STATEMENT PURSUANT TO SECTION 102 (1) OF THE COMPANIES ACT, 2013

Transcription

1

2

3

4 STATEMENT PURSUANT TO SECTION 102 (1) OF THE COMPANIES ACT, 2013 ITEM NO. 4 M/s. ABK & Associates, Cost Accountants, Jamuna Niwas, 1st Floor, 32-A, Jai Bharat Society, 3rd Road, Khar (W), Mumbai are re-appointed as the Cost Auditors of the Company for the financial year by the Board vide its meeting dated 28th June, 2016 on the recommendation by the audit committee of the Board dated 24th June, 2016, at a remuneration of Rs. 50,000/- besides out of pocket and TA expenses. Hence the Board of Directors recommends the resolution as set out in item No. 4 for being ratified by the members by way of Ordinary Resolution. None of the Directors and/or Key Managerial Personnel of the Company is interested in this resolution. ITEM NO. 5 In terms of requirements of Section 23(1)(b) of the Sick Industrial Companies (Special Provisions) Act, 1985, a report of the Board of Directors on erosion of more than 50% of the Company s peak net worth during the immediately preceding four financial years along with its causes and revival plan is being submitted herewith to the Members of the Company. As per audited financial accounts of the Company for the financial year ended March 31, 2016 which is to be adopted by the shareholders of the Company at their Thirteenth Annual General Meeting to be held on Wednesday, the 14th day of September, 2016, the accumulated losses as at the end of financial year ended March 31, 2016 stood at Rs Crores which are more than 50% of its peak net worth of approx. Rs. 476 Crore during the four financial years preceding the financial year ended March 31, 2016 calculated as per the provisions of SICA. The Net Worth for the preceding four years are as follows: Year Net Worth (Rs. in Crores) Rs (approx.) Rs (approx.) Rs (approx.) Rs (approx.) The facts of such erosion and its causes and the revival measures being taken by the Company are explained in the enclosed Report of the Board of Directors of the Company forming part of this notice. Your Directors recommend for passing of the resolution as an Ordinary Resolution.

5

6 REPORT OF BOARD OF DIRECTORS TO THE SHAREHOLDERS OF INDIAN STEEL CORPOARTION LIMITED UNDER SECTION 23(1)(B) OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985 ******************************************************************************************************************* To, The Members of Indian Steel Corporation Limited, In terms of requirements of Section 23(1)(b) of the Sick Industrial Companies (Special Provisions) Act, 1985, a report of the Board of Directors on erosion of more than 50% of the Company s peak net worth during the immediately preceding four financial years along with its causes and revival plan is being submitted herewith to the Members of the Company. As per audited financial accounts of the Company for the financial year ended March 31, 2016 which is to be adopted by the shareholders of the Company at their Thirteenth Annual General Meeting to be held on Wednesday, the 14th day of September, 2016, the accumulated losses as at the end of financial year ended March 31, 2016 stood at Rs Crores which are more than 50% of its peak net worth of approx. Rs. 476 Crore during the four financial years preceding the financial year ended March 31, 2016 calculated as per the provisions of SICA. The Net Worth for the preceding four years are as follows: Year Net Worth (Rs. in Crores) Rs (approx.) Rs (approx.) Rs (approx.) Rs (approx.) Causes of erosion of the relevant net worth: The Company is engaged in Manufacturing of Cold-Rolled Steel products. (Cold Rolled / Cold Rolled Closed Annealed Steel / Coils, Sheets / Galvanised Steel Sheets / Coils Plain / Corrugated and Colour Coated Coils & Sheets falling under NIC description). Our Company has always been selling quality products and owns a good reputation in the market. The Steel Industry of India is facing severe crisis which has greatly affected the financial position of our Company in last few years. Having a look at the deteriorating trend of the turnover of the Company as well as the profit of the Company for the last four years, will help understand the deteriorating financial position of the Company in a better way. The following table depicts the turnover and the profit/loss for the last four financial years: Year Turnover (Rs. in Crores) Net Profit (Rs. in Crores) Rs. 2, Rs. (306.52) Rs. 3, Rs. (144.23) Rs. 3, Rs Rs. 3, Rs. 3.68

7 Looking at the present scenario of the Steel Industry as well as the downstream products industry, it is seen that on account of poor off-take in the domestic as well as export markets coupled with cheap imports into India, it has in an enormous manner hit the Steel Industry of India. Further, it has greatly affected the overall performance including financial position of the Company. The Company s overall sales performance dropped much lower than anticipated for the year The year proved the worst year for ISCL, as the Company was not able to recover its variable cost and suffered heavy losses. The main reasons for such huge losses are mainly attributed to the environmental factors such as low domestic demand, high interest cost, continuous falling of prices of finished goods. Measures initiated by the Company to improve the financial performance: 1. In the year 2014, the Company launched a new product Ultrashine XL which received a pretty favorable response from the domestic market. The Company also set up the ISC Steel Zone in Pune (a retail store) through which the profile sheets could be directly sold to the retail customers. 2. As the board is already aware that Punjab National Bank and SBBJ had already sanctioned for carving out their share into Working Capital Term Loan of an amount of Rs Crores. Further SBBJ had sanctioned a Corporate Loan of Rs. 69 Crores. The said rectification was carried out during the FY In the year 2015, the Company in order to sail through tough times, approached its strategic partner; Mitsui & Co., Ltd. and other business partners like LU Qin (Hong Kong) Company Limited, SK networks etc. for extending its credit lines and timely availability of raw-materials at the competitive prices. 4. As the turbulent times of the industry continued even during the year ended March 2016 resulting in cash losses for the Company, the Company had approached the lenders led by Punjab National Bank for structuring of debts under RBI Circular for Scheme for Sustainable Structuring of Debts. The said proposal of the Company is under consideration of the lenders and upon its implementation, the Company / Directors are confident of the revival of the Company s operations, profitability and cash flows. 5. As Government of India declared a Minimum Import Price (MIP) for the products such as Pre- Painted Galvanized Iron (PPGI) and Galvanized Steel Coil/Sheet (GP/GC), the domestic market of India should be benefitted in an enormous manner. Such initiative of Indian Government would increase the domestic demand of the PPGI and GP/GC as imports would be restricted. The Company has undertaken the above mentioned steps to smoothen the operational mechanism of the Company and in coming future, will also play a well defined strategy for future growth and to sustain and boost its revenue and profitability.

8

9 Form No. MGT-11 Proxy form [Pursuant to section 105 (6) of the Companies Act, 2013 and rule 19 (3) of the Companies (Management and Administration) Rules, 2014] CIN: U27100 MH 2004 PLC Name of the Company: Indian Steel Corporation Limited Registered office: 611, Tulsiani Chambers, Nariman Point, Mumbai Name of Member(s):- Registered Address:- Id:- Folio No. I/We, being the member (s) of. shares of the above named Company, hereby appoint:- 1. Name: Address: Id: Signature:, or failing him 2. Name: Address: Id: Signature: as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Thirteenth Annual General Meeting of the Company, to be held on, Wednesday, the 14th day of September, 2016 at Hotel Sahara Star, Opp. Domestic Airport, Vile Parle (East), Mumbai (MH) at a.m. and at any adjournment thereof in respect of such resolutions as are indicated in the notice of the said meeting. Signed this day of 2016 Signature of shareholder: Affix Revenue Stamp Signature of Proxy holder(s): Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.