SATHAVAHANA ISPAT LIMITED
Your Board of Directors has pleasure in presenting the 30th Annual Report together withthe Audited Accounts of the Company for the year ended 31st March 2019:
Your Board of Directors reports the following financial results for the year 2018-19:
| || || ||(Amount in Rs.) |
|Sl. No. ||Particulars ||Year ended ||Year ended |
| || ||31-03-2019 ||31-03-2018 |
|1. ||Gross revenue from operations ||4985369053 ||2487308166 |
|2. ||Other income ||81787127 ||81086816 |
|3. ||Operating profit /(loss) before finance costs and depreciation ||238336422 ||(1152735074) |
|4. ||Finance costs ||1743849722 ||1405597605 |
|5. ||Depreciation and amortization ||473865403 ||505310460 |
|6. ||Profit / (loss) before tax ||(1979378703) ||(3063643139) |
|7. ||Exceptional Item ||(298397641) ||0 |
|8. ||Tax expense ||0 ||0 |
|9. ||Net Profit / (loss) after tax ||(2277776344) ||(3063643139) |
|10. ||Earning /(loss)per Equity Share-Basic ||(44.75) ||(60.19) |
|11. ||Earning/(loss)per Equity Share-Diluted ||(44.75) ||(60.19) |
The performance during the year was impacted adversely due to factors beyond thecontrol of the Company. The performance suffered due to working capital constraints andthe consequent financial stress which resulted in underutilization of capacities and plantshut downs. The gross revenue at Rs.4985369053/- is higher as compared to previous year'srevenue of Rs.2487308166/-. The year ended with loss before tax of Rs.2277776344/- asagainst loss before tax of Rs.3063643139/- in the previous year. During the year in theabsence of reasonable certainty deferred tax asset on account of unabsorbed depreciationand business loss and others amounting to Rs.1156797361/- as against previous year'samount of Rs.1114567283/- has been recognized to the extent it can be realised fullyagainst deferred tax liability. Accordingly the tax impact is nil in both current andprevious years. The year ended with net loss after tax of Rs.2277776344/- as against netloss after tax of Rs.3063643139/- in the year before. Accordingly the loss per shareaccounted for at Rs.44.75 as compared to loss per share of Rs.60.19 in the previous year.
DIVIDEND AND GENERAL RESERVE:
The Board of Directors has not recommended any dividend for the year 2018-19 due toloss incurred during the year and carry forward loss from earlier years. Company cannotdeclare dividend until the carry forward loss is fully set off against the profits asprovided in the Companies Act 2013. The Board of Directors also has not proposed totransfer any amount to General Reserve in view of the carry forward loss.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement your Directors hereby state and confirmthat: i. In the preparation of Annual Accounts for the Financial Year 2018-19 theapplicable Indian Accounting Standards (Ind AS) had been followed with proper explanationrelating to material departures; ii. The Accounting Policies selected were appliedconsistently and the judgements and estimates made are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2019 andProfit and Loss of the Company for the year ended on that date; iii. Proper and sufficientcare has been taken for the maintenance of adequate accounting records in accordance withthe provisions of the Companies Act 2013 for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; iv. The Annual Accounts havebeen prepared on a going concern basis; v. Internal financial controls to be followed bythe Company have been laid down and that such Internal Financial Controls are adequate andwere operating effectively; and vi. Proper systems had been devised to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
The Audit Committee is duly constituted as per the provisions of the Act applicableRules framed thereunder read with the listing regulations. The primary objective of thecommittee is monitoring and supervising the Management's financial reporting process toensure accurate and timely disclosures with highest levels of transparency integrity andquality of financial reporting. Committee comprises of Chairman - Shri K.Thanu PillaiIndependent Director and two other Independent Director members -Shri Syed Anis Hussainand Shri S.N.Rao. The Committee met 4(four) times during the year. Details of terms ofreference of the Committee number and dates of meetings held and attendance of Membersduring the year are part of the Corporate Governance Report.
The Audit Committee at its meeting held on 30th May 2019 has considered and approvedthe Audited Accounts of the Company for the financial year ended 31st March 2019. TheAudited Accounts for the financial year ended 31st March 2019 as approved and recommendedby the Audit Committee do not require any explanations from the Board.
