DIRECTORSYour Directors present the Thirty-Ninth Annual Report together with Audited Accounts ofthe Company for the year ended 31 st March 2011.
FINANCIAL RESULTS
Rs in Lakhs
| PARTICULARS | 2010-11 | 2009-10 |
| Gross Income | 21819.11 | 14705 15 |
| Less: Excise duty | 1694.61 | 1009.98 |
| Net Income | 20124.50 | 13695.17 |
| Profit before Interest and Depreciation | 720.93 | 661.63 |
| Less: Interest | 62.83 | 63.60 |
| Profit before Depreciation | 658.10 | 598.03 |
| Depreciation for the year | | |
| (Net of withdrawal from revaluation reserve) | 290.43 | 362.75 |
| Profit after Interest and Depreciation | 367.67 | 235.28 |
| Provision for tax | 100.91 | 112.43 |
| Profit for the year | 266.76 | 122 85 |
| Taxation adjustments of earlier year | - | 4.40 |
| Prior period adjustments | 0.34 | 0.19 |
| Total | 266.42 | 127.44 |
| Balance profit for earlier years | 1763.11 | 1675.55 |
| Profit available for appropriation | 2029.53 | 1802.99 |
| Transfer to General Reserve | 25.00 | 25.00 |
| Dividend on equity shares | 12.76 | 12.76 |
| Tax on proposed dividend | 2.09 | 2.12 |
| Balance to be carried forward a sum of | 1989.68 | 1763.11 |
| Earnings per equity share of Rs. 10/- each | 41.75 | 19.97 |
PERFORMANCE HIGHLIGHTS
The members would be glad to note that the Company has shown appreciable all-roundimprovement in production, sales, turnover and profit during the year under review. Thecomparative charts, given hereunder, highlight the impressive performance.
1. PRODUCTION
During the year under review the Company produced 38,241 tons of Grinding Media ascompared to 29,865 tons in the previous year, an increase of 28%.
2. SALES & PROSPECTS
The Company sold 38,379 tons of Grinding Media during the year under review as against29,404 tons in the previous year. The sales revenue was higher at Rs.20,124 lakhs asagainst Rs. 13,695 lakhs in the previous year recording a jump of 47%.The order book forthe current year is also quite comfortable.
3. DIVIDEND
Your Directors are pleased to recommend a dividend of 20% (Rs.2.0 per share).
4. FINANCE
The liquidity position of the Company remained satisfactory. Canara Bank and State Bankof India extended their full co-operation to the Company.
5. SCIENTIFIC RESEARCH
The In-House Research & development Section of the Company has continued to focusits attention on innovation, quality improvement, waste elimination and pollution control.With its sustained efforts, new grades of products have been developed for mineralgrinding operations which have been well received by the mining industry. The Company'sproducts have now global presence and command a premium for its quality.
6. EMPLOYEE RELATIONS
The relationship with the employees remained cordial.
DIRECTORS
Messrs R.P.Agarwal, D.P.Dhanuka and Pradip R.Shah retire by rotation and are eligiblefor reappointment.
AUDITORS
Messrs Dagliya & Company, Chartered Accountants, retire at this Annual GeneralMeeting and are eligible for reappointment.
DIRECTORS'RESPONSIBILITY STATEMENT:
Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, withrespect to Directors' Responsibility statement, it is hereby confirmed:
i) That in the preparation of the accounts for the financial year ended 31st March2011, the applicable accounting standards have been followed along with proper explanationrelating to material departures;
ii) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit of the company for the year under review;
iii) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
iv) That the Directors have prepared the accounts for the financial year ended 31stMarch, 2011 on a going concern basis.
GENERAL
1. Information required under section 217(2-A) of the Companies Act of 1956: -
Number of employees employed by the Company during the financial year under reviewdrawing a remuneration in aggregate of not less than Rs. Sixty Lakhs per annum or Rs. FiveLakhs per month —NIL
2. Particulars as required under listing agreement Clause 49 are furnished asAnnexure-I to this report and form a part thereof.
3. Certificate from a Company Secretary under proviso to section 383A of the CompaniesAct is attached asAnnexure II to this report.
4. The relevant notes on the accounts and accounting policy contained elsewhere in thisAnnual Report are self-explanatory with regard to the observations of the Auditors.
| Place : Bangalore | For and on behalf of the Board of Directors |
| Date : 05-05-2011 | VINOD NARAIN |
| Chairman |
ANNEXURE-I TO DIRECTORS' REPORT
ANNEXURE-I
Particulars as per the Companies (Disclosures of particulars in the Report of the Boardof Directors) Rules, 1988 and forming part of the Directors' Report for the year ended31.03.2011.
I. CONSERVATION OF ENERGY
Effective steps were taken to conserve energy.
