welfare of
the society has adopted a voluntary and proactive approach to connect
with the society around its operating units by creating a sense of
belonging and welfare, building a spirit of co-existence and harmony.
The immediate society benefits from the organisation and forms its
first line of development. The CSR activities of the group involves the
approach of sustainability, scalability and synergy in its endeavor. We
strive for sustainable development programs in partnership with the
communities for larger impact.
The Company through a dedicated, committed, trained and skilled team
secures and channelizes funds to serve a wider community by delivering
developmental program that aims to fulfill overall development
aspirations of the community.
Education:
In Education the Company endeavors to spark the desire for learning and
knowledge at every stage. A number of initiatives have been undertaken
in this direction and some of the important benchmarks achieved are:
Sponsored R. K. Sarda Vidya Mandir, a state-of-the-art CBSE school
near Raipur, opened by Bharatiya Vidya Bhavan for providing best
education to children. In addition to the land and donation, your
Company has also extended interest free loan of Rs. 10 crores to the
Institution so as to enable the Institution impart quality education at
affordable price.
Founder member of Shiksha Deep Trust,
which has the main objective of provinding scholarship to meritorious &
needy students. Supported 270 Ekal Vidyalayas of tribal students with
FTS.
Infrastructure facilities, furniture and computer to schools of Siltara
& Parastarai villages. Financial support to village schools for
renovation and extension of school building.
Apart from the above, a full-fledged school in the Siltara industrial
area, Raipur, has also been proposed with the aid of Ramakrishna
Vivekananda Ashram, to cater to the educational needs of the children
of industrial workers.
CSIDC has approved the allotment of 5 acres of land for the purpose.
Besides, school at Khadgoan village (near the Company's captive iron
ore mines) has been provided with new building, uniforms, books and
other school support material.
Healthcare:
In Healthcare, the Company endeavors to render quality healthcare
facilities to people living in villages. We recognize our
responsibility to operate in harmony with our local communities. The
Company actively sponsors medical facilities, assisting in primary
healthcare across villages.
The Company operates Mobile dispensary vans which provide free medical
checkup and medicines. During the year 37427 patients availed the
benefit of the mobile dispensary vans maintained by the Company. The
Company also provides medical treatment to critical patients of tribal
area's at Multi specialty hospitals on Company's expenses. The Company
promotes preventive health care through awareness programs and regular
health checkup camps. The Company has set up first-aid facilities in
the villages surrounding its mines & operating units, to provide
low-cost and high-quality medical assistance for the economically
underprivileged community. Apart from these initiatives, a cluster of
villages have been adopted by the Company near its iron ore mines and
provides these villages with health care on an annual basis.
During the year, the Company has also organized Blood Donation Camp in
association with Confederation of Indian Industries Young India forum
under which, Modern Blood Bank, Raipur has recorded highest ever
collection of 205 No. units of blood in a single day in Raipur
Chhattisgarh. The Hon'ble Governor of Chhattisgarh State, has awarded
the certificate of recognition for this to the Company.
Company has provided drinking water facility at its plant and mining
sites and has also undertaken works for supply of drinking water to the
nominated points in the villages surrounding its plant site in addition
to providing for sanitation facilities for the villagers.
Community development
Social welfare, to the Company, means much more than just providing
education and health care facilities. The Company endeavors to set up
essential services which form the foundation for sustainable
development. Our interventions in the area of infrastructure
development include basic infrastructure facilities, safe drinking
water facilities, sanitation and hygiene and renewable sources of
energy. The Company has undertaken the task of community development
like one of its projects. Various activities have been done for the
social welfare and community development, some of which are as under:
Infrastructure upgradation of villages by constructing approach roads,
water tanks, stairs near pond, drainages, pipelines for supplying
drinking water, potable water supply deepening of ponds, social
forestry, school building & boundary wall, community hall construction,
area lighting etc.
Promotion of sports by supporting State and District Games Associations
for Tennis & Cricket.
Support to various trusts engaged in providing community services
Support to local associations for various religious
functions/celebrations.
