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NOTICE OF ANNUAL GENERAL MEETING 1 27th annual report 2011-12 NOTICE IS HEREBY GIVEN THAT THE TWENTY SEVENTH ANNUAL GENERAL MEETING of the members of SIDDHARTHA TUBES LIMITED will be held at Registered Office of the Company at Taraganj Industrial Area, A.B. Road, Sarangpur (Dist.Rajgarh) - 465697, M.P. on Saturday, the 29 th day of September 2012 at 10.30 A.M. to transact the following businesses: ORDINARY BUSINESS 01. To receive, consider and adopt the Audited Annual Accounts of the Company for the year ended 31st March, 2012, together with the Report of the Board of Directors of the Company and Report of the Auditors of the Company on Annual Accounts 2011-2012. 02. To appoint a Director in place of Mr. Satish Chandra Mundra who retires by rotation and being eligible offers himself for reappointment. 03. To consider and if thought fit, to pass, with or without modification(s), the following as a ordinary Resolution: RESOLVED THAT M/s Rakesh Jain & Associates be and are hereby appointed as Auditors of the Company for the Financial Year 2012 - 2013, to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting, on such remuneration as may be mutually agreed upon between the Board of Directors and the Auditors. SPECIAL BUSINESS To consider and if thought fit, to pass, with or without modification(s), the following as a Special Resolution 04. TO REAPPOINT THE MANAGING DIRECTORS RESOLVED THAT pursuant to the provisions of Sections 269, 309, 310 read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956 including any statutory modification or re-enactment thereof for the time being in force, Listing Agreement (s), entered by the Company with the Stock Exchanges where the securities of the Company listed and prior approval of the Central Government and subject to confirmation by the members and FIs/Banks, consent of the Company be and is hereby accorded for the re-appointment of Mr. Nainesh J. Sanghvi as the Managing Director and Mr. Rajendra Prasad Gupta as Joint Managing Director of the Company for a further period of five (5) years with effect from 1st February, 2013 on the unchanged terms and conditions . Explanatory Statement pursuant to section 173 (2) of the Companies Act, 1956 ITEM NO. 4 The Present appointment of Shri Nainesh J.Sanghvi and Shri Rajendra Prasad Gupta, respectively as Managing Director and Joint Managing Director of the Company expires on 31st January 2013. The Board of Directors feels that for the sake of continuity of the present management and for the effective administration of the plans & policies of the Company, the services of Shri Nainesh J. Sanghvi and Shri Rajendra Prasad Gupta should be availed by the Company for a further period of five years with effect from 1st February 2013. Pursuant to applicable Sections of the Companies Act 1956 and Articles of Association of the Company the Board of Directors at their meeting proposed reappointment of both the Managing Directors for a further period of 5 years with effect from 1st February 2013, subject to approval by the Shareholders. Shri Rajendra Prasad Gupta and Shri Nainesh J. Sanghvi, both are deemed to be interested & concerned in the said resolution as it relates to their reappointment as Managing Director and remuneration to them. By Order of the Board of Directors For SIDDHARTHA TUBES LIMITED, Priyanka Sisodiya Place: Indore Company Secretary Dated: 07.09.2012

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NOTICE OF ANNUAL GENERAL MEETING

1 27th annual report 2011-12

NOTICE IS HEREBY GIVEN THAT THE TWENTY SEVENTH ANNUAL GENERAL MEETING of the members of

SIDDHARTHA TUBES LIMITED will be held at Registered Office of the Company at Taraganj Industrial

Area, A.B. Road, Sarangpur (Dist.Rajgarh) - 465697, M.P. on Saturday, the 29th

day of September

2012 at 10.30 A.M. to transact the following businesses:

ORDINARY BUSINESS

01. To receive, consider and adopt the Audited Annual Accounts of the Company for the year ended 31st

March, 2012, together with the Report of the Board of Directors of the Company and Report of the

Auditors of the Company on Annual Accounts 2011-2012.

02. To appoint a Director in place of Mr. Satish Chandra Mundra who retires by rotation and being eligible

offers himself for reappointment.

03. To consider and if thought fit, to pass, with or without modification(s), the following as a ordinary

Resolution:

�RESOLVED THAT M/s Rakesh Jain & Associates be and are hereby appointed as Auditors of the

Company for the Financial Year 2012 - 2013, to hold office from the conclusion of this meeting until

the conclusion of the next Annual General Meeting, on such remuneration as may be mutually agreed

upon between the Board of Directors and the Auditors.� SPECIAL BUSINESS

To consider and if thought fit, to pass, with or without modification(s), the following as a

Special Resolution

04. TO REAPPOINT THE MANAGING DIRECTORS

�RESOLVED THAT pursuant to the provisions of Sections 269, 309, 310 read with Schedule XIII and

other applicable provisions, if any, of the Companies Act, 1956 including any statutory modification or

re-enactment thereof for the time being in force, Listing Agreement (s), entered by the Company with

the Stock Exchanges where the securities of the Company listed and prior approval of the Central

Government and subject to confirmation by the members and FI�s/Banks, consent of the Company be

and is hereby accorded for the re-appointment of Mr. Nainesh J. Sanghvi as the Managing Director

and Mr. Rajendra Prasad Gupta as Joint Managing Director of the Company for a further period of five

(5) years with effect from 1st February, 2013 on the unchanged terms and conditions .

Explanatory Statement pursuant to section 173 (2) of the Companies Act, 1956

ITEM NO. 4

The Present appointment of Shri Nainesh J.Sanghvi and Shri Rajendra Prasad Gupta, respectively as

Managing Director and Joint Managing Director of the Company expires on 31st January 2013. The Board

of Directors feels that for the sake of continuity of the present management and for the effective

administration of the plans & policies of the Company, the services of Shri Nainesh J. Sanghvi and

Shri Rajendra Prasad Gupta should be availed by the Company for a further period of five years with

effect from 1st February 2013. Pursuant to applicable Sections of the Companies Act 1956 and

Articles of Association of the Company the Board of Directors at their meeting proposed reappointment

of both the Managing Directors for a further period of 5 years with effect from 1st February 2013, subject

to approval by the Shareholders.

Shri Rajendra Prasad Gupta and Shri Nainesh J. Sanghvi, both are deemed to be interested &

concerned in the said resolution as it relates to their reappointment as Managing Director and

remuneration to them.

By Order of the Board of Directors

For SIDDHARTHA TUBES LIMITED,

Priyanka Sisodiya

Place: Indore Company Secretary

Dated: 07.09.2012

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NOTICE OF ANNUAL GENERAL MEETING

2 27th annual report 2011-12

NOTES

1. A Member entitled to attend & vote at the meeting is entitled to appoint proxy to attend and vote

instead of himself and the proxy need not be a member.

2. Proxies in order to be effective must be received by the Company not less than 48 hours before

the meeting.

3. (i) In terms of Notification No.SMDRP/POLICY/CIR-23/2000 dated 29.05.2000 of the Securities

and Exchange Board of India, shareholders may kindly note that trading in Equity Shares of

the Company are under compulsory dematerialized form with effect from 29th January 2001.

(ii) The Company has entered into tripartite agreements with National Securities Depositories

Limited and Central Depositories Services Limited and Intime Spectrum Registry Pvt. Ltd. for

electronic connectivity for facilitating trading in the Company's scrip in dematerialized form

and the connectivity has been activated. The ISIN No. Allotted to the Shares of the Company

is INE 708 B01018. This will enable members to select the depository of their choice for

holding and dealing in shares in electronic form.

4. In case of any grievance, shareholders may contact either registered Depository Participant or

Share Department at the Administrative office of the Company at 15-16, Jawahar Marg, Old IDA

Building, Indore - 452007 (M.P.).

5. The Register of Members and the Share Transfer books of the Company will remain closed from

26.09.2012 to 28.09.2012 (inclusive of both dates).

6. The equity shares of the Company are listed at Bombay Stock Exchange, Mumbai.

7. In terms of the provisions of Section 109A of the Companies, Act, 1956, nomination facility is now

available to individual shareholders. The shareholders who are desirous of availing this facility may

kindly write to the Company.

8. Members who are holding shares in identical names in more than one folios, are requested to write

to the Company to enable to consolidate their holdings in one folio.

9. Members are requested to send their queries in writing, if any, relating to the Final Accounts at

least seven days before the date of meeting.

10. Members are requested to quote folio number/client ID number in all their correspondence.

11. Members are requested to bring their copy of the Annual Report and their attendance slips at the

meeting.

12. The explanatory statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of

Special Business as set out above is annexed hereto.

By Order of the Board of Directors

For SIDDHARTHA TUBES LIMITED

Priyanka Sisodiya

Place: Indore Company Secretary

Dated: 07.09.2012

DIRECTORS REPORT

1 27th annual report 2011-12

To,

The Members,

Your Directors take great pleasure in presenting the 27th Annual Report of your company together with audited

accounts for the year ended 31st March, 2012.

�� Financial Highlights (Rs. in Lacs)

2011-2012 2010-2011

Net Sales/Income from operation

Other Income

Total Income

Total Expenditure

Profit/Loss before Interest & Depreciation

Less: (a) Interest

(b) Depreciation

Exceptional & Extraordinary Items Profit /(Loss) before Tax

Provision for taxation

Profit / (Loss) after Tax

Add : Balance brought forward from previous year

Balance Carried Forward to Next Year

33239.38

62.76

33302.14

32974.49

327.64

97.11

1008.99

2134.79

1356.33

-

1356.33

(21948.82)

(20592.49)

24191.90

23.85

24215.75

23952.44

263.31

48.08

1142.99

1461.58

533.81

-

533.81

(22482.63)

(21948.82)

�� DIVIDEND

Your Directors express their inability to declare any dividend to Shareholders.

�� PERFORMANCE OF THE COMPANY

The three production lines of the Company viz- Tubes, CR Coils and GP/GC Coils operated at 42.74% (43.05%),

43.90% (39.92%) and 28.37% (53.91%) respectively during the year. While utilization at the Tube & CR mills

have been similar to the previous year levels, the Galvanising line operations got hit due to lower quantities

received for job work during the year and eventual termination of Job agreements towards the third quarter of

the year. Members may recall that the Galvanising line has, hitherto, essentially been operated on Job Work.

