Mar 31, 2023
BOARDâS REPORT
To
The Members,
Your Directors have pleasure in presenting the 24th Annual Report on the business & operations of the Company together
with the Audited Financial Statement for the year ended 31 st March 2023.
1. FINANCIAL HIGHLIGHTS:
The performance of the Company for the Financial Year ended March 31,2023 is as under:
PARTICULARS |
31-Mar-23 |
31-Mar-22 |
Total Revenue |
139336.31 |
112087.78 |
Profit/ (Loss) before finance cost, depreciation and |
10168.80 |
12635.39 |
Finance cost |
10563.68 |
8811.83 |
Profit / (Loss) before depreciation and tax expense |
(394.88) |
3823.56 |
Depreciation |
2437.47 |
2375.23 |
Profit/(Loss) before tax expense |
(2832.35) |
1448.33 |
Tax expense |
||
i.Tax expense of prior years |
0.00 |
0.00 |
ii. Deferred Tax |
(3052.75) |
10199.67 |
Profit/(Loss) for the year |
(5885.11) |
11648.01 |
Add: Other Comprehensive Income |
1.93 |
(11.45) |
Total Comprehensive Income/ (Loss) for the year |
(5883.17) |
11636.55 |
During the year under review, the total Revenue of the company stood at Rs 1393.36 Crores as against the Rs.1120.87
Crores in FY 22. Net Profit/Loss recorded at Rs. (58.85) Crores as against Net Profit of Rs.116.48 Crores in the Previous
Year.
The Manufacturing Sales including power sales were Rs.1094.76 Crores in the current year compared to Rs.960.93 Crores
in the previous year. The trading sales during the year amounted to Rs.293.57 Crores compared to Rs.139.65 Crores in the
previous year.
The Members are informed that, during the year 2022-23, the management of the Company evaluated a few options for
increasing the production in the manufacturing units of the company as well as improving the margins. To give effect to this,
the company is seeking additional funding at a lower cost to the company. In this regard, the company has appointed a few
reputed agencies, to assist the company in the fund raising.
In line with the long term plans of the management to improve the value of the company for all stake holders, the company
is continuing its plans to re-align the business verticals by way of Synergies / Strategic Value Unlocking / Investments in
the identified Organic & Inorganic Assets of the Company for value creation to all stakeholders of the Company under
Corporate Restructuring Strategy. During the current financial year 2023-24 the management plans to look for agencies with
proven track record and competent to make a feasibility report with various options of the business model which would be
in synergy to the existing operations of the company.
The Board of Directors of the Company has not recommended Dividend for the financial year ended March 31,2023.
Pursuant to Regulation 43A of the Listing Regulations, the Board has approved and adopted a Dividend Distribution Policy.
The Dividend Distribution Policy is available on the Company''s website at https://seil.co.in/uploads/5479-
SEI L_Dividend_Distribution_Pol icy. pdf ^---v.
During the year under review, the Equity Shares of the Company were sub-divided such that each Fully Paid-up Equity
Share of the Company of Face Value of Rs.10/- got sub-divided into Face Value of Rs.1/- each w.e.f. July 13, 2022. Post
such sub-division, the Authorised and Paid-Up Share Capital of the Company was as is set forth below:
⢠The Authorized Share Capital of the Company is Rs.332,00,00,000/- (Rupees Three Hundred and Thirty-Two Crores
only) divided into 258,00,00,000 (Two Hundred and Fifty Eighty Crores only) Equity Shares of Rs.1/- (One only) each,
and 7,40,00,000 (Seven Crore Forty Lakhs only) Preference Shares of Rs.10/- (Ten only) each.
⢠The Paid-up Equity Share Capital of the Company as on March 31, 2023 was Rs. 1,03,96,11,770/- (Rupees One
Hundred Three Crores and Nine Six Lakhs Eleven Thousand Seven Hundred Seventy).
There was change in Paid up Share Capital of the Company during the year under review:
During the year, the Company has allotted 15,88,00,000 Equity Shares of the face value of Rs.1/- each at an issue price of
Rs.7.250/- per share (including share premium of Rs.6.250/- per share) on Conversion of Compulsorily Convertible Debentures
("CCDs") on preferential basis to promoter and Non-promoter of the Company.
The Company has not issued any shares with differential rights and hence no information as per the provisions of Section
43(a)(ii) of the Companies Act, 2013 (hereinafter referred as "the Act") read with Rule 4(4) of the Companies (Share Capital
and Debenture) Rules, 2014 is furnished and the Company has not issued any stock options to its employees.
The Equity Shares of your Company are listed on BSE Limited and National Stock Exchange of India Limited. It may be
noted that there are no payments outstanding to the Stock Exchanges by way of Listing Fees. The company has paid the
listing fee for the financial year 2022-23.
Members may note that post sub-division, the new ISIN - INE503B01021 has been activated in place of the old ISIN -
INE503B01013.
In the Financial Year 2020-21, the Company issued and allotted 3,828 Secured, Rated, Listed, Redeemable, Non-Convertible
Debentures bearing a face value of INR 10,00,000 (Rupees Ten Lakh only) each, aggregating up to an amount of INR
382,80,00,000/- (Rupees Three Hundred and Eighty-Two Crores Eighty Lakhs only) ("Debentures") in dematerialized form
on a private placement basis to Group of Investors led by Edelweiss as a part fundraising for one time settlement of all
dues of the company with existing lenders. The said NCDs are listed on BSE Limited.
Further, During FY 2022-23, no other issue or allotments of NCD''s took place.
As per Regulation 53 of the Listing Regulations, the name along with full contact details of the Debenture Trustees is given
below:
The IL&FS Financial Centre
Plot No. C-22, G Block, 7th Floor
Bandra Kurla Complex, Bandra (East)
Mumbai 400051, India
Tel: 91 99104 96860, Tel: 91 22 26593535
Cell: 91 98206 61411, Email: [email protected]
The company did not raise any fund during the financial year under review, and no deviation of utilization of funds raised
through preferential allotment.
During the year under review, there were no deviations in the use of proceeds from the objects stated in the offer document.
Instrument Type |
Tenor |
Amount (Rs. Cr) |
Rating |
Listed Secured Non¬ |
Long Term |
304.35 |
CARE BB; Stable (Double B; Outlook: |
Total |
304.35 |
(INR Three Hundred-Four Crores and |
As required by Section 92(3) of the Act read with Section 134(3)(a) of the Act the Annual Return in Form MGT-7 is placed at
the company website https://seil.co.in/governance/annualreturn.
During the financial year ended March 31,2023, Five Board Meetings were held.
The dates on which the Board Meetings were held are 25th April, 2022, 16th May, 2022, 23rd July, 2022, 21st October, 2022,
14th February, 2023.
Details of number of Meetings attended by each Director have been given in the Corporate Governance Report, which forms
part of the Annual Report.
Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to the Directors'' Responsibility
Statement, the Board of Directors of the Company hereby confirms for the year ended 31 st March, 2023:
i. that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;
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 as at
March 31,2023 and of Profit and Loss Account of the Company for that period;
iii. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accor¬
dance with the provisions of this 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 for the Financial Year ended March 31,2023 on a going concern
basis;
v. that the Directors have laid down internal financial controls to be followed by the company and that such internal financial
controls are adequate and were operating effectively; and
vi. That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that
such systems were adequate and operating effectively.
All Independent Directors of the Company have given declarations as required under the provisions of Section 149(7) of the
Companies Act, 2013 and Regulations 16(1 )(b) and 25(8) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, stating that they meet the eligibility criteria of independence as laid down under Section 149(6) of the
Companies Act, 2013 and Regulation 16(1 )(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
("Listing Regulations").
In the opinion of the Board all our Independent Directors possess requisite qualifications, experience, expertise and hold high
standards of integrity for the purpose of Rule 8(5) (iiia) of the Companies (Accounts) Rules 2014.
During the year under review, the Independent Directors held their separate meeting on March 29, 2023 inter alia, to:
- Review the performance of the Non-Independent Directors.
- Review the performance of the committees and Board as a whole.
- Review the performance of the Chairman of the Company, taking into account the views of Executive Directors and Non¬
Executive Directors.
- Assess the quality, quantity and timeliness of flow of information between the Company management and the Board that is
necessary for the Board to effectively and reasonably perform their duties.
Pursuant to the provisions of Section 139 of the Act and the rules framed thereafter M/s. Bhavani & Co., Chartered Accoun¬
tants (FRN 012139S) were appointed as Statutory Auditors of the Company in the Annual General Meeting held on 30th
September, 2019, for a term of 5 (five) consecutive years. M/s. Bhavani & Co., Chartered Accountants, have confirmed their
eligibility and qualification required under the Act for holding the office, as Statutory Auditors of the Company.
Cost Auditors:
Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Record and Audit)
Rules, 2014, as amended from time to time, Mr. D Zitendra Rao, Practicing Cost Accountant has been appointed as Cost
Auditor for conducting Cost Audit for the financial year 2022-23 under review.
The Products of the company was classified as "Steel and Electricity" manufactured by the Company are subject to Cost
Audit in terms of Section 148 of the Companies Act, 2013 read with the rules issued there under by the Central Government.
The Board of Directors of the Company has, on the recommendation of the Audit Committee, approved the appointment of
Dendukuri & Co., Cost Accountants (Proprietor Mr. D Zitendra Rao, Practicing Cost Accountant) as the Cost Auditors of the
Company for the financial year ending March 31,2023.
In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules,
2014, as amended, the remuneration of Rs.8.00 lakh plus applicable taxes payable to the Cost Auditors as recommended by
the Audit Committee and approved by the Board has to be ratified by the Members of the Company. Accordingly, a resolution
to this effect forms part of the Notice convening the AGM.
M/s. Pavuluri & Co., Chartered Accountants were appointed as Internal Auditors for the Financial Year 2022-23 under review.
Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, your Directors had appointed M/s. B S S & Associates, Practicing Company Secretaries, Hyderabad
to undertake the Secretarial Audit of your Company for the financial year 2022-23.
Statutory Audit Report
There are no qualifications, reservations, adverse remarks or disclaimers in the Statutory Auditor''s Report on the financial
statements of the Company for the Financial Year 2022-23 and hence does not require any explanations or comments by the
Board. No frauds have been reported by the Auditor under Section 143(12) of the Companies Act, 2013 during the Financial
Year 2022-23.
Internal Audit Reports
Internal Auditors has performed internal audit of the operations of the Company for the Financial Year 2022-23 and the
Internal Auditors have presented the observations to the Audit Committee at their meetings of the Committee held on 25th
April, 2022, 23rd July, 2022, 21st October, 2022, 14th February, 2023 and 29th March, 2023 respectively for the financial year
2022-23.
Secretarial Audit Report
The Secretarial Audit Report received from the Secretarial Auditor of the Company for the Financial Year 2022-23 and
Secretarial Compliance Report for the Financial Year are annexed herewith as Annexure - 1.
The Managements'' Comments on observations made in Secretarial Audit Report and Secretarial Audit Report Secretarial
Compliance Report are as under:
Your Company has not given any Loans / Guarantees and not made any Investments during the FY 2022-23, as specified
under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers)
Rules, 2014.
Your Company doesn''t propose to transfer any amount to the general reserve for the Financial Year ended 31 st March, 2023.
All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Regulation 23 of SEBI
Listing Regulations, 2015 during the financial year were in the ordinary course of business and on an arms'' length pricing
basis. There were no materially significant transactions with related parties during the financial year, which were in conflict
with the interest of the Company. Suitable disclosure as required by the Indian Accounting Standards (Ind AS-24) has been
made in the notes to the financial statements.
Your Company has framed a Policy on Related Party Transactions in accordance with the Act and SEBI (LODR) Regula¬
tions. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions
between the Company and its related parties. The policy is uploaded on website of the Company at www.seil.co.in.
A statement, in summary form, of all the transactions entered into with the related parties in the ordinary course of business,
details of individual transactions with related parties are placed before the audit committee for the review from time to time.
The particulars of contracts or arrangements with related parties referred to in Sub-section (1) of Section 188 are prepared in
Form No. AOC-2 pursuant to Clause (h) of Sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies
(Accounts) Rules, 2014 and the same is given in notes to accounts of the company wide note no 3.36.3 and also brief details
are annexed to Boards Report as Annexure-2.
The Company has not accepted any deposits from the public and as such, no amount on account of principal or interest on
deposits from public was outstanding as on the date of the balance sheet, in terms of Section 73 of the Companies Act, 2013
during the year ended 31st March, 2023.
22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO PUR¬
SUANT TO PROVISIONS OF SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 (ACT) READ WITH THE COMPA¬
NIES (ACCOUNTS) RULES, 2014
Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to
Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is prepared and the same is enclosed as
Annexure - 3 to this Report.
The Company has an adequate risk management policy in place. The risk management process is reliable and broad based,
ensuring that the Company is well guarded against foreseeable risks and aptly prepared for future contingencies. Risk
management encompasses risk identification, evaluation, reporting and resolution to ensure the smooth functioning of
operations and business sustainability. Risk Management has become an integral part of business decision making.
The Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee to monitor implementation of
CSR activities of your Company. The details of the composition of the CSR Committee, CSR policy, CSR initiatives and
activities during the year are given in the Annual Report on CSR activities in Annexure - 4 to this Report.
The Board has Audit Committee, Nomination and Remuneration Committee, Stakeholders'' Relationship Committee, Corpo¬
rate Social Responsibility Committee and Risk Management Committee. The composition and other details of these com¬
mittees have been given in the Report on the Corporate Governance forming part of the Annual Report.
A separate report on Corporate Governance is annexed as part of the Annual Report along with the Auditor''s Certificate on its
compliance.
Management Discussion and Analysis Report for the year under review, as stipulated under SEBI Listing Regulations, is
annexed herewith which forms part of this report.
The Board of Directors has adopted Whistle Blower Policy. The Whistle Blower Policy aims for conducting the affairs in a fair
and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All perma¬
nent employees of the Company are covered under the Whistle Blower Policy.
A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud, or
violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who
avail of the mechanism and allows direct access to the Chairperson of the audit committee in exceptional cases.
The Board evaluated the effectiveness of its functioning, of the Committees and of individual Directors, pursuant to the
provisions of the Companies Act, 2013 and the SEBI Listing Regulations.
The Board sought the feedback of the Directors on various parameters including:
⢠Degree of fulfillment of key responsibilities towards stakeholders (by way of monitoring corporate governance
practices, participation in the long-term strategic planning, etc.);
⢠Structure, composition and role clarity of the Board and Committees;
⢠Extent of co-ordination and cohesiveness between the Board and its Committees;
⢠Effectiveness of the deliberations and process management;
⢠Board/Committee culture and dynamics; and
⢠Quality of relationship between Board Members and the Management.
The above criteria are based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of
India on January 05, 2017.
