THE SILCAL METALLURGIC LIMITED
ANNUAL REPORT 2000-2001
Your Directors have pleasure in placing before you the TWENTY SECOND ANNUAL
REPORT of the Company for the year ended 31st March, 2001 together with the
Audited Balance Sheet as at 31st March, 2001 and the Profit and Loss
Account for the year ended that date.
COURSE OF BUSINESS
During the year under review, the production of Ferro Silicon has
marginally increased to 7836 MT as compared to the previous year production
of 7028 MT; correspondingly the turnover of the Company has increased by
11%. However, the increase in the turnover has not resulted increase in
profitability in view of the continuous poor price realisation due to
sluggish market conditions and increased in product costs.
The unit at Pondicherry & Avanashi continued to be remained closed for the
whole year in view of the heavy power tariff increase by the respective
The steel industries sector continues to be in bad shape because of very
low indigenous production and dumping of imports.
The Ferro Alloy Industries which depend upon the fortune of steel
industries also suffered a lot owing to the non-favourable conditions of
Notwithstanding the fact, your Company, made a net profit of Rs.52 Lakhs
before prior period adjustments and provision for Taxation.
The Company could not make any further progress towards Bhoothathankettu
Hydro Electric Project since the portion of land by the Irrigation
Department for the project has not been handed over to the Company. The
Company has approached the Honble High Court of Kerala requesting their
intervention and direction to the concerned authorities to hand over the
land to the Company immediately. The matter is still pending.
Further, no significant progress has been achieved in both the Power
Projects due to paucity of funds. The Company is on the look outfor
external commercial borrowings.
The Companys request to the Government of Kerala and Kerala State
Electricity Board to provide Power at Pre-92 Tariff till the commissioning
of Bhoothathankettu Hydro Electric Project, was in vain. The Company has
approached the Honble High Court of Kerala for the same along with a
Petition for handing over of Land. The Companys performance depends upon
the early implementation of the Hydro Electric Projects. The Directors of
the Company are working in this direction.
No Dividend has been recommended for the year since the Company has not
earned sufficient Cash Profits.
The observation made in the Auditors Report have been dealt within item
No.2(c) and 16 of Schedule 27 - Notes forming parts of Acounts. These are
self explanatory and do not call for further comments.
The Company has been maintaining cordial relationship with the Employees.
The Company has neither accepted nor renewed any deposits during the year
and has no overdue or unclaimed deposits of any kind.
ENERGY CONSERVATION, TECHNOLOGY-ABSORPTION, FOREIGN-EXCHANGE EARNINGS AND
Particulars of Conservation of Energy, Technology-Absorption, Foreign
Exchange earnings and outgo in terms of requirement of Section 217(1)(e) of
the Companies Act, 1956 are set out in the Annexure-A in the prescribed
format, forming part of this report.
Listing Agreement with Stock Exchanges have been amended to include
Corporate Governance Code as per SEBI directives. The said Corporate
Governance Code will become applicable to your Company by March, 2002.
However, your Company has already initiated steps to put in place the
system of Corporate Governance and all the mandatory provisions will be
fully complied with before the deadline prescribed. The Audit Committee and
Share Transfer Committee have already been set-up. The other information on
Corporate Governance are given in Annexure-B.
PARTICULARS OF EMPLOYEES
No employee of the Company is covered under the provisions of Section
217(2A) of the Companies Act, 1956.
DIRECTORS RESPONSIBILITY STATEMENT
As required by Section 217(2AA) of the Companies Act, 1956 introduced by
the Companies (Amendment) Act 2000, you Directors state that:
i) in the preparation of the annual accounts for the year ended
31.03.2001, the applicable accounting standards have been followed along
with proper explanation relating to material departures.
ii) that the accounting policies adopted in the preparation of the annual
accounts have been applied consistently and reasonable and prudent
judgements and estimates have been made 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 the year ended that date.
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company for
preventing and detecting fraud and other irregularities.
iv) the annual accounts for the year ended 31.03.2001 have been prepared on
a going concern basis.
M/s. Indian Renewable Energy Development Agency Ltd., (IREDA) has also
filed a case against the Company with Debt Recovery Tribunal (DRT) in line
with M/s. Industrial Investment Bank of India (IIBI) which is already
pending before DRT for the recovery of outstandings. The Company has
requested time for making payment on the plea that the Company has incurred
losses on account of continuous power-cuts imposed by the Kerala State
Electricity Board. As reported in the previous year, one of the project
creditors has filed a case in Honble High Court of Chennai for winding-up
of the Company for non-payment of the dues to them. The Company is
contending the case since this is not a fit case for winding-up. In the
meantime, the said creditor has also initiated Arbitration Proceedings
Sri. K. Chandran and Sri. C.V. Krishnaswamy, Directors of the Company,
retire at the ensuing Annual General Meeting and, being eligible, offer
themselves for re-appointment. Smt. M. Roopa Rajalakshmi has been co-opted
as Director of the Company till the ensuing Annual General Meeting. The
Company has received notice from a member of his intention to propose Smt.
M. Roopa Rajalakshmi as Director of the Company whose office is subject to
retirement by rotation at the forthcoming Annual General Meeting.
Sri. S. Ranganathan (Nominee of IREDA) & Smt. N. Amsaveni, Directors of the
Company have resigned from the Board during the year. Your Directors place
on record their deep appreciation for the services rendered by them during
M/s. T. Nagarajan & Co., Chartered Accountants, Coimbatore retire at the
forthcoming Annual General Meeting and being eligible, offer themselves for
Your Directors acknowledge with gratitude the co-operation and assistance
given by the Financial Institutions and Banks during the year under review.
Your Directors also wish to place on record their sense of appreciation of
the devoted services rendered by Executives, Staff and Workers of the
Your Directors are constantly striving to improve the performance and
strength of the Company with the help of Lord Almighty.
BY ORDER OF THE BOARD
ANNEXURE TO DIRECTORS REPORT
INFORMATION UNDER SECTION 217 (1)(e) OF THE COMPANIES ACT 1956, READ WITH
COMPANIES DISCLOSURE OF PARTICULARS RULES, 1988 AND FORMING PART OF THE
DIRECTORS REPORT FOR THE YEAR ENDED 31st MARCH, 2001.
I. Conservation of Energy
a) Energy conservation measures taken : The specific energy consumption of
various products is being continuously
monitored and effective steps are being
taken to reduce it, continuously.
b) Additional investments and : The company has been spending huge
proposals, if any. amounts every year for conservation of
energy and reduction in consumption of
Units of Power. In view of the impending
Hydel Projects presently, no additional
investments have been made.
c) Impact of the measures at (a) : The measures have started yielding
and (b) above for reduction of results in reduction in the power
energy consumption and consequent consumption
impact on the cost of production.
II. Technology Absorption : The process know-how & product-mix
has been modified to improve and
optimise the performance of the Plant.
III. Foreign Exchange Earnings and Outgo: Earnings - Nil Lakhs
Outgo - 14.08 Lakhs
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