Click it and Unblock the Notifications
Directors Report of ISMT Ltd.
Mar 31, 2023
The Directors are pleased to present the 25th Annual Report together with the Audited Financial Statements for the year ended March 31,2023 of ISMT Limited (âCompanyâ). Below is the state of the Companyâs affairs during FY2022-23:
Financial Summary (Standalone)
|
Rs. in Crore |
||
|
Particulars |
2022-23 |
2021-22 |
|
Total Income |
2,581.70 |
2,170.66 |
|
Profit before tax |
157.31 |
2,500.05* |
|
Tax Expenses |
60.76 |
142.66 |
|
Profit for the year |
96.55 |
2,357.39* |
|
Other Comprehensive Income |
2.48 |
(5.86) |
|
Total Comprehensive Income |
99.03 |
2,351.53 |
⢠Including exceptional income of Rs. 2,494.10 Crore, mainly due to write back of the outstanding principle debt and unpaid interest to lenders in view of the onetime settlement of the entire outstanding debt of the Company.
Directors do not propose any dividend for the year ended March 31, 2023, in order to conserve resources.
Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted the Dividend Distribution Policy which is available on the website of the Company: www.ismt.co.in
No amount is proposed to be transferred to Reserves. COMPANY PERFORMANCE
The Company achieved Net Sales of Rs. 2,533.53 Crores as compared to Rs. 2,123.41 Crores in the previous year.
Profit before Tax for the year under review stood at Rs. 157.31 Crores as compared to Rs. 2,500.05 Crores for the previous year (this includes exceptional income of Rs. 2,494.10 Crore, mainly due to write back of the outstanding principle debt and unpaid interest to lenders in view of the onetime settlement of the entire outstanding debt of the Company).
During the year under review:
⢠The Company recorded a growth in Tube business with capacity utilization improvement at Nagar and Baramati Plant.
⢠Jejuri Steel Plant remained operational throughout the year & contributed both in volume and value growth of the Company.
The Company sold 1,57,143 MT of Tubes valued at Rs. 1,977 Crore during FY 2022-23 as compared to 1,39,057 MT of Tubes valued at Rs. 1,503 Crore in the previous financial year.
The demand for Tubes was good especially from OCTG & Projects throughout the year under review. The average realisation of Tube, which was at around Rs. 1,08,075 per MT in the previous year went upto around Rs 1,25,838 per MT during the year under review.
The Company sold 68,165 MT of Steel aggregating to Rs. 556 Crore during FY 2022-23 as compared to 87,214 MT Steel aggregating to Rs. 621 Crore for the previous financial year.
The demand for Steel from Audtomobile and Bearing Sectors was lower during the financial year under review.
Capacity utilization at Steel Plant dropped marginally from 68% to 67%. The Capacity utilization at Tube Plants gone up from 45% to 49%.
The Company has availed credit facilities from ICICI Bank Limited, Axis Bank Limited and Kotak Mahindra Bank Limited. The Company aims for optimization of interest rates by availing credit facilities at competitive rates and to effectively manage the working capital thereby reducing the interest expenses.
Captive Power Plant (CPP) continued to be inoperative throughout the year in absence of banking facility from Maharashtra State Electricity Distribution Company Ltd.
The Companyâs appeal against wrongful denial of banking facility is pending in Supreme Court.
Nevertheless, the Company had identified a buyer (viz. Omsairam Steels and Alloys Private Limited) for CPP and executed Business Transfer Agreement with the said buyer on December 9, 2022 for sale of CPP on a slump sale basis for Rs. 65.71 Crore. The Plant has been handed over to the buyer on February 27, 2023. SCHEME OF ARRANGEMENT - MERGER The Board at its meeting held on November 4, 2022 which was adjourned to November 5, 2022 has approved a draft Scheme of Arrangement and Merger between the Company (Transferor Company) and Kirloskar Ferrous Industries Limited (KFIL/ Transferee Company). Pursuant to the said Scheme and upon receipt of all the requisite approvals, 17 fully paid up equity shares of face value of Rs. 5/- each of KFIL will be allotted for every 100 fully paid up equity shares of face value of Rs. 5/- each of the Company.
