METALS & TUBES LTD. AHMEDABAD
Board of Directors : Shri S. Solanki Chairman (upto 30-7-2005) Shri P. M. Sanghvi Managing Director Shri J. M. Sanghvi Whole-time Director Shri S. M. Sanghvi Director (Marketing) Shri D. C. Anjaria Director Dr. V. M. Agrawal Director Shri P. M. Mehta Director
Bankers : Dena Bank Punjab National Bank State Bank of India IDBI Limited
Auditors : M/s. Mehta Lodha & Co. Chartered Accountants
Registered Office : 17, Rajmugat Society Naranpura Char Rasta Naranpura Ahmedabad - 380 013
Works : STAINLESS STEEL TUBES AND PIPES DIVISION Ahmedabad - Mehsana Highway Village - Indrad Nr. Chhatral GIDC Taluka - Kadi Dist. - Mehsana GUJARAT
SAW PIPE DIVISION Plot No. 3306 to 3309 GIDC - Chhatral Taluka - Kalol Dist. - Gandhinagar GUJARAT
KUTCH DIVISION Survey No. 474 Village - Bhimasar Taluka - Anjar Dist. - Kutch GUJARAT
1 FINANCIAL HIGHLIGHTS OF LAST FIVE YEARS
(Rs. in Lacs) Financial Year 2000-01 2001-02 2002-03 2003-04 2004-05
Turnover & Profitability
Gross Total Income 7675.14 7102.28 8473.02 13435.08 20679.41
Profit before Interest & depreciation 826.92 809.60 815.71 1237.00 2917.62
Profit Before Tax 307.58 302.58 323.82 626.96 2102.93
Net Profit after Tax 235.30 199.03 217.41 405.97 1325.21
Cash Profit 523.97 554.45 579.07 916.58 2315.40
Balance Sheet
Gross Fixed Assets 4730.52 5065.53 5554.18 6723.21 11107.25
Ordinary Share Capital 673.99 673.99 673.99 900.00 900.00
Reserve & Surplus (incl. deferred tax) 2819.06 3059.51 3244.31 3929.10 5603.21
Secured Loan 752.09 414.49 67.70 14.58 3666.46
Performance Ratios
PBIDT / Total Income 10.77% 11.40% 9.63% 9.21% 14.11%
Operating Profit / Total Income 4.01% 4.26% 3.82% 4.67% 10.17%
Return on Net-worth 6.74% 5.33% 5.55% 8.41% 20.38%
EPS Rs. 3.491 2.953 3.226 4.511 14.725
Book Value (Rs.) 51.66 55.31 58.13 53.66 72.26
Int. Coverage (times) 3.585 4.194 4.697 4.874 7.705
Current Ratio 1.668 1.444 1.263 1.264 1.048
D/E Ratio 0.27 0.15 0.10 0.11 0.68
Total Debt/Equity Ratio 0.79 0.80 0.96 0.91 1.56
Fixed Assets Coverage 3.43 5.69 8.40 8.29 2.40
2 NOTICE NOTICE is hereby given that the Twentyfirst Annual General 1956, the Articles of Association of the Company be Meeting of the Members of RATNAMANI METALS & TUBES amended by insertion of a new Article 180 A after the LTD. will be held on Wednesday, 28th September 2005 at 10:00 existing Article 180 under the heading titled “Questions at a.m. at the Conference Hall of “The Ahmedabad Textile Mills Board Meeting how decided” reading as follows: Association”, Near “Gurjari”, Ashram Road, Ahmedabad - 380 009 to transact the following business: 180 A “Questions arising at any Board Meeting shall be decided by majority of votes and in case of ORDINARY BUSINESS equality of votes, the Chairman shall have the second or casting vote.” 1. To receive, consider and adopt the Balance Sheet as at 31st March, 2005 and the Profit and Loss Account for the Registered Office : By the Order of the year ended on that date and the Reports of the Directors 17, Rajmugat Society Board of Directors and Auditors thereon. Naranpura Char Rasta V.C. Bhagat Ahmedabad - 380 013 Company Secretary 2. To declare dividend on equity shares 29th July, 2005
3. To appoint a Director in place of Shri S.M. Sanghvi who NOTES: retires by rotation and being eligible offers himself for re- appointment. 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO 4. To appoint a Director in place of Shri S. Solanki, who was ATTEND AND VOTE INSTEAD OF HIMSELF AND A liable to retire by rotation at this Annual General Meeting PROXY NEED NOT BE A MEMBER and who has resigned with effect from 30th July, 2005. It is proposed not to fill up the resultant vacancy at present. 2. Proxies, in order to be effective, must be received at the Company’s Registered Office, not less than 48 hours 5. To re-appoint Auditors from the conclusion of this Annual before the commencement of the meeting. General Meeting until the conclusion of the next Annual General Meeting and to fix their remuneration. 3. The Register of Members and Share Transfer Books of the Company will remain closed from Wednesday, 21st SPECIAL BUSINESS September 2005 to Wednesday, 28th September 2005 (Both days inclusive). 6. Ordinary Resolution : 4. The Dividend, if declared will be made payable from 7th To consider and if thought fit, to pass with or without October 2005. modification, the following resolution as an Ordinary Resolution: (a) to those members whose names appear in the Register of Members of the Company after giving effect to all valid “RESOLVED THAT in modification of the Ordinary transfers in physical form lodged with the Registrar and Resolution passed at the Annual General Meeting of the Share Transfer Agent of the Company before 21st Company held on 30th September 2004, consent of the September 2005 and Company pursuant to the provision of Section 293(1) (d) and other applicable provisions, if any, of the Companies (b) in respect of shares held in electronic form to those Act, 1956 be and is hereby accorded to the Board of members whose names appear on the statements of Directors of the Company for borrowing from time to time beneficial owners furnished by NSDL and CDSL as at the such sum or sums or money as it may consider fit for the end of the business hours on the 20th September 2005 purpose of the business of the Company, notwithstanding Members are requested to note that the Dividend Warrants that the monies to be so borrowed together with monies already borrowed by the Company (apart from temporary are payable at par with the initial validity period of three months. loans obtained or to be obtained from the Company’s Bankers in the ordinary course of business) may exceed 5. Queries on “Account and Operations” of the Company if the aggregate of the paid up capital of the Company and any, may please be sent to the Company ten days in its free reserves, that is to say, reserves not set apart for advance of the Meeting so that the answers are readily any specific purpose, provided however, that the total available at the meeting. amount so borrowed by the Board of Directors and outstanding at any one time shall not exceed the sum of 6. Kindly quote your LF Number / Cl. ID in all your future Rs.200 crores (Rupees Two Hundred Crores only)” correspondence.