Total Revenues for the year stood at Rs.360.34 Crore (Rs.266.07 Crore). Operating Profits (EBIDTA) stands at

Rs.3.27 Crore (Rs.2.63 Crore). Further, during the year, two more lenders �viz LIC and IDBI (as CRPS holders)

stood fully repaid as per the terms of settlement reached respectively with them. Therefore, the write-offs

entailed under these settlements amounting to Rs.21.15 Crore (previous year Rs.14.92 Crore) have been written

back to the P&L A/c and the resulting Net Profit carried over to the Balance Sheet stand at Rs.13.56 Crore

(Previous year Rs.5.34 Crore).

�� Market opportunities

The Indian Steel sector, in the near term faces a threat of impending slow down, due to various Global factors,

economic slowdown, a below average monsoon etc. The industry is therefore expected to put up a somewhat

subdued performance in the current year, although in the medium and long term, the underlying note of

optimism continues. Your Company also expects to be able to maintain its operating levels for the current year.

The Company�s products continue to enjoy a good demand, and despite the slowdown, it is only Working Capital

Constraints that restrict operations at the plants. Operating levels are expected to improve in the near future

once necessary finances are tied up for operations.

�� PROJECT IMPLEMENTATION & RESTRUCTURING PACKAGE

Members are aware that the Company has concluded a �Negotiated Settlement of Dues� with practically all its

lenders and by end FY12, 05 Secured Lenders and IDBI (as CRPS holders) have exited from the Company. It is

expected that similarly the remaining lenders will stand fully repaid in due course as per the agreed schedule.

Meanwhile, however, the 6 Hi CR Mill remains incomplete, although all other production facilities are fully

operational and running. Your Company will take steps to complete the 6 Hi Mill as soon as it reaches financial

closure with any Investor/ Lender for this purpose.

�� FIXED DEPOSITS

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DIRECTORS REPORT

2 27th annual report 2011-12

The Company has not accepted any Fixed Deposits during the year under review, as per Section 58A of the

Companies Act, 1956.

�� BOARD OF DIRECTORS

Mr. Satish Chandra Mundra retires by rotation at the ensuing Annual General Meeting and being eligible, offer

himself for re-appointment.

�� ISSUE OF SECURITIES

The Company has not issued any securities in the financial year under review.

�� AUDITORS & AUDITORS REPORT

M/s Rakesh K. Jain & Associates, Chartered Accountant, Indore who were appointed as Auditors of the Company

for the year 2011-2012, hold office till the conclusion of the ensuing Annual General Meeting.

M/s Rakesh K. Jain & Associates has given their consent for reappointment for the year 2012 - 2013 if approved

by shareholders. Necessary certificate under Section 224 (1-B) of the Companies Act, 1956 has been received

from them confirming their eligibility. The Board hereby recommends their appointment.

These observations made by the Auditors in their reports & notes forming part of the accounts, are self-

explanatory & do not require further elucidation.

�� INSURANCE

All the insurable assets of the Company are adequately insured.

�� COST AUDITORS

Mr. Mihir Turakhia, Cost Accountant, was appointed to conduct cost audit for the Tube Mill of the Company for

the financial year 2011-2012. They will submit their report to the Department of Company Affairs, Government

of India.

�� DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217 (2AA) of the Companies Act, 1956, your Directors hereby state

and confirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with

proper explanation relating to material departures;

(ii) they have selected such accounting policies and applied them consistently and made judgments 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) they have 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 your Company and for preventing and

detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

�� ENVIRONMENT, HEALTH AND SAFETY

The Company is committed to the highest level of concern in providing safe and healthy environment for all its

stake holders, employees, customers, vendors, business associates and neighbourhood.

�� CORPORATE GOVERNANCE

The detailed Report on Corporate Governance forms part of this Annual Report.

�� MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report (MDA) of the Company are discussed elsewhere in this Annual

Report.

DIRECTORS REPORT

3 27th annual report 2011-12

�� DEMATERIALISATION OF SECURITIES & INVESTOR SERVICE CENTRE

Nearly 55.84% of total Equity Share Capital is held in dematerialised form with National Securities Depository

Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The ISIN No. allotted to the Company

Share is INE 708B01018.

The securities of your company are listed at The Bombay Stock Exchange, Mumbai and The M.P. Stock

Exchange, Indore.

�� CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

EARNINGS AND OUTGO

A statement giving details of conservation of energy, technology absorption, foreign earnings and outgo in

accordance with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988, is

annexed hereto and forms part of the Report.

�� PARTICULARS OF EMPLOYEES

The Company does not have any employee in the category as specified under Section 217(2A) of Companies Act,

1956 (as amended) read with Companies (Particulars of Employees) Rules, 1975 (as amended).

�� APPRECIATION

Your Directors place on record their appreciation of the continued support and co-operation received from the

Government of India and Government of Madhya Pradesh and the Financial Institutions / Banks. We also thank

the vendors, customers, consultants, auditors and others who have been assisting your Company in the various

facets of its operations.

The Directors also wish to place on record their sincere appreciation of the employees at all levels for their

dedicated contribution towards the growth of your Company.

For and on behalf of the Board

Place: INDORE Rajendra Prasad Gupta Nainesh J. Sanghvi

Dated: 07.09.2012 Jt. Managing Director Chairman and Managing Director

DIRECTORS REPORT

4 27th annual report 2011-12

ANNEXURES TO THE DIRECTORS' REPORT 2011 � 2012

Information pursuant to Section 217(1)(e) of the Companies (Disclosure of particulars in the report of the Board

of Directors) Rules 1988 and forming part of the Directors Report for the year ended 31st March 2012.

Form "A"

�� CONSERVATION OF ENERGY

(a) Energy conservation measures taken: Installation of CFL Lights in place of tube rods in offices.

(b) Proposals for reduction of consumption of energy: NIL.

(c) Additional investment for above: From internal accruals.

(d) Impact of above measures: Not significant.

�� Details Power & Fuel Consumption

Form "B"

�� TECHNOLOGY ABSORPTION

Research & Development:

Tube Division: Auto Varnishing for Tubes.

2011-12 2010-11

1. Electricity:

i. Purchased units 10176565 10876312

Total amount (Rs. in Lacs) 648.19 602.65

Rate per unit (Rs.) 6.37 5.54

ii. Own Generated

a. Through Diesel Generator

Units generated 16000 32984

Diesel (Rs. in Lacs) 1.62 3.90

Rate per Unit (Rs.) 10.10 11.83

b. Furnace oil

Qty. in MT 203.09 170.13

Total Amount (Rs. in Lacs) 93.59 51.86

Average rate per unit (Rs.) 46.08 30.48

c. Coal

Qty. in MT 1045.43 2256.790

Total Amount (Rs. in Lacs) 48.75 90.90

Average rate per unit (Rs.) 4663.25 4027.93

2. CONSUMPTION PER UNIT OF PRODUCTION:

Standard (if any)

A Product M.S. Steel Tubes & Pipes (Unit in MT)

(Including transfer for Galvanizing)

50602 45926

Electricity per MT (Rs.) 461.11 399.78

Furnace oil per MT (Rs.) 184.95 112.91

B Product CR Coil & GP/GC Coil Sheet (Unit in MT)

(Including transfer for Galvanising)

41344 68478

Electricity per MT (Rs.) 1003.43 611.93

Furnace oil per MT (Rs.) - -

Coal per MT (Rs.). 117.91 132.75

DIRECTORS REPORT

5 27th annual report 2011-12

CRM Division: Nil

Benefits derived: Quality Improvement on Tubes.

Future plan of action:

Tube Division: Replacement of HF welders with Solid State welders.

CRM Division: Installation of 6 HI CR Mill pickling line.

�� TECHNOLOGY ABSORPTION, ADOPTION & INNOVATION

Tube Division: -- Not Applicable --

�� Foreign Exchange Earnings and Outgo

1. Total Foreign Exchange used & earned in US Dollars & GBP.

(Value in Rs.)

Current Year

Previous Year

Total Foreign Exchange Used

On import of Stores & Spares

Expenditure in Foreign currencies on Foreign Travels.

On import of Raw Material

1256436

340019

-

1033045

594225

19142286

For and on behalf of the Board

Place: INDORE Rajendra Prasad Gupta Nainesh J. Sanghvi

Dated: 07.09.2012 Jt. Managing Director Chairman and Managing Director

MANAGEMENT DISCUSSION AND ANALYSIS

1 27th annual report 2011-12

MACRO ECONOMIC SCENARIO AND AN OVERVIEW OF THE STEEL SECTOR

Indian Economy in 2011-12 remained in an awkward combination of �slow growth� and elevated

inflation. On the one hand, economic growth is stated to have hit a nine year low of about

6.5%, and on the other, inflation levels continued to rule around 9% for most of the year. RBI,

therefore continued to hike key policy rates for most of the year and only since January this

year could resort to injecting some liquidity into the financial system by reducing CRR and SLR.

While a substantial part of the slow-down can be attributed to Global recession that started in

2008-09, the recovery still do not yet appear to be visible. IMF and other Global agencies have

reduced growth estimates for 2012 to 3.5% and have also lowered forecast for 2013 to 3.9%

from 4.1% indicating harder times for the world economies. For India too, it�s been raining GDP

downgrades-further accelerated by a tardy progress of Monsoons and missing Industrial

turnaround yet. Not surprisingly therefore, outlook for India�s growth projections for 2013 are

also estimated to be lower at under 6%.

In the overall economic scenario, the Steel Industry also slipped into a slowdown phase since

the latter half of 2008-09. The three years period 2005 to 2008 had witnessed double digit

growth in total finished steel consumption, resulting in the Country turning into a net-importer

to meet the production deficits. The situation has changed dramatically since 2011, and during

the April-January 2012 period, growth in steel consumption has fallen to 5.5%. Production of

Finished Steel is reported to have grown by 7% and Imports have fallen down by 0.6%. The

growth rates recorded in respect of the Company�s products are CR Coil (0.4%), GP/GC (6.4%)

and Pipes (11%).

THE COMPANY�S PERFORMANCE:

Your Company, despite the overall slowdown in the Steel Sector, could manage to maintain its

operating levels as hitherto. In fact, Steel Pipes have remained to be the mainstay of your

Company�s products. The CR & GP/GC mills however, that have been essentially offered on

lease to other producers faced production disruptions due to lower quantities received from the

Job Convertees and your Company has eventually terminated the lease arrangement with the

said parties. Notably, Operating margins during the year have been higher and Gross EBIDTA

levels stand improved to Rs.3.27Crore (previous year Rs.2.59 Crore).

