Directors Report of Marmagoa Steel Ltd.

Mar 31, 2015

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

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Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present the Twenty Sixth Annual Report along with the audited Statements of Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS:

For the Year For the Year ending ending 31.03.2014 31.03.2013 (Rs. in Lakhs) (Rs. in Lakhs)

Gross Sales 383 6235

Interest and Other Income 73 20

(Loss) / Profit before Interest, Depreciation & Extra ordinary Items (674) (1625)

Interest 1239 1028

Depreciation 227 243

Prior Period adjustments 1607 (45)

(Loss) / Profit before tax (3747) (2851)

Provision for taxation (133) (103)

(Loss)/Profit after tax (3614) (2748)

OPERATIONS:

The gross sales for the year stand at Rs. 3.83 Crores as against Rs. 62.35 Crores of the previous year. The production was 801 MT and 738 MT of billets and rolled products respectively as compared to 12902 MT and 12078 MT respectively for the year-ended 31.03.2013. The Loss before tax stands at Rs. 37.47 Crores, which includes a sum of Rs.16.07 crores of earlier years, as against a Loss of Rs.28.51 Crores of the previous year.

The Company had approached its Bankers with a proposal for restructuring cum enhancement of the Working Capital facilities dated 18.06.2010. After a lot of follow up, personal visits to the Branch - Regional/Zonal Office - Head Office and submission of details from time to time, Bank of Maharashtra (lead Bank) although finally sanctioned the restructuring cum enhancement proposal on 12.06.2012, communicated the same to the Company on 02.07.2012. The salient features of the sanction are: (1) Restructuring of the existing irregularities by way of creation of a Working Capital Term Loan (WCTL) of Rs.31.40 crores (in consortium) re-payable over a period of 60 months with a moratorium of 12 months. (2) Release of Letter of Credit (LC) facility of Rs.62 crores (in consortium). (3) Company to infuse Rs.24 crores in 3 phases - Rs.10 crores immediately up on sanction and Rs.7 crores each by December 2012 and March 2013 respectively. (4) Company to provide the required guarantees.

The Company immediately requested Bank of Maharashtra (BOM) being the Lead Bank, to hold a Consortium Meeting and the same was held on 08.07.2012 at the Head Office of BOM in Pune which was attended by the General Managers of both; Bank of Maharashtra as well as Union Bank of India.

Although, Union Bank of India assured that they will sanction their share within a fortnight''s time; never sanctioned their share in the Consortium, despite Company infusing Rs.10 crores on 23.07.2012. Upon the infusion of Rs.10 crores, Bank of Maharashtra apart from restructuring their dues by way of creating a WCTL, released only the old LC limits pending sanction of the limits by Union Bank of India. As a result the Company could not get the benefit of the full need based enhanced limits and consequently the capacity utilization gradually decreased month after month. Inspite of several meetings, Union Bank of India did not release their share in the Consortium and hence the Lead Bank also did not implement the full sanction terms, which affected the Capacity utilization and gradually the level reached an all time low of about 10% during 2012-13 culminating in drying up of the cash flows.

Finally, 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, on account of non servicing of the various contractual obligations, especially the repayment schedule.

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 from Companies has not been provided for the year under report.

With a view to restart the operations, the Company has approached the Hon''ble BIFR with a Modified Draft Rehabilitation (MDRS). Please refer Note -28 for further details.

BOARD:

Shri Ashok Mittal was appointed as Chairman of the company for a period of five years w.e.f. 23rd July, 2009. On completion of the five year term, Shri Ashok Mittal has expressed his willingness to continue as a Director. The Board at its meeting held on 18.07.2014 has appointed Shri Ashok Mittal as additional director of the Company w.e.f. 23rd July, 2014. 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 Ashok Mittal, for the office of Director. Shri Ashok Mittal is a commerce graduate and has been in the steel business for over 35 years. He has vast experience in promoting and operating steel plants and rolling mills.

Your Directors recommend his appointment.

The Company had, pursuant to the provisions of clause 49 of the Listing Agreement entered into with Stock Exchange, appointed Mr. P. J. Bhide, Mr K. V. Ramarathnam and Mr. A K Sinha as Independent Directors of the Company. As per section 149(4) of the Companies Act, 2013 (Act), which came into effect from April 1, 2014, every listed public company is required to have at least one-third of the total number of directors as Independent Directors. In accordance with the provisions of section 149 of the Act, these Directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the forthcoming Annual General Meeting (AGM) of the Company.

Your Directors recommend their appointment.

Shri R. K. Radhakrishna was appointed as Managing Director of the company for a period of five years w.e.f. 23rd July, 2009. The said period of appointment expires on 23.07.2014. The Board at its meeting held on 18.07.2014 has extended the tenure by a further period of 3 years w.e.f. 23rd July, 2014 subject to the approval of the members at the ensuing Annual General Meeting. Shri R. K. Radhakrishna is a metallurgist with a sound technoeconomical background having about 38 years of experience in the steel industry. He has held various senior positions in the industry.

