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Sharda Ispat Ltd.

BSE: 513548 | NSE: | Series: NA | ISIN: INE385M01012 | SECTOR: Steel - Medium & Small

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Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2006

Director’s Report

To.

The Members of SHARDAISPAT LIMITED

Your Directors have pleasure in presenting the 54th Board''s Report of your Company together with the Audited Statement of Accounts and the Auditors'' Report of your company for the financial year ended, 31stMarch,2015.

FINANCIAL HIGHLIGHTS

_ (Amt. in Rs.)

Sr.

Particulars

Standalone

No.

2014-2015

2013-2014

1

Gross Income

57.22,16,143

74,36,29,849

2.

Profit Before Interest and Depreciation

2,71,67,589

2,29,28,825

3.

Less: Finance Charges

1.52,34,893

1.52,30,041

4.

Gross Profit

1,19,32,696

76,98,784

5.

Less: Provision for Depreciation

18,86,403

74,11,208

6.

Net Profit Before Tax

1,00,46,293

2,87,576

7.

Less: Provision for Tax

a) Current Tax

35.50,000

20,50,000

b) Income Tax (earlier years)

29,236

88,133

c) Deferred Tax

(13,95,484)

(20,67,535)

8.

Net Profit After Tax

78,62,541

2,16,978

9.

''Balance of Profit/(Loss) brought forward

(19,27,805)

(21,44,783)

10.

Effect of Adjustment due to Transition position of schedule II of Companies Act 2013

(1,14,16.145)

''

11.

Surplus earned to Balance Sheet

(54,81,409)

(19,27,805)

STATE OF COMPANY''S AFFAIRS AND FUTURE OUTLOOK

During the financial year 2014-2015 India has witnessed a significant growth in its economy despite slowdown in the global economy. Nevertheless, the cheaper imports of steel products from the China and Russia posed the major problem for the World''s as well as domestic steel industry. Consequently, the slackened demand for the domestic products amid inflation and higher interest rates resulted into subdued sales of the Company''s products.

During the period under review, the Company posted the sales turnover, of Rs. 6169.22 Lacs (Own Unit Rs. 6124.30 Lacs and Conversion / Service Rs. 44.92 Lacs) as against Rs. 8284.83 Lacs (Own Unit Rs. 8242.52 Lacs and Conversion / Service Rs. 42.30 Lacs) during the previous year. The total expenditure including cost of interest and provision for depreciation is Rs. 5621.70 Lacs and net profit before tax Rs. 100.46 Lacs. After adjusting Rs. 21.84 Lacs towards tax expenses the Company earned net profit after tax of Rs. 78.62 Lacs as against Rs. 2.17 Lacs during the last year. As can be seen, despite the adversities the Company recorded marginal profit for saving in cost of raw materials.

As judged from the financial results of the first quarter of the financial year ending 31.03.2016 the performance of the Company would be satisfactory if the market conditions turns out to be favorable during the balance period of the financial year2015-2016.

DIVIDEND

In view of meeting out working capital requirements of the Company in the ensuing year, your Directors express their inability to recommend any dividend for this year.

AMOUNTS TRANSFERRED TO RESERVES

Your Directors decided to transfer the amount of Rs. 78,62,541/- to the general reserves.

INFORMATION ABOUT SUBSIDIARY/JV/ASSOCIATE COMPANY

The Company has no Subsidiary/Associate/Joint venture Company (ies)in terms of the provisions of the Companies Act, 2013.

TRANSFEROF UNCLAIMED DIVIDENDTO INVESTOR EDUCATION AND PROTECTION FUND

There were no amounts including unclaimed dividend which were required to be transferred, to the Investor Education & Protection Fund by the Company.

MATERIAL CHANGES AND COMMITMENTS

Your Directors confirm that there were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return as required under section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form MGT-9 is annexed herewith for your kind perusal and information. (Annexure -1)

MEETINGS OF THE BOARD OF DIRECTORS

During the Financial Year 2014-15, the Board met 8 (Eight) times on the following dates.

S.No

Date

Board Strength

No. of Directors present

1

30.05.2014

5

5

2

10.07.2014

5

3

3

11.08.2014

5

5

4

14.11.2014

5

5

5

01.12.2014

5

5

6

28.01.2015

5

5

7

12.02.2015

5

5

*8

31.03.2015

5

3

5

(Note: - This Meeting is only for Non-Executive & Independent Directors)

DIRECTORS'' RESPONSIBILITYSTATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms that-

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures,

b) Appropriate accounting policies have been selected and applied them consistently and have 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 31.03.2015.

