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Directors Report of ISMT Ltd.

Mar 31, 2022

Your Directors present herewith the Twenty Fourth Annual Report & the Audited Financial Statements of the Company for the financial year ended March 31, 2022.

FINANCIAL HIGHLIGHTS

Rs. in Crore

Particulars

Financial Year

2021-22

2020-21

Gross Sales

3216.84

1681.70

Revenue from Operations

2152.54

1234.67

Earnings Before Interest, Depreciation, Tax & Amortization (EBIDTA)

79.66

31.25*

Cash Profit/ (Loss)

48.66

(289.33)

Net Profit/ (Loss)

2357.39

(350.71)

Total Comprehensive income

2351.53

(350.18)

*regrouped/ reclassified to meet current years classification. Members will be pleased to note that as a result of the successful debt resolution, the Company has returned to profit after several years.

DIVIDEND

Directors do not propose any dividend for the year ended March 31, 2022, in order to conserve resources.

RESERVES

No amount is proposed to be transferred to Reserves.

IMPACT OF COVID-19

While the delta variant has caused severe disruption in the economic activity and loss of human life, subsequent variant however has been milder leading to gradual return of normalcy.

OPERATIONS

Capacity utilization at steel plant went up from 44% to 68% driven by higher captive sourcing. Tube plants too attained pre pandemic level with capacity utilization going up from 30% to 45% on account of higher Automobile and Energy sectors demand.

DEBT RESOLUTION

Members are aware that the Company along with lenders has been working towards satisfactory debt resolution which had became inevitable due to mismatch of cash flows arising from economic slowdown, dumping of tubes by China, regulatory changes etc.

Accordingly, various processes as mandated by RBI guidelines were undertaken by Banks from time to time, but could not be concluded for various reasons beyond the Company’s control including RBI circular dated February 12, 2018 and subsequently COVID-19 pandemic.

Debt resolution was finally attained on March 12, 2022 and the Company repaid entire outstanding debt to lenders by way of One-time Settlement (OTS) of Rs. 670 Crore along with change in management. Kirloskar Ferrous Industries Limited (KFIL), a part of 130 years old Kirloskar group acquired majority stake in the Company by investing Rs. 476.63 Crore in the equity share capital of the Company and further extended unsecured loan of Rs. 194 Crore towards OTS.

The Company on its part ensured that the value of the business was preserved despite numerous challenges leading to successful debt resolution.

The operations of the Company continued to be sustained and in fact increased during the entire pendency of the debt resolution period. Thus, the turnover of the Company was increased from Rs. 968.44 Crore in FY2015-16 to Rs. 2,123.41 Crore in FY2021-22 with corresponding EBITDA increased from Rs. 33.66 Crore to Rs. 79.66 Crore.

The Company is deeply thankful to all lenders for their unstinted support and co-operation. We are especially thankful to our business associates viz. customers, suppliers, vendors etc. who stood by the Company during this difficult period. Most of all, this has been made possible by dedicated hard work of the employees of the Company across all the levels.

AUTHORIZED SHARE CAPITAL

Authorized share capital of the Company was Rs. 158.50 Crore comprising of 17.50 Crore equity shares of Rs. 5/- each aggregating to Rs. 87.50 Crore & unclassified shares aggregating to Rs. 71 Crore.

The Board at its meeting held on November 25, 2021 approved classification of the aforesaid unclassified shares into 14.20 Crore equity shares of Rs. 5/- each, ranking pari passu in all respect with the existing equity shares of the Company. Accordingly, the revised authorized share capital of the Company is Rs. 158.50 Crore comprising of 31.70 Crore equity shares of Rs. 5/- each. The shareholders of the Company approved the aforesaid classification at the Extra-ordinary General Meeting (EGM) held on December 22, 2021.

PREFERENTIAL ALLOTMENT

Pursuant to the Share Subscription Agreement dt. November 25, 2021, executed with KFIL, the Board at its meeting held on March 10, 2022 allotted 15,40,00,000 equity shares, on preferential basis, to KFIL for Rs 476.63 Crore and that the Company became a subsidiary of KFIL. Post the aforesaid allotment, paid up share capital of the Company stood at Rs. 150.25 Crore. UTILIZATION OF FUNDS RAISED VIA PREFERENTIAL ISSUE

The entire issue proceeds of the funds raised via preferential issue has been utilized by the Company for the purposes/ objects as stated in the Explanatory Statement to the notice of the EGM held on December 22, 2021, wherein the shareholders’ approval was given for the aforesaid issue.

CHANGE IN MANAGEMENT

Consequent upon allotment of 15.40 Crore equity shares, KFIL acquired majority stake in the Company (i.e. 51.25% of post issue paid-up share capital). Accordingly, KFIL appointed its representatives on the Board w.e.f. March 10, 2022. Simultaneously, Mr. B R Taneja, Promoter and Managing Director of the Company, stepped down from the Board. KFIL, a 25 years old entity, is a major producer of pig iron and castings with turnover of Rs. 2,038.08 Crore and net profit of Rs. 302.11 Crore in FY2020-21. Its future plans include setting up of steel making facility.

CAPTIVE POWER PLANT

Captive Power Plant (CPP) continued to be inoperative throughout the year in absence of banking facility from Maharashtra State Electricity Distribution Company Ltd. (MSEDCL).

The Company’s appeal against wrongful denial of banking facility is pending in Supreme Court. The Company in the past had pursued various options viz. for selling CPP or operating as group captive without success.

Consequent upon change in management on March 10, 2022, the Company is again evaluating these options. However, while demand for power is showing increasing trend, recent spurt in commodity prices including coal prices has affected the economics of thermal power generation.

IMPORTS

Anti dumping duty on imports from China was provisionally extended until October 31,2021 and the Ministry of Finance vide notification dated October 28, 2021 extended the duty for further

5 years until October 27, 2026.

Steep increase in raw material cost has resulted in the domestic setting price being higher than the reference price and an effective Anti Dumping Duty needs to address the impact of this increase in input cost.

RAW MATERIAL

The Company has also witnessed sudden and steep increase in international scrap prices as well as in the prices of domestically procured raw materials.

Effective implementation of the New Vehicle Scrappage policy will increase domestic availability of scrap at competitive price

6 considerably enhance the viability of steel making by EAF. The Company is entirely dependent on high cost power from the State grid. Availability of power at competitive rates is key to success of Atmanirbhar Bharat and suitable steps need to be taken at both Central and State Governments levels to facilitate-

(a) Special tariff for EAF route;

(b) Free market for sale of power across India;

(c) Removal of cross subsidy and other State levies on captive power generation; and

(d) Banking of energy on the lines of renewable.

RESEARCH & DEVELOPMENT

Details of R&D activities undertaken are enumerated in Annexure ‘A’ attached to this Report.

DIRECTORS & KEY MANAGERIAL PERSONNEL

Consequent upon change in management, Mr. B R Taneja, Promoter and Managing Director stepped down from the Board after serving the Company for over four decades.

Under the leadership of Mr. B R Taneja-

i. The Company, which started with initial capacity of 3,000 Tons at single location, has now reached 4,65,000 Tons of tube making at three locations and 3,50,000 Tons of Steel making capacity in addition to 40 MW CPP;

ii. Turnover has grown from Rs. 4 Crore in the first year to over Rs. 2,000 Crore;

iii. The Company provided direct and indirect employment to over 10,000 people; and

iv. The Company has built a strong reputation for quality and is globally a recognized producer of precision seamless tubes.