RISK, CONCERNS AND INTERNAL CONTROL SYSTEMS:

Your Company, as members are aware has been facing liquidity constraints for the last several

years. Operating levels at the production lines have therefore, also suffered due to Working

Capital facilities not being possible from Banks/ FIs. The last of the Working Capital Bankers �

viz SBI and Dena Bank � also assigned their facilities to ACRE with whom a Negotiated

Settlement of Dues has since been reached. You Company aims at mitigating this �financial� risk

by looking out for an Investor/Lender in the Company.

No other major risk or concern is apprehended by your Company, and despite the ruling

sluggishness in market sentiments, the Company is hopeful of maintaining / improving its

market share.

In respect of Internal Control System, your Company has all its necessary arms in place �

marketing, production, purchases etc) and with suitable controls & checks like MIS, Audit, IT,

Market report etc, a close follow up & control of these systems is maintained on a continuous

basis.

INDUSTRIAL RELATIONS

The Company enjoys cordial relations with all its employees. Your Directors reiterate their

appreciation for the contribution made by all employees of the Company.

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MANAGEMENT DISCUSSION AND ANALYSIS

2 27th annual report 2011-12

OPERATIONAL AND FINANCIAL PERFORMANCE Summarized performances of the Tube and CRM Divisions were as follows:

Operational and Financial performance:

A TUBE DIVISION 2011-12 2010-11

Sales (Rs. in lacs) 25826.78 16620.56

PBIDTA (Rs. in lacs) 381.78 167.60

Black Pipe Production (M.T.)

(includes Job work) 34630.953 31145.976

Black Pipe Sales

in M.T. 24909.027 20752.985

Rs. in lacs 10496.60 8292.79

Galvanised Pipe Production (M.T.) 15971.481 14780.414

Galvanised Pipe Sales

in M.T. 14961.705 15229.448

Rs. in lacs 7155.56 6845.00

Raw Material procurement (Rs. in lacs) 22771.51 14993.89

B CRM DIVISION

Sales (Rs. in lacs) 9054.71 8600.07

PBIDT (Rs. in lacs) (54.13) 95.71

GP/GC Coil/ Sheet Production (M.T.) 25531.974 48517.102

(Including Job work )

GP/GC Coil/ Sheet Sales

in M.T. 6810.396 10210.342

Rs. in lacs 2953.62 3987.64

CR Coil/ Sheet Production (M.T.) 21950.395 19961.093

(Including Job work )

CR Coil/ Sheet Sales

in M.T. 14168.989 11762.518

Rs. in lacs 5875.38 4462.04

Raw Material procurement (Rs. in lacs) 7703.23 7225.88

(Note: Sales are including Excise Duty)

CORPORATE GOVERNANCE REPORT

1 27th annual report 2011-12

(a) Company�s Philosophy

Corporate governance refers broadly to the rules, processes, or laws by which businesses are

operated, regulated, and controlled. A well-defined and enforced corporate governance provides

a structure that works for the benefit of everyone concerned by ensuring that the enterprise

adheres to accepted ethical standards and best practices as well as to formal laws. STL is

committed to run its business in a legal, ethical and transparent manner with dedication that

originates from the very top and permeate throughout the organization. Besides adhering to the

prescribed corporate practices as per clause 49 of the Listing Agreement, it voluntarily governs

itself as per highest ethical and responsible standard of business.

(b) Board of Directors

Composition

As on 31st March 2012 the Board comprised of six directors of which three were Executive

Directors (including the Chairman & Managing Director), one Nominee Director of IFCI and

two Independent Directors.

The Independent Directors of the Company are experienced, competent and renowned

persons from their respective field. The Independent Directors take active part at the Board

and Committee meetings which adds value in the decision making process.

Executive Non-Executive

Mr. Nainesh J. Sanghvi Chairman &

Managing Director

Mr. Kiran O. Mehta Non-Executive

Independent

Mr. Rajendra Prasad Gupta Jt. Managing

Director

Mr. Satish Chandra

Mundra *

Non-Executive

Independent

Mr. K.R. Murthy

Wholetime Director

(Technical)

Mr. B.K. Roy Nominee Director, IFCI

* Mr. Satish Mundra has been inducted as an Additional Director (Independent) w.e.f.

07/09/2011 in place of Mr. Prakash Ghate, on account of his resignation from the Board w.e.f.

07/09/2011.

Meetings and attendance record of each Director

Board Meetings (2011-2012) - 1. 28th June, 2011 2. 07th September, 2011

3. 31st December, 2011 4. 24th March, 2012

Attendance of Directors at these Board Meetings and at the last Annual General Meeting was as

under:

Sr.

No.

Name of Director

Number of Board

Meetings held

Number of

Board Meetings

attended

Whether present

at the previous

AGM

01. Mr. Nainesh J. Sanghvi 4 4 Yes

02. Mr. R.P.Gupta 4 4 Yes

03. Mr. K.R.Murthy 4 4 Yes

04. Mr. Kiran O. Mehta 4 1 No

05. Mr. Prakash Ghate* 4 0 No

06.

07.

Mr. B.K. Roy

Mr. Satish Chandra Mundra*

4

4

3

3

No

Yes

* Mr. Satish Mundra has been inducted as an Additional Director (Independent) w.e.f.

007/09/2011 in place of Mr. Prakash Ghate, on account of his resignation from the Board w.e.f.

07/09/2011.

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CORPORATE GOVERNANCE REPORT

2 27th annual report 2011-12

(c) Audit Committee

Terms of reference - All members of the Audit Committee have accounting and financial

management expertise.

The functions of the Audit Committee include the following:

Oversight of the Company�s financial reporting process and disclosure of its financial

information to ensure that the financial statement is correct, sufficient and credible.

Recommending to the Board the appointment, re-appointment and, if required, the

replacement or removal of the statutory auditor and the fixation of audit fees.

Approval of payment to statutory auditors for any other services rendered by the statutory

auditors.

Reviewing, with the Management, the annual financial statements before submission to the

Board for approval, with particular reference to:

Matters required to be included in the Director�s Responsibility Statement to be included in

the Board�s report in terms of sub section (2AA) of section 217 of the Companies Act, 1956.

Changes, if any, in accounting policies and practices and reasons for the same.

Major accounting entries involving estimates based on the exercise of judgment by the

Management.

Compliance with listing and other legal requirements relating to financial statements.

Reviewing, with the Management, the quarterly financial statements before submission to

the Board for approval.

Reviewing, with the Management, performance of statutory and internal auditors, adequacy

of the internal control systems.

Reviewing the adequacy of internal audit function, if any, including the structure of the

internal audit department, staffing and seniority of the official heading the department,

reporting structure coverage and frequency of internal audit.

Discussion with internal auditors any significant findings and follow-ups there on.

Discussion with statutory auditors before the audit commences, about the nature and scope

of audit as well as post audit discussion to ascertain any area of concern.

Composition:

During the year under review, four meetings of the Committee were held. The Composition of

the Committee as on 31-Mar-12 as well as the particulars of attendance at the Committee

during the year is given in the table below:

Sr.

No Name of the Director Category

No. of Meetings

attended

01 Mr. Kiran O. Mehta Non Executive (Independent)

1

02 Mr. B.K. Roy

Non Executive (Independent-

Nominee IFCI)

3

03 Mr. Prakash Ghate*

Non Executive (Independent)

0

04 Mr. Satish Chandra Mundra*

Non Executive (Independent)

3

* Mr. Satish Mundra has been inducted as member of the Committee w.e.f. 07/09/2011 in

place of Mr. Prakash Ghate.

The composition of the Committee complies with requirements under of Clause 49 of the listing

agreement and Section 292A of the Companies Act, 1956.

(d) Remuneration Committee

CORPORATE GOVERNANCE REPORT

3 27th annual report 2011-12

Terms of reference The Remuneration cum Compensation Committee of the Company, inter-

alia, evaluates, recommends to the Board and approves the Executive Directors compensation

plans, policies and programmes of the Company. The committee also reviews the overall

remuneration, compensation policy for all employees of the Company; keeping in line with the

market trends, work conditions etc. The Company�s remuneration strategy is market-driven and

aims at attracting and retaining high calibre talent.

Composition

During the year under review, four meetings of the Committee were held. The members of the

Remuneration Committee are:

Sr.

No Name of the Director Category

No. of Meetings

attended

01 Mr. Kiran O. Mehta Non Executive (Independent)

1

02 Mr. B.K. Roy

Non Executive (Independent-

Nominee IFCI)

3

03 Mr. Prakash Ghate*

Non Executive (Independent)

0

04 Mr. Satish Chandra Mundra*

Non Executive (Independent)

3

* Mr. Satish Mundra has been inducted as member of the Committee w.e.f. 07/09/2011 in

place of Mr. Prakash Ghate.

The Managing Director and Executive Director are paid remuneration by way of salary,

perquisites and allowances as approved by the Board and within the overall limits approved by

the Members of the Company. The Non-Executive Directors do not draw any remuneration from

the Company other than the sitting fees as may be determined by the Board.

Remuneration of Directors

Details of remuneration paid to the Executive Directors during the year 2011-12 are as under:

{Amt. in Rs.}

Name Designation Salary Other Benefits Total

Nainesh J. Sanghvi

Chairman and Managing

Director

2480000 782430 3262430

Rajendra P. Gupta

Joint Managing Director 2480000 306388 2786388

K.R. Murthy Wholetime Director

921173 252610 1173783

(e) Shareholders and Investors Grievances Committee

Terms of reference

The Committee performs the following functions:

i) Transfer/Transmission of shares.

ii) Split-up/Sub-division and Consolidation of shares.

iii) Dematerialization/ Rematerialization of shares.

iv) Issue of new and duplicate share certificates.

CORPORATE GOVERNANCE REPORT

4 27th annual report 2011-12

v) Registration of Power of Attorneys, Probate, Letters of Transmission or similar other

documents.

vi) To open/close bank account(s) of the Company for depositing share/debenture

applications, allotment and call monies, authorise operation of such account(s) and issue

instructions to the Bank from time to time in this regard.

vii) To look into redressal of shareholders� and investors� complaints, like transfer of shares,

non-receipt of Annual Report, non-receipt of declared dividends etc.

Composition

During the year under review, four meetings of the Committee were held. Attendance of

Members at these meetings was as under:

Sr.

No

Name of the Director Category No. of

Meetings

attended

01

Mr. Rajendra P. Gupta

Executive

4

02

Mr. B.K. Roy

Non Executive (Independent- Nominee

IFCI)

3

03

Mr. Prakash Ghate *

Non Executive (Independent)

0

04 Mr. Satish Chandra

Mundra*

Non Executive (Independent)

3

* Mr. Satish Mundra has been inducted as member of the Committee w.e.f. 07/09/2011 in

place of Mr. Prakash Ghate.