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act.2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities,

d) The directors had prepared the annual accounts on a going concern basis; and

e) Proper internal financial controls had laid down and that internal financial controls are adequate and were operating effectively

AUDITORS AND REPORT THEREON

The Auditors Report and its Annexure are self-explanatory. M/s. Loya Bagri & Co., gartered Accountants, Nagpur retire as Statutory Auditors of the Company at the conclusion of 54 Annual General Meeting and are eligible for re-appointment.

There are no qualifications or adverse remarks in the Auditors Report which require any clarification explanation. The Notes on financial statements are self-explanatory, and needs no further explanation.

Further, the Auditors'' Report for the financial year ended, 31st March, 2015 is annexed hereto an forms part of the annual report. (Annexure-2)

LOANS, GUARANTEES AND INVESTMENTS

During the period under review, the Company has not given any loans or guarantees or provided any security or made any investments as referred to in section 186 of the Companies Act, 20 .

RELATED PARTY TRANSACTIONS

The Company has entered into various Related Parties Transactions as defined under Sector1188 of the Companies Act, 2013 with related parties as defined under Section 2 (76) of the said Act further all the necessary details of transaction entered into by the Company with the related parties are given in Form No. AOC-2 annexed hereto. (Annexure-3)

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:

The information in accordance with the provisions of Section 134(3) (m) of the Companies; Act :20 read with Rule 8 of Companies (Accounts) Rules,2014 matters to be included in Board s Report regarding conservation of energy, technology absorption, foreign exchange earnings and outgo is given in Annexure-4.

RISK MANAGEMENT

The text on the Risk Management is set out in Report on Corporate Governance and forms the part of this board report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENT OF WOMAN DIRECTOR

Smt Sarda. Poonam who was appointed as Director of the company on 21.01.2010 and further as whole Time Director on 01.04.2012 has been continued as woman director of the company she is a part of promoters group and related to chairman & Managing Director of the company Shri. N.K. Sarda

RE-APPOINTMENT OF DIRECTOR:

Smt. Poonam Sarda, the Whole Time Directors CFO of the Company is liable to ret.re by rotation and being eligible, offers herself for re-appointment.

None of the other directors are related inter se except Shri, N K Sarda and Smt. Poonam Sarda, who are related to each other.

APPOINTMENT OF KEY MANAGERIAL PERSONNEL:

During the year under review the Board of Directors of the company at their meeting held on 11.08.2014 appointed smt poonam sarda the whole Time Director of the company as chief Financial officer of the company for the period of 5 (five) years effective from 01.04.2014 subject to the existing terms and conditions of her appointed as while time director liable to retire by rotation Accordingly she was designated as whole time Director & chief financial officer the appointed was made on recommendation of the nomination & Remuneration committee of the Board.

INDEPENDENT DIRECTORS:

During the year under review the members at the annual general meeting held on 29.09.2014 approved the appointments of shri R.P. Mohanka shri H.K. Dass and shri Ramesh mantra as independent directors who are not liable to retire by rotation pursuant to section 149 (7) of the companies Act,2013 all indecent director have given declaration for the financial year 2015-16 that the meet the criteria of independences Act, 2013 and Clause 49 of the Listing Agreement.

DEPOSITS .

The company has not invited or accepted any public deposit during the year under review.

CORPORATE SOCIAL RESPONSIBILITY

The company does not meet the criteria of section 135 of companies Act, 2013 read with the companies (Corporate social Responsibility policy) rules 2014 so there is no requirement to constitute Corporate Social Responsibility Committee.

RATIO OF REMUNERATION TO EACH DIRECTOR

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given (Annexure-5) hereto.

ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee and Stakeholder Relationship Committee.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

Separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department.

CORPORATEGOVERNANCE

Report on Corporate Governance along with the Certificate of the Auditors, M/s. Loya Bagri & Co., Chartered Accountants, Nagpur, confirming compliance of conditions of Corporate Governance as stipulated in the Listing Agreement with the Stock Exchanges forms part of the Board Report and annexed hereto byway of Annexure-6

Name of Director

Shri N.K. Sarda

Smt. Poonam Sarda

Salary

Bonus

Stock Options

Pension

Rs. 15,00,000/- p.a.

Nil

Nil

Nil

Rs. 12,00,000/- p.a.

