To the Members,
Your Directors have pleasure in presenting their 65th Annual Report together with theAudited Accounts of the Company for the financial year ended 31st March, 2012.
| ||2011 - 2012 ||2010 - 2011 |
| ||Rs. in Lakhs ||Rs. in Lakhs |
|FINANCIAL RESULTS || || |
|Total Revenue ||5,900.21 ||5,194.01 |
|EBITDA ||581.06 ||605.00 |
|Less : || || |
|Finance Costs ||135.82 ||106.18 |
|Depreciation ||180.87 ||190.91 |
|Tax for Earlier Year ||6.42 || |
|Profit after Tax (PAT) ||257.95 ||307.91 |
|Add : Opening Balance in Profit & Loss Account ||(2,758.58) ||(3,066.49) |
|Closing Balance ||(2,500.63) ||(2,758.58) |
During the year under review, the Total Revenue of the Company showed a significantgrowth of 14% from Rs. 5,194 Lakhs to Rs. 5,900 Lakhs. However, the ExportSales of the Company during the current year was Rs. 1,255 Lakhs as against Rs.1,438 Lakhs in the previous year, showing a decrease of 13%, which was because of lowdemand from the Overseas Customers.
There was a reduction in the PAT of the Company (which stood at 4.37%) as compared tothe last year and the same was due to an increase in the Finance Costs.
In view of the slowdown and the downtrend being witnessed in the Indian Economy too,the aforesaid Results and the Performance of the Company is considered to be quitesatisfactory.
The Current Years Profit has led to a further reduction in the Accumulated Lossesof the Company from Rs. 2,758 Lakhs to Rs. 2,500 Lakhs.
The Durgapur Unit continued to remain closed during the year.
In view of the Brought forward unabsorbed accumulated losses, the Directors expresstheir inability to recommend any dividend for the year under review.
The Board of Directors of your Company have obtained a written consent from thePreference Shareholder in terms of Section 106 of The Companies Act, 1956 for postponementof the date of redemption of 60,00,000, 10% Cumulative Redeemable Preference Shares of Rs.10/- each from 9th March, 2012 to 9th March, 2017.
The necessary Resolution seeking Equity Shareholders approval to the aforesaidpostponement forms part of the Notice of the ensuing Annual General Meeting of theCompany.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review, as stipulated inclause 49 of the Listing Agreements with the Stock Exchanges is appended below:-
The Company is engaged in the manufacturing of Alloy and Stainless Steel Castings withstringent quality requirements required in Turbines, Metal Shredding, Earth Moving andMining Equipment, Power Plants, Pumps, Valves, Compressors and other Heavy EngineeringIndustries. It is also engaged in the manufacturing of Material Handling Equipments ofvaried nature required in Mines, Cement Plants, Power Plants and Other General EngineeringSectors. The manufacturing units are located in Kolkata and Nagpur.
B. REVIEW OF OPERATIONS & FUTURE PROSPECTS
During the year under review, your Company took the following steps leading toefficiency in its operations:-
Development of Duplex Stainless Steel grade of 6 MT single piece casting weightprimarily required in Oil and Gas, Chemical Processing, Paper and Mining Industries.
Development of Valve Bodies weighing 6.6 MT and 3MT single piece.
Capability to pour 20 MT Liquid Metal at one time with the help of two ladles.
Completion of Axle Housing Developmental Work
Completion of SS410 Diaphragms (of 2 frame sizes) Developmental Work
Erection of new machine shop shed
Further, the Company during the year continued its constant objective of creation ofNew Products and Customers and improvements in quality of its Existing Products with fullcommitment.
The aforesaid developments have resulted in significant Material and ProductDevelopment which will enable the Company to continuously improve and enhance its marginsin the years to come.
The Future prospects of the Foundry Industry (of which we are a part) seems bright asit is extensively focusing on the development of Industries dealing in Gas, Turbine,Power, Pumps, Compressors, Valves and Earth Moving Equipments. These Industries arealready having good order bookings and expansion plans and have immense scope of growth inthe next 10-15 years thereby creating a demand for the Foundry Products in substantialvolumes.
