| Dear Members,
Your Directors are pleased to present the Twenty Seventh Annual Report
along with the audited Statements of Accounts for the year ended 31st
March, 2015.
FINANCIAL RESULTS:
For the Year For the Year
ending ending
31.03.2015 31.03.2014
(Rs. in Lakhs) (Rs. in Lakhs)
Gross Sales 0 383
Interest and Other Income 1205 73
(Loss) / Profit before Interest,
Depreciation &
Extra ordinary Items (2924) (674)
Interest 60 1239
Depreciation 204 227
Prior Period adjustments 4 1607
(Loss) / Profit before tax (3192) (3747)
Provision for taxation (28) (133)
(Loss)/Profit after tax (3164) (3614)
OPERATIONS:
There were no operations during the year as the Company was forced to
suspend the operations since June 2013 as the Banks stopped lending
Working Capital support consequent on the Accounts being classified as
NPA. Also on account of the demand of Rs.87 crores raised by the GEB
and non grant of reliefs and concessions by the Govt. of Goa, Banks
were apprehensive of lending further exposure to your Company.
During the year the Company's Bankers viz., Bank of Maharashtra and
Union Bank of India invoked the provisions of SARFAESI ACT, 2002 and
also assigned the respective debts in favour of ARCs; PARAS and ARCIL
respectively. The assignees viz., PARAS and ARCIL have notified their
acquiring the debts as above and the Company has recognised the said
change in the lenders particulars accordingly.
After holding a series of meetings with the Union as well as all the
Officers, on account of the suspension of operations since June 2013,
the employees have been requested not to report for duty, except a few
essential employees (with an assurance that no sooner the Company is in
a position to restart the operations they would be called to report for
duty) and hence no provision has been made for Salaries/wages from June
2013. Similarly, interest on loans has not been provided for the year
under report.
During the year the Company has written back Rs.1157.44 lakhs being
liability to Unsecured Loans that have become time barred and no longer
payable. The Company has also during the year written off as bad debts
an amount of Rs.2076.09 lakhs towards Sundry Debtors pertaining to the
disputed billing during 2008-09 on account of sudden fall in prices of
shredded scrap from USD 690 PMT to USD 220 PMT and selling prices from
Rs.60,000/- PMT to Rs.32,000/- PMT as a result of the Global economic
crisis which in the opinion of the management have become bad and
irrecoverable and Rs.243.23 lakhs towards advances made to suppliers
which in the opinion of the management have become bad and not
realizable.
The Company had recognized the claims made by the Geb towards
electricity supply to the Company in excess of Rs.2.84 per unit
(inclusive of energy & demand charges) as refundable by the GEB in line
with the tariff approved vide order dated 28.08.2000 and its extension
for a period of 5 years as further rehabilitation scheme sanctioned by
BIFR. However, the State Govt./GEB have not extended the same till
date. In the meanwhile the Company is in the process of finalizing its
MDRS envisaging various reliefs and concessions from the State Govt.
of Goa which is currently pending before the Govt. of Goa/BIFR. In the
circumstances and pending revised MDRS to be sanctioned by BIFR duly
supported by the Govt. of Goa, the provision of Rs.1717.45 lakhs
relating to the past period is in the opinion of the management not
enforceable and hence written off during the year.
With a view to restart the operations, the Company has approached the
Hon'ble BIFR with Modified Draft Rehabilitation (MDRS) envisaging
restructuring of dues assigned to ARCs, power, sales tax and entry tax
concessions from the Govt. of Goa and infusion of funds.
BOARD:
The BIFR had appointed Mr. M. K. Garg as Special Director on the board
during the year 2009. His nomination has been withdrawn by the BIFR
w.e.f. 20.08.2014 having completed five years as Special Director. The
Board places on record its appreciation for his valuable contribution
during his tenure.
Shri A. K. Sinha, Independent Director resigned as a Director with
effect from 17.07.2015. The Board places on record its appreciation for
his valuable contribution during his tenure.
Shri P. J. Bhide retires by rotation at this Annual General Meeting and
is eligible for reappointment. Mr. Bhide, aged 81 years, is a
practicing Chartered Accountant and has vast experience in accounting
and taxation. He is the Chairman of the Company's audit committee and a
member of the Company's remuneration committee. He is a Director in 1.
Coorg Tea Company Limited, 2. Greenfield Exports Limited, 3. Unick
Fix-A-Form & Printers Limited, 4. Belsund Sugar & Industries Limited,
5. Plenty Valley Intra Limited, 6. Cochin Malabar Estates & Industries
Limited, 7. Goa Springs Limited, 8. Western India Mining Services Pvt.
Ltd. 9. Grob Tea Company Ltd. 10. Kwality Builders & Developers Ltd.
11. Design India Pvt. Ltd. and 12. Shahadev Investments & Finance Pvt.
Ltd.
Mr. Purushotham Jagannath Bhide does not hold by himself or for any
other person on a beneficial basis, any shares in the Company.
The Board considers that his continued association would be of immense
benefit to the Company and it is desirable to continue to avail services
of Mr. Purushotham Jagannath Bhide as an Independent Director.
