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Orissa Sponge Iron Directors Report, Orissa Sponge Reports by Directors
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Orissa Sponge Iron
BSE: 504864|ISIN: INE228D01013|SECTOR: Steel - Sponge Iron
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Directors Report Year End : Mar '13    « Mar 12
The Directors are pleased to report that after nearly 10 years of
 sustained effort, Forest Clearance for operating the Iron Ore Mines
 alloted to the Company has been granted on 3rd June, 2013 by the
 Ministry of Environment and Forest (MOEF). The Company will do its
 utmost to expedite compliance of all conditions and requirements
 leading to commencing mining operation as early as possible.
 Availability of Iron Ore from own mines will vastly improve production
 and profitability. Your Directors express their sincere gratitude to
 all concerned for bearing with the company during the difficult times.
 
 Your Directors submit the following report on Financial Results for the
 year ended 31 st March, 2013:
 
 Financial Results: 
 
                                        For the
                                        year ended     For the 
                                                       year ended
                                        31st March,    
                                         2013          31st March,
                                                       2012
                                       (Rs. in lacs)    (Rs. in lacs)
 
 Turnover                                3,808.73      10,055.62
 
 Profit / (Loss) before depreciation    (5,266.36)     (6,433.95)
 
 Depreciation (net of revaluation 
 adjustment)                             1,478.20       1,218.07
 
 Exceptional Items                                        530.91
  
 Profit / (Loss) before tax             (6,744.56)     (8,182.93)
 
 Tax for earlier years                                    190.79
 
 Provision for Deferred Tax - Assets     1,747.51       1,846.98
 
 Profit / (Loss) after tax              (4,997.05)     (6,526.74)
 
 Surplus/(Deficit) brought forward 
 from previous year                    (18,760.40)    (12,233.66)
 
 Surplus /(Deficit) carried forward 
 to Statement of Profit & Loss         (23,757.45)    (18,760.40)
 
 Performance
 
 The Company could operate the plant for only four months during the
 year. Nonavailability of iron ore of required quality and quantity at
 affordable prices and the continuing losses left the Company with no
 alternative but to shut down plant operations from 17th July, 2012 to
 reduce rapid erosion of net worth.
 
 Production of sponge iron for the year was 12,430 MT as compared to
 42,872 MT recorded last year. Revenue from sponge sales and power sales
 dropped to Rs. 3,897 lacs and Rs. 165 lacs respectively. Billet Plant
 was not operated during the year. The Company suffered losses for this
 year also.
 
 Subsidiary Company
 
 Bamra Iron & Steel Company (India) Ltd. is a wholly owned subsidiary of
 the Company. Since the said Company has not started its operations as
 the project is under implementation, consolidated financial statement
 has not been prepared.
 
 Dividend
 
 Your Directors regret their inability to recommend any dividend for the
 year in view of losses.
 
 Project & Engineering Division
 
 The Project and Engineering (P&E) division is continuing its work of
 supplying process know-how and basic engineering to several existing
 sponge iron units as well as new units who call for such services. It
 has widened its network to include consultancy and supervisory services
 for renovation, up- gradation and re-commissioning of the mini steel
 plants with Sponge Iron, Power, Steel Mill Shop and Rolling Mills. It
 also takes up assignment for carrying out technical audit of Company''s
 plant health, process health, quality, safety, energy efficiency and
 environment protection on a regular basis and recommeding corrective
 measures.
 
 Community Development
 
 In line with your Company''s philosophy, your Company continues to
 pursue a comprehensive programme of Community Development covering
 education, immunization, agricultural & horticultural extension, mother
 & child care etc. directly and also through OSIL TRFI Community
 Services Trust.
 
 Quality
 
 Your Company continues to follow the Quality Management System for
 production and supply of Sponge Iron and Steel Billets and possesses
 Certificate of Registration of ISO 9001:2008 from British Certification
 Inc. Your Company is proud of maintaining the clean environment in the
 vicinity of the Plant and your Company''s Environmental Management
 System applicable to production and supply of Sponge Iron and Steel
 Billets has been certified under ISO 14001:2004 by British
 Certification Inc. The Occupational Health and Safety Management System
 of your Company has also been certified by the same Agency and your
 Company complies with the requirements of OHSAS 18001:2007.  Listing
 Fees
 
 The annual listing fees have been paid to the Stock Exchanges where the
 Company''s shares are listed. Your Company''s application to National
 Stock
 
 Exchange (NSE) for listing and Calcutta Stock Exchanges for de-listing
 is pending before the respective Exchanges.
 
 Reconciliation of Share Capital
 
 In compliance of the directions of Securities and Exchange Board of
 India (SEBI), Reconciliation of Share Capital is being carried out
 quarterly by a
 
 Practising Company Secretary. The findings of the Reconciliation of
 Share Capital were satisfactory.
 
 Directors
 
 Mr. G. Mathi Vathanan, IAS was nominated by Industrial Promotion and
 Investment Corporation of Odisha Limited (IPICOL) in place of Mr. C. ].
 
 Venugopal, IAS as Director cum Chairman. Accordingly he was appointed
 by the Board as Additional Director to hold the position of Director
 and
 
 Chairman on the Board with effect from 03.10.2012. Mr. S. H. Gupta was
 nominated by Torsteel Research Foundation in India (TRFI) on the Board.
 