Your Directors recommend his appointment. REHABILITATION SCHEME:

The BIFR Sanctioned Scheme has been fully implemented by all the concerned Agencies. viz. Financial Institutions, Banks and Promoter; except the State Govt. of Goa. Please refer Note - 28 for further details.

AUDITORS:

M/s. Kamath & Rau, Chartered Accountants, Mangalore resigned with effect from 24.06.2014. The Board places on record its appreciation for the services rendered to the Company during their tenure as Auditors.

At the Extra Ordinary General Meeting held on 23.08.2014 M/s. N. D. Hegde & Associates, Chartered Accountants, Margao were appointed as Auditors and are eligible for reappointment.

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.

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

Sd/- Ashok Mittal Place: Camp Bangalore CHAIRMAN Date: 06.09.2014

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Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present the Twenty Fifth Annual Report along with the audited Statements of Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS:

For the Year For the Year ending ending 31.03.2013 31.03.2012 (Rs. in Lakhs) (Rs. in Lakhs)

Gross Sales 6235 17699

Interest and Other Income 20 35

(Loss) / Profit before Interest, (1625) 94 Depreciation & Extra ordinary Items

Interest 1028 1050

Depreciation 243 281

Prior Period adjustments (45) 2

(Loss) / Profit before tax (2851) (1239)

Provision for taxation (103) (117)

(Loss)/Profit after tax (2748) (1122)

OPERATIONS:

The gross sales for the year stand at Rs. 62 Crores as against Rs. 177 Crores of the previous year. The production was 12902 MT and 12078 MT of billets and rolled products respectively as compared to 37680 MT and 35606 MT respectively for the year-ended 31.03.2012. The Loss before tax stands at Rs. 28.51 Crores as against a Loss of Rs.12.39 Crores of the previous year.

The current year''s performance was adversely affected on account of the lower capacity utilization for want of sufficient working capital facilities.

BOARD:

Sri K.V. Ramarathnam, retires by rotation at this Annual General Meeting and is eligible for reappointment. Mr. Ramarathnam, aged 65 years, holds a Bachelor''s degree in Engineering and has a total of 42 years experience in steel plant management. Your Directors recommend his appointment.

REHABILITATION SCHEME:

The BIFR Sanctioned Scheme has been fully implemented by all the concerned Agencies. viz. Financial Institutions, Banks and Promoter; except the State Govt. of Goa.

AUDITORS:

M/s. Kamath & Rau, Chartered Accountants, retire at the conclusion of ensuing Annual General Meeting and are eligible for reappointment.

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 under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 Pursuant to Section 217 (1) (e) of The Companies Act, 1956 are given in the annexure form ''A'' and ''B''.

PARTICULARS OF EMPLOYEES:

There were no employees during the year or for the part of the year and who were in receipt of remuneration attracting the provisions of Section 217 (2A) of The Companies Act, 1956, read with Companies (Particulars of Employees) Rule, 1975.

DIRECTORS'' RESPONSIBILITY STATEMENT:

As required by Section 21 7 (2AA) of The Companies Act, 1956, 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.

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.

Management Discussion And Analysis Opportunities and threats:

Opportunities:

The Company''s plant, in the West Coast of India, has state-of-the-art facilities with ISO 9001 and 14001 affiliations. The company is well connected by road, rail and sea. The company enjoys the benefits of the lowest power cost in the country, proximity to the sea port and cordial labour relations. The Company manufactures alloy and special steel through the Electric Arc Furnace route to produce Alloy Steel Billets, Flats and Rounds. The billets produced are for captive consumption for rerolling.

The main product of the Company is spring steel flats, which is the key component for manufacture of leaf spring used in automobiles.

The Steel industry is presently doing well due to the growth in automobile, construction and infrastructural activities.

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. The company has appointed a firm of Chartered Accountants as Internal Auditors who submit their quarterly report to the Audit Committee.

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 sd/-

Ashok Mittal CHAIRMAN

Place: Camp Bangalore

Date: 24.06.2013

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Mar 31, 2012

The Directors are pleased to present the Twenty Fourth Annual Report along with the audited Statements of Accounts for the year ended 31s' March, 2012.



FINANCIAL RESULTS:

For the Year For the Year ending ending 31.03.2012 31.03.2011 (Rs. in Lakhs) (Rs. in Lakhs)

Gross Sales 17699 20510

Interest and Other Income 35 67

Profit/(Loss) before Interest, Depreciation & Extra ordinary Items 94 752

Interest 1050 937

Depreciation 281 284

Prior Period adjustments 2 0

(Loss)/Profit before tax (1239) (469)

Provision for taxation (117) 73

(Loss)/Profit after tax (1122) (542)



OPERATIONS:

The gross sales for the year stands at Rs. 177 Crores as against Rs. 205 Crores of the previous year. The production was 37680 MT and 35606 MT of billets and rolled products respectively as compared to 49356 MT and 48139 MT respectively for the year ended 31.03.2011. The Loss before tax stands at Rs. 12.39 Crores as against a Loss of Rs.4.69 Crores of the previous year.

