To the Members of ISMT LIMITED
The Directors have pleasure in presenting their Annual Report and
Audited Accounts for the year ended March 31, 2011
FINANCIAL HIGHLIGHTS (Rs. in Crore)
Financial Year
Particulars
2010-11 2009-10
Gross Sales 2601.92 1914.19
Profit before Finance
Charges, Depreciation,
Amortization & Tax (EBIDTA) 277.84 217.81
Cash Profit 162.99 132.91
Gross Profit 101.74 82.71
Profit Before Tax 96.02 91.23
Taxation 20.66 16.62
Net Profit 75.36 74.61
Add : Balance brought
forward from previous year 54.83 47.30
Balance available for
Appropriation 130.19 121.91
Appropriations
Dividend 18.31 14.65
Tax on Dividend 2.97 2.43
General Reserve 50.00 50.00
Balance carried to
Balance Sheet 58.91 54.83
Despite a 28% improvement in EBIDTA, the net profit was impacted by
higher interest and depreciation of the expansion project.
DIVIDEND
The Board has recommended a higher Dividend of Rs 1.25 per Equity Share
of Rs. 5/- each (25 % of face value) for the financial year ended March
31, 2011 and is subject to the approval of the shareholders at the
ensuing Annual General Meeting of the Company.
OPERATIONS
While incremental capacity became available during the year leading to
higher production at Baramati plant, the volumes at Ahmednagar plant
were flat. Expansion of both, the size range and the product mix was
targeted and achieved during the year.
MARKET
Consistent marketing efforts by your Company during last few years
towards developing new customers especially in Export market has helped
the Company to achieve strong Export led growth. Export during the year
were higher by about 87%, while Domestic Tubes & Steel Sales increased
by 24% & 31% respectively riding on strong growth in Auto, Bearing and
Power Sector.
FINANCE
There were frequent increases in the bank rates on account of higher
inflation. However by optimizing the foreign currency borrowings, where
the libor rates continued to be low, the Company could limit the
adverse impact and finance cost which came down from 6.6% to 5.6% of
the sales. With over 30% of Export Sales in Euro denomination, the
Company has started borrowing in Euro to create a natural hedge.
POWER PROJECT
The Company''s 40 MW Captive Power Project at Chandrapur District is now
close to commissioning. But for the frequent interruptions and
impediments both internal and external, the project should have already
been on stream. The Company has applied for domestic coal linkage.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Mr J P Sureka and Mr Salil
Taneja retire by rotation and being eligible offer themselves for
re-appointment.
AUDITORS
J K Shah & Co and M/s P G Bhagwat, Joint Statutory Auditors of the
Company retire at the conclusion of the forthcoming Annual General
Meeting and being eligible offer themselves for re-appointment.
COST AUDITORS
The Central Government had directed an audit of the Cost Accounts
maintained by the Company in respect of Steel and Tube businesses for
the financial year commencing from 2010 -11. In terms of the said
direction the Company has appointed M/s. D. V. Joshi & Associates and
M/s. Parkhi Limaye & Co., Cost Accountants as Cost Auditors for
conducting the cost audit for Tube & Steel divisions respectively. The
Central Government has approved appointment of the said Cost Auditors.
SUBSIDIARIES
While the operations of Structo attained break even during the year, in
order to reduce cost and to attain long term viability & growth, it was
decided to re-locate some of the upstream facilities to India. One of
the Draw Benches has already been shifted to Ahmednagar Plant and the
Second Draw Bench is planned for shifting during the current year to
Baramati Plant.
As on date of this report, the Company has eight direct & indirect
subsidiary companies. The Central Government has granted general
exemption to all Companies from attaching the Annual Accounts of the
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.
In accordance with the Accounting Standard (AS 21), the audited
consolidated financial statement of the Company forming part of this
report is attached hereto.
FIXED DEPOSITS
The Company has not accepted any deposits from the public.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, a separate section on Corporate Governance and Management
Discussion and Analysis together with a Certificate from the Company''s
Auditors on compliance, forming part of the Directors'' Report is
attached hereto.
RESEARCH & DEVELOPMENT
Your Company continued its efforts towards Research & Development
activities during the year in key areas of Product, Process and inhouse
tooling development.
Details of the R&D activities undertaken are enumeated in Annexure I to
this report.
DISCLOSURE PARTICULARS
The Particulars in respect of energy conservation, technology
absorption and foreign exchange earnings outgo, etc as required under
Section 217(1) (e) of the Companies Act, 1956 are given in Annexure - I
to this report. The Company has also initiated number of Energy
reduction initiatives anticipating UNFCCC benefits under Green House
Gas Commission reduction programme The particulars of employees as
required under Section 217 (2A) of the Companies Act, 1956 forming part
of this Report are given in Annexure -II to this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required by Section 217 (2AA) of the Companies Act, 1956 the
Directors'' Responsibility Statement is given hereunder:
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,
2011 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
irregularities;
iv) that the Directors have prepared the annual accounts on a going
concern basis.
ACKNOWLEDGEMENTS
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 team work.
For and on behalf of the Board of Directors
Pune S C Gupta
June 29, 2011 Chairman
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