Mar 31, 2018
To
The Members,
SATHAVAHANA ISPAT LIMITED,
The Board of Directors has pleasure in presenting the 29th Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2018:
FINANCIAL RESULTS:
Your Board of Directors reports the following financial results for the year 2017-18:
(Amount in Rs.)
SL NO. |
Particulars |
Year ended 31-03-2018 |
Year ended 31-03-2017 |
1. |
Gross revenue from operations |
2487308166 |
11315975529 |
2. |
Other income |
81026938 |
119101662 |
3. |
Operating profit /(loss) before finance costs and depreciation |
(1152735074) |
1009041013 |
4. |
Finance costs |
1405597605 |
1169215306 |
5. |
Depreciation and amortization |
505310460 |
482032028 |
6. |
Profit / (loss) before tax |
(3063643139) |
(642206321) |
7. |
Tax expense |
0 |
0 |
8. |
Net Profit / (loss) after tax |
(3063643139) |
(642206321) |
9. |
Earning /(loss)per Equity Share-Basic |
(60.19) |
(12.62) |
10. |
Earning/(loss)per Equity Share-Diluted |
(60.19) |
(12.62) |
The performance during the year was impacted adversely due to factors beyond the control of the Company. The performance suffered due to working capital constraints and the consequent financial stress which resulted in underutilization of capacities and plant shut downs. Accordingly, the gross revenue at Rs.2487308166^- is lower as compared to previous yearâs revenue of Rs.11315975529/-. The year ended with loss before tax of Rs.3063643139/- as against loss before tax of Rs.642206321/- in the previous year. During the year, in the absence of virtual certainty deferred tax asset on account of unabsorbed depreciation and business loss and others amounting to Rs.1114567283/- as against previous yearâs amount of Rs.1047886528/- has been recognized to the extent it can be realised fully against deferred tax liability. Accordingly, the tax impact is nil in both current and previous years. The year ended with net loss after tax of Rs.3063643139/- as against net loss after tax of Rs.642206321/- in the year before. Accordingly, the loss per share accounted for at Rs.60.19 as compared to loss per share of Rs.12.62 in the previous year.
DIVIDEND AND GENERAL RESERVE:
The Board of Directors has not recommended any dividend for the year 2017-18 due to loss incurred during the year and carry forward loss from earlier years. Company cannot declare dividend until the carry forward loss is fully set off against the profits as provided in the Companies Act 2013. The Board of Directors also has not proposed to transfer any amount to General Reserve in view of the carry forward loss.
DIRECTORSâ RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 with respect to Directorsâ Responsibility Statement, your Directors hereby state and confirm that:
i) In the preparation of Annual Accounts for the Financial Year 2017-18 the applicable Indian Accounting Standards (Ind AS) had been followed with proper explanation relating to material departures;
ii) The Accounting Policies selected were applied consistently and the judgements and estimates made 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 Loss of the Company for the year ended on that date;
iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) The Annual Accounts have been prepared on a going concern basis;
v) Internal financial controls to be followed by the Company have been laid down and that such Internal Financial Controls are adequate and were operating effectively; and
vi) Proper systems had been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
AUDIT COMMITTEE:
The Audit Committee comprises Chairman -Shri K.Thanu Pillai, Independent Director and two other Independent Director members -Shri Syed Anis Hussain, and Shri S.N.Rao. Smt Y. Prameela Rani and Shri M.S. Rama Mohan Rao have ceased to be members of the Audit Committee with effect from 20.11.2017 and 01.10.2017 respectively upon cessation of directorship. The Audit Committee at its meeting held on 30th May 2018 has considered and approved the Audited Accounts of the Company for the financial year ended 31st March 2018. The Audited Accounts for the financial year ended 31st March 2018, as approved and recommended by the Audit Committee, do not require any explanations from the Board.
CORPORATE GOVERNANCE:
Pursuant to Listing Regulations 2015 the Company is required to comply with the Code of Corporate Governance for the financial year under review. Accordingly, the Reports on Corporate Governance and Management Discussion and Analysis together with Auditorsâ Report on compliance of Code of Corporate Governance are attached to this Report and forms part of the Annual Report. These Reports are to be read in conjunction with this Directorsâ Report.
DIRECTORS:
Shri A.S. Rao and Dr. Shailendra Dasari are liable for retirement of Directors by rotation at the end of the ensuing 29th Annual General Meeting and being eligible, offer themselves for re-appointment at the said Annual General Meeting.
Shri A.S. Rao has been appointed as Executive Vice Chairman at 26th Annual General Meeting held on 30.09.2015 for a period of three years effective from 27.07.2015 to 26.07.2018 and the office of Executive Vice Chairman is liable for retirement of Directors by rotation. Shri A.S. Rao is eligible for re-appointment and approval of the Members for his re-appointment is being sought in the ensuing Annual General Meeting. The Nomination and Remuneration Committee at its meeting held on 30.05.2018 has recommended the re-appointment and the Board of Directors at its meeting held on 30.05.2018 has commended the resolution for re-appointment to the members for their approval in the ensuing Annual General Meeting.
Dr. Shailendra Dasari has been appointed as Executive Director (Operations) at 26th Annual General Meeting held on 30.09.2015 for a period of three years effective from 01.10.2015 to 30.09.2018 and the office of Executive Director (Operations) is liable for retirement of Directors by rotation. Dr. Shailendra Dasari is eligible for re-appointment and approval of the Members for his re-appointment is being sought in the ensuing Annual General Meeting. The Nomination and Remuneration Committee at its meeting held on 14.08.2018 has recommended the re-appointment and the Board of Directors at its meeting held on 14.08.2018 has commended the resolution for re-appointment to the members for their approval in the ensuing Annual General Meeting.
In the opinion of the Board the proposed appointees fulfils the conditions specified in the Companies Act 2013 and Rules made thereunder and keeps the Board strengthened. These appointments are subject to approval of secured lenders who have lent to the Company term / corporate loans and working capital loans and approval of members in the Annual General Meeting.
Smt Y. Prameela Rani, an Independent Director on the Board of the Company has resigned due to personal reasons and her resignation was accepted by the Board with effect from 20.11.2017. Shri M. Sreerama Mohan Rao, small shareholder holder director ceased to be director with effect from 01.10.2017 on expiry of tenor of appointment. Board wishes to place on record of its appreciation for the valuable services rendered by these Directors during their tenure.
Policy on selection and appointment of Directors, Composition and category of Directors, attendance of each Director at meetings, Number of other Directorships held by each Director, Number of Board meetings held and dates on which held, Board meetings process, familiarisatioin programme of each Independent Directors, Boardâs evaluation process are discussed in the Report on Corporate Governance which forms part of this Report.
The Board of Directors confirms that based on the declarations given by all the Independent Directors in pursuance of provisions of Section 149(7) of the Companies Act 2013 they meet the criteria of independence as provided in Section 149(6) of the Companies Act 2013.
AUDITORS AND AUDIT REPORT:
The tenor of present Auditors M/s Majeti & Co., Chartered Accountants, Hyderabad has been fixed for period of five years at the Annual General Meeting held on 29.09.2017 subject to ratification of appointment at every subsequent Annual General Meeting. However the Ministry of Corporate Affairs, Government of India, has vide Companies (Amendment) Act 2017 notified vide notification dated 07.05.2018 that such ratification of appointment of statutory auditors is not required at the subsequent Annual General Meetings which in other words means that appointment made initially continues to be effective until the expiry of five years from the date of their appointment. Accordingly no ratifications of appointment of statutory auditors is proposed in the ensuing Annual General Meeting.
With respect to the Independent Auditorsâ Report for the year ended 31st March 2018 which forms part of the Annual Report containing emphasis of matter and qualification your Board of Directors state that the management replies to the same are as under:
1. With respect to emphasis matter the explanation contained in Note No.35 to the financial statements is self-explanatory and the opinion of the Auditors is unmodified in respect of this matter.
2. With respect to Qualification on Trade receivables, supplier advances and capital advances as at March 31, 2018 the explanation contained in Note No.38 to the financial statements is self-explanatory and does not require further explanations.
The Independent Auditorsâ Report for the financial year ended 31st March 2018 which forms part of the Annual Report do not require any further explanations from the Board.
COST AUDITORS AND COST AUDIT REPORT:
Company appointed M/s. S. Mahadevan & Co, Coimbatore, Practicing Cost Accountants (Firmâs Registration Number 00007), as Cost Auditors for the financial year 2016-17 and 2017-18. The Cost Compliance Report as prepared by the Cost Auditors for the financial year 2016-17 has been filed with the Central Government with in the due date. The Cost Compliance Report for the year 2017-18 prepared by the said Cost Auditors has been reviewed and adopted by the Board. The Board of Directors based on the recommendations of the Audit Committee, has appointed M/s S. Mahadevan & Co., Practicing Cost Accountants (Firmâs Registration Number : 00007) as Cost Auditors for conducting Cost Audit of the Cost Records of the Company for the year 2018-19. In pursuance of the provisions of Section 148 and other applicable provisions, if any, of the Companies Act 2013, read with Companies (Audit and Auditors) Rules 2014 the remuneration payable for conducting the Cost Audit for the year ending 31st March 2019 to M/s S. Mahadevan & Co., Practicing Cost Accountants is being placed before the Members in the ensuing Annual General Meeting for their ratification and approval.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:
M/s D. Hanumanta Raju & Co., Practicing Company Secretaries, Hyderabad who have been appointed as Secretarial Auditor for the financial year 2017-18 have conducted the Audit of the Secretarial Records and submitted their Report in MR-3 which is annexed to this Report (Annexure-V). With respect to observation of Secretarial Auditor on Non-appointment of woman director on the Board, the response of your Board is that the Company is in search of suitable person who has sectoral and financial background with integrity and is in the process of identifying the person for complying with Regulation 17 of Listing Regulations 2015. The Board of Directors at its meeting held on 30th May 2018 has re-appointed D. Hanumanta Raju & Co., Practicing Company Secretaries, Hyderabad as Secretarial Auditor for the financial year 2018-19.
TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS TO IEPF:
Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956 and / or Section 124(5) of the Companies Act 2013, previously declared dividends, which remained unclaimed for a period of seven years, have been transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205C of the Companies Act, 1956 and / or Section 125 of the Companies Act 2013.
DIRECTORS, EMPLOYEES AND THEIR REMUNERATION:
The particulars of employees required to be furnished pursuant to Section 197(12) of the Companies Act 2013 read with sub rule (2) to Rule 5 to the Companies (Appointment & Remuneration) Rules, 2014, as amended, are not required to be provided as there were no employees drawing remuneration more than the stipulated limits. Details of Remuneration Policy and payment of remuneration to all Directors / Key Managerial Personnel / other managerial employees is given in the Report on Corporate Governance under the head Nomination and Remuneration Committee which forms part of this Report. Managing Director and other Whole Time Directors have not received any remuneration or commission from holding or subsidiary companies as the Company do not have such companies. In the opinion of the Board the level and composition of remuneration to Directors, Key Managerial Personnel and other managerial employees is reasonable and sufficient to attract, retain and motivate the people who could run the Company efficiently. The Board affirms that the remuneration paid is in accordance with Remuneration Policy of the Company. The relationship between performance and remuneration is clear and meets appropriate benchmarks and that the remuneration criteria succinctly balances between fixed and variable pay wherever set reflecting short and long term performance objectives appropriate to the working of the Company and its goals. Disclosures required to be made pursuant to Rule 5 to the Companies (Appointment & Remuneration) Rules, 2014 are attached to this report (Annexure-II).
DEMATERIALISATION OF EQUITY SHARES:
The Agreements entered into by the Company with the two Depositories viz., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialisation of Shares are in force and the Companyâs Shares are in dematerialised mode under ISIN No. INE176C01016. As per the Securities and Exchange Board of India(SEBI) directives, the Equity Shares of the Company are to be compulsorily traded in dematerialisation form with effect from 26th February 2001. Further the Securities and Exchange of India (SEBI) in its circular dated 20.04.2018 has stated that the equity shares have to compulsorily converted into dematerialization before 5th December 2018 and thereafter dematerialized equity shares are only eligible for transfers with the exception of transmissions. In view of the significant benefits that accrue on dematerialisation of securities, Members may avail the facility.
LISTING OF SHARES ON STOCK EXCHANGES:
The Equity Shares of the Company are listed on BSE Ltd (formerly The Bombay Stock Exchange Limited) Stock Code:526093 and The National Stock Exchange of India Limited (NSE) Stock Code: SATHAISPAT and are regularly traded. The listing fee to these Stock Exchanges has been paid upto date.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information on conservation of energy, technology absorption, foreign exchange earnings and out go required to be disclosed under Section 134 of the Companies Act 2013 read with Companies (Accounts) Rules 2014, is given in the Annexure forming part of this Report (Annexure-I).
FIXED DEPOSITS:
During the year the Company has not accepted fixed deposits within the meaning of Section 2(31) read with Sections 73 and 74 of the Companies Act 2013. There are no overdue deposits or outstanding deposits as on the Balance Sheet date.
RISK MANAGEMENT:
The Board engaged itself with the task of Risk Management by preparing, implementing and monitoring the risk management plan of the Company. The Board apart from ensuring the effectiveness of risk management covering internal financial risks and controls also reviews the same on regular basis. Major risks identified are monitored on a regular basis by the Board.
INTERNAL FINANCIAL CONTROL AND SYSTEMS AND THEIR ADEQUACY:
The Company has put in place Internal Financial Controls that will ensure the policies and procedures of the Company are followed regularly so that the business of the Company is conducted in orderly and efficient manner. The Internal Financial Controls are applied inter alia to test various aspects in the conduct of business including adherence to Companyâs policies, safeguarding Companyâs assets, prevention and detection of frauds and errors or irregularities, the accuracy and completeness of the accounting records and timely preparation of reliable financial information and the financial statements. In the opinion of the Board such Internal Financial Controls are adequate and were operating effectively. During the year such Internal Financial Controls have been tested and no reportable weaknesses in the design and operations were observed. With respect to the Independent Auditorsâ Report for the year ended 31st March 2018 which forms part of the Annual Report containing qualification on the Internal Financial Controls your Board of Directors state that the management replies to the same are contained in Note No.38 to the financial statements which is self-explanatory.
RELATED PARTY TRANSACTIONS:
There are no material related party transactions entered into by the Company falling within the meaning of Section 188(1) of the Companies Act 2013. Other related party transactions, contracts or arrangements entered into by the Company are in the ordinary course of business and at armâs length price. The details of these contracts or arrangements or transactions as required to be disclosed in terms of Section 134(3)(h)are provided in Form AOC-2 which forms part of this Report (Annexure-III) and accompanying Financial Statements.
PARTICULARS OF LOANS,GUARANTEES AND INVESTMENTS:
The Company has not granted loans, guarantees or made investments in or to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act 2013. The Company has not extended any loans to the employees for purchase of its shares. Other investments made by the Company are given in the accompanying Financial Statements which are in the ordinary course of business.
EXTRACTS OF ANNUAL RETURN:
Information on Extracts of Annual Return required to be disclosed under Section 92(3) of the Companies Act 2013 read with Rule 12 of Companies (Management and Administration) Rules 2014, is given in the prescribed Form MGT-9 forming part of this report (Annexure-IV).
CORPORATE SOCIAL RESPONSIBILITY:
The details with respect to Corporate Social Responsibility of the Company as required to be disclosed in terms of provisions of Section 135 read with Section 134(3)(o) and Rule 9 of Companies (Accounts) Rules 2014 are given in the Report on Corporate Governance attached to and forming part of this Report. During the year the Company, in terms of provisions of sub section 5 to Section 135 of the Companies Act 2013, is not required to earmark any fund for Corporate Social Responsibility activities in view of the losses.
MATERIAL CHANGES:
Adoption of S4A scheme:
The Company during the year considering the delay in repayment of term loans including interest thereon and in meeting the obligations of short term borrowings and letters of credit has requested the secured lenders to consider and adopt the âScheme for Sustainable Structuring of Stressed Assetsâ (S4A) with respect to the total exposure to the Company on the term loans and working capital loans.
The Lenders, having constituted Joint Lenders Forum (JLF), in their meeting held on i.e.07-Jun-2017 have acceded in-principle to the request of the Company for S4A scheme with Reference date i.e. 07-Jun-2017 which scheme shall be finalised within 180 days from Reference Date in terms of guidelines / directions of Reserve Bank of India (RBI) issued from time to time with respect to S4A scheme. Under the S4A scheme, the debt exposure of the Company based on Techno Economic Viability study will be bifurcated into two parts -Sustainable and Unsustainable debt. The Sustainable debt amount which shall not be less than 50% of existing debt, shall have to be serviced by the Company on the same terms as that of existing terms and conditions including repayment schedules. The Unsustainable debt portion of the exposure shall be converted in to equity or other instruments as mutually agreed between the Company and the JLF by following the RBI guidelines for the S4A scheme with a clearly spelt out terms. JLF gets 180 days from Reference Date to formulate the resolution plan and implement the same after due internal approvals.
The S4A scheme however could not be implemented due to non-fulfillment of mandatory norm of sufficient cash flows six months prior to and after the reference date and the same was called off on 19.11.2017. Consequent to the calling off the implementation of the S4A scheme and the debt of the Company was classified by JLF as Non-Performing Asset (NPA).
Debt Restructuring:
Consequent to the calling off the implementation of the S4A scheme and classifying the debt of the Company by JLF as NonPerforming Asset (NPA) the Company has requested the JLF to consider deep restructuring of the debt which the banks have considered favourably and initiated the process of restructuring which is under different stages of progress and shall be implemented upon full tie up of restructuring package. The restructuring plan envisages extended tenors of repayment of loans and sanction of additional working capital funding. The restructuring plan also envisages no haircuts to banks and the sacrifice amount on interest concessions requested by the Company would be fully re-compensed after the end of restructuring scheme. Promoters have offered to pledge their total shareholding to the secured lenders apart from offering some personal assets as a collateral security upon sanction of the restructuring plan. The existing personal guarantees of Wholetime Promoter Directors continues to be inforce. The management believes that the shortage of working capital funds faced by the Company will be temporary and lenders will consider the request for deep restructuring of the debt and arrive at the resolution plan at the earliest.
The Company has considered adopting the restructuring scheme of loans for the first time in its history of over two and a half decades.
Plant shutdown:
Due to tight cash flows and non-availability of working capital limits the operations at ferrous division have been impacted and the plant was under shut down since 12th June 2017. The operations at Kudithini works too were impacted where Metallurgical Coke facility is running partly on job work basis and partly for own production and power generation has been restarted. This impact is likely to continue until the restructuring of the loans are done by the secured lenders.
Barring the above, there are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the Financial Statements relates and the date of this Report.
ORDERS PASSED BY THE REGULATORS, COURTS OR TRIBUNALS:
There are no significant and material orders passed by the Regulators, or Courts or Tribunals impacting the going concern status and Companyâs operations in future. However the Company in the year 2015-16 along with some other buyers of Iron Ore contested before the Honâble High Court of Karnataka (HC) the levy of Forest Development Tax (FDT) by the miners on their sale of Iron Ore. The Honâble HC vide its judgement dated 15.02.2016 has granted partial relief to the Company and directed the Government of Karnataka (GOK) to refund the FDT collected earlier. Following the judgement the Company has vide its letter dated 09.03.2016 filed an application for refund of 2325.73 lakhs towards FDT collected in the earlier years. However Government of Karnataka and some mining companies have since gone on appeal before the Honâble Supreme Court against the above judgement. Company has also filed a petition before the Honâble High Court of Karnataka against collection of Forest Development Fee (FDF) on purchase of Iron Ore and the petition has been held in favour of the Company where an amount of Rs.264.11 lakhs was ordered to be refunded to the Company. The Government of Karnataka has appealed before the Honâble Supreme Court against the Order of High Court of Karnataka. Pending disposal of these appeals, the Company has not recognised the said refund claims in its books of account in the Financial Year 2017-18 or in the earlier financial years.
