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Sarda Energy & Minerals Ltd.

BSE: 504614 Sector: Metals & Mining
BSE 12:05 | 07 May 578.40 -10.20






NSE 11:59 | 07 May 576.00 -12.95






OPEN 597.35
VOLUME 11247
52-Week high 612.00
52-Week low 127.95
P/E 10.57
Mkt Cap.(Rs cr) 2,085
Buy Price 576.55
Buy Qty 79.00
Sell Price 577.90
Sell Qty 14.00
OPEN 597.35
CLOSE 588.60
VOLUME 11247
52-Week high 612.00
52-Week low 127.95
P/E 10.57
Mkt Cap.(Rs cr) 2,085
Buy Price 576.55
Buy Qty 79.00
Sell Price 577.90
Sell Qty 14.00

Sarda Energy & Minerals Ltd. (SARDAEN) - Director Report

Company director report

Dear Shareholders

Your directors take pleasure in presenting the 47th Annual Report onbusiness and operations of your Company for the financial year ended 31st March 2020.

Results of our operations (' in crore)




2019-20 2018-19 2019-20 2018-19
Revenue from operations 1424 1653 2000 2324
Exports 49 124 331 637
Other Income (Loss) 61 32 (17) 17
EBIDTA 301 406 339 499
Depreciation 51 50 78 76
Finance cost 36 35 82 99
Profit before tax 214 321 179 324
Provision for tax 32 106 43 117
Net Profit 182 215 136 207

Review of performance

The year under review was a challenging year for global and so for theIndian economy. GDP growth particularly IIP of the country has been shrinking since 2016.Global Slowdown was mainly attributed to the trade war between US and China which inspiteof a series of negotiations and discussions and even execution of a preliminary dealbetween the two nations in January 2020 still continues to haunt the global marketsparticularly those markets which are anywhere in demand-supply chain of the two nations.

Even as the year began with dampened market conditions growth seemedto have gradually stabilized at the close of 2019. However the COVID-19 pandemic whichinitially affected the Chinese market gradually spread across beginning 2020 to mostparts of the world affecting the demand. The nationwide lockdowns to break the chain oftransmission brought economic activities to near halt affecting the steel demand in themonth of March 2020. An uncertain economic environment coupled with continued tradetensions slowdown in global manufacturing notably auto sector and intensifyinggeopolitical issues weighed on investment and trade. Similarly production growth wasonly visible in Asia and the Middle East and to some extent in the US while the rest ofthe world witnessed a contraction.

The global slowdown due to COVID-19 induced lockdown in China andacross the world and in India in the month of March 2020 impacted the Company'sperformance in the fourth quarter of FY 2019-20. In view of the lockdown imposed theCompany temporarily suspended operations w.e.f. 25th March 2020. The Company restartedmanufacturing operations with effect from 16th April 2020 in a synchronized manner withvarious restrictions imposed by the Govt. and full capacity could be achieved only in the3rd week of May 2020.

During the year the plants operated satisfactorily. Revenue fromoperations were impacted due to:

a) Maintenance shutdown of one ferro alloy furnace at Vizag facility inQ1FY20 and relining work of one furnace from end of Aug-19 to Nov-19;

b) Repair work related shut down of one power plant at Raipur facilityin Q4FY20; and

c) shut down of Pellet plant on achievement of permitted capacity inthe month of March.

The total income and profitability has also been impacted on account ofCOVID-19 related disruption in economic activity and volatility in currency and capitalmarket. Accordingly there has been a Mark-To-Market loss of ' 40.08 crore in Other Incomeand a Forex loss of ' 16.65 crore in Other Expenses in FY20 which is mostly notional innature.

During the year scattered and better rainfall helped in better capacityutilization of hydropower plants.

Despite the headwinds the Company delivered steady operationalperformance backed by strong focus on cost reduction and a healthy mix of value-addedproducts. During the year your Company scaled new highs in production of most products.The production of other products was also in line with previous year. Operations at theiron ore mine was satisfactory. Your Company fulfilled all its financial obligations ontime.

