nilachal iron power ltd Directors report


DIRECTORS

To the Members of

Nilachal Iron & Power Limited

Your Directors are pleased to present their Eleventh Annual Report together with the Audited Balance Sheet and Statement of Profit and Loss Account of your Company for the year ended 31st March, 2013.

FINANCIAL PERFORMANCE

Particulars 2012-13 (Rs.) 2011-12 (Rs.)
Revenue from Operations (Net of Excise Duty) 23,36,96,931.00 981,883,123.00
Other Income 63,32,165.00 72,34,948.00
Total Income 24,00,29,096.00 989,118,071.00
Less: Expenditure 31,01,85,280.00 906,250,972.00
Profit/Loss before Interest, Depreciation and tax (PBIDT) (7,01,56,184.00) 82,867,099.00
Less: Finance Charges 10,55,29,022.00 4,73,86,658.00
Depreciation 7,10,15,680.00 3,57,50,012.00
Profit/(Loss) before Tax (24,67,00,886.00) (2,69,571.00)
Less: Tax 7,89,29,000.00 21,54,152.00
Profit/(Loss) for the year (16,77,71,886.00) (24,23,723.00)
Earnings per share
(Nominal value per share Rs. 10/-) Basic and Diluted (4.81) 0.07

Operational Performance

During the year under review, your Company has achieved the total revenues of Rs. 2,400.29 lacs against Rs. 9,891.18 lacs in the previous year. The EBIDTA for the year amounted to Rs. 701.56 lacs while the same was Rs. 828.67 lacs for the previous year. The Loss for the year 2012-13 stood Rs. 1677.72 lacs as compared to loss of Rs. 24.23 lacs in the last year.

During the year two coal washery was put to use and two units of Kiln was introduced and operation started in the plant.

Dividend

In view of financial position of the Company during the financial year, the directors do not recommend any dividend on the Equity Shares of the Company for the year ended 31st March, 2013.

Future Outlook

World Steel Association has said steel demand is expected to pick up in India and demand expected to grow by 5.9% to 75.8 million tonne (mt) in 2013 following 2.5% growth in 2012. It also said that Indian steel demand is likely to grow due to monetary easing which is expected to support investment activities. In 2014, growth in steel demand is further to accelerate to 7.0% because of the reform measures aimed at narrowing the fiscal deficit, coupled with measures to improve the foreign direct investment climate. The Company shall take steps to further strengthen its operations and make use of most of the accelerated demand.

Holding Company

The company continued to be a wholly owned subsidiary of M/s. Jai Balaji Industries Limited throughout the year under review.

Directors

Pursuant to the provisions of the Companies Act, 1956 Shri Aditya Jajodia and Shri Santosh Kumar Shah, Directors of the Company retire by rotation at the ensuing Annual General Meeting of the Company and being eligible have offered themselves for re-appointment.

Shri Prashant Akhaury has been appointed as Executive Director of the Company, being an Additional Director, w.e.f. 7th November, 2012, and he will hold office up to the date of the ensuing Annual General Meeting.

The Company has received special notice under Section 257 of the Companies Act, 1956, proposing the appointment of Shri Prashant Akhaury as the Director of the Company. In view of their considerable experience, your Directors recommend his appointment. Shri Prasant Akhaury if appointed, shall continue to act as an Executive Director of the Company.

Board Sub Committees

i. Audit Committee:

The Audit Committee of the Company consists of four directors, namely Shri Sanjiv Jajodia, Shri Ashim Kumar Mukherjee, Shri Dinesh Kumar Agarwal and Shri Santosh Kumar Shah. Shri Sanjiv Jajodia being a non-executive director of the Company acts as the Chairman of the Committee.

ii. Remuneration Committee:

The Remuneration Committee of the Company consists of four directors, namely Shri Sanjiv Jajodia, Shri Ashim Kumar Mukherjee, Shri Dinesh Kumar Agarwal and Shri Santosh Kumar Shah. The Chairman of the Committee is Shri Sanjiv Jajodia.

Directors Responsibility Statement

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956, your Directors state that:

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

ii) They have opted such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the loss of the Company for the year ended on that date;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) The annual accounts have been prepared on a going concern basis.

Statutory Auditors

M/s. B. Chhawchharia & Co., Chartered Accountants, Kolkata retire at the conclusion of ensuing Annual General Meeting and being eligible offers themselves for re-appointment. Your directors on the recommendation of Audit Committee, recommends re-appointment of M/s. B. Chhawchharia & Co., Chartered Accountants, Kolkata as the Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting.