1. POWER AND FUEL CONSUMPTION
| Electricity | 2010-11 | 2009-10 |
| i) Units purchased | 4,71,90,000 | 3,83,39,160 |
| Total amount in Rs. | 24,92,43,601 | 19,47,22,378 |
| Rate / Unit (Rs.) | 5.28 | 5.08 |
| ii) Units generated | 9,41,735 | 1,38,181 |
| Unit generated /Litre of Diesel/HFO | 3.77 | 3.18 |
| 2. CONSUMPTION PER UNIT (Metric ton) OF PRODUCTION (PRODUCT : GRINDING MEDIA) | | |
| Electricity Units | 1275 | 1327 |
II. RESEARCH AND DEVELOPMENT
1. SPECIFIC AREAS IN WHICH R&D CARRIED OUT BY THE COMPANY
a) Development of highly corrosion resistant grinding media.
b) Use of alternate fuels for heat treatment.
c) Improvement in pollution control systems.
2. BENEFITS DERIVED
a) Increase in business volume in mining area
b) Cost reduction.
c) Better working environment.
3. FUTURE PLAN OF ACTION
a) Up-gradation of moulding technology.
b) Mechanization of material handling.
c) Conservation of water.
III. TECHNOLOGY ABSORPTION AND INNOVATION
1. EFFORTS MADE
a) Introduction of new quality control parameters.
b) Computerised radiation checking of raw materials.
2. BENEFITS
a) Reduction in rejection.
b) Elimination of radioactive contamination.
3. PARTICULARS OF TECHNOLOGY IMPORTED DURING THE LAST 5 YEARS - NIL -
| 4. EXPENDITURE ON R&D | Rs. in Lakhs |
| a) Capital | N I L |
| b) Revenue | 5.78 |
Total R&D Expenditure as a percentage of total turnover (%) 0.03
IV. FOREIGN EXCHANGE EARNINGS AND OUTGO
Rs.in Lakhs
| 1. EARNINGS | |
| Foreign exchange earned. | NIL |
| 2. OUTGO | |
| a) CIF Value of Imports | NIL |
| b) Expenditure in Foreign Currency on Dividend Payment | 1.20 |
V . PARTICULARS IN COMPLIANCE WITH THE LISTING AGREEMENT: CLAUSE 49
a) The security of the Company is not suspended from trading in any stock exchangeswherever it is listed.
b) Name and address of the stock exchange where the securities are listed.
| Bangalore Stock Exchange Ltd., | SCRIPT CODE NO 504988 |
| Stock Exchange Towers, | The Stock Exchange-Mumbai, |
| No.51, 1st Cross, J C Road | Phiroze Jeejeebhoy Towers, |
| Bangalore -560 027. | 25th Floor, Dalai Street, |
| Mumbai -400 001. |
| ISIN-INE380G01015 | ISIN-INE380G01015 |
| Central Depository Services (India) Limited. | National Security Depository Ltd. |
| Phiroze Jeejeebhoy Towers, | Trade World, |
| 28th Floor, Dalai Street, | Kamala Mills Compound. |
| Mumbai - 400 001. | Senapathi Bapat Marg, Lower Parel, |
| Mumbai-400 013 |
The Company has paid the listing fees for the financial year 2011-2012 to all the Stockexchanges wherever its securities are listed.
SECRETARIAL COMPLIANCE CERTIFICATE
To,
The Members
WELCAST STEELS LIMITED
I have examined the registers, records, books and papers of WELCAST STEELS LIMITED asrequired to be maintained under the Companies Act, 1956, (the act) and the rules madethere under and also the provisions contained in the Memorandum and Articles ofAssociation of the Company for the financial year ended on 31st March 2011. In my opinionand to the best of my information and according to the examinations carried out by me andexplanations furnished to me by the company, its officers and agents, I certify that inrespect of the aforesaid financial year:
1. The Company has kept and maintained all registers as stated in Annexure 'A' to thiscertificate, as per the provisions and the rules made there under and all entries thereinhave been duly recorded.
2. The Company has duly filed the forms and returns as stated in Annexure 'B' to thiscertificate, with the Registrar of Companies, Regional Director, Central Government,Company Law Board or other authorities within the time prescribed under the Act and therules made there under.
3. The Company, being a Public Limited Company, comments are not required.
4. The Board of Directors duly met five times on 28.04.2010, 20.05.2010,26.07.2010,12.11.2010 and 03.02.2011 in respect of which meetings proper notices weregiven and the proceedings were properly recorded and signed in the Minutes Book maintainedforthe purpose.
5. The Company closed its Register of Members from 13.07.2010 to 26.07.2010 andnecessary compliance of section 154 of the Act has been made.
6. The Annual General Meeting for the financial year ended on 31.03.2010 was held on26.07.2010 after giving due notice to the members of the company and the resolutionspassed there at were duly recorded in Minutes Book maintained for the purpose.
7. No extraordinary General Meeting held during the financial year.
8. According to the information and explanations given to me, the company has notadvanced loans to its directors and/or persons or firms or companies referred in thesection 295 of the Act.
9. The Company has duly complied with the provisions of section 297 of the Act inrespect of contracts specified in that section.