The Board places on record its whole-hearted appreciation for the yeoman services rendered by Mr. B R Taneja.

In accordance with the provisions of the Companies Act, 2013 (Act) and the Articles of Association of the Company, Mr. Rajiv Goel, Director retires by rotation and being eligible, offers himself for re-appointment.

The term of Mr. Rajiv Goel as Whole-time Director expired on September 30, 2021 & he was further re-appointed upto September 30, 2022.

Mr. Rahul Kirloskar & Mr. Ravindranath Gumaste were appointed as Directors (Non-Executive, Non-Independent) of the Company w.e.f March 10, 2022, designated as Chairman and Vice-Chairman, respectively.

Mr. Nishikant Ektare was appointed as Managing Director of the Company w.e.f March 10, 2022.

Dr. Shalini Sarin & Mr. S. Venkataramani were appointed as Independent Directors of the Company w.e.f March 10, 2022.

Mr. O P Kakkar & Ms. Deepa Mathur resigned as Directors of the Company w.e.f. March 10, 2022.

The Board placed on record its sincere appreciation and gratitude for services rendered by Mr. O P Kakkar & Ms. Deepa Mathur during their association with the Company.

Ten meetings of the Board were held during the year under review. Detailed information is given in the Corporate Governance report as enclosed herewith.

Independent Directors have given declarations pursuant to Section 149(7) of the Act & Regulation 25(8) of the SEBI (LODR), Regulations, 2015 (Listing Regulations), stating that they meet the criteria of independence. The Board is assured that Independent Directors posses adequate proficiency, experience, expertise and integrity. Pursuant to Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors have confirmed that they hold valid registration certificate with the Databank of Independent Directors.

The recent infrastructure push could create new opportunities for green field project like Tridem Port and Power Company Private Limited (Tridem), wholly owned subsidiary of the Company. Consequent upon change in management on March 10, 2022, the Company will evaluate fresh potential opportunities for Tridem as well.

FIXED DEPOSITS

The Company has not accepted deposits from the public. MANAGEMENT DISCUSSION & ANALYSIS & CORPORATE GOVERNANCE REPORT

Pursuant to Listing Regulations, a separate section on Management Discussion & Analysis & Corporate Governance’ Report is forming part of this Report.

The Managing Director & CFO has certified to the Board with regard to the financial statements & other matters as required under Regulation 17(8) of the Listing Regulations.

Certificate from Auditors regarding compliance of conditions of Corporate Governance is also annexed to this Report.

ANNUAL RETURN

Latest Annual Return of the Company in Form MGT-7 is available on website: www.ismt.co.in CONSERVATION OF ENERGY ETC Information required under Section 134(3)(m) of the Act is forming part of this Report as Annexure ‘A’.

DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to Section 134(3)(c) read with Section 134(5) of the Act, your Directors make the following statement:

i) That in preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) That Directors have selected such accounting policies & applied them consistently & made judgments & estimates, that are reasonable & prudent so as to give a true & fair view of the state of affairs of the Company at end of the financial year March 31, 2022 & of the Profits of the Company for that period;

iii) That Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act 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;

v) That the Directors had laid down internal financial controls to be followed by the Company & that such internal financial controls are adequate & were operating effectively; and

vi) That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The Company has devised Policy for annual performance evaluation of the Board, Committees & Directors which include criteria for performance evaluation of non-executive & executive directors. The Board evaluates performance of the Committees & of the Independent Directors whereas the Chairman of the Board evaluates performance of the Board. The Independent Directors evaluate the performance of Non-Independent Directors.

Details of familiarization Programme of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company and related matters are on website of the Company: www.ismt.co.in

AUDITORS

Tenure of the Auditors of the Company will expire at the ensuing Annual General Meeting (AGM) of the Company.

The Auditors have discussed the key matters separately as per the Annexure A to the Independent Auditors Report as enclosed herewith.

COST AUDITORS

The Company is required to maintain cost records as specified u/S 148(1) of the Act & accordingly such accounts/ records are made & maintained.

Pursuant to Section 148 of the Act, the Board, on recommendation of Audit Committee, has approved the appointment & remuneration of the following Cost Auditors, for FY2021-22:

(i) M/s. Dhananjay V. Joshi & Associates; and

(ii) M/s. Parkhi Limaye & Co.

Payment of remuneration for FY2021-22 to the aforesaid Cost Auditors is subject to ratification by Members at ensuing AGM.

The Cost Audit Report for FY2020-21 was filed within the prescribed time limit as per the Companies (Cost Record and Audit Rules), 2014.

SUBSIDIARIES

As on date of this report, the Company has ten direct & indirect subsidiaries. In accordance with Section 129(3) of the Act, statement containing salient features of financial statements of subsidiaries in Form AOC-1 & report on performance & financial position of each subsidiary is forming part of enclosed financial statements for FY2021-22. The Company has framed Policy for determining Material Subsidiaries which is available on: www. ismt.co.in

Consequent upon the change in management on March 10, 2022, the Company has initiated review of its subsidiary’s viz. Structo Hydraulics AB, Sweden (Structo) with regard to its operations and future opportunities. With positive net-worth and strong balance sheet of the Company, Structo can expect to have better market access and availability of working capital. Recent geopolitical developments, however, together with steep increase in ocean freight, create fresh business challenges.

NOMINATION & REMUNERATION POLICY

The Nomination & Remuneration Policy of the Company on director’s appointment & remuneration including criteria for determining qualifications, positive attributes, independence of a director & other matters is available on website: www.ismt.co.in.

The criteria for performance evaluation as laid down by the Nomination Remuneration Committee have been defined in the Nomination & Remuneration Policy.

Details pertaining to Section 197(12) of the Act read with Rules thereunder are forming part of this Report as Annexure ‘B’.

Pursuant to Section 197(9) of the Act, Mr. B R Taneja, erstwhile Managing Director has, pending lenders approval, refunded remuneration due for refund during the year under review.

A statement showing details of employees in terms of Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, in terms of Section 136 of the Act, Annual Report excluding the aforesaid information is being sent to members and others entitled thereto. The same is available for inspection by Members at the Registered Office of the Company during business hours on working days upto the date of ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary.

SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Act & Rules made thereunder, the Board has appointed M/s. KPRC & Associates, Company Secretaries as Secretarial Auditors to undertake Secretarial Audit of the Company for the period ended March 31,2022. The Report of the Secretarial Auditors in Form MR-3 is forming part of this Report as Annexure ‘C’.

In respect of the Audit observations, following are the comments of the Board:

i. Delay in submission of Financial Results:

Submission of financial results for Quarter ended March 31, 2021 and September, 2021 got delayed on account of delay in the financial statements of the foreign subsidiaries & delay in finalization of the financial results, respectively.

ii. Promoter shareholding not in demat form:

The Company has requested the concerned promoter group entity, from time to time, to Demat shareholding or reclassify to Public Category which remained unattended.

iii. Non-filing of Annual Performance Report (APR):

The Company has initiated corrective steps for filing the APR.

PARTICULARS OF LOANS, GUARANTEES & INVESTMENTS

Particulars of Loans, Guarantees & Investments covered under Section 186 of the Act have been mentioned in Notes to the enclosed Financial Statements.


RISK MANAGEMENT

The Company has constituted a Risk Management Committee to address organization wide risk including credit, security, property, regulatory and other risks. The Committee is assisting the Board in ensuring that there is adequate risk management policy in place capable of addressing those risks.