The outbreak of COVID-19 pandemic in the financial year under reviewhas not been contained rather its severity has increased across the world including Indiaseverely impacting economy. Apart from COVID-19 pandemic impact which may affect thefinancial performance of the Company there are no other material changes and commitmentsaffecting the financial position of the Company required to be reported under thissection. Stakeholders are requested to refer the detailed analysis of the performancegiven in the Management Discussion and Analysis Report appended hereto. There was nochange in the nature of the business of the Company during the year.

Impact of COVID-19

The outbreak of COVID-19 pandemic has led to an unprecedented healthcrisis and has disrupted economic activities and global trade while severely impactingconsumer spending power. Consequently the global steel demand is expected to be sharplylower in 2020.

The Government of India had imposed a stringent nationwide lockdownwith effect from 25th March 2020 which has severely impacted manufacturingactivities. Though the continuous process Steel plants and Mining sectors were exemptedfrom the strict lockdown measures they could not be operated in the given environment andother restrictions. We took steps for resuming manufacturing operations from 16thApril 2020 but full normalcy could return only in third week of May 2020. Due torespreads of the virus localized lockdowns and other restrictions have been imposed whichwill have an impact on production and demand.

The health and safety of our employees and the communities in which weoperate continues to be the foremost priority of the Company. The Company is focussed onrunning operations safely and efficiently to service our customers. The operations havebeen aligned with the prevailing market conditions Cross-functional teams worked to managesupply chain and logistics issues within the constraints imposed by the lockdown to ensurethat plant could operate as planned. Increased steel has helped in balancing demand-supplyof steel and preventing sharp correction in prices. The Company is also focused onliquidity management to face any future disruption in business conditions. Funds wereraised to manage liquidity considering the heightened uncertainty over the extent ofimpact on underlying demand conditions.


Your Directors are pleased to recommend dividend of ' 5/- (i.e. 50%)per equity share for the financial year 2019-20 (last year ' 5/- per equity share). Thedividend if approved by the shareholders in the ensuing Annual General Meeting will bepaid as per the applicable provisions. The dividend would result in cash outflow of '18.02 crore.

Further your Company has transferred the unpaid dividend amount of '8.05 lakh in respect of the F.Y. 2011-12 to the Investor Education and Protection Fund.However due to technical reasons the corresponding returns could not be filed with MCA.The Company has raised its concern to IEPFA and is awaiting the resolution.

Transfer to Reserves

The Board of Directors has decided to retain the entire amount ofprofit for Financial Year 2019-20 in the statement of profit and loss.

Subsidiaries / Controlled Entities / Joint Ventures

During the year under review -

• two of Company's subsidiaries namely Raipur Fabritech PrivateLimited and Raipur Industrial Gases Private Limited were dissolved/wound-up.

• there was an increase of 3.61% in the stake of your Company inMadhya Bharat Power Corporation Limited due to further infusion of equity capital towardsits commitment in the project cost.

• as already reported the Company has made further investmentsdirectly and through its wholly owned Subsidiary - Sarda Energy Limited - to acquire 100%stake in Chhattisgarh Hydro Power LLP

• the Company has also infused further equity in overseassubsidiaries namely Sarda Global Venture Pte. Limited and Sarda Global Trading DMCC.

A brief on the performance/business operations ofsubsidiaries/controlled entities/joint ventures consolidated with your Company is givenhereunder.


• Sarda Energy & Minerals Hongkong Limited Hongkong (SEMHKL)is a wholly owned subsidiary functioning as global investment and trading arm of yourCompany. During the year under review the subsidiary reported a net loss of ' 30.22 croreas against net profit of ' 7.20 crore in the previous year. The loss was mainly related tomark- to-market losses on investments held by the company due to global meltdown on fearsof COVID-19 pandemic. The company has paid a dividend of USD 2.50 Mn during the year (Pr.Year USD 2.60 Mn).

• Sarda Global Venture Pte. Limited Singapore (SGV) a whollyowned subsidiary has acquired economic interest in coal mines in Indonesia. The companyis having JV with Indorama group for the coal mine in Indonesia. During the year underreview your Company has made further equity contribution of USD 2.00 Mn in the company.During the year under review the venture extracted 579316 MTs (PY 500004 MTs) of coal.The subsidiary reported a net profit of ' 0.08 crore as against net profit of ' 0.09 crorein the previous year.