7. Special Resolution : 7. Members are requested to bring their copy of the Annual Reports to the Annual General Meeting of the Company. To consider and if thought fit, to pass with or without modification, the following resolution as a Special 8. The Company has already transferred unclaimed Dividend Resolution: declared for the Financial Year ended 31st March, 1997 to the Investors Education and Protection Fund of the “RESOLVED THAT pursuant to provisions of Section 31 Central Government pursuant to Section 205C of and all other applicable provisions of the Companies Act, Companies Act, 1956. 3 In view of the amendments to the Companies Act, 1956 Other Directorship : Nil the details of the unpaid Dividend that are due for transfer Shareholding in the Company : 1,36,649 to the Investors Education and Protection Fund set up by the Central Government are as follows: Relationship with other Directors of the Company : Shri Date of For the Due for Unpaid Amt. S.M. Sanghvi is the brother of Shri Prakash M. Sanghvi and Shri Jayanti M. Sanghvi, Directors of the Company. Declaration Financial Year Transfer on (Rs. in lac) Annexure to the Notice 31/12/1998 1997-1998 10/02/2006 2.85 Explanatory Statement Pursuant to Section 173(2) of the 30/09/1999 1998-1999 29/10/2006 1.10 Companies Act, 1956 25/05/2000 1999-2000 24/06/2007 1.15 ITEM No.6 29/09/2001 2000-2001 28/10/2008 1.26 In the last Annual General Meeting of the Company held on 30th September 2004 an ordinary resolution was passed 30/09/2003 2002-2003 29/10/2010 1.64 authorizing Board of Directors to borrow money in excess of 30/09/2004 2003-2004 29/10/2011 1.58 the Company’s paid up capital and free reserves to the extent of Rs.100 crores. The turnover of the Company during the Members who have not encashed their Dividend Warrants financial year 2004-05 increased over Rs.200 crores and your may approach to the Company immediately for re- Company expects that the same would reach to about Rs.400 validation as otherwise no claim thereafter shall lie against crores after stable production from the new facilities installed the Fund or the Company in respect of such unclaimed at Kutch. Dividend Amount. Moreover the Company is in need of long-term resources for 9. The Company has appointed Pinnacle Share Registry Pvt. expansion programmes and for regular capital expenditure and Ltd. as its Registrar and Share Transfer Agent w.e.f. 01/ therefore the borrowing limit is required to be increased. 04/2003. All the shareholders of the Company are therefore requested to correspond directly with them at the following In view of the above, the consent of the Members of the address in the matters related both for the transfer of shares Company under Section 293(1)(d) of the Companies Act, 1956 as well as for dematerialization of the shares. is required to enable Board of Directors to borrow upto an amount of Rs.200/- crores (Rupees Two Hundred crores only) Shri Gautam V. Shah, Pinnacle Share Registry Pvt. Ltd., over and above the paid up capital and free reserves of the Unit: Ratnamani Metals & Tubes Ltd., Near Ashoka Mills, Company. Your Directors, therefore, recommend adoption of Naroda Road, Ahmedabad-380025. Phone the resolution. No.(079)22204226, 22200338, 22200582 Fax No.(079)22202963, Email: [email protected] None of the Directors is concerned or interested in the 10. Members are requested to notify immediately any change resolution. in their address / Bank mandate to their respective ITEM No.7 Depository Participants (DPs) in respect of their electronic share accounts and in respect of their physical shares The Company has adopted its own Articles of Association and Folios to the Registrar and Share Transfer Agent of the the regulations contained in Table “A” Schedule I of the Company. Companies Act, 1956 are not applicable to the Company. 11. With a view to providing protection against fraudulent Generally the decisions are taken at a meeting of the Board of encashment of Dividend Warrants, members are requested Directors of the Company by majority except in cases where to provide their Bank Account Numbers, names of the specific provisions are made under Companies Act, 1956. Banks and addresses of the branches to enable the However it is felt that the provisions in the Articles of Association Company to incorporate the said details in the Dividend should be explicitly clear in this regard. With a view to bring Warrants. more clarity in the matter, it is proposed to insert Article 180A 12. Explanatory statement as required under Section 173(2) after the existing Article 180 of the Articles of Association of of the Companies Act, 1956 in respect of items 6 and 7 of the Company. the notice is annexed hereto. Under Section 31 of the Companies Act, 1956, the Articles of 13. Pursuant to the Corporate Governance Code, the Association of a Company can be altered only by passing particulars of Director, who is proposed to be re-appointed, Special Resolution in General Meeting. are given below: Your directors commend passing of the resolution as a Special Name: Shri S.M. Sanghvi Resolution as set out under Item 7 of the accompanying notice. Age : 43 Years None of the Directors is concerned or interested in the Qualification : Undergraduate resolution. Experience : Shri S.M. Sanghvi was a Director on the Board Registered Office : By the Order of the of erstwhile Ratnamani Engineering Limited with effect from 17, Rajmugat Society Board of Directors 27th September 1988. He also worked as a Whole-Time Naranpura Char Rasta V.C. Bhagat Director on the Board of erstwhile Ratnamani Fine Tubes Ahmedabad - 380 013 Company Secretary Pvt. Ltd. 29th July, 2005 4 DIRECTORS’ REPORT
Dear Shareholders, Ratnamani has an impressive clientele comprising of major The Board of Directors is pleased to present the Twenty first public, private and joint sector domestic Companies. These Annual Report with Audited Accounts of the Company for the customers include reputed corporates like L & T, Dodsal, year ended 31st March, 2005. GWSSB, HPCL, IOCL, BPCL, Reliance Industries, Godrej, BHEL etc. Your Company exports products to U.S., 1. FINANCIAL RESULTS: Europe, Gulf, CIS and Asia-Pacific Countries. (Rs. in lac) During the year under review, your Company received a 2004-2005 2003-2004 prestigious order worth Rs.60.83 Crore from Gujarat Water Gross Sales and 20679.41 13435.08 Supply and Sewerage Board, Gandhinagar under Asian Income from Operation Development Bank (ADB) Funding for supply of 17000 MT Profit before Depreciation and tax 2538.97 983.23 of Pipes for rehabilitation of earthquake affected area of Less : Depreciation 436.04 356.27 Jamnagar District. In value terms, this is one of the largest Profit before tax 2102.93 626.96 order received by the company in recent past and it bears Less : Provision for taxation 223.57 66.65 testimony to the skills and systems developed by the Company. The execution of the said order would commence Deferred Tax Liability 554.15 154.34 in the financial year 2005-06. Profit after Tax 1325.21 405.97 Indian economy is on steep trajectory and upsurged to an Add Balance brought forward 210.17 205.73 impressive growth of 7% in the financial year 2004-05, from previous year which is primarily aided by an impressive industrial growth Amount available for appropriation 1535.38 611.70 rate of 8.3%. All major industrial segments including infrastructure are growing steeply. There has been a sharp Appropriations: rise in investments in the above sectors. Your Company General Reserve 1000.00 300.00 is known to be a very strong player in the niche stainless Proposed Dividend 180.00 90.00 steel tubes and pipes. The prospects for a steady and Dividend Tax 25.25 11.53 sustainable growth are bright for your Company. Balance carried to Balance Sheet 330.13 210.17 Your Company received a substantially large export order from one of the overseas equipment manufacturers for Total 1535.38 611.70 the supply of Heat Exchanger Tubes for their projects. This will give us large opening for various requirements in this 2. DIVIDEND: sector worldwide. Since we are putting up additional facility Your Directors are pleased to recommend Dividend of Rs. in Kutch for meeting the delivery terms of customers as 2/- per equity share (20%) payable on 90,00,000 Equity per their needs, it is expected that our exports would Shares of the Company. This will absorb Rs.205.25 lacs considerably go up in the current financial year. including Dividend Tax. With the buoyancy in domestic and overseas economies, 3. REVIEW OF OPERATIONS: particularly in Gulf and Far-East Asia, we would continue and in fact, improve the Company’s performance which Your Directors are happy to inform you that during the would be satisfying in the years ahead. year under review, your Company has reported very satisfying performance. There has been an overall growth Your Company’s vision is to emerge as one of the prominent in the economy and more particularly in the infrastructure, global players in this segment catering to the entire range heavy engineering, Oil & Gas and other Industrial of Stainless Steel and Carbon Steel Pipes and Tubes. segments. Looking to the present buoyancy in economy, your Directors foresee comfortable future prospects for the Company. During the year under review, your Company has 5. ON GOING PROJECTS: registered gross sales of Rs.20455.28 lacs which represents 53.38% growth over the previous year, whereas A) THE KUTCH PROJECT: net profit after tax stood at Rs.1325.21 lacs, which again In view of the unfolding opportunities, your company represents 226.43% growth over the previous year. Your has already embarked upon a Greenfield project at Company has achieved export sales of Rs.2398.06 lacs, an estimated outlay of Rs.63.00 Crore for manufacture which amounted to 11.72% of total sales. of Carbon Steel ERW, Spiral SAW Pipes as well as Stainless Steel Seamless Pipes and Tubes, Welded 4. FUTURE PROSPECT: Pipes (large dia) and S.S. condenser Tubes in Kutch Your company manufactures wide range of Stainless Steel area in the state of Gujarat. This project is eligible for and Carbon Steel Pipes and Tubes serving a broad Sales Tax benefits and Central Excise benefits, under spectrum of industries which include Petroleum, the Earthquake Rehabilitation Scheme announced by Petrochemicals, Oil and Gas, Fertilizer, Power Plants, the State