INTERNAL FINANCIAL CONTROLS The Company has an internal financial control framework which is commensurate with the size, scale and complexity of its operations. The Statutory Auditors of the Company reviews the same on periodical basis.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the provisions of Section 135 of the Act, no profits were available for spending on CSR activities.

AUDIT COMMITTEE & VIGIL MECHANISM Pursuant to Section 177 of the Act, an Audit Committee has been constituted by the Board consisting of three Independent directors.

Whistle Blower Policy/ Vigil Mechanism of the Company was established by the Board & available on website: www.ismt. co.in.

CONTRACTS WITH RELATED PARTIES

During the year under review, the Company has not entered into any contract/ arrangement/ transaction with related parties which were either not at arm’s length or not in the ordinary course of business & further could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Hence, there is no information to be provided in Form AOC-2 while particulars of Related Party Transactions in terms of Ind AS-24 are forming part of the enclosed financial statements.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on website: www.ismt.co.in GENERAL

1. No significant or material orders were passed by Regulators or Courts or Tribunals which impact the going concern status & the Company’s operations in future.

2. The Company has complied with the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and during the year under review there were no cases filed under the said Act.

3. The Company has complied with the applicable secretarial standards.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to express its sincere gratitude for continued support & co-operation received by the Company from the Government of India, Government of Maharashtra, Reserve Bank of India, Stock Exchanges, other regulatory agencies & shareholders. The Board would also like to acknowledge continued support of its bankers, vendors, clients & investors. The Directors also wish to place on record their appreciation of all employees for their dedication & team work.

For and on behalf of the Board of DirectorsPune Rahul Kirloskar

May 09, 2022 Chairman


Mar 31, 2018

To the Members of ISMT Limited

The Directors present herewith the Twentieth Annual Report & Audited Financial Statements of the Company for financial year ended March 31, 2018.

FINANCIAL HIGHLIGHTS

Rs. in Crore

Particulars

Financial Year

2017-18

2016-17

Gross Sales

1915.31

1416.45

Profit/ (Loss) before Finance Charges, Depreciation, Amortization & Tax (EBIDTA)

86.09

51.96

Cash Profit/ (Loss)

(182.38)

(216.44)

Gross Profit/ (Loss)

(188.76)

(218.64)

Profit/ (Loss) Before Tax

(240.93)

(279.62)

Taxation

(0.98)

-

Net Profit/ (Loss)

(239.95)

(279.62)

Re-measurement Gains/ (Losses) on Defined Benefit Plans

0.60

0.74

Total Comprehensive income for the year

(239.35)

(278.88)

INDIAN ACCOUNTING STANDARDS (IND AS)

The Company had adopted Ind AS with effect from 1st April, 2017 pusuant to the Ministry of Corporate Affairs notification dated 16th February, 2015 notifying the Companies (Indian Accounting Standard) Rules, 2015. Accordingly, the Financial Statements for the year ended 31st March, 2018 of the Company was prepared with comparative data, in compliance with Ind AS.

DIVIDEND

Your Directors are unable to recommend dividend for the year ended March 31, 2018 in view of the losses.

RESERVES

No amount was proposed to be transferred to Reserves. OPERATIONS

There was a marked improvement in capacity utilization at Tube Plant. The higher captive requirement also helped improve steel plant capacity utilization.

MARKET

Tube sales showed a healthy growth of 55% contributed by both domestic & international markets. Levy of Anti-Dumping Duty on imports of seamless tubes from China coupled with initial pick-up in domestic demand resulted in domestic sales going up by 53%. Export sales also went up by 67% with the increase in international oil prices.

FINANCE

The net turnover & EBIDTA for the year increased by 40% & 71% respectively over the previous year. The Company along with its advisers and Bankers have been looking at various options as per the RBI Circulars in force from time to time. The Banks have since decided to assign their debt to Asset Reconstruction Companies (ARCs) as a resolution plan. A few Banks including Lead Bank have already assigned their debt to ARCs.

CAPTIVE POWER

For want of energy banking facility, the Company could not operate its Captive Power plant during the year. The Company’s appeal in this regard is pending with Supreme Court. The Company also have not been successful in finding any buyer for the plant.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. J.P. Sureka, one of the founding Directors of the Company, expired on December 22, 2017. The Board of Directors express grief on his sad demise.

In accordance with the provisions of the Companies Act, 2013 (‘Act’) and the Articles of Association of the Company, Mr. O.P Kakkar retires by rotation and being eligible, offers himself, for reappointment.

IDBI Bank Ltd appointed Mr. Shashank Dixit as its Nominee Director in place of Mr. Ajit Ingle on the Board of the Company w.e.f. December 21, 2017.

The Board placed on record its sincere appreciation and gratitude for services rendered by Mr. J.P. Sureka and Mr. Ajit Ingle during their respective association with the Company.

Mr. Jaikishan Pahlani, Company Secretary ofthe Company resigned from the services of the Company w.e.f. March 1, 2018. The Board has appointed Mr. Chetan Nathani as the Company Secretary & Compliance Officer of the Company w.e.f. June 11, 2018.

The term of Mr. Rajiv Goel as Whole-time Director expired on September 30, 2017. He was re-appointed as such for a period from October 01, 2017 to September 30, 2018 subject to approval of Shareholders of the Company.

Five (5) meetings of the Board of Directors were held during the year. Detailed information is given in the Corporate Governance report.

The Independent Directors have given a Declaration pursuant to Section 149(7) of the Act.

The Company has devised a Policy for annual performance evaluation of the Board, its Committees & individual Directors which include criteria for performance evaluation of the nonexecutive & executive directors.

The performances of non-independent directors & Committees of the Board have been evaluated by independent directors. The performances of independent directors have been evaluated by Chairman of the Nomination & Remuneration Committee (NRC) with inputs from all directors. The performance of the Board as a whole is evaluated by the Chairman with inputs from all directors. The performance evaluation of Chairman of NRC is evaluated by Chairman with inputs from all the directors.

The above evaluations have been carried out once during the year.

The details of familiarization Programme of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at www.ismt.co.in

AUDITORS REMARKS

In respect of the Qualified Opinion and Emphasis of Matter by the Auditors on the Standalone and Consolidated Financial Statements of the Company, it has been explained in the Notes forming part of the said Financial Statements which are self-explanatory and therefore do not call for any further comments.

COST AUDITORS

Pursuant to Section 148 of the Act read with Rules framed thereunder, your Directors had, on recommendation of the Audit Committee, approved the appointment & remuneration of the following Cost Auditors of the Company for FY 2017-18:

(i) M/s Dhananjay V. Joshi & Associates; and

(ii) M/s Parkhi Limaye & Co.

The payment of remuneration for FY 2017-18 to aforesaid Cost Auditors is subject to ratification by the Members in the ensuing Annual General Meeting.

The Cost Audit Report for FY 2016-17 was filed within the prescribed time limit as per the Companies (Cost Record and Audit Rules) 2014.

SUBSIDIARIES

As on date of this report, the Company has ten direct & indirect subsidiary companies. In accordance with Section 129(3) of the Act, a statement containing salient features of the financial statements of subsidiaries in Form AOC-1 is provided separately in this Annual Report. A report on performance & financial position of each of the subsidiaries is provided in financial statements forming part of this Annual Report. The Company has also framed a Policy for determining Material Subsidiaries which is available on website: www.ismt.com.