Nil

Nil

Nil

Perquisites:

i) Contribution to provident fund, superannuation fund or annuity fund to the extent these either singly or put together are not taxable under the Income Tax Act, 1961.

ii) Gratuity payable at a rate not exceeding half a month''s salary for each completed year of service and

iii) Encashment of leave at the end of tenure.

INDEPENDENT DIRECTORS AND DECLARATION

Shri R.P. Mohanka, Shri. Ramesh Mantri and Shri. H.K. Dass have been appointed as the independent directors of the company as per Section 149(10) of the Companies Act, 2013 on 29.09.2014 for a term of 5 consecutive years on the Board of the Company.

The Board of Directors of the Company hereby confirm that all the independent directors duly appointed by the Company have given the declaration and they meet the criteria of independence as provided under section 149(6) of the Companies Act, 2013.

NOMINATION AND REMUNERATION COMMITTEE

As perthe section 178(1) of the Companies Act, 2013 the Company''s Nomination and Remuneration I Committee comprises of three Non-executive Directors. The table sets out the composition of the I Committee:

Name of Director

Position held in the Committee

Category of the Director

Shri R. P.Mohanka

Chairman

Non-Executive Independent Director

Shri Ramesh Mantri

Member

Non-Executive Independent Director

Shri H. K. Dass

Member

Non-Executive Independent Director

Terms of Reference

The Terms of Reference of the Nomination and Remuneration Committee are as under:

1. To identify persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall carry out evaluation of every Director’s performance.

2. To formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees.

3. The Nomination and Remuneration Committee shall, while formulating the policy ensure that:

a. the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

b. relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

c. remuneration to Directors, Key Managerial Personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals;

4. Regularly review the Human Resource function of the Company.

5. Discharge such other function(s) or exercise such power(s) as may be delegated to the Committee by the Board from time to time.

6. Make reports to the Board as appropriate.

7. Review and reassess the adequacy of this charter periodically and recommend any proposed changes to the Board for approval from time to time.

8. Any other work and policy, related and incidental to the objectives of the committee as per provisions of the Act and rules made there under.

REMUNERATION POLICY Remuneration to Executive Directors:

The remuneration paid to Executive Directors is recommended by the Nomination and Remuneration Committee and approved by Board in Board meeting, subject to the subsequent approval of the shareholders at the General Meeting and such other authorities, as may be required. The remuneration is decided after considering various factors such as qualification, experience, performance, responsibilities shouldered, industry standards as well as financial position of the Company.

Remuneration to Non Executive Directors:

The Non Executive Directors are paid remuneration by way of Sitting Fees and Commission. The Non Executive Directors are paid sitting fees for each meeting of the Board and Committee of Directors attended by them.

AUDIT COMMITTEE

According to Section 177 of the Companies Act, 2013 the company''s Audit Committee comprised of three directors. The board has accepted the recommendations of the Audit Committee. The table sets out the composition of the Committee:

Name of Director

Position held in the Committee

Category of the Director

Shri R. P. Mohanka

Chairman

Non-Executive Independent Director

Shri Ramesh Mantri

Member

Non-Executive Independent Director

Shri H. K. Dass

Member

Non-Executive Independent Director

SECRETARIAL AUDIT REPORT

Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 requires every listed company to annex to its Board''s Report, a Secretarial Audit Report given by a Company Secretary in practice, in the prescribed form. The Board of Directors appointed Megha Bhaiya, Practicing Company Secretary as Secretarial Auditor to conduct Secretarial Audit of the Company for Financial Year 2014-15 and her report is annexed to this Boa rd Report by way of Annexure-7.

The necessary clarification/explanation on the qualifications or adverse remarks in the Secretarial Audit Report are given below:

Clause No. (1)(a) & (1) (b): The non filing of e-form MGT-14 for Resolutions passed at Annual General Meeting was occurred inadvertently. Steps are being taken to e-file the Forms.

Clause No. <1)(c): The non filing of e-form DIR 12 took place due to administrative reasons. Nevertheless, the e-Form is being e-filed shortly.

Clause No. (1)(d)&(1) (e) : The charges were not filed with ROC due to communication gap between the Bank and the Company. Necessary steps have been taken to regularize the matter.

Clause No. (2): Earlier, the financial position of the Company was by and large affected due to consistent losses and therefore it was beyond the capacity of the Company to engage Company Secretary. Nevertheless, the Company appointed Company Secretary during the year under review. The minor delay in that behalf has been due to the time taken to find out a right person forthe job. Clause No. (3) & (4): The Company is in process of forwarding the said documents to the Stock Exchanges shortly. The Company will take due care in future in that regard.