SUBSIDIARY OR ASSOCIATE COMPANIES:
There are no subsidiary or associate companies to the Company as at the end of 31st March 2018. Accordingly no Consolidated Financial Statements is required to be prepared and reported.
CREDIT RATING:
During the year Brickwork Ratings India Private Limited., has assigned BWR D rating for the Companyâs long term bank borrowings and BWR D for working capital limits a notch down considering the stress in the financial resources of the Company. The rating will be revisited by the Rating agency once the restructuring of the debt is implemented.
STANDALONE FINANCIAL STATEMENTS:
The accompanying Financial Statements and this Boardâs Report are prepared based on standalone operations of the Company.
BOARDâS APPROVAL:
This Directorsâ Report has been considered, approved and adopted by the Board of Directors at its meeting held on 14th August 2018. The accompanying Financial Statements were approved and adopted by the Board of Directors at its meeting held on 30th May 2018.
ACKNOWLEDGMENTS:
Your Directors take this opportunity to express their grateful thanks to Canara Bank, State Bank of India (formerly State Bank of Hyderabad), Andhra Bank, Shareholders, Central and State Governments and valued suppliers and customers for their cooperation and support. The Board also places on record its appreciation of the valuable services rendered by the employees at all levels of the Company.
for and on behalf of the Board
(K. Thanu Pillai)
Place: Hyderabad Chairman
Date: 14.08.2018 (DIN:00025312)
Mar 31, 2015
To
The Members,
SATHAVAHANA ISPAT LIMITED,
The Board of Directors has pleasure in presenting the 26th Annual
Report together with the Audited Accounts of the Company for the year
ended 31st March, 2015:
FINANCIAL RESULTS:
Your Board of Directors reports the following financial results for the
year 2014-15:
(Amount in Rs.)
SL
NO. Particulars Year ended Year ended
31-03-2015 31-03-2014
1. Gross revenue from operations 10558535415 10151387666
2. Other income 70053077 88476066
3. Operating profit/(loss) before
finance costs and depreciation 1019215721 369817416
4. Finance costs 493381950 682122764
5. Depreciation and amortization 245078782 231750698
6. Profit / (loss) before tax 280754989 (544056046)
7. Tax expense 22441507 36210845
8. Net Profit / (loss) after tax 258313482 (580266891)
9. Add: Profit/floss) brought forward
from last year (654592443) (74325552)
Less: Depreciation on fixed assets
due to revision in estimated
useful lives (16199140) 0
10. Balance carried forward (412478101) (654592443)
11. Earning/(loss)per Equity Share-Basic 5.07 (14.50)
12. Eaming/(loss)per Equity Share-Diluted 5.07 (14.50)
During the year under review, the performance of the Company improved
both in terms of sales and profitability inspite of subdued market
conditions and falling commodity prices in particular Iron and Steel
prices. Although the interest costs and raw material prices remained
high during the year, yet the factors like better capacity utilization
and lesser volatility in foreign exchange fluctuations contributed to
the improved performance of the Company. The gross revenue from
operations at Rs. 10558535415/- is higher as compared to previous
year's revenue of Rs.M 0151387666/-.The year ended with a profit before
tax of Rs.280754989/- as against loss before tax of Rs.544056046 /- in
the previous year. Accordingly, the earning per share accounted for at
Rs. 5.07 as compared to loss per share of Rs. 14.50 in the previous
year.
DIVIDEND AND GENERAL RESERVE:
The Board of Directors has not recommended any dividend for the year
2014-15, due to very tight cash flows, loss incurred during the year
and funds deployed to the Integrated Project at Haresamudram plant.
Moreover in view of the recent amendments to the Companies Act 2013 by
virtue of which Company cannot declare dividend until the past losses
are fully set off against the current profits. The Board of Directors
also has not proposed to transfer any amount to General Reserve as the
current profit has been fully utilized to set off carry forward loss.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134(3)(c) of the Companies
Act, 2013 with respect to Directors' Responsibility Statement, Your
Directors hereby state and confirm that:
i) In the preparation of Annual Accounts for the Financial Year 2014-15
the applicable Accounting Standards had been followed with proper
explanation relating to material departures;
ii) The Accounting Policies selected were applied consistently and the
judgements and estimates made are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company as at 31st
March 2015 and of the Profit of the Company for the year ended on that
date;
iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) The Annual Accounts have been prepared on a going concern basis;
v) Internal financial controls to be followed by the Company have been
laid down and that such internal financial controls are adequate and
were operating effectively; and
vi) Proper systems had been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
AUDIT COMMITTEE:
The Audit Committee has been reconstituted during the year by
nominating Smt Y. Prameela Rani and Shri M.S. Rama Mohan Rao as
additional members with effect from 14.11.2014. The Audit Committee
comprises Chairman - Shri K.Thanu Pillai, Independent Director and
three other Independent Director members -Shri Syed Anis Hussain, Shri
S.N.Rao, SmtY. Prameela Rani and Shri M.S.Rammohan Rao. The Audit
Committee at its meeting held on 30th May 2015 has considered and
approved the Audited Accounts of the Company for the financial year
ended 31st March 2015. The Audited Accounts for the financial year
ended 31st March 2015, as approved and recommended by the Audit
Committee, do not require any explanations from the Board.
CORPORATE GOVERNANCE:
Pursuant to Clause 49 of the listing agreements entered into by the
Company with the Stock Exchanges where the Shares of the Company are
listed, Company is required to comply with the Code of Corporate
Governance for the financial year under review. Accordingly, the
Reports on Corporate Governance and Management Discussion and Analysis
together with Auditors'Report on compliance of Codeof Corporate
Governance are attached to this Report and forms part of the Annual
Report. These Reports are to be read in conjunction with this
Directors' Report.
PROJECT:
The Company has commenced commercial operations of Ductile Iron Pipe
making plant, Sinter plant and captive Thermal Power plant forming part
of Integrated Project at Haresamudram Village, Bommanahal Mandalam,
Anantapuramu District, Andhra Pradesh effective from 1st April 2015.
Ductile Iron Pipe fittings project has been given up due to paucity of
funds. Accordingly the Integrated Project at Haresamudram Plant is
treated as completed
DIRECTORS:
Shri T. Sreerama Murthy ceased to be Director on the Board of the
Company with effect from March 02, 2015 consequent to his resignation.
The Board of Directors places on record of its appreciation for the
valuable services rendered by Shri T. Sreerama Murthy during his tenure
as Executive Director (Operations). Shri A.S.Rao, Executive Vice
Chairman is liable for retirement of Directors by rotation at the end
of the ensuing 20h Annual General Meeting and being eligible, offer
himself for re-appointment at the said Annual General Meeting.
Shri A.S. Rao has been re-appointed as Executive Vice Chairman for a
further period of three years effective from 27.07.2015 to 26.07.2018
and approval of the Members by a Special Resolution for the said
re-appointment is being sought in the ensuing Annual General Meeting.
The Office of Executive Vice Chairman held by Shri A.S. Rao is liable
for retirement of Directors by rotation and may require approval of the
Central Government.
Members have proposed in terms of Section 160 of the Companies Act 2013
read with Sections 149 and 152 to nominate Dr. Shailendra Dasari, as
Non-independent Director and approval of Members for his appointment is
being sought in the ensuing Annual General Meeting. Approval of the
Members is also being sought in the ensuring Annual General Meeting for
approval of appointment of Dr. Shailendra Dasari as Executive Director
(Operations) for a period of three years from 01.10.2015 to 30.09.2018.
The office of Executive Director (Operations) held by Dr. Shailendra
Dasari is liable for retirement of Directors by rotation and
theappointment do not require the approval of the Central Government.
In the opinion of the Board the proposed appointees fulfil the
conditions specified in the Companies Act 2013 and Rules made
thereunder and would further strengthen the Board.
Policyon selection and appointment of Directors, Composition and
category of Directors, attendance of each Director at meetings, Number
of other Directorships held by each Director, Number of Board meetings
held and dates on which held, familiarisatioin programme of each
Independent Directors, Board's evaluation process are discussed in the
Report on Corporate Governance which forms part of this Report.
The Board of Directors confirms that based on the declarations given
byall the Independent Directors in pursuance of provisions of Section
149(7) of the Companies Act 2013 they meet the criteria of independence
as provided in Section 149(6) of the Companies Act 2013.
AUDITORS AND AUDIT REPORT:
Pursuant to Section 139, 142 and other applicable provisions, if any,
of the Companies Act, 2013 and Rules made there under as amended from
time to time and for the time being in force, the appointment of M/s.
P.V.R.K. Nageswara Rao & Co., Chartered Accountants, (Firm's
Registration Number: 002283S) Hyderabad, as Auditors of the Company to
hold office from conclusion of this Annual General Meeting till the
conclusion of twenty seventh Annual General Meeting is coming up for
your ratification. The auditors have confirmed that they are eligible
to continue to be the Auditors of the Company subject to ratification
of their appointment by the members at the ensuing Annual General
Meeting.
The Independent Auditors' Report for the financial year ended 31st
March 2015 which forms part of the Annual Report do not require any
explanations from the Board as there are no qualifications or
reservations or adverse remarks.