FIXED DEPOSITS

The Company has not accepted any deposits from the public. RESEARCH & DEVELOPMENT

As part of Company’s overall strategy, Company remained focused on developing new products for all its market segments including Energy, OCTG, Bearing, Auto & Mining Sectors. R&D activities also focused on process cost reductions. Details of R&D activities undertaken are enumerated in Annexure ‘B’ attached to this Report.

MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT

Pursuant to SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a separate section on Management Discussion & Analysis & Corporate Governance’ Report is forming part of this Report.

The Managing Director & CFO have certified to the Board with regard to the financial statements & other matters as required under Regulation 17(8) of the aforesaid Regulations.

Certificate from Auditors of the Company regarding compliance of conditions of Corporate Governance is also annexed to this Report.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return in Form MGT-9 is forming part of this Report as Annexure ‘A’.

Further, the latest Annual Return of the Company in Form MGT-7 is placed on website of the Company at www.ismt.com

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

Information required under Section 134(3)(m) of the Act is forming part of this Report as Annexure ‘B’.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Act, your Directors make the following statement:

i) That in preparation of 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 & applied them consistently & made judgments & estimates, that are reasonable & prudent so as to give a true & fair view of the state of affairs of the Company at end of financial year March 31, 2018 and of the Loss 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, 2013 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;

v) That the Directors had laid down internal financial controls to be followed by the Company & that such internal financial controls are adequate & were operating effectively; and

vi) That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

NOMINATION & REMUNERATION POLICY

The Nomination & Remuneration Policy of the Company on director’s appointment & remuneration including criteria for determining qualifications, positive attributes, independence of a director & other matters is available on website of the Company at www.ismt.com.

The criteria for performance evaluation as laid down by NRC have been defined in the Nomination & Remuneration Policy.

Details pertaining to Section 197(12) of the Act read with Rules framed thereunder are forming part of this Report as Annexure ‘C’.

SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Act & Rules made thereunder the Board has appointed M/s. MRM Associates, Company Secretaries as Secretarial Auditors to undertake Secretarial Audit of the Company for period ended March 31, 2018.

The Report of the Secretarial Auditors in Form MR-3 is forming part of this Report as Annexure ‘D’.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of Loans, Guarantees and Investments covered under Section 186 of the Act have been mentioned in the Notes to the Financial Statements forming part of this Annual Report.

RISK MANAGEMENT

The Company has constituted a Risk Management Committee to address organization wide risk including credit, security, property, regulatory and other risks. The Committee is assisting the Board in ensuring that there is adequate risk management policy in place capable of addressing those risks.

INTERNAL FINANCIAL CONTROLS

The Company has an internal financial control framework which is commensurate with the size, scale and complexity of its operations. The Statutory Auditors of the Company review the same on periodical basis.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Act a CSR Committee has been constituted by the Board consists of three directors including one independent director.

In view of the losses during three immediately preceding financial years, the Company was not required to spend on CSR activities in year 2017-18.

AUDIT COMMITTEE & VIGIL MECHANISM

Pursuant to Section 177 of the Act, an Audit Committee constituted by the Board consists of three directors with independent director forming a majority.

The Whistle Blower Policy/ Vigil Mechanism of the Company was established by the Board of Directors & available on website at www.ismt.com.

CONTRACTS & ARRANGEMENTS WITH RELATED PARTIES

During the year, the Company has not entered into any contract/ arrangement/ transaction with related parties which were not at an arm’s length or not in the ordinary course of business & further would be considered material in accordance with the policy of the Company on materiality of related party transactions.

Hence, there is no information required to be provided in Form AOC-2 while particulars of Related Party Transactions in terms of Ind AS-24 are forming part of financial statements enclosed.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the website at www.ismt.com

GENERAL

1. No significant or material orders were passed by Regulators or Courts or Tribunals which impact the going concern status & Company’s operations in future.

2. During the year, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.

3. The Company has complied with the applicable secretarial standards.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to express its sincere gratitude for continued support & co-operation received by the Company from Government of India, Government of Maharashtra, Reserve Bank of India, Stock Exchanges, other regulatory agencies & shareholders. The Board would also like to acknowledge continued support of its bankers, vendors, clients & investors. The Directors also wish to place on record their appreciation of all employees for their dedication & team work.

For and on behalf of the Board of Directors

Pune S C Gupta

June 11, 2018 Chairman


Mar 31, 2016

Directors'' Report

To the Members of ISMT Limited

The Directors have pleasure in presenting the 18th Annual Report and Audited Financial Statements of the Company for the year ended March 31, 2016.

FINANCIAL HIGHLIGHTS

Rs. in Crore

Particulars

Financial Year

2015-16

2014-15

Gross Sales

1331.28

2320.15

Profit/ (Loss) before Finance Charges, Depreciation, Amortization & Tax (EBIDTA)

33.65

46.17

Cash Profit/ (Loss)

(300.99)

(250.70)

Gross Profit/ (Loss)

(246.47)

(180.17)

Profit/ (Loss) Before Tax

(372.82)

(220.99)

Taxation

(9.39)

-

Net Profit/ (Loss)

(382.21)

(220.99)

Add : Balance brought forward from Previous Year

(472.19)

(245.27)

Balance carried to Balance Sheet

(854.40)

(472.19)

DIVIDEND

Your Directors are unable to recommend a dividend for the year ended on March 31,2016in view of the loss.

RESERVES

No amount was proposed to be transferred to Reserves.

OPERATIONS

The already low production at both the Tube Plants and in the Steel Plant further suffered a large drop during the year on account of continuing cheap imports (mainly from China) and economic slowdown resulting in lower capacity utilization at all three plants.

MARKET

The markets of the Company continued to suffer from excess capacity. Further low priced imports and all time low oil prices led to steep drop in domestic and export markets.

FINANCE

The lenders of the Company had constituted a Joint Lenders Forum (JLF) and undertaken a Corrective Action Plan (CAP) for the Company during the year 2014-15, which could not be effective on account of steep decline in volumes during latter part of the year 2014-15 due to weak domestic / export demand and dumping of Chinese imports. The JLF on June 13, 2015 agreed in principle for restructuring the debt of the Company and initiated various steps as per JLF guidelines culminating into an agreed Restructuring Scheme on January 5, 2016. After Lead Bank''s approval, the scheme will require approval of the Independent Evaluation Committee (IEC) before implementation by respective Banks.

REFERENCE TO BIFR

The net worth of the Company has been totally eroded by its accumulated losses as per the audited Financials (Standalone) for the year ended March 31, 2016.As such, the Company has become a Sick Industrial Company in terms of Section 3(1)( o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Consequently, the Board of Directors are statutorily required to file a Reference with the Board for Industrial and Financial Reconstruction (BIFR) in accordance with Section 15(1) and the other applicable provisions under SICA for determination of measures for revival of the Company. The Company is taking necessary steps to comply with the said provisions.

CAPTIVE POWER

The Company had appealed to Appellate Tribunal (APTEL) against MERC order which appeal has been dismissed by the APTEL. The Company''s appeal against this order has already been admitted by the Supreme Court. The Company is yet to receive Rs. 39.53 Crore from Maharashtra State Electricity Distribution Company Limited (MSEDCL) towards excess energy charges paid on account of non-availability of banking facility.

SALE OF NON CORE ASSETS

The Company has been aggressively working for sale of its non core assets viz., Port and Power Project in Tamil Nadu and Captive Power Project in Chandrapur District, Maharashtra, for quite some time. Despite engaging Advisors and approaching all the likely prospects, the Company has not succeeded to find a buyer purely because of complete lack of investment appetite.

