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Orissa Sponge Iron

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Directors Report Year End : Mar '15    « Mar 14
The Directors submit the following report on Financial Results for the
 year ended 31st March, 201S:
 
 Financial Results:         For the year ended       For the year ended
                             31 st March, 2015        31 st March. 2014
                                 (Rs, in lacs)            (Rs, in lacs)
 
 Turnover                              259.42                    83.76
 
 Profit / (Loss) before 
 depreciation                       (8,748.89)               (6,685.52)
 
 Depreciation (net of 
 revaluation adjustment)               940.76                   228.92
 
 Profit / (Loss) before tax         (9,689.65)               (6,914,44)
 
 Provision for Deferred 
 Tax - Assets                        1,676.54                2,785.19
 
 Profit/(Loss) after tax            (8,013.11)              (4,129.25)
 
 Surplus Deficit) brought 
 forward from previous year        (27,886.70)             (23,757.45)
 
 Adjustment relating to 
 expired Fixed Assets                 (172.90)                 -
 
 Surplus /(Deficit) carried 
 forward to Statement of 
 Profit and Loss                   (36,072.71)             (27,886.70)
 
 State of Affairs
 
 The Company suspended production in )tune 2012 due to unviable cost
 economics and continuing losses. The loss for the financial your
 2014-15 amount to 7 9.689.65 lacs. In the present scenario resumption
 of plant operations and viability of the Company is largely dependent
 on availability of raw material from captive sources.
 
 The net worth of the Company has been fully eroded as on 31 st March,
 2015 under the applicable provisions of the Sick Industrial Companies
 (Special Provisions) Act, 1985 (SlCA). The Company shall take measures
 to file the application for registration as sick unit in terms of the
 provisions of SlCA to the Board for Industrial and Financial
 Reconstruction (B1FR) within the stipulated time.
 
 State Bank of India an behalf of itself. Bank of India and Punjab
 National Bank have issued Possession Notice dated 24.04.201 5 under
 Section 1 3(4) of the Securitization and Reconstruction of Financial
 Assets and Enforcement of Security Interest Act. 2002 (SARFAESI) in
 respect of the properties described in the notice. Indian Renewable
 Energy Development Agency Limited (IREDA) has also issued notice under
 Section 13(2) of SARFAESI.
 
 In addition. State Bank of India and Edelweiss Asset Reconstruction
 Company Limited has also filed application under Section 19(1) of the
 Recovery of Debts due to Banks and Financial Institutions Act, 1993
 before the Debt Recovery Tribunal (DRT).
 
 The Company has mode representation before all the lenders explaining
 the reasons for the current state of affairs and the action plan for
 revival of the Company in the near future. The Company is hopeful of
 receiving favorable response from the lenders for a comprehensive debt
 restructuring and working capital facility in view of the iron ore
 mines allotted to the Company which on commencement of mining
 operations has the potential to turnaround the Company into a
 profitable unit in the near future.
 
 The Project and Engineering Division earned revenue ofRs, 175.37 lacs
 from sale of technology during the year.
 
 Dividend and Reserves
 
 Your Directors regret their inability to recommend any dividend for the
 year in view of losses.
 
 The balance m Reserves and Surplus (Net) stands at Rs, 204.38 lacs as
 on 31 st March, 2015. For the year under review there Is no proposal to
 transfer any amount to Reserves in view of losses.
 
 Future Outlook
 
 The Company was allotted Iron Ore Mines by the Central Government and
 the State Government of Odisha. The Company has received all approvals
 and clearances including Stage ] Clearance from the Ministry of
 Environment and Forest and Compliance Certificate under the Scheduled
 Tribes and Other Traditional Dwellers (Recognition of Forest Rights
 Act) 2006 and are presently awaiting Stage II Clearance on receipt of
 which lease agreements could be executed for commencement of mining
 operations.
 
 Availability of iron ore from captive mines will permit production at
 higher capacity and significantly improve profitability of the Company.
 
