Dear Members,
The Directors are pleased to present the Tenth Annual Report and
Audited Accounts for the financial year ended March 31, 2011.
Financial
The financial performance of the Company for the year ended March 31,
2011 is summarised below:
2010-11 2009-10
Particulars Rs. lakhs $ mn Rs. lakhs $ mn
Sales, services and job work 1,56,218 350 1,34,550 298
Less: Excise duty 12,488 28 8,691 19
1,43,730 322 1,25,859 279
Profit before interest,
depreciation and tax 32,150 72 26,414 58
Less: Interest 16,732 37 13,802 30
Depreciation 8,758 20 5,823 13
Profit before tax 6,661 15 6,789 15
Less: Provision for taxation 974 2
Current tax - - 1,125 2
Income tax relating to earlier
years/ - - 273 1
(Excess provision for taxation
written back)
Profit after taxation 5,686 13 5,391 12
Add: Balance brought forward from
previous years 21,266 48 18,391 40
Less: Adjustment of loss on
amalgamation 581 1
Profit available for appropriation 26,952 60 23,201 51
Less: Transfer to General Reserve 284 1 135 0
Proposed dividend 1,853 4 1,544 3
Dividend Distribution tax 8 0 256 1
Profit carried to balance sheet 24,806 55 21,266 47
* 1$ = Rs.44.65 exchange rate as on March 31, 2011 (1$ = Rs.45.14 as on
March 31, 2010)
Operations
Your Company continues to progress well as a result of our focus on
high value-added rolled products despite recent raw material cost
pressures. The Company also benefited from the continued strong demand
of steel in the auto, infrastructure and engineering sectors during the
year. In the mining business, we continued to ramp up our production
and focused on medium to high grade manganese ore which helped improve
average price realisations. Iron ore prices also increased
significantly during the year, which also contributed to an increase in
margins of the mining business. The first phase of power venture is
expected to commence production by March 2012.
The Company achieved net sales of Rs.1,437.30 cr in FY 2011, an
increase of 14.2% compared to the prior year primarily due to an
increase in sales volumes and prices. Profit after tax also increased
to Rs.56.86 cr in FY 2011 against Rs.53.90 cr in FY 2010. The Company''s
sales volume of billets and rolled products increased from 3,00,880 MT
in FY 2010 to 3,17,892 MT in FY 2011.
The Company''s consolidated net sales increased to 1,793.41 cr in FY
2011, an increase of 23.7% compared with the prior year, driven by
strong performance in the mining segment. The consolidated profit after
tax also increased from Rs.137.35 cr to Rs.184.31 cr in FY 2011,
recording a jump of 34.2%.
Deposits
Your Company did not accept any deposits within the meaning of Section
58A of the Companies Act, 1956 and the rules made there under.
Transfer to Reserves
In compliance with sub-section (2-A) of section 205 of the Companies
Act, 1956 and in accordance with The Companies (Transfer of Profits to
Reserves) Rules, 1975, it is proposed to carry an amount of Rs.284.30
lakhs (Rs.134.76 lakhs) to the General Reserves.
Dividend
Yours Directors recommended a dividend of Rs.1.50 per share (last year
Rs.1.25 per share) subject to approval of the shareholders at the
ensuing Annual General Meeting. The dividend will be paid on
12,34,99,536 equity shares in line with the applicable regulations. The
dividend will be paid to the members whose name appear in the Register
of Members as on August 31, 2011; in respect of shares held in
dematerialised form, it will be paid to members whose names are
furnished by National Securities Depository Limited and Central
depository Services (India) Limited, as beneficial owners. The total
dividend outflow is Rs.2,153.01 lakhs, as against Rs.1,800.14 lakhs in
the previous year.
Deferred tax
In terms of Accounting Standard on Accounting for Taxes on Income''
(AS-22) issued by Institute of Chartered Accountants of India and in
compliance with Hon''ble Calcutta High Court order dated May 7, 2007,
and order dated March 29, 2010 the Securities Premium Account was
utilised towards net deferred tax liability amounting to Rs.1,289.03
lakhs (Rs.3,545.32 lakhs) during the year under review.
Management''s Discussion and Analysis Report
Management''s Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges, is presented in a separate section forming part of the
Annual Report.
The Company has executed the Mining Lease with Government of Orissa,
Department of Steel & Mines, for iron ore over an area of 33.803
hectares in village - Deojhar, Kulum and Mahadevnasa under Champua
sub-division of Keonjhar district. These strategies and initiatives are
aimed at ensuring that Adhunik delivers long-term sustainable growth
and creates unprecedented value for all its stakeholders.