ANTI DUMPING DUTY

The Company along with Industry have been pursuing with Directorate General of Anti-Dumping & Allied Duties (DGAD) for imposition of Anti-Dumping Duty for last many months. Based on the recommendation of DGAD, Ministry of Finance vide its notification dated May 17,2016 has imposed a provisional Anti-Dumping Duty on the imports of the seamless tubes and pipes originating in or exported from China. The Company is now pursuing imposition of the final Anti-Dumping Duty.

A unique feature of this provisional duty is that it has been imposed by way of reference price to make the duty really effective. Further, separate prices have been fixed for respective category of tubes.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Shyam Powar was appointed as an Additional Director on November 13, 2015 to hold office until conclusion of the ensuing Annual General Meeting. The term of office of Independent Directors Mr. S. C. Gupta and Ms. Deepa Mathur also ends at the conclusion of the ensuing Annual General Meeting. It is now proposed to appoint Mr. S. C. Gupta, Mr. Shyam Powar and Ms. Deepa Mathur as Independent Directors of the Company for a period of two years.

Mr. K. K. Rai, Independent Director of the Company has resigned w.e.f. November 20, 2015. The Board places on record its sincere appreciation of the services rendered by Mr. K. K. Rai during his tenure as Director of the Company.

In accordance with the provisions of the Companies Act, 2013 (''Act'') and the Articles of Association of the Company, Mr. Rajiv Goel retires by rotation and being eligible, offers himself for reappointment.

Mr. Rajiv Goel, whose term as a Whole-time Director expired on November 30, 2015, was re-appointed as a Whole-time Director designated as the Chief Financial Officer of the Company for the period from December 1, 2015 to September 30, 2016 subject to approval of the Members of the Company at the ensuing Annual General Meeting. Further, the Board of Directors has approved his re-appointment as a Whole-time Director of the Company for a further period of one year from October 1, 2016 subject to approval of the Members of the Company at the ensuing Annual General Meeting.

Mr. B.R. Taneja whose term as Managing Director of the Company is up to November 30, 2016, has been re-appointed as Managing Director of the Company for a period of two years w.e.f. December 1, 2016 subject to approval of the Members of the Company at the ensuing Annual General Meeting.

Seven (7) meetings of the Board of Directors were held during the year. Detailed information is given in the Corporate Governance Report.

The Independent Directors of the Company had given declaration pursuant to Section 149 (7) of the Act.

Performance evaluation of Independent Directors, Board, Committees and other individual Directors have been done by the Board of Directors.

The details of familiarization Programme of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company www.ismt.com.

Mr. Nilesh Jain, Company Secretary, resigned from the services of the Company w.e.f. November 30, 2015. The Board has appointed Mr. Jaikishan Pahlani as Company Secretary of the Company w.e.f. February 13,2016.

AUDITORS

Pursuant to Section 139 of the Companies Act, 2013 and the Rules framed there under, the members of the Company at the 16th Annual General Meeting (AGM) held on September 26, 2014, approved the appointment of M/s. P. G. Bhagwat and J. K. Shah & Co., as Joint Statutory Auditors of the Company to hold office for a period of 3 (three) consecutive years till the conclusion of 19th Annual General Meeting, subject to ratification of the re-appointment at every Annual General Meeting. Accordingly, members are requested to ratify their said appointment at the ensuing AGM.

In respect of the Qualified Opinion and Emphasis of Matter by the Auditors on the Standalone and Consolidated Financial Statements, it has been explained in the Notes forming part of said Financial Statements which are self-explanatory and therefore do not call for any further comments.

COST AUDITORS

Pursuant to Section 148 of Companies Act, 2013 read with The Companies (Audit and Auditors) Rules, 2014, your Directors had, on recommendation of the Audit Committee, approved the appointment and remuneration of the following Cost Auditors for the Financial Year 2015-16:

(i) M/s. Dhananjay V. Joshi & Associates and

(ii) M/s. Parkhi Limaye & Co.

The payment of remuneration for FY 2015-16 to the aforesaid Cost Auditors is subject to ratification by the Members in the ensuing Annual General Meeting.

The Cost Audit Report for FY 2014-15 was filed within the prescribed time limit as per the Companies (Cost Records and Audit) Rules, 2014.

SUBSIDIARIES

As on date of this report, the Company continued to have eleven direct and indirect subsidiary companies. A report on the performance and financial position of each of the subsidiary companies is provided in the Financial Statements forming part of this Annual Report.

The Company has framed a Policy for determining Material Subsidiaries which is available on its website www.ismt.com.

FIXED DEPOSITS

The Company has not accepted any deposits from the public.

RESEARCH & DEVELOPMENT

As part of the Company''s overall strategy, throughout the year the Company remained focused on developing value added products for all its market segments including Energy, OCTG, Bearing, Auto and Mining Sectors. R & D activities also focused on process cost reductions. Details of the R&D activities undertaken are enumerated in Annexure attached to this Report.

MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Management Discussion and Analysis and Corporate Governance Report is forming part of this Report.

The Managing Director and CFO have certified to the Board with regard to the financial statements and other matters as required under regulation 17 (8) of the above Regulations.

Certificate from Auditors of the Company regarding compliance of conditions of Corporate Governance is annexed to this Report.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 is forming part of this Report as Annexure ''A''.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information required under Section 134 (3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 is forming part of this Report as Annexure ''B''.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, 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, 2016 and of the Loss 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, 2013 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;

v) That the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi) That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy of the Company on director’s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters is available on the website of the Company www.ismt.com

The criteria for performance evaluation as laid down by Nomination and Remuneration Committee has been defined in the Nomination and Remuneration Policy.

Details pertaining to remuneration of Directors and employees required under Section 197(12) of the Companies Act, 2013 read with Rules framed thereunder are forming part of this Report as Annexure ‘C’.

SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Act and Rules made there under the Board has appointed M/s. MRM Associates, Company Secretaries in Practice as Secretarial Auditors to undertake the Secretarial Audit of the Company for the financial year ended March 31,2016. The Report of the Secretarial Auditors in Form MR-3 is forming part of this Report as Annexure ‘D’.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of Loans, Guarantees and Investments covered under Section 186 of the Act has been mentioned in the Notes to the Financial Statements forming part of this Annual Report.

RISK MANAGEMENT

The Company has constituted a Risk Management Committee to address organization wide risks including credit, security, property, regulatory and other risks. The Committee is assisting the Board in ensuring that there is adequate risk management policy in place capable of addressing those risks.

INTERNAL FINANCIAL CONTROLS

The existing internal financial control systems are being further enlarged and strengthened to meet the requirements in terms of the new Guidelines.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to Section 135 of the Companies Act, 2013 a CSR Committee constituted by the Board of Directors consists of three Directors including one Independent Director.

In view of losses during three immediately preceding financial years, the Company was not required to spend on CSR activities in the year 2015-16.

AUDIT COMMITTEE AND VIGIL MECHANISM

Pursuant to Section 177 of the Companies Act, 2013 an Audit Committee constituted by the Board of Directors consists of three directors with independent directors forming a majority.

The Whistle Blower Policy/ Vigil Mechanism of the Company was established by the Board of Directors and is available on the website of the Company www.ismt.com.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which were either not on an arm’s length or not in the ordinary course of business and further could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Hence, there is no information to be provided in Form AOC-2 while the particulars of all Related Party Transactions in terms of AS-18 are forming part of the financial statements.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company’s website www.ismt.com

GENERAL

1. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

2. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their 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

August 10, 2016 Chairman


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Annual Report and Audited Accounts of the Company for the year ended March 31,2015.