 Changes in Capital Structure - Issue of Preference Shares
 
 The Company issued and allotted 10% Cumulative Non Convertible
 Redeemable Preference Shares amounting to Rs, 20croreson private
 placement during the year. These Shares are redeemable on the expiry of
 12 years from the date of allotment
 
 Transfer of Unclaimed Dividend to Investor Education & Protection Fund
 
 The Company does not have any unclaimed dividend for transfer to
 Investor Education & Protection Fund.
 
 Deposits
 
 The Company has not accepted deposit within the meaning defined under
 the Companies Act, 2013.
 
 Project & Engineering Division
 
 The activities of the Project & Engineering Division has been closed
 with effect from 1st September, 2015.
 
 Subsidiary Company
 
 Bamra Iron & Steel Company (Indio) Ltd. has been struck off from the
 Register of Companies as per the Order issued by the Registrar of
 Companies, Odessa. Consequently, the Company has no subsidiary on the
 reporting dote.
 
 Directors and Key Managerial Personnel
 
 (1) Independent Directors
 
 At the Annual General Meeting of the Company held on 26th September,
 2014, the members of the Company appointed Mr, S. K. Kheton (DIN
 01297082), Mr. B. K. Sarkar (DIN 00670952) and Mr. A. K. Mukherjee (DIN
 00047844) as Independent Directors for a term of 5 years from the date
 of appointment As per the terms of appointment the Independent
 Directors shall not retire by rotation.
 
 (2) Nominee Directors
 
 The nomination of Mr. G. Mathivathanan (DIN 01203901) as Chairman &
 Director on the Board of the Company was withdrawn by IPICOL on
 26.12.2014. IPICOL also withdrew the nomination of Mr. P. C, Mohanty
 (DIN 05211242) as Director on the Board on 06.04.2015.
 
 
 Mr. S- K. Kar (DIN 07220975) was nominated by I PICO L and appointed as
 Additional Director at the Board Meeting held on 29-08-2015 on the
 recommendation of the Nomination and Remuneration Committee. Having
 been appointed as Additional Director he vacates his office at the
 ensuing Annual General Meeting, Proposal for his reappointment has been
 received from a member and accordingly the Resolution for
 re-appointment of Mr, S- K. Kar as Director is being placed before the
 ensuing Annual General Meeting for approval.
 
 Ms. Sonia Jabbar(DIN 01222834) was nominated by Torsteel Research
 Foundation in India (TRFI) as Additional Director at the Board Meeting
 held on 29.08.2015 on the recommendation of the Nomination and
 Remuneration Committee. Having been appointed as Additional Director
 she vacates her office at the ensuing Annual General Meeting. Proposal
 for her re-appointment has been received from a member and accordingly
 the Resolution for re-appointment of Ms. Sonia Jabbar as Woman Director
 is being placed before the ensuing Annual General Meeting for approval.
 
 The nomination of Mr. S. H. Gupta, as Director was withdrawn by TRFI on
 01.04.2015 due to operation of Section 167(1 )[bj of the Companies Act,
 2013
 
 The Company has received declarations from all the Independent
 Directors of the Company confirming that they meet the criteria of
 independence as laid down in 5ection 149(6) of the Companies Act, 2013
 and Clause 49 of the Listing Agreement,
 
 (3) Retirement by Rotation
 
 There is no Director liable to retire by rotation at the ensuing Annual
 General Meeting,
 
 (4) Key Managerial Personnel
 
 Mr. S. Ramakri5hnan retired as CFO & Company Secretary on 31.01.201S.
 Mr. Munir Mohanty. Whole time Director was given additional
 responsibility of CFO at the meeting held on 13.02.2015.
 
 Meetings
 
 (1) Meeting of the Board of Directors
 
 During the financial year ended 31 st March, 2015, four meetings were
 held the details of which are given in the Corporate Governance Report.
 The Intervening gap between the meetings was within the period
 prescribed under the Companies Act, 2013.
 