Pursuant to Listing Regulations 2015 the Company is required to comply with the Code ofCorporate Governance for the financial year under review. Accordingly the Reports onCorporate Governance and Management Discussion and Analysis together with Auditors' Reporton compliance of Code of Corporate Governance are attached to this Report and forms partof the Annual Report. These Reports are to be read in conjunction with this Directors'Report.
Shri Naresh Kumar Adusumilli is liable for retirement of Directors by rotation atthe end of the ensuing 30th Annual General Meeting and being eligible offer themselvesfor re-appointment at the said Annual General Meeting.
Shri A. Naresh Kumar had been appointed as Managing Director in the Board Meetingheld on 30.05.2014 for a period of five years w.e.f. 01.06.2014 to 31.05.2019 and theappointment was subsequently approved at the 25th Annual General Meeting of the Companyand the office of Managing Director is liable for retirement of Directors by rotation.Shri A. Naresh Kumar is eligible for re-appointment and approval of the Members for hisre-appointment is being sought in the ensuing Annual General Meeting. The Nomination andRemuneration Committee at its meeting held on 30.05.2019 has recommended the reappointmentand the Board of Directors at its meeting held on 30.05.2019 has commended the resolutionfor re-appointment to the members for their approval in the ensuing Annual GeneralMeeting.
hri S.N.Rao has in pursuance of Section 149 of the Companies Act 2013 read withSchedule IV thereto and Companies (Appointment and Qualification of Directors) Rules 2014given a declaration to the Board that he meets the criteria of independence as providedthereunder. In the opinion of the Board Shri S.N.Rao fulfils the conditions specified inthe Act and the Rules made thereunder for appointment as Independent Director and he isindependent of the management. The matter regarding appointment of Shri S.N.Rao as anIndependent Director was placed before the Nomination & Remuneration Committee whichcommended his appointment as an Independent Director from 01.10.2019 to 30.09.2024 for asecond term. The Board at their meeting held on 14.08.2019 has approved the appointment ofShri S.N.Rao as Independent Director In compliance with the provisions of Section 149read with Schedule IV of the Act the appointment of Shri S.N.Rao as Independent Directoris now being placed before the Members in the Annual General Meeting for their approval.
Shri RAMANA KUMAR DAVULURI was appointed as Director on the Board at the BoardMeeting held on 20th April 2019 as Executive director as per the provisions of CompaniesAct 2013 for a period of three years w.e.f. 20th April 2019 to 19th April 2022. and theoffice of Executive Director (Operations) is liable for retirement of Directors byrotation. The Nomination and Remuneration Committee at its meeting held on 20.04.2019 hasrecommended the appointment and the Board of Directors at its meeting held on 20.04.2019has commended the resolution for appointment to the members for their approval in theensuing Annual General Meeting. In the opinion of the Board the proposed appointeesfulfils the conditions specified in the Companies Act 2013 and Rules made thereunder andkeeps the Board strengthened. These appointments are subject to approval of securedlenders who have lent to the Company term / corporate loans and working capital loans andapproval of members in the Annual General Meeting.
Shri. Shailendra Dasari Executive Director on the Board of the Company hasresigned due to personal reasons and his resignation was accepted by the Board with effectfrom 31.01.2019. Board wishes to place on record of its appreciation for the valuableservices rendered by Shailendra Dasari during his tenure.
During the year Smt. Latha Pamula has been appointed as Independent WomanDirector on the Board of the Company on recommendation of Nomination and RemunerationCommittee meeting held on 14.02.2019 for a period of 5 years. Policy on selection andappointment of Directors Composition and category of Directors attendance of eachDirector at meetings Number of other Directorships held by each Director Number of Boardmeetings held and dates on which held Board and streamline its operations as well as themanagement of affairs it was decided to shift the registered office of the company toexisting corporate office in the best interest of the Company.
Accordingly Board of Directors of the Company has approved in their meeting on 20thApril 2019 to shifted the Registered office of the Company to Flat No.505 5th FloorBlock I Divyashakti Complex Ameerpet Hyderabad 500016 with effect from20.04.2019.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:
M/s. D.Hanumanta Raju & Co. Practicing Company Secretaries Hyderabad who havebeen appointed as Secretarial Auditor for the financial year 2018-19 have conducted theAudit of the Secretarial Records and submitted their Report in MR-3 which is annexed tothis Report (Annexure-V). The Secretarial Audit Report for the financial year ended 31stMarch 2019 with respect to observations in the Secretarial Audit Report.