FINANCIAL HIGHLIGHTS Rs. in Crore

Particulars Financial Year

2014-15 2013-14

Gross Sales 2320.15 2563.10

Profit/(Loss) before Finance 46.17 102.91 Charges, Depreciation,

Amortization & Tax (EBIDTA)

Cash Profit/ (Loss) (250.70) (102.56)

Gross Profit/ (Loss) (180.17) (80.62)

Profit/ (Loss) Before Tax (220.99) (204.65)

Taxation 0.00 (34.36)

Net Profit/ (Loss) (220.99) (170.29)

Add: Balance brought forward from (245.27) (74.98)

Previous Year

Balance available for Appropriation (472.19) (245.27)

Appropriations / Transfer to Reserves NIL NIL

Balance carried to Balance Sheet (472.19) (245.27)

DIVIDEND

Your Directors are unable to recommend a dividend for the year ended on March 31, 2015, in view of the loss.

OPERATIONS

This has been one of the most difficult years with all the three plants viz. Baramati, Jejuri and Ahmednagar recording lowest production and sales in last 10 years. The continuing imports resulted in tube segment operating at 25% capacity.

MARKET

Both domestic and export markets continued to be extremely challenging - on account of large volume of imports at low prices and sharp drop in oil prices in the international market.

FINANCE

The Joint Lenders’ Forum (JLF) of the Company bankers had mandated SBI Capital Markets Limited to make a financial plan and had also commissioned Techno Economic Viability Study by Dun and Bradstreet Information Services India Pvt. Ltd. The JLF then approved a Corrective Action Plan for fresh Corporate Term Loans of Rs. 450 Crore by way of rectification.

Term Loans of Rs. 405 Crore were accordingly disbursed during the year. Due to increased borrowings and higher interest rates, the finance cost shot up by more than 23%.

The Corrective Action Plan (CAP), however, failed to achieve the desired result primarily due to aggressive Chinese imports in the absence of a deterrent Import Duty. The Company is now discussing with Bankers the various options including Restructuring.

CAPTIVE POWER PLANT

Captive Power Plant (CPP) had envisaged that the Coal Linkage will be available and the Banking of Power will be allowed, both of which are still not in place resulting in large losses. The Company has now appealed to APTEL against the MERC order denying Banking to the Company.

The Company has yet to receive an amount of Rs. 40.83 Crore from MSEDCL towards excess energy charges paid on account of non availability of Banking facility.

IMPORT DUTY

The Safeguard Duty of 20% was finally imposed after about two years in August, 2014 which will soon come down to 10% in August 2015. The domestic industry has since filed an application for levy of Anti Dumping Duty against imports from China.

It is critical for survival of the industry that steep and long term Anti Dumping Duty is imposed at the earliest and that the Provisional Duty is urgently levied immediately after initiation of Anti Dumping Proceedings.

SALE OF NON CORE ASSETS

Reduction of debt through sale of non core assets is one of the highest priority of the Company.

DIRECTORS

In accordance with the provisions of the Companies Act, 2013 (‘Act’) and the Articles of Association of the Company, Mr. O. P. Kakkar retires by rotation and being eligible, offers himself, for re-appointment.

IDBI Bank Limited had appointed Mr. Ajit Ingle as its Nominee Director in place of Mr. Suresh Khatanhar on the Board of the Company w.e.f September 6, 2014. The Board placed on record its sincere appreciation and gratitude for his guidance and contribution to the Company.

Mr. Salil Taneja whose term as Whole-time Director was upto November 30, 2014 has resigned as Director of the Company w.e.f. December 1, 2014. The Board placed on record its appreciation and gratitude for his guidance and contribution to the Company.

Mr. B. R. Taneja was appointed as the Managing Director of the Company w.e.f. December 1, 2014 for a period of 2 (two) years with approval of the Members of the Company by way of Postal Ballot.

Mr. Rajiv Goel has been re-appointed as a Whole-time Director of the Company w.e.f. December 1, 2014 for a period of 1 (one) year subject to approval of the Members of the Company at its ensuing Annual General Meeting (AGM).

The Independent Directors ofthe Company had given a declaration pursuant to Section 149 (7) of the Act.

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the non-executive directors and executive directors like : Knowledge and Skills, Familiarity with the Company and its business, Monitoring Company’s Corporate Governance Practices, Development of strategies and risk management, Participation and attendance in meetings, Professional conduct and Sharing of information etc.

The details of familiarisation programme of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at www.ismt.com

AUDITORS

Pursuant to Section 139 of the Companies Act, 2013 and the Rules framed thereunder, the members of the Company at the 16th AGM held on September 26, 2014, approved the appointment of M/s. P G. Bhagwat and J. K. Shah & Co., as Joint Statutory Auditors of the Company to hold office for a period of 3 (three) consecutive years till the conclusion of 19th AGM, subject to ratification of their appointment at every AGM.

In respect of the Qualified Opinion and Emphasis of Matter by the Auditors on the Standalone and Consolidated Financial Statement, it has been explained in the Notes forming part of said Financial Statements which are self-explanatory and do not call for further comments.

COST AUDITORS

Pursuant to Section 148 of Companies Act, 2013 read with The Companies (Audit and Auditors) Rules, 2014, your Directors had, on recommendation of the Audit Committee, approved the appointment and remuneration of following Cost Auditors for Financial Year 2014-15:

(i) M/s. Dhananjay V. Joshi & Associates and

(ii) M/s Parkhi Limaye & Co.

The payment of remuneration for FY 2014-15 to aforesaid Cost Auditors is subject to ratification by the Members at the ensuing Annual General Meeting.

The Cost Audit Report for the financial year 2013-14 was due on September 30, 2014 and was filed with the Ministry of Corporate Affairs on September 26, 2014.

SUBSIDIARIES

As on date of this report, the Company continued to have eleven direct and indirect subsidiary companies. A report in Form AOC-1 on the performance and financial position of each of the subsidiary companies as per the Companies Act, 2013 included in the consolidated financial statement is provided in the Financial Statements forming part of this Annual Report.

The Company has framed a Policy for determining Material Subsidiaries which is available on its website at www.ismt.com

FIXED DEPOSITS

The Company has not accepted any deposits from the public.

MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Management Discussion Analysis and Corporate Governance Report together with a Certificate from the Company’s Auditors on compliance, is forming part of this Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134 (3) (c) read with Section 134 (5) of the Companies Act, 2013, 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 31,2015 and of the Loss 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, 2013 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;

v) That the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi) That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 is forming part of this Report as Annexure A.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The particulars as required under Section 134(3)(m) of the Companies Act, 2013 is forming part of this report as Annexure B.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy of the Company on director’s appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters is available on the website of the Company at www.ismt.com.

The criteria for performance evaluation as laid down by Nomination and Remuneration Committee has been defined in the Nomination and Remuneration Policy.

Detail pertaining to remuneration of Directors and employees required under Section 197(12) of the Companies Act, 2013 read with Rules framed thereunder are forming part of this Report as Annexure C.

SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Act, the Board has appointed M/s. MRM Associates, Company Secretaries in Practice as Secretarial Auditors to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2015. The Report of the Secretarial Auditors is forming part of this Report as Annexure D. The Company is in the process of appointing an Independent Woman Director to address both the observations of the Secretarial Audit Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of Loans, Guarantees and Investments covered under Section 186 of the Act forming part of the Notes to the Financial Statements is forming part of this Report.