Government and the Central Government Nuclear, heavy Engineering, Pharmaceutical, Chemicals which are added incentives. and water service. Your Directors wish to inform that the Company has Your company has built a strong order book and has been already achieved full financial closure for the required able to bag several prestigious orders from domestic as Term Loan of Rs.44.00 Crore for the new project. The well as overseas Customers. said financial closure is achieved through Term Loan 5 Facilities granted by ICICI Bank (UK) Ltd., Syndicate of Particulars in the Report of Board of Directors) Rules, Bank and Bank of Maharashtra. The expansion project 1988 is given in the Annexure “B” forming part of the is in advanced stage of implementation and the Report. Company has commenced trial production for some 11. PARTICULARS OF EMPLOYEES: of the products in March 2005. It is scheduled to commence commercial production of some of the The particulars of employees under the Companies products by August 2005 and at full capacity by (Particulars of Employees) Rules, 1975 as amended upto September 2005. date which are required to be included in the Directors’ In the second phase, your Company plans to go in for Report pursuant to Section 217 (2A) of the Companies creating capacities for backward integration into S.S. Act, 1956 are attached herewith as per Annexure - “C”. Extruded Mother Pipes, increase in SAW Pipes 12. AUDITORS: capacity and setting up value added coating lines. M/s. Mehta Lodha & Company, Chartered Accountants, The impact of the revenue expected from the Kutch retire but as they are eligible for re-appointment, your project will be felt from the F.Y. 2006-07. Directors recommend that they be re-appointed, as B) EXPANSION OF EXTISTING CHHATRAL UNIT: Statutory Auditors of the Company until the conclusion of During the year under review your Company has the next Annual General Meeting of the Company at such commissioned the third mobile plant for manufacturing remuneration as may be fixed by the Members. higher thickness, tubulers for offshore platform 13. DIRECTORS’ RESPONSIBILITY STATEMENT applications. PURSUANT TO SECTION 217 (2AA) OF THE C) WIND POWER: COMPANIES ACT, 1956: During the year under review your Company has The Board of Directors hereby state and confirm: further invested around Rs. 11.50 crore in increasing the wind power capacity by 2.5 MW, making the total (i) that in the preparation of the annual accounts, the wind power capacity at 6.00 MW. Thus your Company applicable accounting standards have been followed, has attained the status of 100% captive “Green alongwith proper explanation relating to material Energy” generation. departures; 6. MANAGEMENT DISCUSSION AND ANALYSIS: (ii) that the directors have selected such accounting Management discussion and analysis report is set out as policies and applied them consistently and made separate Annexure “A”. judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state 7. CERTIFICATE OF EXPORT EXCELLENCE: of affairs of the Company at the end of the financial During the year under review your Company has been year and of the profits of the Company for that period; awarded by Engineering Export Promotion Council a Certificate of Export Excellence in recognition of achieving (iii) that the directors have taken proper and sufficient care highest export performance during 2001-2002 amongst for the maintenance of adequate accounting records the Non-SSI exporters in the panel of Steel Pipes, Tubes in accordance with the provisions of this Act for and Fittings thereof. safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 8. DIRECTORS: In accordance with the requirement of the Companies Act, (iv) that the directors have prepared the annual accounts 1956 and Article 170 of the Articles of Association of the on a going concern basis. Company Shri S.Solanki and Shri S.M. Sanghvi are liable 14. CORPORATE GOVERNANCE REPORT: to retire by rotation and are eligible for re-appointment. A separate report on Corporate Governance is enclosed However Shri S. Solanki has conveyed his inability to as part of this Annual Report and marked as Annexure continue as a director of the company with effect from 30th “D”. Requisite Certificate from the Statutory Auditors of July, 2005 and accordingly his reappointment is not the Company regarding Compliance of Corporate considered. Governance as stipulated under Clause 49 of the Listing The Board of Directors places on record its sincere Agreement is annexed to the report of Corporate appreciation for the valuable guidance and excellent Governance. directions provided by Shri S. Solanki in the capacity as a 15. ACKNOWLEDGEMENTS: director as well as chairman of the Board of Directors during his association of ten years with the Company. The Directors hereby place on record their commendation 9. DEPOSITS: of the valuable contribution made by the employees. The Directors also express their gratitude to the Shareholders, Your Company has not invited or accepted any deposits Customers, Suppliers, Banks, Financial Institutions and from the shareholders and Public during the year within the Central and State Governments for their unwavering the meaning of Section 58(A) of the Companies Act, 1956. support to the Company. 10. PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN For and on behalf of the Board of Directors EXCHANGE EARNINGS AND OUTGO: The statement pursuant to Section 217(1)(e) of the Ahmedabad S. SOLANKI Companies Act, 1956 read with Companies (Disclosure 29th July, 2005 Chairman 6 Annexure-A MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY Oil and Gas sector is one of most vital sectors of a national Your Company operates in one segment namely Steel Pipes economy. The important elements in the value chain of the & Tubes. sector are: The Steel Tubes and Pipes industry can be broadly classified • Exploration into: • Refining (a) Stainless Steel Tubes and Pipes • Distribution (b) Carbon Steel Tubes and Pipes. LINE PIPES act as the critical link in this value chain, because S.S. Tubes and Pipes are typically used in Heat Exchangers, they provide backbone of transportation of inputs and outputs Boilers, Refrigeration, Instrumentation, Hydraulics, Fuel in the chain. Injection, Exhaust Systems for Automobiles, General Piping The growth of Oil and Gas Sector is primarily driven by the for Power Plants, Space Applications and Special Pipings for energy consumption, as component of GDP & the International Nuclear Applications. Oil prices, in correlation with market dynamics of supply and From the above application profile it would be evident that major demand. user industry segment would be Petrochemicals, Fertilizer, Thus, our country will see a change in oil transportation trends, Refinery, Chemical, Power Plants, Sugar, Pump, Automobile, where the current 70:30 ratio of oil transported by rail and road Food and Dairy, Paper, Pharmaceutical, Nuclear, Aeronautics, to pipelines will be reversed. Transportation through pipelines Space Research Centers, Atomic Energy, Ship Building, is economical as well as environment-friendly,. There is huge Railway Coaches etc. market potential for pipe manufacturers both within India and Since Stainless Steel has much superior metallurgical abroad. properties, it is used as preferred metal in all the critical QUALITY CONTROL applications/applications involving transportation of corrosive liquids. The company features its achievements to adherence to strict quality standards. This has been achieved through our efforts CS Pipes are proving to be an ideal means for the continuous to strike the balance between resources and technology to transportation of large quantities of oil, natural gas and water develop products at same level in excellence with international over the long distances. (LINE PIPES). Basic advantage of standards. The quality standard is taken care from the initial this mode of transportation is that only the goods move, not stage of production to ensure high end product quality. the means of conveyance. Transport operations in pipes, which are laid mostly on the ground or on sea/ river beds, are more INTERNAL CONTROL SYSTEMS economical because the routes are shorter. Further, pipes are The Company has adequate internal control system in operation not dependent on the weather conditions and are not commensurate with the size and nature of its business for detrimental to the environment. Last but not the least, pipes enduring efficiency of operation and protection of company’s are advantageous in that the materials being transported are assets. The Audit Committee formed by the company review far less exposed to atmospheric temperature and other physical on periodical basis the compliance with the Company’s policies, or chemical influences. Main applications for CS pipes are: procedures and prevailing laws. i) For conveying oil and gas INDUSTRIAL RELATION & HUMAN RESOURCES ii) On shore and off-shore Drilling Platforms We have a team of experienced workers who are skilled and iii) For conveying non-corrosive liquids or semi-liquids trained to get best out of its resources. Regular orientation iv) For conveying water from reservoir to pumping stations programs are being conducted by the company wherein workers are directly exposed to the experts, which keep them v) Casing Pipes, Structurals, etc. with the latest technology and development. FUTURE OUTLOOK & OPPORTUNITIES The Company’s philosophy is to provide its employees friendly Stainless Steel Pipes and Tubes working environment and a performance oriented work culture. The demand prospects for S.S. Pipes and Tubes depends upon The Company believes that human resources are important the growth prospects of the end user industries. Since last few assets for giving company a competitive edge in a competitive years the major end user industries, namely Fertilizer, environment. Petrochemicals, Power Plants, Chemicals and Pharmaceuticals RISK FACTORS are growing at an average growth rate of around 8% per annum. The industry is facing competition from big players who are Again, automobile sector is also now on high growth mode producing on large scale production and have the advantage coupled with the automation and instrumentation industry. Due of economies in cost, facing challenges from cheaper imports to this reason, the demand for SS Pipes and Tubes is steadily and the industry is also facing risks from unorganized sector. on the increase. However, your company does not foresee any risk due to its Presently, the annual production of S.S. Tubes and Pipes in concentration on quality commitment for better products and the country is around 50000 TPA and is expected to grow in prompt after sales service, coupled with a unique position as the coming years with the growth rate of around 10% - 12% being present in both Stainless Steel as well as Carbon Steel per annum. Segment. Your Company occupies a prominent position in the SSTP CAUTIONARY STATEMENT market, having good market share in the Industrial segment in The statement given in this report, describing the Company’s the country. objectives, estimates and expectations and future plans may Carbon Steel Pipes be construed forward looking statement within the meaning of One of the major end use segment for Carbon Steel Pipes and applicable laws and/ or regulations. Actual performance may Tubes is transportation of water, oil and gas. differ materially from those either expressed or implied. 