The Directors have pleasure in presenting the Eighteenth Annual Report
together with the audited accounts of the company for the year ended
31st December, 2001
(Rs. in Million)
Year ended Nine Months Ended
Sales 194.258 146.628
Gross Profit before Depreciation
and interest 20.213 0.568
Less: Depreciation 6.074 5.401
Interest 2.431 3.697
Net Profit/(loss) before tax 11.708 (8.532)
After suffering losses for the past few years it is indeed heartening
to report that your Company has started to post profit. The reason
behind this better performance of the Company can be attributed mainly
to the higher domestic sales, change to a more profitable product mix
and strict cost control. Inspite of not so encouraging market scenario
, the Company has been able to increase its market share due to
increased sales, both to institutional customers as also through
In accordance with the provisions of the Companies Act, 1956, after
adjustment of past years losses/depreciation the Company has no
distributable profit for payment of dividend.
Your Company has during the year successfully undergone the
Surveillance Audit conducted by the IS09001 team and the Company is
constantly working towards achieving its objective for Total Quality
All the properties and insurable interests of the Company including
Building, Plant & Machinery and Stocks, wherever necessary and to the
extent required, have been adequately insured.
SAFETY & ENVIRONMENT
Safety and Environment Protection has been a hallmark of our industrial
activity and has throughout the year received the focused attention of
the Board. Your Company was accident free during the period under
review. The Safety Committee of the Company has been extremely vigilant
during the year and has reviewed with extreme care all safety measures
adopted by the Company. Safety rules, policies and regulations
previously framed by this Committee has also been adhered to strictly
by the Company.
During the year under review your Company has closed down its Bimetal &
Strip manufacturing unit in Hosur. Consequentially the Company has on
27th July, 2001 entered into Memorandum of Settlements, under
Industrial Dispute Act, 1951 with 11 of its workmen, through which
these 11 workmen have voluntarily resigned from the services of the
Industrial relations during the year remained cordial. The Board wishes
to place on record its appreciation to all employees working at
various levels in the Company for their devotion and sense of
During the year under review, Shri N. P. Achuthan and Shri C. Sukumaran
joined the Board as Alternate Directors in place of Shri Lelio Segre
and Shri Harry Furuberg respectively. The Board takes this opportunity
to welcome these gentlemen and hopes that their rich experience and
acumen will sincerely benefit your Company in the coming days. Shri. M.
T. Shah, Shri. D. M. Shah & Shri. C. K. Thanawala have all resigned
from the Board during the year 2002. The Board expresses its
appreciation of the contribution of these Directors to the Company.
In accordance to the provisions of the Companies Act, 1956 and as per
Article 132 of the Articles of Association of the Company Shri Hans C.
Gass retires by rotation and being eligible offers himself for
At the ensuing Annual General Meeting, the members are requested to
appoint Auditors for the current year and fix their remuneration.
Messrs. N. A. Shah, Associates, Chartered Accountants, Mumbai, retire
and though eligible for re-appointment have expressed their intention
not to be re-appointed. The Company has received a special notice in
accordance with Section 225, read with Section 190 of the Companies
Act, 1956, from a member signifying his intention to propose the
appointment of M/s Bharat S. Raut & Co., Mumbai as the Auditors of the
Company. Your directors recommend their appointment. The Directors
place on record their appreciation of the valuable advice and guidance
rendered by M/s. N. A. Shah Associates to your Company during their
tenure as Auditors.
In terms of clause 49 of Listing Agreement with Stock Exchanges, the
requirements as to corporate governance are required to be implemented
by your Company by not later than 31st March, 2003.
PARTICULARS OF EMPLOYEES
There are no employees to whom the provisions of Sec. 217 (2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 applies.
DISCLOSURE OF PARTICULARS
Information as per Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 relating to Conservation of Energy,
Technology Absorption, Foreign Exchange Earnings and Outgo, is given in
Annexure - `A to this report and forms an integral part of this
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956 inserted by the
Companies Amendment Act, 2000, the Directors Responsibility Statement
is given as Annexure - `B and forms an integral part of this report.
MERGER WITH SANDVIK ASIA LIMITED
Pursuant to the approval accorded to the Scheme of Arrangement of the
Company with Sandvik Asia Limited by the shareholders of the Company at
the Court convened meeting held on 21st January, 2002 the legal
formalities of the merger are in progress.
SUPPORT FROM KANTHAL AB, SWEDEN
Your Directors wish to place on record their appreciation for the
wholehearted support and co-operation, both technical and financial,
extended by the Parent Company and its management during the period
under review and are very much confident that the same will continue in
The Board wishes to express appreciation and place on record its
gratitude for the faith reposed in and co-operation extended to the
Company by the Government of India, State Governments, various
Government Agencies/Departments, Banks, Customers, Suppliers and
Investors of the Company. Your Directors place on record their
appreciation of the dedicated and sincere services rendered by the
employees of the Company.
ANNEXURE TO THE DIRECTORS REPORT
Additional information given in terms of Notification 1029, dt.
31.12.1988 issued by the Department of Company Affairs.
1. CONSERVATION OF ENERGY
As mentioned in the previous years report, the Company has already
taken care during its production planning itself, to run the machines
at optimum capacity over a period. This has helped in reducing idle
running of the equipments and saving of electricity. It is not
possible to quantify the savings.
Total energy consumption and energy consumption per unit of production
as required in Form A is not given, as the Company is not covered under
the list of specified industries.
2. TECHNOLOGY ABSORPTION
The Company has initiated measures to raise its productivity and to
bring the same in line with global standards and also to that of the
Parent Company. Small investment have been made to upgrade existing
facilities in our plant and regular interactions have been undertaken
throughout the year with the highly efficient technicians of our Parent
Company. Our Engineers have also been visiting Kanthal ABs plant at
Sweden in order to keep themselves abreast of the latest developments
taking place in the industry.
3. FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of Foreign Exchange earnings and outgo are contained in
Note No. 18 of Schedule No. 17 to the accounts.
Pursuant to the provisions of Section 217(2AA) of the Companies Act,
1956, the Directors hereby confirm:
1) That in the preparation of the account for the financial year ended
31st December, 2001, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
2) That the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that were
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 the
profit of the Company for that period;
3) 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
4) That the Directors have prepared the accounts for the financial year
ended 31st December, 2001 on a `going concern basis.
For and on behalf of the Board of Directors
Place: Mumbai Hans C. Gass Sumit Datta
Date: 17th July, 2002 Chairman Managing Director