Details of investor complaints/queries received & disposed off during the year are as

under:

No. of pending share transfers as on 01.04.2011 (due to Court stay order) 22700

No. of complaints received during the period 01.04.11 to 31.03.12 10

(Pertaining to Annual Reports, Securities sent for transfer, demat queries etc.)

No. of complaints sorted out to the satisfaction of the investors 10

No. of complaints not sorted out to the satisfaction of the investors Nil

No. of pending share transfers as on 31.3.2012 (due to Court stay order) 22700

(f) General Body Meetings: Details Regarding Venue, Date & Time of the Last Three

AGMs

Year Details of location Date & Time

2010-11

Taraganj Industrial Area, AB Road, SARANGPUR Distt.

Rajgarh (M.P.)

30/09/11 10.30 A.M

2009-10

30/09/10 10.30 A.M

2008-09

29/09/09 10.30 A.M

No Special Resolution was put through postal ballot in the previous year.

CORPORATE GOVERNANCE REPORT

5 27th annual report 2011-12

(g) Disclosures

Disclosure of Material Transactions

During the year under review, there were no materially significant related party transactions

with the promoters, the management or their relatives or subsidiaries etc. that have a potential

conflict with the interest of the Company at large. Details of related party transactions as

required by Accounting Standards (AS-18) are included in the Notes to the Accounts.

Compliance

The Company has complied with the requirements of the Stock Exchanges, SEBI and other

Statutory Authorities on all matters relating to Capital Markets during the last three years. No

penalties or strictures have been imposed on the Company by any of these authorities.

Code of Conduct

The Board has laid down a Code of Conduct for the Management of the Company.

(h) Means of Communication

The Quarterly results are published in daily newspapers and sent to the relevant Stock

Exchanges on approval by the Board. The shareholders can also visit the website of the

Company for any information/query.

(i) Management

Management Discussion & Analysis Report is annexed hereto and forms part of the Annual

Report.

(j) General Shareholders Information

27 th Annual General Meeting

Date, Time & Venue

Saturday, 29-Sep-12 at 10:30AM, Taraganj Industrial Area,

A.B. Road, Sarangpur (Distt. Rajgarh) MP

Financial year 1-April to 31-March

Date of Book Closure 26th September, 2012 to 28th September, 2012 (both days

inclusive).

Demat ISIN No. INE 708 B01018

Listing on Stock

Exchanges

Bombay Stock Exchange, Mumbai 523728

Dematerialisation of Shares and Liquidity:

The shares of the Company fall under the category of compulsory delivery in dematerialised

mode by all categories of investors and are actively traded under rolling settlement. The

Company has signed agreements with both the Depositories i.e. National Securities

Depository Limited & Central Depositories Services (India) Limited, and 55.84% of Share

Capital of the Company has been dematerialised. The Company also offers simultaneous

transfer cum demat facility to its investors.

CORPORATE GOVERNANCE REPORT

6 27th annual report 2011-12

Market Price Data:

High / Low of Market price of Company's equity shares traded on the Stock Exchange,

Mumbai and M.P. Stock Exchange, Indore, during the last financial year was as follows:

Month Bombay Stock Exchange,

Mumbai

High Low

April 2011 7.40 5.33

May 6.71 5.51

June 5.75 5.00

July 7.02 4.80

August 7.60 5.86

September 8.50 7.23

October 8.80 8.08

November 9.20 8.37

December 8.51 6.89

January 2012 6.55 5.33

February 5.33 4.20

March 7.77 4.63

Categories of Shareholders

Sr.

No.

Category

No. of Share

held

%

Shareholding

01.

02

03.

04.

05.

Promoters and their relatives

Financial Institutions, Banks & Mutual Funds

NRIs,Foreign Nationals,OCBs and FIIs

Body Corporates (Not covered above)

Indian Public

1356010

9100

1417

2069927

2563546

22.60

0.15

0.02

34.50

42.73

TOTAL: 6000000 100.00

Distribution of Shareholding

Sr.

No.

No. of Equity

Shares held

No. of

Share

Holders

Percentage of

total

Shareholder

No. of

Share held

% of

Total

Shares

1. 2. 3. 4. 5. 6. 7. 8.

1 to 500

501 to 1000

1001 to 2000

2001 to 3000

3001 to 4000

4001 to 5000

5001 to 10000

10001 & above

11825

353

142

29

15

13

21

43

95.04

2.84

1.14

0.23

0.13

0.10

0.17

0.35

1571927

293324

216537

76441

57458

101106

165905

3517302

26.20

4.89

3.61

1.27

0.96

1.69

2.76

58.62

TOTAL: 12442 100.00 6000000 100.00

Locations PLANTS ADMINISTRATIVE OFFICE

TUBE DIVISION CRM DIVISION 3rd Floor, Old IDA Building,

TARAGANJ Industrial Area, A.B. Rd, LONDHIYA Industrial Area 15- 16, Jawahar Marg,

SARANGPUR, Distt. Rajgarh MP Distt. Shajapur (M.P.) Indore MP

CORPORATE GOVERNANCE REPORT

7 27th annual report 2011-12

MANAGING DIRECTOR CERTIFICATION

Declaration regarding Clause 49 (V) of the Listing Agreement

I, Nainesh J. Sanghvi, Chairman and Managing Director of the Company, hereby certify that:

I. I have reviewed financial statement and cash flow statement of Siddhartha Tubes Limited for the year ended 31st

March 2012 to the best of my knowledge, belief and state that:

i) these statements do not contain any materially untrue statement or omit any material fact or contain statements

that might be misleading;

ii) these statements together present a true and fair view of the Company�s affairs and are in compliance with existing

accounting standards, applicable laws and regulations.

II. There are, to the best of my knowledge and belief, no transactions entered into by the Company during the year

that are fraudulent, illegal or violative of the Company�s Code of Conduct.

III. I accept responsibility for establishing and maintaining internal controls for financial reporting and that I have

evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and have

disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if

any, of which I am aware and the steps I have taken or proposed to take to rectify these deficiencies.

VI. I have indicated to the Auditors and Audit Committee;

i) significant changes if any, in internal control over financial reporting during the year;

ii) significant changes if any, in accounting policies during the year and that the same have been disclosed in the notes

to the financial statements; and

iii) instances of significant fraud of which I have become aware and the involvement therein, if any, of the management

or an employee having a significant role in the Company�s internal control system over financial reporting.

As required by Clause 49(1)(D)(ii) of the Listing Agreement, I hereby declare that Management has confirmed

compliance with the Code of Conduct as adopted by the Company.

Place: Indore Nainesh J. Sanghvi

Date: 07 September 2012 Chairman and Managing Director

(on the Letter Head of Auditors)

AUDITORS� CERTIFICATE ON COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

To,

The Members

of Siddhartha Tubes Limited, Sarangpur

We have examined the compliance of the conditions of Corporate Governance by Siddhartha Tubes Limited for the year

ended 31st March, 2012, as stipulated in Clause 49 of the Listing Agreements of the said Company with Stock

Exchanges in India.

The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was

limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the

conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of

the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the

Company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing

Agreements.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the

efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Rakesh K. Jain & Associates,

Chartered Accountants

Indore Rakesh Jain

07/09/2012 PARTNER

(M.No. 401098)

Rakesh K. Jain & Associates. Chartered Accountants ---------------------------------------------------------------------------------------------------------------------------------

202- Kuber Palace, 35 - Jaora Compound, Indore, (MP), Cell -9826394013

AUDITORS' REPORT To, The Members of SIDDHARTHA TUBES LIMITED

1. We have audited the attached Balance Sheet of SIDDHARTHA TUBES LIMITED, as at 31st March 2012 and also the Profit and Loss Account for the year ended on that date annexed thereto and Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

3. As required by Companies (Auditors' Report) Order, 2003, as amended by the Companies (Auditor�s Report) (Amendment) Order, 2004 (together the �Order�), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of �The Companies Act, 1956� of India (the �ACT�) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: - (i) We have obtained all the information and explanations, which to the best of our knowledge and belief

were necessary for the purposes of our audit; (ii) In our opinion, proper books of accounts, as required by law, have been kept by the Company so far as

appears from our examination of the books of accounts of the Company; (iii) The Balance Sheet and Profit & Loss Account and Cash Flow Statement dealt with by this report are in

agreement with the books of accounts of the Company; (iv) In our opinion, the Balance Sheet and the Profit & Loss Account and Cash Flow Statement dealt with by

this report comply with the mandatory Accounting Standards referred to in Sub - Section (3C) of Section 211 of the Companies Act, 1956.

(v) In our opinion and based on information and explanation given to us, none of the Directors is, as at 31st

March, 2012, prima-facie disqualified from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

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(vi) In our opinion and to the best of our information and according to the explanation given to us, the said

financial statements, read together with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and present a true and fair view in conformity with the accounting principles generally accepted in India; subject to Note No. 13 & 37 (b) regarding preparation of Accounts on a �Going Concern basis".