Clause No. (5): The website of the company is under construction and once it starts to operate the company will upload all the required documents as per the statutory provisions.

Clause No. (6): The talks of the Company in that behalf with the Calcutta Stock Exchange are on. Once, the irregularities prevailing gets known, the Company will comply with all the requirements including payment of listing fees to remove the status of ‘Suspended’.

Clause No. (7): The delay in filing the documents with ROC as well as Stock Exchange was due to administrative reasons. To ensure the timely filing and compliances the Company has appointed in the Company the Qualified Company Secretary as a Company Secretary & Compliance Officer.

Cause No. (8): In view of present Board Structure, the Company followed the provision of section 152 of the companies Act, 2013 regarding retirement of director into consideration the prohibitory provisions for retirement of managing Director given in the Articles of Association of the Company and further provision in the Act as regards to non retirement of Independent Directors As such, the Company has planned to increase the number of Directors on the Board of the company possible.

APPOINTMENT OF COST AUDITORS

The Board at its meeting held on 30.05.2015 has re-appointed M/s.Narendra Peshne & Associates cost Accountants as cost Auditors to conduct audit of cost accounting records of the company for the financial year ending 31.03.2016 pursuant to the provisions of section 148 of the companies Act, 2013 and rules made there under the ratification of the members is necessary for the payment of the remuneration to cost auditors. Your Directors recommend the same. ‘

VIGIL MECHANISM / WHISTLE BLOWER POLICY

As per section 177(9) and (10) of the and companies Act, 2013 as per the Clause 49 of the Listing Agreement the company has established vigil Mechanism named Whistle Blower Policy for directors and employees to report genuine concerns and made provisions for direct access to the chairperson of the Audit Committee. The Company has formulated the present policy for establishing the vigil mechanism/ whistle Blower policy to safeguard the Interest of its stakeholders Directors and employees, to freely communicate and address to the Company their genuine concerns in relation to any illegal or unethical practice being carried out in the Company. The details of the Whistle

Blower Policy are explained in the corporate governance report.

SEXUAL HARASSMENT POLICY

The Company has in place a policy on prevention of sexual harassment of its employees at the workplace. In line with the requirements of the Sexual Harassment of Women at Workplace (prevention prohibition and redressal) Act. 2013, an Internal Complaints Committee has been constituted by the company to redress the complaints received regarding sexual harassment. Y0ur Directors state that during the year under review, there were no cases filed pursuant to the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal)Act, 2013.

SHARES

a. BUY BACK OF SECURITIES

The Company has not bought back any of its securities during the year under review

b. SWEAT EQUITY

The Company has not issued any Sweat Equity Shares during the year under review

c. BONUS SHARES

No Bonus Shares were issued during the year under review.

d. EMPLOYEES STOCK OPTION PLAN

The Company has not provided any Stock Option Scheme to the employees.

ORDER OF COURT

The Details of signification and material orders passed by the regulators or courts or Tribunals Impacting the going concern status and company operation in future if any not Applicable

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The internal financial control system in your Company commensurate with the size and nature of its operations and financial aspects. The periodic audits are conducted in various disciplines to ensure adherence to the same. During the year, Internal Auditors of your Company had independently evaluated the adequacy and efficacy of the internal controls. The Board and the management review the findings and recommendations of the audit committee as well as the auditors and take in that behalf the corrective actions, whenever necessary. The Board invariably monitors the accounting functioning in the Company and ensures that the accounting treatments are in conformity with the prescribed accounting standards and procedures in that behalf.

The Board also considers risk assessment, identification of mitigating actions and internal financial control procedure to ensure that business as well as financial risks are identified, managed and regularly reviewed at all levels and that Directors are periodically apprised of the key risks.

SHARES IN SUSPENSE ACCOUNT

There are no such shares of the Company which are to be kept in shares suspense account.

MATERIAL VARIATIONS

There are no material variations between the projections and the actual utilization/profitability.

CODEOFCONDUCT

The code of conduct for the members of the board and senior management personnel is given in Point No. 15 of the Report on Corporate Governance forming part of this Board’s Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT ECONOMY:

in the year 2015 the global economy grew at moderate pace, only marginally faster than the previous year manifesting disparate growth rates in the advanced and emerging economies. Among the advanced economies, while the US economy exhibited modest growth, the European economy continued to be sluggish. Most of the emerging market economies, barring China and India, registered slowdown in their respective growth momentum.