The Overall Foundry Industry would benefit from above as there are limited players inthis Industry resulting in the creation of a big gap between demand and supply.
C. OPPORTUNITIES AND THREATS, RISKS AND CONCERNS
The Company sees opportunity in the development and supply of high contribution items.
Further, good opportunity exists for catering new export markets which needs to beaggressively tapped. For taking advantage of the aforesaid opportunities, the Company iscontinuously carrying on improvement in its infrastructure and other facilities andworkings which will enable it to yield better results in the near future. However, yourCompany is exposed to certain risks and areas of concern for it are:-
(i) Demand for Companys highly sophisticated steel casting products in fewcritical segments only.
(ii) Stagnancy in the Market Demand due to General Economic conditions.
(iii) Dependence on Few Customers in the Export Market. Any change in theirrequirements will have a direct impact on the Exports Volume of the Company.
(iv) Currency Fluctuations in adverse direction.
(v) Fluctuations in raw material prices in fixed price orders which will have aconsequential effect on the bottomline.
(vi) Pressure on Pricing.
(vii) Increase in Prices of Power and various other Manufacturing Expenses.
D. INTERNAL CONTROL SYSTEM
The Company has internal control procedures commensurate with the nature of itsbusiness and size of its operations. The objective of these procedures are to ensureefficient use and protection of the Companys resources, accuracy in financialreports and due compliance of statutes and Company policies and procedures.
The Internal Audit function is conducted by a Senior Management Team of the Company.The reports of such audit, the progress in implementation of recommendations contained insuch reports and the adequacy of internal control systems are reviewed by the AuditCommittee of the Board in its periodical meetings.
E. HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The Industrial Relations were cordial during the year under review. At all levels,employees of the Company are fully committed to the growth of the Company and there was noloss of work due to any industrial relation problem during the year.
The principles of good Corporate Governance through professionalism, accountability,transparency, trusteeship and control have always been followed by your Company and it hascomplied with all the applicable provisions of Corporate Governance as per Clause 49 ofthe Listing Agreements with the Stock Exchanges.
A separate Report on Corporate Governance as prescribed by the Listing Agreement formspart of the Annual Report 2011 - 2012 along with the Auditors Certificate on itscompliance in Annexure "B".
Mr. A.K. Ghosh, Director retires by rotation at the ensuing Annual General Meeting andbeing eligible offers himself for re-appointment.
A Brief Resume of the above named Director seeking re-appointment is attached to theNotice of the ensuing Annual General Meeting.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 217(2AA) of The Companies Act, 1956, theDirectors state as follows:-
(i) That in the preparation of the Annual Accounts for the financial year ended 31stMarch, 2012, the applicable accounting standards had been followed along with properexplanation relating to material departures.
(ii) That the Directors had selected such accounting policies and applied themconsistently and made judgements and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of your Company at the end of thefinancial year and of the profit or loss of your Company for that period.
(iii) That the Directors had taken proper and sufficient care to the best of theirknowledge and ability for the maintenance of adequate accounting records in accordancewith the provisions of The Companies Act, 1956.
They confirm that there are adequate systems and controls for safeguarding the assetsof your Company and for preventing and detecting fraud and other irregularities.
(iv) That the Directors had prepared the Annual Accounts for the financial year ended31st March, 2012 on a "going concern" basis.
Messrs S. Ghose & Co., Chartered Accountants, Auditors of the Company, hold officetill the conclusion of this Annual General Meeting. They have expressed their willingnessto continue as the Auditors of the Company, if so re-appointed and have furnished to theCompany the requisite certificate to the effect that their re-appointment, if effected,would be within the limits prescribed under section 224(1B) of the Companies Act, 1956.Accordingly, approval of the Shareholders will be sought at the ensuing Annual GeneralMeeting of the Company to the re-appointment of and remuneration payable to Messrs S.Ghose & Co., Chartered Accountants as Auditors to hold office from the conclusion ofthis Annual General Meeting till the conclusion of next Annual General Meeting.
Your Company has not invited and/or accepted any deposits from the General Public underSections 58A and 58AA of the Companies Act, 1956 and the Rules framed thereunder.
