As you are aware your Company made a steady growth in the last 20 years
of its existence and maintained a consistence record of building up the
capacities and increase in the revenues of the Company. Transformation
Sponge Iron player to a Steel player was possible with the inspiration
and support of all the Shareholders and lenders.
The year 2014-15 unraveled unexpected series of events which were
beyond our scope of advance preparation and hit the Company from many
First came the decision of Hon''ble Supreme Court of India to
de-allocate all Coal mines in the Country, which included fve mines in
the Monnet forte. It included an operating mine closer to our operation
in Raigarh, which was providing a big strength to our operations in
terms of stable supply, quality of coal and distinct pricing advantage.
Two other mines, which were advance at the stage of approvals, one for
our steel plant and another for our upcoming power plant at Angul also
The year also saw steep decline in the demand and pricing of Steel
product across the board Iron Ore the principal RM for steel declined
in prices across the globe but actually became scare in availability
and increased in prices in India on account of closure of many mine in
the Iron Ore hub of State of Orissa. Indian industry faced high Iron
Ore prices against declining selling prices of end products at least
till December, 2014. The year ended with huge challenges on all fronts.
The performance of Company drew no comfort with a loss of Rs.795
Crores, which includes one-time loss of Rs.252 Crores. On account of
one time Royalty payment on Coal extracted in the last 10 years of
operations of Mines, as per the order of the Hon''bal Supreme Court.
The current conditions in the industry continue to be challenging, the
demand for steel is not showing any sign of recovery which calls for a
new orientation and approach to run the business of the company. We
have recently embarked on major cost cutting exercise and drive,
besides constantly focusing on the effciency of operations to
rationalize production cost to realign the operation of plant from time
to time according to the market conditions.
I believe the dynamics of Steel industry have under gone a dramatic
change which calls for an engagement with the lenders to re-organize
the debt profle of the company with a view to establish a viable and
sustainable level of debt. The exercise is being initiated at right
earnest by soliciting the support of lenders within regulatory
permissions to achieve debt rationalization and asset classification.
The Company will keep the Shareholder posted with the developments and
assure you my commitment to riggle the Company out of the current
Chairman & Managing Director