DIRECTORS' REPORT Your Directors have pleasure in placing before you the 45th Annual Report together with Audited Accounts for the year ended on 31st March, 2009. 1. Operational Highlights: During the year, the Smelter and Refinery continued to operate successfully with various imported raw materials. The operation of the entire plant was stable with increased production and cost efficiencies. During the year, Kaldo Furnace was run with Direct Revert Charging System with reduced cycle time and production costs. The Refinery was operated at 98.08% current and 96.09% time efficiencies respectively at par with world class Refineries. During the year, 12,675 MT copper cathodes conforming to LME Grade "A" specifications were produced frorh the raw materials purchased and procured on tolling basis, against production of 9,913 MT copper cathodes for the same period in the pervious year. During the year, the total sale of copper cathodes was 11,202 MT of the value of Rs. 305 crores including export of 8641 MT. The aggregate value of exports done by the company in last 4 years have exceeded Rs. 852 crores. During the year, the plant was operated at 25.3% capacity mainly because of inadequacy of working capital and adverse market conditions due to lower treatment/refining charges on medium grade and lower discount on high grade materials. The low capacity utilization has adversely affected the margins. 2. Transfer of long term financial assistance to Asset Reconstruction Company (India) Limited: During the year, IFCI Limited and State Bank of India have transferred outstandings of their long term financial assistance extended to the company to Asset Reconstruction Company (India) Limited (ARCIL). As on 31st March, 2009 ARCIL was holding 88.22% of the outstanding of the long term financial assistance extended to the company. 3. Dividend: 1 Your Directors are unable to recommend any dividend on both equity shares and preference shares in view of the losses incurred during the year. ' 4. Environment, Safety and Health: During the year, the emphasis was continued on maintaining the highest standards of environment management for carrying out operations. During the year, the safety and health continued to be one of the top priorities of the company and the reportable accident frequency rate has remained NIL. During the year, the efforts in maintaining highest standards of environment, safety and health have been acknowledged by continuing ISO 9001:2000, ISO 14001:2004 and OHSAS 18001:2007 certifications by DNV. 5. Management Discussions and Analysis: The Management Discussions and Analysis Report is annexed as Annexure-t to this Report. 6. Corporate Governance: As per Clause 49 of Listing Agreement with Bombay Stock Exchange Limited, the Corporate Governance Report is annexed to and forms, part of this Report. 7. Employee Stock Options Scheme: The details of stock options granted, outstanding and other relevant details are provided in Annexure-2 and forms part of this Report. 8. Insurance: The company has made arrangements for adequately insuring its insurable interests. 9. Directors: During the year, Shri P.P. Vora resigned as Director of the company and Chairman of the Board. Shri R.K. Sukhdevsinhji, Director has taken over as Chairman of the Board w.e.f. 25lh April, 2009 in place of Shri P.P. Vora. After.close of the year Shri P.Parvathisem, Director resigned as Director of the company. During the year, IFCI Limited nominated Shri R.P.Singh as its nominee director in place of Shri Mahendra Kumar Sharma. The nomination of Shri R.P. Singh was subsequently withdrawn by IFCI Limited on transfer of its outstanding of long term loans to Asset Reconstruction Company (India) Limited. During the year, Shri Rajendra Mittal resigned and ceased as Managing Director & CEO of the company w.e.f. 27,h January, 2009. During the year, Shri Om Prakash Chugh has been appointed as Additional Director and Managing Directors & CEO of the company w.e.f. 9th February 2009. Shri Chugh holds office as Additional Director upto the date of next annual general meeting of the company pursuant to Article 95 of the Articles of Association of the company. The company has received the notice under Section 257 of the Companies Act, 1956 from a member proposing candidature of Shri Chugh as Director of the company. At the ensuing Annual General Meeting, in accordance with the provisions of Section 259 of the Companies Act, 1956 and Article 107 of the Articles of Association of the company, Shri R.K. Sukhdevsinhji, Director retires by rotation at the ensuing Annual General Meeting is eligible for reappointment. Your Directors place on record their profound gratitude for the valuable contributions made by Shri P.P. Vora during his tenure as Chairman of the company. Your Directors also place on record their appreciation for the valuable contributions made by the outgoing Directors. 10. Auditors: M/s N.M. Raiji & Co., Chartered Accountants, Statutory Auditors of the company shall retire at the ensuing Annual General Meeting and being eligible have offered themselves for reappointment. Further, as required under Section 224 of the Companies Act, 1956 a certificate from M/s N.M. Raiji & Co., Chartered Accountants has been obtained that their re-appointment as Statutory Auditors, if made, would be in conformity with the limits prescribed in the said Section. Your Directors propose them for reappointment as Statutory Auditors of the company. ' 11. Auditors' Report: In respect of Auditors' qualification as per Paragraph 4 of the Auditors' Report, the Directors are of the view that impairment of assets have not been worked out as restructuring of business is contemplated, which is likely to impact the value of fixed assets and carry forward losses. On completion of the restructuring exercise, the management will be in the position to ascertain the impairment of assets. 12. Energy, Technology and Foreign Exchange: The details as required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are given in Annexure-3 to this Report. 13. Particulars of employees: The particulars of the employees as required under Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended are set out in the Annexure-4 to this Report. Directors' Responsibility Statement: Pursuant to the provisions contained in Section 217(2AA) of the Companies Act, 1956, the Directors of your company confirm that subject to the Auditors' Qualification in respect of impairment of assets: i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures; ii) they have, in the selection of the accounting policies, consulted statutory auditors and have 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 year i.e. 31st March, 2009. iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding assets of the company and for preventing and detecting fraud and other irregularities; iv) they have prepared the accounts on a going concern basis. Personnel/Industrial Relations: During the year, the personnel and industrial relations, with the employees remained cordial in all respects. Acknowledgments: Your Directors place on record their appreciation and thanks to all the financial institutions and banks, Asset Reconstruction Company (India) Limited, the State Trading Corporation of India Limited, Central and State Governments and Local Authorities and all stakeholders for their continued support in the working of your company. Your Directors also extend their wholehearted thanks to entire JCL team and its associates. For and.on behalf of the Board R.K.Sukhdevsinhji Place: Mumbai Date: 29th July, 2009 |