As on date, the Company is awaiting approval of the stock exchanges to the aforesaid draft Scheme.
a. Changes in Directors & Key Managerial Personnel (KMP)
Mr. Nishikant Ektare, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
Changes in Directors during FY2022-23
The shareholders of the Company at the Extra-ordinary General Meeting (EGM) held on June 9, 2022 regularized the appointment of Mr. Rahul Kirloskar, Mr. Ravindranath Gumaste, Mr. Nishikant Ektare, Dr. Shalini Sarin and Mr. S Venkataramani as Directors of the Company.
In the EGM, the shareholders approved the appointment of Mr. Nishikant Ektare as Managing Director of the Company and Dr. Shalini Sarin and Mr. S Venkataramani were also appointed as Independent Directors of the Company.
The Board requires and possesses skills and expertise in the field of Management, Operations, Strategic Planning, Finance, Accounts, Legal, Corporate Restructuring, Administration, Sales & Marketing. Dr. Shalini Sarin brings the desired skills into the Board including but not limited to Management, Administration, Corporate Restructuring & Strategic Planning whereas Mr. S Venkataramani brings the desired skills into the Board including but not limited to Management, Strategic Planning, Finance, Accounts & Legal.
Upon expiry of tenure as Whole-time Director, which tenure was upto September 30, 2022, Mr. Rajiv Goel resigned as the Chief Financial Officer of the Company w.e.f. October 1, 2022.
Mr. R Poornalingam & Mr. Rajiv Goel resigned as Directors of the Company w.e.f. March 8, 2023 & March 18, 2023, respectively.
The Board placed on records its sincere appreciation and gratitude for services rendered by Mr. R Poornalingam & Mr. Rajiv Goel during their association with the Company.
Changes in KMP during FY2022-23
Mr. Suresh Patil was appointed as the Chief Financial Officer of the Company w.e.f. November 5, 2022. b. Statement on declarations by Independent Directors
Independent Directors have given declarations pursuant to Section 149(7) of the Companies Act, 2013 (Act) & Regulation 25(8) of the SEBI (LODR), Regulations 2015 (Listing Regulations), stating that they meet the criteria of independence. 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 Board is assured that Independent Directors possess adequate proficiency, experience, expertise and integrity. The Company has laid down a Code for the Board of Directors and Senior Management of the Company (Code). The Code is available on website of the Company: www. ismt.co.in.
Board Members and Senior Management Personnelâs of the Company have affirmed compliance with the Code.
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.
d. Nomination and Remuneration Policy
The Board has adopted a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel, their remuneration and criteria. The policy is available on website of the Company: viz. www.ismt.co.in
e. Number of meetings of the Board
Six meetings of the Board were held during the year under review. Detailed information is given in the Corporate Governance report as enclosed herewith.
f. Composition of Audit and other Committees of the Board
Details of composition of committees of the Board, viz. Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee etc. are provided in the Report on Corporate Governance as enclosed herewith.
LOANS, GUARANTEES & INVESTMENTS
Particulars of Loans, Guarantees & Investments covered under Section 186 of the Act have been mentioned in Notes to the Financial Statements of the Company for FY 2022-23 and forms part of the Annual report for FY 2022-23.
TRANSACTIONS WITH RELATED PARTIES During the year under review, all related party transactions entered into by the Company were approved by the Audit Committee and were at armâs length and in the ordinary course of business. Pursuant to Section 134 of the Act read with Rules thereof, details of material transaction with related party in Form AOC-2 is enclosed herewith as Annexure A.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board is available on website of the Company: www.ismt.co.in RESEARCH & DEVELOPMENT
Details of R&D activities undertaken are enumerated in Annexure B as enclosed herewith.
The Company has constituted a Risk Management Committee consisting of Mr. Ravindranath Gumaste as Chairman and Dr. Shalini Sarin and Mr. S Venkataramani as Members to address the 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 the aforesaid risks.