The Chairman of the Board had one-on-one meetings with the Independent Directors (''IDs'') and the Chairman of NRC had
one-on-one meetings with the Executive and Non-Executive, Non-Independent Directors. These meetings were intended to
obtain the Directors'' input on effectiveness of the Board/ Committee processes.
In a separate meeting of IDs, the performance of the Non-Independent Directors, the Board as a whole and the Chairman of
the Company were evaluated, taking into account the views of Executive Director and other Non-Executive Directors.
The NRC reviewed the performance of the individual directors and the Board as a whole. In the Board meeting that followed
the meeting of the Independent Directors and the meeting of NRC, the performance of the Board, its committees, and
individual Directors were discussed.
During the financial year under review, on the recommendations of the Audit Committee and the Nomination and Remunera¬
tion Committee, the Board appointed Mr. Suresh Babu Anubrolu as Chief Financial Officer (CFO) in the place of Mr. B.
Ramesh Kumar, who had resigned from the office of CFO w.e.f May 01st, 2022.
Further that, on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Com¬
pany, has approved the appointment of Mr. Siva Sagar Rao Yendamuri (DIN: 00210188) as Independent (Additional) Director
for a period of five consecutive years on 16th May, 2022 and approval of shareholders by way of Special resolution was taken
in the AGM held on 24.06.2022.
Shri Bavineni Suresh (DIN: 00181832) and Shri Veeramachaneni Venkata Krishna Rao (DIN: 00206884) retired and re¬
elected at the last Annual General Meeting of the Company held on June 24, 2022.
As per Regulation 17(1A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Mr. Veeramachaneni
Venkata Krishna Rao (DIN: 00206884) Non-Executive Director who has attained the age of 75 years, the Company has
obtained approval of shareholders by way of special resolution was taken in the AGM held on 24.06.2022 to effect the
appointment as Rules and Regulation of said Regulation.
In accordance with the provisions of Section 152 of the Companies Act, 2013, Shri Bavineni Suresh (DIN: 00181832) and Shri
Veeramachaneni Venkata Krishna Rao (DIN: 00206884) will be retiring by rotation at the ensuing Annual General Meeting
and being eligible, offer themselves for re-appointment. Accordingly, the resolutions seeking the approval of the members for
the said re-appointments have been incorporated in the Notice of the Annual General Meeting.
Further that, on the basis of recommendation of the Nomination and Remuneration Committee, the Board of Directors of the
Company in their meeting held on February 14, 2023, has approved the appointment of Mr. Veera Brahma Rao Arekapudi
(DIN: 07540040) as Independent (Additional) Director for a period of five consecutive years on 14th February, 2023 and the
Company has obtained approval of shareholders through the postal ballot dated May 12, 2023.
Further that, Mr. E Sankara Rao (DIN: 05184747) as Non-Executive Independent Director of the company resigned with effect
from 14th February, 2023 due to personal reasons and preoccupation only, and there is no other reason for resignation.
The company''s policy on directors'' appointment and remuneration and other matters provided in Section 178 (3) of the Act
have been disclosed in the Corporate Governance Report. Under Section 178 (3) of the Companies Act, 2013, the Nomina¬
tion and Remuneration Committee of the Board has adopted a policy for nomination, remuneration and other related matters
for Directors and Senior Management Personnel. A gist of the policy is available in the Corporate Governance Report.
Company''s Policy on Directors Appointment and Remuneration including criteria for determining qualification, positive at¬
tributes, independence of directors and other matters provided under section 178(3) of the Companies Act, 2013 is also
placed at the website of the Company at http://seil.co.in/Code_and_Policies.html
The Company has an Internal Financial Control System, commensurate with the size, scale and complexity of its opera¬
tions. The Board of Directors of the Company is responsible for ensuring that Internal Financial Control has been laid down
by the Company and that such controls are adequate and operating effectively. The internal financial control framework has
been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational
information, complying with applicable laws, safeguarding assets from unauthorized use, executing transactions with proper
authorisation and ensuring compliance with corporate policies.
The scope and authority of the Internal Auditor is well defined in the company. To maintain its objectivity and independence,
the Internal Auditor reports to the Chairman of the Audit Committee of the Board.
The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its
compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the
report of Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the
controls. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board.
The Company is required to maintain cost records of the Company as specified under Section 148(1) of the Companies Act,
2013. Accordingly, the Company has properly maintained cost records and accounts during the financial year ended 31.03.2023.
The ratio of remuneration of each director to the median of employees'' remuneration as per Section 197(12) of the Compa¬
nies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
forms part of the Board''s report enclosed as Annexure - 5.
During the financial year 2022-23, there were no employees in the Company whose details are to be given pursuant to Rule
5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
There were no frauds reported by the Statutory Auditors under Sub-section 12 of Section 143 of the Companies Act, 2013
along with the Rules made there under.
The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards
issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.
In accordance with the procedure laid down in Schedule VI to the SEBI Listing Regulations, the Company has transferred
unclaimed shares of Equity shareholders (previously GSAL Shareholders) into one folio in the name of "Steel Exchange India
Limited -Unclaimed Suspense Account" and maintain details of shareholders whose shares are credited to the said Un¬
claimed Suspense Account.
Company is doing transfer of Equity shares in Dematerialised from to respected shareholders of GSAL (India) Limited upon
receipt of communication from time to time.
Your company incorporated a wholly owned subsidiary company SEIL (Hong Kong) Ltd on 02nd June, 2015 which was in
dormant stage due to non-commencement of business operations since its incorporation. Your company has closed SEIL
(Hong Kong) Ltd and the same was strike of by respective authority in the origin of the company.
As on 31.03.2023, the Company has no Subsidiary, Joint Venture or Associate Company.
All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully
insured.
There is no change in the nature of business of the Company.
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
There were no material changes that affecting the financial position of the company.
43. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME
SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS
ALONG WITH THE REASONS THEREOF: Not Applicable
There are no applications made during the financial year 2022-23 by or against the company and there are no proceedings
pending under the Insolvency and Bankruptcy Code, 2016.
The details of the policies approved and adopted by the Board as required under the Companies Act, 2013 and SEBI Listing
Regulations are provided in Annexure - 6.
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''). BRSR is a notable departure from the existing Business Responsibility
Report and a significant step towards giving platform to the companies to report the initiatives taken by them in areas of
Environment, Social and Governance. Further, SEBI has mandated top 1,000 listed companies, based on market capitaliza¬
tion, to transition to BRSR from FY 2022-23 onwards. Accordingly, we are glad to present our inaugural BRSR for FY 2022¬
23 is given as Annexure - 7.
Your Company strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and
social responsibility while setting targets and improving economic performance to ensure business continuity and rapid
growth.
The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harass¬
ment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The company has complied with provisions
relating to the constitution of Internal Complaints Committee to redress complaints received regarding sexual harassment.
During the financial year 31 st March, 2023, the company has not received any complaints pertaining to sexual harassment.
Your company believes that its employees are one of the most valuable assets of the Company and the Board appreciates
the employees across the cadres for their dedicated service to the company and expects their continuous support and
higher level of productivity for achieving the targets set for the company. During the year under review, the company orga¬
nized various training programmes at all levels to enhance skills of employees. The total employee strength is 995 as on 31st
March, 2023.
The Directors take this opportunity to place on record their sincere thanks to the Banks and Financial Institutions, Insurance
Companies, Central and State Government Departments and the shareholders for their support and co-operation extended to
the Company from time to time. Directors are pleased to record their appreciation of the dedicated services of the employees
and workmen at all levels.
On behalf of the Board of Directors
For Steel Exchange India Limited
Sd/-
Place: Hyderabad B. Satish Kumar
Date:14.08.2023 Chairman and Managing Director
(DIN:00163676)
Mar 31, 2022
Your Directors have pleasure in presenting the 23rd Annual Report on the business & operations of the Company together with the Audited Financial Statement for the year ended 31st March 2022.
The performance of the Company for the Financial Year ended March 31,2022 is as under:
('' in Lakhs) |
||
PARTICULARS |
31 -Mar-22 |
31-Mar-21 |
Total Revenue |
111974.56 |
92204.77 |
Profit/ (Loss) before finance cost, depreciation and tax expense |
12635.39 |
16995.54 |
Finance cost |
8811.83 |
262.42 |
Profit / (Loss) before depreciation and tax expense |
3823.56 |
16733.12 |
Depreciation |
2375.23 |
2469.85 |
Profit/(Loss) before tax expense |
1448.33 |
14263.27 |
Tax expense |
||
i. Tax expense of prior years |
0.00 |
(0.76) |
ii. Deferred Tax |
10199.67 |
(265.30) |
Profit/(Loss) for the year |
11648.01 |
13997.20 |
Add: Other Comprehensive Income |
(11.45) |
12.44 |
Total Comprehensive Income/ (Loss) for the year |
11636.55 |
14009.64 |
During the year under review, the total revenue of the company stood at Rs.1119.74 Crores as against the Rs.922.05 Crores in FY 21. Net Profit recorded at Rs.116.48 Crores as against Net Profit of Rs.139.97 Crores in the Previous Year.
The Manufacturing Sales including power sales were Rs.959.80 Crores in the current year compared to Rs.736.27 Crores in the previous year. The trading sales during the year amounted to Rs.139.65 Crores compared to Rs.162.13Crores in the previous year.
3. STATE OF COMPANY''S AFFAIRS AND FUTURE OUTLOOK
The Members are informed that, during the year the management of the Company was evaluated various options for Corporate Restructuring to re-align the business vertical interests for better business by way of Synergies / Strategic Value Unlocking / Investments in the identified Organic & Inorganic Assets of the Company for value creation to all stakeholders of the Company under Corporate Restructuring Strategy.
After implementation of One Time Settlement with Consortium of Banks during 4th Quarter of previous financial year 202021 and after Raising of funds by way of CCDs and Warrants of the Company during the 3rd quarter of financial year 2021-22, the company is assessing the core strengths and assets of the company and wants to utilise the strengths and assets of the company to start the Logistics Business under corporate restructuring strategy which includes multiple options to evaluate the business verticals of the company.
During the Current financial year 2022-23, the management will assess underutilized and the unutilized infra-assets of the company and will unlock the value of these underutilized assets by way of a new Logistics & Warehousing services business model (Logistics & Warehousing Hub) which can complement and add value to the SEIL operations and all the stakeholders. In this regard the management of the company is looking to appoint a reputed consultant/advisor to make a feasibility report with various options of the business model to unlock the value of the unutilized and underutilized infraassets of the company.
The Board of Directors of the Company has not recommended Dividend for the financial year ended March 31,2022.
Pursuant to Regulation 43A of the SEBI Listing Regulations, the Board has approved and adopted a Dividend Distribution Policy. The Dividend Distribution Policy is available on the Company''s website at www.seil.co.in.
5. SHARE CAPITAL AND LISTING OF SHARES
During the period under review, there was no change in the Authorized Share Capital of the Company.
The Authorized Share Capital of the Company is Rs.332,00,00,000/- (Rupees Three Hundred and Thirty-Two Crores only) divided into 25,80,00,000 (Twenty-Five Crores Eighty Lakhs only) equity shares of Rs.10/- (Ten only) each, and 7,40,00,000 (Seven Crore Forty Lakhs only) preference shares of Rs.10/- (Ten only) each.
There was change in Paid up Share Capital of the Company during the year under review:
During the year, the Company has allotted 76,92,306 equity shares of the face value of Rs.10/- each at an issue price of Rs.39/- per share (including share premium of Rs.29/- per share) on preferential basis.
During the year, the company has allotted 2,34,60,000 unsecured 12% Compulsorily Convertible Debentures ("CCDs") of Rs.72.50 /- each convertible in to 2,34,60,000 shares of Rs.10/- each at a price of Rs.72.50/- per share (inclusive of a premium of Rs.62.50 /- per share) on preferential basis.
During the year, the company has allotted 58,22,150 Convertible Warrants of Rs.72.50/- each convertible in to 58,22,150 equity shares of Rs.10/- each at a price of Rs.72.50/- per share inclusive of premium of Rs.62.50/- per share) on preferential basis.
The Company has not issued any shares with differential rights and hence no information as per the provisions of Section 43(a)(ii) of the Companies Act, 2013 (hereinafter referred as "the Act") read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished and the Company has not issued any stock options to its employees.
The Equity Shares of your Company are listed on BSE Limited, National Stock Exchange of India Limited and Calcutta Stock Exchange. It may be noted that there are no payments outstanding to the Stock Exchanges by way of Listing Fees. The company has paid the listing fee for the financial year 2021-22.
During the financial year 2020-21, the Company issued and allotted 3,828 secured, rated, listed, redeemable, non-convertible debentures bearing a face value of INR 10,00,000 (Rupees Ten Lakh only) each, aggregating up to an amount of INR 382,80,00,000/- (Rupees Three Hundred and Eighty-Two Crores Eighty Lakhs only) ("Debentures") in dematerialized form on a private placement basis to Group of Investors led by Edelweiss as a part fundraising for one time settlement of all dues of the company with existing lenders. The said NCDs are listed on BSE.
7. NAME OF THE DEBENTURE TRUSTEE(S) WITH FULL CONTACT DETAILS:
VISTRA ITCL (INDIA) LIMITED The IL&FS Financial Centre Plot No. C-22, G Block, 7th Floor Bandra Kurla Complex, Bandra (East)
Mumbai 400051, India
Tel: 91 99104 96860, Tel: 91 22 2659 3535 Cell: 91 98206 61411, Email: [email protected]
8. DETAILS OF UTILIZATION OF FUNDS RAISED THROUGH PREFERENTIAL ISSUE:
During the FY2021-22 the company raised Rs.10.55 Crores (25% of total consideration) by issue and allotment of 58,22,150 Convertible Warrants of Rs.10/- each an issue price of Rs.72.50 per Warrant.
Further, the company raised Rs.170.08 Crores by issue and allotment of 2,34,60,000 - 12% Compulsorily Convertible Debentures (CCDs) of face value of Rs.72.50 per CCD.
The funds raised from issuance of Convertible Warrants and 12% Compulsorily Convertible Debentures were used for partial redemption of existing Non-Convertible Debentures, repayment of Unsecured Loans and Working Capital requirement of the company.
Further, the company has issued and allotted 76,92,306 Equity Shares of Rs.10/- each at a premium of Rs.29/- per share aggregating to Rs.29.99 Crores against the unsecured loan received from the promoters.
During the financial year under review, there was no deviation of utilization of funds raised through preferential allotment.
9. DEVIATIONS IN THE USE OF PROCEEDS FROM THE OBJECTS STATED IN THE OFFER DOCUMENT:
During the year under review, there were no deviations in the use of proceeds from the objects stated in the offer document.
10. CREDIT RATING
Instrument Type |
Tenor |
Amount (Rs. Cr) |
Rating |
|
unsecured 12% Compulsorily Convertible Debentures ("CCDs") |
Long Term |
400.00 |
BWR D Assigned |
|
Total |
400.00 |
(INR Four Hundred Crores Only) |
11. ANNUAL RETURN
As required by Section 92(3) of the Act read with Section 134(3)(a) of the Act the Annual Return in Form MGT-7 is placed at the company website http://www.seil.co.in/annual_reports.html
12. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the financial year ended March 31,2022, Six Board Meetings were held.