As part of community services, 2000 woolen blanket were distributed
amongst the tribal residents of rural area, tree plantation were done,
iron tree guards were donated for protection of trees/saplings,
financial aid to siltara village panchayat for purchase of ambulance
for use by the nearby villagers, financial support for mass
marriages/local festivals, cleaning and de-siltation of water ponds at
nearby villages, etc. The Company also organized skill development
training for the village youths in association with the industrial
training institutes. The Company also has plans to undertake watershed
development and environmental up gradation programs including
plantation in the coming years.
Directors
Mr. G.K. Chhanghani, Mr. Pankaj Sarda and Mr. Rakesh Mehra, Directors
of your Company, retire by rotation and being eligible, offer
themselves for reappointment. The brief resume/details of Directors who
are to be appointed/ reappointed are made a part of the Annual Report.
Directors' responsibility statement
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, your Directors state as under:
i) that in the preparation of the Annual Accounts, the applicable
accounting standards have been followed along with proper explanation;
ii) that the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the fnancial year and of the
profit of the Company for the year;
iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts on a going
concern basis.
Auditors
M/s. M.M. Jain & Associates, Chartered Accountants, the retiring
auditors of the Company, hold office till the conclusion of the ensuing
Annual General Meeting and are eligible for reappointment.
The Company has received a letter from M/s. M.M. Jain & Associates,
Chartered Accountants, Nagpur to the effect that their appointment as
auditors for the year 2011-12, if made, would be within the limits
under Section 224 (1-B) of the Companies Act, 1956.
Auditors' Report
The observations made in the Auditors' Report, read with the relevant
notes thereon, are self-explanatory and do not call for any comments
under Section 217 of the Companies Act, 1956.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The statement giving details of conservation of energy technology
absorption, foreign exchange earnings and outgo, in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is annexed and marked as Annexure 'A, forming a
part of this report.
Particulars of employees
The particulars of employees, as required under Section 217 (2A) read
with the Companies (Particulars of Employees) Rules, 1975, are given in
Annexure 'B' to this report.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the stock
exchanges, a Management Discussion and Analysis, Corporate Governance
Report and Auditors' Certificate regarding compliance of conditions of
Corporate Governance are made a part of the Annual Report.
Acknowledgement
Your Directors express their thanks and record appreciation for the
co-operation they received from various government authorities,
financial institutions, banks, suppliers and customers of your Company.
Your Directors place on record, their sincere appreciation for the
devoted services rendered by the employees at all levels of your
Company and look forward to their continued support.
On behalf of the Board of Directors,
Place: Mumbai (K.K. Sarda)
Dated: July 30, 2011 Chairman & Managing Director
Mar 31, 2010
We hereby present the Thirty-Seventh Annual Report on business and
operations of your company for the fnancial year ended 31st March 2010.
Financial results
(Rs. in lacs)
Particulars Standalone Consolidated
2009-10 2008-09 2009-10 2008-09
Gross sales 55,592 1,03,214 56,081 1,03,220
Less: Excise duty 3,310 8,338 3,310 8,338
Net sales 52,282 94,876 52,770 94,882
Export 7,259 21,176 7,259 21,176
EBIDTA 8,402 22,668 15,930 23,257
Interest 1,272 459 32 66
Forex Fluctuation
(Gain) / Loss (4,470) 4,491 (4,303) 4,492
Depreciation 3,880 2,789 4,093 2,813
Profit before tax 7,719 14,919 15,878 15,877
Provision for taxation 1,399 2,595 1,441 2,632
6,320 12,324 14,437 13,245
Appropriations:
Transfer to general
reserve 1,500 1,500 1,500 1500
Transfer to debenture
redemption reserve - - -
Dividend (including
tax on dividend) 1,195 1,195 1,195 1,195
Dividend
Your Directors recommend a dividend of Rs. 3/- per share (30%) for the
year ended 31st March, 2010. The total outgo on account of Dividend
including tax thereon will be Rs. 1195 lacs. The dividend shall be paid
after approval of the members in annual general meeting.