The Indian economy exhibited a healthy growth at 7.3% in 2014-2015, vis-a-vis 6.9% in 2013-2014, aided by among other factors, various initiatives taken by the Government to address the policy issues, which have served to regenerate the investment appetite. Owing to this, various global institutions like international monetary fund (IMF) and the World Bank have both forecasts India to grow at a higher rate of 7.5 % in 2015. For 2016, while IMF has forecast India to grow by 7.5%. World Bank expects the economy to grow even faster at 7.9%. It is also for the first time India has been forecast to grow at a faster rate than China.

Besides, cyclical macro parameters like inflation, current account deficit have improved during the year due to domestic as well as external factors. However, domestic steel producers witnessed subdued sales as increased imports from China and Russia resulted in sharp cut to steel prices in India over the past six months.

INDUSTRY STRUCTURE & DEVELOPMENTS;

As per the World Steel Association (WSA), global apparent steel use reported a growth of 0.6% only in CY2014, as against a growth of 3.6% in CY2013, while aggregate capacity utilization too dropped to 76.7% in CY2014, from 78.4% in CY2013. Weak demand in China, owing to the real estate sector slowdown, resulted in a de-growth of 3.4% in CY2014 in the country and was one of the major reasons behind the decline in the growth rate of global steel consumption. Muted demand condition! prompted steel producers in China to turn to export markets in CY2014 and the same resulted in i 50% growth in China’s steel exports, which in turn led to a sharp decline in steel prices in the rest the world, especially during the second half of FY15, from about $485/MT in October 2014 t< S370/MT in March 2015. With WSA estimating China''s steel demand to contract in CY2015 an< CY2016 and the IMF also revising downwards the global growth rate forecast to 3.5% in January2015, from 3.8% in October 2014, global steel demand is unlikely to witness any significant improvement in the coming period.

Despite an improvement in the second half of FY15, domestic steel consumption growth rat< remained low at 3.1% in FY15; pricing pressures from cheaper imports intensified in Q4 FY15, Domestic steel consumption growth improved to 3.1% in FY15 from 0.6% in FY14, but remained low at an absolute level. However, the growth rate improved from 0.5% level during Apr-Oct 2014 to 3.1 % in the whole of FY15, indicating a sharper improvement in the second half of FY15 on the back o( improved automobile sales. Given that the construction and capital goods sectors, which together account for about 70-75% of the total steel demand in India, are yet to witness much on-the-ground recovery, automobile sector is expected to support domestic steel demand in the near term. On supply side, India''s steel production growth rate continued to exceed the consumption growth rate in FY15, and stood at 3.3%, with secondary steel producers reporting a higher growth of 3.9% during FY15 compared to 2.9% reported by integrated steel producers.

Whereas steel exports de-grew by 8.1% in FY15, imports surged by 71% due to a sharper fall ir international steel prices than domestic prices, leading to a widening gap between price levels. Since India became a net importer of steel in FY15 and there was a large gap between steel production (90.6 mt)and steel consumption levels (76.4 mt), ICRA believes that inventory levels of steel players have risen and the same, coupled with weak international demand, is unlikely to result in any meaningful improvement in domestic steel prices in the near term.

FUTURE OF STEEL INDUSTRY:

In emerging economies the structural factors of population growth linked to urbanization and (hopefully) industrialization, suggest a bright future for our product. It is estimated that a bit more than 1 billion people will move to towns and cities between now and 2030. This major flow not only creates substantial new demand for steel to be used in infrastructure developments such as water, energy and mass transit systems as well as major construction and housing programmes, but the process of urbanization also leads to an increased, and hopefully, more equitable distribution of wealth. This in turn drives demand for steel for additional consumer products such as household appliances, vehicles and additional machine building that supports the industrial processes to manufacture these consumer goods. Moreover, continued transformation of urban areas plays an important role even in the countries having already reached a high level of urbanization. Cities are in the process towards improvements in city organization and living standards. Over the last 10 years, many countries have started revising their urban policies to increase living standards in urban areas, to improve energy efficiency and to make cities more environmental friendly. Given the expected population growth, emerging new applications for steel and more sophisticated steel applications, the global steel market has a potential to grow by between 700 and 1000 million tons in the next 50 years. That is equivalent to a market that is 60% larger than that of today. We believe that between now and 2030; global use of steel will increase by as much as 400 million tons annually. A good future prospect indeed

Many of the conditions as applicable to the global steel industry also apply to India. It is a developing economy with a large population. The forces of economic growth will require continued investments

In new Infrastructure, new and larger cities, machinery and production to employ more people and drive the economy forward. India already is the third largest producer of steel!, with an expected steel use of 80 million tonnes In 2015 and 86 million tonnes in 2016. It is also expected to be one of the fastest growing areas in steel use this year and next year.