• Sarda Global Trading DMCC Dubai (SGT) a wholly ownedsubsidiary has been incorporated in 2018 with the object of trading in metal ores andfirewood. During the year under review your Company has made further equity investmentsof United Arab Emirates Dirham 0.80 Mn to meet its establishments expenses. The subsidiaryreported a net loss of ' 8.36 crore crore as against net loss of ' 1.23 crore in theprevious year. The losses mainly related to mark-to-market loss on investments held in thecompany due to global melt-down triggered by COVID-19 pandemic.

• Sarda Metals & Alloys Limited (SMAL) a wholly ownedsubsidiary operating 2 x 33 MVA Ferro Alloys plant backed by 80 MW captive thermal powerplant enjoys a Two Star Export House status. During the year power generation was 453.40MU as compared to 524.28 MU in the previous year. The ferro alloys production stood at68596 MTs as against 79585 MTs in the previous year. Relining works in one of thefurnaces was carried out during the year which resulted in production loss. Post reliningthe furnace has demonstrated increased availability and reduced specific consumptions.Captive consumption of Power was 292.20 MU as against 331.71 MU in previous year. Theabove was coupled with low demand of power due to overall sluggishness in economy andprolonged monsoon. As a result the company was able to achieve PLF of 64.52% against PLFof 74.81% in previous year.

During the FY 2019-20 the Company exported 41773 MTs ferro alloysagainst 69844 MTs in the previous year valuing ' 281.11 crore and ' 512.19 croresrespectively. The fall in export was attributed mainly to trade war and subdued marketconditions. However the company was able to capture the domestic market achieving salesof 26956 MTs against 10414 MTs in the PY. During the year the Company has reported anet profit of ' 2.86 crore as against Profit of ' 5.92 crore in P.Y. The fall in theprofit was on account of the production loss because of time taken for overhaul andrelining of furnaces. The company has met all its financial obligations on time.

• Sarda Energy Limited (SEL) a wholly owned subsidiary wasincorporated as an SPV to put-up 1320 MW super critical IPP thermal power project inChhattisgarh. As reported earlier the company has abandoned the project. The funds lyingidle with the Company have been invested in acquisition of share in Chhattisgarh HydroPower LLP (CHP LLP) and Madhya Bharat Power Corporation Limited as part of promoters'contribution. During the year under review the subsidiary earned a net profit of ' 3.27crore mainly from share of profit from investment in Chhatisparh Hydro Power LLP asagainst net profit of ' 0.43 crore in the previous year .

• Chhattisgarh Hydro Power LLP (CHP LLP) is operating 24 MW GulluSmall Hydro Electric Project in Chhattisgarh. The Plant has been earning cash surplus fromthe very first year of its operation. It has generated healthy returns. During the yearthe Plant has generated and supplied highest ever 885.39 lakh units (PY 631.13 Lakh units)and has earned profit of ' 17.46 crore (PY ' 10.01 crore).

The LLP as it has licenses for implementation of four more small hydelpower projects with installed capacity of 97.80 MW. Amongst these 24.90 MW Rehar-I SHP isin the most advance stage of take-off. Various statutory clearances including Second stage(Final) forest clearance is in place. Pre-construction activities like construction oflabour camps stores and guest house is complete. The civil construction works will kickoff after improvement of conditions posed by COVID 19 pandemic.

Your Company has increased its stake in the LLP to 100%.

• Parvatiya Power Limited (PPL) is operating 4.8 MW LoharkhetHydro Power project in Bageshwar district of Uttarakhand. The Company has supplied 264.03lakh KWh (Previous Year 217.18 lakh KWh) to the state grid. The Plant has achieved highestever generation in the current financial year. The plant enjoys debt free operations sincefinancial year 2017-18. The capacity of the Plant is proposed to be enhanced by installingadditional unit of 3 MW. The Detailed Project Report has been submitted for approval ofUttarakhand Jal Vidyut Nigam Limited.

During the year the Company has earned profit after tax of ' 4.52crore (Previous Year ' 2.76 crore). Your Company continues to hold 51% stake in PPL.