Subsidiaries
Your Company has four subsidiaries viz.:
- Adhunik Power Transmission Limited (Formerly Unistar Galvanisers &
Fabricators Limited) became a subsidiary of the Company with effect
from July 17, 2006. During the year under review, the name of Unistar
Galvanisers & Fabricators Limited was changed to Adhunik Power
Transmission Limited vide ROC Certificate dated January 4, 2011 issued
pursuant to section 23(1) of the Companies Act, 1956.
- Orissa Manganese & Minerals Limited became a subsidiary of the
Company with effect from April 5, 2007
- Neepaz V Forge (India) Limited became subsidiary of the Company with
effect from October 4, 2007
- Adhunik Power & Natural Resources Ltd became subsidiary of the
Company with effect from November 14, 2008. However with effect from
December 24, 2010 Adhunik Power & Natural Resources became a subsidiary
of Orissa Manganese & Minerals Limited, the wholly-owned subsidiary of
the Company.
During 2010-11, Adhunik Power & Natural Resources Limited which is in
the process of implementing 270 MW X 2 thermal power project in the
state of Jharkhand also received equity commitment of Rs.125 crore from
SBI Macquarie Infrastructure Fund. This was in addition to Rs.250 crore
of equity commitment from IDFC Project Equity Fund.
In accordance with the general circular issued by the Ministry of
Corporate Affairs, Government of India, the balance sheet, profit and
loss account and other documents of the subsidiary companies namely
Orissa Manganese & Minerals Limited, Adhunik Power & Natural Resources
Limited, Neepaz VForge (India) Limited and M/s Adhunik Power
Transmission Limited (formerly M/s Unistar Galvanisers & Fabricators
Limited) are not being attached with the balance sheet of the Company.
The annual accounts of the subsidiary companies and the related
detailed information is available on the Company''s website. The Company
will make available the annual accounts of the subsidiary companies and
the related detailed information to any member of the Company who may
be interested in obtaining the same. The annual accounts of the
subsidiary companies will also be kept open for inspection at the
Registered Office of the Company and of the subsidiary companies
concerned. The consolidated financial statements presented by the
Company include the financial results of its subsidiary companies. The
statement as required under
General Circular No. 2/2011 dated February 8, 2011 issued by the
Ministry of Corporate Affairs with respect to disclosure of certain
information in the consolidated balance sheet in aggregate for each
subsidiary including subsidiaries of subsidiaries is annexed, and forms
part of consolidated balance sheet:
Consolidated Financial Statement and Cash Flow Statement
The consolidated financial statements were prepared by your Company in
accordance with the applicable Accounting Standards issued by The
Institute of Chartered Accountants of India and the same together with
the Auditor''s Report thereof form a part of the Annual Report. The
consolidated net profit of the Company amounted to Rs.18,431 lakhs as
compared with Rs.5,687 lakhs for the Company on a standalone basis. In
conformity with the provisions of Clause 32 of the Listing Agreement
the Cash Flow Statement for the year ended March 31, 2011 is included
in the annual accounts.
Personnel
At Adhunik, values make for more than just a powerful tagline. We have
a proven role model for creating wealth ethically and legally. We
engage employees through a fair and rewarding work environment. The
information required under Section 217(2A) of the Companies Act, 1956
read with Companies (Particulars of Employees) Rules, 1975 as amended,
is provided in the Annexure, attached hereto, and forming part of this
report.
Directors
During the year under review, Mr. Makhan Lal Majumdar resigned as
Independent Director of the Board with effect from February 11, 2011.
The Board placed on record its deep sense of appreciation for the
services rendered by Mr. Makhan Lal Majumdar as an Independent Director
of the Board.
In accordance with the provisions of the Companies Act, 1956 and
Article 152 of the Articles of Association, Mr. Ghanshyam Das Agarwal,
Mr. Mohan Lal Agarwal, Mr. Lalit Mohan Chatterjee and Mr. Nihar Ranjan
Hota, Directors of your Company, retire from the Board by rotation at
the ensuing
Annual General Meeting of the Company and, being eligible, offer
themselves for re-election. The Board has recommended their
re-election.
Pursuant to Clause 49 of the Listing Agreement, the details of the
Directors seeking reappointment together with the nature of their
expertise in specific functional areas, their shareholding and names of
the companies in which they hold office as Director and/or the
Chairman/Membership of Committees of the Board, are provided in the
Notice of the ensuing Annual General Meeting.