7 ANNEXURE ‘B’ TO THE DIRECTORS REPORT FOR THE YEAR ENDED 31.03.2005 ADDITIONAL INFORMATION AS REQUIRED UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956. (A) CONSERVATION OF ENERGY: 2. Benefits derived : (a) Energy conservation 1. The Company can now do chemical analysis of Steels The Company has given utmost importance to Energy for 20 elements very quickly for Raw Material and conservation by adopting the modern technology and Finished Product which in course helps in Quality has implemented energy conservation measures Assurance. through small group activities and suggestions scheme. The Company has always given priority for minimization 3. Future plan of action: of energy consumption by putting continuous efforts The Company would continue research and development towards optimization of operating and processing work to improve the systems. parameters and upgradation of Plant equipments. 4. Estimated expenditure on R&D (b) Additional investment No separate record of expenditure is maintained. No separate A/c is maintained TECHNOLOGY ABSORPTION, ADAPTATION AND (c) Impact of measures (a) and (b) above INNOVATION Substantial Energy saving as compared to the previous power supply system. (1) Efforts in brief : (d) Total Energy consumption as per form “A” : The Quality Management system is being maintained Not applicable efficiently so as to have improved image and quality of our (B) TECHNOLOGY ABSORPTION products (e) Efforts made in technology absorption as per (2) Benefits derived as a result of the above : Form B. : Form B enclosed . Improvement of operational efficiency, productivity and (C) FOREIGN EXCHANGE EARNINGS AND OUTGO energy saving. (f) Activities relating to exports : (3) In case of imported technology following information is Your company has exported Pipes to Germany, furnished. France, U.K., Egypt, U.S.A, Holland, U.A.E, Belgium, (a) Technology imported : Tricathode (TTT) Indonesia and Australia. welding system (g) Total foreign exchange earnings used and earned. (b) Year of import : 2005 Total Foreign exchange Rs. 2398.06 Lac earnings (FOB) (Rs.1381.16 Lac) (c) Has technology been fully : yes Total Foreign exchange outgo Rs. 54.89 Lac absorbed (Rs. 44.01 Lac) (d) If not fully absorbed : not applicable. FORM B (D) Information on pollution control measures forming part FORM FOR DISCLOSURE OF PARTICULARS WITH of Directors’ report RESPECT TO ABSORPTION, RESEARCH AND Your Company monitors and maintains environment and DEVELOPMENT (R&D) pollution control parameters at its plant site. The Company 1. Specific areas in which R&D is carried out: is maintaining proper effluent treatment plant and the 1. Installed Spectrometer treated water is used for plantation of trees. ANNEXURE ‘C’ TO THE DIRECTORS’ REPORT Information as per Provision of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Sr Name Age Qualification Date of Designation/ Remuneration Experience Last No. Yrs. Employment Nature of duties (Rs. in Lac) employment held 1. Shri Prakash M. 49 Matriculation 12.6.89 Managing 66.47 28 Director Sanghvi Director Ratnamani Tube Ind. Ltd. 2. Shri Jayantilal M. 47 1st B. Com 12.6.89 Whole-time 43.91 25 Director Sanghvi Director Ratnamani Tube Ind. Ltd. 3. Shri Shantilal M. 43 Under 1.11.98 Whole-time 31.94 23 Director Sanghvi Graduate Director Ratnamani Engineering Ltd. & Ratnamani Fine Tubes P. Ltd. Notes : 1. Remuneration includes Salary, Company's contribution to Provident and superannuation funds, taxable value of perquisites and commission. 2. Shri Prakash M. Sanghvi, Shri Jayantilal M. Sanghvi and Shri Shantilal M. Sanghvi are related to each other. They are not related to any other Director of the Company. 3. The services of all the above employees are contractual and are for term of 5 years. 8 ANNEXURE 'D' CORPORATE GOVERNANCE REPORT
1. Company’s philosophy on Corporate Governance Your Company has always believed in the concept of good Corporate Governance and lays emphasis on transparency, accountability, integrity and responsibility in all areas of its operations to ensure investors protection. The Company has implemented necessary changes in the systems and procedures - to ensure high ethical standards in all its business activity to have steady growth of the Company to increase the value for all stake holders and to have long term partnership with them. It is also our commitment to continue to provide best services to our investors and gradually improve thereon in the days to come. Mandatory provisions of Corporate Governance as stipulated under Listing Agreement of Stock Exchanges are complied with. 2. Board of Directors The Board of Directors has three Executive Promoter Directors and four Non-Executive Independent Directors. The composition of Board is in compliance with the requirement of Clause 49(1)(A). The detailed composition of the Board and other related information is given in the table below: Name of the Designation Category No. of No. of other No.of Board Attendance Director Directorship Board Comm. meeting at the last held members attended AGM *Shri S. Solanki Chairman Independent Non-Executive - 3 8 Yes
Shri P.M. Sanghvi Managing Director Promoter Executive 1 1 8 Yes
Shri J.M. Sanghvi Whole-time Director Promoter Executive 1 1 8 Yes
Shri S.M. Sanghvi Whole-time Director Promoter Executive - - 8 Yes
Shri D.C. Anjaria Director Independent Non-Executive 6 5 8 Yes
Shri V.M. Agrawal Director Independent Non-Executive - 3 8 Yes
**Shri P.M. Mehta Director Independent Non-Executive - 1 6* Yes * Upto 30/07/05 **Appointed on 30/07/04 During the year eight Board Meetings were held, details of which are given in the table below: Date of Meeting 05/05/04 29/06/04 30/07/04 30/09/04 28/10/04 27/01/05 03/03/05 19/03/05
No. of Directors present 6 6 7 7 7 7 7 7 3. Audit Committee The Audit Committee was constituted by the Board of Directors in its meeting held on 30.01.2001. The composition of the Audit Committee is as under: Name of the Director Category Remarks Shri D.C. Anjaria Independent Non-Executive Chairman Shri S.Solanki Independent Non-Executive Member (ceased w.e.f. 30/07/04) Dr. V.M. Agrawal Independent Non-Executive Member Shri P.M. Mehta Independent Non-Executive Member (appointed on 30/07/04) The Terms of reference a. To investigate into any matter in relation to the items specified in Section 292(A) of the Companies Act 1956, and also as contained under Clause 49 of the Listing Agreement. b. Reviewing of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. c. Recommending the appointment of external Auditor and fixation of their Audit fee d. Reviewing with management the Annual financial statements and half yearly and quarterly financial results before submission to the Board. 9 e. Reviewing periodically the adequacy of the internal control systems. f. Discussions with Internal Auditor on any significant findings and follow up there on. Details of Audit Committee meetings held during the year Name of the Directors Meetings held on and presence
29/06/04 30/07/04 28/10/04 27/01/05 09/02/05 19/03/05
Shri D.C. Anjaria Yes Yes Yes Yes Yes Yes Shri S.Solanki* Yes Yes - - - - Dr. V.M. Agrawal Yes Yes Yes Yes Yes Yes Shri P.M. Mehta** - - Yes Yes Yes Yes *ceased w.e.f. 30/07/04, ** appointed on 30/07/04 4. Remuneration Committee Terms of reference To determine the Company’s policy on specific remuneration packages for executive Directors including their pension rights, after taking into consideration the financial position of the Company, experience and past performance and the interest of the Company and its shareholders. The remuneration Committee was constituted by the Board of Directors at its meeting held on 23/03/02. Name of the Director Category Remarks
Shri S.Solanki Independent Non-Executive Chairman Shri D. C. Anjaria Independent Non-Executive Member Dr. V. M. Agrawal Independent Non-Executive Member All the members attended the meeting held on 29/06/2004 Details of Remunerations paid
a. Executive Directors Name of the Director Salary Commission Perquisites Retirement Benefits Total (Rs. in lac) (Rs. in lac) (Rs. in lac) (Rs. in lac) (Rs. in lac)
Shri P.M. Sanghvi 13.50 50.00 — 2.97 66.47 Shri J.M. Sanghvi 10.80 30.00 0.73 2.38 43.91 Shri S.M. Sanghvi 9.30 20.00 — 2.04 31.34
b. Non-Executive Directors Name of the Director Sitting Fees (Rs.) Commission (Rs.) Shri S.Solanki 55000 — Shri D.C. Anjaria 75000 — Dr. V.M. Agrawal 75000 — Shri P.M. Mehta 50000 — Service Contract 1. Shri P.M. Sanghvi, Managing Director is appointed for term of five years w.e.f. 1st November 2003 by the shareholders of the Company at its Annual General Meeting held on 30th September 2003. 2. Shri J.M. Sanghvi, Whole-time Director is appointed for term of five years w.e.f. 1st November 2003 by the shareholders of the Company at its Annual General Meeting held on 30th September 2003. 3. Shri S.M. Sanghvi, Whole-time Director is appointed for term of five years w.e.f. 1st November 2002 by the shareholders of the Company at its Annual General Meeting held on 30th September 2002. 5. Shareholders / Investor’s Grievance Committee The shareholders grievance Committee was formed by the Board of Directors on 31/03/2001 to ensure the effective redressal of the complaints of the investors. The Committee also recommends steps to be taken for further implementation in the quality and services to the investors. 10 Name of the Director Category Remarks