The Board wishes to inform the members that;
1. The Company has Appointed Independent Woman Director on the Board of the Companyw.e.f 14th February 2019. And paid Fine to Stock Exchanges as per SEBI (LODR) Regulations2015 which is 5000/- per day of default to each exchange The Company has formallyapproached National Stock Exchange & Bombay Stock Exchange for waiver of levied finebut due to Standard Operating Procedure of Stock Exchanges the waiver request by theCompany was not considered favourably.
2. The Company is in process of filing of IEPF -4 The company has received variousrequests from members of the Company to whom the reminders were given for transfer ofShares to IEPF to not to transfer their shares to IEPF and the Company had substantialshares held in physical form and the shareholders holding these shares have not updatedtheir correspondence details to the company to send reminders to them However the companynow has decided to transfer all shares relating to Unclaimed dividend to IEPF Authorityand file IEPF-4 the Company is in the process of the same.
The Board of Directors at its meeting held on 30th May 2019 has re-appointed D.Hanumanta Raju & Co. Practicing Company Secretaries Hyderabad as Secretarial Auditorfor the financial year 2019-20.
TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS TO IEPF:
Pursuant to the provisions of Section 205A(5) of the Companies Act 1956 and / orSection 124(5) of the Companies Act 2013 previously declared dividends which remainedunclaimed for a period of seven years have been transferred by the Company to theInvestor Education and Protection Fund (IEPF) established by the Central Governmentpursuant to Section 205C of the Companies Act 1956 and / or Section 125 of the CompaniesAct 2013.
DIRECTORS EMPLOYEES AND THEIR REMUNERATION:
The particulars of employees required to be furnished pursuant to Section 197(12) ofthe Companies Act 2013 read with sub rule (2) to Rule 5 to the Companies (Appointment& Remuneration) Rules 2014 as amended are not required to be provided as there wereno employees drawing remuneration more than the stipulated limits. Details of RemunerationPolicy and payment of remuneration to all Directors / Key Managerial Personnel / othermanagerial employees is given in the Report on Corporate Governance under the headNomination and Remuneration Committee which forms part of this Report. Managing Directorand other Whole Time Directors have not received any remuneration or commission fromholding or subsidiary companies as the Company do not have such companies. In the opinionof the Board the level and composition of remuneration to Directors Key ManagerialPersonnel and other managerial employees is reasonable and sufficient to attract retainand motivate the people who could run the Company efficiently. The Board affirms that theremuneration paid is in accordance with Remuneration Policy of the Company. Therelationship between performance and remuneration is clear and meets appropriatebenchmarks and that the remuneration criteria succinctly balances between fixed andvariable pay wherever set reflecting short and long term performance objectivesappropriate to the working of the Company and its goals. Disclosures required to be madepursuant to Rule 5 to the Companies (Appointment & Remuneration) Rules 2014 areattached to this report (Annexure-II).
DEMATERIALISATION OF EQUITY SHARES:
The Agreements entered into by the Company with the two Depositories viz. NationalSecurities Depository Limited (NSDL) and Central Depository Services (India) Limited(CDSL) for dematerialisation of Shares are in force and the Company's Shares are indematerialised mode under ISIN No. INE176C01016. As per the Securities and Exchange Boardof India(SEBI) directives the Equity Shares of the Company are to be compulsorily tradedin dematerialisation form with effect from 26th February 2001. Further the Securities andExchange of India (SEBI) in its circular dated 20.04.2018 has stated that the equityshares have to compulsorily converted into dematerialization before 5th December 2018 thesame was further extended to 1st April 2019. and thereafter dematerialized equity sharesare only eligible for transfers with the exception of transmissions. In view of thesignificant benefits that accrue on dematerialisation of securities Members may avail thefacility.
LISTING OF SHARES ON STOCK EXCHANGES:
The Equity Shares of the Company are listed on BSE Ltd (formerly The Bombay StockExchange Limited) Stock Code:526093 and The National Stock Exchange of India Limited (NSE)Stock Code: sathaispat and are regularly traded. The listing fee to these Stock Exchangeshas been paid upto date.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information on conservation of energy technology absorption foreign exchange earningsand out go required to be disclosed under Section 134 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 is given in the Annexure forming part of this Report(Annexure-I).