The dates on which the Board Meetings were held are 28th May, 2021,9th August, 2021,15th October, 2021,14th November, 2021,24th December, 2021 and 12th February, 2022.
Details of number of Meetings attended by each Director have been given in the Corporate Governance Report, which forms part of the Annual Report.
13. DIRECTOR''S RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT, 2013
Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to the Directors'' Responsibility Statement, the Board of Directors of the Company hereby confirms for the year ended 31st March, 2022:
i. that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;
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 as at March 31,2022 and of Profit and Loss Account of the Company for that period;
iii. that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this 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 for the Financial Year ended March 31,2022 on a going concern basis;
v that the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
vi. that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
14. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have given declarations as required under the provisions of Section 149(7) of the Companies Act, 2013 and Regulations 16(1)(b) and 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, stating that they meet the eligibility criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1 )(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations").
In the opinion of the Board all our Independent Directors possess requisite qualifications experience expertise and hold high standards of integrity for the purpose of Rule 8(5) (iiia) of the Companies (Accounts) Rules 2014.
15. SEPARATE MEETING OF INDEPENDENT DIRECTORS
During the year under review, the Independent Directors held their separate meeting on February 12th, 2022 inter alia, to discuss:
- Review the performance of the Non-Independent Directors.
- Review the performance of the committees and Board as a whole.
- Review the performance of the Chairman of the Company, taking into account the views of Executive Directors and NonExecutive Directors.
- Assess the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
16. AUDITORS Statutory Auditors:
Pursuant to the provisions of Section 139 of the Act and the rules framed thereafter M/s. Bhavani & Co., Chartered Accountants (FRN 012139S) were appointed as Statutory Auditors of the Company in the Annual General Meeting held on 30th September, 2019, for a term of 5 (five) consecutive years. M/s. Bhavani & Co., Chartered Accountants, have confirmed their eligibility and qualification required under the Act for holding the office, as Statutory Auditors of the Company.
Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Record and Audit) Amendment Rules, 2014, Mr. D Zitendra Rao, Practicing Cost Accountant has been appointed as Cost Auditors for conducting Cost Audit for the financial year 2021-22 under review.
The Products of the company was classified as "Steel and Electricity" manufactured by the Company are subject to Cost Audit in terms of Section 148 of the Companies Act, 2013 read with the rules issued there under by the Central Government.
The Board of Directors of the Company has, on the recommendation of the Audit Committee, approved the appointment of DENDUKURI & CO., Cost Accountants (Proprietor D Zitendra Rao, Practicing Cost Accountant) as the Cost Auditors of the Company for the financial year ending March 31,2023.
In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration of Rs.6.00 lakh plus applicable taxes payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the Members of the Company. Accordingly, a resolution to this effect forms part of the Notice convening the AGM.
M/s. Pavuluri & Co., Chartered Accountants were appointed as Internal Auditors for the Financial Year 2021-22 under review.
Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. B S S & Associates, Practicing Company Secretaries, Hyderabad
to undertake the Secretarial Audit of your Company for the financial year 2021-22.
Statutory Audit Report
There are no qualifications, reservations, adverse remarks or disclaimers in the Statutory Auditor''s Report on the financial statements of the Company for the Financial Year 2021-22 and hence does not require any explanations or comments by the Board. No frauds have been reported by the Auditor under Section 143(12) of the Companies Act, 2013 during the Financial Year 2021-22.
Internal Audit Reports
Internal Auditors has performed internal audit of the operations of the Company for the Financial Year 2021-22 and the Internal Auditors have presented the observations to the Audit Committee at their meetings of the Committee held on 28th May, 2021,9th August, 2021,14th November, 2021, and 12th February, 2022 respectively for the financial year 2021-22.
The Secretarial Audit Report received from the Secretarial Auditor of the Company for the Financial Year 2021-22 and Secretarial Compliance Report for the Financial Year are annexed herewith as Annexure - 1.
The Managements'' Comments on observations made in Secretarial Audit Report and Secretarial Audit Report Secretarial Compliance Report are as under:
Observation |
Managementâs comment |
|
The Board of Directors of the Company was not comprised of requisite number of Independent Directors as prescribed under Regulation 17(1)(b) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements), 2015 from 12.02.2022. |
The Company had received a notice from M/s. Vishwa Samudra Holdings Private Limited, Investor of the Company, to appoint Mr. Shyam Jagetiya its Nominee on the Board of Directors of the Company and the Board decided to appoint Mr. Shyam Jagetiya immediately i.e. w.e.f. February 12, 2022. With the appoint of said Nominee Director, the composition of the Board was changed and adversely resulted into non-compliance of Regulation 17(1)(b) i.e. at least half of the board of directors shall comprise of Independent Directors. On obtaining Shareholders'' approval, through postal ballot on 12.05.2022, for appointment of Mr. Shyam Jagetiya as Nominee Director, immediately the Board in its meeting held on 16.05.2022, appointed Mr. Siva Sagar Rao Yendamuri as an Additional Director in independent category to comply Regulation 17(1)(b) of SEBI (Listing Obligations and Disclosure Requirements), 2015. |
18. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Your Company has not given any Loans / Guarantees and not made any Investments during the FY 2021-22, as specified under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.
19. TRANSFER OF AMOUNT TO GENERAL RESERVES
Your Company doesn''t propose to transfer any amount to the general reserve for the Financial Year ended 31st March, 2022.
20. RELATED PARTY TRANSACTIONS
All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Regulation 23 of SEBI
Listing Regulations, 2015 during the financial year were in the ordinary course of business and on an arms'' length pricing basis. There were no materially significant transactions with related parties during the financial year, which were in conflict with the interest of the Company. Suitable disclosure as required by the Indian Accounting Standards (Ind AS-24) has been made in the notes to the financial statements.
A statement, in summary form, of all the transactions entered into with the related parties in the ordinary course of business, details of individual transactions with related parties are placed before the audit committee for the review from time to time. The particulars of contracts or arrangements with related parties referred to in Sub-section (1) of Section 188 are prepared in Form No. AOC-2 pursuant to Clause (h) of Sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same is given in notes to accounts of the company wide note no 3.36.3 and also brief details are annexed to Boards Report as Annexure-2.
The Company has not accepted any deposits from the public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet, in terms of Section 73 of the Companies Act, 2013 during the year ended 31st March, 2022.
22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO PURSUANT TO PROVISIONS OF SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 (ACT) READ WITH THE COMPANIES (ACCOUNTS) RULES, 2014
Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is prepared and the same is enclosed as Annexure - 3 to this Report.
The Company has an adequate risk management policy in place. The risk management process is reliable and broad based, ensuring that the Company is well guarded against foreseeable risks and aptly prepared for future contingencies. Risk management encompasses risk identification, evaluation, reporting and resolution to ensure the smooth functioning of operations and business sustainability. Risk Management has become an integral part of business decision making.
24. CORPORATE SOCIAL RESPONSIBILITY
The Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee to monitor implementation of CSR activities of your Company. The details of the composition of the CSR Committee, CSR policy, CSR initiatives and activities during the year are given in the Annual Report on CSR activities in Annexure - 4 to this Report.
The Board has Audit Committee, Nomination and Remuneration Committee, Stakeholders'' Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee. The composition and other details of these committees have been given in the Report on the Corporate Governance forming part of the Annual Report.
A separate report on Corporate Governance is annexed as part of the Annual Report along with the Auditor''s Certificate on its compliance.
27. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review, as stipulated under SEBI Listing Regulations, is annexed herewith which forms part of this report.
28. VIGIL MECHANISM / WHISTLE BLOWER POLICY AND MECHANISM
The Board of Directors has adopted Whistle Blower Policy. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All permanent employees of the Company are covered under the Whistle Blower Policy.
A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud, or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson of the audit committee in exceptional cases.
The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by SEBI Listing Regulations. The performance of the Board was evaluated by the board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of the board processes, in formation and functioning etc. In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and Individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.
30. CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, Mr. Venkata Narayana Reddy Godi, Non-Executive Independent Director of the Company has left for heavenly abode on May 06, 2021.
On the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company, has approved the appointment of Mr. E Sankara Rao as Independent (Additional) Director for a period of five consecutive years on 28th May, 2021 and approval of shareholders by way of Special resolution was taken in the AGM held on 27.09.2021.
Shri Bavineni Suresh (DIN: 00181832) and Shri Veeramachaneni Venkata Krishna Rao (DIN: 00206884) retired and reelected at the last Annual General Meeting of the Company held on September 27, 2021.
In accordance with the provisions of Section 152 of the Companies Act, 2013, Shri Bavineni Suresh (DIN: 00181832) and Shri Veeramachaneni Venkata Krishna Rao (DIN: 00206884) will be retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Accordingly, the resolutions seeking the approval of the members for the said re-appointments have been incorporated in the Notice of the Annual General Meeting.
Further that, on the basis of recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in their meeting held on February 12, 2022, approved the re-appointment of Mr. Bandi Satish Kumar (DIN: 00163676) as the Chairman & Managing Director for a period of three years with effect from March 01,2022. Later, the Company has obtained approval of shareholders by way of special resolution through the postal ballot dated May 12, 2022.
Further that, on the basis of recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in their meeting held on February 12, 2022, appointed Mr. Shyam Jagetiya (DIN: 02581262) as Additional NonExecutive (Nominee) Director of the company with effect from February 12th, 2022, subject to approval of members of the company, pursuant to the nomination received from the M/s. Vishwa Samudra Holdings Private Limited, Investor of the company. Later, the Company has obtained approval of shareholders through the postal ballot dated May 12, 2022 for the regularization of appointment of Mr. Shyam Jagetiya.
After the financial year 2021-22, on the recommendations of the Nomination and Remuneration Committee, the Board, in its meeting held on May 16, 2022, appointed Mr. Siva Sagar Rao Yendamuri (Din: 00210188) as an Additional Director in independent category. The Board believes that Mr. Siva Sagar Rao Yendamuri has appropriate skills, professional expertise, experience, knowledge, and experience in industry and management of the Company. The resolution seeking the approval of the members for the above said appointment has been incorporated in the Notice of the AGM.
During the financial year under review, there was no change in Key Managerial Personnel of the Company. However, after the financial year 2021-22, on the recommendations of the Audit Committee and the Nomination and Remuneration Committee, the Board appointed Mr. Suresh Babu Anubrolu as Chief Financial Officer (CFO) in the place of Mr. B.Ramesh Kumar, who had resigned from the office of CFO.
31. POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION
The company''s policy on directors'' appointment and remuneration and other matters provided in Section 178 (3) of the Act have been disclosed in the corporate governance report. Under Section 178 (3) of the Companies Act, 2013, the Nomination and Remuneration Committee of the Board has adopted a policy for nomination, remuneration and other related matters for Directors and senior management personnel. A gist of the policy is available in the Corporate Governance Report.
Company''s Policy on Directors Appointment and Remuneration including criteria for determining qualification, positive attributes, independence of directors and other matters provided under section 178(3) of the Companies Act, 2013 is also placed at the website of the Company at http://seil.co.in/Code_and_Policies.html
32. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Financial Control System, commensurate with the size, scale and complexity of its operations. The Board of Directors of the Company is responsible for ensuring that Internal Financial Control has been laid down by the Company and that such controls are adequate and operating effectively. The internal financial control framework has been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorized use, executing transactions with proper authorisation and ensuring compliance with corporate policies.
The scope and authority of the Internal Auditor is well defined in the company. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board.
The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board.
33. MAINTENANCE OF COST RECORDS
The Company is required to maintain cost records of the Company as specified under Section 148(1) of the Companies Act, 2013. Accordingly, the Company has properly maintained cost records and accounts during the financial year ended 31.03.2022.
The ratio of remuneration of each director to the median of employees'' remuneration as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Board''s report enclosed as Annexure - 5.
During the financial year 2021 -22, there were no employees in the Company whose details are to be given pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
35. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
There were no frauds reported by the Statutory Auditors under Sub-section 12 of Section 143 of the Companies Act, 2013 along with the Rules made there under.
The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.
37. DELISTING OF EQUITY SHARES FROM CALCUTTA STOCK EXCHANGE LIMITED (CSE)
The Company has made an application for voluntary delisting of equity shares from Calcutta Stock Exchange Limited (CSE) during the year 2017-18 and it''s in work in progress and waiting for final order from CSE.
38. UNCLAIMED SUSPENSE ACCOUNT/ESCROW ACCOUNT:
In accordance with the procedure laid down in Schedule VI to the SEBI Listing Regulations, the Company has transferred unclaimed shares of Equity shareholders (previously GSAL Shareholders) into one folio in the name of "Steel Exchange India Limited -Unclaimed Suspense Account" and maintain details of shareholders whose shares are credited to the said Unclaimed Suspense Account.
Company is doing transfer of Equity shares in Dematerialised from to respected shareholders of GSAL (India) Limited upon receipt of communication from time to time.
39. SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES
Your company incorporated a wholly owned subsidiary company SEIL (Hong Kong) Ltd on 02nd June, 2015 which was in dormant stage due to non-commencement of business operations since its incorporation. Your company has closed SEIL (Hong Kong) Ltd and the same was strike of by respective authority in the origin of the company.
As on 31.03.2022, the Company has no Subsidiary, Joint Venture or Associate Company.
All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully insured.
41. CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company.
42. THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE
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
43. MATERIAL CHANGES AND COMMITMENTS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT;
There were no material changes that affecting the financial position of the company.
44. THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF: Not Applicable
45. DETAILS 0F APPLICATIONS MADE OR ANY PROCEEDING PENDING UNDER THEINSOLVENCY AND BANKRUPTCY CODE2016:
There are no applications made during the financial year 2021-22 by or against the company and there are no proceedings pending under the Insolvency and Bankruptcy Code, 2016.
The details of the policies approved and adopted by the Board as required under the Companies Act, 2013 and SEBI Listing Regulations are provided in Annexure - 6.
47. BUSINESS RESPONSIBILITY REPORT:
The ''Business Responsibility Report'' (BRR) of your Company for the year 2021-22 forms part of this Annual Report as required under Regulation 34(2)(f) of the SEBI Listing Regulations is given as separate annexure which forms part of the report. Your Company strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting targets and improving economic performance to ensure business continuity and rapid growth.
48. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The company has complied with provisions relating to the constitution of Internal Complaints Committee to redress complaints received regarding sexual harassment. During the financial year 31st March, 2022, the company has not received any complaints pertaining to sexual harassment.
49. INDUSTRIAL RELATIONS AND HUMAN RESOURCES
Your company believes that its employees are one of the most valuable assets of the Company and the Board appreciates the employees across the cadres for their dedicated service to the company and expects their continuous support and higher level of productivity for achieving the targets set for the company. During the year under review, the company organized various training programmes at all levels to enhance skills of employees. The total employee strength is 805 and strength of trainees is 269 on 31st March, 2022.