COST AUDITORS AND COST AUDIT REPORT:
Company appointed M/s. S. Mahadevan & Co, Coimbatore, Practicing Cost
Accountants, as Cost Auditors for the financial year 2013-14. The Cost
Compliance Report as prepared by the Cost Auditors for the financial
year 2013-14 has been filed with the Central Government with in the due
date. The cost compliance report for the financial year 2014-15 has
been taken on record by the Board of Directors on 14th August 2015. The
Board of Directors based on the recommendations of the Audit Committee,
has appointed M/s S. Mahadevan & Co., Practicing Cost Accountants
(Firm's Registration Number: 00007) as Cost Auditors for conducting
Cost Audit of the Cost Records of the Company for the year 2015-16. In
pursuance of the provisions of Section 148 and other applicable
provisions, if any, of the Companies Act 2013, read with Companies
(Audit and Auditors) Rules 2014 the remuneration payable for conducting
the Cost Audit for the year ending 31st March 2016 to M/sS. Mahadevan &
Co., Practicing Cost Accountants is being placed before the Members in
the ensuing Annual General Meeting for their ratification.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:
M/s. D. Hanumanta Raju & Co., Practicing Company Secretaries, Hyderabad
who have been appointed as Secretarial Auditor for the financial year
2014-15 have conducted the Audit of the Secretarial Records and
submitted their Report in MR-3 which is annexed to this Report
(Annexure-V). The Secretarial Audit Report for the financial year ended
31st March 2015, do not require any explanations from the Board as
there are no qualifications or reservations or adverse remarks. The
Board of Directors at its meeting held on 30h May 2015 has re-appointed
D.Hanumanta Raju & Co., Practicing Company Secretaries, Hyderabad as
Secretarial Auditor for the financial year 2015-16.
TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS TO IEPF:
Pursuant to the provisions of Section 205A(5) of the Companies Act,
1956 and / or Section 124(5) of the Companies Act, 2013, the declared
dividends, which remained unclaimed for a period of seven years, have
been transferred by the Company to the Investor Education and
Protection Fund (IEPF) established by the Central Government pursuant
to Section 205C of the Companies Act, 1956 and / or Section 125 of the
Companies Act, 2013.
DIRECTORS, EMPLOYEES AND THEIR REMUNERATION:
The particulars of employees required to be furnished pursuant to
Section 197(12) of the Companies Act, 2013 read with sub rule (2) to
Rule 5 to the Companies (Appointment & Remuneration) Rules, 2014, as
amended, are not required to be provided as there were no employees
drawing remuneration more than the stipulated limits. Details of
Remuneration Policy and payment of remuneration to all Directors / Key
Managerial Personnel / other manageria employees is given in the Report
on Corporate Governance under the head Nomination and Remuneration
Committee which forms part of this Report. Managing Director and other
Whole Time Directors have not received any remuneration or commission
from holding or subsidiary companiesas the Company do not have such
companies. In the opinion of the Board the level and composition of
remuneration to Directors, Key Managerial Personnel and other
managerial employees is reasonable and sufficient to attract, retain
and motivate the people who could run the Company efficiently. The
Board affirms that the remuneration paid is in accordance with
Remuneration Policy of the Company. The relationship between
performance and remuneration is clear and meets appropriate benchmarks
and that the remuneration criteria succinctly balances between fixed
and variable pay wherever set reflecting short and long term
performance objectives appropriate to the working of the Company and
its goals. Disclosures required to be made pursuant to Rule 5 to the
Companies (Appointment & Remuneration) Rules, 2014 are attached to this
report (Annexure-ll).
DEMATERIALISATION OF EQUITY SHARES:
The Agreements entered into by the Company with the two Depositories
viz., National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSL) for dematerialisation of
Shares are in force and the Company's Shares are in dematerialised mode
under ISIN No. INE 176C01016. As per the Securities and Exchange Board
of India(SEBI) directives, the Equity Shares of the Company are to be
compulsorily traded in dematerialisation form with effect from 26th
February 2001. In view of the significant benefits that accrue on
dematerialisation of securities, Members may avail the facility.
LISTING OF SHARES ON STOCK EXCHANGES:
The Equity Shares of the Company are listed on BSE Ltd (formerly The
Bombay Stock Exchange Limited) Stock Code:526093 and The National Stock
Exchange of India Limited (NSE) Stock Code: SATHAISPAT and are
regularly traded. The listing fee to these Stock Exchanges has been
paid upto date.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO:
Information on conservation of energy, technology absorption, foreign
exchange earnings and out go required to be disclosed under Section 134
of the Companies Act, 2013 read with Companies (Accounts) Rules 2014,
is given in the Annexure forming part of this Report (Annexure-I).
FIXED DEPOSITS:
During the year the Company has not accepted fixed deposits within the
meaning of Section 2(31) read with Sections 73 and 74 of the Companies
Act, 2013. There are no overdue deposits or outstanding deposits as on
the Balance Sheet date.
RISK MANAGEMENT:
The Board engaged itself with the task of Risk Management by preparing,
implementing and monitoring the risk management plan of the Company.
The Board apart from ensuring the effectiveness of risk management
covering internal financial risks and controls also reviews the same on
regular basis. Major risks identified by the Board are monitored on a
regular basis.
INTERNAL FINANCIAL CONTROL AND SYSTEMS AND THEIR ADEQUACY:
The details with regard to internal financial control system and their
adequacy are included in the Management Discussion and Analysis which
forms part of this Report.
RELATED PARTY TRANSACTIONS:
There are no material related party transactions entered into by the
Company falling within the meaning of Section 188(1) of the Companies
Act 2013. Other related party transactions contracts or arrangements
entered into by the Company are in the ordinary course of business and
at arm's length price. The details of these contracts or arrangements
or transactions as required to be disclosed in terms of Section
134(3)(h)are provided in Form AOC-2 which forms part of this Report
(Annexure-lll) and accompanying Financial Statements.
PARTICULARS OF LOANS,GUARANTEES AND INVESTMENTS:
The Company has not granted loans, guarantees or made investments in or
to companies, firms or other parties covered in the Register maintained
under Section 189 of the Companies Act 2013. The Company has not
extended any loans to the employees for purchase of its shares. Other
investments made by the Company are given in the accompanying Financial
Statements which are in the ordinary course of business.
EXTRACTS OF ANNUAL RETURN:
Information on Extracts of Annual Return required to be disclosed under
Section 92(3) of the Companies Act, 2013 read with Rule 12 of Companies
(Management and Administration) Rules 2014, is given in the prescribed
Form MGT-9 forming part of this report (Annexure-IV).
CORPORATE SOCIAL RESPONSIBILITY:
The details with respect to Corporate Social Responsibility of the
Company as required to be disclosed in terms of provisions of Section
135 read with Section 134(3)(o) and Rule 9 of Companies (Accounts)
Rules 2014 are given in the Report on Corporate Governance attached to
and forming part of this Report. During the year the Company, in terms
of provisions of sub section 5 to Section 135 of the Companies Act
2013, is not required to earmark any fund for Corporate Social
Responsibility activities in view of the past losses.
MATERIAL CHANGES:
There are no material changes and commitments affecting the financial
position of the Company which have occurred between the end of the
financial year to which the Financial Statements relates and the date
of this Report.
ORDERS PASSED BY THE REGULATORS,COURTS OR TRIBUNALS:
There are no significant and material orders passed by the Regulators,
or Courts or Tribunals impacting the going concern status and Company's
operations in future.
SUBSIDIARY OR ASSOCIATE COMPANIES:
There are no subsidiary or associate companies to the Company as at the
end of 31st March 2015. Accordingly no Consolidated Financial
Statements is required to be reported.
STANDALONE FINANCIAL STATEMENTS:
The accompanying Financial Statements and this Board's Report are
prepared based on standalone operations of the Company.
BOARD'S APPROVAL:
This Directors' Report has been considered, approved and adopted by the
Board of Directors at its meeting held on 14th August 2015. The
accompanying Financial Statements were approved and adopted by the
Board of Directors at its meeting held on 30th May 2015.
ACKNOWLEDGMENTS:
Your Directors take this opportunity to express their grateful thanks
to Canara Bank, State Bank of Hyderabad, Andhra Bank, Shareholders,
Central and State Governments and valued suppliers and customers for
their co-operation and support. The Board also places on record its
appreciation of the valuable services rendered by the employees at al
levels of the Company.
for and on behalf of the Board
Place: Hyderabad (K.Thanu Pillai)
Date: 14.08.2015 Chairman
(DIN:00115814)
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the 25th Annual Report
together with the Audited Accounts of the Company for the year ended
31st March, 2014:
FINANCIAL RESULTS:
Your Directors report the following financial results for the year
2013-14:
(Amount in Rs. )
SL Particulars Year ended Year ended
NO. 31-03-2014 31-03-2013
1. Gross revenue from operations 10151387666 8042717802
2. Other Income 88476066 128454013
3. Operating profit /(loss) before
finance costs and depreciation 369817416 1005446905
4. Finance costs 682122764 715019240
5. Depreciation and amortisation 231750698 232506274
6. Profit / (loss) before tax (544056046) 57921391
7. Tax expense 36210845 35927147
8. Net Profit / (loss) after tax (580266891) 21994244
9. Add: Profit/(loss) brought
forward from last year (74325552) (96319796)
10. Balance carried forward (654592443) (74325552)
11. Earning /(loss)per
Equity Share-Basic (14.50) 0.59
12. Earning/(loss)per
Equity Share-Diluted (14.50) 0.57
Your Directors report that the performance of the Company during the
year under review is satisfactory as the Company is able to maintain
its sales trend despite slackening demand and subdued market
conditions. Inspite of improved sales the year ended with loss mainly
on account of exchange fluctuations due to steep depreciation of Rupee,
higher interest costs, high raw material costs during most part of the
year. The gross revenue from operations at Rs. 10151387666/- is higher
as compared to previous year''s revenue of Rs. 8042717802/-. The year
ended with a loss of Rs. 544056046/- as against profit before tax of
Rs. 57921391/- in the previous year. Accordingly, the loss per share
accounted for at Rs. 14.50 as compared to earning per share of Rs. 0.59
in the previous year.