Directors'' Responsibility Statement
As required under Section 217(2AA) of the Companies Act, 1956, your
Directors confirm and state that:
(i) In the preparation of the annual accounts for the financial year
ended March 31, 2011, the applicable accounting standards were followed
and there were no material departures;
(ii) The Directors selected such accounting policies and applied them
consistently and made judgments and estimates that were reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2011 and of the profit of the Company for
that period;
(iii) The Directors took proper and sufficient care to maintain
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) The Directors had prepared the annual accounts on a going concern
basis.
Corporate Governance
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI.A separate section on Corporate Governance is annexed and forms
part of the annual report. A certificate from Mr. B. P. Dhanuka,
Practicing Company Secretary (Past President of Institute of Company
Secretaries of India), regarding compliance of conditions and
provisions of the Corporate Governance as stipulated under Clause 49 of
the Listing Agreement with the Stock Exchanges, is given as annexure to
the report along with a certificate from CEO/CFO in terms of sub Clause
(v) of Clause 49 of the Listing Agreement.
Code of Conduct
In compliance with Clause 49 of the Listing Agreement, the Company
adopted a Code of Conduct for all Board Members and Senior Management
of the Company. A copy of the said Code of Conduct for all Board
Members and Senior Management of the Company is available on the
Company''s website. All the members of the Board and Senior Management
of the Company have affirmed compliance with the Code for the financial
year 2010-11. A declaration to this effect signed by the Managing
Director is annexed and forms part of the annual report.
Code for Prevention of Insider Trading Practices
Pursuant to the Securities and Exchange Board of India (Prohibition of
Insider Trading) Regulations1992, a comprehensive code for prevention
of Insider Trading is in place. The objective of the Code is to prevent
purchase and /or sale of shares of the Company by insider while in
possession of unpublished price sensitive information. The Code is
available on the Company''s website.
Statutory Disclosures
None of the Directors of the Company are disqualified as per the
provisions of Section 274(1)(g) of the Companies Act 1956. The
Directors made necessary disclosures, as required under various
provisions of the Companies Act and Clause 49 of the Listing Agreement.
Equity Shares in Suspense Account
As per Clause 5A(I) of the Listing Agreement, the Company reports the
following details in respect of equity shares lying in the suspense
account which were issued pursuant to the public issue or any other
issue as provided by the Registrar & Transfer Agents:
Particulars No. of No. of
shareholders equity shares
Aggregate number of shareholders and the
outstanding shares in the suspense 6 1,574
account lying as on April1, 2010
Number of shareholders who approached
the Company for transfer of shares 2 750
from suspense account during the year
Number of shareholders to whom shares
were transferred from the suspense 2 750
account during the year
Aggregate number of shareholders and the
outstanding shares in the suspense 4 824
account lying as on March 31, 2011
The voting rights on the shares outstanding in the suspense account as
on March 31, 2011 shall remain frozen till the rightful owner of such
shares claims the shares.
As per Clause 5A(II) of the Listing Agreement, there are no shares
issued in physical form pursuant to a public issue or any other issue
and remain unclaimed.
Transfer of amounts to Investor Education and Protection Fund
Pursuant to the provisions of section 205A(5) of the Companies Act,
1956, the Company is not required to transfer any amount to Investor
Protection and Education Fund as the Company is declaring dividends
since financial year 2005-06 and as such there is no amount of dividend
which was due and payable and remained unclaimed and unpaid for a
period of seven years.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
Informations required pursuant to Section 217(1)(e) of the Companies
Act, 1956 read with the Company''s (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 are provided in the annexure
attached hereto and forming part of this report.
Auditors
M/s. S. R. Batliboi & Co., Chartered Accountants, Statutory Auditors of
the Company, holds office until the conclusion of the ensuing Annual
General Meeting and is eligible for reappointment.
The Company has received letter from them to the effect that their
reappointment, if made, would be within the prescribed limits under
Section 224(1B) of the Companies Act, 1956 and that they are not
disqualified for reappointment within the meaning of Section 226 of the
said Act. The Board recommends their reappointment.
The Notes on Accounts referred to in the Auditors'' Report are
self-explanatory and do not call for any further comments.
Appreciation
The Board takes this opportunity to express its sincere appreciation
for the excellent support and cooperation received from Company''s
customers, suppliers, government authorities, bankers, investors,
financial institutions and shareholders for their consistent support to
the Company. The Directors also sincerely acknowledge the outstanding
support and services of the workers, staff and executives of the
Company, which have together contributed to the efficient operation and
management of the Company.
For and on behalf of the Board
Ghanshyam Das Agarwal
Chairman
Registered office
14 Netaji Subhas Road, Kolkata -- 700001
Date: May 20, 2011
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