INTERNAL FINANCIAL CONTROLS The Company has deployed controls including defined code of conduct, whistle blower policy, management review and MIS mechanisms, internal audit mechanism. The process level controls have been instituted through the Company policies and procedures and continuous monitoring of efficiency in operations. There is regular management oversight of the internal controls environment at the Company. The Audit Committee along-with the Management oversees reports of the internal audit and reviews implementation, on a periodic basis.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY The Board has adopted the Vigil Mechanism/ Whistle Blower Policy to deal with instances of fraud, unethical behaviour, mismanagement, leakage of Unpublished Price Sensitive Information etc. The Policy has provided a mechanism for employees and other persons dealing with the Company to report any such instance to the Chairman of the Audit Committee. No case was filed during the year. The Policy has been uploaded on website of the Company: www.ismt.co.in.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place a Policy for Prevention of Sexual Harassment at workplace which, inter alia, provides a mechanism for the resolution, settlements or prosecution of acts or instances of sexual harassment at workplace and to ensure that all employees are treated with respect and dignity. There was no complaint/ case filed/ pending with the Company during the year under review. The Company has complied with the provisions relating to the constitution of Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ANNUAL RETURNS FILED WITH THE MINISTRY OF CORPORATE AFFAIRS
Pursuant to Section 134 read with Section 92(3) of the Act, as amended, copies of the annual returns filed with the Ministry of Corporate Affairs (MCA) are available on website of the Company: www.ismt.co.in and Annual Return for FY 2022-23 will be uploaded on the Companyâs website in due course. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO
Details on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are annexed herewith as Annexure B.
CORPORATE SOCIAL RESPONSIBILITY
The Company has always believed in working for the betterment and upliftment of the society and that Corporate Social Responsibility (CSR) has been practiced over the years in the Kirloskar Group. Focus areas under CSR includes Education, Health and Hygiene, Environment and Rural Development. During the period under review, the Company has carried out CSR activities through an implementing agency. The composition of CSR Committee and the Report on CSR is annexed herewith as Annexure C.
INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
Information relating to remuneration and other details as required pursuant to Rule 5 of the Companies (appointment and remuneration of managerial personnel) Rules, 2014 is annexed herewith as Annexure D.
The Members of the Company at Annual General Meeting (AGM) held on 29 July 2022 appointed P G Bhagwat LLP, Chartered Accountants as Statutory Auditors of the Company to hold office for term of five years from conclusion of 24th AGM until the conclusion of 29th AGM of the Company. The Statutory Auditors have provided a certificate confirming that requirements prescribed under provisions of Section 141 of the Act have been fulfilled.
The reports given by the Statutory Auditors on standalone and consolidated financial statements of the Company forms part of the Annual report for FY 2022-23.
There are no qualification/ reservation/ adverse remark in the aforesaid reports given by the Statutory Auditors.
Pursuant to Section 204 of the Act and rules thereof, M/s. KPRC & Associates, Company Secretaries have been appointed to conduct the Secretarial Audit of the Company for FY2022-23. The Secretarial Audit Report issued by them is annexed herewith as Annexure E.
In respect of the Audit observations, following are the comments of the Board:
a. Shareholding of promoter group not in demat form:
During FY2022-23, the concerned promoter group entity has Dematted its entire shareholding in the Company.
b. Non-filing of Annual Performance Report:
Opinion will be taken on its applicability and accordingly, corrective steps, if any, will be taken.
c. Non-filing of e-form CHG-4 - Charge satisfaction:
In view of the technical issue in filing e-form CHG-4 on MCA website, the Company has requested ROC to take on record the charge satisfaction through back office mechanism.
d. Non receipt of prior approval of the Audit Committee:
Prior approval was, inadvertently, not obtained for reimbursement of expenses to a related party of Rs. 4 Lakh which was subsequently ratified by the Audit Committee.
