Siddhartha Tubes Ltd Directors Report.



The Members,

Your Directors take great pleasure in presenting the 29th Annual Report of your Company together with Audited Accounts for the year ended 31st March, 2014.

Financial Highlights

(Rs. in Lacs)

2013-2014 2012-2013
Net Sales/Income from operations 19908.08 23528.56
Other Income 249.64 185.16
Total Income 20157.72 23713.72
Total Expenditure 20531.31 24930.11
Profit/Loss before Interest & Depreciation (373.59) (1216.39)
Less: (a) Interest 114.90 126.99
(b) Depreciation 939.67 1004.24
Exceptional & Extraordinary, Items 1768.70 (0.02)
Profit /(Loss) before Tax 340.55 (2347.60)
Provision for taxation - -
Profit / (Loss) after Tax 340.55 (2347.65)
Add : Balance brought forward from previous year (22940.14) (20592.49)
Balance Carried Forward to Next Year (22599.59) (22940.14)


Your Directors express their inability to declare any dividend to Shareholders.


Operating capacities at your Companys Production lines - viz Tubes/ Pipes and CR/GP/GC Coils - suffered a decline vis-a-vis the previous year. While the Tube Mills registered about a 3% decline in Capacity utilization to 29.31%, utilization at the CR Mill fell to 27.2% from 48.9% in the previous year. The GP/GC line, that has essentially been run on Job Work for others, remained practically closed during FY14 also.

Gross Revenues therefore recorded a decline to Rs.225.19 Crore (Previous year Rs.265.52 Crore). However, the Company suffered a lower operating loss (LBDIT) of Rs.373.59 Crore (Previous year Rs.1216.39 Crore) due to relatively better realizations/contributions in the year. Further, during the year, IFCI stood fully repaid and paid out as per settlement terms concluded with them, and your Company has hence accounted for interest and depreciation write back aggregating to Rs.1517.89 lacs arising therefrom, under its P&L A/c. As a result of these Write Backs, net profit for the year stands at Rs.340.55 lacs (Previous year loss of Rs.2347.65 lacs).

Market Opportunities

Market experts are voicing cautious optimism on prospects of the Steel Industry in the near term. A decisive mandate in the General Elections is expected to allow the new Government to quickly focus on Infrastructure developments and boost demand for Steel. On the other hand, higher food inflation, rising fuel prices due to political instability in West Asia, Iron ore mining restrictions, higher dependency on coking coal imports etc are sure to act as impediments for the Steel Industry in particular. Thus, your Company expects price constraints and demand depression to continue and keep operating margins compressed in the current year also. However, your Company has an established network of dealers/ stockiest and marketing reach, and no major bottlenecks or difficulties are envisaged to be encountered for marketing of its products.


Your Company has, since FY09, entered into Negotiated Settlement of Dues with practically all its Secured Lenders (only one lender remains to conclude settlement with the Company and negotiations with them are under way). By end FY14, most of the lenders stand repaid & exited from the Company and only two lenders are outstanding in the Books, (who will also stand repaid in due course as per terms agreed/to be agreed with them). Therefore, as the emphasis and thrust has been on a repayment of the concluded settlements, the Company has not invested further into the incomplete 6 Hi CR Mill. Your Company will initiate steps for completing of this Mill immediately after settlement commitments to lenders are met and adequate finances tied up for completion & operations of the 6 Hi CR Mill.


The Company has not accepted any public deposits during the year under review.


In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Associations of the Company, Mr. Satish Chandra Mundra, Director(Din No: 00011532), retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Kiran O. Mehta (Din No:00028884), and Mr. Satish Chandra Mundra(Din No: 00011532) are Directors whose period of office is liable to determination by retirement of directors by rotation under the erstwhile applicable provisions of the Companies Act, 1956. In terms of Section 149 and other applicable provisions of the Companies Act, 2013, the aforesaid directors being eligible and offering themselves for appointment, are proposed to be appointed as Independent Directors under Section 149 of the Companies Act, 2013, to hold office for five years as per their terms of appointment mentioned in the notice of the forth coming Annual General Meeting of the Company.

In the opinion of the Board, Mr. Kiran O. Mehta(Din NO: 00028884) & Mr. Satish Chandra Mundra(Din NO: 00011532) fulfill the condition specified in the Companies Act, 2013 and rules made under for their appointment as Independent Directors of the Company and are independent of the management.

The proposals regarding the appointment/ reappointment of the aforesaid Director are placed for your approval. The Board of Directors recommend their appointmenr/re-appointment.

Other changes in the Board of Directors of your Company, during the year under review, are as follows:

Mr. Shubham Shree (Din NO: 06428775) ceased to be Director of the Company w.e.f May, 30, 2014 consequent to the withdrawal of his nomination by IFCI Limited.

Mr. K.R. Murthy (Din No.: (00013723) also ceased to be Director of the Company w.e.f. Dec, 04,2013 consequent upon his resignation from the Board.