Your Company has not accepted any fixed deposits nor does the Company have anyoutstanding deposits under section 73 of the Act read with the Companies (Acceptance ofDeposits) Rules 2014 as on the date of Balance Sheet.
The Board engaged itself with the task of Risk Management by preparing implementingand monitoring the risk management plan of the Company. The Board apart from ensuring theeffectiveness of risk management covering internal financial risks and controls alsoreviews the same on regular basis. Major risks identified are monitored on a regular basisby the Board.
INTERNAL FINANCIAL CONTROL AND SYSTEMS AND THEIR ADEQUACY:
The Company has put in place Internal Financial Controls that will ensure the policiesand procedures of the Company are followed regularly so that the business of the Companyis conducted in orderly and efficient manner. The Internal Financial Controls are appliedinter alia to test various aspects in the conduct of business including adherence toCompany's policies safeguarding Company's assets prevention and detection of frauds anderrors or irregularities the accuracy and completeness of the accounting records andtimely preparation of reliable financial information and the financial statements. In theopinion of the Board such Internal Financial Controls are adequate and were operatingeffectively. During the year such Internal Financial Controls have been tested and noreportable weaknesses in the design and operations were observed. With respect to theIndependent Auditors' Report for the year ended 31st March 2019 which forms part of theAnnual Report containing qualification on the Internal Financial Controls your Board ofDirectors state that the management replies to the same are contained in Note No.36 to thefinancial statements which is self-explanatory.
RELATED PARTY TRANSACTIONS:
In Compliance with the provision of the Act and the Listing Regulations each Relatedpart transaction is placed before the Audit Committee for prior approval/noting.
There are no material related party transactions entered into by the Company fallingwithin the meaning of Section 188(1) of the Companies Act 2013. Other related partytransactions contracts or arrangements entered into by the Company are in the ordinarycourse of business and at arm's length price. The details of these contracts orarrangements or transactions as required to be disclosed in terms of Section 134(3)(h)areprovided in Form AOC-2 which forms part of this Report (Annexure-III) and accompanyingFinancial Statements.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
The Company has not granted loans guarantees or made investments in or to companiesfirms or other parties covered in the Register maintained under Section 189 of theCompanies Act 2013. The Company has not extended any loans to the employees for purchaseof its shares. Other investments made by the Company are given in the accompanyingFinancial Statements which are in the ordinary course of business.
EXTRACTS OF ANNUAL RETURN:
Information on Extracts of Annual Return required to be disclosed under Section 92(3)of the Companies Act 2013 read with Rule 12 of Companies (Management and Administration)Rules 2014 is given in the prescribed Form MGT-9 forming part of this report(Annexure-IV).
A copy of the same has also been hosted on our website weblink for the same iswww.sathavahana.com/annual_report.html
CORPORATE SOCIAL RESPONSIBILITY:
The details with respect to Corporate Social Responsibility of the Company as requiredto be disclosed in terms of provisions of Section 135 read with Section 134(3)(o) and Rule9 of Companies (Accounts) Rules 2014 are given in the Report on Corporate Governanceattached to and forming part of this Report. During the year the Company in terms ofprovisions of sub section 5 to Section 135 of the Companies Act 2013 is not required toearmark any fund for Corporate Social Responsibility activities in view of the losses.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
Your Company has well-defined Vigil Mechanism policy in place to provide a formalmechanism for all Directors employees business associates and vendors of the Company toapproach Chairman of the Audit Committee.
During the year under review none of the Directors/employees/ business associates /vendors was denied access to Chairman of Audit Committee.
REPORTING OF FRAUD:
The auditors of the Company have not reported any fraud as specified under Section143(12) of the Act.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013:
Your Company has zero tolerance towards sexual harassment at the workplace. It has welldefined policy in compliance with the requirements of The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder. An internal Committee is in place to redress complaints received regardingsexual harassment. All employees (permanent contractual temporary trainees etc.) arecovered under this Policy. The Company has not received any complaint of sexual harassmentduring the F.Y. 2018-19.
S4A SCHEME NON-FULFILLMENT:
The S4A scheme could not be implemented due to non-fulfillment of mandatory norm ofsufficient cash flows six months prior to and after the reference date and the same wascalled off on 19.11.2017. Consequent to the calling off the implementation of the S4Ascheme and the debt of the Company was classified by JLF as Non-Performing Asset (NPA).