Operations
The operations in manufacturing facilities of the Company were
adversely affected during the year under review on account of fire on
29.03.2009 in the captive power plant of the Company. The operations
could be normalized only by September, 2009. The iron ore mining
operations remained suspended throughout the year due to non- conducive
environment in the area due to law and order problem. Recently the
Company has restarted bringing in iron ore lying in the mining area;
however, mining operations have not yet been resumed. In view of the
unremunerative prices of steel, the Company preferred to sell power
over using the same for production of steel. All these factors along
with fall in the selling prices post global meltdown adversely affected
the quantum of revenue. For product-wise analysis, the Members are
requested to refer to the Management Discussion and Analysis, forming a
part of this Annual Report.
Projects
This was the year of happening on the project front. During the year
the Company spent Rs. 13,206 lacs on ongoing projects for expansion and
new projects. The project-wise detail is enumerated hereunder:
Coal Mines
The production from coal mines was started in March, 2009. During the
year coal production is stabilized and mine production has reached to a
level to meet full requirement of end use project.
Pellet Plant
The installation of the 6 lac tonnes iron ore pellet plant with
complete infrastructure for integrated steel plant including railway
siding has been completed. The plant has stabilised and commenced
commercial production w.e.f. 1st April, 2010. The pellet plant will use
the fines generated at iron ore mines, which otherwise goes as waste
and rejects, as feed stock.
Wire Rod Mill
The installation of 1.8 lac tonnes Wire Rod Mill at Siltara, Raipur,
has been completed. The plant is ready for commissioning.
Fly Ash Bricks Plant
The installation of state of the art Fly Ash Bricks plant at Siltara,
Raipur with a capacity of 1,92,000 TPA has been completed and the
production commenced in February, 2010. This will use a substantial
part of fly ash generated from the thermal power plant and slag
generated in ferro alloys plant of the company serving as an ideal
waste management project. This will enable your company to maintain
and improve the clean and green environment.
Pithead Thermal Power Project
The Company has acquired sufficient land for the proposed thermal power
project at Kolam, Raigarh near its captive coal mines. Water has
already been allocated for the project. The work on the project will
start during the current year after receipt of statutory clearances.
Coal Washery
The work on installation of one million tonne coal washery in coal
mines in Raigarh is awaiting statutory approvals and is expected to be
operational during current financial year. Washed coal will help in
improvement of quality and efficiency of the sponge iron plant of the
Company. The middling and rejects generated in the washery will be used
for power generation at Pithead Thermal Power Plant.
Mineral Resources
Iron Ore
The Company has received prospecting licence for iron ore over an area
of 150 hect. in Narangsur area of Chhattisgarh, which is at about 15
Kms. aerial distance from iron ore mines of SAIL Bhilai Steel plant. In
addition to this, Company has been granted in principle approval for
prospecting licences in four more areas.
Manganese Ore
Your Company has acquired Manganese Ore and Iron Ore mines in Goa and
steps are being taken to operationalise the mines. The mining lease has
been registered in the name of the company. Applications for seeking
various clearances have been made and the environmental clearance is
awaited.
Coal Mines
The Company has got interest in one more coal mine in a JV and also
interest in coal mines in Indonesia through a wholly owned subsidiary.
These mines will ensure long-term sustainable and uninterrupted
availability of raw materials to the Company.
Iron Ore Sizing and Screening plant
The construction of Iron Ore Sizing and Screening Plant of 6.0 LTPA
capacity at Dhruvatola near Iron Ore Mines is progressing well. After
commissioning, it would enable the company to get the desired quality
of iron ore for the Pellet Plant as well as the Sponge Iron Plant from
our own mines.
The Plant Construction & Commissioning was planned in Two Phases. First
phase has been completed & commissioned on 01.08.2009.
Subsidiary companies
During the year under review your company has made additional
investment in three hydro power companies of the group resulting into
majority control in these companies. Your company has also acquired
100% shareholding in Sarda Energy Ltd. promoted by it as an SPV for
Mega thermal power project. Sarda Metals & Alloys Limited incorporated
last year by the company along with promoters has also been converted
into 100% subsidiary. A brief about subsidiaries is given hereunder.