 (2) Meeting of the Independent Directors
 
 In terms of Schedule IV of the Companies Act, 201 3 and revised Clause
 49 of the Listing Agreement a meeting of the Independent Directors was
 held on 9th February, 2015, wherein the performance of the non
 independent Directors including the Chairman and the Board as a whale
 was reviewed.  The Independent Directors also assessed the quality,
 quantity and timeliness of flow of information between the Company
 management and the Board of Directors of the Company.
 
 Corporate Governance
 
 (1) Directors'' Responsibility Statement
 
 Pursuant to Section 134(3)(cJ and 134(5) of the Companies Act, 2013,
 the Directors hereby confirm that:
 
 a) In the preparation of the annual accounts for the year ended 31 st
 March, 2015, the applicable accounting standards have been followed
 along with proper explanation relating to material departures from the
 standards.
 
 b) Accounting policies were selected are applied consistently.
 Judgments and estimates that are reasonable and prudent are mode, so as
 to give a true and fair view of the state of affairs of the Company as
 at 31st March, 2015 and of the 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 this
 Act for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities.
 
 d) The Accounts for the financial year ended 31 st March, 201 5 have
 heed prepared on a ''going concern'' basis.
 
 e) The laid down internal financial controls to be followed by the
 Company ore adequate and are operating effectively.
 
 f) Proper system devised by the Company to ensure compliance with the
 provisions of all applicable laws were adequate and ore operating
 effectively.
 
 (2) Management Discussion and Analysis
 
 Management Discussion and Analysis for the year under review as
 stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchanges Is presented In a separate section forming part of this
 Report,
 
 (3) Corporate Governance Report
 
 The Report on Corporate Governance as stipulated in douse 49 of the
 Listing Agreement with the Stock Exchanges is presented in a separate
 section and forms part of this report
 
 A Certificate from Mys. A. K. Labh & Co., Practicing Company
 Secretaries confirming compliance with the conditions of Corporate
 Governance as stipulated under the aforesaid clause 49 is attached to
 the Report on Corporate Governance.
 
 W CEO & CFO Certification
 
 As required under Clause 49 of the Listing Agreement, the CEO & CFO
 certification has been submitted to the Board and a copy thereof Is
 contained elsewhere in this Annual Report.
 
 (5) Board Evaluation
 
 The manner In which the Board evaluates Its own performance and also
 the performance of the Committee and Individual Directors are dealt in
 detail in the Report on Corporate Governance farming part of this
 Report.  Related Parties
 
 None of the transaction with related parties is in the nature of
 contract or arrangement but in the nature of discharge of obligation by
 the concerned related parties. All such transactions including loans,
 guarantee or investment, wherever application are disclosed in para 36
 of the Notes on Accounts and forms part of this Report.
 
 There are no materially significant related party transaction made by
 the Company with Promoters, Directors, Key Managerial Personnel or
 other designated persons which may have o potential conflict with the
 interest of the Company at large.
 
 
 Committees of the Board
 
 (1) Audit Committee
 
 The composition and terms of reference of the Audit Committee have been
 furnished in the Corporate Governance Report forming port of this
 Report.  There has been no instance where the Board has not accepted
 the recommendation of the Audit Committee.
 
 (2) Nomination and Remuneration Committee
 
 The composition and terms of reference of the Nomination and
 Remuneration Committee have been furnished in the Corporate Governance
 Report forming port of this Report.
 
 (3) Stakeholders Relationship Committee
 
 The composition and terms of reference of the Stakeholders Relationship
 Committee have been furnished in the Corporate Governance Report
 forming part of this Report.
 
 (4) Ethics Committee
 
 The composition and terms of reference of the Ethics Committee hove
 been furnished In the Corporate Governance Report forming part of this
 Report.
 
 (5) Risk Management Committee
 
 The composition and terms of reference of the Risk Management Committee
 have been furnished in the Corporate Governance Report forming part of
 this Report.  Policies and Codes
 
 (1) Remuneration Policy
 
 The Policy oF the Company on appointment and remuneration of Directors,
 Key Managerial Personnel and Senior Management Personnel including
 criteria for determining qualification, positive attributes,
 independence of a Director and other matters provided in Section 17S(3)
 of the Companies Act, 2013, is dealt in detail in the Report on
 Corporate Governance.
 