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012, And

b) in the case of the Profit and Loss Account, of the Profit of the Company for the year ended on

that date, c) in case of Cash flow statement of the Cash flows for the year ended on that date. For and on behalf of For: RAKESH K. JAIN & ASSOCIATES., CHARTERED ACCOUNTANTS FRN-011019C

RAKESH JAIN PLACE: INDORE PROPRIETOR DATE: 07-09-2012 M.NO.401098

ANNEXURE TO AUDITOR'S REPORT

Referred to in paragraph 2 of our report of even date

i) In respect of Fixed Assets: a) The Company is maintaining proper records showing full particulars, including quantitative details and

situation of fixed assets on the basis of available information. b) We are informed that major portion of the fixed assets have been physically verified by the management

at regular intervals during the year, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification

c) The Company did not dispose off a substantial part of fixed assets during the year. ii) In respect of Inventories a) We are informed that physical verification of inventory has been conducted at reasonable intervals during

the year by the management. In our opinion the frequency of such verification is reasonable. b) In our opinion and according to the information give to us, the procedures of physical verification of

inventory followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on

physical verification of inventory as compared to the book records. iii. The Company has taken loan from persons falling under Section 301. The terms of the same are not prejudicial

to the interest of the Company. iv. In our opinion and according to the information and explanation given to us there are adequate internal control

procedures commensurate with the size of the Company and the nature of its business, for purchase of inventory and fixed assets and for the sale of goods. Further during the course of audit we have not observed any major weaknesses in the internal control;

v. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a) Based on the audit procedures applied by us and according to the information and explanation provided by the management, we are of the opinion that all the transactions that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

b) These transaction have been made at prices which are reasonable having regard to the prevailing market

prices at the relevant time. vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any

deposits from the public within the meaning of section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder.

vii In our opinion the internal audit system of the Company is commensurate with its size and nature of its

business. viii The Central Government has prescribed the maintenance of Cost records under section 209 (1) (d) of the

companies act 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the cost records maintained by the Company and are of the opinion that prima-facie the prescribed accounts and records are made and maintained.

ix In respect of statutory dues : a) According to the records examined by us the Company is generally regular in depositing undisputed statutory

dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, VAT Tax, Wealth Tax, Custom Duty, Excise Duty, and any other statutory dues with the appropriate authorities.

b) According to the information and explanation given to us, statutory dues under appeal at various forums

aggregating to `428.34 lakh are as under:

S.No Name of the Statute

Nature of the Dues

Period Amount Forum where appeal / matter is pending

1 CESTA Excise & Custom 1998-99 1594141 CESTAT, New Delhi 2004-05 3000000 Commissioner Appeal 2005-06 586755 CESTAT, New Delhi 2006-07 10000000 Add. DGFT, New Delhi 2007-08 5591632 Commissioner Appeal 2008-09 19242228 CESTAT, New Delhi 2009-10 2316150 Commissioner Appeal 2011-11 502635 CESTAT, New Delhi Total 42833541

x) As at 31st March 2012 the accumulated losses of the Company are more than fifty percent of its net worth. The Company has incurred cash profit of `230.53 lacs for the year ended 31st of March 2012 (previous year profit of `215.22 lacs).

xi) In our opinion based on our audit procedures & according to the information & explanation given to us, the

Company has defaulted in repayment of dues aggregating to `232.24 crores in respect of Financial Institutions and Banks.

xii) In our opinion and according to the information and explanation given to us. No loans and advances have

been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion the Company is not a chit fund or a nidhi mutual benefit fund/ society. Therefore the provision

of clause 4 (xiii) of the companies (Auditors report) Order 2003 are not applicable to the Company. xiv) In our opinion the Company is not dealing in or trading in shares, securities, debentures and other

investments. Accordingly the provisions of clause 4(xiv) of the companies (Auditors Report) Order 2003 are not applicable to the Company.

xv) According to the information and explanation given to us, the Company has not given any guarantee for loans

taken by others from banks or financial institutions. xvi) In our opinion & according to the information & explanation given to us on an overall basis, the term loans

have been applied for the purpose for which they were raised. xvii) According to the information and explanation given to us on an overall examination of the Balance Sheet of the

Company we are of the opinion that the Company has not utilized funds raised from short-term sources towards repayment of long-term borrowings and acquisition of fixed assets.

xviii) During the year the Company have not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act 1956.

xix) The Company did not issue any debenture during the year. xx) The Company has not raised any money by way of public issue during the year. xi) Based on audit procedures performed and information & explanation given by the management, we report that no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated. For: RAKESH K. JAIN & ASSOCIATES., CHARTERED ACCOUNTANTS FRN-011019C

RAKESH JAIN PLACE: INDORE PROPRIETOR DATE: 07-09-2012 M.NO.401098

(Amount Rs. In lacs)

Particulars Note No.

EQUITY AND LIABILITIES Shareholders' Funds :- Share Capital 1 4800.00 4800.00 Reserves & Surplus 2 (19956.35) (15156.35) (21312.68) (16512.68)

Share Application 3 8430.14 11408.82

Non Curent Liabilities:- Long Term Borrowings 4 29417.63 33140.75 Long Term Liab. & Provisions 5 0.00 29417.63 0.00 33140.75

Curent Liabilities:- Short Term Borrowings 6 0.00 0.00 Trade Payable 7 4025.78 2385.10 Other Current Liabilities 8 3597.23 3109.09 Short Term Provisions 9 345.82 7968.83 308.84 5803.03

TOTALS : 30660.25 33839.91

ASSETSNon- Current Assets Fixed Assets 10 Tangible Assets 10776.15 13452.57 Intangible Assets 0.00 0.00 Capital Work in Progress 10203.08 11897.48 Intangible Assets in Development 0.00 20979.23 0.00 25350.05

Non-Current Investments 11 12.52 12.52 Long Term Loans & Advances 12 626.39 928.94 Other Non-Current Assets 13 1726.54 1387.57 Deffered Tax Assets (net) 1013.33 3378.77 1013.33 3342.35

Current Assets Current Investments 14 0.00 0.00 Inventories 15 4236.67 3633.30 Trade Receivables 16 1121.66 835.87 Cash & Bank Balance 17 230.74 335.11 Short Term Loans & Advances 18 713.18 343.22 Other Current Assets 19 0.00 6302.24 0.00 5147.51

Total 30660.25 33839.910.00 0.00

As per our report of even date attached

for RAKESH K. JAIN & ASSOCIATESCHARTERED ACCOUNTANTSFRN:011019C RAJENDRA P.GUPTA NAINESH J. SANGHVI

Jt. MANAGING DIRECTOR CHAIRMAN CUM MANAGING DIRECTOR

RAKESH JAINPROPRIETORM.No. 401098

PLACE : INDOREDATE: 07.09.2012

SIDDHARTHA TUBES LIMITEDBALANCE SHEET AS AT 31 MARCH, 2012

Priyanka SisodiyaCOMPANY SECRETARY

Amount As at Amount As at 31.03.2012 31.03.2011

For & On behalf of the Board

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Particulars Note No.

INCOME :

I Revenue from Operations(Gross) 20 34881.49 25220.63Job Work / Other Receipts 20 1089.27 1362.22 Less: Excise Duty 2731.39 2390.94Revenue from Operations(Net) 33239.38 24191.90

II Other Misc. Income 21 62.76 23.85

III Total Revenue 33302.14 24215.75

IV EXPENDITURE :Cost of Materials Consumed 22 22394.45 20957.79Purchase of Traded Goods 7407.32 1203.48Change in Inventories of FinishedGoods 23 100.24 (1340.06)Employees Remuneration &Benefit 24 1053.57 889.85Finance Cost 25 97.11 48.08Depreciation 10 1008.99 1142.99Other Expenses 26 2018.92 2241.38

Total Expenses 34080.60 25143.51

V

327.64 (778.46) 263.31 (927.76)VI Exceptional & Extraordinary Items 230.53 215.22

1) Earlier years Expenses 20.24 (25.82)2) Depreciation Written Back 1146.27 212.583) Interest written back 969.06 1279.374) Loss on sale of Fixed Assets (0.78) 2134.79 (4.54) 1461.58

VII Profit /(Loss) before tax 1356.33 533.81Tax Expenses 0.00 0.00

VIII Profit/(Loss)after Tax 1356.33 533.81

IX Earning Per Equity Share1) Basic 20.36 6.652) Diluted 20.36 6.65

(Additional Information Note nos. 27 to 39)

As per our report of even date attached

for RAKESH K. JAIN & ASSOCIATESCHARTERED ACCOUNTANTSFRN:011019C RAJENDRA P.GUPTA NAINESH J. SANGHVI

Jt. MANAGING DIRECTOR CHAIRMAN CUM MANAGING DIRECTOR

RAKESH JAINPROPRIETORM.No. 401098

PLACE : INDOREDATE: 07.09.2012

SIDDHARTHA TUBES LIMITEDSTATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH, 2012

(Amount Rs. In lacs)

Profit /(Loss) before exceptional andextraordinary items and tax

Priyanka SisodiyaCOMPANY SECRETARY

Amount As at Amount As at 31.03.2012 31.03.2011

For & On behalf of the Board

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH,2012PARTICULARS 2011-12 2010-11

(` In Lacs) (` In Lacs)A. Cash Flow From Operating Activities

Net Profit / (Loss) before tax and extraordinary items 1,355.54 529.27 Add / (Deduct) for:Depreciation 1,008.99 1,142.99 Interest 97.11 48.08 Loss/ (Profit) on Sales on F.Assets 0.78 1,106.89 4.54 1,195.61

Operating Profit before before sale of Investment 2,462.43 1,724.88 Increase / (Decrease)

Increase / (Decrease) in Trade and Other receivables (285.79) 53.68 Increase / (Decrease ) in Inventories (603.37) (1,437.73)

Increase / (Decrease) in Loans & Advances (406.38) 534.95 Increase / (Dectease ) in Trade Payables 1,640.68 1,259.49

345.14 410.39 Cash generated from operations 2,807.57 2,135.27 Interest Paid (97.11) (48.08) Cash Flow before Extraordinary items 2,710.46 2,087.19 Extraordinary Items - -

Net Cash used in Operating Activities (Total 'A') 2,710.46 2,087.19

B CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets (3,358.62) (795.59) Sale of Fixed Assets (3.21) (3,361.83) (2.04) (797.63)

Net Cash used in Investing Activities (Total 'B') (3,361.83) (797.63)

C CASH FLOW FROM FINANCING ACTIVITIES:Add / (Deducted) for:Share Application Money (2,978.68) (42.30) Long term Borrowings (3,723.11) (3,131.14) Short term Borrowings 525.13 (6,176.66) 618.91 (2,554.53)

Net Cash generated from Financing activities (Total C) (6,176.66) (2,554.53)

Net increase / (Decrease in cash and cash equivalents (104.38) 330.29 Add: Cash and Cash Equivalents as at (Opening

Balance) 335.11 4.82 Add: Cash and Cash Equivalents as at (Closing

Balance) 230.73 335.11 230.73 335.11

Note: Figures in brackets indicate negative figures 0.00 0.00

As per our report of even date attached

for RAKESH K. JAIN & ASSOCIATESCHARTERED ACCOUNTANTSFRN:011019C

RAJENDRA P.GUPTA NAINESH J. SANGHVI

Jt. MANAGING DIRECTOR CHAIRMAN CUM MANAGING DIRECTOR

RAKESH JAINPROPRIETORM.No. 401098 Priyanka Sisodiya

PLACE : INDORE COMPANY SECRETARY

DATE: 07.09.2012

SIDDHARTHA TUBES LIMITED

AUDITORS CERTIFICATE:We have checked that attached Cash Flow Statement of Siddhartha Tubes Limited for the year ended 31 st March -2011, from

thebooks and records maintained by the Company in the ordinary course of business and have found it in accordancetherewith.

