To the Members of ISMT LIMITED
The Directors have pleasure in presenting the Annual Report and Audited
Accounts of the Company for the year ended March 31,2012.
FINANCIAL HIGHLIGHTS (Rs.in Crore)
Particulars 2011-12 2010-11
Gross Sales 2980.60 2552.79
Profit before Finance Charges,
Depreciation, Amortization & Tax (EBIDTA) 265.47 274.64
Cash Profit 107.08 162.98
Gross Profit 144.68 184.08
Profit Before Tax 28.66 95.96
Taxation 0.07 20.60
Net Profit 28.59 75.36
Add: Balance brought forward from previous year 58.91 54.83
Balance available for Appropriation 87.50 130.19
Dividend 10.99 18.31
Tax on Dividend 1.78 2.97
General Reserve 50.00 50.00
Balance carried to Balance Sheet 24.73 58.91
Despite drop in profit and taking long term view, the Board has
recommended a dividend of Rs. 0.75 per Equity Share of face value of
Rs. 5/- each (15 % of face value) for the financial year ended March
31,2012 and is subject to the approval of the shareholders at the
ensuing Annual General Meeting of the Company.
During the year the Company registered incremental tube sales of 17,532
MT and incremental steel sales of 10,950 MT. After streamlining the new
PQF capacity with the existing processes last year, this year the
efforts were to increase the lot size so as to minimize downtime on
account of size changes and further on Production Planning to optimize
on available resources.
Exports growth of over 52% has been quite encouraging given the fact
that the key world economies are passing through uncertain times. On
the domestic front, while inflation and higher interest rates have
adversely impacted some of the industries, construction equipment
segment witnessed good growth.
During the year the company redeemed entire outstanding Foreign
Currency Convertible Bonds (''FCCB'') amounting to USD 20 Million along
with redemption premium. Increase in overall interest rates and adverse
foreign exchange rates along with provisioning for FCCB redemption
premium led to the increase in finance cost during year. Unprecedented
forex volatility during the financial year resulted in forex loss of
Rs. 31.52 Crore. To address the risks associated with foreign currency
transactions, company has put in place forex risk management policy.
The 40 MW Captive power plant of the company has commenced commercial
production from May 28, 2012. The Power generated is wheeled using the
state electricity grid to all three manufacturing plants located at
Ahmednagar, Baramati & Jejuri. The surplus power generation resulting
from the current Banking Regulations, on account of varying load
consumption pattern at the manufacturing plants, is proposed for sale
to MSEDCL. The Company has applied for domestic coal linkage, which is
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr. A.K. Jain and Mr. Vinod
Sethi retire by rotation and being eligible offer themselves for
M/s P. G. Bhagwat and J. K. Shah & Co., Joint Statutory Auditors of the
Company retire at the conclusion of the forthcoming Annual General
Meeting and being eligible offer themselves for re-appointment.
The Central Government had approved appointment of the following Cost
Auditors for FY 2011-12:
(i) M/s Dhananjay V. Joshi & Associates and
(ii) M/s Parkhi Limaye & Co.
The Cost Audit Report for the year 2010-11 was due on September 27,
2011 and was filed with the Ministry of Corporate Affairs on September
As on date of this report, the Company has eight direct and indirect
subsidiary companies. The Central Government has granted general
exemption to the holding Companies from attaching the Annual Accounts
of their subsidiary companies. The Annual Accounts of these subsidiary
companies and other relevant information shall be made available for
inspection at the Company''s Registered Office.
Continuing with the strategy to shift employee intensive activity from
Structo to India, while retaining technology intensive front end
activities in Sweden, the second cold draw bench was shifted during the
year to the Company''s Baramati plant and is now fully operational.
In accordance with the Accounting Standard (AS 21), the audited
consolidated financial statement of the Company forming part of this
report is attached hereto.
The Company has not accepted any deposits from the public.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION & ANALYSIS
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance and Management
Discussion & Analysis together with a Certificate from the Company''s
Auditors on compliance, forming part of this Report is attached hereto.
RESEARCH & DEVELOPMENT
Your Company is actively pursuing R&D activities focussed on developing
new Steel grades and tubes to match customer requirements. In addition,
the Company also encourages in house development of tooling and
indigenisation of imported machinery. The Company remained focused on
developing value added products for all its market segments including
the Energy, OCTG, Bearing, Auto and Mining Sectors. R&D activities also
focused on process cost reductions through an increase in yields.
Details of the R&D activities undertaken are enumerated in Annexure I
to this report
PARTICULARS OF DISCLOSURE
The particulars in respect of energy conservation, technology
absorption and foreign exchange earnings and outgo etc. as required
under Section 217(l)(e) of the Companies Act, 1956 are given in
Annexure I to this report.
The particulars of employees as required under Section 217(2A) of the
Companies Act, 1956 are given in Annexure II to this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to provisions of Section 217(2AA) of the Companies Act, 1956,
your Directors make the following statement:
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii) that the Directors 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 March 31,2012 and
of the Profit of the Company for that period;
iii) that the Directors have taken 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
iv) that the Directors have prepared the annual accounts on a going
Your Directors take this opportunity to express its sincere gratitude
for the continued support and co-operation received by the Company from
the Government of India, Government of Maharashtra, Reserve Bank of
India, Stock Exchanges, other regulatory agencies and the shareholders.
The Board would also like to acknowledge the continued support of its
bankers, vendors, clients and investors. The Directors also wish to
place on record their appreciation of all the employees for their
dedication and teamwork.
For and on behalf of the Board of Directors
Pune S C Gupta
May 28, 2012 Chairman