The Joint lenders forum to consider deep restructuring of the debt which the banks haveconsidered favourably and initiated the process of restructuring which is under differentstages of progress and shall be implemented upon full tie up of restructuring package. Therestructuring plan envisages extended tenors of repayment of loans. The Andhra Bank hadissued Notice dated 24.08.2018 under the provisions of SARFAESI which upon the request ofthe Company and as advised by the Lead Lender has been kept on hold and initiated theappraisal of the debt restructuring package.
The restructuring plan also envisages no haircuts to banks and the sacrifice amount oninterest concessions requested by the company would be fully re-compensed after the end ofrestructuring scheme. Promoters have offered to pledge their total shareholding to thesecured lenders apart from offering some personal assets as a collateral security uponsanction of the restructuring plan. The existing personal guarantees of Whole-timePromoter Directors continue to be inforce. Promoters may have to infuse further throughEquity or debt as part of debt restructuring plan.
The JLF has appointed Dun & Brad street as techno economic viability consultant andSBI Caps as Financial Consultant for the proposed restructuring plan and both havesubmitted their TEV Study Information memoranda to the lenders.
The Deep debt restructuring plan is in final stages by the banks and outcome of thesame is expected soon the management opines that restructuring plan by the banks will beconsidered favourably and will help the company in reviving the operations. The Companyhas considered adopting the restructuring scheme of loans for the first time in itshistory of three decades.
Due to cash crunch and non-availability of working capital limits the operations atferrous division have been impacted and the plant was under shut down since 12th June2017. The operations at Kudithini works too were impacted where Metallurgical Cokefacility is running partly on job work basis and partly for own production and powergeneration has been restarted. This impact is likely to continue until the restructuringof the loans are done by the secured lenders.
Barring the above there are no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear to which the Financial Statements relates and the date of this Report.
ORDERS PASSED BY THE REGULATORS COURTS OR TRIBUNALS:
There has been no significant and material order(s) or Tribunal(s) impacting the goingconcern status of the Company's operations. However Members' attention is drawn to thestatement of contingent liabilities in the notes to the Financial Statement.
OPERATION MAINTANANCE & MANAGEMENT AGREEMENT WITH JINDAL:
On 2nd August 2019the Company has entered into "OPERATION MAINTANANCE &MANAGEMENT AGREEMENT" with JINDAL SAW Ltd. JINDAL SAW LIMITED has agreed to operatemaintain and manage the manufacturing facilities of SATHAVAHANA ISPAT LIMITED for a periodof 3 years which may be extended for a maximum period of 10 years subject to certainconditions as provided in the Agreement.
Under the above Agreement JINDAL SAW LIMITED shall manufacture and sell the productsnamely ductile iron pipes pig iron and coke and all other related items under its brandname during the term of the Agreement in consideration of the rentals as defined in theabove Agreement.
The above arrangement will be effective upon receipt of all necessary statutory andother approvals and upon sanction of the restructuring proposal by the banks.
SUBSIDIARY OR ASSOCIATE COMPANIES:
There are no subsidiary or associate companies to the Company as at the end of 31stMarch 2019. Accordingly no Consolidated Financial Statements is required to be preparedand reported.
STANDALONE FINANCIAL STATEMENTS:
The accompanying Financial Statements and this Board's Report are prepared based onstandalone operations of the Company.
This Directors' Report has been considered approved and adopted by the Board ofDirectors at its meeting held on 14th August 2019. The accompanying Financial Statementswere approved and adopted by the Board of Directors at its meeting held on 30th May 2019.
Your Directors take this opportunity to express their grateful thanks to Canara BankState Bank of India (formerly State Bank of Hyderabad) Andhra Bank Shareholders Centraland State Governments and valued suppliers and customers for their cooperation andsupport. The Board also places on record its appreciation of the valuable servicesrendered by the employees at all levels of the Company.
| ||for and on behalf of the Board |
| ||(K. Thanu Pillai) |
|Place: Hyderabad ||Chairman |
|Date: 14.08.2019 ||(DIN: 00123920) |
ANNEXURE-I TO DIRECTORS' REPORT
Statutory information as required under Section 134(3) (m) read with Rule 8(3) of theCompanies (Accounts) Rules 2014
a) Conservation of Energy: The Company has set-up Captive Power Generation Plantswhich utilise surplus Blast Furnace gas and waste heat from exhaust gases of Coke Ovensfor generating Power apart from thermal coal. The Power Plants have been functioningsatisfactorily. The power requirement of operations is met from these Power Plants.