The Directors take this opportunity to place on record their sincere thanks to the Banks and Financial Institutions, Insurance Companies, Central and State Government Departments and the shareholders for their support and co-operation extended to the Company from time to time. Directors are pleased to record their appreciation of the dedicated services of the employees and workmen at all levels.
On behalf of the Board of Directors For Steel Exchange India Limited
Place: Hyderabad B. Satish Kumar
Date : 16.05.2022 Chairman and Managing Director
(DIN:00163676)
Mar 31, 2018
Dear Members,
The Directors have pleasure in presenting the 19thAnnual Report together with the Standalone Audited Accounts for the year ended 31st March, 2018.
Financial Results
The performance of the Company for the Financial Year ended March 31, 2018 is as under:
(Rs. in Lakhs)
PARTICULARS |
31-Mar-18 |
31-Mar-17 |
Total Revenue |
939.51 |
1337.98 |
Profit/ (Loss) before finance cost, depreciation and tax expense |
(5017.50) |
2835.45 |
Finance cost |
13552.06 |
15744.23 |
Profit / (Loss) before depreciation and tax expense |
(18569.56) |
(12908.78) |
Depreciation |
2899.87 |
2975.59 |
Profit/(Loss) before tax expense |
(21469.43) |
(15884.37) |
Tax expense i. Tax expense of prior years ii. Deferred Tax |
(4456.23) |
23.49 (191.88) |
Profit/(Loss) for the year |
(17013.20) |
(15715.98) |
Add: Other Comprehensive Income |
0.80 |
(9.61) |
Total Comprehensive Income/ (Loss) for the year |
(17012.40) |
(15725.59) |
Review of operations:
During the year under review, the total revenue of the company was Rs. 939.51 crores as against the 1337.98 Crores. Net Profit/Loss recorded at (170.12) Crores as against Net Profit/Loss of (157.25) crores in the Previous Year.
The Manufacturing Sales including power sales were Rs.610.36 Crores in the current year compared to 645.96 crores in the previous year. The trading sales during the year amounted to Rs.317.36 Crores compared to 669.68 Crores in the previous year.
The decrease in revenues was due to the lower production levels in the steel segment due to liquidity constraints. Power sales were also substantially less in the current year due to lower price and reduced off-take of power by the state utilities despite agreement existing for supply of power.
SEIL Debt Resolution Scheme
The Company has been under financial stress since 2016- 17 due to various external factors beyond the control of the Company and its management, which amongst others, includes continued recession in steel markets and non-off take of surplus power by state utilities despite signing a PPA for 1 year in 2016-17. This has resulted in sharp drop in EBIDTA earnings and consequently the company has been unable to service its debt obligations.
On reference to the Lenders, it was agreed for a debt resolution under the S4A scheme and the sanction was received during the year. However due to the effects of demonetization and introduction of GST in the intervening period, the steel markets were adversely affected resulting in lower than anticipated earnings under the S4A scheme. There has been no improvement in power off take even during 2017-18. The S4A scheme was therefore not implemented by the Lenders.
With the uptrend and strong demand witnessed in the steel markets since October 2017, the company has requested the lenders for a suitable debt restructuring for a possible debt resolution. RBI has changed the guidelines vide its notification in February 2018 wherein all existing schemes like CDR, S4A, SDR etc have been completely withdrawn and new guidelines have been introduced with onus of debt resolution to be decided by the Lenders subject to guidelines of RBI. The Lenders have broadly agreed for debt resolution by way of restructuring the debt. The Lenders in a JLM held on 20.06.18 have agreed on the broad contours of the draft proposal submitted to them.
The revised proposals with couple of options have been submitted to the Lenders based on the observations made. The proposal is based on the outstanding of Rs.1046.78 cr as on 31.3.18 as per the balances given by the Lenders. The final proposal is expected to be selected by the Lenders in the ensuing JLM to be held on 17.08.18. Thereafter the accepted proposal has to be rated by two external agencies appointed by the Lenders before receiving the final approval and sanction.
The operations of the company have been ensured with the support of operational creditors to continue production so that Plant does not shut down and thus is having large overdue outstanding payments to operational creditors.
Listing of Equity Shares
The Equity Shares of your Company are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. It may be noted that there are no payments outstanding to the Stock Exchanges by way of Listing Fees. The company has paid the listing fee for the financial year 2018-19.
Delisting from Calcutta Stock Exchange Limited (CSE)
The Company has made an application for voluntary delisting of equity shares from Calcutta Stock Exchange Limited (CSE) during the year and itâs in work in progress and waiting for final order from CSE.
Unclaimed Suspense Account/Escrow Account:
In accordance with the procedure laid down in Schedule VI to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company has transferred unclaimed shares of Equity shareholders (previously GSAL Shareholders) into one folio in the name of âSteel Exchange India Limited -Unclaimed Suspense Account âand maintain details of shareholders whose shares are credited to the said Unclaimed Suspense Account.
Subsidiaries, Joint Ventures or Associate Companies
Your company incorporated a subsidiary company in Hong Kong on 02nd June, 2015 which was in dormant due to non- commencement of business operations since its incorporation. Your company does not have any Joint Ventures or associate companies.
Number of Meetings of the Board of Directors
During the year ended March 31, 2018, Seven Board Meetings were held.
The dates on which the Board meetings were held are May 27, 2017, May 30,2017, June 24, 2017, August 16, 2017, September 11, 2017, December 14, 2017, and February 9, 2018.
Details of number of Meetings attended by each Director have been given in the corporate governance report, which forms part of the Annual Report.
Directorâs Responsibility Statement as required under Section 134 of the Companies Act, 2013
Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to the Directorsâ Responsibility Statement, the Board of Directors of the Company hereby confirms:
i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;
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 as at March 31, 2018 and of Profit and Loss Account of the Company for that period;
iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this 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 for the Financial Year ended March 31, 2018 on a going concern basis;
v) that the Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
vi) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Statement on Declaration given by Independent Directors under Sub-Section (6) of Section 149
The independent directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section(6).
Particulars of Loans, Guarantees and Investments under Section 186 of the Companies Act, 2013
The company has not given any Loans / Guarantees and not made any Investments during the FY 2017-18, as specified under the provisions of section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, the disclosure in the prescribed format is annexed as Annexure-1
Related Party Transactions
The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 are prepared in Form No. AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same is given in notes to accounts of the company wide note no 4.36.3.
Transfer of Amount to Reserves
The Company doesnât propose to transfer any amount to the general reserve for the Financial Year ended 31st March, 2018.
Dividend
The Board of Directors of the Company has not recommend Dividend for the financial year ended March 31, 2018.
Share Capital
During the period under review, there was a change in the Authorized Share Capital, the revised capital structure as mentioned bellow:
The Authorized Share Capital of the Company is Rs. 332, 00,00,000/- (Rupees three hundred and thirty two crores only) divided into 25,80,00,000 (Twenty Five crores Eighty Lakhs only) equity shares of Rs.10/- ( Ten only) each, and 7,40,00,000 (Seven Crore Forty Lakhs only) preference shares of Rs. 10/- (Ten only) each and the said preference shares may be redeemable/non-redeemable, cumulative/non-cumulative, convertible/nonconvertible, participating/non-participating or otherwise at the option of the Company, in the share capital of the Company with power to increase or reduce the capital of the Company and to divide the shares in the capital for the time being into several classes and to attach thereto respectively such preferential/deferred, qualified or special rights, privileges or conditions as may be determined by or in accordance with the regulations of the company and to vary modify or abrogate any such rights, privileges or conditions in such manner as may for the time being be provided by the regulations of the Company .
There was no change in Paid up Share Capital of the Company during the year under review
The Company has not issued any shares with differential rights and hence no information as per the provisions of Section 43(a) (ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.
Deposits
The Company has not accepted any deposits from the public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet, in terms of Section 73 of the Companies Act, 2013.
Extracts of Annual Return
As required by Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of the Annual Return in Form MGT-9 is available on the Companyâs website at www.seil.co.in / investor relations.
Conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to provisions of Section 134(3)(m) of the Companies Act, 2013 (Act) read with the Companies (Accounts) Rules, 2014
Information with respect to conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is prepared and the same is enclosed as Annexure - 2 to this Report.
Risk Management
The Board of Directors has formed a risk management committee to identify, evaluate, mitigate and monitor the risk associated with the business carried by the company. The committee reviews the risk management plan and ensures its effectiveness. A mechanism has been put in place which will be reviewed on regular intervals.
Corporate Social Responsibility
The Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee to monitor implementation of CSR activities of your Company. The details of the composition of the CSR Committee, CSR policy, CSR initiatives and activities during the year are given in the Annual Report on CSR activities in Annexure - 3 to this Report.
Committees of the Board
The Board has Audit Committee, Nomination and Remuneration Committee, Stakeholdersâ Relationship Committee and Corporate Social Responsibility Committee. The composition and other details of these committees have been given in the Report on the Corporate Governance forming part of the Annual Report.
Corporate Governance
A separate report on Corporate Governance is annexed as part of the Annual Report along with the Auditorâs Certificate on its compliance.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review, as stipulated under Listing Regulations, is annexed herewith which forms part of this report.
Whistle Blower Policy and Mechanism
The Board of Directors has adopted Whistle Blower Policy. The Whistle Blower Policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All permanent employees of the Company are covered under the Whistle Blower Policy.
A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud, or violation of Code of Conduct and Ethics. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairperson of the audit committee in exceptional cases.
Board Evaluation
The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015. The performance of the Board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of the board processes, in formation and functioning etc. In a separate meeting of independent directors, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting off the independent directors, at which the performance of the board its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.
Directors
Mr. Bavineni Suresh and Mr. Veeramachaneni Venkata Krishna Rao, Directors of the Company retire by rotation and being eligible offer themselves for re-appointment.
Details of Directors or Key Managerial Personnel Who were appointed or have resigned during the Year
Mr. B. Ramesh Kumar (DIN: 00206293) was reappointed as Joint Managing Director of the Company for a further period of three years with effect from 9th February, 2018 pursuant to the provisions of Sections 196, 197 and 203 read with Schedule V and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Mr. B Ramesh Kumar, Joint managing Director of the Company was appointed as CFO of the company with effect from 14th December, 2017 and Mr. Raveendra Babu M was appointed as Whole time Company Secretary & Compliance officer of the company w.e.f 31st December, 2017 pursuant to the provision of Section 203 and all other applicable provisions of the Companies Act, 2013.
Resignations:
Mr. V S Rakesh resigned as CFO of the Company with effect from 14th December, 2017 Mr. A.L Babu resigned as Company Secretary of the company w.e.f 31st December, 2017 Policy on directorsâ appointment and remuneration
A gist of policy of the Company on directorsâ appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of Section 178 of the Companies Act, 2013, is available in the Corporate Governance Report.
The companyâs policy on directorsâ appointment and remuneration and other matters provided in Section 178 (3) of the Act have been disclosed in the corporate governance report. Under Section 178 (3) of the Companies Act, 2013, the Nomination and Remuneration Committee of the board has adopted a policy for nomination, remuneration and other related matters for directors and senior management personnel. A gist of the policy is available in the Corporate Governance Report.
Statutory Auditors
At the Annual General Meeting held on December 31st 2014, M/s. Pavuluri& Co, Chartered Accountants (Firm Registration No. 012194S), Hyderabad, were appointed as Statutory Auditors of the Company to hold office for a period of Five years i.e., till the conclusion of the Annual General Meeting to be held in the calendar year 2019.
As required under section 139 of the Companies Act, 2013, the Company has obtained written consent from M/s. Pavuluri& Co, Chartered Accountants (Firm Registration No. 012194S), Hyderabad, to such appointment and also a certificate from the auditors to the effect that if their appointment is ratified, it would be in accordance with the provisions of Section 139(1) of the Act and the rules made there under.
The para-wise management response to the qualifications / observations made in the Independent Auditors Report is stated as under: Attention is drawn to point No 8 of the Independent Auditors Report regarding Basis for Qualified Opinion. The detailed clarification of the same is provided in Note No. 4.11 of the Accounts of the Standalone Accounts
The Auditors observation in point No. 8 of the Annexure to the Auditors report regarding dues to financial institution and banks aggregating Rs 214.78 Cr were due to severe liquidity crisis being faced by the Company on account of continued cash losses incurred.
The majority of the lenders have stopped charging interest on debts since the dues from the Company have been categorized as Non-performing Asset. The Company is in active discussion / negotiation With the Lenders for a suitable debt resolution by way of debt restructuring at a sustainable level. Pending finalization of a suitable debt resolution, the Company has stopped providing for accrued Interest and unpaid effective from 1st January 2018, in its books of accounts, as the same is under discussion with the Lenders. The amount of such accrued and unpaid interest (including penal interest and other charges) not â provided for is estimated at Rs.36,82,l4,336 for the year ended 31st March 2018 and the same has not been considered for preparation of the financial statements for the year ended 3lst March 2018.
Cost Auditors:
The Products classified as âSteel and Electricityâ manufactured by the Company are subject to Cost Audit in terms of Sec. 148 of the Companies Act, 2013 read with the rules issued there under by the Central Government.
Accordingly M/s. DZR & Co., Cost Accountants have been re-appointed as the Cost Auditors for the year ending 31st March 2019.
The Cost Audit Report for year ended 31st March 2017 was reviewed by the Audit Committee at its meeting held on September 11, 2017 and has been filed on October 10, 2017.
Internal Auditors
The Board of Directors of the Company has appointed M/s. Bhavani & CO., as Internal Auditors to perform Internal Audit of the operations of the Company for the Financial Year 2017-18 and the Internal Auditors have presented the observations to the Audit Committee at the meeting held on 30.05.2018.
Internal Control Systems and their Adequacy
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Auditor is well defined in the company. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board.
The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of Internal Auditor, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors had appointed M/s. B.S.S & Associates, Practicing Company Secretaries, Hyderabad to undertake the Secretarial Audit of your Company for the financial year 2017-18. The Secretarial Audit Report does not contain any qualifications, reservation or adverse remarks. The Report in Form MR-3 is enclosed as Annexure-4.
Particulars of employees
The ratio of remuneration of each director to the median of employeesâ remuneration as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Boardâs report.
A statement containing the names of every employee posted throughout the financial year and in receipt of a remuneration of Rs.60 lakh or more, or posted for part of the year and in receipt of Rs.5 lakh or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Boardâs report enclosed as Annexure - 5 Insurance
All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully insured.
Change in the nature of business
There is no change in the nature of business of the Company.