 (2) Whistle Blowers Policy
 
 The Company has formed a Whistle Blower Policy/Vigil Mechanism as
 required under Section 177 of the Companies Act, 2013 and Clause 49 of
 the Listing Agreement. A Vigil (Whistle Blower) Mechanism provides a
 channel to the Directors and Employees to report their concerns about
 unethical behavior, actual or suspected fraud or violation of the code
 of conduct business ethics that provides for adequate safeguards
 against victimization of the director(s) and employee(s) who avail of
 the mechanism. No director/employee have been denied access to the
 Chairman of the Audit Committee.  The so id Policy may be referred to
 at the Company''s Website.
 
 (3) Risk Management Policy
 
 The process of identification and evaluation of various risks inherent
 in the business environment and the operations of the Company and
 initiation of appropriate measures for prevention and/or mitigation of
 the same are dealt with by the concerned operational heads under the
 overall supervision of the Managing Director of the Company. The Risk
 Management Committee periodically reviews the adequacy and efficacy of
 the overall risk management system.
 
 (4) Policy on prevention of Sexual Harassment
 
 The Company has in place an Anti Sexual Harassment Policy in line with
 the requirements of the Sexual Harassment of Woman at the Workplace
 (Prevention, Prohibition & Redressal) Act, 201 3 covering all employees
 of the Company. Internal Complaints Committee has been set up for the
 purpose. No complaint was received during the year. The Audit Committee
 periodically reviews the adequacy of the system on prevention of sexual
 harassment.
 
 (5) Policy on Corporate Social Responsibility
 
 The provisions of Section 1 35 of the Companies Act, 201 3 is not
 applicable to the Company. However the internal CSR Policy encompasses
 the Campony''s philosophy for glving bock to the socletyos a
 corporo.tecitizen.CSR activities in the Company are carried through
 OSltTRFl Community Services Trust
 
 (6) Policy on determining Material Subsidiaries
 
 As the Company has no subsidiary, the requirement of Clause 49(V) of
 the amended Listing Agreement is not applicable to the Company.
 
 (7) Policy on Materiality of and Dealing with Related Party
 Transactions
 
 As required under Clause 49(Vnf) of the amended Listing Agreement the
 Company has formulated a Policy on Materiality of and Dealing with
 Related Party Transaction and the same has been put up on the Company''s
 Website.
 
 (8) Code of Conduct
 
 Code of conduct for Prevention of Insider Trading and Code of Corporate
 Disclosure Practices for prevention of Insider Trading
 
 In compliance with the provisions of SEB1 (Prohibition of Insider
 Trading), Regulations, 1992, as amended from time to time, the Company
 has in place a comprehensive code of conduct for its Directors and
 Senior Management Officers, which lays down guidelines and procedures
 to be followed and disclosures to be made, while dealing with shares of
 the Company so as to preserve the confidentiality and prevent misuse of
 unpublished price sensitive information by Directors and specified
 employees of the Company. This policy also provides for periodical
 disclosures from designated employees as well as pre clearance of
 transactions by such persons so that they may not use their position or
 knowledge of the Company to gain personal benefit or to provide benefit
 to any third party.
 
 Corporate Social Responsibility
 
 Your Company provided financial assistance of Rs. 0.20 lakhs to Green
 Field School, located in Palaspnga, Dist. Keonjhar, Odisha for Children
 education and Rs. 0.56 lakhs to 03IL TRF1 Community Services Trust for
 Community Developments. Your Company regrets its inability to provide
 the desired support for CSR activities due to financial losses suffered
 by the Company.
 
 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 JS014001:2004 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
 compiles with the requirements of OHSA518001:20O7.  
 
