It is my pleasure to present before you the 42nd Annual Report of your Company andshare with you the highlights for the year as well as the outlook for the near andmidterms.
2014 was indeed a challenging year. The commodity industry across the globe is goingthrough the down cycle mainly on account of European crisis and slowdown in the Chineseeconomy resulting into sharp fall in the commodity and energy prices. This had an impacton your Company also. However your Company has taken various strategic initiatives toface such challenges.
Your Company over the years has overcome challenges and roadblocks by beingRESILIENT RESOLUTE RESURGENT. The Company's integrated business model makes it possiblefor the end product of one business to be positioned as the raw material of anothercreating a self-feeding ecosystem within minimal inventory costing and logistic issues.This integration has strengthened the Company's insulation from external pricing andsupply shocks and enhancing input security.
During the year the operations at the iron ore mines of the Company resumed after morethan five years and the Company started receiving material from its captive iron oremines.
The financial performance of the Company has to be seen in the backdrop of additionalliability of Rs.107 crore for earlier years on account of additional levy imposed byHon'ble Supreme Court on the coal extracted. Inspite of this the Company has earned a netprofit of Rs.56 crore.
Your Company has always remained conservative. In the recently concluded auction ofcoal mines your Company participated but keeping in view the associated risksparticularly due to uncertainties and linking of the premium with the WPI restricted itsbids at the levels which are commercially sustainable in the long term. Your Company isconfident that in the near future the mines will be available at much lower premium withlesser uncertainties.
It has kept its financial gearing at low level. The long-term loans of Rs.351 crore arerepresented by the investments made in subsidiaries. As such the existing operations andfacilities of the Company are practically debt free. The long-term debt to equity ratio isjust 0.34 on standalone basis and 0.83 at the consolidated level. The investments made insubsidiaries have just started generating revenue which is expected to go upsubstantially over the years and will reflect in the improved performance in the years tocome.
Your Company has focused on harnessing of natural resources. It has taken up number ofhydropower projects through SPVs totaling more than 200 MW. 1st project of 5 MW isoperating successfully for last seven years. The second project of 24 MW is expected to becommissioned in the next financial year. Another project of 96 MW will come on steam inthe financial year 2018-19.
Your Company is holding sizable land bank the value of which shall be unlocked infuture.
Your Company has been awarded the Integrated Management System (IMS) certificate fromABS Quality Evaluations Inc. which comprises of ISO 14001:2004 OHSAS 18001:2007 &ISO 9001:2008. Further your Company has also received Certificate of Recognition as aTrading House from the Ministry of Commerce and Industry Government of India.
The outlook for the near and mid-term for your Company remains positive. With thegrowth rate for the Indian economy forecasted at plus 7 percent coupled with government'sthrust on manufacturing power and infrastructure sectors we are confident and convincedthat this huge spending will unleash significant growth opportunities for the Company.With our ready and integrated infrastructure with other cost advantages we are lookingoptimistically ahead.
I thank you for the faith and trust that you have always shown in the Company.
KAMAL KISHORE SARDA
Chairman and Managing Director.