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SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS-2011-2012: (1) ACCOUNTING CONVENTION: i. 1 The financial statements are prepared under the historical cost conventions, on accrual basis in accordance with

the Generally Accepted Accounting Principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the Provisions of the Companies Act, 1956.

i. 2 The preparation of financial statements in conformity with Generally Accepted Accounting Principles, require

making of estimates and assumptions that affect the reported amounts of Assets and Liabilities at the date of financial statements and the reported amounts of revenues and expenses during the year. Difference between the actual results and estimates are recognised in the year in which the results are known / materialized.

(2) FIXED ASSETS: - The Company has production facilities at Sarangpur (Tube Division) and Shajapur (CRM

Division). Fixed Assets of the Tube Division are stated at cost less accumulated depreciation. Similarly the fixed assets of CRM Division except 6Hi CRM Mill are stated at cost less accumulated depreciation. The Company capitalizes all direct costs, relating to the acquisition and installation of Fixed Assets, and Interest if any on borrowed Funds used for acquisition of Fixed Assets upto the date of Assets becoming ready for being put to use.

The 6HI CRM Mill is under commissioning and so far not put to use, hence no depreciation has been provided in the books of accounts.

i) DEPRECIATION: (a) Depreciation is provided by the straight-line method at rates and in the manner stipulated in schedule XIV

of the Companies Act 1956. Also refer schedule no. 6.

(b) The amount incurred on Staff Holiday resorts has been amortized / depreciated over a period of ten years. The Book value stands reduced to NIL as at 31/03/2012.

(3) INVENTORIES: Cost of Inventories have been computed to include all Cost of Purchase, Cost of Conversion and other costs

incurred in bringing these to their present location & condition. a) In case of Finished Goods, cost is determined adding material, labour and related factory overheads including

depreciation and excise duty.

b) Raw Material, Stores and Spares and Production consumables are valued at lower of historical cost (Net of MODVAT) or Net realisable value applying the First in / first out (FIFO) Method.

c) By products and Scrap are valued at estimated realizable value. (4) INVESTMENTS: Long term Investments are valued at Cost. There are no Current Investments. No provision for permanent

diminishing value of any such investment, (where the Investee Company has accumulated losses etc.) has been made.

(5) FOREIGN CURRENCY TRANSACTION:

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a) Purchases and sales in Foreign Currency are accounted at exchange rates prevailing on the date of transaction/payment.

b) All outstanding Foreign Currency receivables / Liabilities are translated at the exchange rate prevailing on the last day of accounting year.

c) All exchange differences are dealt with in Profit and Loss Account. (6) MODVAT /EXCISE DUTY: a) Modvat on purchase of Raw and other materials, Capital goods / Capital work in progress is deducted from the

cost of such materials, Capital goods/Capital work in progress. b) Excise duty has been accounted on the basis of both payments made in respect of goods cleared and also

provision made for goods lying in bonded warehouses. (7) REVENUE RECOGNITION: a) Revenue from the sales of goods is recognised upon passage of title to the customer which, generally, coincides

with the delivery. b) Sales include Excise Duty; Debit Notes realised from customers but excludes rebates and discounts. c) Export Sales includes Deemed Exports of ` Nil (Previous Year ` Nil). (8) TAXATION: No Provision for Income Tax is made in the Current year in view of the computation of income resulting in a loss

in accordance with the provisions of the I.T. Act 1961. Further, there is no "Book Profit" as envisaged in Section 115 JB of the Income Tax Act.

(9) RETIREMENT BENEFIT: Retirement Benefits to employees comprise of payments towards gratuity, and provident funds under the

approved schemes of the company. Annual Contribution to the gratuity fund is determined based on a valuation furnished by Life Insurance Corporation of India under the Group Gratuity Scheme. Liability on account of encashment of leave entitlement of employees is provided on accrual basis and in accordance, with the rules of the Company.

(10) BORROWING COST: Interest and other borrowing costs on specific borrowings relatable to qualifying assets are capitalized. During

the year the Company has not made interest provision on loans which have become NPA with lenders and / or where the respective lenders have not charged interest on the account.

(11) BALANCE CONFIRMATION: The closing balances in respect of receivables / payables are subject to confirmation and consequential

adjustment if any. (12) SECURITY DEPOSITS: Security Deposits are stated at Cost and interest accrued thereon is shown separately in Balance Sheet under

the head interest accrued.

Note ParticularsNo.

1 SHARE CAPITAL : AUTHORISED :

15000000 Equity Shares of Rs.10/- each 1500.00 1500.0020000000 Preference Shares of Rs.10/- each 2000.00 2000.002500000 Preference Shares of Rs.100/- each 2500.00 2500.00

6000.00 6000.00

ISSUED SUBSCRIBED & PAID-UP

600.00 600.00

1800.00 1800.00

2400.00 2400.00

4800.00 4800.00

1-A List of Shareholders holding more than 5% of Equity Shares

Number of % holding Number of % holding shares held of Eq. Shares shares held of Eq. Shares

Equity Shares with voting rightsMapale International Pvt. Ltd. 345500 5.76% 345500 5.76%

Sapphire Business & Holding P. Ltd. 300000 5.00% 300000 5.00%

Total 645500 10.76% 645500 10.76%

2 RESERVES & SURPLUS :(a) General Reserve 636.14 636.14(b) Profit & (Loss) Account Opening Balance (21948.82) (22482.63) Add: Profit / (Loss) for the year 1356.33 533.81 Closing Balance (20592.49) (21948.82)

(19956.35) (21312.68)

As at 31-03-2012 As at 31-03-2011

SIDDHARTHA TUBES LIMITED, SARANGPURNOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH,2012

(Amount Rs. In lacs)

Amount As at Amount As at31.03.2012 31.03.2011

Name of Shareholder

6000000 Equity Shares of Rs.10/- each fullypaid in Cash

18000000 7.5% Redeemable CummulativePreference Shares of Rs.10/- each fullypaid in cash.2400000 0% Redeemable CummulativePreference Shares of Rs.100/- each fullypaid in Cash

SIDDHARTHA TUBES LIMITED, SARANGPUR

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Note ParticularsNo.3 Share Application Money

(A) Share Application Money 0.00 400.52

(B) CONVERSION OF INTEREST DUES (*) IDBI /ARCIL (**) 5602.13 8180.29 IFCI (***) 471.01 471.01

2357.00 2357.008430.14 11408.82

4 LONG TERM BORROWINGS 4.1 SECURED LOANS :

IDBI / ARCIL 8928.97 8928.97 LIC - 3297.23 IFCI 3761.41 3669.85

3377.92 3542.187155.26 23223.55 7503.18 26941.40

Sub Total (4.1) 23223.55 26941.40NOTES:

Notes :(*) Under various restructuring schemes sanctioned by the Secured Lenders, certain Interest duesare to be converted into Equity Shares / 9% Compulsorily Convertible Cumulative Redeemable PreferenceShares (9%CCCRPS) / 8.85% Yield to Maturity Cumulative Redeemable Preference Shares (8.85%YTMCRPS). Pending allotment, these dues are classified under Share Application Money.

(**) Under a restructuring scheme approved by IDBI, interest dues aggregating to Rs.25.78 crore stoodclassified as "Share Application Money" pending conversion into Equity Shares (please see note (*) above).The said amount stand written off during the year as per terms of settlement reached with IDBI. Theresidual balance of Rs. 56.02 crore, being a part of similar Share Application Money (against allotment of9% CCCRPS and 8.85% YTMCRPS) assigned by IDBI to ARCIL remain outstanding in the Company'sBooks.

ASSETS CARE & RECO. ENT. LTD.(WC)

1)Term Loans from Financial Institutions / Banks are secured by way of first mortgage of all immoveableproperties and hypothecation of all the Company's movables (save and except book debts and stocks)including movable Machinery, Spares and Tools both present and future ranking pari-passu inter-se subjectto prior charge created/ to be created in favour of the Banks on specified movable assets for securingborrowings for working capital requirements and personal guarantee of the Jt. Managing Director andManaging Director.

ASSETS CARE & RECO. ENT. LTD.(TL)

2) Secured Loans from ACRE represent Term Loans & Working Capital facilities acquired by them from SBIand Dena Bank (Both facilities shown seperately ). A settlement has been concluded between the Companyand ACRE, whereupon both these facilities are clubbed together and made jointly payable as per an agreedschedule. Therefore, the Working Capital facilities acquired by ACRE, being also now repayable over anagreed term, have lost the character of Demand Cash Credit attributed to W.Capital facilities, and hencethese are also included under "Long Term Borrowings" (the corresponding pro-rata current maturities beingclassified under other Current Liabilities).

(Amount Rs. In lacs)

(***) The Company has reached 'Negotiated Settlement of Dues' (NSD) with IFCI and ACRE, whereby,interalia, their interest dues (pending conversion as per note (*)) will stand waived in full on repayment ofthe respective NSD amounts.

ASSETS CARE & RECO. ENT. LTD. (***)

NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH,2012

Amount As at Amount As at31.03.2012 31.03.2011

Note ParticularsNo.

4.2 UNSECURED LOAN :1) Financial Institutions IDBI (Corp-Loan) 161.30 161.30

2) Others 6032.78 6038.04

Sub Total (4.2) 6194.08 6199.34 TOTAL (4.1+4.2) 29417.63 33140.75

5 Long Term Provisions 0.00 0.00

0.00 0.006 SHORT TERM BORROWINGS

6.1 Working Capital Loans (Please see note 4.1 (2) above 0.00 0.00

Sub Total (6.1) 0.00 0.00

6.2 UnsecuredFrom Banks 0.00 0.00 Sub Total (6.2) 0.00 0.00

TOTAL (6.1+6.2) 0.00 0.00

7 TRADE PAYABLEMicro , Small and Medium Entp. 0.00 0.00Others 4025.78 2385.10

4025.78 2385.10

8 OTHER CURRENT LIABILITIES8.1 Current Maturities of Long Term Debts

IFCI LTD 92.04 183.601211.21 699.04

LIC 0.00 1303.25 94.00 976.64

8.2 Others Advance from Customers 424.10 184.94 Others 1869.88 2293.98 1947.51 2132.45

3597.23 3109.09

4) The Negotiated settlement of Dues reached with LIC, stood fully repaid during the year. Consequently, onrepayment of the settled sum, the residual outstanding dues have been written off in full as per the terms ofsettlement.

3) Working Capital facilities acquired through assignment by ACRE are secured by hypothecation ofCompany's entire Stock of Raw Materials, Stock-in-process, Finished goods, Stores & Spares, Stock intransit, other current assets and second charge over entire fixed assets of the Company ranking pari-passuinter-se and personal guarantee of the Jt. Managing Director and Managing Director.

