Mar 31, 2011
Dear Shareholders,
The Directors take pleasure in presenting the 15th Annual Report on
the business and operations of your Company together with the Audited
Accounts for the year ended 31st March, 2011.
FINANCIAL AND PERFORMANCE REVIEW
(Rs. in Lacs)
Particulars 2010-11 2009-10
Sales (Net of Excise Duty) 84,988.46 69,185.69
Other Income 156.44 168.04
Total Income 85,144.90 69,353.73
Less:Total Expenses (80,574.39) (65,685.03)
Profit before Depreciation,
Interest & Tax 4,570.51 3,668.70
Less: Interest (2,194.80) (2,210.54)
Depreciation (885.57) (876.20)
Profit before Tax 1,490.14 581.96
Less: Provision for Current Tax (310.24) (103.26)
Provision for Deferred Tax (452.10) (163.84)
Deferred MAT credit
entitlement 296.99 98.90
Profit after Tax 1,024.79 413.76
Less: Income Tax for earlier
years (8.60) (42.09)
Add : Profit brought forward
from Previous year 3,029.64 2,760.35
Profit available for
appropriation 4,045.83 3,132.02
Proposed Dividend on equity
shares (177.98) (87.80)
Corporate Tax on Dividend (28.87) (14.58)
Balance carried to Balance Sheet 3,838.98 3,029.64
During the financial year under review, the gross turnover of your
Company increased from ? 70730.28 Lacs to ? 87980.46 Lacs, registering
a growth of about 23% compared to previous financial year 2009-10 while
Profit Before Tax (PBT) increased by 156% to Rs. 1490.14 lacs (Previous
year Rs. 581.96 Lacs) and Profit After Tax (PAT) increased by 173% to
Rs. 1016.19 Lacs (Previous year Rs. 413.76 Lacs). Earnings per Share
for the year is ? 2.89 compared to ? 1.06 for the previous year. Thus,
your Company delivers a healthy growth in the sales and profitability.
DIVIDEND
The Company's dividend policy is based on twin objectives to
appropriately reward the Shareholders and at the same time to keep
enough capital to fuel growth needs., Accordingly, your directors
recommend a final dividend of 2.5% on Equity shares of Rs. 10/-each i.e
Rs. 0.25 per equity share for the year ended 2010-11 .The proposed
dividend, if approved, at the ensuing Annual General Meeting would
result in appropriation of Rs. 177.98 Lacs (in addition to the
Corporate Dividend Tax of Rs. 28.87 Lacs) out of the profits.
DIRECTORS
In accordance with the requirements of the Companies Act, 1956, and
Articles of Association of the Company Mr. Vijay Kumar Jain, Director
of your Company, will retire by rotation at the ensuing Annual General
Meeting and, being eligible, offers himself for reappointment. The
Board recommends his re-appointment as Director of your Company.
INCREASE OF AUTHORISED SHARE CAPITAL AND ISSUE OF GLOBAL DEPOSITORY
RECEIPTS (GDRs) OF THE COMPANY
The authorized share capital of your Company was increased from Rs. 60
crores to Rs. 100 crores in order to facilitate the issue of Global
Depository Receipts. In April, 2011, the company has raised US$
11,999,952 through this issue. The Company's GDRs are listed on the
Luxembourg Stock Exchange.
STATUTORY DISCLOSURE
None of the Directors of the Company are disqualified as per the
provisions of Section 274(1) (g) of the Companies Act, 1956. All the
Directors have made the necessary disclosures as required under various
provisions of the Companies Act, 1956 and Clause 49 of the Listing
Agreement.
AUDITORS & AUDITORS' REPORT
M/s. S. Jaykishan, Chartered Accountants, the Statutory Auditors of the
Company are retiring at the conclusion of the forthcoming Annual
General Meeting and being eligible, offer themselves for
re-appointment. Certificate from the Auditors has been obtained to the
effect that their re-appointment, if made, would be within the limits
prescribed under section 224(1 B) of the Companies Act, 1956.
The Auditors' Report and the notes forming part of the accounts are
self explanatory and hence does not require to be elucidated further.
FIXED DEPOSIT
The Company did not invite/accept any fixed deposit from the public
during the year under review and as such there are no outstanding
deposits in terms of the Companies (Acceptance of Deposits) Rules,
1975.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to section 217 (2AA) of the Companies Act, 1956, the Board of
Directors of the Company hereby state and confirm that:
a) in preparation of statement of accounts for the financial year under
review, the applicable Accounting Standards have been followed and in
case of departures there from, proper explanations relating thereto
have been given in the notes forming part thereof.
b) Accounting Policies selected have been applied consistently and
judgments and estimates made are reasonable and prudent and they give
true and fair state of affairs of the Company at the end of the
financial year under review and of the profit of the Company for that
period.
c) Proper and sufficient care has been taken 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.
d) Annual Accounts have been prepared on a going concern basis.
COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES, 1988
Information pursuant to Section 217(1 )(e) of the Companies Act, 1956
read with Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988 regarding conservation of energy, technology
absorption and foreign exchange earnings and outgo is given in Annexure
'A'.
ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation of
the financial institutions and consortium of banks led by Bank of India
and Company's customers and investors for their continued support
during the year.
Your Directors also wish to place on record their appreciation for the
dedication and contribution made by employees at all levels and look
forward to their support in future as well.
For and on behalf of the Board of Directors
Place :Kolkata Vimal Kumar Patni
Date: 21st July,2011 Chairman
Mar 31, 2010
The Directors take pleasure in presenting the 14th Annual Report
together with the Audited Accounts for the year ended 31st March, 2010.
FINANCIAL AND PERFORMANCE REVIEW (Rs. in Lacs)
Particulars 2009-10 2008-09
Sales (Net of Excise Duty) 69185.69 59357.68
Other Income 168.04 269.70
Total income 69353.73 59627.38
Less: Total Expenses (65685.03) (56554.94)
Profit before Depreciation,
interests Tax 3668.70 3072.44
Less: Interest (2210.54) (1337.40)
Depreciation (876.20) (716.74)
Profit before Tax 581.96 1018.30
Less: Provision for Current Tax (103.26) (120.22)
Provision for Fringe Benefit Tax - (7.22)
Provision for Deferred Tax (163.84) (354.97)
Deferred MAT credit entitlement 98.90 115.37
Profit after Tax 413.76 651.26
Less: Income Tax for
earlier years (42.09) (30.00)
Add : Profit brought forward
from Previous year 2760.35 2241.81
Profit available for
appropriation 3132.02 2863.07
Proposed Dividend on
equity shares (87.80) (87.80)
Corporate Tax on Dividend (14.58) (14.92)
Balance carried to Balance Sheet 3029.64 2760.35
During the year under review, the gross turnover of your Company
increased from Rs. 61678.11 Lacs to Rs. 70730.28 Lacs, yielding a
growth of about 15%. Profit before Tax (PBT) and Profit after Tax (PAT)
were Rs. 581.96 Lacs and Rs. 413.76 Lacs respectively. After witnessing
a sharpest downturn in global economy in the previous FY 2008-09, the
FY 2009-10 was an extremely challenging year for your Company.
INDUSTRY STRUCTURE, DEVELOPMENTS, OPPORTUNITIES, THREATS, RISKS AND
CONCERNS AND FUTURE OUTLOOK
Presently, India is 5th largest producer of steel in the world and
recorded a growth of 2.7% as compared to 2008. India also emerged as
the largest sponge iron producing country and important producer of Pig
Iron.
Your Company is in the manufacturing of Sponge Iron, Pig Iron, MS
Billets, TMT Bars, Ferro Alloys and also in generation of Power. Thus,
serving a large section of structural & infrastructure industries with
slogan From Structure to Infrastructure. "Vikash" brand TMT bars are
supplied to leading construction companies and turnkey projects. Your
Directors are happy to inform that your Company has received an
allotment for Moira Madhujore North & South non coking coal block in
the state of West Bengal from Ministry of Coal, Govt, of India, in a
joint venture with other reputed companies. This Joint Venture is being
set up through a separate company titled Moira Madhujore Coal Limited
(MMCL), which has been incorporated with the Registrar of Companies,
West Bengal. Your Companys share in this Joint Venture is 23.32%.
Therefore, your Company is well-poised to take advantage of the growth
in the Iron and Steel sector.
As the Indian Steel Industry integrates more and more with global
industry, it will have to tackle some key issues for retaining its
competitive edge and increasing its international presence. Some of the
prominent risks faced by the Company are of Human Resource, Natural
Calamities, Competitive environment, Market condition, etc.
The downturn in the global economy is set to recover at a faster rate
than expected earlier though at varied pace across geographies and
economies. Buoyed by expected strong performance from the consuming
segments like automobile, construction, infrastructure, etc it is
expected that the situation will remain favourable for the Company.
DIVIDEND
The Companys dividend policy is based on twin objectives to
appropriately reward the shareholders and at the same time to keep
enough capital to fuel growth needs. Accordingly, your Directors
recommend a final dividend of Re. 0.25 per share on 3,51,20,100 fully
paid equity shares of Rs. 10/- each for the year ended 2009-10. The
proposed dividend, if approved, at the ensuing Annual General Meeting
would result in appropriation of Rs. 87.80 Lacs (in addition to the
Corporate Dividend Tax of Rs. 14.58 Lacs) out of the profits.
The Register of Members and share transfer books shall remain closed
from 15th September, 2010 to 22nd September, 2010 (both days inclusive)
for the purpose of Annual General Meeting and payment of dividend.