Shri D. C. Anjaria Independent Non-Executive Chairman Shri S.Solanki Independent Non-Executive Member Dr. V. M. Agrawal Independent Non-Executive Member Shri V.C. Bhagat, Company Secretary acts as a Secretary of the Committee and has been designated as Compliance Officer. The particulars of Investors Grievances received and redressed during the financial year are furnished below: Particulars Opening Balance Received Redressed Pending on as on 01/04/04 during the year during the year 31/03/05
1. Non-receipt of Share Certificates Nil Nil Nil Nil 2. Non-receipt of Dividend Nil 1 1 Nil 3. Revalidation of Dividend Warrants Nil Nil Nil Nil 4. Non-receipt of Balance Sheet Nil Nil Nil Nil 5. For Demat Nil 5 5 Nil 6. Others Nil Nil Nil Nil 6. General Body meeting AGM Date Time Venue No. of special resolutions approved *
18 th 30.09.02 10.00 a.m. The Ahmedabad Textile Mills Association 1 19 th 30.09.03 10.00 a.m. The Ahmedabad Textile Mills Association - 20th 30.09.04 10:00 a.m. The Ahmedabad Textile Mills Association - * Special resolution indicated above was passed by show of hands. No Extra Ordinary General Meeting was held during the financial year 2002-2003 and 2004-2005. During the financial year 2003-2004, an Extra Ordinary General Meeting was held on 30th October, 2003 and a special resolution under Section 81, 81(1A) of the Companies Act, 1956 for the issue of Equity Shares on Preferential basis was unanimously passed. No resolution was proposed by postal ballot during the financial year 2004-2005. 7. Disclosures i. There was no materially significant related party transaction during the year with the management or with the directors of the Company, which may have potential conflict with the interests of the Company. ii. There was no instance of non-compliance on any matter related to capital markets during the last three years. In other words the Company has complied all the regulations as per the Listing Agreement with Stock Exchanges and SEBI. iii. The Company ensures compliance of various statutory requirements by all its divisions and obtains quarterly reports in the form of certificate from the head of the divisions. These certificates are placed before the Board on quarterly basis. iv. All the statutory registers that are required to be maintained, particularly Registers of contracts in which Directors have interests, Register of Director shareholding, Register on investments etc. are maintained and continuously updated. 8. Means of communication i. During the year quarterly and half yearly (Unaudited) and Annual financial result (Audited) of the Company were submitted to the Stock Exchanges immediately after the Board meeting approved the same and were published either in the Economic Times / Business Standard / Indian Express in English and Jansatta / Financial Express in Gujarati. ii. The results were also put on the Company’s website namely www.ratnamani.com 9. Financial calendar for the financial year 2004-2005 i. Financial year : 1st April 2004 to 31st March, 2005 First Quarter ended : 30th June 2004 Half year ended : 30th September 2004 ii. AGM for the year 2004-05 : 28th September 2005 at 10:00 a.m. at The Ahmedabad Textile Mills Association iii. Date of Book Closure : 21st September 2005 to 28th September 2005 iv. Dividend payment date : 7th October 2005 v. Listing on Stock Exchange : Ahmedabad and Mumbai vi. Stock Code : 48930 (ASE) & 520111 (BSE) 11 vii. & viii.Market Price data and performance in comparison to broad-based indices of BSE Sensex Month Share Price of RMTL BSE Sensex Open High Low Close Wtd. Avg. High Low (Rs.) (Rs.) (Rs.) (Rs.) Price April 2004 23.00 27.90 22.85 27.00 25.68 5979 5599 May 2004 26.30 28.30 21.00 21.00 26.48 5773 4228 June 2004 21.90 23.85 18.20 21.50 20.97 5013 4614 July 2004 22.00 29.45 21.50 27.50 23.79 5201 4723 August 2004 26.05 29.95 22.75 26.40 28.23 5269 5022 September 2004 26.00 33.80 24.90 33.80 28.72 5639 5179 October 2004 34.20 37.00 29.20 31.20 34.06 5804 5558 November 2004 35.05 52.00 35.00 46.05 43.41 6248 5649 December 2004 46.50 63.35 42.25 56.80 51.42 6617 6176 January 2005 58.00 71.40 52.00 66.90 61.00 6696 6069 February 2005 68.50 82.00 62.50 74.00 72.64 6721 6508 March 2005 74.50 108.00 73.10 87.15 90.93 6955 6321 ix. Registrar & Transfer Agent Pinnacle Share Registry Pvt. Ltd. Unit: Ratnamani Metals & Tubes Ltd. Near Ashoka Mills, Naroda Road, Ahmedabad - 380 025. Phone No.(079)2204226,2200591,2200852 Fax No.(079)2202936, Email: [email protected] In view of the above, the work for transfer of shares in physical form is now being carried out at the above address. x. Share Transfer system Due to mandatory provision of SEBI and upon the instructions of Stock Exchange, Mumbai and Ahmedabad, the Company has appointed a common agency at a single point for physical and demat registry work. The Company has appointed Pinnacle Share Registry Pvt. Ltd., as its Registrar and Transfer Agent w.e.f. 01/04/03. All the shareholders of the company are therefore requested to correspond directly with them at the above address on the matters related to both transfer of shares as well as for demat of the shares of the Company. xi. (a) Distribution of Shareholding as on 31st March 2005 No.of Equity No. of % of No.of % of Shares held Shareholders Shareholders Shares held Shareholding Upto 500 6710 93.87 684680 7.61 501 to 1000 181 2.53 143145 1.59 1001 to 2000 86 1.20 136339 1.51 2001 to 3000 30 0.42 75804 0.84 3001 to 4000 17 0.24 58777 0.65 4001 to 5000 13 0.18 60811 0.68 5001 to 10000 22 0.31 173745 1.93 10001 & above 89 1.25 7666699 85.19 Total 7148 100.00 9000000 100.00
(b) Categories of Shareholders as on 31st March, 2005 Category Number of Shares held % of shareholdings Promoters (Directors & Relatives) 4345591 48.28 Persons acting in concert 982909 10.92 Mutual fund 1400 0.01 Banks, Financial Institutions 136 0.01 Corporate Bodies 319836 3.55 NRI 127057 1.42 Indian Public 3223071 35.81 Grand Total 9000000 100.00
12 xii. Dematerialization of shares The Equity Shares of the Company are traded compulsorily in the dematerialized form by all the investors w.e.f. 26th March 2001. The Company has entered into an agreement with both National Securities Depository Ltd. (NSDL) and Central Depository Securities Ltd. (CDSL) whereby the shareholders have an option to dematerialize their shares with either of the depository. Demat ISIN No. for both NSDL and CDSL for the Company’s Equity Shares is INE703B01019. Status of Dematerialization as on 31st March 2005 Particulars No. of shares % of total Capital No. of Shareholders
National Securities Depository Ltd. 1214757 13.50 1612 Central Depository Services (India) Ltd. 144362 1.60 286
Total Dematerialized 1359119 15.10 1898
Physical 7640881 84.90 5250
Grand Total 9000000 100.00 7148
xiii. Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity —NIL— xiv. Plant Location 1. SSTP Division: Ahmedabad - Mehsana Highway, Village - Indrad, Nr. Chhatral GIDC, Taluka - Kadi, Dist. Mehsana Gujarat, Pin code - 382 729. 2. SP Division: Plot No.3306 to 3309, GIDC Estate, Phase IV, Ahmedabad - Mehsana Highway, P.O. Chhatral, Pin : 382 729 Tal. Kalol Dist. Gandhinagar, Gujarat 3. Kutch Division: Survey No.474, Village Bhimasar, Tal. Anjar, Dist. Kutch, Gujarat. xv. Address for Correspondence 17, Rajmugat Society, Naranpura Char Rasta, Ankur Road, Naranpura, Ahmedabad - 380 013.
CERTIFICATE To the Members of the Ratnamani Metals & Tubes Ltd.
We have examined the compliance of conditions of Corporate Governance by the RATNAMANI METALS & TUBES LTD. for the year ended on 31st March, 2005 as stipulated in Clause 49 of the Listing Agreement of the said company with Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of the procedures and implementation thereof, adopted by the company for ensuring the compliance with the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company.
In our opinion and to the best of our information and according to the explanations given to us, and the representations made by the Directors and the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned listing Agreement.
As required by the Guidance note issued by the Institute of Chartered Accountants of India, we have to state that the Company has maintained records to show Investors’ Grievances against the Company and certify that as on 31st March, 2005 there were no investor grievance remaining unattended / pending for a period exceeding one month.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For MEHTA LODHA & CO. Chartered Accountants
Ahmedabad PRAKASH D. SHAH 27th June, 2005 Partner
13 AUDITORS’ REPORT
To the Members of Ratnamani Metals & Tubes Ltd. 1. We have audited the attached Balance Sheet of RATNAMANI METALS & TUBES LIMITED as at 31st March, 2005 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed there to. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, and on basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, for the year under consideration. 4. Further to our comments in the Annexure referred to above, we report that: - (a) We have obtained all the information and explanations to the best of our knowledge and belief, which were necessary for the purposes of our audit; (b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; (c) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account; (d) In our opinion, the balance sheet, profit and loss account and cash flow statement deal with by this report, read with the notes to accounts, comply with the applicable accounting standards (AS-I to AS-29) referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; (e) On the basis of written representations received from the directors, as on March 31, 2005 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March, 31, 2005 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; 5. In our opinion, and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and notes on accounts, give the information required by the Companies Act, 1956 in the manner so required and gives a true and fair view : (a) In the case of Balance Sheet, of the state of affairs of the company as at 31st March, 2005, and (b) In the case of Profit and Loss Account, of the PROFIT for the year ended on that date. (c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.
