DIRECTORS' REPORT To, The Members, Your Directors take great pleasure in presenting the 30th Annual Report of your company together with audited accounts for the year ended 31st March, 2015. DIVIDEND Your Directors express their inability to declare any dividend to Shareholders. PERFORMANCE OF THE COMPANY The year under review has been one of the most difficult year for Your Company. Operating levels at all the production lines declined substantially and recorded low capacity utilizations. Tubes 7.8% (29.32) and CR Coils18.9% (27.18%), while the GP/GC Line remained inoperative in FY15 also. Gross revenues of the Company have hence declined to Rs.88.54 Crore (Rs.201.58 Crore) and the Company has suffered an Operating Loss (LBDIT) of Rs.14.00 Crore (Rs.3.74 Crore). As the GP/GC line remained closed during the year, your Company has provided depreciation on these assets @10% of the stipulated rates under the Act. A corresponding write back of depreciation has been made (under Exceptional & Extraordinary Items) for FY14 also for similar reasons. Besides, the provisions of Companies Act 2013 have also been applied, and all these factors have resulted in a lower Depreciation Provision for the year at Rs.2.61 Crore (Rs.9.40 Crore). The Net Loss (before extraordinary items) stands at Rs.17.03 Crore (Rs.14.28 Crore), which after accounting for extraordinary items stand reduced to Rs.11.07 Crore (Profit Rs.3.41 Crore). Market Opportunities Amidst Global glut, steel imports into the Country have jumped by over 73% in the last fiscal and have continued to register increasing imports in the current year also. The local Steel Industry is therefore being forced to reduce prices continuously, month after month, to remain competitive, and have also been strongly lobbying with the Steel Ministry for imposing higher import duties to help them compete with the overseas rivals. In fact, benchmark CIS and China HRC export prices are stated have touched new 10 year lows in July 2015, and there is a clear advantage of about of Rs.2000/ - pmt over the domestic prices. Prices of domestically produced steel are therefore under tremendous pressure. The market conditions for your Company also are hence expected to remain tough throughout whole of FY16. Besides, Investors and Lenders are also expected to remain wary of making further/new investments and the liquidity of your Company is likely to remain under strain in FY16 too. Your Company is hence looking at low operations during the year, and awaits tie up for some strategic alliance with an Investor/Lender for upping its scale of operations. PROJECT IMPLEMENTATION & RESTRUCTURING PACKAGE As members are aware, your Company has since FY09, concluded 'Negotiated Settlement of Dues' with most of its lenders, as a result of which only two lenders now remain outstanding in the Company.s Books. The Company is exploring various options for settlement of the remaining dues also, and in the meanwhile have put on hold further investments into its incomplete 6 Hi CR Mill. In view of the liquidity crunch, your Company has also suspended operations at one if its production line- CGL- for over two years now. FIXED DEPOSITS The Company has not accepted any public deposits during the year under review. Personnel The Industrial Relations scenario continued to be cordial. The Company regards its employees as a great asset and accords high priority to training and development of employees. The information required pursuant to Section 197 of the Companies Act, 2013 ("the Act") read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing AGM. BOARD OF DIRECTORS In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Associations of the Company, Ms. Babita Rathore, Director (Din No: 06871372), retires by rotation at the ensuring Annual General Meeting and being eligible, offers herself for re-appointment. Mr. Kiran O. Mehta (Din No: 00028884) has resigned from the Board of the Company w.e.f 26/12/2014. Your Director place on record their deep appreciation for the valuable services rendered by Mr. Kiran O. Mehta (Din No: 00028884) during his tenure as Director of the Company. AUDITORS & AUDITORS REPORT M/s Rakesh K. Jain and Associates, Chartered Accountants; Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for reappointment. In accordance with the Companies Act 2013, it is proposed to re-appoint them as Auditors for the financial year 2015-16 from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting, subject to the approval of shareholders. The Company has received confirmation from the firm regarding it's consent and eligibility under Sections 139 and 141 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 for appointment as the Auditors of the Company CORPORATE GOVERNANCE The detailed Report on Corporate Governance forms a part of this Annual Report as Annexure A. MANAGEMENT DISCUSSION AND ANALYSIS REPORT The Management Discussion and Analysis Report (MDA) of the Company are discussed in this Annual Report and attached as Annexure B. Secretarial Audit Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed Ramachandra Rao Karandikar, Practicing Company Secretary for conducting Secretarial Audit of the Company for the financial year 2014-2015. The Secretarial Audit Report is annexed herewith as Annexure C. Related Party Transactions All transactions entered by the Company with Related Parties were in the Ordinary Course of Business and at Arm's Length pricing basis. The Audit Committee granted omnibus approval for the transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors. There were no materially significant transactions with Related Parties during the financial year 2014-15 which were in conflict with the interest of the Company. INSURANCE All the insurable assets of the Company are adequately insured. DIRECTORS RESPONSIBILITY STATEMENT The Directors report that i) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. ii) 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 at the end of the financial year and of the profit and loss account of the company for that period. iii) 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) The Directors have prepared the Annual Accounts on a going concern basis. v) the Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has been employing women employees in various cadres within the factory and its head office premises. The Company has in place an Anti Harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under the policy. There was no compliant received from any employee during the financial year 2014-15 and hence no complaint is outstanding as on 31.03.2015 for redressal. ENVIRONMENT, HEALTH AND SAFETY The Company is committed to the highest level of concern in providing safe and healthy environment for all its stake holders, employees, customers, vendors, business associates and neighborhood. Extracts of Annual Return and other disclosures under Companies (Appointment & Remuneration) Rules, 2014 The Extract of Annual Return in form No. MGT-9 as per Section 134 (3) (a) of the Companies Act, 2013 read with Rule 8 of Companies Act (Accounts) Rules 2014 and Rule 12 of Companies (Management & Administration) Rules, 2014 is annexed hereto as Annexure D and forms part of this report. Cost Audit Compliance Pursuant to Sec. 209 (1)(d) of the Companies Act, 1956, Cost Audit Report for the financial year ended 31/03/2014 has been submitted to the Central Government. DEMATERIALISATION OF SECURITIES & INVESTOR SERVICE CENTRE Nearly 55.96 of total Equity Share Capital is held in dematerialized form with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The ISIN No. allotted to the Company Share is INE 708B01018. The securities of your company are listed at The Bombay Stock Exchange, Mumbai. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO A statement giving details of conservation of energy, technology absorption, foreign earnings and outgo in accordance with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988, is annexed as Annexure E hereto and forms part of the Report. DISCLOSURES Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions in these items during the year under review: a) Details relating to deposits covered under Chapter V of the Act. b) Issue of equity shares with differential rights as to dividend, voting or otherwise. c) Issue of shares (including sweat equity shares) to employees of the Company under any scheme. d) Neither the Managing Director nor the Whole Time Director of the Company receives any remuneration or commission from any of its subsidiaries. e) The Company has not offered any Shares during the financial year under Employee Stock Option/Purchase Scheme. APPRECIATION The Directors would like to place on record their gratitude for the valuable support received from Government of India and Government of Madhya Pradesh and the Financial Institutions/Banks. They also covey their appreciation for the continuous support received from vendors, customers, consultant, auditors and others. The Directors also wish to place on record their appreciation for the commitment and efforts of all employees of the Company. For and on behalf of the Board of SIDDHARTHA TUBES LIMITED, Nainesh Sanghvi (Din No:00006553) Chairman and Managing Director Place: Indore Date : 19/09/2015 |