DIRECTORS
In accordance with the requirements of the Companies Act, 1956, and
Articles of Association of the Company Mr. Vimal Kumar Patni, Director
of your Company, will retire by rotation at the ensuing Annual General
Meeting and, being eligible, offers himself for re-appointment. The
Board recommends his re-appointment as Director of your Company.
STATUTORY DISCLOSURE
None of the Directors of the Company are disqualified as per the
provisions of Section 274(l)(g) of the Companies Act, 1956. All the
Directors have made the necessary disclosures as required under various
provisions of the Companies Act, 1956 and Clause 49 of the Listing
Agreement.
AUDITORS & AUDITORSREPORT
M/s. S. Jaykishan, Chartered Accountants, the Statutory Auditors of the
Company are retiring at the conclusion of the forthcoming Annual
General Meeting and being eligible, offer themselves for
re-appointment. Certificate from the auditors has been obtained to the
effect that their re-appointment, if made would be within the limits
prescribed under Section 224(1B) of the Companies Act, 1956.
The notes to the accounts referred to in the Auditors Report are self
explanatory, and therefore, do not call for any further comment.
The outstanding income tax amounting to Rs. 291.83 Lacs as at 31st
March, 2010 as observed by the Auditors at point no. (ix)(a) in
annexure to their report has hence been paid. Term Loan installment
with interest outstanding to Banks as at 31st March, 2010 as observed
by the Auditors at point no. (xi) is also been paid.
FIXED DEPOSIT
The Company did not invite/accept any fixed deposit from the public
during the year under review and as such there are no outstanding
deposits in terms of the Companies (Acceptance of Deposits) Rules,
1975.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of
Directors of the Company hereby confirm that:
a) in preparation of statement of accounts for the financial year under
review, the applicable Accounting Standards have been followed and in
case of departures therefrom, proper explanations relating thereto have
been given in the notes forming part thereof.
b) Accounting Policies selected have been applied consistently and
judgments and estimates made are reasonable and prudent as they give
true and fair state of affairs of the Company at the end of the
financial year under review and of the profit of the Company for that
period.
c) proper and sufficient care has been taken 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.
d) Annual Accounts have been prepared on a going concern basis.
COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORTOF BOARD OF
DIRECTORS) RULES, 1988
Information pursuant to Section 217(l)(e) of the Companies Act, 1956
read with Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988 regarding conservation of energy, technology
absorption and foreign exchange earnings and outgo is given in
AnnexureA.
CORPORATE GOVERNANCE/INTERNAL CONTROL SYSTEM
Your Company continues to be committed to good Corporate Governance
aligned with the good practices. Your Company is in compliance with the
standards set out by clause 49 of the Listing Agreement with the Stock
Exchanges. A detailed report on Corporate Governance compliance duly
certified by the Companys Statutory Auditors forms part of this report
as Annexure B.
Your Company has in place adequate systems of internal control
commensurate with its size and the nature of its operations. The
Company has an Audit Committee which actively reviews the adequacy and
effectiveness of Internal control systems and suggest improvements for
strengthening them from time to time.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
Your Company firmly believes in the immense potential of its human
resources in developing the organization and ensuring its success. The
Company endeavors to keep the employees motivation level high by
providing conducive work atmosphere and remunerating adequately. During
the year under review, Industrial Relations remained cordial.
During the year under review, no employee of your Company was in
receipt of remuneration in excess of the limits specified under the
provision of Section 217(2A) of the Companies Act, 1956 read with
Companies (Particulars of Employees) Rules, 1975.
SEGMENT WISE/PRODUCT WISE PERFORMANCE
Your Company is engaged mainly in the manufacturing and selling of Iron
and Steel products. Thus, the Company primarily operates in one
reportable segment i.e., Iron and Steel and all products manufactures
fall under this segment. The Company also generates power from its
captive power plant which is entirely consumed in its manufacturing
unit.
CAUTIONARY STATEMENT
Statements in this Directors Report & Management Discussion and
Analysis Report describing the Companys activities, projections about
the future, estimates, assumptions with regard to global economic
conditions and Government policies, etc. have been made in good faith
and may be "forward looking statements" within the meaning of
Place : Kolkata
Date :21st July, 2010
applicable securities laws and regulations. Many unforeseen factors may
come into play and affect the actual results which might differ from
those either expressed or implied. Market data was based on information
gathered from various published and unpublished sources and their
reliability and completeness cannot be assured.
ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation of
the financial institutions and consortium of banks led by Bank of India
and Companys customers and investors for their continued support
during the year.
Your Directors also wish to place on record their appreciation for the
dedication and contribution made by employees at all levels and look
forward to their support in future as well.
For and on behalf of the Board of Directors
Vimal Kumar Patni
Chairman