• Madhya Bharat Power Corporation Limited (MBPCL) is implementingrun of the river 96 MW Rongnichu HEP in East Sikkim. It is a CDM registered project. Theconstruction works of the project are nearing completion. 12.60 kms long undergroundtunnel has been fully excavated except 13.39 metres left intentionally to be excavated atthe end. The concrete lining works is almost complete. Civil works of Barrage andPowerhouse Complex is largely completed. Hydro-Mechanical works of Gate erection andpenstock steel lining is underway. Supply of power plant equipments is largely completeand half of erection works have been completed. All transmission line towers have beenerected and stringing work is nearing completion. The project commissioning has beendelayed due to effect of COVID-19 pandemic on project activities. Now project is expectedto be commissioned in next quarter.

During year under review your Company has infused ' 153.37 crore inMBPCL (' 95.74 crore by way of equity contribution and ' 57.63 crore by way of unsecuredloan). Your Company holds 82.96% stake in the project (73.84% directly and 9.12% throughits wholly owned subsidiary Sarda Energy Limited).

• Natural Resources Energy Private Limited (NREPL) is an SPV tocarry on the business of development of mines and minerals generation and trading ofpower and infrastructure development. The entire share capital of the company is held bySEML and its wholly owned subsidiary SMAL.

• Sarda Hydro Power LLP (SHP LLP) formerly M/s Sarda Hydro PowerPrivate Limited has been converted into LLP during the financial year 19-20. Your Companycontinues to hold 60% stake in LLP. The LLP is implementing two small hydro projectsnamely 24 MW Kotaiveera and 9 MW Ganeshpur which are under planning and approval stage.

• Shri Ram Electricity LLP (SRE LLP) was incorporated as a specialpurpose vehicle (SPV) for setting up a captive thermal power plant of 40 MW in the Stateof Chhattisgarh. In view of the changed power scenario and cancellation of coal linkagefor the power project the LLP has dropped the project. The entity reported a net profitof ' 0.12 crore as against net profit of ' 0.09 crore in the previous year. Your Companycontinues to hold 51% stake in SRELLP. The firm will be dissolved once coal allocationrelated matters are closed.

Joint Ventures

• Raipur Infrastructure Company Limited (RICL) was operating aleased Railway Siding in Mandhar Raipur which has expired. The company will be wound-upafter closure of pending proceedings and getting refunds from Railways and the taxauthorities. Your Company holds one third share in the Joint Venture. During the year2019-20 the Company had incurred net loss of ' 0.11 crore as against net loss of ' 3.70crore in the previous year.

• Madanpur South Coal Company Limited (MSCCL) a SPV was allottedMadanpur South Coal Block in consortium. The Supreme Court had cancelled all coal blockallotments. Consequent to cancellation of coal mines there is no business left in thecompany and no other activity has been planned. MSCCL holds certain assets includingland acquired for the project. MSCCL would be wound-up after disposal of these assets.Your Company holds 20.13% in the Joint Venture.

A report on the performance and financial position of each of thesubsidiaries associates and joint ventures as per the Companies Act 2013 and theircontribution to the overall performance of the company during the period under report isprovided as part of the Consolidated Financial Statements and hence not repeated here forthe sake of brevity. The Policy for determining material subsidiaries as approved by theBoard may be accessed on the Company's website under the head corporategovernance/policies under the Investors' section.

Consolidated financial statements

The consolidated financial statements presented by the Company includefinancial information of its subsidiaries prepared in compliance with applicableAccounting Standards.

In accordance with Section 136 of the Companies Act 2013 the Auditedfinancial statements including the consolidated financial statements and relatedinformation of the Company and audited financial statements of each of its subsidiariesare available on our website These documents are also available forinspection.


In accordance with the provisions of the Act and the Articles ofAssociation of the Company Mr. Pankaj Sarda Jt. Managing Director of the Company retireby rotation at the ensuing Annual General Meeting and being eligible has offered himselffor re-appointment.

Further on the recommendation of the Nomination & RemunerationCommittee the Board of Directors of the Company in its meeting held on 1st February2020 subject to the consent of the members of the Company had re-appointed Mr. K.K.Sarda as Chairman & Managing Director of the Company for a period of five years w.e.f.1st April 2020.

Necessary resolutions for the above re-appointments are being made apart of the Notice convening the ensuing general meeting.

Brief profile of Mr. Kamal Kishore Sarda and Mr. Pankaj Sarda who areproposed to be re-appointed nature of their expertise names of the companies in whichthey hold directorships their shareholding in the Company and other relevant details areprovided in the Corporate Governance Report forming part of the Annual Report.