 Listing Fees
 
 The annual listing fees could not be plod to the Stock Exchanges where
 the Company''s shares are listed due to financial constraints. 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 (SEEI), Reconciliation of Share Capital is being carried out
 quarterly by a Practicing Company Secretary. The findings of the
 Reconciliation of Share Capital were satisfactory,
 
 Conservation of energy, technology absorption, foreign exchange
 earnings and outgo
 
 Since the plant operations are closed from )June 2012, no figureRs, are
 available for conservation of energy, technology absorption etc. as
 required under the provisions of the Act read with Rule 8(3) of the
 Companies (Accounts) Rules, 2014, The relevant Information applicable
 to the Company under these circumstances are given below:
 
 (1) During the year the Company has purchased electricity 751200
 (764880} units from NESCO amounting to T 55.71 lacs (Rs, 72.47 Iocs)
 
 (2) During the year the Company has earned foreign exchange of Rs,
 132.40 lacs (Rs, 71,06 lacs) by sale of technology.  Particulars of
 Employees
 
 There were no employees drawing the requisite remuneration whose names
 are required to be disclosed as required under Section 197 of the
 Companies
 
 Act, 2013 read with Rule S(2) of the Companies (Appointment and
 Remuneration of Managerial Personnel) Rules, 2014.
 
 Industrial Relations
 
 Industrial relations have by and large remained cordial during the
 year.  Audit/Audi tars
 
 (1) Statutory Auditors
 
 The Statutory Auditors, M/s L. N More & Co., Chartered Accountants,
 Cuttack, retires at the conclusion of the ensuing Annual General
 Meeting and have expressed their unwillingness for reappointment as
 Auditors for the next financial year.
 
 The Audit Committee and the Board has recommended the appointment of
 M/s. A. K. Bhardwaj & Company, Chartered Accountants for approval of
 the shareholders at ensuing Annual General Meeting. The Company has
 received confirmation from them to the effect that they satisfy the
 criteria provided in Section 1 39(1) of the Companies Act, 201 3 and
 their appointment would be within the limits prescribed under Section
 141 (3)(g) of the Companies Act, 2013.
 
 (2) Secretarial Auditors
 
 Pursuant to the provisions of Section 204 of the Companies Act, 2013
 and the Companies (Appointment and Remunerations of Managerial
 Personnel) Rule, 2014, the Company has appointed Ms. Disha Dugar,
 Practicing Company Secretary to conduct Secretarial Audit for the
 financial year ended 31 st March, 2015, The Report on Secretarial Audit
 is provided separately and forms part of this Report.
 
 (3) Cast Auditors
 
 Pursuant to the provision of Section 148 of the Companies Act. 2013 and
 the Com ponies {Audit ond Auditors) Rules, 2014, M/s. B. Roy &
 Associates, Cost Accountants, Kolkata was re-appointed as Cost Auditor
 of the Company for the year 2014-15 to conduct audit of cost records
 maintained by the Company, Auditors'' Report
 
 Explanation to the Statutory Auditors'' Report card Secrc-taricl
 Aldiccre; '' Report pursuant: to Section 1 34(3)(f) of the Companies
 Act, 201 3 is given in the Annexure 1 forming part of the Directors
 Report.
 
 Extract of Annual Return
 
 The extract of the Annual Return in Form MGT 9 is provided in the
 Annexure If and forms part of this Report.
 
 Significant and Material Orders Passed by the Regulator Courts
 Tribunals
 
 There are no significant material orders passed by the
 Regulators/Courts Tribunals which would impact the going concern status
 of the Company and Its future operations.
 
 Litigations
 
 Particulars of litigation agonist the Company ore given in Para 30Aof
 Notes on Financial Statements.
 
 Acknowledgement and Appreciation
 
 The Directors acknowledge with gratitude the co-operation extended by
 Indian Renewable Energy Development Agency Limited, Edelweiss Asset
 Construction Company Limited. Banks. State Government. Local
 Administration, 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 Mohonty, Director 
 
 Place: Kolkata                      Dr. P. K. Mohanty, Vice Chairman
 
 Dated: 2nd Januaryr 2016                         & Managing Director
Source : Dion Global Solutions Limited
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