31.03.2012 31.03.2011

SIDDHARTHA TUBES LIMITED, SARANGPURNOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH,2012

(Amount Rs. In lacs)

Amount As at Amount As at

ASSETS CARE & RECO. ENT. LTD.

Note :(8.1) Current maturities of Long Term debts comprise of installments payable to ACRE and IFCIduring the year as per NSD terms settled with them.

Note ParticularsNo.

9 SHORT TERM PROVISIONS9.1 Provision for employee benefits

Salary Payable 45.22 37.19 PF/ Professional Tax Employees 4.22 3.56 Bonus Payable 18.35 16.55 Contribution to PF (Employers) 4.31 72.10 3.60 60.91

9.2 Provision - Others TDS / Income Tax 9.14 3.67 Audit Fees Payable 2.25 2.25 Exp. Payable 22.97 29.38 Excise Duty Provision 239.36 273.72 212.64 247.93

345.82 308.84

SIDDHARTHA TUBES LIMITED, SARANGPURNOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH,2012

(Amount Rs. In lacs)

Amount As at Amount As at31.03.2012 31.03.2011

10 FIXED ASSETS 10.1 TANGIBLE ASSETS: (Rs. In lacs)

As at01.04.2011

Addition during theyear

Deduction during theyear (**)

As at31.03.2012

Up to31.03.2011 For the year

Dep. Return Back

Up to31.03.2012

As on31.03.2012

As on31.03.2011

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

Land 51.83 0.00 0.00 51.83 0.00 0.00 0.00 0.00 51.83 51.83

Lease Hold 0.35 0.00 0.00 0.35 0.00 0.00 0.00 0.00 0.35 0.35

Building 3.34 3869.34 0.00 496.03 3373.31 1107.38 112.67 132.61 1087.44 2285.87 2761.96

Staff Building 1.63 149.61 0.00 17.06 132.55 19.56 2.16 2.22 19.50 113.05 130.05

Plant & Machinery 5.28 14712.64 57.74 1787.71 12982.66 6603.96 686.75 757.33 6533.38 6449.28 8108.68

Electric Installation 5.28 2477.97 0.00 338.44 2139.52 1066.94 111.27 143.04 1035.18 1104.35 1411.03

Misc. Fixed Assets (*) 5.28 1018.28 0.00 137.59 880.69 429.31 46.50 58.15 417.66 463.03 588.97

Furniture & Fixture 6.33 63.69 0.00 5.80 57.89 42.66 2.30 2.94 42.02 15.87 21.02

Vehicle 9.50 122.55 0.00 5.55 117.00 96.72 11.11 4.22 103.61 13.39 25.83

D.G.Set 5.28 586.34 0.00 75.82 510.53 266.07 26.96 32.04 260.98 249.54 320.27

Computer 16.21 104.56 2.75 9.25 98.06 95.86 5.87 12.00 89.72 8.33 8.70

Pollution Equipment 5.28 4.31 0.00 0.00 4.31 3.24 0.23 0.00 3.47 0.84 1.07

Office Equipment 6.33 51.97 2.45 3.38 51.03 29.17 3.17 1.71 30.62 20.41 22.80

Staff Holiday Resorts 10.00 7.76 0.00 0.00 7.76 7.76 0.00 0.00 7.76 0.00 0.00

Total 23221.19 62.94 2876.64 20407.50 9768.62 1008.99 1146.27 9631.34 10776.15 13452.57Previous Year 23733.63 93.99 606.42 23221.19 8838.21 1142.99 212.58 9768.62 13452.57 14895.41

10.2 INTANGIBLE ASSETS: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

10.3 Capital Work In Progress 11897.48 0.00 1694.40 10203.08 0.00 0.00 0.00 0.00 10203.08 11897.48

Total WIP 11897.48 0.00 1694.40 10203.08 0.00 0.00 0.00 0.00 10203.08 11897.48

10.4 Intangible Assets in Development 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Notes: (*)Miscellaneous Fixed Assets- Work Shop, Lab, Fire Fighting, Equipments, Weigh Bridge, Drawing Equipment, Water, Air, Fuel Line & Packing Equipments.

(**) Deductions during the year includes an amount of Rs.4567.83 lacs, being interest capitalised (FA & WIP) in earlier years, now written back on account of exit of LIC & IDBI(CRPS & Share Application Money) during the year as per NSD concluded with them.

Particulars

Rate of Depreciatio

GROSS BLOCK DEPRECIATION NET BLOCK

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10.5 Depreciation and amortisation relating to contunuing operations:

For the year ended For the year ended

31 March,2012 31 March,2011

Amount Rs. In lac Amount Rs. In lac

Depreciation and amortisation for the year on tangible assets 1008.99 1142.99Depreciation and amortisation for the year on intangible assets - -

Depreciation and amortisation relating to continuing operations 1008.99 1142.99

Particulars

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Note ParticularsNo.

11 NON CURRENT INVESTMENTSCosmos Co-operative Bank Ltd., 12.52 12.5262600 Equity Shares @ Rs.20/- each

12.52 12.52

12 LONG TERM LOANS & ADVANCESCapital Advances 490.02 790.02Earnest Money/ Security Deposits 102.64 105.53Adv. Agt. Pending Claims 33.73 33.38

626.39 928.94

13 OTHER NON CURRENT ASSETSSettlement Amount Paid to FI's/Bank (**) 1705.07 1366.10Export Incentive Receivable 18.18 18.18Income Tax Seizure 3.29 3.29

1726.54 1387.57

14 CURRENT INVESTMENTS 0.00 0.00

15 INVENTORIES (As certified) Raw Material (At Cost) 1672.52 999.55 Consumable Stores & Spares (At Cost) 387.25 356.61 Finished Goods (At Cost) 2103.02 2226.37 Waste Scrap & Others (At estimated 73.89 50.77 realisable value)

4236.67 3633.30

16 TRADE RECEIVABLES(Unsecured Considered goods) Due over six months 158.95 136.03 Others 962.71 699.85

1121.66 835.87

17 CASH & BANK BALANCE : Cash on hand 2.14 4.11 Balance with Scheduled & Other Banks 10.10 21.33 FDR & Acc. Interest With Banks 1) Margin Money against Guarantee 56.37 125.61 2) Security/ Earnest Money/ Others 162.12 218.49 184.05 309.66

230.74 335.11

Note: (**) IFCI and ACRE are existing Lenders to the Company, with whom a Negotiated settment of Dueshas been concluded , and several instalments have been paid to them till end March 2012. However, furtherinstalments remain payable as per the agreed schedule, and these lenders remain outstanding on theCompany's Books. The said payment made upto 31/03/2012, viz Rs. 17.05 crore (Previous year Rs.13.66crore) has been accounted for under Other Non Current Assets, and these will be adjusted / accounted foragainst the corresponding outstandings in Secured Loans after full repayment of the NSD amount, andreceipt of No Dues Certificate from the respective Lender.

SIDDHARTHA TUBES LIMITED, SARANGPURNOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH,2012

(Amount Rs. In lacs)

Amount As at Amount As at31.03.2012 31.03.2011

SIDDHARTHA TUBES LIMITED, SARANGPUR

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Note ParticularsNo.

18 SHORT TERM LOANS AND ADVANCES18.1 Balance with Statutory Authorities

Advance Income Tax 62.16 61.24 Central Excise Duty - Basic 11.34 2.51 Central Excise Duty - Modvat 154.09 114.83 Modvat on Capital Goods 4.47 1.80 Modvat Receivables 8.65 10.47 Employee Group Gratuity Fund 0.09 0.09 VAT Receivable 7.25 248.05 4.49 195.44

18.2 Prepaid Expenses 31.39 24.01

18.3 Security Deposits 333.09 14.09

18.4 Advance to Staff 12.07 8.84

18.5 Advance to Suppliers 87.14 99.05

18.6 Other Advances 1.43 1.80

713.18 343.22

19 OTHER CURRENT ASSETS 0.00 0.00

0.00 0.00

20 REVENUE FROM OPERATIONS Sales (Indigeneous) 34881.49 25220.63Sales (Export) 0.00 0.00Job Work 1089.27 1362.22

Total 35970.76 26582.84

21 OTHER INCOME Interest / Misc. Receipt 62.76 23.85

62.76 23.85

22 COST OF MATERIAL CONSUMED Opening Stock 999.55 941.04 ADD : Purchase 23067.42 21016.29

24066.97 21957.33 LESS : Closing Stock 1672.52 999.55

22394.45 20957.79

Amount As at

NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH,2012(Amount Rs. In lacs)

NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH,2012

Amount As at31.03.2012 31.03.2011

SIDDHARTHA TUBES LIMITED, SARANGPUR

Note ParticularsNo.

23 CHANGE IN INVENTORIES OFFINISHED GOODS Opening Stock : Finished Goods 2226.37 902.55 Waste, Scrap & Others 50.77 34.54

TOTAL (A) : 2277.14 937.09

Closing Stock :

Finished Goods 2103.02 2226.37 Waste, Scrap & Others 73.89 50.77

TOTAL (B) : 2176.90 2277.14

TOTAL ( B - A) 100.24 (1340.06)

24 EMPLOYEES REMUNERATION & BENEFITS24.1 Salary & Wages 883.46 751.01

Bonus 18.25 16.45 Contribution to Gratuity 17.55 919.26 10.45 777.91

24.2 Directors Remuneration 72.21 61.17

24.3 Contribution to Provident Fund 45.55 36.92

24.4 Workmen and Staff Welfare 16.54 13.85

1053.57 889.85

25 INTEREST AND FINANCE CHARGES On Secured Loans 1.51 8.66

Others 95.60 39.43

97.11 48.08

(Amount Rs. In lacs)

Amount As at Amount As at31.03.2012 31.03.2011

Note ParticularsNo.