Accordingly, the Board recommends the resolution in relation to
appointment of Mr. Purushotham Jagannath Bhide as an Independent
Director, for the approval by the shareholders of the Company.
The Board at its meeting held on 17.07.2015 has appointed Shri T
Srinivasa as additional director of the Company. He holds office until
the ensuing Annual General Meeting. The Company has received notice
under Section 160 of the Companies Act, 2013 from a member signifying
his intention to propose the candidature of Shri T. Srinivasa, for the
office of Director. Shri T. Srinivasa, aged 60 years, is a practicing
Chartered Accountant and has vast experience in Auditing and taxation.
Your Directors recommend his appointment.
REHABILITATION SCHEME:
The BIFR Sanctioned Scheme 2002/2003 has been fully implemented by all
the concerned Agencies. viz. Financial Institutions, Banks and
Promoter; except the State Govt. of Goa. The Company has approached the
Hon'ble BIFR with Modified Draft Rehabilitation (MDRS).
AUDITORS:
Pursuant to the provisions of Section 139 of the Companies Act 2013 and
the rules framed there under, M/s. N. D. Hegde & Associates, Chartered
Accountants, Margao were appointed as Auditors of the Company from the
conclusion of the 26th Annual General Meeting of the Company held on
29.09.2014 till the conclusion of the 30th Annual General Meeting to be
held in the year 2018, subject to ratification of their re-appointment
at every Annual General Meeting.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
The Company continued its emphasis on upgradation of process technology
and on energy conservation on a continuous basis. The company has
installed facilities for improved quality of production like Vacuum
Degassing and Vacuum Oxygen Decarburization, Electro Magnetic Stirrer
and Auto Cutters.
The details required pursuant to Section 134 (3) (m) of The Companies
Act, 2013 are given in the annexure form 'A' and 'B'.
FOREIGN EXCHANGE EARNING AND OUTGO:
During the year under report, our Company has earned and expended
foreign exchange as under:
Foreign exchange earned - Rs. NIL
Foreign exchange outgo - Rs. NIL
DIRECTORS' RESPONSIBILITY STATEMENT:
As required by Section 134 (3) (c) of The Companies Act, 2013, the
Directors' state as under:
(i) that in the preparation of the annual accounts, the applicable
accounting standards has been followed along with proper explanation
relating to material departures;
(ii) that the Directors had selected such accounting policies and
applied them consistently and made judgements 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 or loss of the Company for that period;
(iii) that the Directors had 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
preventing and detecting fraud and other irregularities;
(iv) that the Directors had prepared the annual accounts on a going
concern basis pending sanction of the MDRS by the Hon'ble BIFR;
(v) that 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) that 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 on Voluntary Corporate Governance Guidelines:
The Ministry of Corporate Affairs has issued a set of Voluntary
guidelines called "Corporate Governance - Voluntary Guidelines 2009" in
December, 2009. The guidelines include conditions for composition of
board, appointment of directors, scope and role of audit committee,
Secretarial Audit Report and Institution of mechanism for whistle
blowing. The Company is substantially complying with the
recommendations on Audit committee and Internal Auditors and is taking
steps towards implementation of other guidelines.
Threats:
The company faces competition from other steel mills in the country who
can offer the same products at a lower price mainly due to locational
advantage.
Risks and Concerns:
Nature of the industry:
The company presently produces Alloy Steel rounds and Steel flats for
the automobile industry. This segment has very high competition. The
management is considering development of alternate products to improve
the company's performance.
Technology:
With technology obsolescence being an inherent risk in any industry,
the Company is constantly upgrading and modernizing its manufacturing
process. The company has commissioned an Electro Magnetic Stirrer and
has commissioned a Vacuum Degassing System / Vacuum Oxygen
Decarburization for the melting process for improvement in the quality
of the steel billets. The company is now in a position to cater to the
stringent requirement of the automobile, defense and Railways sectors.
Financial:
The lack of adequate Working Capital Facilities has had an adverse
impact not only on the volume of production but also on the liquidity
position of the company's finances.
Outlook:
There is a good demand for the company's product. If adequate Working
Capital support is extended by the Companies Banker's, the management
is confident that there will be no fall in demand for its product in
the near future.
Internal Control Systems
There are adequate internal control procedures commensurate with the
size of the Company and the nature of its business for:
* Purchase of stores and assets, and sales of its products.
* Adequacy of accounting records and
* Authorisation for and record of transactions.
Financial Performance
The current year's financial performance has been discussed in detail
in the Directors' Report forming part of this Annual Report.
Industrial Relations
Industrial relations have remained cordial and good.
Cautionary Statement
Statements in this report describing the Company's objectives,
projections, estimates and expectations may be "forward looking
statements" within the meaning applicable in securities law and
regulations. Actual results could differ materially from those
expressed or implied.
ACKNOWLEDGEMENT:
The Board of directors wishes to thank the Company's shareholders,
employees, customers, suppliers, bankers, and the Government of Goa and
its agencies for their continued and unstinted support.
For and on behalf of the Board
Ashok Mittal P J. Bhide
DIRECTOR DIRECTOR
DIN: 00066318 DIN:00012326
Place: Camp Bangalore
Date:17.07.2015 |