Your Director place on record their deep appreciation for the valuable services rendered by Mr. Shubham Shree and Mr. K.R. Murthy during their tenure on the Board.

Ms. Babita Rathore (Din No. 06871372) has been inducted as Additional Director (Non Executive) of the Company w.e.f. 21/03/2014.

Mr. Satish Mehta (Din No.: 03314561) and Mr. Umesh Dubey (Din No. : 06967808) have been inducted as Additional Directors (Non Executive) of the Company w.e.f. 14/08/2014. ISSUE OF SECURITIES

The Company has not issued any securities in the financial year under review.


M/s Rakesh K. Jain & Associates, Chartered Accountant, Indore who were appointed as Auditors of the Company for the year 2012-2013, hold office till the conclusion of the ensuing Annual General Meeting.

Pursuant to provisions of Section 139 of the Companies Act, 2013 and rules framed there under, it is proposed to appoint M/s Rakesh K. Jain & Associates as Statutory Auditors of the Company from the conclusion of the ensuing AGM till the conclusion of 32nd AGM to be held in the year 2017, subject to annual ratification by members at the Annual General Meetings.

They have further confirmed that the said appointment if made, would be within the prescribed limits under Section 141(3) of the Companies Act, 2013 and that they are not disqualified for re-appointment.


In terms of Section 204 of the Companies Act, 2013, the Board in its meeting held on August 14, 2014 has appointed M/s M Maheshwari & Associates, Company Secretaries, for conducting Secretarial Audit of the Company for the FY 2014-15


All the insurable assets of the Company are adequately insured.


Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, your Directors hereby state and confirm 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) they 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 or loss of the Company for that period;

(iii) they 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 your Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis. 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.


The detailed Report on Corporate Governance forms a part of this Annual Report.


The Management Discussion and Analysis Report (MDA) of the Company are discussed elsewhere in this Annual Report.


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.


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 hereto and forms part of the Report.


The Company does not have any employee in the category as specified under Section 217(2A) of Companies Act, 1956 (as amended) read with Companies (Particulars of Employees) Rules, 1975 (as amended).


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 convey their appreciation for the continuous support received from vendors, customers, consultants, 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
Nainesh 3. Sanghvi
Place: Indore (DIN NO:00006553)
Dated: 14.08.2014 Chairman and Managing Director


Information pursuant to Section 217(l)(e) of the Companies (Disclosure of particulars in the report of the Board of Directors) Rules 1988 and forming part of the Directors Report for the year ended 31st March 2014. Form "A"


(a) Energy conservation measures taken: NIL.

(b) Proposals for reduction of consumption of energy: NIL.

(c) Additional investment for above: From internal accruals.

(d) Impact of above measures: Not significant.

Details of Power & Fuel Consumption

2013-14 2012-13
1. Electricity:
i. Purchased units 5079802 - 8124798
Total amount (Rs. in Lacs) 481.68 625.31
Rate per unit (Rs.) 9.48 7.70
ii. Own Generated
a. Through Diesel Generator
Units generated 14440 19916
Diesel (Rs. in Lats) 2.26 2.59
Rate per Unit(Rs.) 15.64 13.00
b. Furnace oil
Qty. in MT 300.04 230.60
Total Amount (Rs. in Lacs) 149.30 114.99
Average rate per unit (Rs.) 49.76 49.86
c. Coal
Qty. in MT 794.96 620.94
Total Amount (Rs. in Lacs) 44.69 23.04
Average rate per unit (Rs.) 5621.84 3710.27
Standard (if any)
A Product M.S. Steel Tubes & Pipes (Unit in MT) (Including transfer for Galvanizing) 33389 36460
Electricity per MT (Rs.) 489.42 562.52
Furnace oil per MT (Rs.) 447.14 315.38
B Product CR Coil & GP/GC Coil Sheet (Unit in MT)
(Including transfer for Galvanising) 17904 30214
Electricity per MT (Rs.) 1777.69 1399.34
Furnace oil per MT (Rs.) - -
Coal per MT (Rs.). 249.62 76.25



Research & Develooment:

Tube Division: Auto Varnishing for Tubes.

CRM Division: Nil

Benefits derived: Quality ImDrovement on Tubes.

Future Dlan of action:

Tube Division: Replacement of HF welders with Solid State welders.

CRM Division: Installation of 6 HI CR Mill pickling line.

Tube Division: — Not Applicable —

Foreign Exchange Earnings and Outgo

1. Total Foreign Exchange used & earned in US Dollars & GBP.

(Value in Rs.)

Current Year Previous Year
Total Foreign Exchange Used
On import of Stores & Spares 7,04,637 4,62,392
Expenditure in Foreign currencies on Foreign Travels. - 5,19,800
On import of Raw Material - -


For and on behalf of the Board
Nainesh 3. Sanghvi
Place: Indore (DIN NO:00006553)
Dated: 14.08.2014 Chairman and Managing Director