For MEHTA LODHA & CO., Chartered Accountants
PRAKASH D. SHAH Place : Ahmedabad Partner Date : 27-06-2005 M.No.34363
Annexure referred to in paragraph [3] of our report of even date 1. (a) The Company has prepared fixed assets register showing particulars including quantitative details and situation of fixed assets. As informed to us, the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies between the book records and the physical inventory were noticed by the management. (b) There was no substantial disposal of fixed assets during the year. 2. (a) The management has conducted physical verification of inventory at reasonable intervals. (b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. 14 3. As informed to us, the Company has not taken / granted any loans, secured or unsecured from/to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. 4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls. 5. (a) In our opinion and according to the information and explanations given to us, there are no contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956. (b) In our opinion and according to the information and explanations given to us, there are no contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956, paragraph (v) (b) of the order is not applicable. 6. The Company has not accepted any deposits from the public. 7. In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business. 8. As informed to us, the Company has prima facie maintained accounts and records as prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 which have not been examined by us. 9. (a) According to the records of the Company, the Company is regular, in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales-tax, Customs Duty, Excise Duty, cess and other statutory dues applicable to it with the appropriate authorities. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, sales tax, customs duty and excise duty were outstanding at the year end for a period of more than six months from the date they became payable. (c) According to the records of the Company, there are no dues outstanding of sales tax, customs duty, wealth tax, and cess on account of any dispute, except the followings:- Nature of Liability Nature of the dues Amount Forum where appeal is pending
Central Excise Act Excise duty Rs. 106.34 lacs Appellate Tribunal Rs. 28.79 lacs Commissioner (appeals) 10. The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current and immediately preceding financial year. 11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues financial institution and bank. The Company does not have any borrowings by way of debentures. 12. Based on our examination of documents and records, we are of the opinion that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/societies. 14. The Company has not undertaken any trading in shares and debentures. 15. The Company has not given any guarantees for loan taken by others from banks or financial institutions. 16. According to the information and explanations given to us, and on the basis of overall fund flow position, we report that the term loans have been applied for the purpose for which they were raised. 17. According to the information and explanation given to us and on an overall examination of the balance sheet of the company, we report that generally, no funds raised on short-term basis have been used for long term investment and no long term funds have been used to finance short-term assets, except working capital. 18. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956. 19. The Company has not issued any debentures during the year. 20. The Company has not raised any money through a public issue during the year. 21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.
For MEHTA LODHA & CO., Chartered Accountants
PRAKASH D. SHAH Place : Ahmedabad Partner Date : 27-06-2005 M.No.34363 15 BALANCE SHEET AS AT 31ST MARCH, 2005 Rs. in Lacs As at As at Schedule 31/03/2005 31/03/2004
SOURCES OF FUNDS Shareholders’ Funds Share Capital 1 900.00 900.00 Reserves and Surplus 2 4167.62 3047.66 5067.62 3947.66 Loan Funds Secured Loans 3 4258.96 797.36 Unsecured Loans 4 784.54 506.98 5043.50 1304.34 Deferred Tax Liability 1435.58 881.44 11546.70 6133.44
APPLICATION OF FUNDS 5 Fixed Assets Gross Block 11107.25 6723.21 Less : Depreciation 2908.10 2497.52
Net Block 8199.15 4225.69 Capital Work-in-Progress 2476.13 99.23 10675.28 4324.92 Investments 6 3.84 0.26 Current Assets, Loans and Advances Inventories 7 2349.35 2582.63 Sundry Debtors 8 2159.68 1556.86 Cash & Bank Balances 9 795.72 358.97 Loans & Advances 10 681.48 400.35 5986.23 4898.81 Less : Current Liabilities and Provisions 11 Liabilities 4913.40 2989.02 Provisions 205.25 101.53 5118.65 3090.55 Net Current Assets 867.58 1808.26 11546.70 6133.44
Notes to the Accounts 17 As per our report attached S. SOLANKI Chairman P. M. SANGHVI Managing Director For Mehta Lodha & Co. Chartered Accountants J. M. SANGHVI Wholetime Director S. M. SANGHVI Wholetime Director PRAKASH D. SHAH D. C. ANJARIA Director Partner DR. V. M. AGRAWAL Director P. M. MEHTA Director Ahmedabad, V. C. BHAGAT Company Secretary 27th June, 2005 S. S. TALATI Finance Controller 16 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH 2005. Rs. in Lacs
Schedule 2004-2005 2003-2004
INCOME Gross Sales & Income from operations 20678.36 13433.61 Less : Excise Duty 2579.89 1563.57
18098.47 11870.04
Other Income 12 1.05 18099.52 1.47 11871.51
EXPENDITURE Material Cost 13 11677.56 7795.37 Employees’ Remuneration and Benefits 14 580.07 508.47 Financial Expenses 15 378.65 253.77 Other Expenses 16 2924.27 2330.67 Depreciation 436.04 15996.59 356.27 11244.55
PROFIT BEFORE TAX 2102.93 626.96 Less : Income Tax (including of earlier years) 223.57 66.65 Less : Deferred Tax Liability 554.15 154.34
PROFIT AFTER TAX 1325.21 405.97 Balance Brought Forward 210.17 205.73 1535.38 611.70
PROFIT AVAILABLE FOR APPROPRIATION
APPROPRIATION
Proposed Dividend 180.00 90.00 Dividend Tax 25.25 205.25 11.53 101.53
Transfer to General Reserve 1000.00 300.00 Balance Carried Forward 330.13 210.17 1535.38 611.70
Earning Per Share (in Rs.) (Basic) 14.72 4.51 (Face value of Rs.10/-)
Notes to the Accounts 17 As per our report attached S. SOLANKI Chairman P. M. SANGHVI Managing Director For Mehta Lodha & Co. Chartered Accountants J. M. SANGHVI Wholetime Director S. M. SANGHVI Wholetime Director PRAKASH D. SHAH D. C. ANJARIA Director Partner DR. V. M. AGRAWAL Director P. M. MEHTA Director Ahmedabad, V. C. BHAGAT Company Secretary 27th June, 2005 S. S. TALATI Finance Controller 17 SCHEDULE TO THE ACCOUNTS Rs. in Lacs As at As at 31/03/2005 31/03/2004 SCHEDULE 1: SHARE CAPITAL Authorised 1,50,00,000 (1,50,00,000) Equity Shares of Rs 10 each 1500.00 1500.00
Issued 90,00,000 (90,00,000) Equity Shares of Rs.10 each 900.00 900.00 Subscribed and Paid-up 90,00,000 (90,00,000) Equity Shares of Rs.10 each 900.00 900.00 900.00 900.00
Out of the above shares, 30,70,200 (30,70,200) Equity Shares were allotted as fully paid-up by the way of bonus shares. Out of the above shares, 24,60,133 (24,60,133) Equity Shares were allotted as fully paid-up for consideration other than cash. SCHEDULE 2: RESERVES AND SURPLUS A) Subsidy from Government as per last account 25.13 25.13 Less : Transferred to Capital Reserve 25.13 0.00 0.00 25.13 B) Capital Reserve as per last account 37.41 37.41 Add : Transferred from Subsidy from Government 25.13 62.54 0.00 37.41
C) Share Premium Account Balance as per last year 882.84 656.83 Add : Addition during the year 0.00 226.01 882.84 882.84 D) General Reserve as per last account 1500.00 1200.00 Add : Transferred from Profit & Loss Account 1000.00 300.00 2500.00 1500.00 E) Amalgamation Reserve as per last account 392.11 392.11 F) Profit and Loss Account 330.13 210.17 4167.62 3047.66
