Adhunik Metaliks

Financial highilights
 
                                                          Rs. in lakhs
                                                         2008     2007
 
 Sales, services and job work                        1,10,404   81,154
 
 Less: excise duty                                      9,945    7,579
 
                                                     1,00,459   73,575
 
 Profit before interest, depreciation and tax          17,134   12,329
 
 Less: Interest                                         5,676    2,618
 
 Depreciation                                           2,325    1,134
 
 Profit before tax                                      9,133    8,577 
 Less: Provision for taxation
 
 Current tax                                            1,042      803
 
 Deferred tax -
 
 Fringe benefit tax                                        45       27
 
 Profit after taxation                                  8,046    7,747
 
 Add: Balance brought forward from previous year       10,650    3,971
 
 Profit available for appropriation                    18,696   11,718
 
 Less: Proposed dividend                                1,095      912
 
 Dividend tax                                             186      155
 
 Profit carried to Balance Sheet                       17,415   10,651
 
 Dividend
 
 The Board, for the year ended 31 st March, 2008, recommended a dividend
 of Rs, 1.20 per share (Re. 1/- per share for the year ended 31 st
 March, 2007), subject to approval of the shareholders at the Annual
 General Meeting. The dividend will be paid on 9,12,31,247 ordinary
 shares of the Company (9,12,31,247 ordinary shares for the year ended
 31st March, 2007).
 
 Operations
 
 During the year, your Company witnessed a robust growth in sales and
 profit figures, coupled with wider geographic extension of customer
 base and extension of the product mix to growing sectors. The
 production of billets increased from 1,78,000 MT in the last year to
 2,22,000 MT in year 2007-08. Your Company also capitalised on higher
 
 realisations, a complement to its service, product mix and production.
 Billet realisations strengthened from Rs. 20,153 to Rs. 25,341 per MT
 and rolled products from Rs. 31,598 to Rs. 33,617 per MT across the
 period. Your Company evolved a product mix from 79-21 (semi-rolled) to
 an enhanced value-addition of 61-39. Your Company, during the year,
 commissioned its vacuum degassing unit, which reduced gas traces and
 metal impurities, enhancing ductility and longevity. Cost of production
 also marked a reduction during the last quarter of the fiscal year due
 to the commissioning of iron ore fines usage in the sinter plant.
 
 Expansion
 
 During the year, your Company completed the second phase of its
 expansion in terms of increasing its production capacity from 0.25
 million MT to 0.46 million MT. The ferro-alloy plant with a capacity of
 6 MVA commenced production during the year. Your Company also
 commissioned a rolling mill, with 2,00,000 TPA steel capacities during
 November 2007, which had reported a capacity utilisation of 50%. During
 the year, the Company had also set up a 17 MW captive power plant using
 the waste heat recovery technology, thus leveraging the generation of
 waste heat from the DRI plant.
 
 Subsidiary
 
 During the year under review, your Company acquired Orissa Manganese
 and Mineral Pvt. Limited (converted into public company subsequently)
 on April 5, 2007, having iron ore and manganese ore reserves of 90MN
 and 50MN tons respectively. These iron ore mines possess quality iron
 ore with 64% plus Fe content and manganese ore with 34-36% manganese
 content. The mines are located in
 
 Jharkhand and Orissa, respectively.
 
 Your Company also acquired VCube Forge (India) Limited (subsequently
 its name was changed into Neepaz VForge (India) Limited) on October 4,
 2007, which has a manufacturing facility of forged machine parts
 catering to the demands of the automobiles and railways segment, with
 an installed capacity of 24,000 TPA.
 
 The Ministry of Corporate Affairs, Government of India, vide letter
 dated 25/06/2008 directed that the requirement to attach various
 documents with respect to subsidiary Companies, namely Orissa Manganese
 and Minerals Limited, Neepaz VForge (India) Limited and Unistar
 Galvanisers and Fabricators Pvt. Limited, as set out in Sub-section (1)
 of Section 212 of the Companies Act, 1956, shall not apply to the
 Company. Accordingly, the Balance Sheet, Profit & Loss Account and
 other documents of the subsidiary Companies are not attached with the
 Balance Sheet of the Company. Financial information of the subsidiary
 Companies is disclosed in the Annual Report.  Investors who wish to
 have a copy of annual accounts and detailed information on the
 subsidiaries may write to the Company. The annual accounts of the
 subsidiary Companies will also be kept open for inspection by any
 investor at the corporate office of the Company. The consolidated
 financial statements presented by your Company includes financial
 results of its subsidiaries.
 
 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.
 