OPPORTUNITIES AND THREATS:

Your Company is poised to seize the opportunities in the Iron & Steel Industry (both for steel & intermediary saleable products) through its strengths of vocational and logistical advantages, raw material linkages, technology edge and management expertise. These opportunities will be linked directly to the growing demand from the automobile and auto components, infrastructure, construction and power sectors. Your Company''s strategic location in Nagpur offer scope for seamless value addition in its manufacturing process from hot metal to stainless steel. The threats for your Company would come from adverse fluctuations in input and capital costs, foreign exchange variations and taxes & duties. The buoyancy in the Iron & Steel Sector has attracted many players, resulting in reduced availability of skilled manpower and contractor workforce. Delay in opportunity grabbing may result in loss in revenue generation and rise in costs.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

The Company operates in only one segment i.e. iron & steel. During the financial year 2014-2015 the Company achieved production of steel product as under:

Own Unit - 12083.94 MT (Previous Year 16732.45 MT)

Sales (Rs.) - 6124.30 (Previous Year 8242.52 Lacs)

Conversion Service - 1159.33 MT (Previous Year 1380.510 MT)

Sales(Rs.) - 44.92 (Previous Year 42.30 Lacs)

RISK & CONCERNS:

Your Company has identified major areas of risk and concerns and increased focus thereon to ensure achievement of the organizational objectives. The Company has a well defined structure and proactive approach to assess, monitor and mitigate risks associated with these areas, as briefly enumerated below:

a) Systems - Your Company has implemented ERP. the software for Enterprise Resource Planning and integrated its operations to use best business and commercial practices.

b) Statutory compliances - Procedure is in place for monthly reporting of compliance of statutory obligations and reported to the Board of Directors at its meetings.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an internal control system which includes internal financial controls, the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of business, including adherence to the Company''s policies, the safeguarding of the assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial information, commensurate with the size, scale and complexity of its operations.

The scope and authority of the internal auditors have been defined by the audit committee from time to time. To maintain its objectivity and independence, the internal auditor reports its observations to the audit committee of the board. The internal auditor monitors and evaluate the efficacy and adequacy of internal control system in the company, its compliance with operating system, accounting procedures and policies of the company. Based on the report of the internal auditors, process owners undertake corrective actions in their respective areas and thereby strengthen the control. Audit observations and corrective actions thereon are presented to the audit committee of the board.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE.

Dunng the fiscal 2014-15, the Company achieved the sales turnover, of Rs. 6169.22 Lacs (Own Unit 6124.30 Lacs (12083.94 MT) and Conversion / Service 44.92 Lacs) (1159.33 MT) as against Rs. 8284.83 Lacs [Own Unit 8242.52 Lacs (16732.450 MT) and Conversion I Service 42.30 Lacs] (1380.510 MT) during the previous year. After providing Rs. 18.86 Lacs for depreciation and Rs. 152.34 Lacs towards interest and further adjusting Rs. 21.84 Lacs for taxation (net) the Company posted net profit after-tax of Rs. 78.62 Lacs as against Rs. 2.17 Lacs during the last year. The decline in operational performance of the Company was due to slackened demand for the domestic products. Nevertheless, the financial performance of the Company registered growth over the previous year as a result of saving in cost of inputs.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES I INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED.

Your Company recognizes the fact that manpower is one of the vital constituent of a successful organization. The success of any business lies under the qualified, trained & motivated Human Resources. The company increased its more concentration on the development of Human Resources than any other Resources. The company updated its HR policy in line with the changing system in the industry as a whole and took adequate steps for maintaining safety and healthy environment for the workers. The Industrial relations continue to be cordial, throughout the year. Your Directors place on record their sincere appreciation for the excellent team work displayed by the employees of the Company. During the year ended 31.03.2015 the total number of employees employed by the Company was 44 (Forty Four).

ACKNOWLEDGEMENT

Your Directors wish to express their grateful appreciation to the continued co-operation received from the Banks. Government Authorities, Customers, Vendors and Shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed service of the Executives, staff and Workers of the Company.

For & on behalf of the Board of Directors

Date: 02.09.2015 N. K. Sarda

Place: Nagpur DIN: 00229911

Chairman & Managing Director

Director’s Report