The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companyâs operations in future
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
Material changes and commitments
During the year under review the majority of the lenders have stopped charging interest on debts since the dues from the Company have been categorized as Non-performing Asset. The Company is in active discussion / negotiation With the Lenders for a suitable debt resolution by way of debt restructuring at a sustainable level. Pending finalization of a suitable debt resolution, the Company has stopped providing for accrued Interest and unpaid effective from 1st January 2018, in its books of accounts, as the same is under discussion with the Lenders. The amount of such accrued and unpaid interest (including penal interest and other charges) not â provided for is estimated at Rs.36,82,l4,336 for the year ended 31st March 2018 and the same has not been considered for preparation of the financial statements for the year ended 3lst March 2018. Except this there are no Material changes and commitments in the business operations of the Company from the financial year ended 31stMarch, 2018 to the date of signing of the Directorâs Report.
Prevention of Sexual Harassment at workplace
The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Committee has been set up to redress complaints received regarding sexual harassment. During the financial year 31st March, 2018, the company has not received any complaints pertaining to sexual harassment Industrial Relations and Human Resources
Your company believes that its employees are one of the most valuable assets of the Company and the Board appreciates the employees across the cadres for their dedicated service to the company and expects their continuous support and higher level of productivity for achieving the targets set for the company. During the year under review, the company organized various training programmes at all levels to enhance skills of employees. The total employee strength is over 1092 as on 31st March, 2018.
Acknowledgement
The Directors take this opportunity to place on record their sincere thanks to the Banks and Financial Institutions, Insurance Companies, Central and State Government Departments and the shareholders for their support and co-operation extended to the Company from time to time. Directors are pleased to record their appreciation of the dedicated services of the employees and workmen at all levels.
On behalf of the Board of Directors
For STEEL EXCHANGE INDIA LIMITED
Place: Visakhapatnam B. SATISH KUMAR
Date: 14.08.2018 Chairman and Managing Director
(DIN: 00163676)
Mar 31, 2014
Dear Members,
The Directors take pleasure in presenting the Fifteenth Annual Report
of the Company together with the Audited Statements of Accounts for the
year ended March 31,2014.
FINANCIAL RESULTS:
The performance of the Company during year under review is summarised
below:
(in Lakhs)
PARTICULARS Year ended 9 Months ended
31.03.2014* 31.03.2013*
Total Income 125546.95 98150.66
Total Expenditure
(excluding Depreciation and Interest) 112092.30 86630.99
Profit before Interest & Depreciation 13454.65 11519.57
Less: Interest and other
financial charges 8043.98 6309.16
Depreciation 1500.98 1175.94
Profit before Tax 3909.69 4034.47
Less: Tax Expense
- Deferred Tax 222.22 354.79
- Tax Expense for prior years /
(Excess provision written back) 105.25 (1649.20)
Profit after Tax 3582.20 5328.89
Balance brought forward from
previous year (21149.29) (26478.18)
Profit /(Loss) available for
Appropriation (17567.09) (21149.29)
Balance carried forward (17567.09) (21149.29)
*Note: The current year''s figures are for 12 months period while
previous year''s figures are for 9 months period only and hence the same
are not comparable.
Review of Operations:
The Company achieved a turnover of Rs. 1255.46 crores for the year
ended 31st March 2014 as against Rs. 981.51 crores in the previous 9
months period ended 31st March 2013. The Company earned a Gross Profit
of Rs. 134.54 crores before interest and depreciation as against Rs.
115.20 crores in the previous period. After deducting interest of Rs.
80.44 crores, providing a sum of Rs. 15.01 crores towards depreciation
and after adjusting deferred tax and excess income tax written back,
the operations resulted in a Net Profit of Rs. 35.82 crores as against
Rs. 53.29 crores for the previous 9 months period ended 31st March
2013.
Though the company''s manufacturing activity was marginally higher
during the year under review, decrease in profit was attributable to
decrease in margins in manufacturing activity and trading activity
coupled with decrease in steel prices when compared to previous period.
Further the net profit also decreased due to increase in the cost of
raw materials.
During the period under review, the company continued with low level of
operations at the Steel Melting Division at Kothapeta unit by selling
the unutilised power produced from the Power Plant. .
EXTENSION OF ANNUAL GENERAL MEETING & SCHEME OF AMALGAMATION:
As you are aware, the company has preferred a petition before the
Hon''ble High Court of Judicature at Hyderabad for the State of
Telangana and the State of Andhra Pradesh for the sanction of the
Scheme of Amalgamation of M/s Simhadri Power Limited with the Company
with appointed date 01.04.2013.
In view of the above, the company has applied to the Registrar of
Companies at Hyderabad for extension of time for a period of three
months i.e up to 31st December, 2014 for holding the Annual General
Meeting for consolidation of the accounts for the year ended 31st
March, 2014 and got the approval .
The Board of Directors pleased to inform that the Hon''ble High Court
has approved the Scheme of Amalgamation by orders dated 18th November,
2014. The Company has yet to receive the certified copies of the orders
and on filing certified copies with the Registrar of Companies, the
Scheme will come into effect from 01.04.2013. Therefore the accounts of
M/s Simhadri Power Limited are not included in the accounts of the
company
DIVIDEND:
To conserve the resources for funding the expansion plans, the Board
has deemed it prudent not to recommend any dividend for the year ended
31st March 2014.
TRANSFER TO RESERVES:
During the financial year under review, there were no transfers to
Reserves.
CAPITAL STRUCTURE:
During the period under review there is no change in the Authorised and
paid up capital of the Company.
The allotment of equity shares to the shareholders of GSAL, Rs.
59,827,195 continues to be pending awaiting the clearances from
statutory bodies and has been shown under Equity Share Capital suspense
account in the financial statements.
DIRECTORS:
In accordance with the provisions of Companies Act, 1956 and the
Articles of Association of the Company, Mr. B. Suresh Kumar and Mr.
V.V. Krishna Rao retire by rotation and being eligible, offer
themselves for re-appointment.
In terms of Sections 149, 152, Schedule IV and other applicable
provisions, if any, of the Companies Act, 2013 read with Companies
(Appointment and Qualification of Directors) Rules, 2014, the
Independent Directors can hold office for a term of up to five (5)
consecutive years on the Board of Directors of your Company and are not
liable to retire by rotation. Accordingly, it is proposed to appoint
Mr. C. Siva Prasad, Mr. K. Krishna Rao, Mr. G. Venkatanarayana Reddy
and Mr. R. Ramachandra Rao, as Independent Directors of your Company
with effect from 31st December 2014 to 30th December 2019.
Appropriate resolutions for the appointment/ re-appointment of
Directors are being placed before you for your approval at the ensuing
Annual General Meeting. The brief resume of the aforesaid Directors and
other information have been detailed in the Notice. Your Directors
recommend their appointment/reappointment as Directors of your Company.
REPORT ON SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:
The Company has no subsidiaries for the year ended 31st March 2014 and
hence the report on subsidiaries and consolidated financial statements
and the statement pursuant to Section 212 of the Companies Act, 1956
are not applicable to the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors hereby confirm that:
(i) in the preparation of the accompanying accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures, if any;
(ii) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent, so as to give a true and fair view of the state of affairs of
the Company at the end of the year 31st March 2014 and of the profit of
the Company for the said year;
(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) they have prepared the accompanying accounts on a going concern
basis.
REPORT ON THE CORPORATE GOVERNANCE:
Your Company continues to follow the principles of good Corporate
Governance. In pursuance of Clause 49 of the Listing Agreement entered
into with the Stock Exchanges, a separate report on Corporate
Governance along with a certificate from the Auditors of the Company
regarding its compliance is annexed herewith and forms part of this
Report.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis report as required under the
Listing agreement entered into with the Stock Exchanges is annexed
herewith and forms part of this Report.
AUDITORS and AUDITORS'' REPORT:
M/s Pavuluri& Co, Chartered Accountants bearing ICAI Registration No.
012194S are proposed to be appointed as Statutory Auditors of the
Company from the conclusion of the ensuing Annual General Meeting till
the conclusion of the sixth Annual General Meeting of the Company held
thereafter, subject to ratification of the appointment by the members
at every AGM held after the ensuing 15th Annual General Meeting The
Notes to Accounts forming part of the financial statements are
self-explanatory and need no further explanation. There are no
qualifications or adverse remarks in the Auditors'' Report which require
any clarification or explanation.
COST AUDITORS:
The Products classified as "Steel and Electricity" manufactured by the
Company are subjected to Cost Audit in terms of Sec. 148 of the
Companies Act 2013 read with the rules issued there under by the
Central Government on 30th June 2014.
Accordingly M/s.DZR & Co., Cost Accountants have been reappointed as
the Cost Auditors for the year ending 31st March 2015.
The Cost Audit Report for 9 months period ended 31st March 2013 was
reviewed by the Audit Committee at its meeting held on 12.08.2013 and
has been filed on 20.09.2013.
The Cost Audit Report for year ended 31st March 2014 was reviewed by
the Audit Committee at its meeting held on 11.08.2014 and has been
filed on 27.09.2014.
PUBLIC DEPOSITS:
The Company has not accepted any Deposits from the Public during the
year under review and, as such, no amount on account of principal or
interest on Deposits was outstanding as on 31st March, 2014.
PARTICULARS OF EMPLOYEES:
The information required under Section 217(2A) of the Companies Act,
1956 read with Rules thereunder is provided in the Annexure forming
part of this report. However, in terms of Section 219(1)(b)(iv) of the
Companies Act 1956, the Report and Accounts are being sent to the
Members, excluding the aforesaid Annexure. Any shareholder interested
in obtaining a copy may write to the Company Secretary at the
Registered Office of the Company.
CORPORATE SOCIAL RESPONSIBILITY:
The company has taken up a series of a charitable works as part of its
Corporate Social Responsibility. It focuses on 4 thrust areas viz,
natural resource management, education, health and women empowerment.
It seeks to bring corporate sector with an overall aim to create
equitable, sustainable, and accessible developmental opportunities for
the communities we serve..
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:
Details of energy conservation along with the information required in
accordance with the provisions of Section 217(1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, as amended from time to
time, are given in Annexure ''A'' to the Directors'' Report and forms part
of this report.
INDUSTRIAL RELATIONS:
The Industrial relations have been cordial during the year ended 31st
March 2014 and your Directors wish to place on record their sincere
appreciation to employees at all levels for their dedication,
commitment and teamwork who have been instrumental in enabling your
Company to achieve higher growth levels during the period.
ACKNOWLEDGEMENTS:
Your Directors take this opportunity to express their appreciation for
the continued support and assistance received from the Company''s
Bankers. The Directors also thank the Business Associates, Financial
Institutions and various Central and State Government Departments and
Government Authorities for their continued co-operation and support.
The Directors also wish to place on record their gratitude for the
continued support and cooperation received from the valued Customers,
Vendors, Members, and Investors of the Company and look forward to the
same in greater measure in the coming years.
For and on behalf of the Board of Directors
Place: Visakhapatnam B. SATISH KUMAR
Date: December 03, 2014 Chairman & Managing Director
(DIN:00163676)
Mar 31, 2013
To the Members,
The Directors take pleasure in presenting the Fourteenth Annual Report
of the Company together with the Audited Statements of Accounts for the
9 months period ended March 31, 2013.
FINANCIAL RESULTS:
The performance of the Company during period under review is summarised
below:
(Rs. in Lakhs)
PARTICULARS 9 Months ended 15 Months ended
31.03.2013* 30.06.2012*
Total Income 98150.66 170209.42
Total Expenditure
(excluding Depreciation
and Interest) 86630.99 153931.27
Profit before Interest &
Pepreciation 11519.57 16278.15
Less: Interest and other
financial charges 6309.16 10781.06
Depreciation 1175.94 1716.46
Profit before Tax 4034.47 3780.63
Less: Provision for Tax
- Current and earlier year Taxes 1062.50
- Deferred Tax 354.79 989.05
- Tax Expense for prior years /
(Excess provision written back) (1649.20) 69.80
- MAT Credit Entitlement (1027.85)
Profit after Tax 5328.89 2687.13
Profit brought forward
from previous year (26478.18) 4469.17
Profit available for
Appropriation/(Loss) (21149.29) 7156.30
Appropriations:
Transfer to General Reserve 75.00
Proposed Dividend on
Preference Shares 4.70
Tax on Dividend as above 0.76
Transfer to Capital
Redemption Reserve 55.04
Balance 7020.80
Balance of GSAL
(India) Ltd on amalgamation (33498.98)
Balance carried forward (21149.29) (26478.18)
*Note: The current period''s figures are not comparable with the
previous period''s figures as the current period''s figures are for 9
months where as the previous period''s figures are for 15 months.
Review of Operations:
The Company achieved a turnover of Rs.. 981.51 crores for the 9 months
period ended 31st March 2013 as against Rs.. 1702.09 crores in the
previous period ended 30th June 2012. The Company earned a Gross Profit
of Rs.. 115.20 crores before interest and depreciation as against Rs..
162.78 crores in the previous period. After deducting interest of Rs..
63.09 crores, providing a sum of Rs.. 11.76 crores towards depreciation
and after adjusting deferred tax and excess income tax written back,
the operations resulted in a Net Profit of Rs.. 53.29 crores as against
Rs.. 26.87 crores for the previous 15 months period ended 30th June 2012.
Though the company''s manufacturing activity was marginally lower during
the period under review, higher net profit was attributable to increase
in margins in manufacturing activity and trading activity coupled with
increase in steel prices when compared to previous period. Further the
net profit also increased with write back of excess provision of income
tax of earlier years. However decrease in the turnover was mainly on
account of sluggish market conditions and frequent and long power cuts
imposed in the state.
During the period under review, the company continued with low level of
operations at the Steel Melting Division at Kothapeta unit. The Company
sold the unutilised power produced from the Power Plant. The power
sales were less in comparison due to the reduced supply of Natural gas.
During the period under review, the Company has extended corporate
guarantee of Rs.. 58 crores for the working capital credit facilities
sanctioned to Simhadri Power Limited subject to the approval of members
which will be sought through the Postal Ballot in the due course.
The Board of Directors have approved the sale/disposal of rolling unit
situated at Parawada, Visakhapatnam and wire drawing unit situated at
IDA, Auto Nagar, Visakhapatnam in their meeting held on 03.07.2013
subject to the approval of members which will be sought through the
Postal Ballot in the due course.
LISTING OF SECURITIES ON BOMBAY STOCK EXCHANGE (BSE) :
The Company''s Securities are traded in the IndoNext Segment on the
Bombay Stock Exchange since January 2005.Your Directors are pleased to
inform you that the BSE has approved the direct listing of Company''s
Securities vide notice no. 20121129-15 dated 29th November, 2012 and
trading of Securities commenced on BSE with effect from 3rd December,
2012 under ÂB" Segment with scrip code 534748.
VOLUNTARY DELISTING OF SECURITIES FROM THE CALCUTTA STOCK EXCHANGE
LIMITED:
At present the equity shares of the company are listed on The Bombay
Stock Exchange Limited, Mumbai and the Calcutta Stock Exchange Limited,
Kolkata. As the trading volume is NIL on the Calcutta Stock Exchange
and as a part of cost reduction measure, the Board of Directors in
their meeting held on 03.07.2013 agreed to delist the securities from
the Calcutta Stock Exchange subject to requisite approvals. The
securities of the company will continue to be listed and traded on the
Bombay Stock Exchange Limited, Mumbai.