 Information in accordance with the provisions of Section
 
 217(2A) of the Companies Act, 1956, read with the Companys
 (Particulars of Employees) Rules, 1975, is given in the annexure
 attached hereto, forming a part of this report.
 
 Directors
 
 In accordance with the provisions of the Companies Act, 1956, Mr. Jugal
 Kishore Agarwal, Mr. Nirmal Kumar Agarwal and Mr. Mahesh Kumar Agarwal
 retires by rotation at the ensuing Annual General Meeting and being
 eligible offer themselves for re-appointment.
 
 Your Company received a notice from a member under the provisions of
 Section 257 of the Companies Act, 1956, nominating re-appointment of
 Dr. Ramgopal Agarwala in the ensuing Annual General Meeting. Dr.
 Agarwala was appointed on the Board of the Company as an Additional
 Director on January 28,,2008 and holds his office till the ensuing
 Annual General Meeting (AGM).
 
 Directors Responsibility Statement :
 
 Pursuant to 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 31st March, 2008, the applicable accounting standards were
 followed so that there were no material departures;
 
 (ii) The Directors selected such accounting policies, 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 as at March 31, 2008 and of the profit of the Company for
 that period;
 
 (iii)The Directors took proper and sufficient care for the maintenance
 of 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 prepared the annual accounts on a going concern
 basis.
 
 Your Company has been assigned an Issuer Rating of A- (ind) [A minus
 ind] by Fitch Ratings India Private Limited for its long-term bank
 loans and working capital limits denoting a strong credit risk relative
 to other issuers or issues in the country. The short- term bank loans
 were rated as F1(ind) [F one ind] indicating the strongest capacity
 for timely payment of financial commitments relative to other issuers
 or issues in the country. The outlook on the rating is stable by the
 same rating agency.
 
 Fitch Ratings India Pvt. Limited affirmed F1(ind) [F one ind] rating to
 the commercial paper program of the Company.
 
 Corporate Governance
 
 The conditions laid down in the amended Clause 49 of the Listing
 Agreement with the stock exchanges are complied with and certified from
 Mr. B.P. Dhanuka, practicing Company Secretary regarding compliance of
 conditions and provisions of the Corporate Governance, given as
 annexure to the Report.
 
 Code of conduct
 
 The Board laid down a code of conduct for all the Board members and
 senior management of your Company.
 
 The Board Members and senior management personnel have affirmed
 compliance with the Code for the financial year 2007-08.  A certificate
 from the CEO is annexed in this regard.
 
 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 have made necessary disclosures, as required under the
 various provisions of the Act and Clause 49 of the Listing Agreement.
 
 Information as required by Section 217(1)(e) of the Companies Act,
 1956, read with the Companys (Disclosure of Particulars in the Report
 of Board of Directors) Rules 1988, is given in the annexure attached
 hereto, forming a part of this report.
 
 The Consolidated Financial Statements prepared by your Company, in
 accordance to the applicable accounting standards issued by the
 Institute of Chartered Accountants of India and the same together with
 the Auditors Report, thereof form a part of the Annual Report.
 
 The Auditors, M/s S. R. Batliboi & Co., Chartered Accountants, retire
 at the ensuing Annual General Meeting and have expressed their
 willingness to be re-appointed.
 
 The comments made by the auditors in their report are self-explanatory.
 
 As a measure of good Corporate Governance practice, the Board of
 Directors of the Company appointed Mr. B.P.  Dbanuka, practicing
 Company Secretary (past President of the Institute of Company
 Secretaries of India), to conduct independent secretarial audit of the
 Company. The Secretarial Compliance Certificate for the financial year
 ended March 31, 2008, is provided in the Annual Report.
 
 The Secretarial Compliance Certificate confirms that the Company has
 complied with all the applicable provisions of the Companies Act, 1956,
 Depositories Act, 1996, Listing Agreements with the stock exchanges,
 Securities Contract (Regulation) Act, 1956, and all the regulations of
 SEBI as applicable to the Company, including the SEBI (Substantial
 Acquisition of Shares and Takeovers) Regulations, 1997 and the SEBI
 (Prohibition of Insider Trading) Regulations, 1992.
 
 The Board takes this opportunity to express its heartfelt appreciation
 for the excellent support and co-operation received from your Companys
 customers, suppliers, government authorities, bankers, investors,
 financial institutions and shareholders for their consistent support to
 the Company. The Directors also sincerely acknowledge the significant
 contributions and the dedicated services of all the employees.
 
                                  For and on behalf of the Board
 
                              G.D. Agarwal   Manoj Kumar Agarwal
                                  Chairman     Managing Director
 
 Registered Office:
 
 14 Netaji Subhas Road, Kolkata 700001
 
 Date: June 30, 2008