Sarda Energy & Minerals Hongkong Ltd, Hongkong (SEMHKL), a wholly owned
subsidiary of your company, incorporated in the year 2007 as
international trading and investment arm of the company is performing
well. During the year 2009-10, it has posted a profit of HK$ 15.21
crores.
Sarda Global Ventures Pte. Ltd. Singapore (SGV), a wholly owned
subsidiary of your company, was incorporated during the year 2008 in
Singapore for global acquisitions. SGV has acquired economic interest
in coal mines in Indonesia. The mining is expected to start in 2011.
However, the work on development of the mine has been slowed due to
frequent changes in the mining law in Indonesia. The Company has
deputed dedicated force to ensure the compliances and commencement of
mining as per the schedule.
Sarda Metals & Alloys Limited, has taken up a Greenfeld Ferro Alloys
plant near Visakhapatnam. 281 acres of land has already been acquired
from APIIC. In the first phase, it is putting up a 2 x 33 MVA Furnaces
backed by captive thermal power plant of 80 MW capacity. Orders for
long delivery items including Turbine, Boiler and Furnaces have been
placed. The work for the installation of the plant is progressing as
per schedule. The project is expected to be completed in first quarter
of financial year 2012-13.
Sarda Energy Limited, was incorporated as an SPV for taking up the
installation and operation of the 1320 MW power plant in Chhattisgarh
for which the MOU had been signed by your company. State Govt. has
allocated water for the project. Ministry of Environment & Forests,
Government of India has cleared Terms of Reference. The Company has
applied for Long Term Open access for evacuation of the power. The
acquisition of land required for the project is in progress.
Parvatiya Power Ltd. is operating a 4.8 MW Loharkhet Small hydro power
plant in Uttarakhand. In spite of belated monsoon the plant has
generated 18.59 Million KWH of power in the financial year 2009-10, its
second year of commercial operation. During the year the Company has
reported net profit of Rs. 26.74 lacs. During the year your Company
has increased its holding in the company from 48% to 54%.
Madhya Bharat Power Corporation Limited is implementing 96 MW Rongnichu
Hydro Power Project in East Sikkim on Rongnichu river near Gangtok. The
project is close to State Highway. The project has been appraised by
PFC. The project will be operational in the fnancial year 2014-15. Long
term access agreement has been entered into with Power Grid Corporation
of India for direct evacuation of power from the generating units.
Civil contracts have already been awarded and the work is in progress.
Tenders for award of hydro-mechanical and electro-mechanical works have
also been floated in accordance with International Competitive Bidding
norms and the contracts would be awarded in the current financial year.
Your Company has acquired 52% stake in the company during the year under
review.
Chhattisgarh Hydro Power Pvt. Ltd. has been allotted hydro-electric
projects of 110 MWs in the State of Chhattisgarh. First project of 24
MW is in the advanced stage of various clearances. In à principal
forest clearance has been received and final forest clearance is
expected anytime. Land acquisition is in progress. During the year
under review your Company has increased its stake in Chhattisgarh Hydro
Power Pvt. Ltd. from 50% to 61%. Banks have sanctioned the financial
assistance required for the project. Work on the project will be
started soon and it will be commissioned in the financial year 2013-14.
Application is being made for CDM benefit.
Joint Ventures
Raipur Infrastructure Company Ltd. operates a private railway siding in
Mandhar near the manufacturing facility of the company and other joint
venture partners for movement of their goods, which are transported
through the railways. Your Company has one-third share in the joint
venture. During the year 2009 Ã 10, the company has handled a total of
162 rakes of different material. The total quantity handled
6,05,105.03 MTs.
In order to increase the operations, the Company is expanding its rake
handling capacity. During the year the company has already completed
the job of other side platform for unloading. The Company has also
applied for another private railway siding in Orissa. The in-principal
approval from Railways has been received and DPR has been submitted to
Railways for approval. The approval of DPR from Railway is under
process. The acquisition of land required for railway siding is in
process.