CHANGE OF ACCOUNTING YEAR:
In order to align the accounting year of the Company with the practices
followed in India, it was decided that the accounting year of the
Company for financial year 2012-13 will be for 9 months. Accordingly,
the accounting period of the Company for the period under review was up
to 31 March 2013.
SCHEME OF AMALGAMATION OF SIMHADRI POWER LIMITED (SPL) WITH THE COMPANY
(SEIL):
Members are aware that the Company (SEIL) has promoted Simhadri Power
Limited (SPL) as a Special Purpose Vehicle and has set up 60 MW captive
power plant. The Power Plant of SPL is located on the land taken on
lease from SEIL and is close to the major manufacturing facilities of
SEIL.
The draft Scheme of Amalgamation of SPL with SEIL was approved by the
Board in its meeting held on 03.07.2013 subject to various statutory
approvals, the consent of members and confirmation by the High Court.
The proposed Scheme will enable the amalgamated entity to reduce the
overall costs and offer economies of scale and would also lead to
reduction in overall operative costs, taxes and administrative cost.
The proposed Amalgamation of SPL with SEIL would bring the entire
operations under one roof which would integrate itself into a bigger
economic entity giving greater financial strength and also enhances
shareholders'' wealth.
As per the proposed Scheme of Amalgamation:
---With effect from the appointed date i.e. 1st April 2013, the
transfer of and vesting of the Undertaking of SPL including all its
movable and immovable properties such as buildings, plant & machinery
and other assets of whatsoever nature but subject to all mortgages and
charges and hypothecation and guarantees, if any, and all other rights
whatsoever affecting the properties of SPL shall without any further
act or deed be transferred to and be vested in SEIL.
---With effect from the appointed date all liabilities, debts, duties
and obligations of whatsoever nature of SPL shall without any further
Act or Deed be transferred to and taken over by SEIL.
---In consideration of the transfer of and vesting of the Undertaking
by SPL to SEIL, the Company shall allot 2,73,56,467 equity shares of Rs..
10/- each in the ratio of 1 (One) equity share of Rs.. 10/- each fully
paid up of the Company for every 2 (Two) equity shares of Rs.. 10/- each
held by such members in "SPL".
The detailed scheme and other information will be informed to the
members in the due course.
DIVIDEND:
To conserve the resources, the Board has deemed it prudent not to
recommend any dividend for the 9 months period ended 31st March 2013.
CAPITAL STRUCTURE:
During the period under review, there is no change in the paid up
equity share capital of the Company i.e. Rs.. 519,500,000 comprising of
51,950,000 Equity Shares of Rs.. 10/- each.
Pending the allotment of equity shares to the shareholders of GSAL, Rs..
59,827,195 has been shown under Equity Share Capital suspense account
in the financial statements.
DIRECTORS:
Mr. B. Satish Kumar was re-appointed as Managing Director for a further
period of three years w.e.f 01.03.2013 by the Board of Directors in
their meeting held on 11.02.2013 subject to the approval of members
which will be sought through the Postal Ballot in the due course.
Mr. B. Suresh Kumar was re-appointed as Joint Managing Director for a
further period of three years w.e.f 27.10.2013 by the Board of
Directors in their meeting held on 03.07.2013 subject to the approval
of members which will be sought through the Postal Ballot in the due
course.
In accordance with the provisions of Companies Act, 1956 and the
Articles of Association of the Company, Mr. V.V. Krishna Rao and Mr. R.
Ramachandra Rao retire by rotation and being eligible, offer themselves
for re-appointment.
FUTURE OUTLOOK:
The long term outlook of the Steel Industry continues to be promising
and challenging. With increased manufacturing base, your Company
expects to better the revenues with improved margins.
REPORT ON SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:
The Company has no subsidiaries as on 31st March 2013 and hence the
report on subsidiaries and consolidated financial statements and the
statement pursuant to Section 212 of the Companies Act, 1956 are not
applicable to the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors hereby confirm that:
(i) in the preparation of the accompanying accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures, if any;
(ii) they 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 9 months period ended 31st March 2013 and
of the profit of the Company for the said period;
(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) they have prepared the accompanying accounts on a going concern
basis.
REPORT ON THE CORPORATE GOVERNANCE:
Your Company continues to follow the principles of good Corporate
Governance. In pursuance of Clause 49 of the Listing Agreement entered
into with the Stock Exchanges, a separate report on Corporate
Governance along with a certificate from the Auditors of the Company
regarding its compliance is annexed herewith and forms part of this
Report.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis report as required under the
Listing agreement entered into with the Stock Exchanges is annexed
herewith and forms part of this Report.
AUDITORS and AUDITORS'' REPORT:
M/s Pavuluri& Co, Chartered Accountants, the Company''s Auditors will
retire at the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment and have expressed their willingness to act
as Auditors of the Company, if appointed, and have further confirmed
that the said appointment would be in conformity with the provisions of
Section 224 (1B) of the Companies Act, 1956.
The Notes to Accounts forming part of the financial statements are
self-explanatory and need no further explanation. There are no
qualifications or adverse remarks in the Auditors'' Report which require
any clarification or explanation.
COST AUDITORS:
The Products classified as "Steel and Electricity" manufactured by the
Company are subjected to Cost Audit in terms of Sec.233B of the
Companies Act, 1956 read with the Central Government Rules.
M/s.DZR & Co., Cost Accountants have been reappointed as the Cost
Auditors for the year ending 31st March 2014 subject to the approval of
Central Government having been appointed for the FY 2011-12 & 2012-13.
The Cost Audit Report for the 15 months period ended 30th June 2012 was
reviewed by the Audit Committee at their meeting held on 09.11.2012 and
has been filed on 28.01.2013 well within the due date of 28.02.2013.
The Cost Audit for the 9 months period ended 31st March 2013 is in
progress and the Cost Audit Report will be filed within the stipulated
time.
FIXED DEPOSITS:
The Company has not accepted any Fixed Deposits from the Public within
the meaning of Section 58-A, of the Companies Act, 1956 and the rules
made there under during the 9 months period ended 31st March 2013 and,
as such, no amount on account of principal or interest on Fixed
Deposits was outstanding as on 31st March, 2013.
PARTICULARS OF EMPLOYEES:
The information required under Section 217(2A) of the Companies Act,
1956 read with Rules thereunder is provided in the Annexure forming
part of this report. However, in terms of Section 219(1)(b)(iv) of the
Companies Act 1956, the Report and Accounts are being sent to the
Members, excluding the aforesaid Annexure. Any shareholder interested
in obtaining a copy may write to the Company Secretary at the
Registered Office of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:
Details of energy conservation along with the information required in
accordance with the provisions of Section 217(1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, as amended from time to
time, are given in Annexure ''A'' to the Directors'' Report and forms part
of this report.
INDUSTRIAL RELATIONS:
The Industrial relations have been cordial during the 9 months period
ended 31st March 2013 and your Directors wish to place on record their
sincere appreciation to employees at all levels for their dedication,
commitment and teamwork who have been instrumental in enabling your
Company to achieve higher growth levels during the period.
ACKNOWLEDGEMENTS:
Your Directors take this opportunity to express their appreciation for
the continued support and assistance received from the Company''s
Bankers. The Directors also thank the Business Associates, Financial
Institutions and various Central and State Government Departments and
Government Authorities for their continued co-operation and support.
The Directors also wish to place on record their gratitude for the
continued support and cooperation received from the valued Customers,
Vendors, Members, and Investors of the Company and look forward to the
same in greater measure in the coming years.
For and on behalf of the Board of Directors
Place: Visakhapatnam B. SATISH KUMAR
Date: July 03, 2013 Chairman & Managing Director
Jun 30, 2012
The Directors take pleasure in presenting the Thirteenth Annual Report
of the Company together with the Audited Statements of Accounts for the
15 months period ended June 30, 2012.
FINANCIAL RESULTS:
The performance of the Company during period under review is summarised
below:
(Rs. Lakhs)
PARTICULARS 15 Months ended Year ended
30.06.2012* 31.03.2011
Total Income 170209.42 115749.02
Total Expenditure
(excluding Depreciation and Interest) 153931.27 107107.63
Profit before Interest & Depreciation 16278.15 8641.39
Less: Interest and other financial charges 10781.06 4792.16
Depreciation 1716.46 1114.09
Profit before Tax 3780.63 2735.14
Less: Provision for Tax
- Current and earlier year Taxes 1062.50 897.38
- Deferred Tax 989.05 616.71
- Tax Expense for prior years 69.80 -
- MAT Credit Entitlement (1027.85) (478.61)
Profit after Tax 2687.13 1699.66
Profit brought forward from previous year 4469.17 2876.00
Profit available for Appropriation 7156.30 4575.66
Appropriations:
Transfer to General Reserve 75.00 100.00
Proposed Dividend on Preference Shares 4.70 5.64
Tax on Dividend as above 0.76 0.85
Transfer to Capital Redemption Reserve 55.04 -
Balance 7020.80 4469.17
Balance of GSAL (India) Ltd on amalgamation (33498.98) -
Balance carried forward (26478.18) 4469.17
*Note: The current period's figures are not comparable with the
previous year's figures on account of:
1. Extension of the accounting year by the Company. The current
period's figures are for 15 months where as the previous year's figures
are for 12 months.
2. The current period's figures include the accounts of GSAL (India)
Limited consequent to the amalgamation as per the approval of BIFR,
where as the previous year's figures relate to the company only.
Review of Operations:
The Company achieved a turnover of Rs. 1702.09 crores for the 15 months
period ended 30th June, 2012 as against Rs. 1157.49 crores in the
previous year ended 31st March 2011. The Company earned a Gross Profit
of Rs. 162.78 crores before interest and depreciation as against Rs.
86.41 crores in the previous year. After deducting interest of Rs.
107.81 crores, providing a sum of Rs. 17.16 crores towards
depreciation, tax provision of Rs. 11.32 crores and after adjusting
deferred tax and MAT Credit, the operations resulted in a Net Profit of
Rs. 26.87 crores as against Rs. 16.99 crores for the previous year.
The company's manufacturing activity was higher during the period under
review and coupled with the increase in prices of steel products
resulted in higher turnover and higher net profit when compared to
previous year. However the margins were largely effected on account of
volatility in the exchange rate and frequent and long power cuts
imposed in the state.
During the period under review, the company continued with low level of
operations at the Steel Melting Division at Kothapeta unit. The Company
sold the unutilised power produced from the Power Plant.
As informed in the last Annual report, the Company has promoted
Simhadri Power Limited (SPL) as a Special Purpose Vehicle (SPV) which
will set up the 60 MW Power Plant based on waste heat recovery, coal
char, fines and fresh coal in which the Company shall hold not less
than 26% equity and 51% of the power generated will be captively
consumed by the units of the Company.
The proposed power plant is being set up at Malliveedu, L.Kota Mandal,
Vizianagaram District, Andhra Pradesh. The works are in advanced stage
of completion and the commercial production is expected as per schedule
in October 2012. During the period under review, the Company has
invested Rs. 18.60 crores in SPL by subscribing to 18,600,000 Equity
shares of Rs. 10/- each fully paid and the total investments in SPL as
on 30th June 2012 is Rs. 35.29 crores .
With the setting up of the power project, the Company expects to
improve its manufacturing levels on the back of regular and continuous
power supply. The waste heat recovery, and utilisation of coal fines
and char will also contribute to the margins of the company.
During the period under review, the company has disposed the 6000 TPA
Wire drawing unit -1 situated at Autonagar, Vishakapatnam. Pending the
approval of the working capital lenders, the same is continues to be
shown under fixed assets.
CHANGE OF ACCOUNTING YEAR:
The Board of Directors approved the extension of the financial year
2011-12 by 3 months to take the effect of hearing scheduled on
08.05.2012 before the Hon'ble Board for Industrial and Financial
Reconstruction for the proposed merger of GSAL (India) Limited with the
Company. Accordingly, the current accounting period of the Company is
for 15 months starting from 1 April 2011 and up to 30 June 2012.
In order to align the accounting year of the Company with the practices
followed in India, it was decided that the accounting year of the
Company for financial year 2012-13 will be for 9 months. Accordingly,
the accounting period of the Company for the ensuing period will be up
to 31 March 2013.
SCHEME OF MERGER OF GSAL (INDIA) LIMITED (GSAL) WITH THE COMPANY:
Your Directors pleased to inform you that The Hon'ble Board for
Industrial and Financial Reconstruction, New Delhi (BIFR) vide its
order dated 06.08.2012 approved the Scheme of Merger of M/s GSAL
(India) Limited with the Company (SEIL).
GSAL was engaged in the business of manufacture and sale of sponge iron
and has been declared as a sick industrial company within the meaning
of Section 3 (1) (o) of the Sick Industrial Companies (Special
Provisions) Act, 1985 by BIFR.
The members of the Company approved the revised Scheme of Merger
through Postal Ballot on 23rd March 2011. As per the Scheme of Merger,
all the assets and liabilities pertaining to GSAL (India) Limited stood
transferred to the Company w.e.f 1st April, 2010.
As per the Scheme of Merger:
---With effect from the appointed date i.e. 1st April 2010, the
transfer of and vesting of the Undertaking and the Liabilities of the
GSAL including all its movable and immovable properties such as land,
buildings, plant & machinery and other assets of whatsoever nature but
subject to all mortgages and charges and hypothecation and guarantees,
if any, and all other rights whatsoever affecting the properties of
GSAL shall without any further act or deed be transferred to and be
vested in SEIL.
---With effect from the appointed date all liabilities, debts, duties
and obligations of whatsoever nature of GSAL shall without any further
Act or Deed be transferred to and taken over by SEIL.
---In consideration of the transfer of and vesting of the Undertaking
and the Liabilities of GSAL to SEIL, the Company shall allot 59,82,720
equity shares of Rs. 10/- each in the ration of 1 (One) equity share of
Rs. 10/- each fully paid up for every 10 (Ten) equity shares of Rs.
10/- each held by such members in "GSAL". And the Paid up Equity share
capital of the Company will be Rs. 57.93 Crores as against Rs. 51.95
Crores before the merger.
Effects of Merger on the financial statements of the Company:
The accumulated losses of GSAL amounting to Rs.334.98 crores were set
off against the surplus in profit & loss account and the balance loss
has been carried forward in the financial statements. However the
company will benefit from the carry forward of losses of GSAL and
expects lower tax outflows in the ensuing years.
The additions to capital and other reserves are on account of the
implementation of the Draft Rehabilitation Scheme of GSAL as approved
by the Board of Industrial and Financial Reconstruction (BIFR).
The management has revalued the land of GSAL (India) Limited at fair
market value of as valued by a certified valuer and the difference in
value of Rs. 102.56 crores has been reflected under the revaluation
reserve in the financial statements.