Pursuant to Section 148 of the Act & rules thereof, the Board appointed M/s. Dhananjay V. Joshi & Associates & M/s. Parkhi Limaye & Co, Cost Accountants as the Cost Auditors to conduct audit of cost records maintained by the Company for FY2022-23.
Payment of remuneration for FY2022-23 to the aforesaid Cost Auditors is subject to ratification by members at the ensuing AGM.
Cost Audit Report for FY2021-22 was filed within prescribed time limit as per the Companies (Cost Record and Audit Rules), 2014.
MANAGEMENT DISCUSSION & ANALYSIS
Pursuant to Regulation 34(3) of the Listing Regulations, the Report on Management Discussion and Analysis forms part of the Annual Report of the Company for FY2022-23. CORPORATE GOVERNANCE REPORT The Company conforms to norms of the corporate governance as envisaged in the Listing Agreement executed with the stock exchanges. Pursuant to Regulation 34(3) of the Listing Regulations, the Report on Corporate Governance forms part of th Annual Report of the Company for FY2022-23.
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.
A certificate from the Practicing Company Secretary, regarding compliance with conditions of corporate governance, as required pursuant to the Listing Regulations, has been annexed to the Report on Corporate Governance.
BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility & Sustainability Report forms part of the Annual Report for FY 2022-23.
DIRECTORSâ RESPONSIBILITY STATEMENT Pursuant to Section 134 of the Act, in respect of Directorâs Responsibility Statement, the Directors state that:
a) in the preparation of annual accounts, the applicable accounting standards have been followed and there were no material departures;
b) accounting policies as mentioned in the Notes forming part of the Financial Statements have been selected and applied consistently. Further, judgments & estimates made are reasonable & prudent so as to give a true & fair view of the state of affairs of the Company as at March 31, 2023 & of the Profits of the Company for the year ended on that date;
c) proper and sufficient care has been taken 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;
d) the annual financial statements have been prepared on a going concern basis;
e) proper internal financial controls were laid down & such financial controls were adequate & operating effectively; &
f) proper systems were in place to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.
In relation to an ongoing MCA investigation initiated against the Company, under Section 212 of the Act, a Petition has been filed by MCA in NCLT, Mumbai against certain past Key Managerial Personnels of the Company, inter alia, alleging misappropriation of resources of the Company and seeking freezing of their assets. The Company has been made a party to the aforesaid Petition as a Proforma Respondent. However, the Company has applied to the NCLT for removal of its name from the Petition as there is no prayer against the Company in the said Petition.
The Petition is still being heard before the NCLT. INVESTMENT IN SOLAR AND WIND MILLS With an intent to reduce the power cost, the Company has decided to make investments, upto Rs. 305 Crore, for setting up of solar power plant for captive consumption. For this, commissioning of 70 MW solar power plant, in phased manner, is in process.
Similarly, consent has been accorded for investment by the
Company, upto Rs. 50 Crore, for acquiring wind-mills, upto 35
MW, for captive consumption, in a phased manner.
During the year under review, the Company has repaid the
unsecured loan so availed from KFIL of Rs. 194 Crore.
As on date, the Company has ten direct & indirect subsidiaries. In accordance with Section 129(3) of the Act, statement containing salient features of the financial statements of the subsidiaries in Form AOC-1 & report on performance & financial position of each subsidiary is provided in the financial statements for FY2022-23. The Company has framed the Policy for determining Material Subsidiaries which is available on: www.ismt.co.in
The Board has in principle agreed to take steps for closure of non-operational subsidiaries viz. Indian Seamless Inc., USA, ISMT Europe AB, Sweden and PT ISMT Resources, Indonesia. The Company has also initiated review of operations & future opportunities of subsidiary viz. Structo Hydraulics AB, Sweden. During the period under review, no company has become or ceased to be a Subsidiary, Joint Venture or Associate Company. GENERAL
During the year under review-
1. The Company was required to maintain cost records as specified u/S 148(1) of the Act & accordingly such accounts/ records are prepared & maintained.