During the year under review the members approved the re-appointmentof Mrs. Uma Sarda as Director liable to retire by rotation.

Your Company has received the necessary declaration from eachIndependent Directors who are part of Board confirming that;

a) he/she meets the criteria of Independence as laid out in Section149(6) of the Companies Act 2013 read with the Schedules rules made there under andRegulation 25 of SEBI Listing Regulations 2015; and

b) registered themselves with the Independent Directors' Databank asper the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules2019.

Board Evaluation

The Board has carried out an annual evaluation of effectiveness of itsfunctioning that of its Committees and individual Directors in the manner specified bythe NRC.

The Nomination and Remuneration Committee ("NRC") reviewedthe performance of the individual Directors the Board as a whole and its Committees.

A separate meeting of Independent Directors was also held to review theperformance of Non-Independent Directors; and performance of the Chairperson of theCompany taking into account the views of Executive Directors and NonExecutive Directors.

This was followed by a Board meeting that discussed the performance ofthe Board its Committees and individual Directors including independent Directors. Duringevaluation of the individual director the concerned director was not present in themeeting. The performance of the Board and individual Directors was evaluated by the Boardseeking inputs from all the Directors. The performance of the Committees was evaluated bythe Board seeking inputs from the Committee Members. Key criteria for performanceevaluation are given in Annexure A to directors' report.

Remuneration Policy for the Board and Senior Management

Your Company follows a policy on remuneration of Directors KeyManagerial Personnel (KMP) Senior Management Personnel (SMP) and other employees of theCompany. The policy is approved by the Nomination & Remuneration Committee of theCompany. Remuneration Policy for Directors Key Managerial Personnel and other employeesis marked as Annexure B to directors' report.

Your Company with the approval of Nomination & RemunerationCommittee has adopted a policy on Board diversity and the recommendation of candidaturefor Board appointment will be based on merit that complements and expands the skillsexperience and expertise of the Board as a whole taking into account gender ageprofessional experience and qualifications cultural and educational background and anyother factors that the Board might consider relevant and applicable from time to timetowards achieving a diverse Board. The criteria for determining Qualification positiveattributes and Independence of director is enclosed as Annexure C to directors' report.

Familiarization programmes for Board Members

The Familiarization program aims to provide insight to the IndependentDirectors to understand the business of the Company. Upon induction the IndependentDirectors are familiarized with their roles rights and responsibilities. Your Companyprovides information to familiarize the Independent Directors with the strategyoperations and functions of

the Company. The Board members are also taken to the sites ofsubsidiaries to understand and review their functions.

At various Board meetings during the year the Board members areprovided with information/ presentations and are given the opportunity to interact withthe Senior Management of your Company to help them to understand the Company'sstrategy/policies business model operations products markets organization structurefinance human resources technology quality facilities and risk management changes inthe regulatory environment applicable to the corporate sector and to the industry in whichit operates and such other matters as may arise from time to time.

Quarterly presentations on operations made to the Board includeinformation on business performance operations safety market scenario financialparameters working capital management fund flows senior management change majorlitigation compliances subsidiary information donations regulatory scenario etc.

The policy on familiarization programmes for Independent Directors isposted on the website of the Company www. and can be accessed under the headcorporate governance/ policies under the Investors' section.

Directors' Responsibility Statement

Your Directors state that:

a) in the preparation of the annual accounts for the year ended 31stMarch 2020 the applicable accounting standards read with requirements set out underSchedule III to the Act have been followed and there are no material departures from thesame;

b) the Directors have selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at 31st March 2020and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) the Directors have prepared the annual accounts on a 'going concern'basis;

e) the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and

f) the Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.

Key managerial personnel

During the year there was no change in the Key Managerial Personnel.

Auditors and Auditors' Report Statutory Auditors

At the Annual General Meeting for the financial year 2018-19 held on21st September 2019 M/s. O.P. Singhania & Co. Chartered Accountants Raipur wereappointed as statutory auditors of the Company to hold office till the conclusion of theAnnual General Meeting (AGM) to be held in the calendar year 2024.