b) Technology absorption: The technologies sourced in earlier years from SINO STEEL forthe Pig Iron plant and from Chinese Academy of Agriculture Mechanisation Sciences (CAAMS)for Ductile Iron Pipe manufacturing plant at Haresamudram works and Anshan Technology forMetallurgical Coke plant at Kudithini works all technologies sourced from P.R.Chinastand fully absorbed.
c) The Company is not engaged into any Research and Development activity and as suchthere is no expenditure incurred on Research and Development activity.
d) Foreign Exchange earnings and outgo:
| ||( Amount in Rs..) |
|I) Foreign Exchange Earnings: || |
|a) F.O.B value of exports ||Nil |
|II) Foreign Exchange Outgo: || |
|a) C.I.F. value of imports: || |
|I. Raw materials ||Nil |
|ii. Capital goods ||Nil |
|b) Usance interest ||Nil |
ANNEXURE-II TO DIRECTORS' REPORT
DIRECTORS EMPLOYEES AND THEIR REMUNERATION
Disclosures required to be made pursuant to Section 197 (12) Read with Rule 5 to theCompanies (Appointment & Remuneration) Rules 2014
a. Details of Remuneration Policy and payment of remuneration to all Directors / KeyManagerial Personnel / other managerial employees is given in the Report on CorporateGovernance under the head Nomination and Remuneration Committee which forms part of thisReport.
b. The particulars of employees required to be furnished pursuant to Section 197(12) ofthe Companies Act 2013 read with sub rule (2) to Rule 5 to the Companies (Appointment& Remuneration) Rules 2014 as amended are not required to be provided as there wereno employees drawing remuneration more than the stipulated limits:
c. The ratio of the remuneration of each Director and Key Managerial Personnel to themedian remuneration of the employees of the Company for the financial year:
|S.No. ||Directors ||Ratio |
| ||Independent Directors: || |
|1. ||Shri K. Thanu Pillai ||1.12 |
|2. ||Shri Syed Anis Hussain ||1.83 |
|3. ||Shri S.N.Rao ||0.90 |
|4. ||Smt Latha Pamula # ||0.11 |
| ||Whole Time Directors: || |
|5. ||Shri A.Naresh Kumar ||54.24 |
|6. ||Shri A.S.Rao ||49.71 |
|7. ||Dr. Shailendra Dasari * ||41.36 |
| ||Key Managerial Personnel: || |
|8. ||Shri K.V.Krishna Rao % ||47.36 |
|9. ||Shri VSRK Hanuman@ ||2.37 |
|10. ||Shri A.Sainath ^ ||0.54 |
# Smt.Latha Pamula has been appointed w.e.f 14th February 2019 as Independent WomanDirector.
* Dr Shailendra Dasari ceased to be director w.e.f 31st January 2019 by virtue of hisResignation
% Shri K.V.Krishna Rao ceased as CFO & Company Secretary w.e.f 30th November 2018
@ Shri V.S.R.K Hanuman appointed as Chief Financial Officer w.e.f 14th February 2019
^ Shri A.Sainath appointed as Company Secretary & Compliance Officer w.e.f 14thFebruary 2019.
d. The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:
|S.No. ||Directors ||% increase |
| ||Independent Directors: || |
|1. ||Shri K. Thanu Pillai ||2.85 |
|2. ||Shri Syed Anis Hussain ||-46.45 |
|3. ||Shri S.N.Rao ||24.31 |
|4. ||Smt Latha Pamula ||NA |
| ||Whole Time Directors: || |
|5. ||Shri A.Naresh Kumar ||16.95 |
|6. ||Shri A.S. Rao ||24.30 |
|7. ||Dr. Shailendra Dasari ||(1.38) |
| ||Key Managerial Personnel: || |
|8. ||Shri K.V.Krishna Rao % ||99.99 |
|9. ||Shri VSRK Hanuman@ ||NA |
|10. ||Shri A.Sainath ^ ||NA |
1. Remuneration of Independent Directors for current year includes fees for attendingcommittee meetings.
Decrease in Fee paid for Shri Syed Anis Hussain is due to arrears of 150000/- paid inprevious year.