DIVIDEND:
The Board of Directors has not recommended any dividend for the year
2013-14, due to very tight cash flows, loss incurred during the year
and funds commitment to the ongoing Integrated Project at Haresamudram
plant.
DIRECTORS'' RESPONSIBILITY STATEMENT'':
Pursuant to the requirement under Section 217 (2AA) of the Companies
Act, 1956 with respect to Directors'' Responsibility Statement, Your
Directors hereby confirm that:
i) The applicable Accounting Standards have been followed in the
preparation of Annual Accounts for the Financial Year 2013-14;
ii) The accounting policies selected were applied consistently and the
judgements and estimates made are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company as at 31st
March 2014 and of the loss of the Company for the year ended on that
date;
iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and,
iv) The Annual Accounts have been prepared on a going concern basis.
AUDIT COMMITTEE:
The Audit Committee comprises Chairman -Shri K.Thanu Pillai,Independent
Director and two other Independent Director members -Shri Syed Anis
Hussain and Shri S.N.Rao. Shri Khaja Ruknuddin ceased to be member of
the Committee consequent to his death. The Audit Committee at it''s
meeting held on 30th May 2014 has considered and approved the Audited
Accounts for the financial year ended 31st March 2014. The Audited
Accounts for the financial year ended 31st March 2014, as approved and
recommended by the Audit Committee, do not require any explanations
from the Board.
CORPORATE GOVERNANCE:
Pursuant to Clause 49 of the listing agreements entered into by the
Company with the Stock Exchanges where the Shares of the Company are
listed, Company is required to comply with the Code of Corporate
Governance for the financial year under review. Accordingly, the
reports on Corporate Governance and Management Discussion and Analysis
together with Auditors'' Report on compliance of Corporate Governance
are attached to this report and forms part of the Annual Report.
PROJECT:
The Integrated Project at Haresamudram village for manufacture of DI
Pipes, setting up Sinter Plant and captive Power plant as also the
modernisation of Blast Furnace is in progress. Modernisation of Blast
Furnace has already been completed and re-commissioned. Sinter Plant is
under stabilisation. DI Pipe making plant and captive Power plant are
nearing completion and would be commissioned shortly.
DIRECTORS:
Shri Khaja Ruknuddin ceased to be Director on the Board of the Company
with effect from November 23, 2013 consequent to his death. The Board
of Directors places on record of its appreciation for the valuable
services rendered by Shri Khaja Ruknuddin during his tenure as
Director. Shri K. Thanu Pillai, Shri Syed Anis Hussain and Shri
S.N.Rao, Directors are liable for retirement by rotation at the end of
the ensuing 25th Annual General Meeting and being eligible, offer
themselves for re-appointment at the said Annual General Meeting.
Shri A. Naresh Kumar has been re-appointed as Managing Director for a
further period of five years effective from 01.06.2014 and approval of
the Members for the said re-appointment is being sought in the ensuing
Annual General Meeting.
Members have proposed in terms of Section 160 of the Companies Act 2013
read with Sections 149 and 152 to nominate Smt. Y. Prameela Rani as
Independent Director and Shri T. Sreerama Murthy, as Non-independent
Director and approval of Members for their appointment is being sought
in the ensuing Annual General Meeting. The Company also proposed suo
motu to appoint Shri M. Sreerama Mohan Rao, as Small Shareholder
Director on the Board of the Company for which approval of Members is
sought through a Postal Ballot. Approval of the Members is also being
sought in the ensuring Annual General Meeting for approval of
appointment of Shri T. Sreerama Murthy as Executive Director
(Operations) for a period of three years from 01.10.2014 to 30.09.2017.
In the opinion of the Board the proposed appointees fulfil the
conditions specified in the Companies Act 2013 and Rules made
thereunder and would further strengthen the Board.
AUDITORS:
M/s. P.V.R.K. Nageswara Rao & Co., Chartered Accountants, Hyderabad
(Firm''s Registration Number: 002283S) retire as Auditors at this Annual
General Meeting and are eligible for re-appointment in the ensuing
Annual General Meeting as Auditors of the Company to hold office from
conclusion of the said Annual General Meeting till the conclusion of
twenty eighth Annual General Meeting subject to ratification by the
members in each and every Annual General Meeting held interregnum.
COST AUDITORS:
Company appointed M/s. S. Mahadevan & Co, Coimbatore, Practicing Cost
Accountants, as Cost Auditors for the financial year 2012-13. The cost
compliance report for the financial year 2012-13 has been filed with
the Central Government with in the due date. The Board of Directors
based on the recommendations of the Audit Committee, has appointed M/s
S. Mahadevan & Co., Practicing Cost Accountants (Firm''s Registration
Number : 00007) as Cost Auditors for conducting the Cost Audit of the
cost records of the Company for the year 2014-15. In pursuance of the
provisions of Section 148 and other applicable provisions, if any, of
the Companies Act 2013, read with Companies (Audit and Auditors) Rules
2014 the remuneration paid / payable for conducting the Cost Audit for
the year ending 31st March 2015 as well as 31st March 2014 to M/s S.
Mahadevan & Co., Practicing Cost Accountants is being placed before the
Members in the ensuing Annual General Meeting for their ratification.
TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS TO IEPF:
Pursuant to the provisions of Section 205A(5) of the Companies Act,
1956, the declared dividends, which remained unclaimed for a period of
seven years, have been transferred by the Company to the Investor
Education and Protection Fund (IEPF) established by the Central
Government pursuant to Section 205C of the said Act.
EMPLOYEES:
The particulars of employees required to be furnished pursuant to
Section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are not given as
there were no employees drawing more than the stipulated limits.
SHARE CAPITAL:
At the Extraordinary General Meeting held on 19th December 2013, the
Company has increased the Authorised Share Capital from Rs. 400000000/-
to Rs. 600000000/- by creating additional 20000000 Equity Shares of Rs.
10/- each. The Company in the said Extraordinary General Meeting has
also made a preferential allotment of 9980000 Equity Shares to Foreign
Institutional Investors and 2520000 Equity Shares to Promoters'' group
concern aggregating to 12500000 Equity Shares, at an issue price of Rs.
36/- per Share, comprising Rs. 10/- per Share towards face value and
Rs. 26/- per Share towards Securities Premium and accordingly raised a
sum Rs. 450000000/-. Consequently, as on 31st March 2014, the Paid Up
Share Capital has gone up by Rs. 125000000/- and Securities Premium by
Rs. 325000000/-. After the present allotment, the Paid Up Capital now
stands at Rs. 509000000/- and Securities Premium Account at Rs.
930000000/-. The Equity Shares so allotted ranks pari-passu with the
existing Equity Shares of the Company in all respects including
dividend.
DEMATERIALISATION OF EQUITY SHARES:
The Agreements entered into by the Company with the two Depositories
viz., National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSL) for dematerialisation of
Shares are in force and the Company''s Shares are in dematerialised mode
under ISIN No. INE 176C01016. As per the Securities and Exchange Board
of India(SEBI) directives, the Equity Shares of the Company are to be
compulsorily traded in dematerialisation form with effect from 26th
February 2001. In view of the significant benefits that accrue on
dematerialisation of securities, Members may avail the facility.
LISTING OF SHARES ON STOCK EXCHANGES:
The Equity Shares of the Company are regularly traded on BSE Ltd
(formerly The Bombay Stock Exchange Limited) Stock Code:526093 and The
National Stock Exchange of India Limited (NSE) Stock Code: sathaispat.
The listing fee to these Stock Exchanges has been paid upto date. The
listing on Hyderabad Stock Exchange Limited (Stock Code: SVI)is not in
force as the said exchange was de-recognised by The Securities and
Exchange Board of India. Preferential allotment of further Equity
Shares of 12500000 allotted on 13th February 2014 in terms of approval
accorded by the Members in the Extraordinary General Meeting held on
19th December 2013 have since been listed on the Stock Exchanges.
STATUTORY INFORMATION:
Information on conservation of energy, technology absorption, foreign
exchange earnings and out go required to be disclosed under Section 217
(1) (e) of the Companies Act, 1956, is given in the Annexure forming
part of this report.
FIXED DEPOSITS:
During the year the Company has not accepted fixed deposits within the
meaning of Section 58-A of the Companies Act, 1956. There are no
overdue deposits or outstanding deposits as on the Balance Sheet date.
ACKNOWLEDGMENTS:
Your Directors take this opportunity to express their grateful thanks
to Canara Bank, State Bank of Hyderabad, Andhra Bank, Shareholders,
Central and State Governments and valued suppliers and customers for
their co-operation and support. The Board also places on record its
appreciation of the valuable services rendered by the employees at all
levels of the Company.
for and on behalf of the Board
(K. Thanu Pillai)
Place: Hyderabad Chairman
Date: 14.08.2014 (DIN:00115814)
Mar 31, 2013
The Members of SATHAVAHANA ISPAT LIMITED,
The Directors have pleasure in presenting the 24th Annual Report
together with the Audited Accounts of the Company for the year ended
31st March, 2013.
FINANCIAL RESULTS:
Your Directors report the following financial results for the year
2012-13:
(Amount in Rs.)
SL
NO. Particulars Year ended Year ended
31-03-2013 31-03-2012
1. Gross Revenue
from operations 8042717802 6885378047
2. Other Income 128454013 120604176
3. Operating profit/
(loss) before
finance costs and
depreciation 1005446905 (237348923)
4. Finance costs 715019240 433439056
5. Depreciation and
Amortization 232506274 198998588
6. Profit/(loss)
before Tax 57921391 (869786567)
7. Tax expense 35927147 (75307698)
8. Net Profit/
(loss) after
Tax 21994244 (794478869)
9. Add: Profit/
(loss) brought
forward from last
year (96319796) 698159073
10. Balance carried
forward (74325552) (96319796)
11. Earnings/(loss)
per Equity
Share-Basic 0.59 (22.96)
12. Earnings/(loss)
per Equity
Share-Diluted 0.57 (22.96)
Your Directors report that the performance of the Company during the
year under review is satisfactory as the Company is able to maintain
its sales trend despite capital shut down of Blast Furnace; slackening
demand and general slowdown in the economy. Although the Company was
able to maintain the sales trend, yet the profitability has not
improved due to lower margins; high interest costs and adverse foreign
exchange fluctuations However the Company is successfully able to stop
the loss and return to its profitability track record despite adverse
economic conditions. The gross revenue from operations at e8042717802/-
is higher as compared to previous year''s revenue of e6885378047/-. The
year ended with a Profit before tax of e57921 391/- as against Loss
before tax of e869786567/- in the previous year. Accordingly, the
earnings per share accounted for ateo.59 as compared with Loss per
share of Rs.22.6 in the previous year.