 Accordingly he was appointed as Additional Director with effect from
 10.01.2013. Having been appointed as Additional Directors, they vacate
 office conclusion of the ensuing Annual General Meeting. Notices under
 Section 257 of the Companies Act, 1956 have been received from some
 members for appointing them as Directors at the ensuing Annual General
 Meeting.
 
 Mr. C. J. Venugopal, IAS was withdrawn from the Board as Director and
 Chairman by IPICOL with effect from 03.10.2012. Mr. M. A. Khan was
 withdrawn from the Board as Director byTRFI with effect from
 10.01.2013. Mr. S. N. Nayak resigned as Director from the Board having
 been withdrawn as Director on the Board by IPICOL vide letter dated
 10.05.2013.
 
 Your Directors place on record its deep appreciation of the valuable
 guidance and services of Mr. C. ]. Venugopal, IAS as Director cum
 Chairman,
 
 Mr. M. A. Khan and Mr. S. N. Nayak as Directors during their tenure of
 office.
 
 Mr. S. K. Khetan and Mr. B. K. Sarkar retire by rotation at the ensuing
 Annual General Meeting and being eligible offer themselves for re
 appointment.
 
 Dr. P. K. Mohanty was re appointed as Vice Chairman and Managing
 Director by the Board for a period of three years with effect from
 23.06.2013 subject to all necessary approvals.
 
 Mr. Munir Mohanty was re appointed as Whole-time Director by the Board
 for a period of five years with effect from 31.05.2013 subject to all
 necessary approvals.
 
 Proposal for re appointment of Dr. P. K. Mohanty as Vice Chairman and
 Managing Director and Mr. Munir Mohanty as Whole-time Director are
 included in the Notice of the ensuing Annual General Meeting for the
 approval of Shareholders.  Your Directors recommend all the
 appointments and re appointments as mentioned above for approval of the
 Shareholders.
 
 Conservation of energy, technology absorption, foreign exchange earning
 and outgo
 
 The 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 are set out in Annexure,
 which forms part of this Report.
 
 Particulars of Employees
 
 There were no employees drawing the requisite remuneration whose names
 are required to be disclosed as required under sub-section 2A of
 Section
 
 217 of the Companies Act, 1956 read with the Companies (Particulars of
 Employees) Rules 1975 as amended from time to time.
 
 Industrial Relations
 
 The Company was constrained to declare lockout of its plant with effect
 from 1410.2012 following illegal strike by the Workers Union with
 effect from 12.10.2012, which is still continuing. Deliberations and
 negotiations are going on with the Union for arriving at an amicable
 settlement soon.
 
 Directors'' Responsibility Statement
 
 In accordance with the provisions of sub-section 2AA of Section 217 of
 the Companies Act, 1956, your Directors state that:
 
 (a) In the preparation of the Annual Accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures.
 
 (b) Accounting policies selected are applied consistently. Judgments
 and estimates that are reasonable and prudent are made, so as to give a
 true and fair view of the state of affairs of the Company as on 31st
 March, 2013 and of the Profit/ Loss of the Company for the year ended
 on that date.
 
 (c) Proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities.
 
 (d) The Accounts for the financial year ended 31st March, 2013 have
 been prepared on a ''going concern'' basis.  Auditors
 
 The Statutory Auditors, M/s L. N. More & Co., Chartered Accountants,
 Cuttack, will retire at the conclusion of the ensuing Annual General
 Meeting and being eligible offer themselves for re-appointment.
 
 The Audit Committee and the Board has recommended their re-appointment.
 The necessary resolution is being placed before the shareholders for
 approval. The Company has received confirmation that their appointment
 will be within the limits prescribed under Section 224 (1B) of the
 Companies Act, 1956.
 
 Auditors'' Report
 
 There are no qualifications or adverse remarks in the Auditors'' Report
 which require any clarification/explanation. The Notes on Accounts
 forming part of the financial statements are self-explanatory and needs
 no further explanation.  Cost Auditors
 
 Pursuant to the provision of Section 233B of the Companies Act, 1956
 and The Companies (Cost Accounting Records) Rules, 2011, M/s. B. Ray &
 
 Associates, Cost Accountants, Kolkata has been re-appointed as Cost
 Auditor of the Company for the year 2013-1 k to conduct audit of cost
 records maintained by the Company.
 
 Corporate Governance
 
 Pursuant to Clause 49 of the Listing Agreement with the Stock
 Exchanges, the following documents form part of the Annual Report:
 
 (i) Management Discussion and Analysis
 
 (ii) Report on Corporate Governance along with Certificate for
 compliance of conditions of Corporate Governance
 
 (iii) Vice-Chairman & Managing Director''s declaration regarding
 compliance of code of conduct by board members and senior management
 personnel.  Acknowledgement and Appreciation
 
 The Directors acknowledge with gratitude the co-operation extended by
 Indian Renewable Energy Development Agency Ltd. (IREDA), Banks, State
 Government, Suppliers, Customers and Shareholders and solicit their
 continued support. The Directors also wish to place on record their
 sincere appreciation of the dedicated services put in by the Company''s
 workers, staff and executives under difficult conditions.
 
                           For and on behalf of the Board
 
                           Munir Mohanty, Director
 
 Place: Bhubaneswar        Dr. P. K. Mohanty,
 
                           Vice Chairman
 
 Dated: 13th August, 2013  & Managing Director
Source : Dion Global Solutions Limited
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