2. Remuneration of Dr. Shailendra Dasari and Shri K.V.Krishna Rao is up to the date oftheir resignation or expiry of tenure.
% Shri K.V.Krishna Rao resigned as CFO & Company Secretary w.e.f 30th November2018.
@ Shri V.S.R.K Hanuman Appointed as Chief Financial Officer w.e.f 14th February 2019.
^ Shri A.Sainath appointed as Company Secretary & Compliance Officer w.e.f 14thFebruary 2019.
e. The percentage increase in the median remuneration of employees in the financialyear is 3.9%
f. The number of permanent employees on the rolls of Company:468
g. The explanation on the relationship between average increase in remuneration andCompany performance:
The Increase in remuneration is due to individual performance appraisal and as per theterms of their employment in the company.
h. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:
|S.No. ||Description ||Amount ` ||Comparative % |
|1. ||Aggregate remuneration of Key Managerial Personnel during financial year 2018-19 ||11560635 || |
|2. ||Revenue || || |
|3. ||Loss before tax ||2277776344 || |
|4. ||Remuneration of Key Managerial Personnel as % of Revenue || ||0.50 |
|5. ||Remuneration of Key Managerial Personnel as % of profit before tax || ||negative |
i. Variations in the market capitalisation of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer:
|S.No. ||Particulars ||31.03.2019 ||31.03.2018 ||% change |
|1. ||Market capitalisation ||369534000 ||908565000 ||-59.21 |
|2. ||Price Earnings Ratio ||-0.08 ||-29.66 ||-2965.73 |
| || || ||IPO price || |
|S.No. ||Particulars ||31.03.2019 ||April 1994 ||% change |
|1. ||Market price -BSE ||7.26 ||10.00 ||-27.4 |
|2. ||Market price -NSE ||7.45 ||10.00 ||-25.5 |
j. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: Thepercentile increase in the remuneration of managerial personnel is within the normal rangeof increase of other employees. k. Comparison of the each remuneration of the KeyManagerial Personnel against the performance of the Company: The comparison is as providedin clause-h herein above. l. The key parameters for any variable component of remunerationavailed by the Directors: There is no variable component of remuneration to IndependentDirectors. m. The ratio of the remuneration of the highest paid Director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year: None of the employees receiving remuneration higher than that ofremuneration highest paid to the Director. n) Affirmation that the remuneration is as perthe remuneration policy of the Company: The Board affirms that the remuneration paid is inaccordance with Remuneration Policy of the Company.
ANNEXURE-III TO DIRECTORS' REPORT
FORM NO. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act 2013 andRule 8(2) of the Companies (Accounts) Rules 2014) Form for disclosure of particulars ofcontracts/arrangements entered into by the Company with related parties referred to insub-section (1) of section 188 of the Companies Act 2013 including certain arm's lengthtransactions under third proviso thereto
|1. Details of contracts or arrangements or transactions not at arm's length basis. || |
|(a) Name(s) of the related party and nature of relationship || |
|(b) Nature of contracts/arrangements/transactions || |
|(c) Duration of the contracts / arrangements / transactions || |
|(d) Salient terms of the contracts or arrangements or transactions including the value if any ||During the financial year 2018-19 Sathavahana Ispat Limited has not entered into any contracts or arrangements or transactions that are not at arm's length basis. |
|(e) Justification for entering into such contracts or arrangements or transactions || |
|(f) date(s) of approval by the Board || |
|(g) Amount paid as advances if any: || |
|(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188 || |
|2. Details of material contracts or arrangement or transactions at arm's length basis || |
|(a) Name(s) of the related party and nature of relationship ||The details are provided in the Report on Corporate Governance and accompanying Financial Statements. Transactions contracts or arrangements entered into by the Company are in the ordinary course of business on an annual renewal basis and at arm's length price. These transactions were duly approved by the Audit Committee and the Board on 30th May 2018. |
|(b) Nature of contracts/arrangements/transactions || |
|(c) Duration of the contracts / arrangements / transactions || |
|(d) Salient terms of the contracts or arrangements or transactions including the value if any: || |
|(e) Date(s) of approval by the Board if any: || |
|(f) Amount paid as advances if any: || |