DIVIDEND:
The Board of Directors has not recommended any Dividend for the year
2012-13, due to very tight cash flows in view of the moderate profit
during the year and funds commitment to the ongoing integrated project
at Haresamudram plant.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under section 217 (2AA) of the Companies
Act, 1956 with respect to Directors'' Responsibility Statement, Your
Directors hereby confirm that:
i) The applicable Accounting Standards have been followed in the
preparation of annual accounts for the financial year 2012-13;
ii) The accounting policies selected were applied consistently and the
judgments and estimates made are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company as at 31st
March 2013 and of the Profit of the Company for the year ended on the
date;
iii) Proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and,
iv) The annual accounts have been prepared on a going concern basis.
AUDIT COMMITTEE:
The Audit Committee comprises Chairman -Shri K.Thanu Pillai,
independent Director and three other independent Director members -Shri
Khaja Ruknuddin, Shri Syed Anis Hussain and Shri S.N.Rao. The Audit
Committee at its meeting held on 30th May 2013 has considered and
approved the Audited Accounts for the financial year ended 31st March
2013. The Audited Accounts for the financial year ended 31st March
2013, as approved and recommended by the Audit Committee, do not
require any explanations from the Board.
CORPORATE GOVERNANCE:
Pursuant to Clause 49 of the Listing Agreement entered into by the
Company with the Stock Exchanges where the shares of the Company are
listed, Company is required to comply with the Code of Corporate
Governance for the financial year under review. Accordingly, the
reports on Corporate Governance and Management Discussion and Analysis
together with Auditors'' Report on compliance of Corporate Governance
are attached to this report and forms part of the Annual Report.
PROJECT:
The Integrated expansion project at Haresamudram village for
manufacture of Dl Pipes, setting up Sinter Plant and captive Power
plant as also the modernization of Blast Furnace is in progress.
Modernization of Blast Furnace has been completed and re-commissioned
on 8th January 2013. Sinter Plant is under trial runs. Major Orders for
Dl Pipe making plant and captive Power plant have been placed. There is
some change in the scope of the project and the same has been appraised
by the Consortium of banks and requests for additional term loans are
under process. Accordingly the commissioning of the project stands
postponed to March 2014.
DIRECTORS:
Shri K.Thanu Pillai and Shri Khaja Ruknuddin, Directors are liable for
retirement by rotation at the end of the ensuing 24th Annual General
Meeting and being eligible, offers themselves for re-appointment at the
said Annual General Meeting.
AUDITORS:
M/s. P.V.R.K. Nageswara Rao & Co., Chartered Accountants, Hyderabad
retire as Auditors at this Annual General Meeting and are eligible for
reappointment.
EMPLOYEES:
The particulars of employees required to be furnished pursuant to
section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are not given as
there were no employees drawing more than the stipulated limits.
SHARE CAPITAL:
During the year Ganapati Adusumilli Fininvest Private Limited, the
allotted of Share Warrants, has exercised option of conversion of
1,97,00,000 Share Warrants (out of 1,97,00,000 Share Warrants
outstanding at the beginning of the year) to 1,97,00,000 Equity Shares.
Accordingly, as on 31st March 2013, the Share Warrants issued and
allotted stands fully subscriptions subsequent to the above exercise of
option the paid up hare capital has gone up by Rs.1,97,00,000/- and
securities premium by Rs.9,85,00,000/- while squaring off the money
received on share warrants account Accordingly the paid up capital
now stands at Rs.38,40,00,000/- and securities premium Account at
Rs.60,50,00,000/-
DEMATERIALISATION OF EQUITY SHARES:
The Agreements entered into by the Company with the two Depositories
viz., National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSL) for dematerialization of
shares are in force and the Company''s Shares are in dematerialized mode
under ISIN No. INE 176C01016. As per the Securities and Exchange Board
of India(SEBI) directives, the Equity Shares of the Company are to be
compulsorily traded in dematerialization form with effect from 26th
February 2001. In view of the significant benefits that accrue on
dematerialization of securities, members may avail the facility.
LISTING OF SHARES ON STOCK EXCHANGES:
The Equity Shares of the Company are regularly traded on BSE Ltd
(formerly The Bombay Stock Exchange Limited) Stock Code:526093 and The
National Stock Exchange of India Limited (NSE) Stock Code:
sathaispat.
The listing fee to these stock exchanges has been paid up to
date. The listing on Hyderabad Stock Exchange Limited (Stock Code:
SVI)is not in force as the said exchange was de-recognized by The
Securities and Exchange Board of India.
STATUTORY INFORMATION:
Information on conservation of energy, technology absorption, foreign
exchange earnings and out go required to be disclosed under section 217
(1) (e) of the Companies Act, 1956, is given in the Annexure forming
part of this report.
FIXED DEPOSITS:
During the year the Company has not accepted fixed deposits within the
meaning of Section 58-A of the Companies Act, 1956. There are no
overdue deposits or outstanding deposits as on the Balance Sheet date.
ACKNOWLEDGMENTS:
Your Directors take this opportunity to express their grateful thanks
to Canara Bank, State Bank of Hyderabad, Andhra Bank, Shareholders,
Central and State Governments and valued suppliers and customers for
their co-operation and support. The Board also places on record its
appreciation of the valuable services rendered by the employees at all
levels of the Company.
for and on behalf of the Board
Place: Hyderabad (K.Thanu Pillai)
Date: 30.05.2013 Chairman
Mar 31, 2012
To The Members of SATHAVAHANA ISPAT LIMITED,
The Directors have pleasure in presenting the 23rd Annual Report
together with the Audited Accounts of the Company for the year ended
31st March, 2012.
FINANCIAL RESULTS:
Your Directors report the following financial results for the year
2011-12:
(Amount in Rs)
SL Particulars Year ended Year ended
NO 31-03-2012 31-03-2011
1. Gross Revenue from operations 6885378047 7075798516
2. Other Income 120604176 98096143
3. Operating profit /(loss) before finance
costs and depreciation (237348923) 1234151494
4. Finance costs 433439056 276148493
5. Depreciation 198998588 167721074
6. Profit / (loss) before tax (869786567) 790281927
7. Tax expense (75307698) 224874986
8. Net Profit / (loss) after tax (794478869) 565406941
9. Add: Profit brought forward from last
year 698159073 455135505
10. Available for appropriation (96319796) 1020542446
11. Less: Transfer to General Reserve 0 250000000
12. Less: Proposed Dividend 0 62280000
13. Less: Provision for Corporate
Dividend Tax 0 10103373
14. Balance carried forward (96319796) 698159073
15. Earnings/(loss) per Equity Share-Basic (22.96) 16.91
16. Earnings/(loss) per Equity Share-Diluted (22.96) 16.81
Your Directors report that the performance of the Company during the
year is satisfactory as the Company is able to maintain its sales trend
despite serious and unprecedented setbacks on raw material; worst ever
depreciation of Rupee vis-a-vis US Dollar and slackening demand. The
mining ban in the Bellary-Hospet belt adversely affected not only the
Pig Iron production but also Metallurgical Coke as other Steel units in
the belt who were buying the said product from your Company also were
affected. Although the Company was able to maintain the sales trend,
yet the profitability turned to be negative. The gross revenue from
operations at B6885378047/- is marginally lower as compared to previous
year's turnover of B7075798516/-. The year ended with a Loss before tax
of B869786567/- as against profit before tax of B790281927/- in the
previous year. Accordingly, the Loss per share accounted for at B22.96
as compared with earnings per share of B 16.91 in the previous year.
DIVIDEND:
The Board of Directors has not recommended any Dividend for the year
2011-12, due to very tight cash flows in view of the losses suffered by
the Company during the year and funds commitment for implementation of
the integrated expansion project at Haresamudram plant.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under section 217 (2AA) of the Companies
Act, 1956 with respect to Directors' Responsibility Statement, Your
Directors hereby confirm that:
i) The applicable Accounting Standards have been followed in the
preparation of annual accounts for the financial year 2011-12;
ii) The accounting policies selected were applied consistently and the
judgements and estimates made are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company as at 31st
March 2012 and of the Loss of the Company for the year ended on the
date;
iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and,
iv) The annual accounts have been prepared on a going concern basis.
AUDIT COMMITTEE:
The Audit Committee comprises Chairman -Shri K.Thanu Pillai,
independent Director and three other independent Director members -Shri
Khaja Ruknuddin, Shri Syed Anis Hussain and Shri S.N.Rao. The Audit
Committee at it's meeting held on 30th May 2012 has considered and
approved the Audited Accounts for the financial year ended 31st March
2012. The Audited Accounts for the financial year ended 31st March
2012, as approved and recommended by the Audit Committee, do not
require any explanations from the Board.
CORPORATE GOVERNANCE:
Pursuant to Clause 49 of the listing agreement entered into by the
Company with the Stock Exchanges where the shares of the Company are
listed, Company is required to comply with the Code of Corporate
Governance for the financial year under review. Accordingly, the
reports on Corporate Governance and Management Discussion and Analysis
together with Auditors' Report on compliance of Corporate Governance
are attached to this report and forms part of the Annual Report.
