super smelters ltd share price Management discussions

SUPER SMELTERS LIMITED ANNUAL REPORT 2004-2005 MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL RESULTS: (Rs. in lacs) Financial Results 2004-2005 2003-2004 Total Income 24784.59 16614.32 Total Expenditure 23704.38 16375.03 Profit before Interest Depreciation & Tax 1080.21 239.29 Less Interest 243.23 106.01 Less Depreciation 305.77 292.98 Profit before Tax/ (loss) 531.21 (159.70) Provision for Tax 6.36 _ profit /(Loss) after tax 524.85 (159.70) Your Company has been manufacturing and marketing billets and rods since inception. But in the last Financial Year as the global demand for Steel have gone up substantially your Company could achieve 149.18 growth in turnover in comparison to the previous year. It could have achieve new height if sufficient working capital would be available to your Company. Inspite of many players in the industry we have captured good market share for our products due to our quality. In this financial year your Company have earned a book profit of Rs. 531.21 lacs before tax and cash profit of Rs. 836.98 lacs whereas it had incurred a book loss of Rs. 159.70 lacs in the previous year. In the current year your company has launched TMT (Thermo Mechanically Treated) grade of rods in the brand name of SUPER SHAKTI. Besides Central Bank of India, have assured increase of working capital assistance to the Company. Considering all these your Directors are expecting a better result in the current financial year i.e. 2005-06. FUTURE: Your company has already started manufacturing and marketing of TMT grade of Rods in the brand name of SUPER SHAKTI in the current financial year and is getting over whelming response in the market. Further, Block Mill for manufacturing wire rods of thinner size, a premium product, is under commissioning. Your Directors are expecting to commercialise the same in the current financial year itself. Besides, if sufficient working capital assistance from bank is sanctioned, production will undoubtedly go up. Hence your Directors are expecting a better result in years to come. FINANCE: In the previous financial year your company had been sanctioned an NTS proposal by Industrial Bank of India. As per the proposal, the settlement amount of Rs. 1747.21 Lacs after down payment of Rs. 400.00 lacs was payable by 20 equal quarterly installments. You will be glad to know that your company has paid all the installments in time besides servicing of interest. your Directors have requested IDBI to further reduce rate of interest from 12.50% to 11.00% w.e.f. 01.04.2005 which have been principally agreed by the institution. Besides, the Company, has approached Central Bank of India for enhancement of Working Capital facility suitably. HUMAN RESOURCES: Improvement in capability profile of the Human Resources across the organisation has contributed a lot to the improvements in overall performance of the company.