The Scheme of Merger has strengthened the manufacturing activity of the
Company with the addition of the manufacturing capacities of the GSAL
and also added huge asset base to the Company.
TRANSFER TO RESERVES:
The Company transferred Rs. 75.00 Lakhs to the General Reserve out of
the amount available for appropriation for the 15 months period ended
30th June, 2012 as against Rs. 100.00 Lakhs in the previous year ended
31st March 2011.
DIVIDEND:
The Board has, subject to the approval of the Members at the ensuing
Annual General Meeting, recommended a dividend at the stipulated rate
of 10.25 % on 5,50,400 Preference Shares of Rs. 10/- each of the
Company for the period 01.04.2011 to 30.01.2012 on pro rata basis (the
said preference shares were redeemed on 30.01.2012).
To conserve the resources for funding the expansion plans, the Board
has deemed it prudent not to recommend any dividend on the Equity
Shares of the Company for the 15 months period ended 30th June, 2012.
ISSUE OF SHARES AND SHARE WARRANTS:
During the period under review, the Company, on 8th April, 2011 has
allotted 40,00,000 equity shares of the Company at a price of Rs. 38/-
(Rupees Thirty Eight) per share upon conversion of share warrants which
were allotted on 23rd July 2010 on preferential basis to M/s Umashiv
Garments Private Limited (Promoter Group Company).
During the period under review, the Company, on 8th April, 2011 has
allotted 51,00,000 share warrants of the Company at a price of Rs. 45/-
(Rupees Forty Five) per share warrant on preferential basis to M/s
Umashiv Garments Private Limited (Promoter Group Company) pursuant to
the members' approval obtained through Postal Ballot. Each of these
warrants is convertible into 1 (one) Equity Share of par value of Rs.
10/- each at the option of the Warrant holder within a period of 18
months from the date of allotment (i.e latest by 7th October, 2012).
Accordingly, the Company, on 2nd April, 2012 has allotted 51,00,000
equity shares of the Company at a price of Rs. 45/- (Rupees Forty Five)
per share upon conversion of share warrants which were allotted on 8th
April, 2011 on preferential basis to M/s Umashiv Garments Private
Limited (Promoter Group Company).
The amount raised through the issue was fully utilised for the purpose
for which it was raised.
CAPITAL STRUCTURE:
During the period under review, the Authorised Equity share capital of
the Company has increased from Rs. 990,000,000 to Rs. 1,590,000,000 and
the Authorised Preference share capital of the Company has increased
from Rs. 10,000,000 to Rs. 740,000,000 respectively with the addition
of Authorised Capitals of GSAL (India) Limited.
During the period under review, the paid up equity share capital of the
Company has increased from Rs. 428,500,000 to Rs. 519,500,000
comprising of 51,950,000 Equity Shares of Rs. 10/- each with the
allotment of 4,000,000 (Forty Lakhs) Equity Shares of Rs. 10/- each
upon conversion of the share warrants on 8th April, 2011 and with the
allotment of 5,100,000 (Fifty one Lakhs) Equity Shares of Rs. 10/- each
upon conversion of the share warrants on 2nd April, 2012 respectively.
Pending the allotment of equity shares to the shareholders of GSAL, Rs.
59,827,195 has been shown under Equity Share Capital suspense account
in the financial statements.
PREFERENCE SHARES:
The Company had issued 5,50,400 10.25 % Redeemable Preference Shares of
Rs. 10/- each in the year 2005 redeemable at the end of seven years .
During the period under review, your Board of Directors in its meeting
held on 1st February 2012 approved the redemption of 5,50,400 10.25%
Redeemable preference shares of Rs. 10 each along with pro-rata
dividend till the date of redemption. The Preference shares were fully
redeemed and payment was made on 27th June 2012 to the shareholder.
DIRECTORS:
Mr. B. Suresh was re-appointed as Director (Finance) by the members of
the Company in their Extraordinary General Meeting held on 30th
November 2009 for a period of three years with effect from 1st
September 2009 and his tenure will be completed on 31st August 2012.
Mr. B. Suresh informed of his inability to continue as Whole Time
Director owing to his other occupations and will continue to hold the
office of the Director of the Company effective from 1st September
2012, who shall be liable to retire by rotation. The Board placed on
record its appreciation for the services rendered by Mr. B. Suresh as
Director (Finance) of the Company.
In accordance with the provisions of Companies Act, 1956 and the
Articles of Association of the Company, Mr. B. Suresh Kumar and Mr. B.
Suresh retire by rotation and being eligible, offer themselves for
re-appointment.
Mr. G. Venkata Narayana Reddy has been appointed as Additional Director
of the Company by the Board of Directors with effect from 30th July,
2012 in their meeting held on the even date and now Mr. G. Venkata
Narayana Reddy is being proposed to be appointed as Director of the
Company, liable to retire by rotation, in the ensuing Annual General
Meeting of the Company. The Company has received a notice from the
shareholder proposing his candidature.
During the period under review, Mrs. Nilam Sawhney, IAS nominee
director of M/s Andhra Pradesh Industrial Development Corporation
(APIDC) has resigned and the same was approved in the Board meeting
held on 30th July, 2012. The Board placed on record its appreciation
for the services rendered by Mrs. Nilam Sawhney as a Director.
FUTURE OUTLOOK:
The long term outlook of the Steel Industry continues to be promising
and challenging. With increased manufacturing base, your Company
expects to better the revenues with improved margins.
REPORT ON SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:
The Company has no subsidiaries for the 15 months period ended 30th
June 2012 and hence the report on subsidiaries and consolidated
financial statements and the statement pursuant to Section 212 of the
Companies Act, 1956 are not applicable to the Company.
As on the date of reporting, the company holds 41,152,566 shares of Rs.
10/- each in M/s Simhadri Power Limited (SPL) (SPV promoted by the
Company), by virtue of which SPL has become the subsidiary of the
Company as informed by SPL.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors hereby confirm that:
(i) in the preparation of the accompanying accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures, if any;
(ii) they 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 15 months period ended 30th June 2012 and
of the profit of the Company for the said period;
(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) they have prepared the accompanying accounts on a going concern
basis.
REPORT ON THE CORPORATE GOVERNANCE:
Your Company continues to follow the principles of good Corporate
Governance. In pursuance of Clause 49 of the Listing Agreement entered
into with the Stock Exchanges, a separate report on Corporate
Governance along with a certificate from the Auditors of the Company
regarding its compliance is annexed herewith and forms part of this
Report.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis report as required under the
Listing agreement entered into with the Stock Exchanges is annexed
herewith and forms part of this Report.
AUDITORS and AUDITORS' REPORT:
M/s Pavuluri& Co, Chartered Accountants, the Company's Auditors will
retire at the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment and have expressed their willingness to act
as Auditors of the Company, if appointed, and have further confirmed
that the said appointment would be in conformity with the provisions of
Section 224 (1B) of the Companies Act, 1956.
The Notes to Accounts forming part of the financial statements are
self-explanatory and need no further explanation. There are no
qualifications or adverse remarks in the Auditors' Report which require
any clarification or explanation.
COST AUDITORS:
During the period under review, in terms of Section 233B of the
Companies Act, 1956 and as per the directives of the Central Government
vide circular F. NO. 52/26/CAB-2010; dated the 3rd May, 2011, M/s DZR &
Co., Cost and Management Accountants, Hyderabad are appointed as the
Cost Auditors of the Company on 12.08.2011 to conduct cost audit of
Steel and Power divisions of the Company for the financial year 2011-12
ending 30th June 2012 and the same was approved by the Central
Government.
The due date to submit Cost Audit Reports to the Central Government for
the period under review is 27th December 2012 i.e. 180 days from the
close of the financial year.
FIXED DEPOSITS:
The Company has not accepted any Fixed Deposits from the Public within
the meaning of Section 58-A, of the Companies Act, 1956 and the rules
made there under during the 15 months period ended 30th June 2012 and,
as such, no amount on account of principal or interest on Fixed
Deposits was outstanding as on 30th June, 2012.
PARTICULARS OF EMPLOYEES:
None of the employees of the Company is in receipt of remuneration for
whole/ part of the 15 months period ended 30th June 2012 exceeding the
limits as prescribed under Section 217(2A) of the Companies Act, 1956
read with Companies (Particulars of Employees) Rules, 1975.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:
Details of energy conservation along with the information required in
accordance with the provisions of Section 217(1) (e) of the Companies
Act, 1956, read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, as amended from time to
time, are given in Annexure 'A' to the Directors' Report and forms part
of this report.
INDUSTRIAL RELATIONS:
The Industrial relations have been cordial during the 15 months period
ended 30th June 2012 and your Directors wish to place on record their
sincere appreciation to employees at all levels for their dedication,
commitment and teamwork, who have been instrumental in enabling your
Company to achieve higher growth levels during the period.
ACKNOWLEDGEMENTS:
Your Directors take this opportunity to express their appreciation for
the continued support and assistance received from the Company's
Bankers. The Directors also thank the Business Associates, Financial
Institutions and various Central and State Government Departments and
Government Authorities for their continued co-operation and support.
The Directors also wish to place on record their gratitude for the
continued support and cooperation received from the valued Customers,
Vendors, Members, and Investors of the Company and look forward to the
same in greater measure in the coming years.
For and on behalf of the Board of Directors
Place: Visakhapatnam B. SATISH KUMAR
Date:August 27, 2012 Chairman & Managing Director
Mar 31, 2011
To the Members,
The Directors take pleasure in presenting the Twelfth Annual Report of
the Company together with the Audited Statements of Accounts for the
year ended March 31, 2011.
FINANCIAL RESULTS:
The performance of the Company during 2010-2011 is summarised below:
(Rs. in Lakhs)
PARTICULARS 2010-2011 2009-2010
Total Income 115609.10 69697.92
Total Expenditure (excluding
Depreciation and Interest) 106922.88 65042.03
Profit before Interest & Depreciation 8686.22 4655.89
Less: Interest and other financial
charges 4792.16 3159.40
Depreciation 1114.09 318.11
Profit before Prior period items 2779.97 1178.38
Less/(Add): Expenditure pertaining to
previous year 44.83 1.26
Profit before Tax 2735.14 1177.12
Less: Provision for Tax
- Current Tax and Earlier Year Taxes 897.38 176.57
- Deferred Tax 616.71 504.51
- MAT Credit Entitlement (478.61) -
Profit after Tax 1699.66 496.04
Profit brought forward from previous year 2876.00 2410.60
Profit available for Appropriation 4575.66 2906.64
Appropriations:
Proposed Dividend on Preference Shares 5.64 5.64
Tax on Dividend as above 0.85 -
Transfer to General Reserve 100.00 25.00
Balance carried forward 4469.17 2876.00
Review of Operations:
The Company achieved a turnover of Rs. 1156.09 crores for the year
ended 31 st March, 2011 as against Rs. 696.98 crores in the previous
year. The Company earned a Gross Profit of Rs. 86.86 crores before
interest and depreciation as against Rs. 46.56 crores in the previous
year. After deducting interest of Rs. 47.92 crores, providing a sum of
Rs. 11.14 crores towards depreciation, tax provision of Rs. 8.97 crores
and after adjusting deferred tax and MAT Credit, the operations
resulted in a Net Profit of Rs. 16.99 crores as against Rs. 4.96 crores
for the previous year.
The company's manufacturing activity was higher during the year under
review and coupled with the increase in prices of steel products
resulted in higher turnover and higher net profit when compared to
previous year.
During the year under review, the company continued with low level of
operations at the Steel Melting Division at Kothapeta unit as the input
costs continued to be high throughout the year. The Company sold the
unutilised power produced from the Captive Power Plant.
The setting up of the 2,40,000 SMS plant in the premises of GASL
(India) Limited was completed during the year under review and the
commercial production commenced in August' 2010.
As informed in the last Annual report, the Company has promoted
Simhadri Power Limited (SPL) as a Special Purpose Vehicle (SPV) which
will set up the 60 MW waste heat recovery based power generation unit
in which the Company shall hold not less than 26% equity in SPL and 51%
of the power generated will be captively consumed by the units of the
Company. The proposed power plant is being set up at Malliveedu, L.Kota
Mandal, Vizianagaram District, Andhra Pradesh and the setting up of the
Power plant is in progress as per the schedule and the commercial
production is expected as per schedule in October 2012. During the year
under review, the Company has invested Rs. 16.69 crores in M/s.
Simhadri Power Limited by subscribing to 1,66,87,066 Equity shares of
Rs. 10/- each fully paid.
The acquisition of GSAL (India) Limited is in progress with the DRS
being filed with the Hon'ble BIFR for its consideration. Subject to
the approval of the Hon'ble BIFR, the proposal inter-alia is for merger
with the Company in line with the revised Scheme of Amalgamation
already approved by the members through Postal Ballot held on 23rd
March 2011.
DIVIDEND:
The Board has, subject to the approval of the Members at the ensuing
Annual General Meeting, recommended a dividend at the stipulated rate
of 10.25 % on 5,50,400 Preference Shares of Rs. 10/- each of the
Company for the year ended 31st March, 2011.
To conserve the resources for funding the expansion plans, the Board
has deemed it prudent not to recommend any dividend on the Equity
Shares of the Company for the year ended 31 st March, 2011.
TRANSFERTO RESERVES:
The Company transferred Rs. 100 Lakhs to the General Reserve out of the
amount available for appropriation and Rs. 44.69 crores is retained in
the Profit and Loss Account.
ISSUE OF SHARES AND SHARE WARRANTS:
During the year under review, the Company, on 23rd July, 2010 has
allotted 35,50,000 equity shares of Rs. 10/- each at a price of Rs.
37/- (Rupees Thirty Seven) per share and also 40,00,000 share warrants
at a price of Rs. 38/- (Rupees Thirty Eight) per warrant on
preferential basis to M/s Umashiv Garments Private Limited belonging to
Promoter Group pursuant to the members' approval obtained in the
Extraordinary General Meeting held on 9th July, 2010. Each of these
warrants is convertible into 1 (one) Equity Share of par value of Rs.
10/- each at the option of the Warrant holder within 18 months from the
date of their allotment.
During the current year 2011 -12, the Company, on 8th April, 2011 has
allotted 40,00,000 equity shares of the Company at a price of Rs. 28/-
(Rupees Twenty Nine) per share consequent upon conversion of share
warrants which were allotted on 23rd July 2010 on preferential basis to
M/s Umashiv Garments Private Limited (Promoter Group Company).
During the current year 2011-12, the Company, on 8th April, 2011 has
allotted 51,00,000 share warrants of the Company at a price of Rs. 45/-
(Rupees Forty Five) per share warrant on preferential basis to M/s
Umashiv Garments Private Limited (Promoter Group Company) pursuant to
the members' approval obtained through Postal Ballot. Each of these
warrants is convertible into 1 (one) Equity Share of par value of Rs.