PROJECT:
Works to de-bottleneck idle capacity in the Turbine Generator capacity
by installing Coal fired CFBC Boiler as also augmentation of additional
Co-generation Power of 10 MW from the expanded Coke making facility,
whereby increasing the installed Power generating capacity to 50 MW has
been commissioned on 08th March 2012. The Integrated expansion project
at Haresamudram village for manufacture of DI Pipes, setting up Sinter
plant and captive Power plant as also the modernisation of Blast
Furnace is in progress.
DIRECTORS:
Shri Syed Anis Hussain and Shri S.N.Rao, Directors are liable for
retirement by rotation at the end of the ensuing 23rd Annual General
Meeting and being eligible, offers themselves for re-appointment at the
said Annual General Meeting. AUDITORS:
M/s. P.V.R.K. Nageswara Rao & Co., Chartered Accountants, Hyderabad
retire as auditors at this Annual General Meeting and are eligible for
reappointment.
EMPLOYEES:
The particulars of employees required to be furnished pursuant to
section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are not given as
there were no employees drawing more than the stipulated limits.
SHARE CAPITAL:
During the year Ganapati Adusumilli Fininvest Private Limited, the
allottee of Share Warrants, has exercised option of conversion of
1830000 Share Warrants (out of 3800000 Share Warrants outstanding at
the beginning of the year) to 1830000 Equity Shares. Accordingly, as on
31st March 2012, 1970000 Share Warrants are outstanding where an amount
of Rs 15/- per Share Warrant is paid up aggregating to Rs
2,95,50,000/-. Subsequent to the above issue / allotment the Paid-up
share capital has gone up by Rs 1,83,00,000/- and securities premium by
Rs 9,15,00,000/-. Accordingly the Paid-up capital now stands at Rs
36,43,00,000/- and Securities Premium Account at Rs 50,65,00,000/-
DEMATERIALISATION OF EQUITY SHARES:
The Agreements entered into by the Company with the two Depositories
viz., National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSL) for dematerialisation of
shares are in force and the Company's Shares are in dematerialised mode
under ISIN No. INE 176C01016. As per the Securities and Exchange Board
of India(SEBI) directives, the Equity Shares of the Company are to be
compulsorily traded in dematerialisation form with effect from 26th
February 2001. In view of the significant benefits that accrue on
dematerialisation of securities, members may avail the facility.
LISTING OF SHARES ON STOCK EXCHANGES:
The Equity Shares of the Company are regularly traded on the Bombay
Stock Exchange Limited (BSE) (Stock Code:526093) and The National Stock
Exchange of India Limited (NSE) (Stock Code: sathaispat). The listing
fee to these stock exchanges has been paid upto date. The listing on
Hyderabad Stock Exchange Limited (HSE) (Stock Code: SVI) is not in
force as the said exchange was de-recognised by the Securities and
Exchange Board of India.
STATUTORY INFORMATION:
Information on conservation of energy, technology absorption, foreign
exchange earnings and out go required to be disclosed under section 217
(1) (e) of the Companies Act, 1956, is given in the Annexure forming
part of this report.
FIXED DEPOSITS:
During the year the Company has not accepted fixed deposits within the
meaning of Section 58-A of the Companies Act, 1956. There are no
overdue deposits or outstanding deposits as on the Balance Sheet date.
ACKNOWLEDGMENTS:
Your directors take this opportunity to express their grateful thanks
to Canara Bank, State Bank of Hyderabad, Andhra Bank, Shareholders,
Central and State Governments and valued suppliers and customers for
their co-operation and support. The Board also places on record its
appreciation of the valuable services rendered by the employees at all
levels of the Company.
for and on behalf of the Board
Place: Hyderabad (K. Thanu Pillai)
Date: 30.05.2012 Chairman
Mar 31, 2011
The Members,
SATHAVAHANA ISPAT LIMITED,
The Directors have pleasure in presenting the 22"ð Annual Report
together with the Audited Accounts of the Company for the year ended 31
"March, 2011.
FINANCIAL RESULTS:
Your Directors report the following financial results for the year
2010-11:
(Rs. in Lakhs)
SL NO. Particulars Year ended Year ended
31-03-2011 31-03-2010
1. sales 70757.99 40776.75
2. Other Income 980.96 2329.07
3. Operating Profit before Interest and
Depreciation 12072.39 6637.94
4. Interest 2492.36 2048.87
5. Depreciation 1677.21 1507.00
6. Profit before Tax 7902.82 3082.07
7. Income Tax adjustment and provision 2248.75 537.10
8. Net Profit after Tax 5654.07 2544.97
9. Add: Profit brought forward from last year 4551.35 3590.59
10. Available for appropriation 10205.42 6135.56
11. Less: Transfer to General Reserve 2500.00 1000.00
12. Less: Proposed Dividend 622.80 501.00
13. Less: Provision for Corporate
Dividend Tax 101.03 83.21
14. Balance carried forward 6981.59 4551.35
15. Earning per Equity Share Basic 16.91 7.73
16. Earning per Equity Share-Diluted 16.81 7.73
Your Directors are glad to report that the Company achieved during the
year an all round improvement in its performance, despite setbacks on
raw material front and thus the performance achieved is considered to
be satisfactory. The sales and profitability have gone up significantly
partially due to commissioning of Metallurgical Coke capacity and
partially due to prudent inventory management and improved sales
realisations. The gross sales turnover at Rs.70757.99 Lakhs is higher
by 73.53% as compared to previous year's turnover of Rs.40776.75 Lakhs.
In line with the improved turnover the Profit before Tax too has gone
up from Rs.3082.0? Lakhs to Rs.7902.82 Lakhs. Similarly the Net Profit
after Tax has gone up from Rs.2544.97 Lakhs to Rs.5654,07 Lakhs. The
non availability of raw materials like Iron Ore and high increase in
Coking Coal prices had curtailed the margins but for which the
profitability would have been even better. The Earning Per Share at
Rs.16.91 as compared with Rs.7.73 in the previous year has more than
doubled. Out of the amount available for appropriation, an amount of
Rs.2500 Lakhs has been transferred to General Reserves.
DIVIDEND:
The Board of Directors have recommended a Dividend of Rs.l .80 per
Share (18%) for the year 2010-11, an increase by 3%.The proposed
Dividend involves an outlay of Rs.622.80 Lakhs and the applicable
Corporate Dividend Tax on the proposed Dividend amounting to Rs.101.03
Lakhs will be borne by the Company. Thus the total outflow on account
of Dividend payment works out to Rs.723.83 Lakhs. Due to funds
commitment for implementation of the integrated expansion project at
Haresamudram plant, a moderate increase in the dividend rate has been
considered for the year 2010-11 and is being paid out of current year
profits.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under section 217 (2AA) of the Companies
Act, 1956 with respect to Directors' Responsibility Statement, Your
Directors hereby confirm that:
i) The applicable accounting standards have been followed in the
preparation of Annual Accounts for the Financial Year 2010-11;
ii) The accounting policies selected were applied consistently and the
judgements and estimates made are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company as at 31sl
March 2011 and of the Profit of the Company for the year ended on the
date;
iii) Proper and sufficient care has been taken for the maintenance of
adequate,accounting records in accordance with the provisions of the
Companies Actr 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and,
iv) The Annual Accounts have been prepared on a going concern basis.
AUDJT COMMITTEE:
The Audit Committee comprises Chairman -Shri K.Thanu Pillaijndependent
Director and three other independent Director members -Shri Khaja
Ruknuddin, Shri Syed Anis Hussain and Shri S.N.Rao. The Audit Committee
at it's meeting held on 30th May 2011 has considered and approved the
Audited Accounts for the financial year ended 31st March 2011. The
Audited Accounts for the financial year ended 31" March 2011, as
approved and recommended by the Audit Committee, do not require any
explanations from the Board.
CORPORATE GOVERNANCE:
Pursuant to Clause 49 of the listing agreement entered into by the
Company with the Stock Exchanges where the shares of the Company are
listed. Company is required to comply with the Code of Corporate
Governance for the financial year under review. Accordingly, the
reports on Corporate Governance and Management Discussion and Analysis
together with Auditors' Report on compliance of Corporate Governance
are attached to this report and forms part of the Annual Report.
PROJECT:
The expansion of the Coke making facility by 150000 tpa has been
commissioned on 23.12.2010. Works to de- bottleneck idle capacity in
the Turbine Generator capacity by installing coal fired CFBC Boiler as
also augmentation of additional Co-generation power of 10 MW from the
expanded Coke making facility, whereby the total Power generating
capacity would go up to 50 MW will be commissioned in second quarter of
financial year 2011-12 due to some teething troubles.
DIRECTORS:
Shri K.Thanu Pillai and Shri Khaja Ruknuddin, Directors are liable for
retirement by rotation at the end of the ensuing 22nd Annua! General
Meeting and being eligible, offer themselves for re-appointment at the
said Annual General Meeting.
AUDITORS:
M/s. P.V.R.K. Nageswara Rao & Co., Chartered Accountants, Hyderabad
retire as auditors at this Annual General Meeting and are eligible for
reappointment.
EMPLOYEES:
The particulars of employees required to be furnished pursuantto
section 217(2A) of the Companies Act, 1956 read with the Companies
(Particulars of Employees) Rules, 1975, as amended, are given in the
Annexure forming part of this report.
SHARE CAPITAL:
In terms of approval accorded by the members at the Extraordinary
General Meeting held on 15lh December 2010, the Company on 15'h March
2011 allotted 4200000 Share Warrants to Ganapati Adusumilli Fininvest
Private Limited - an associate entity of Promoters'Group and 800000
equity shares to Stemcor AG, at an issue price of Rs.60/- per Share
Warrant/Equity Share, inclusive of share premium of Rs.50/-per each
Share Warrant/Equity Share. Ganapati Adusumilli fininvest Private
Limited has since exercised option of conversion of 400000 Share
Warrants to 400000 Equity Shares.