The current year's performance was adversely affected on account of the lower capacity utilization for want of sufficient working capital . facilities.

BOARD:

Sri A. K. Sinha, retires by rotation at this Annual General Meeting and is eligible for reappointment.

Mr. Sinha, aged 71 years, holds a Bachelor's degree in Engineering and has a total of 45 years experience in steel plant management and mining industry. He has 3 decades of experience in managing SAIL plants across the country. He is also a director on the Board of Goa Infralogistics Limited. Your Directors recommend his appointment. _

REHABILITATION SCHEME:

The BIFR Sanctioned Scheme has been fully implemented by all the concerned Agencies, viz. Financial institutions, Banks and Promoter; except the State Govt. of Goa.

AUDITORS:

M/s. Kamath & Rau, Chartered Accountants, retire at the conclusion of ensuing Annual General Meeting and are eligible for reappointment.

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 Decarbonisation, Electro Magnetic Stirrer and Auto Cutters.

The details required under Companies (Disclosure of Particulars in the Report of Board of Directors) 'Rules, 1988 Pursuant to Section 217 (1) (e) of The Companies Act, 1956 are given in the annexure form 'A' and 'B'.

PARTICULARS OF EMPLOYEES:

There were no employees during the year or for the part of the year and who were in receipt of remuneration attracting the provisions of Section 217 (2A) of The Companies Act, 1956, read with Companies (Particulars of Employees) Rule, 1975.

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. 3283.94 Lakhs

DIRECTORS' RESPONSIBILITY STATEMENT:

As required by Section 217 (2AA) of The Companies Act, 1956, 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 Ihe 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.

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.

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,

sd /-

Place: Camp, Bangalore Ashok Mittal

Date: 29.06.2012 Chairman

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Mar 31, 2010

The Directors are pleased to present the Twentysecond Annual Report along with the audited Statements of Accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS:

For the Year For the Year

ending ending

31.03.2010 31.03.2009

(Rs. in Lakhs) (Rs. in Lakhs)

Gross Sales 16402 18680

Interest and

Other Income 39 19

Loss before Interest, Depreciation &

Extra ordinary Items (566) 99

Interest 787 742

Depreciation 281 279

Prior Period adjustments (6) (144)

(Loss)/Profit before tax (1640) (778)

Provision for taxation (5) (139)

(Loss)/Profit after tax (1635) (639)



OPERATIONS:

The gross sales for the year stands at Rs.164 Crores as against Rs. 187 Crores of the previous year. The production was 45187 MT and 44596 MT of billets and rolled products respectively as compared to 40669 MT and 39259 MT respectively for the year-ended 31.03.2009. The Loss before tax stands at Rs.16.40 Crores as against a Loss of Rs. 7.78 Crores of the previous year.

The current years performance was adversely affected on account of the carry over effect of the global recession, break down of the main furnace Transformer and labour unrest.

BOARD:

Shri M. K. Garg was nominated as Special Director by the Board for Industrial and Financial Reconstruction (BIFR) during the year.

Sri K. V. Ramarathnam retires by rotation at this Annual General Meeting and is eligible for reappointment. Mr. K. V. Ramarathnam aged 60, holds a Bachelors Degree in Mechanical Engineering. He has more than 35 years experience in the steel Industry. He has headed various steel plants both in India and abroad and is presently the Managing Director of" Mahindra Ugine Steel Co. Ltd. He is also a member of the Companys Audit Committee, Investors Grievance Committee and Remuneration Committee.

REHABILITATION SCHEME:

The BIFR Sanctioned Scheme has been fully implemented by all the concerned Agencies, viz. Financial Institutions, Banks and Promoter; except the State Govt, of Goa. The Government of Goa has however recently constituted an empowered committee to look into the matter to enable the Government to come to a decision.

AUDITORS:

M/s. Kamath & Rau, Chartered Accountants, retire at the conclusion of ensuing Annual General Meeting and are eligible for reappointment.

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 additional facilities installed during the previous year for improved quality of production like Vacuum Degassing and Vacuum Oxygen Decarbonisation, Electro Magnetic Stirrer and Auto Cutters are functioning, satisfactorily.

The facilities mentioned above will not only be adding value to the companys products but also improving the top and bottom line of performance.

The details required under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 Pursuant to Section 217 (1) (e) of The Companies Act, 1956 are given in the annexure form A and B.

PARTICULARS OF EMPLOYEES:

There were no employees during the year or for the part of the year and who were in receipt of remuneration attracting the provisions of Section 217 (2A) of The Companies Act, 1956, read with Companies (Particulars of Employees) Rule, 1975.

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.3907.47 Lakhs

DIRECTORS RESPONSIBILITY STATEMENT:

As required by Section 217 (2AA) of The Companies Act, 1956, 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;

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.

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 whisle blowing etc. The company is substantially complying with the recommendations on the Audit committee and is taking steps towards implementation of other guidelines.

For and on behalf of the Board Sd/- Place:Curtorim ASHOK MITTAL Date :31.05.2010 CHAIRMAN