10. The Company has made necessary entries in the register maintained under section 301of the Act.
11. According to the information and explanations given to me, no appointment has beenmade necessitating the company to obtain necessary approvals from the Board of Directors,members and previous approval of the Central Government pursuant to Section 314 of the Actwherever applicable.
12. The Board of Directors has approved / ratified the issue of duplicate sharecertificates.
13. The Company has:
i) Delivered all the certificates on lodgment thereof for transfer / transmission orany other purpose in accordance with the provisions of the act;
ii) Deposited the amount of dividend declared in a separate bank account on 29.07.2010which is within five days from the date of declaration of such dividend.
iii) Paid / posted warrants for dividends to all the members within a period of 30(Thirty) days from the date of declaration and that all unclaimed / unpaid dividend hasbeen remained in the Unpaid Dividend Account of the Company with Canara Bank, IF Branch,Bangalore.
iv) Duly complied with the requirements of section 217 of the act.
v) There were no instances necessitating the transfer of the amount in unpaid dividendaccount, application money due for refund, matured deposits, matured debentures and theinterest accrued thereon which have remained unclaimed or unpaid for a period of sevenyears to Investor Education and Protection Fund.
14. The Board of Directors of the Company is duly constituted and the appointment ofDirectors, additional directors, alternate directors and directors to fill casualvacancies have been duly made.
15. There was no requirement of appointing of a Managing Director / Whole-time-Director/ Manager under the provisions of section 269 read with Schedule XIII to the Act andapproval of the Central Government.
16. According to the information and explanations given to me, the company has notappointed any sole-selling agent.
17. The Company has no requirement necessitating to obtain approvals of the CentralGovernment, Company Law Board, Regional Director, Registrar or such other authorities asmay be prescribed under the various provisions of the Act during the year under scrutiny.
18. The Directors have disclosed their interest in other firms / companies to the Boardof Directors pursuant to the provisions of the Act and the Rules made there under.
19. The Company has not issued shares / debentures / other securities during thefinancial year.
20. The Company has not bought back shares during the financial year ending 31.03.2011.
21. The Company has no redeemable preference shares / debentures due for redemptionduring the year under scrutiny.
22. There were no transactions necessitating the company to keep in abeyance rights todividend, rights shares and bonus shares pending registration of transfer of shares.
23. According to the information and explanations given to me, the Company has notaccepted any deposits from the public during the year under review.
24. The amount borrowed by the Company from financial institutions, banks and othersduring the financial year ending 31.03.2011 are within the borrowing limits of thecompany.
25. According to the information and explanations given to me, the company has not madeloans and investments, or given guarantees or provided securities to other bodiescorporate.
26. The company has not altered the provisions of the memorandum with respect tosituation of the company's registered office from one state to another during the yearunder scrutiny.
27. The Company has not altered the provisions of the memorandum with respect to theobjects of the company during the year under scrutiny.
28. The Company has not altered the provisions of the memorandum with respect to nameof the company during the year under scrutiny.
29. The Company has not altered the provisions of the memorandum with respect to sharecapital of the Company during the year under scrutiny.
30. The Company has not altered of its Articles of association during the financialyear under scrutiny.
31. According to the information and explanations given to me, no prosecution wasInitiated against or show cause notices received by the company for alleged Offences underthe Act and also the fines and penalties or any other punishment imposed.
32. According to the information and explanations given to me, the company has notreceived security deposit from its employees during the year under certification.
33. The Company has deposited both employee's and employer's contribution to ProvidentFund with prescribed authorities pursuant to section 418 of the Act.
| Place : Bangalore | M. MANJUNATHA REDDY |
| Date : 05-05-2011 | Name of the Company Secretary |
| C.P.No: 7259 |
| ACS No 19957 |
ANNEXURE:A'
| Name of the Company | WELCAST STEELS LTD |
| Corporate Identity No. | L27104KA1972PLC002163 |
Registers as maintained by the Company
1. Register of Members & Index of Members U/s. 150/151.
2. Register of charges U/s. 143.
3. Copies of Instrument of charges created by the company U/s. 136.
4. Copies of Annual Returns U/s. 163
5. Minutes of proceedings of General Meetings U/s. 193.
6. Minutes of proceedings of Directors Meetings U/s. 193.
7. Books of accounts U/s.209.
8. Register of contracts, etc in which Directors are interested U/s.301
9. Register of Directors, Managing Director, Manager and Secretary U/s.303.
10. Register of Directors' shareholding U/s.307
11. Bank Receipts relating to deposits of Provident fund U/s.417/418/419.
12. Register of renewed and duplicate share certificates.
ANNEXURE:B'
Forms and returns as filed by the Company with the Registrar of Companies during thefinancial year ending on 31st March, 2011.
1. Balance Sheet (Schedule VI) as at 31.03.2010 Filed U/s.220 on.20.08.2010
2. Annual Return (Schedule V) U/s. 159 filed on 07.09.2010
3. Compliance Certificate u/s.220 filed on 27.07.2010
4. Form No.1 filed on 11.11.2010