SCHEDULE 3: SECURED LOANS Term Loans : Banks [Including External (Foreign) Commercial 3612.64 0.00 Borrowing of Rs. 437 Lac (Nil)] (Refer Note Nos. 1 & 2) Working Capital Facilities from Banks 592.50 782.78 Loans against Vehicles 53.82 14.58 4258.96 797.36 (1) Term Loan from UTI Bank Ltd. is secured by first charge on the Company's immovable and movable properties situated at Plot No. 3306 to 3309, GIDC, Chhatral, Ahmedabad-Mehsana Highway, Tal. Kalol, Dist. Gandhinagar, subject to charges created in favour of Company's bankers on inventories and book debts for working capital facilities and personal guarantees of some of the Directors of the Company. (2) Term Loans from ICICI Bank UK Ltd., Syndicate Bank and Bank of Maharashtra are secured by first charge on the Company's immovable and movable properties situated at Survey No. 769, 780 and 787, Village Indrad, Chhatral, Tal. Kadi, Dist. Mehsana and also Survey No, 474, Village Bhimasar, Tal. Anjar, Dist. Kutch, subject to charges created in favour of Company's bankers on inventories and book debts for working capital facilities and personal guarantees of some of the Directors of the Company. (3) Working Capital Facilities from Dena Bank, Punjab National Bank, State Bank of India and IDBI Bank Limited are secured by hypothecation of Inventories, book debts and by second charge on Fixed Assets of the Company and personal guarantees of some of the Directors of the Company. Working Capital facilities are further secured by joint equitable mortgage of all immovable properties held as free-hold and lease hold land of the Company. SCHEDULE 4: UNSECURED LOANS From Corporates 742.46 422.83 Sales Tax Deferred Payment Loan 42.08 84.15 784.54 506.98
18 SCHEDULE 5 : FIXED ASSETS (Rs. in Lacs) GROSS BLOCK DEPRECIATION NET BLOCK As At Addi- Dedu- As at As at As at As at As at 01.04.2004 tion ction 31.03.2005 31.03.2004 31.03.2005 31.03.2005 31.03.2004 Goodwill 26.41 0.00 0.00 26.41 0.00 0.00 26.41 26.41 Lease Hold Land 32.86 2.17 0.00 35.03 0.00 0.00 35.03 32.86 Freehold Land 27.39 77.05 0.00 104.44 0.00 0.00 104.44 27.39 Buildings 1102.19 657.75 3.81 1756.13 302.81 336.45 1419.68 799.38 Plant & Machinery 5031.09 3569.06 0.00 8600.15 1990.88 2345.53 6254.62 3040.21 Furniture & Fixtures 129.82 13.72 0.24 143.30 67.97 76.02 67.28 61.85 Vehicles 198.43 89.80 44.87 243.36 59.65 60.29 183.07 138.78 Equipments 175.02 23.44 0.03 198.43 76.21 89.81 108.62 98.81 Total 6723.21 4432.99 48.95 11107.25 2497.52 2908.10 8199.15 4225.69 Total Previous Year 5554.18 1183.73 14.70 6723.21 2149.11 2497.52 4225.69 As at As at 31/03/2005 31/03/2004
SCHEDULE 6: INVESTMENTS (AT COST) QUOTED 9118 (0) Equity Shares of Dena Bank of Rs. 27/- fully paid up of face value of Rs. 10/- each 2.46 0.00 866 (0) Equity Shares of ICICI Bank Ltd. Rs. 10/- fully paid up 1.10 0.00 UNQUOTED Shares of Rajmugat Co-Op. Society (Rs.350) 0.00 0.00 Shares of Progressive Mercantile Co-Op Bank Ltd. (Rs. 105) 0.00 0.00 10 Shares of Muktajivan Co. Hsg. So. Ltd. 0.01 0.01 10 Shares of Nijanand Association’s of Rs. 50/- each- Rs. 500/- 10 Shares of Shyamaraj Association’s of Rs. 50/- each- Rs. 500/-} 0.01 0.01 Silver 0.26 0.24 3.84 0.26
SCHEDULE 7: INVENTORIES (As taken, valued and certified by the Management) Raw Materials 1752.28 2196.85 Work in Process 391.28 275.48 Finished Goods 21.07 43.98 Stores and Spares 36.14 19.25 Goods in Transit 139.37 40.11 Scrap 9.21 5.86 Shares & Securities 0.00 1.10 2349.35 2582.63
SCHEDULE 8: SUNDRY DEBTORS Unsecured: Considered Good Over Six Months 26.88 59.52 Others 2132.80 1497.34 2159.68 1556.86
SCHEDULE 9: CASH AND BANK BALANCES Cash on Hand 3.86 4.01 Balances with Scheduled Banks in Current Accounts 114.34 0.00 Fixed Deposit Accounts 667.94 346.42 Unpaid Dividend Accounts 9.58 8.54 795.72 358.97
19 Rs. in Lacs As at As at 31/03/2005 31/03/2004 SCHEDULE 10: LOANS AND ADVANCES Unsecured: Considered good Advances recoverable in cash or in kind or for value to be received 203.00 106.56 Advances to Staff 7.06 8.28 Interest accrued on Deposits 10.33 2.59 Advance Income Tax (Net of Provision for Tax 15.83 20.08 of current year Rs. 66.00 lacs, Previous year Rs. 64.00 lacs) Balances with Central Excise Authorities 394.05 236.36 Deposits - Others 51.21 26.48 681.48 400.35
SCHEDULE 11: CURRENT LIABILITIES & PROVISIONS Liabilities Sundry Creditors for Goods and Expenses 4306.93 2612.81 Advances from Customers 391.33 252.58 Statutory Liabilities 159.26 115.09 Unclaimed Dividend 9.58 8.54 Provision for Taxation (Net of Advance Tax) 46.30 0.00 4913.40 2989.02
Provisions Proposed Dividend 180.00 90.00 Dividend Tax 25.25 11.53 205.25 101.53
2004-2005 2003-2004
SCHEDULE 12: OTHER INCOME Dividend (Gross) 0.06 0.06 Misc. Income 0.99 1.41 1.05 1.47
SCHEDULE 13: MATERIAL COST Opening Stock Work-in-Process 275.48 870.49 Finished Goods 43.98 82.48 Shares & Securities 1.10 1.10 Scrap 5.86 5.17 326.42 959.24 Less : Transfer to Investments 1.10 325.32 0.00 959.24 Raw Materials Consumed Opening Stock 2196.85 736.73 Add: Purchases 11329.23 8622.67 13526.08 9359.40 Less: Closing Stock 1752.28 2196.85 11773.80 7162.55 12099.12 8121.79 Closing Stock Work-in-Process 391.28 275.48 Finished Goods 21.07 43.98 Shares and Securities 0.00 1.10 Scrap 9.21 5.86 421.56 326.42 11677.56 7795.37
20 Rs. in Lacs 2004-2005 2003-2004 SCHEDULE 14: EMPLOYEES’ REMUNERATION & BENEFITS Salaries, Wages and Bonus 463.08 403.30 Contribution to Provident and Other Funds 47.93 38.90 Staff Welfare Expenses 69.06 66.27 580.07 508.47
SCHEDULE 15: FINANCIAL EXPENSES Interest On Term Loans 14.91 3.36 Others 265.36 186.19 Bank Charges & Commission 158.96 105.07
439.23 294.62 Less: Interest Income (Gross) 60.58 40.85 TDS Rs. 8.93 Lacs (Rs. 9.79 Lacs) 378.65 253.77
SCHEDULE 16: OTHER EXPENSES Consumption of Stores and Spares 727.97 552.65 Freight and Transport 159.75 214.11 Power and Fuel 611.86 434.98 Labour & Processing Charges (Net) 485.51 489.28 Repairs Plant and Machinery 216.96 145.57 Buildings 38.19 22.82 Others 10.22 265.37 13.36 181.75
Quality Control 24.79 26.63 Printing and Stationery 12.02 10.50 Postage, Telegram & Telephone 30.20 30.39 Legal and Consultancy Charges 34.28 26.32 Vehicles Expenses 42.65 30.45 Travelling Expenses 58.97 72.90 Insurance 100.35 72.68 Rent, Rate & Taxes 29.45 26.53 Bad Debts 35.22 5.01 Directors’ Remuneration 141.72 61.23 Auditors’ Remuneration 1.92 1.27 General Expenses 63.85 39.63 Advertisement & Other Expenses 19.79 12.70 Sales Commission 72.27 37.76 Miscellaneous Expenses Written Off 0.00 0.57 Loss on sale of Fixed Assets 6.33 3.33 2924.27 2330.67
21 SCHEDULE 17: NOTES TO THE ACCOUNTS 1 SIGNIFICANT ACCOUNTING POLICIES A. BASIS OF ACCOUNTING : Financial statements are prepard under historical cost convention on accrual basis. B. FIXED ASSETS : The Fixed Assets are shown at cost, net of tax/duty credits availed, if any, and includes expenses capitalised during construction period. C. DEPRECIATION : The company has provided depreciation on straight line method at the rates and the manner specified in Schedule XIV to the Companies Act, 1956. D. DEFERRED REVENUE EXPENDITURE : Expenditure relating to Preliminary Expenditure & Capital issue is written off on straight line basis over a period of 5 years. E. INVENTORIES : Inventories are valued at lower of cost or net realisable value except for Scrap. Scrap is valued at net realisable value. Cost is determined on FIFO (First in First Out) method. F. SALES : Sales & Income from operations represent the amount receivable for goods sold including excise duty thereon but excludes Sales Tax, trade discount & other taxes and adjustments for late delivery charges. G. EXCISE / CUSTOMS DUTY : Excise Duty on manufactured goods remaining in the inventory is included as a part of valuation of finished goods. The custom duty on raw materials, stores, spares & components is accounted on clearance thereof. H. RETIREMENT BENEFITS : The Company contributes to group gratuity policy with L.I.C. of India, for future payment of Gratuity to employees. Accrued liability towards leave encashment is provided on the balance of unutilitied leaves on the balance sheet date. I. FOREIGN CURRENCY TRANSACTIONS : Foreign currency transactions are accounted at exchange rates prevailing on the date the transactions take place. All exchange differences arising in respect of foreign currency transactions are dealt with in Profit & Loss Account (except those relating to acquisition of Fixed Assets which are adjusted in the cost of the assets). All foreign currency assets and liabilities, if any, as at the Balance Sheet date are restated at the applicable exchange rates prevailing on the date of financial statements. J. DEFERRED TAXATION : Deferred Tax resulting from timing differences between book and tax profits is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallise. K. INVESTMENTS : Investments are stated at cost. Diminution in value, if any, which is of a temporary nature, is not provided. L. BORROWING COSTS : Borrowing costs are recogized as expenses in the period in which they are incurred, except to the extent where borrowing costs that are directly attributable to the acquisition, construction, or production of an asset till put for its intended use are capitalised as part of the cost of that asset. M. IMPAIRMENT OF ASSETS : The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the assets. If such recoverable amount of the assets is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost. N PROVISION AND CONTINGENT LIABILITIES : a) Provisions are recognized when the present obligation of a past event gives rise to a probable outflow, embodying economic benefits on settlement, and the amount of obligation can be reliably estimated. b) Contingent Liabilities are disclosed after a careful evaluation of facts and legal aspects of the matter involved. c) Provisions and Contingent Liabilities are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. 