Madanpur South Coal Co. Ltd. has been allotted a coal block in Madanpur
area of Dist. Korba of Chhattisgarh in consortium. Your company has a
20.63% share for its share of 36 million tonnes of coal in the Joint
Venture. The work on the Coal Mine is progressing smoothly. However,
due to delay by the Ministry of Environment and Forests (MoEF), the
Forest Clearance is held up. The work would be put on fast track once
the Forest Clearance is received from MoEF.
Awards/Appreciation
Your Company has been granted Star Export House status certificate for
a period of 5 years starting from 1.4.2009 to 31.3.2014.
Your Company has also been awarded the Best Exporter of the State from
Urla Industry Association and Container Corporation of India Ltd.
Consolidated accounts
Your Company has prepared consolidated accounts after including figures
of the subsidiaries, joint ventures and associates, as per the
Accounting standard 21, 27 and 23 respectively. The Auditors Report on
the consolidated accounts are made a part of this Annual Report. The
annual accounts of the subsidiary companies and the related information
will be made available to the investors of the holding and subsidiary
companies seeking such information at any point of time. The annual
accounts of the subsidiary companies will also be kept for inspection
of the investors at the Registered Office of the Company and the
subsidiary company concerned.
Fixed deposits
Your Company has not accepted any fixed deposits within the meaning of
Section 58A of the Companies Act, 1956, and the rules made there under,
during the year under review.
Environmental protection and pollution control
Your Company is a committed player in environmental protection and
preservation of ecological balance while persuing its business
objectives. The Company firmly believes in co-existence of nature and
human activities which is manifested in its continuous efforts towards
development of cleaner production processes while reducing pollution
levels. The Company meticulously monitors impact of its manufacturing
activities on the environment be it water, air or the human habitation
close by and take corrective measures as and when necessary backed by
adequate budgetary provisions. Some of such measures taken by the
Company during the year include installation of Ammonia dosing system
in FBC boilers, commissioning of separate new Electrostatic
Precipitator (ESP) for waste heat recovery boiler (No-2), construction
of 40 TPH ash conveying system with 1000 MT silo for ash removal etc. A
new water sprinkling system has been installed in coal handling plant
to reduce the coal dust pollution. A state- of-the-art fly ash
brick-making facility with a capacity of 1,92,000 TPA has been
commissioned in February, 2010 which will ensure substantial
utilization of increased generation of fly ash from the Power Plant.
Extensive plantation has also been done to increase the green buffer
between the plants and the human habitations close by and thereby
reduce the effect of any pollution. An intensified drive has been
launched for large scale plantation in and around the plants,
particularly in the newly developed Mandhar complex.
Corporate social responsibility
Being a corporate citizen, your Company has the responsibility to
contribute to the welfare of the society in which it operates. The
Group has adopted a voluntary and proactive approach towards Corporate
Social Responsibility by organizing various awareness programmes for
its employees and the general public to ensure a better, sustainable
way of life for the weaker sections of the society. This helps the
Company to develop a sense of belongingness and would also develop a
spirit of co-existence and harmony among the society. The immediate
society is the beneficiary of the CSR activities of the Company. The
Company has embarked upon long term structured programmes as a part of
its CSR activities, some of them are as under:
Educational Programmes
The Company aims to nurture young minds and educate them, so that they
contribute to the nations development. A number of initiatives have
been undertaken in this direction and some of the important benchmarks
achieved are:
- Established School in the name of Bhavans R.K. Sarda Vidya Mandir
from class KG1 to V and every year the school would add 1 class till
12th standard to provide best education to the children. The school is
affiliated to CBSE. The year 2010-11 is the first year of the school.
The Company has provided land and required financial assistance to
Bharatiya Vidya Bhawan for setting up the school.
- Company continues to contribute to Friends of Tribal Society for
running 270 single teacher schools for providing basic education to
tribal students from class 1 to 3 and around 7800 students are
benefiting out of this initiative.
- Company is the founder member of ÃSiksha Deep Trust. Main objective
of this trust is to provide financial aid to deserving, poor and needy
students for higher education.