2. The Company has complied with the applicable secretarial standards.
3. The Company has not accepted deposits from the public.
4. There has been no change in nature of business of the Company.
5. To the best of our knowledge, no significant or material orders were passed by the Regulators, Courts or Tribunals which impact the going concern status & the Companyâs operations in future.
6. No case of fraud by any officer or employee of the Company has been reported by the Auditors of the Company either to the Audit Committee or the Board pursuant to Section 143(12) of the Act.
7. Neither any application has been made nor has any proceeding been pending against the Company under the Insolvency and Bankruptcy Code, 2016.
8. There was no incidence of settlement in respect of any loan availed from any bank or financial institution.
There is no material change or commitment occurring after the end of the financial year, which may affect the financial position of the Company.
Statements in this report, particularly those which relate to the Management Discussion and Analysis, describing the Companyâs objectives, projections, estimates and expectations may constitute âforward looking statementsâ within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied.
The Directors wish to place on record their appreciation towards the contribution of all employees of the Company and their gratitude to the Companyâs valued customers, bankers, vendors and members for their continued support and confidence in the Company.
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.
|
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.
Directors do not propose any dividend for the year ended March 31, 2022, in order to conserve resources.
No amount is proposed to be transferred to Reserves.
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.
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.
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 Companyâs 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 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.
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 shareholdersâ approval was given for the aforesaid issue.
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 (CPP) continued to be inoperative throughout the year in absence of banking facility from Maharashtra State Electricity Distribution Company Ltd. (MSEDCL).
The Companyâs 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.
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.
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.
Details of R&D activities undertaken are enumerated in Annexure âAâ 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 Governanceâ 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 âAâ.
DIRECTORSâ 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
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.
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.
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 subsidiaryâs 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 directorâs 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 âBâ.
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 âCâ.
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.
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 armâs 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 Companyâs 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.
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 Companyâs 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 (âActâ) 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 Companyâs 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 âBâ 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 Governanceâ 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 âAâ.
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 âBâ.
DIRECTORSâ 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 directorâs 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 âCâ.
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 âDâ.
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 armâs 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 & Companyâs 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 directorâs 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 âCâ.
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 âDâ.
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 armâs 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 Companyâs 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 Companyâs 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
(ÂActÂ) 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 CompanyÂs
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
CompanyÂs Auditors on compliance, is forming part of this Report.
DIRECTORSÂ 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 directorÂs
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
CompanyÂs 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 armÂs 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 CompanyÂs 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
CompanyÂs 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 ÃForeign currency translation
difference accountà 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, Directorsà Report and AuditorÃs Report of these
subsidiary companies. The Annual Accounts of these subsidiary companies
and other relevant information shall be made available for inspection
at the CompanyÃs 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 ISMTÃs 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
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on ISMT Ltd.
-
ISMT Ltd. Tools
- Bulk Deals
- Block Deals
-
ISMT Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
- NSE Price History
-
ISMT Ltd. Key Financial Ratios
- Ratios
-
ISMT Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
ISMT Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
ISMT Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
ISMT Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
-
Stocks To Buy Today, Dec 19: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Stocks To Buy Today, Dec 18: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday -
Stocks To Buy Today, Dec 17: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
Stocks To Buy Today, Dec 16: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
India Stock Market Weekly Review: Nifty and Sensex Fall as Caution Spreads -
Stocks To Buy Today, Dec 15: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday
-
Stocks To Buy Today, Dec 12: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Market Outlook 2026: Kotak Securities Sees Nifty 50 at 30,000; THESE 4 Sectors Lead Rally, Gold To Stay Strong -
Stocks To Buy Today, Dec 10: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
D-Street Bleeds For 2nd Day! Sensex Slumps 678 Pts; Nifty Cracks 25,800; Why Stock Market Is Falling Today? -
Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
-
Block for 8 hours
-
Block for 12 hours
-
Block for 24 hours
-
Don't block
Sign in with Google- Male
- Female
- Others
- Under 18
- 18 to 25
- 26 to 35
- 36 to 45
- 45 to 55
- 55+