The Notes on financial statement referred to in the Auditors' Reportare self-explanatory and do not call for any further comments. The Auditors' Report doesnot contain any qualification reservation or adverse remark. During the year underreview the Auditors did not report any matter under Section 143 (12) of the Acttherefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

Cost Auditors

Pursuant to Section 148 of the Companies Act 2013 read with TheCompanies (Cost Records and Audit) Rules 2014 the cost audit records maintained by theCompany in respect of various manufacturing activities are required to be audited.

The cost audit report for the financial year 2018-19 was filed with theMinistry of Corporate Affairs. M/s. S.N. & Co. Cost and Management Accountants wereappointed as the Company's Cost Auditor.

Your Directors have on the recommendation of the Audit Committeeappointed M/s. S.N. & Co. Cost and Management Accountants to audit the cost accountsof the Company on a remuneration of ' 1.75 lakh for the year 2019-20.

As required under the Companies Act 2013 the remuneration payable tothe Cost Auditors:

i) for 2019-20 has been ratified by the members in the Annual GeneralMeeting held on 21.09.2019.

ii) for 2020-21 is being placed before the members in the ensuingannual general meeting for ratification.

Secretarial Auditor

The Board has appointed M/s. S.G. Kankani & Associates PracticingCompany Secretaries to conduct Secretarial Audit for the financial year 2019-20. TheSecretarial Audit Report for the financial year ended 31st March 2020 is annexed herewithmarked as Annexure D to this Report.

With reference to the comment of the secretarial auditors regarding -

a) non-submission of information to Calcutta Stock Exchange yourDirectors wish to inform that the Company had complied with all requirements for delistingof its shares from Calcutta Stock Exchange (CSE) in February 2004. The delistingapplication is still pending on the part of CSE. In view of the pendency of delistingapplication the Company has stopped sending any information to the Calcutta StockExchange and has also reported the matter to SEBI.

b) non-filing of form IEPF 1 and IEPF 4 with MCA your Directors wishto inform that the Company has remitted the unpaid dividend amount for F.Y. 2011-12 to theaccount of IEPF. However due to some technical reasons the same could not been updated inthe MCA /IEPF system due to which the MCA system is not permitting the Company to fileinvestors details against form IEPF 1 and form IEPF 4. The Company has reported the matterto IEPFA.

Further in terms of requirement of regulation 24A of SEBI ListingRegulations the Secretarial Audit Report for the financial year ended 31st March 2020in respect of Sarda Metals & Alloys Limited and Madhya Bharat Power CorporationLimited the material subsidiaries of the Company is annexed to this report marked asAnnexure E and Annexure F. respectively.

Corporate Social Responsibility (CSR)

With the objective of sustainable development and continualimprovement your Company adopts a voluntary and proactive approach to CSR to connect withthe society by creating a sense of belonging. Your Company strives for sustainabledevelopment programs in partnership with the community.

Members are requested to refer the Corporate Governance Report formingpart of this annual report for the composition of the CSR Committee. The CSR policy of theCompany is available on the website of the Company - - under the headcorporate governance/policies under the Investors' section. The annual report on the CSRactivities is annexed as Annexure G to this report.

The Company's CSR initiatives usually involve setting the foundation ofvarious programs at a small scale to learn from on-ground realities getting feedback fromcommunity and then putting an enhanced sustainable model to ensure maximum benefit to thecommunity. During the year the Company's spending on CSR has been more than thestatutorily required.

Corporate Governance

Pursuant to the Listing Regulations Corporate Governance Report alongwith the Auditors' Certificate regarding compliance of conditions of Corporate Governanceis made a part of the Annual Report.

Business Responsibility / Sustainability Report

The Company is committed to pursue its business objectives sustainablyethically transparently and with accountability to all its stakeholders. The Companybelieves in ensuring environmental well-being with a long-term perspective as well asdemonstrating responsible behaviour while adding value to the society and the community.The Company focuses on waste recycling. The Company has installed and expanded brickmanufacturing facility to utilize process wastes. The company has also installed WasteHeat Recovery boilers to recover heat generated in sponge iron manufacturing process. TheCompany is also exploring utilization of waste heat generated from ferro Alloysmanufacturing process. The Business Responsibility Report (BRR) of the Company formingpart of this annual report is being presented to the stakeholders as per the requirementsof Regulation 34 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 describing the environmental social andgovernance initiatives taken by the Company.