- Contributed for upgrading infrastructure in schools near its
operational area as well as mining site, which includes providing
computers, furniture, sports kit, expansion of building, construction
of boundary wall etc. Apart from providing infrastructure facilities,
financial aid is also provided to the schools around the plant and
mining sites of the Company.
Healthcare Programmes
The Company through its mobile dispensaries continues to provide free
medical service to tribal area people, where general medical facilities
are not available. The dispensaries are under the direct supervision of
a full time doctor and compounder and provide free medicines to the
tribal and other weaker section people. Critical patients of tribal
area are taken, at Companys cost, to hospitals at Raipur. During the
year 2009-10 total 28572 patients availed benefit of the facility. The
company has also organized health camps in the areas nearby its plant
and mining sites. Organized blood donation camp at its operational area
and collected 201 units of blood through Modern Blood Bank, Dr. B.R.
Ambedkar Hospital, Raipur which will be utilised for the poor and needy
patients.
Company provided drinking water facility and dug bore well at its plant
and mining sites. Your company has also
constructed over head water tanks and laid down the pipeline for supply
of drinking water to the nominated points in the villages surrounding
its plant site in addition to providing for sanitation facilities for
the villagers.
Community development
At your company, the social welfare means much more than just providing
education and health care facilities. With the rapid pace of
industrialization the plant area and its surroundings have undergone a
lot of transformation. Being at the helm of development, SEML has
undertaken the responsibility of infrastructure up gradation in the
near by villages by constructing approach roads, water tanks, pipe
lines for supplying drinking water, repair and deepening of village
ponds, widening areas under plantations, etc. The company has also
undertaken various social, sporting and cultural activities of nearby
villages. Financial aid for various local festivals, purchase of
computers and an Ambulance for the Siltara village panchayat, has also
been provided. The Company also plays an active role in promotion of
sports and has been providing all possible support to the State &
District Games Associations.
Directors
Mr. G. D. Mundra, Mr. P.R. Tripathi and Mr. G.S. Sahni, Directors of
your Company, retire by rotation and being eligible, offer themselves
for reappointment. The brief resume/details of Directors who are to be
appointed / reappointed are given in the Corporate Governance Report.
Directors responsibility statement
Pursuant to the provisions of Section 217 (2AA) of the Companies Act,
1956, your Directors state as under:
i) that in the preparation of the Annual Accounts, the applicable
accounting standards have been followed along with proper explanation;
ii) that the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit of the Company for the year;
iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts on a going
concern basis.
Auditors
M/s. M.M. Jain & Associate, Chartered Accountants, the retiring
auditors of the Company, holds office till the conclusion of the
ensuing Annual General Meeting and are eligible for reappointment.
The Company has received a letter from M/s. M.M. Jain & Associate,
Chartered Accountants, Nagpur to the effect that their appointment as
auditors for the year 2010-11, if made, would be within the limits
under Section 224 (1-B) of the Companies Act, 1956.
Auditors Report
The observations made in the Auditors Report, read with the relevant
notes thereon, are self-explanatory and do not call for any comments
under Section 217 of the Companies Act, 1956.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The statement giving details of conservation of energy, technology
absorption, foreign exchange earnings and outgo, in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988, is annexed and marked as Annexure ÃA, forming
a part of this report.
Particulars of employees
The particulars of employees, as required under Section 217 (2A) read
with the Companies (Particulars of Employees) Rules, 1975, are given in
Annexure B to this report.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with the stock
exchanges, a Management Discussion and Analysis, Corporate Governance
Report and Auditors Certificate regarding compliance of conditions of
Corporate Governance are made a part of the Annual Report.
Acknowledgement
Your Directors express their thanks and record appreciation for the
co-operation they received from various government authorities,
financial institutions, bankers, suppliers and customers of your
Company. Your Directors place on record, their sincere appreciation
for the devoted services rendered by the employees at all levels of
your Company and look forward to their continued co-operation.
On behalf of the Board of Directors,
(K.K. Sarda)
Chairman and Managing Director
Place: Visakhapatnam
Dated: 30.07.2010
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