10/- each at the option of the Warrant holder within a period of 18
months from the date of allotment (i.e latest by 7th October, 2012).
The amount raised through the issue was fully utilised for the proposed
expansion plans of the Company.
CAPITAL STRUCTURE:
During the year under review, the paid up equity share capital of the
Company was increased from Rs. 393,000,000 to Rs. 428,500,000
comprising of 42,850,000 Equity Shares of Rs. 10/- each with the issue
and allotment of 3,550,000 (Thirty five lakh fifty thousands) Equity
Shares of Rs. 10/- each of the Company on 23rd July, 2010.
During the Current year 2011-12, the paid up equity share capital of
the Company has increased from Rs. 428,500,000 to Rs. 468,500,000
comprising of 46,850,000 Equity Shares of Rs. 10/- each with the
allotment of 4,000,000 (Forty Lakhs) Equity Shares of Rs. 10/- each of
the Company consequent upon conversion of the share warrants on 8th
April, 2011,
DIRECTORS:
In accordance with the provisions of Companies Act, 1956 and the
Articles of Association of the Company, Mr. C. Siva Prasad and Mr. K.
Krishna Rao retire by rotation and being eligible, offer themselves for
re-appointment.
During the year under review, M/s Andhra Pradesh Development
Corporation (APIDC) has nominated Mr. V. Nagf Reddy, IAS as its nominee
in the place of Mr. Vinod Kumar Agrawal, IAS with effect from 20th
August, 2010. The Board placed on record its appreciation for the
services rendered by Mr. Vinod Kumar Agrawal.
During the current year 2011-12, M/s Andhra Pradesh Development
Corporation (APIDC) has nominated Mrs. Nilam Sawhney, IAS as its
nominee in the place of Mr. V. Nagi Reddy, IAS with effect from 7th
July, 2011.
FUTURE OUTLOOK:
The long term outlook of the Steel Industry continues to be promising
and challenging. With increased manufacturing base, your Company
expects to better the revenues with improved margins.
REPORT ON SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:
The Company has no subsidiaries for the year under review and hence the
report on subsidiaries and consolidated financial statements and the
statement pursuant to Section 212 of the Companies Act, 1956 are not
applicable to the Company.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors hereby confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures, if any;
(ii) they 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 that period;
(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis.
REPORT ONTHE CORPORATE GOVERNANCE:
Your Company continues to follow the principles of good Corporate
Governance. In pursuance of Clause 49 of the Listing Agreement entered
into with the Stock Exchanges, a separate report on Corporate
Governance along with a certificate from the Auditors of the Company
regarding its compliance is annexed herewith and forms part of this
Report.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis report as required under the
Listing agreement entered into with the Stock Exchanges is annexed
herewith and forms part of this Report.
AUDITORS and AUDITORS' REPORT:
M/s Pavuluri& Co, Chartered Accountants, the Company's Auditors will
retire at the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment and have expressed their willingness to act
as Auditors of the Company, if appointed, and have further confirmed
that the said appointment would be in conformity with the provisions of
Section 224 (1B) of the Companies Act, 1956.
The Notes to Accounts forming part of the financial statements are
self-explanatory and need no further explanation. There are no
qualifications or adverse remarks in the auditors' report which require
any clarification or explanation.
COST AUDITORS:
During the Current year 2011-12, in terms of Section 233B of the
Companies Act, 1956 and as per the directives of the Central Government
vide circular F. NO. 52/26/CAB-2010; dated the 3rd May, 2011, M/s DZR &
Co., Cost and Management Accountants, Hyderabad are appointed as the
Cost Auditors of the Company to conduct cost audit for the financial
year 2011 -12 subject to the approval of Central Government.
FIXED DEPOSITS:
The Company has not accepted any Fixed Deposits from the Public within
the meaning of Section 58-A, of the Companies Act, 1956 and the rules
made there under during the financial year under review and, as such,
no amount on account of principal or interest on Fixed Deposits was
outstanding as on 31st March, 2011.
PARTICULARS OF EMPLOYEES:
None of the employees of the Company is in receipt of remuneration for
whole/ part of the year exceeding the limits as prescribed under
Section 217(2A) of the Companies Act, 1956 read with Companies
(Particulars of Employees) Rules, 1975.
CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:
Information required under Section 217 (1) (e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in the report
of Board of Directors) Rules, 1988, as amended from time to time, forms
part of this report. However, as per the provisions of Section 219 (1)
(b) (iv), the report and the accounts are being sent to all members of
the Company excluding the information relating to conservation of
energy, technology absorption and foreign exchange earnings and outgo.
Any member interested in obtaining such particulars may inspect the
same in the Registered Office of the Company or write to the Company
Secretary for a copy.
INDUSTRIAL RELATIONS:
The Industrial relations have been cordial through out the year under
review and your Directors wish to place on record their sincere
appreciation for the dedication, commitment and teamwork of employees
at all levels, who have been instrumental in enabling your Company to
achieve higher growth levels during the year.
ACKNOWLEDGEMENTS:
Your Directors take this opportunity to express their appreciation for
the continued support and assistance received from the Company's
Bankers. The Directors also thank the Business Associates, Financial
Institutions and various Central and State Government Departments and
Government Authorities for their continued co-operation and support.
The Directors also wish to place on record their gratitude for the
continued support and cooperation received from the valued Customers,
Vendors, Members, and Investors of the Company and look forward to the
same in greater measure in the coming years.
For and on behalf of the Board of Directors
Place: Malliveedu, LKota (Mandal) B. SATISH KUMAR
Date:August 27, 2011 Chairman & Managing Director
Mar 31, 2010
The Directors take pleasure in presenting the Eleventh Annual Report
of the Company together with the Audited Statements of Accounts for the
year ended March 31, 2010.
FINANCIAL RESULTS:
The performance of the Company during 2008-2009 is summarised below:
(Rs. in Lakhs)
PARTICULARS 2009-2010 2008-2009
Total Income 69697.92 68385.05
Profit before Interest &
Depreciation 4655.89 3599.54
Less: Interest 3159.40 2525.22
Depreciation 318.11 282.79
Profit before Prior period items 1178.38 791.53
Less/(Add): Expenditure
pertaining to previous year 1.26 (3.73)
Profit before Tax 1177.12 795.26
Less: Provision for Tax
- Current Tax 176.57 175.00
- Fringe Benefit Tax - 9.00
- Deferred Tax 504.51 131.89
Profit after Tax 496.04 479.37
Profit brought forward from previous
year 2410.60 2347.87
Profit available for
Appropriation 2906.64 2827.24
Appropriations:
Proposed Dividend on Preference
Shares 5.64 5.64
Dividend on Equity
Shares - 329.11
Tax on Dividend as
above - 56.89
Transfer to General
Reserve 25.00 25.00
Balance carried
forward 2876.00 2410.60
Review of Operations:
The Company achieved a turnover of Rs.696.98 crores for the year ended
31 st March, 2010 as against Rs. 683.85 crores in the previous year.
The Company earned a Gross Profit of Rs. 46.56 crores before interest
and depreciation as against Rs. 35.99 crores in the previous year.
After deducting interest of Rs. 31.59 crores, providing a sum of Rs.
3.18 crores towards depreciation, tax provision of Rs. 1.76 crores and
after adjusting a sum of Rs. 5.04 crores towards deferred tax, the
operations resulted in a Net Profit of Rs. 4.96 crores as against Rs.
4.79 crores for the previous year.
Steel prices remained at low levels in the year under review also while
the input costs continued to remain high and consequently the increase
in profits was only marginal compared to previous year. Higher
provision for deferred tax, high interest costs also added to the
pressure on the margins.
During the year under review, the company continued with low level of
operations at the Steel Melting Division at Kothapeta unit as the input
costs remained high throughout the year. The Company has sold the
unutilised power produced from the 10 MW Power Plant.
The expansion plans of the Company i.e. setting up of 2,25,000 TPA
Rolling Mill and 2,40,000 SMS plant in the premises of GASL (India)
Limited are completed and the Rolling mill commenced commercial
production in March 2010. The billet unit is slated for commencement
of commercial production in August 2010.
The Company has promoted Simhadri Power Private Limited (SPPL) as an
SPV which will set up the 60 MW waste heat recovery based power
generation unit. The Company shall hold not less than 26% equity in
SPPL and 51% of the power generated will be captively consumed by the
units of the Company. The Company has entered into a memorandum of
understanding with SPPL to this effect. The proposed power plant is
being set up Maliveedu, L.Kota Mandal, Vizianagaram District, Andhra
Pradesh.
The acquisition of GSAL (India) Limited is in progress with DRS being
filed with the Honble BIFR for its consideration. Subject to the
approval of the Honble BIFR, the proposal inter-alia is for merger
with the Company in line with the Scheme of Amalgamation already
approved by the members in the Extraordinary General meeting held on
26th February 2010.
Dividend:
The Board has, subject to the approval of the Members at the ensuing
Annual General Meeting, recommended a dividend at the stipulated rate
of 10.25 % on 5,50,400 Preference Shares of Rs. 10/- each of the
Company for the year ended 31st March, 2010.
To conserve the resources for funding the expansion plans, the Board
has deemed it prudent not to recommend any dividend on the Equity
Shares of the Company for the year ended 31st March, 2010.
Issue of Shares and Shares Warrants:
During the year under review, the Company, on 21 st December, 2009 has
allotted 29,00,000 equity shares of the Company at a price of Rs. 35/-
(Rupees Thirty Five) per share on preferential basis to Others pursuant
to the members approval obtained in the Extraordinary General Meeting
held on 30th November, 2009.
The Company, on 23rd December, 2009 has also allotted 34,89,090 equity
shares of the Company at a price of Rs. 29/- (Rupees Twenty Nine) per
share consequent upon conversion of share warrants which were allotted
on 27th March 2009 on preferential basis to M/s Umashiv Garments
Private Limited (Promoter Group Company) pursuant to the members
approval obtained in the Extraordinary General Meeting held on 12th
March, 2009.
During the current year 2010-11, the Company, on 23rd July, 2010 has
allotted 35,50,000 equity shares of Rs. 10/- each at a price of Rs.
37/- (Rupees Thirty Seven) per share and also 40,00,000 share warrants
at a price of Rs. 38/- (Rupees Thirty Eight) per warrant on
preferential basis to Bodies Corporate belonging to Promoter Group
pursuant to the members approval obtained in the Extraordinary General
Meeting held on 9th July, 2010. Each of these warrants will be
convertible into 1 (one) Equity Share of par value of Rs.10/- each at
the option of the Warrant holder within 18 months from the date of
their allotment.
The amount raised through these issues was fully utilised for the
proposed and ongoing expansion plans of the Company.
Capital Structure:
During the year under review, the paid up equity share capital of the
Company was increased from Rs. 32,91,09,100 to Rs.39,30,00,000
comprising of 3,93,00,000 Equity Shares of Rs. 10/- each with the issue
and allotment of 29,00,000 (Twenty Nine Lakhs) Equity Shares of Rs.10/-
each of the Company on 21st December, 2009 and 34,89,090 (Thirty Four
Lakhs Eighty Nine Thousand Ninety) equity shares of Rs. 10/- each
consequent upon conversion of share warrants on 23rd December 2009.
During the Current year 2010-11, the paid up equity share capital of
the Company was increased from Rs. 39,30,00,000 to Rs. 42,85,00,000
comprising of 4,28,50,000 Equity Shares of Rs. 10/- each with the issue
and allotment of 35,50,000 (Thirty Five Lakhs Fifty Thousands) Equity
Shares of Rs.10/- each of the Company on 23rd July, 2010.
Directors:
In accordance with the provisions of Companies Act, 1956 and the
Articles of Association of the Company, Mr. V.V. Krishna Rao and Mr. R.
Ramachandra Rao retire by rotation and being eligible, offer themselves
for re-appointment.
Future Outlook:
The long term outlook of the Steel Industry continues to be promising
and challenging. With increased manufacturing base, your Company is
continuing its efforts on increase in the revenues with better margins.
Report on Subsidiary Companies and Consolidated Financial Statements:
The Company has no subsidiaries for the year under review and hence the
report on subsidiaries and consolidated financial statements and the
statement pursuant to Section 212 of the Companies Act, 1956 are not
applicable to the Company.
Auditors and Auditors Report:
M/s Pavuluri& Co, Chartered Accountants, the Companys Auditors will
retire at the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment and have expressed their willingness to act
as auditors of the Company, if appointed, and have further confirmed
that the said appointment would be in conformity with the provisions of
Section 224 (1B) of the Companies Act, 1956.
In respect of Item no (f) of the Auditors Report to the members of the
Company, the Directors wish to state that no provision has been made in
the accounts for doubtful debts amounting to Rs. 79.15 Lakhs (Previous
year Rs. 84.65 Lakhs) as the Management expects it to be recovered in
the due course.
Fixed Deposits:
The Company has not accepted any Fixed Deposits from the public during
the financial year under review and, as such, no amount on account of
principal or interest on Fixed Deposits was outstanding as on 31st
March, 2010.
Directors Responsibility Statement:
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors hereby confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures, if any;
(ii) they 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 that period;
(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis.
Corporate Governance:
In pursuance of Clause 49 of the Listing Agreement entered into with
the Stock Exchanges, a separate report on Corporate Governance along
with a certificate from the Auditors of the Company regarding its
compliance is annexed and forms part of this Report.
Management Discussion and Analysis:
The Management Discussion and Analysis report as required under the
Listing agreement entered into with the Stock Exchanges is annexed and
forms part of this Report.
Conservation of Energy, Technology Absorption and Foreign Exchange:
Information required under Section 217 (1) (e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in the report
of Board of Directors) Rules, 1988, as amended from time to time, forms
part of this report. However, as per the provisions of Section 219 (1)
(b) (iv), the report and the accounts are being sent to all members of
the Company excluding the information relating to conservation of
energy, technology absorption and foreign exchange earnings and outgo.
Any member interested in obtaining such particulars may inspect the
same in the Registered Office of the Company or write to the Company
Secretary for a copy.
Industrial Relations:
The Industrial relations have been cordial through out the year under
review and your Directors wish to place on record their sincere
appreciation for the dedication, commitment and teamwork of employees
at all levels, who have been instrumental in enabling your Company to
achieve higher growth levels during the year.
Particulars of Employees:
The information required under Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 is
given in the statement annexed hereto forming part of this report.
Acknowledgements:
Your Directors take this opportunity to express their appreciation for
the continued support and assistance received from the Companys
Bankers. The Directors also thank the Business Associates, Financial
Institutions and various Central and State Government Departments and
Government Authorities for their continued co-operation and support.
The Directors also wish to place on record their gratitude for the
continued support and cooperation received from the valued Customers,
Vendors, Members, and Investors of the Company and look forward to the
same in greater measure in the coming years.
For and on behalf of the Board of Directors
Place: Maliveedu, L.Kota (Mandal) B. SATISH KUMAR
Date:August 07,2010 Chairman & Managing Director
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