The Company has received a certificate from the said auditors under Section 224(1B) of the Companies Act, 1956 to the effect that their appointment if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956.

Auditors Report

The Auditors report to the shareholders does not contain any qualifications. The observations of Auditors in their Report read with relevant notes to accounts in Note 25 are self explanatory and do not require further explanation.

Cost Auditors

Pursuant to the provisions of Section 233B of the Companies Act, 1956 read with Cost Accounting Records (Steel Plant) Rules, 1990, The Companies (Cost Accounting Record) Rules, 2011, The Companies (Cost Audit Report) Rules, 2011, Circular No. 15/2011[52/5/CAB-2011] dated 11th April, 2011, Circular No. 52/26/CAB-2010 dated 30th June, 2011 and Circular No. 36/2012[52/5/CAB-2011], dated 6th November, 2012 your directors on the recommendation of the Audit Committee, have appointed M/s. Mondal & Associates, proprietor Mr. Amiya Mondal as the Cost Auditors to conduct the Cost Audit for the Financial Year 2013-14.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 as amended from time to time, particulars regarding Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are given in the Annexure forming part of this Report.

Personnel

The Company has no employee getting remuneration in the category specified under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 during as amended from time to time.

Appreciation

Your Directors place on record their gratitude for the valuable trust, cooperation and support rendered by the Financial Institutions, Banks, Regulatory and Government authorities, dealers, suppliers, business associates and the Companys valued customers.

The Directors also commend the commitment and dedication of the employees and workers of the Company whose unstinted hard work, efforts and ideas have taken the Company on a path of steady growth and development.

For and on behalf of the Board
Aashish Jajodia
Whole-time Director
Place : Kolkata Aditya Jajodia Sanjiv Jajodia
Dated: 29th July, 2013 Director Director

Annexure To Directors Report

Information under Section 217(1)(e) read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors Report for the year ended 31st March, 2013:

A. Conservation of energy:

a) Energy conservation measures taken:

Continuous efforts are being made to identify & implement energy conservation measures at all stages of production process.

b) Additional Investments and Proposals, if any, being implemented for reduction of consumption of energy: Nil

c) Impact of the measures at (a) and (b) above for reduction of energy conservation and consequent impact on the cost of production of goods:

• The above measures have resulted in energy saving cost and thus have led to reduce cost of production.

• As a result of above measures efficient utilization of power and other energy sources has been achieved.

d) Total energy consumption and energy consumption per unit of production as per Form A of the Annexure is annexed.

B. Technology absorption:

The details of efforts made towards absorption of technology are given in the Report in Form B.

C. Foreign exchange earnings and outgo:

a) Activities relating to exports, initiatives taken to exports, development of new export markets for products and services and export plans: Nil

b) Total Foreign Exchange used and earned: Nil

FORM - A

Form for Disclosure of Particulars with respect to Conservation of

Energy

A. Power and Fuel consumption:

Electricity 2012-13 2011-12
a) Purchased Units (KVAH) 17,16,984 5,295,564
Total Amount (Rs. in lacs) 146.25 291.99
Rate per Unit (Rs.) 8.52 5.51
B. Electricity Consumption per unit (M.T.) of consumption:
Sponge iron 247.00 137.22

Form for Disclosure of Particulars with respect to Technology Absorption Research and Development (R & D)

1. Specific areas in which R & D carried out by the Company:

No R&D was carried out within the meaning of applicable accounting standard.

2. Benefits derived as results of the above R & D:

Not Applicable.

3. Future Plan of action:

The Company strives towards energy conservation measures, use of alternative raw materials , improvement in quality and productivity.

4. Expenditure on R & D:

Nil

Technology absorption, adaptation and innovation:

a) Efforts, in brief, made towards technology absorption, adaptation and innovation.

Continuous endeavor is being made to streamline production process, improve machine availability and performance and to achieve highest standards, of quality and quantity benchmark.

b) Benefits derived as a result of the above efforts.

As a result of above efforts, there was improvement in product quality, better and easier availability of materials and saving in process cost.

c) In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), the following information may be furnished :

(i) Technology imported : Nil
(ii) Year of import : Not Applicable
(iii) Has technology been fully absorbedRs. : Not Applicable
(iv) If not fully absorbed, areas where this has not taken place, reasons thereof and future plans of action : Not Applicable