RISK MANAGEMENT

The Management of the Company has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company’s risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, liquidity, security, property, IT, regulatory and other risks have been identified and assessed and there is an adequate risk management policy in place capable of addressing those risks.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to Section 135 of the Companies Act, 2013 a CSR Committee constituted by the Board of Directors consists of three directors including one independent director.

AUDIT COMMITTEE AND VIGIL MECHANISM

Pursuant to Section 177 of the Companies Act, 2013 an Audit Committee constituted by the Board of Directors consists of three directors with independent director forming a majority.

The Whistle Blower Policy/ Vigil Mechanism of the Company was established by the Board of Directors and is available on the website of the Company at www.ismt.com.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which were either not at an arm’s length or not in the ordinary course of business and further could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Hence, there is no information to be provided in Form AOC-2 while the particulars of all Related Party Transactions in terms of AS-18 are forming part of the financial statements.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company’s website at www.ismt.com.

GENERAL

1. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

2. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

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 teamwork.

For and on behalf of the Board of Directors Pune S C Gupta May 30, 2015 Chairman


Mar 31, 2014

Dear members,

The Directors have pleasure in presenting the Annual Report and Audited Accounts of the Company for the year ended March 31, 2014.

FINANCIAL HIGHLIGHTS Rs. in Crore

Particulars Financial Year 2013-14 2012-13

Gross Sales 2563.10 2513.02

Profit / (Loss) before Finance Charges, Depreciation, Amortization & Tax (EBIDTA) 102.91 179.36

Cash Profit / (Loss) (102.56) (45.00)

Gross Profit / (Loss) (80.62) 26.69

Profit / (Loss) Before Tax (204.65) (140.63)

Taxation (34.36) (40.92)

Net Profit / (Loss) (170.29) (99.71)

Add: Balance brought forward

from Previous Year (74.98) 24.73

Balance available for Appropriation (245.27) (74.98)

Appropriations NIL NIL

Balance carried to Balance Sheet (245.27) (74.98)

DIVIDEND

Your Directors are unable to recommend a dividend for the year ended on March 31, 2014, in absence of adequate profits.

OPERATIONS

All the Plants viz., the two Tube Plants at Ahmednagar and Baramati, the Steel Plant at Jejuri and the Captive Power Plant at Chandrapur operated at poor utilization levels leading to higher production cost. However, the focus on internal cost cutting, both fixed and variable and minimizing working capital could partially mitigate the same.

MARKET

The recessionary international environment, a weak domestic market and large imports put tremendous pressure on domestic market. Exports were also drastically affected as a result of slump in US Sales.

FINANCE

While the Company raised long term loans of Rs. 235 Crore during the year, it did not result in the desired improvement given the continuing losses arising from the external factors as above. These losses have led to further erosion in net working capital and the Company is evaluating various options for meeting its requirements.

Due to increased borrowings and higher interest rates, the finance cost shot up by more than 20%.

CAPTIVE POWER

The operation of Captive Power Plant was adversely affected on account of lower production in Tube and Steel Plants. The Company''s persistent efforts in obtaining the coal linkage to improve the viability are continuing and its petition with MERC to get the Banking Agreement is still awaiting decision.

SAFEGUARD DUTY

There has been considerable delay in implementation of Safeguard Duty despite the initiation of Safeguard investigation in April 2013. The Safeguards authority has now recommended Safeguard Duty of 25% subject to the approval of the Safeguards Board. In the absence of this protection, the domestic industry continued to suffer from increasing imports in a declining market.

DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. J.P. Sureka retires by rotation and being eligible, offers himself, for re-appointment.

Mr. Vinod Sethi, Independent Director resigned from the Board on February 11, 2014. The Board placed on record its sincere appreciation and gratitude for his guidance and contribution to the Company.

In compliance with the provisions of Section 149 read with Schedule IV of the Companies Act, 2013, the appointment of Mr. S. C. Gupta and Mr. K.K. Rai as Independent Director(s) is being placed before the Members in the forthcoming Annual General Meeting for their approval.

AUDITORS

M/s. P. G. Bhagwat and J. K. Shah & Co., Joint Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting (AGM) and being eligible have offered themselves for re-appointment.

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint M/s. P. G. Bhagwat and J. K. Shah & Co., as Joint Statutory Auditors of the Company from the conclusion of the forthcoming AGM for a period of three years until the conclusion of the AGM for the year ending March 31, 2017 subject to ratification of their appointment at every Annual General Meeting.

In respect of the Qualified Opinion and Emphasis of Matter by the Auditors on the Standalone and Consolidated Financial Statement, it has been explained in the Notes forming part of said Financial Statements which are self-explanatory and therefore do not call for any further comments.

COST AUDITORS

The Central Government had approved appointment of the following Cost Auditors for Financial Year 2013-14:

(i) M/s. Dhananjay V. Joshi & Associates and

(ii) M/s Parkhi Limaye & Co.

The Cost Audit Report for the year 2012-13 was due on September 30, 2013 and was filed with the Ministry of Corporate Affairs on September 27, 2013.

SUBSIDIARIES

As on date of this report, the Company has eleven 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.

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 & 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

As part of the Company''s overall strategy, throughout the year the Company remained focused on developing value added products for all its market segments including Energy, OCTG, Bearing, Auto and Mining Sectors. R & D activities also focused on process cost reductions. 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 & outgo etc. as required under Section 217(1)(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 forming part of this Report are given in Annexure II to this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the 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, 2014 and of the Loss 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 May 28, 2014 Chairman


Mar 31, 2013

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, 2013

FINANCIAL HIGHLIGHTS

Rs. in Crore

Particulars Financial Year 2012-13 2011-12

Gross Sales 2513.02 2980.60

Profit / (Loss) before Finance Charges, Depreciation, Amortization &Tax(EBIDTA) 171.51 265.47

Cash Profit (45.00) 107.08

Gross Profit 18.85 144.68

Profit / (Loss) Before Tax (140.63) 28.66

Taxation (40.92) 0.07

Net Profit / (Loss) (99.71) 28.59

Add : Balance brought forward from Previous Year 24.73 58.91

Balance available for Appropriation (74.98) 87.50

Appropriations

Dividend 10.99

Tax on Dividend 1.78

General Reserve 50.00

Balance carried to Balance Sheet (74.98) 24.73

DIVIDEND

Your Directors are unable to recommend a dividend for the year ended on March 31, 2013, in absence of adequate profits.

OPERATIONS

As a result of adverse market conditions, particularly on the domestic front, volumes dropped significantly both in Tube as well as Steel. In turn, lower volumes led to higher fixed costs per ton, resulting in a further erosion of margin.

During the year the Company''s focus was on containing its losses by initiating a number of cost reduction measures at its plants with a special emphasis on improving yields, reducing input costs, and reducing the PQF mill process cost.

MARKET

Faced with an uncertain economic situation, both domestically as well as internationally, a volatile domestic currency, and steep inflation, 2012-13 was a very difficult year for the Company. The recessionary international environment, a slow domestic market, coupled with large imports from China put tremendous downward pressure on margins as well as volumes. As a result, domestic Steel & Tube sales fell by 24% and exports fell by 22%.

FINANCE

The Company continues to closely monitor its forex exposure despite which the extreme volatility resulted in a loss of Rs. 63.85 Crore. This is largely offset by savings on interest cost on total forex borrowings of Rs. 1121 Crore.