PARTICULARS OF EMPLOYEES
Information required to be given pursuant to the provisions of section 217(2A) of TheCompanies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 are notapplicable to your Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars relating to Conservation of Energy, Technology Absorption, Foreign ExchangeEarnings and Outgo, as required under section 217(1)(e) of The Companies Act, 1956 readwith Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988are given in the Annexure "A".
Your Company has formulated a Code of Conduct which applies to Board Members and SeniorManagement Personnel of the Company. Confirmations towards adherence to the Code duringthe Financial Year 2011-2012 have been obtained from all the Board Members and SeniorManagement Personnel in terms of the requirements of Clause 49 of the Listing Agreementand a declaration relating to compliance of this code during the year under review by allBoard Members and Senior Management Personnel has been given by the Managing Director ofthe Company which accompanies this report.
Your Directors would like to thank shareholders, customers, dealers, suppliers,bankers, employees union and all other business associates for the continuous supportgiven by them to the Company and their confidence in its management.
| ||FOR AND ON BEHALF OF THE BOARD |
| ||V. N. AGARWAL |
|Place: Kolkata ||RITU AGARWAL |
|Date: 29th May, 2012 ||DIRECTORS |
PARTICULARS AS REQUIRED UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956 READ WITHTHE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988
ENERGY CONSERVATION MEASURES TAKEN :
All Units of the Company continues the endeavor to reduce the energy consumption perunit of production. Energy Conservation Measures taken at the Units located in Kolkataare: i) Replacement of motors/pumps/lighting with energy efficient models. ii)Optimization of electrical distribution system. iii) Improvements to reduce heatgain/cooling losses from building.
Energy Conservation Measures taken at the Unit located in Nagpur are: i) Installationof Induction Furnaces for melting and the bulk production is done through these InductionFurnaces instead of Electric ARC Furnace. ii) Rationalization of Pump Capacities and usein many areas of pumps with lower power ratings with the same efficiency. iii) Use ofduplex billets instead of Loose Scrap for manufacturing of Duplex Steel Castings.
The above mentioned measures initiated across the Companys business have resultedin savings in Energy Consumption per unit of Production and has also helped in partiallyoffsetting the inflationary trend in Power Costs. They have also helped to reduce thetotal Carbon Di-oxide emissions.
Even though the prices per unit of Electricity and Light Diesel Oil have increasedduring the year under review, the same are comparable with the Industry Standards.
|POWERCONSUMPTION ||For the year ended 31.03.2012 ||For the year ended 31.03.2011 |
|1) Electricity || || |
|Units purchased (KWH in Lakhs) ||83.10 ||86.25 |
|Total Amount (Rs. In Lakhs) ||563.35 ||485.61 |
|Rate/Unit (Rs.) ||6.78 ||5.63 |
|2) Light Diesel Oil || || |
|Units purchased (Ltrs. In Lakhs) ||3.40 ||3.45 |
|Total Amount (Rs. In Lakhs) ||141.81 ||113.23 |
|Rate/Unit (Rs.) ||41.71 ||32.82 |
|3) Consumption/Unit of production || || |
|Product (Units): || || |
|Steel, Alloy and Cast Iron Castings (MT) ||2,735 ||2,783 |
|Electricity (KWH/MT) ||3,038 ||3,099 |
|Light Diesel Oil (Ltrs./MT) ||124 ||124 |
TECHNOLOGY ABSORPTION :
Research and Development (R&D) :
Research and Development is continuously carried on for improvement in the quality ofthe existing products and production process so as to bring them in line with therequirements of Customers or Industry Standards and the Company has succeeded in makingout the improvements in the quality and efficiency in production.
Expenditure on Research and Development are charged under primary heads of accounts.
Technology absorption, adaptation and innovation
The Company has not imported any new technology during the last five years reckonedfrom the beginning of the Current Financial Year i.e. 1st April, 2011.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
|Foreign Exchange earned ||Rs. 1,255.82 Lakhs |
|Foreign Exchange used ||Rs. 198.40 Lakhs |