26 OTHER EXPENSES

26.1 MANUFACTURING EXPENSES Stores & Spares Consumed 508.63 465.85 Power & Fuel Consumed 1057.88 1566.52 1257.24 1723.09Repairs & Maintenance : Plant & Machinery 40.87 34.88 Building 12.97 10.35 Others 5.58 5.51 Insurance 11.31 8.30

Amount As at Amount As at31.03.2012 31.03.2011

SIDDHARTHA TUBES LIMITED, SARANGPURNOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH,2012

(Amount Rs. In lacs)

Other Manufacturing Expenses 105.57 176.30 198.73 257.78

26.2 SELLING & DISTRIBUTION EXPENSES : Packing, Forwarding & Distribution Exp. 77.84 69.80 Advertisement 1.05 1.09 Sales Promotion 0.55 2.14 Discount and Sales Commission 14.27 1.78 Other Selling Expenses 0.41 94.12 0.70 75.52

26.3 ADMINISTRATIVE EXPENSES Bank Charges & Commission 1.20 0.71 Board Meeting Fees 0.18 0.07 Books & Periodicals 0.26 0.18 Entertainment / Mess Expenses 7.13 7.02 Deepawali Exp. 0.43 0.43 Insurance Charges 4.35 1.89 Charity & Donation 0.14 0.13 Legal & Professional Charges 42.71 45.02 Bad Debts Written Off 0.00 0.00 Membership & Subscription Fees 1.73 2.18 Postage, Telegram Exp. 1.66 1.56 Telephone & Telex Exp. 8.64 9.67 Printing & Stationery Expenses 7.05 7.18 Registration & Licence Fees 0.17 0.05 Rent & Service Charges 7.07 5.24 Travelling & Conveyance Expenses 45.23 54.04 Vehicle Repairs & Maintanance 19.09 16.11 General & Other Expenses 32.63 31.20 Professional Tax (Employer) 0.05 0.05

179.73 182.74 TOTAL

26.4 AUDITOR'S REMUNERATION Audit Fees 1.50 1.50 Tax Audit Fees 0.35 0.35 Other Services 0.20 0.20 Out of Pocket expenses 0.20 2.25 0.20 2.25

TOTAL 2018.92 2241.38

ADDITIONAL INFORMATION27 RELATED PARTY DISCLOSURES

27.1 KEY MANAGEMENT PERSONNEL:Mr. Nainesh J. Sanghvi Chairman And Managing DirectorsMr. Rajendra Prasad Gupta Jt. Managing DirectorMr. K. R. Murthy Wholetime Director (Technical)Mr. K.C. Sharma Vice President (Marketing)

27.2 SUMMARY OF TRANSACTIONS WITH THE ABOVE RELATED PARTIES IS AS FOLLOWS:NATURE OF TRANSACTION TRANSACTION OUTSTANDING

SIDDHARTHA TUBES LIMITED, SARANGPURNOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH,2012

(Amount Rs. In lacs)

DURING THE YEAR BAL. AS AT 31.03.2012

Remuneration to Directors 72.21 3.25

Remuneration to Key Persons 5.95 0.53

Total 78.16 3.78

27.3 MANAGERIAL REMUNERATION TO MANAGING DIRECTORS:2011-12 2010-11

1) Salary 58.81 52.882) Bonus 0.11 0.113) Contribution to Provident Fund 6.90 6.254) Other Perquisites 6.40 1.93

72.21 61.17

28 DEFERRED TAXATION:

29 EARNINGS PER SHARES (EPS) 2011-12 2010-11(A) Profit / Loss after taxation 1356.33 533.81

Less: Provisions for Preference Dividend (135.00) (135.00) Net Profit / (Loss) for Equity Shareholders 1221.33 398.81

(B) Weighted average number of equity shares outstanding 6000000 6000000(C) Nominal Value per Equity Shares 10 10(D) Basic Earning Per Share (Rs.) 20.36 6.65(E) Diluted Earning Per Shares (Rs.) 20.36 6.65

As per the provisions of Accounting Standard - 22 issued by the Institute of Chartered Accountants ofIndia, during the year the Company has not recognized any additional deferred tax assets in view of theuncertainty attached to the realisability of the same; which has been caused due to heavy losses incurredby the Company during the year.

30 Segment Account

2012 2011 2012 2011 2012 2011 2012 2011RevenueExternal SalesDomestic 18011.17 15395.76 9019.71 8600.07 7850.60 1224.80 34881.49 25220.63Export - - - - - - - - Other Income 89.27 65.37 1062.76 1320.69 - - 1152.03 1386.06

Total Revenue 18100.44 15461.13 10082.48 9920.76 7850.60 1224.80 36033.52 26606.69

Unallocated Corporate ExpensesResultOperating Profit / Loss 210.35 288.54 91.06 (1092.71) - - 301.41 (804.17)Profit on Sale of InvestmentsJob Work Receipts / Others 89.27 65.37 1062.76 1320.69 - - 1152.03 1386.06Interest Expenses (81.73) (20.61) (15.38) (27.48) - - (97.11) (48.08)Income Tax 0.00 0.00 0.00 0.00 - - 0.00 0.00Net Profit / Loss 217.88 333.31 1138.44 200.51 - - 1356.33 533.81

Other Information

Segment Assets 5138.71 4084.05 22142.77 26413.51 - - 27281.48 30497.56

Total Assets 5138.71 4084.05 22142.77 26413.51 - - 27281.48 30497.56

Segment Liabilities 4152.70 2646.73 3816.13 3156.30 - - 7968.83 5803.03

Capital Expenditure 21.24 8.13 (2834.94) (520.56) - - (2813.70) (512.43)

Depreciation 84.21 83.60 924.77 1059.39 - - 1008.99 1142.99

Non-Cash Expenses other than Depreciation

1) Total Assets excluding investments, TDS and total liabilities does not include Secured & Unsecured Loan (except securedloan paid during the year).

TotalConsolidatedSteel Tubes / Pipes GP/GC-Sheets Others

Particulars

Segment accounting policies are generally in line with the accounting policies of the Company. However, the followingspecific accounting policies have been followed for segment reporting:

i). Segment accounting policies.

Segmentation has been determined based on activity and product of the Company i.e. Steel Pipes and Tubes and GP/GC /CR Coil / Sheets.

Information about Primary Business Segments:Consolidated Segment information for the year ended March 31, 2012.(d) Segment assets and liabilities include those directly identifiable with the respective segments.

(c) Income which relates to the Company as a whole and not allocable to segments is included in "Unallocable otherIncome".

(b) Expenses that are directly identifiable with / allocable to segments are considered for determining the segment results.The expenses, which relate to the Company as a whole and not allocable to segments, are included under �OtherUnallowable expenditure".

(a) Segment Revenue includes Sales and other income directly identifiable with / allocable to the segment including inter-segment revenue.

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31 CONTINGENT LIABILITIES 2011-12 2010-1131.1 Bank Guarantee 60.00 134.00

31.2

Central Excise & Custom 428.34 431.84

488.34 565.8432

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34

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Name of Financial Instution / Bank 2011-12 2010-11a) Standard Charted Bank - 838.68b) Jammu & Kashmir Bank Ltd. - 1522.45c) Cosmos Bank - 17.06d) IDBI Ltd. 2478.16 - e) LIC of India Ltd. 3058.73 -

5536.89 2378.20

In the opinion of the management, Debts disclosed in the books of accounts due to lenders, creditors andother parties include debts which have become time barred and are not legally payable and / or debts inrespect of which the Company has its counter claims. Disclosure of the same in the accounts is not to betreated as acknowledgement of debt by the Company. Suitable accounting effects in the books shall begiven at the appropriate stage. However no evidence/legal opinion /documents /correspondence havebeen provided to the auditors for verification; who are thus unable to make any comment.

In respect of Which Company is inAppeal,pending before AppellateAuthorities:

There are no dues payable to Micro and Small Scale Industries, which have been outstanding for more than30 days as on 31.03.2012 and 31.03.2011. This information regarding Micro and Small Scale Industrieshas been determined to the extent such parties have been identified on the basis of information availablewith the Company. This has been relied upon by the auditors.

Assignment of a part of financial assistance extended by IDBI to the Company is disputed and has been / isbeing challenged by the Company before the appropriate court(s)/ RBI. The only effect of assignment (ifeffected), would be to replace IDBI by the assignee as a lender in its place, in respect of the assignedfacilities.

LIC and IDBI (CRPS) { previous year Standard Chartered Bank, Jammu & Kashmir Bank & Cosmos Co-Op}. Bank stood settled and fully repaid by the Company during the year. Accordingly, the dues remainingover and above the settlement amount against these Lenders, stand waived in full, and have been writtenoff from the Company�s Books as under:-

(Amount Rs. In lacs)

SIDDHARTHA TUBES LIMITED, SARANGPURNOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH,2012

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36 CAPITAL WORK IN PROGRESS

2011-12 2010-11Land, Building & Site-DevelopmentPlant, Machinery & Misc. Fixed Assets - - Supervision, Finance Charges & Capital (1694.40) (497.78)Expenditure Preoperative (Net) (1694.40) (497.78)Add: Brought Forward From Last Year 11897.48 12395.26

Net Capital Work in Progress 10203.08 11897.48

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38Amount % Amount %

38.1 Raw Material

Imported 0.00 0.00% 191.42 0.91%

Indigenous 22394.45 100.00% 20766.36 99.09%

22394.45 100.00% 20957.79 100.00%

Stores & Spares Imported 12.56 2.41% 10.33 2.22%

Indigenous 508.63 97.59% 455.51 97.78%

521.20 100.00% 465.85 100.00%

The CRM Division continues to remain partly commissioned. The Capital Work-in-Progress, comprise ofcosts attributable to the 6HI CR Mill, details whereof are as under:

31.03.2012 31.03.2011

(a) The Company is a Sick Industrial Company in terms of Section 3(1) (o) of Sick Industrial Companies(Special Provisons) Act, 1985.

(b) The accounts of the Company have been prepared on going concern basis in spite of the fact that theCompany has become a Sick Company under Sick Industrial Companies (Special Provisions) Act, 1985.

(Amount Rs. In lacs)

Value of Imported and Indigenous

Finance Charges written back during the year correspond to the write-back in respect of LIC and IDBI(CRPS and Share Application Money) pursuant to full repayment of their respective NSD amounts duringthe year.

SIDDHARTHA TUBES LIMITED, SARANGPURNOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH,2012

38.2 VALUE OF IMPORTS CALCULATED ON CIF BASIS 2011-12 2010-11

Raw Materials - 191.42 Capital Goods - - Stores 12.56 10.33

38.3 EXPENDITURE IN FOREIGN CURRENCY Travelling 3.40 5.94 Others -

38.4 EARNING IN FOREIGN CURRENCY

Exports of Goods Calculated on FOB NIL NIL - Basis

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(c )Figures in bracket related to previous year.

SIDDHARTHA TUBES LIMITED, SARANGPURNOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH,2012

(Amount Rs. In lacs)

(a) Figures have been rounded off to the nearest rupee lacs.

(b) Previous year figures have been regrouped / rearranged wherever necessary to make them comparablewith the current year.