Due to increased borrowings and higher interest rates the finance costs went up steeply.

CAPTIVE POWER

The Captive Power Plant commissioned during the year is operating satisfactorily. However, the expected reduction in power cost has not been fully realised because of -

(a) non availability of coal linkage.

(b) the denial of banking facilities by MSEDCL, despite valid agreement for Banking with MSEDCL.

SAFEGUARD DUTY

As repeatedly pointed out in the Chairman''s communication to the shareholders, the Company has undergone immense suffering because of the cheap & unabated imports from China and other countries. Imports have increased dramatically during last three years resulting in serious injury to me domestic Seamless Tube Industry in the form of declining profitability, increase in idle capacity, drop in domestic market share, and an increase in inventory levels.

Recognising the serious injury to the domestic industry the Director General of Safeguards has already proceeded with Safeguard investigation.

DIRECTORS

Mr. A. K. Jain, Director of the Company, expired on April 12, 2013. The Board of Directors express grief on his sad demise.

Mr. Nirmal Chandra, Whole-Time Director designated as President (Project & Product Development) ceased to be Director of the Company w.e.f. November 30, 2012 on completion of his term of office.

IDBI Bank Limited has withdrawn the nomination of Mr. V. Gourishankar from the Board and instead appointed Mr. Suresh Khatanhar as its Nominee Director, w. e. f June 6, 2012.

The Board places on record its sincere appreciation of the services rendered by Mr. A. K. Jain, Mr. Nirmal Chandra and Mr. V. Gourishankar during their respective association with the Company.

Mr. O. P. Kakkar was appointed as an Additional Director of the Company on November 8, 2012. He holds office up to the date of the ensuing Annual General Meeting (AGM) of the

Company and is eligible for appointment. Members'' approval has been sought in the Notice convening AGM for his appointment as a Director of the Company liable to retire by rotation.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. S. C. Gupta and Mr. Rajiv Goel retire by rotation and being eligible, offers themselves, for re-appointment.

AUDITORS

M/s. P. G. Bhagwat and J. K. Shah & Co., Joint Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment.

In respect of the Emphasis of Matter by the Auditors on the Standalone and Consolidated Financial Statement, it has been explained in the Notes forming part of said Financial Statements which are self-explanatory and therefore do not call for any further comments.

COST AUDITORS

The Central Government had approved appointment of the following Cost Auditors for Financial Year 2012-13 :

(i) M/s. Dhananjay V. Joshi & Associates and

(ii) M/s Parkhi Limaye & Co.

The Cost Audit Report for the year 2011-12 was due on January 31, 2013 and was filed with the Ministry of Corporate Affairs on December 31, 2012.

SUBSIDIARIES

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.

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 & 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

As part of the Company''s overall strategy, throughout the year the Company remained focused on developing value added products for all its market segments including Energy, OCTG, Bearing, Auto and Mining Sectors. R & D activities also focused on process cost reductions. 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 & 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 (2 A) of the Companies Act, 1956 forming part of this Report are given in Annexure II - to this Report.

DIRECTORS'' RESPONSD3ILITY STATEMENT

Pursuant to the 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, 2013 and of the Loss 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

May 28, 2013 Chairman


Mar 31, 2012

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)

Financial Year 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

Appropriations

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

DIVIDEND

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.

OPERATIONS

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.

MARKET

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.

FINANCE

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.

POWER PROJECT

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 still awaited.

DIRECTORS

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 re-appointment.

AUDITORS

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.

COST AUDITORS

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 27,2011.

SUBSIDIARIES

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.

FIXED DEPOSITS

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 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 teamwork.

For and on behalf of the Board of Directors

Pune S C Gupta

May 28, 2012 Chairman


Mar 31, 2011

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


Mar 31, 2010

The Directors have pleasure in presenting their Annual Report and Audited Accounts for the year ended March 31, 2010.

FINANCIAL HIGHLIGHTS (Rs. in Crore)

Financial Year Particulars 2009 - 10 2008- 09

Gross Sales 1922.33 2324.14

Profit before Finance Charges, 217.81 251.21

Depreciation, Amortization & Tax (EBIDTA)

Gross Profit 82.71 112.93

Profit Before Tax 91.23 55.98

Taxation 16.62 (0.25)

Net Profit 74.61 56.23

Add : Balance brought forward 47.30 58.21 from previous year

Balance available for Appropriation 121.91 114.44

Appropriations

Dividend 14.65 14.65

Tax on Dividend 2.43 2.49

General Reserve 50.00 50.00 Balance carried to Balance Sheet 54.83 47.30

DIVIDEND

The Board has recommended a Dividend of Re1.00 per Equity Share of Rs. 5/- each (20 % of face value) for the financial year ended March 31, 2010 and is subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

OPERATIONS

During the first half of FY 2009-10, as a result of subdued demand, the steel plant as well as the tube plants operated at below optimal capacity. However, in the second half of the year, following market recovery in the automotive sector, particularly within the domestic markets, both steel as well as tube volumes improved.

While operations at Structo Hydraulics AB, continued to bear the brunt of the slowdown in Europe, aggressive cost reduction measures started yielding results during the second half and as a result, the cash break even level of Structo Hydraulics AB, has significantly reduced.

On May 8, 2010 ISMT commenced commercial production of its Tube expansion project at Baramati. At the same time, incremental steel making capacity at the steel plant in Jejuri also started commercial production on 27th September, 2010.

The 40 MW captive power project at Chandrapur district in Maharashtra is at an advance stage of completion. Key approvals, including the Environmental Clearance is already in place and the majority of equipment has already arrived at the project site. We expect the project to be operational by end of this financial year.

MARKET

Due to the global recession exports suffered severely in the first half of the year. However, during the second half of the year the drop in export volumes was partially offset by a demand recovery in the domestic markets. We continued to focus our efforts on developing new customers and new products both in the domestic as well as international markets with significant success on this front. Steel sales increased 34% as a result of increased demand in the automotive and bearing sectors within India.

FINANCE

On the accounting front, the Company continued to exercise its option under the Accounting Standard (AS 11) to recognize the valuation difference on long-term monetary items arising out of changes in Foreign Exchange rates. As a result, the favorable rupee movement against the US Dollar during the year helped company recover most of its notional loses on account of mark to market of long term liabilities; and the balance in the ‘Foreign currency translation difference account’ now stands reduced at Rs. 5 Crore. With respect to its term loans and working capital borrowings, the Company benefited from lower LIBOR rates prevailing during the year.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr S C Gupta and Mr Rajiv Goel retire by rotation and being eligible offer themselves for re-appointment.

Mr K K Rai was appointed as an Additional Director of the Company on July 29, 2010. He holds office up to the date of the ensuing Annual General Meeting (AGM) of the Company. Members approval has been sought in the notice convening AGM for his appointment as a Director of the Company liable to retire by rotation.

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 has offered themselves for re-appointment.

SUBSIDIARIES

As on date of this report, the company has seven subsidiary companies. The Company has applied to the Government of India for seeking exemption u/s 212 (8) of the Companies Act, 1956 from attaching the Audited Accounts, Directors’ Report and Auditor’s Report of these 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 Companys Auditors on compliance, forming part of the Directors Report is attached hereto.

RESEARCH & DEVELOPMENT

As part of ISMT’s overall strategy, throughout the year 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.

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 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, 2010 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

September 28, 2010 Chairman

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