Accordingly, as on 3T' March 2011, 3800000 Share Warrants are
outstanding where an amount of Rs.15A per Share Warrant is paid up
aggregating to Rs.57000000/-. Subsequent to the above issue / allotment
the paid up share capital has gone up by Rs.12000000/- and share
premium by Rs.60000000/-.
DEMATERIALISATION OF EQUITY SHARES:
The Agreements entered into by the Company with the two Depositories
viz., National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSL) for dematerialisation of
shares are in force and the Company's shares are in dematerialised mode
under ISIN No. INE 176C01016, As per the Securities and Exchange Board
of India (SEBI) directives, the equity shares of the Company are to be
compulsorily traded in dematerialisation form with effect from 26
LISTING OF SHARES ON STOCK EXCHANGES:
The Equity Shares of the Company are regularly traded on the Bombay
Stock Exchange Limited (BSE) (Stock Code:526093) and The National Stock
Exchange of India Limited (NSE) (Stock Code: sathaispat). The listing
fee to these stock exchanges has been paid upto date. The listing on
Hyderabad Stock Exchange Limited (HSE) (Stock Code: SVI)is not in force
as the said exchange was de-recognised by The Securities and Exchange
Board of India.
STATUTORY INFORMATION:
Information on conservation of energy, technology absorption, foreign
exchange earnings and outgo required to be disclosed under section 217
(1) (e) of the Companies Act, 1956, is given in the Annexure forming
part of this report.
FIXED DEPOSITS:
During the year the Company has not accepted / renewed fixed deposits
within the meaning of Section 58-A of the Companies Act, 1956 from the
Shareholders and Directors. There are no overdue deposits or
outstanding deposits as on the Balance Sheet date.
ACKNOWLEDGMENTS:
Your directors take this opportunity to express their grateful thanks
to Canara Bank, State Bank of Hyderabad, Andhra Bank, Shareholders,
Central and State Governments and valued suppliers and customers for
their co-operation and support. The Board also places on record its
appreciation of the valuable services rendered by the employees at all
levels of the Company.
for and on behalf of the Board
Place: Hyderabad {K.ThanuPtllai)
Date: 30.05.2011 Chairman
Mar 31, 2010
The Directors have pleasure in presenting the 21st Annual Report
together with the Audited Accounts of the Company for the year ended
31st March, 2010:
FINANCIAL RESULTS:
Your Directors report the following financial results for the year
2009-10:
(Rs. in Lakhs)
Sl.
No. Particulars Year ended Year ended
31-03-2010 31-03-2009
1. Sales 40776.75 57743.66
2. Other Income 2329.07 868.45
3. Operating profit before
Interest and Depreciation 6637.94 6116.02
4. Interest 2048.87 2590.81
5. Depreciation 1507.00 1457.44
6. Profit before Tax 3082.07 2067.77
7. Income Tax adjustment
and provision 537.10 756.03
8. Net Profit after Tax 2544.97 1311.74
9. Add: Profit brought forward
from last year 3590.59 3337.36
10. Available for appropriation 6135.56 4649.10
11. Less: Transfer to General
Reserve 1000.00 500.00
12. Less: Proposed Dividend 501.00 477.38
13 Less: Provision for Corporate
Dividend Tax 83.21 81.13
14. Balance carried forward 4551.35 3590.59
15. Earning per Equity Share-Basic 7.73 4.12
16. Earning per Equity Share-Diluted 7.73 3.93
Your Directors are pleased to report that the Companys performance is
satisfactory. This performance is despite global recession consequent
to the financial crisis and subdued commodity markets throughout the
year. The sales turnover is lower at Rs.40776.75 Lakhs during the year
under review as against Rs. 57743.66 Lakhs in the last year. The lower
turnover was mainly due to decline in sales realisation and also due to
job works undertaken by the Company. However the Profit before Tax for
the year improved to Rs.3082.07 Lakhs as compared to Rs.2067.77 Lakhs
in the year before. The Net Profit after Tax for the year also improved
to Rs.2544.97 Lakhs as against Rs.1311.74 Lakhs in the previous year.
The profits would have been better but for the reduced margins on Pig
Iron and Metallurgical Coke sales. However, the profits have gone up
due to full year operations of Co-generation Power plant. The Earning
Per Share is at Rs.7.73 as against Rs.4.12 in the last year. A sum of
Rs.1000 Lakhs (previous year Rs.500 Lakhs) was transferred to General
Reserve.
DIVIDEND:
The Board of Directors have recommended a dividend of 15% (Rs.1.50 per
Share) for the year 2009-10, same as in the previous year. The proposed
dividend involves an outlay of Rs.501.00 Lakhs and the applicable
Corporate Dividend Tax on the proposed dividend amounting to Rs.83.21
Lakhs will be borne by the company. Thus the total outflow on account
of dividend payment works out to Rs.584.21 Lakhs. Due to funds
commitment for implementation of the expansion of Kudithini plant, the
dividend rate has been maintained at 15% for the year 2009-10 and is
being paid out of current year profits.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement under section 217 (2AA) of the Companies
Act, 1956 with respect to Directors Responsibility Statement, Your
Directors hereby confirm that:
i) The applicable Accounting Standards have been followed in the
preparation of Annual Accounts for the Financial Year 2009-10;
ii) The accounting policies selected were applied consistently and the
judgements and estimates made are reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company as at 31st
March 2010 and of the Profit of the Company for the year ended on the
date;
iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and,
iv) The Annual Accounts have been prepared on a going concern basis.
AUDIT COMMITTEE:
The Audit Committee was reconstituted by appointing Shri S.N.Rao as
member of the committee effective from 30th April 2009. The Audit
Committee now comprises Chairman -Shri K.Thanu Pillai,independent
Director and three other independent Director members -Shri Khaja
Ruknuddin, Shri Syed Anis Hussain and Shri S.N.Rao. The Audit Committee
at its meeting held on 27th May 2010 has considered and approved the
Audited Accounts for the financial year ended 31st March 2010. The
Audited Accounts for the financial year ended 31st March 2010, as
approved and recommended by the Audit Committee, do not require any
explanations from the Board.
CORPORATE GOVERNANCE:
Pursuant to Clause 49 of the listing agreement entered into by the
Company with the Stock Exchanges where the shares of the Company are
listed, Company is required to comply with the Code of Corporate
Governance for the financial year under review. Accordingly, the
reports on Corporate Governance and Management Discussion and Analysis
together with Auditors Report on compliance of Corporate Governance
are attached to this report and forms part of the Annual Report.
PROJECT:
The expansion of the Coke making facility by 150000 tpa and
augmentation of additional Co-generation power of 10 MW at Kudithini
plant is under progress. The expansion of these facilities is expected
to be completed by second quarter of 2010. The Company has also taken
up works to de-bottleneck idle capacity in the Turbine Generator
capacity by installing coal fired CFBC Boiler whereby the total power
generating capacity would go up to 50 MW. This work is likely to be
completed by September 2010.
DIRECTORS:
Shri Syed Anis Hussain and Shri S.N.Rao Directors are liable for
retirement by rotation at the end of the ensuing 21st Annual General
Meeting and being eligible, offers themselves for re-appointment at the
said Annual General Meeting. Shri A.S.Rao has been re-appointed as
Executive Vice Chairman for a further period of five years effect from
27th July 2010 and approval of the members for the said re-appointment
is being sought in the ensuing Annual General Meeting.
AUDITORS:
M/s. P V R K Nageswara Rao & Co., Chartered Accountants, Hyderabad
retire as auditors at this Annual General Meeting and are eligible for
reappointment.
EMPLOYEES:
The particulars of employees required to be furnished pursuant to
section 217(2A) of the Companies Act, 1956 read with the Companies
(particulars of employees) rules, 1975, as amended, are given in the
Annexure forming part of this report.
SHARE CAPITAL:
During the year the promoters exercised the option for conversion of
1575000 Share Warrants to 1575000 Equity Shares in terms of
preferential allotment made in March 2008. Accordingly the paid-up
capital increased by Rs.1,57,50,000/- and share premium by
Rs.7,87,50,000/-.
DEMATERIALISATION OF EQUITY SHARES:
The Agreements entered into by the Company with the two Depositories
viz., National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSL) for dematerialisation of
shares are in force and the Companys shares are in dematerialised mode
under ISIN No. INE 176C01016. As per the Securities and Exchange Board
of India(SEBI) directives, the equity shares of the Company are to be
compulsorily traded in dematerialisation form with effect from 26th
February 2001. In view of the significant benefits that accrue on
dematerialisation of securities, members may avail the facility.
LISTING OF SHARES ON STOCK EXCHANGES:
The equity shares of the Company are regularly traded on the Bombay
Stock Exchange Limited (Stock Code : 526093) and The National Stock
Exchange of India Limited (NSE) (Stock Code : sathaispat). The listing
fee to these stock exchanges has been paid upto date. The listing on
Hyderabad Stock Exchange Limited (Stock Code : SVI) is not in force as
the said exchange was de-recognised by the Securities and Exchange
Board of India.
STATUTORY INFORMATION:
Information on conservation of energy, technology absorption, foreign
exchange earnings and out go required to be disclosed under section 217
(1) (e) of the Companies Act, 1956, is given in the Annexure forming
part of this report.
FIXED DEPOSITS:
During the year the Company has not accepted / renewed fixed deposits
within the meaning of Section 58-A of the Companies Act, 1956 from the
Shareholders and Directors. There are no overdue deposits or
outstanding deposits as on the Balance Sheet date.
ACKNOWLEDGMENTS:
Your directors take this opportunity to express their grateful thanks
to Canara Bank, State Bank of Hyderabad, Andhra Bank, Shareholders,
Central and State Governments and valued suppliers and customers for
their co-operation and support. The Board also places on record its
appreciation of the valuable services rendered by the employees at all
levels of the Company.
for and on behalf of the Board
Hyderabad (K. Thanu Pillai)
Date: 27.05.2010 Chairman
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