The Company has also provided the requisite mapping of principles ofthe National Guidelines on Responsible Business Conduct to fulfill the requirements of theBusiness Responsibility Report as per directive of SEBI.


Board/Committees/Vigil Mechanism

The Board of Directors met 7 (seven) times during the financial year2019-20. The details of the composition of Board of Directors Corporate SocialResponsibility Committee Audit Committee other committees of the Board meetings of theboard and committees and attendance of directors at the Board and committee meetings andimplementation of Vigil Mechanism are given in the Corporate Governance Report formingpart of this Annual Report.

Particulars of Loans given Investments made Guarantees given andSecurities provided

Particulars of loans given investments made and guarantees given aregiven in note no. 11 47 3 7 and 41 to the standalone financial statements. The Companyin its capacity of promoter has pledged shares of Sarda Metals & Alloys Limited andMadhya Bharat Power Corporation Limited with the lenders of respective companies for loansgranted to them by the lenders. The details of pledged shares are given as part of thefinancial statements. The loans and the guarantees given are utilized by the recipientsfor their business purposes. Members are requested to refer the notes for details whichare not repeated here for the sake of brevity.

Contracts and Arrangements with Related Parties

During the year the Company did not have any contracts or arrangementswith related parties in terms of Section 188 (1) of the Act. Also there were no materialrelated party contracts entered into by the Company and all contracts were at arm's lengthand in ordinary course of business to further the business interests of the Company.

Accordingly particulars of contracts or arrangements with relatedparties referred to in Section 188(1) of the Act along with the justification for enteringinto such contracts or arrangements in Form AOC-2 does not form part of the report.

The Policy on materiality of related party transaction and dealing withrelated party transactions as approved by the Board may be accessed on the Company'swebsite - under the head corporate governance/policies under Investors'section.

Internal Financial Control

The Company has in place adequate internal financial controls withreference to financial statements. During the year such controls were tested and noreportable material weakness in the design or operation were observed.

Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

The particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo as required to be disclosed under theAct are provided in Annexure H to this Report.

Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith as AnnexureI to this report. The same is also available on the Company's website at

Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rules isannexed herewith as Annexure J to this Report.

Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in Annexure K to thisreport.

Risk Management

The Risk Management Committee has been entrusted with theresponsibility to assist the Board in (a) Overseeing and approving the Company'senterprise wide risk management framework; and (b) Overseeing that all the risks that theorganization faces such as strategic financial credit market liquidity accidentsecurity property IT legal regulatory reputational and other risks have beenidentified and assessed and there is an adequate risk management infrastructure in placecapable of addressing those risks.

A Risk Management Policy and a Hedging Policy as approved by the Boardof Directors is in place. The Company monitors and manages the risks and uncertaintiesthat can impact its ability to achieve its strategic objectives.


Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review -

1. Details relating to deposits covered under Chapter V of the Act;

2. Issue of equity shares with differential rights as to dividendvoting or otherwise;

3. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme;

4. Neither the Managing Director nor the Whole-time Directors of theCompany receive any remuneration or commission from any of its subsidiaries;

5. No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operations infuture;

6. The Company is required to maintain cost records as specified by theCentral Government under sub-section (1) of section 148 of the Companies Act 2013 andsuch accounts and records are made and maintained;

7. The Company has in place proper systems to ensure compliance withthe provisions of the applicable secretarial standards issued by The Institute of CompanySecretaries of India and such systems are adequate and operating effectively;

8. The Company has complied with provisions relating to theconstitution of Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 [14 of 2013].

Your Directors further state that during the year under review therewere no cases filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

The disclosures/information/details disclosed/given elsewhere in theannual report have not been repeated again in the directors' report for the sake ofbrevity. Members are requested to refer relevant sections for the information. Allpolicies/disclosures required to be disclosed on the website are available under theInvestors' section on the website of the Company at


Your Directors place on record their gratitude for the valuableguidance and support rendered by various Government departments Financial InstitutionsBanks and various stakeholders shareholders surrounding societies customers andsuppliers among others. The Directors also commend the continuing commitment anddedication of the employees at all levels which has been critical for the Company'ssuccess. The Directors look forward to their continued support in future.

On behalf of the Board of Directors
(K. K. Sarda)

Chairman & Managing Director

8th August 2020 DIN:00008170