2 Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.2618.96 Lac (Rs.14.26 Lac). 3 Contingent Liabilities as on 31st March, 2005 in respect of :- a) Guarantees / Counter guarantees (including Letters of Credit) issued Rs.6634.54 Lac (Rs.3215.42 Lac) b) Taxation matters under appeal - Income Tax Rs.Nil (Rs.61.23 Lac) Excise Rs.135.14 Lac (Rs.177.03 Lac) 22 4 The Company has paid premium of Rs.42.25 lac (Rs.42.01 lac) on Key Man Insurance Policy on the life of Directors, which is included in Insurance Expenses. 5 (a) In the opinion of the Directors, the current assets, loans and advances are approximately of the value stated, if realised in the ordinary course of the business and provisions for all known liabilities are adequate. The accounts of unsecured loans,sundry creditors, loans and advances and sundry debtors are subject to confirmation and necessary adjustments, if any, will be made on their reconciliation and / or settlement. (b) The amount of sundry debtors is net of Bills discounted realised of Rs.1239.79 Lac (Rs.572.77 Lac) with bankers and therefore the same is not shown as contingent liabilities. 6 During the current year, the shares & securities of Rs.1.10 lac held as stock in trade have been converted into investments. 7 The secured loans and fixed deposits amounting to Rs.802.40 lacs relating to the same bank do not include amounts on which the bank has an obligation for mandatory set-off on the maturity date. 8 The Company is engaged in business of Steel Tubes & Pipes which as per Accounting Standard - AS 17 is considered the only reportable business segment. 9 Income from operations include Income from Power Generation of Rs.223.08 Lac ( Rs.97.54 Lac) which is of the power generated from Wind Mill Divisions and consumed by other divisions of the Company. 10 As required by Accounting Standard - AS 18 “Related Parties Disclosure” issued by The Institute of Chartered Accountants of India, the details are as follows : (Rs.in Lacs) 2004-05 2004-05 2003-04 2003-04 Name of Party Relationship Nature of Transa- Total Amount Transactions Total Amount Transaction ctions outstanding Amount outstanding Amount Due from/ Due from/ (Due to) (Due to) Mr. Prakash M. Sanghvi Managing Director Remuneration 16.47 50.00 23.64 9.00 Mr. Jayanti M. Sanghvi Whole Time Director Remuneration 13.91 30.00 19.39 7.00 Mr. Shanti M. Sanghvi Whole Time Director Remuneration 11.35 20.00 15.20 5.00 Mr. S. Solanki Non-Executive Director Remuneration 0.00 0.00 3.00 3.00 Mr. Sudhir S. Talati Finance Controller Remuneration 2.80 0.00 3.59 Nil 11 Directors’ Remuneration Rs. in Lacs 2004-2005 2003-2004 Salary 33.60 30.00 Commission 100.00 24.00 Contribution to PF, FPF & Superannuation Funds 7.39 6.55 Other Perquisites 0.73 0.68 141.72 61.23
12 Computation of Net Profit in accordance with section 198 of the Companies Act, 1956 : 2004-2005 2003-2004 Profit before Tax 2102.93 626.96 Add : Directors’ Remuneration 141.72 61.23 Add : Depreciation as per accounts 436.04 356.27 Add : Loss on sale of fixed assets 6.33 3.33 Less : Depreciation under section 350 436.04 356.27 Net Profit under section 349 & 350 2250.98 691.52 10 % thereof 225.10 69.15 Total remuneration paid to Directors (Including commission) 141.72 61.23
13 Auditors’ Remuneration (including service tax, as applicable) Rs. in Lacs 2004-2005 2003-2004 (i) Audit Fees 1.10 1.08 (ii) Tax Audit Fees 0.14 0.14 (iii) Othe Services 0.68 0.05
1.92 1.27
14 The Company has not been able to indentify the names of Small Scale Industries Undertakings to whom any amounts were payable and outstanding for more than 30 days. 15 Purchase is net of Rs. 15.38 lacs (Rs. 1.29 lacs) and Sales includes Rs. 13.85 lacs (Rs. 9.20 lacs) on account of foreign exchange fluctuations.
23 16 Additional information pursuant to the provision of para 3 & 4(c),(d) of part II of Schedule VI to the Companies Act, 1956 to the extent applicable to the Company and as certified by the Management and relied upon by the Auditors: 2004-2005 2003-2004 (A) Licensed and Installed Capacity and Production : (a) Licensed Capacity - Stainless Steel Tubes & Pipes } N.A N.A - Saw Pipes } N.A N.A (b) Installed Capacity (as assessed by the management) M.T M.T - Stainless Steel Tubes & Pipes 10160 6960 - Saw Pipes 120000 90000 (c) Production Own - Stainless Steel Tubes & Pipes 4293 3359 - Saw Pipes 10270 12094 Job - Stainless Steel Tubes & Pipes 747 315 - Saw Pipes 8780 24252 (B) Particulars of Opening & Closing Stock : 2004-2005 2003-2004 2004-2005 2003-2004 Rs.in Lacs Rs.in Lacs Qty(M.T) Qty(M.T) Sales :- - Stainless Steel Tubes & Pipes - Opening Stock 0.00 31.41 0 23 - Sales 13282.45 8120.41 4293 3382 - Scrap Sales 261.53 84.97 340 238 - Job Work Sales 131.99 27.99 747 315 - Saw Pipes - Opening Stock 43.98 51.07 164 189 - Closing Stock 21.07 43.98 54 164 - Sales 6165.48 4241.63 10380 12119 - Scrap Sales 32.99 16.72 283 238 - Job Work Sales 580.85 844.35 8780 24252 - Power Generation 223.08 97.54 — — (C) DETAILS OF RAW MATERIALS CONSUMPTION - Stainless Steel Coils, Tubes & Pipes 8359.31 4804.98 4913 3796 - M.S / C.S Plates 3414.49 2357.57 10783 11067 (D) Value of Imports calculated on CIF basis (on accrual basis) 2004-2005 2003-2004 Rs.in Lacs Rs.in Lacs (i) Raw Materials 2308.96 1491.51 (ii) Components and Spare parts 43.62 36.45 (iiii) Capital Goods 1538.49 0.00 2004-2005 2003-2004 (E) Consumption of Material % Rs.in Lacs % Rs.in Lacs (i) Indigenous 81.19 9559.01 82.69 5922.39 (ii) Imported 18.81 2214.79 17.31 1240.15 100.00 11773.80 100.00 7162.55 (F) Consumption of Spare Parts & Components % Rs.in Lacs % Rs.in Lacs (i) Indigenous 94.01 684.35 93.40 516.20 (ii) Imported 5.99 43.62 6.60 36.45 100.00 727.97 100.00 552.65 (H) Earning in Foreign Exchange Export at F.O.B. value 2398.06 1381.16 (I) Expenditure in foreign currency for Travelling and other matters Rs.54.89Lacs (Rs.44.01 Lacs) (On accrual basis) 17 Earnings Per Share (EPS) 31/03/2005 31/03/2004 Profit / (Loss) as per Profit & Loss A/c (Rs.in Lacs) 1325.21 405.97 Number of Equity Shares (Lacs) 90 90 Basic Earnings per Share (Rs.) 14.72 4.51 Nominal Value of Share (Rs.) 10 10 18 Deferred Tax Difference between book and tax depreciation (Rs.in Lacs) 1435.58 881.44 19 Corresponding figures of the previous year have been regrouped and / or re-arranged, wherever necessary. As per our report attached S. SOLANKI Chairman P. M. SANGHVI Managing Director For Mehta Lodha & Co. Chartered Accountants J. M. SANGHVI Wholetime Director S. M. SANGHVI Wholetime Director PRAKASH D. SHAH D. C. ANJARIA Director Partner DR. V. M. AGRAWAL Director P. M. MEHTA Director Ahmedabad, V. C. BHAGAT Company Secretary 27th June, 2005 S. S. TALATI Finance Controller 24 CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31ST MARCH, 2005 (Rs. in lacs) 2004-2005 2003-2004 (A) CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax and extraordinary items 2102.93 626.96 Adjustment for : Preliminary Expenses 0.00 0.57 Depreciation 436.04 356.27 Loss on Sale of Fixed Assets(Net) 6.33 3.33 Dividend Received -0.06 -0.06 Interest Income -60.58 -40.85 Interest Expenses 439.23 294.62
820.96 613.87
Operating Profit before Working Capital changes 2923.89 1240.83 Adjustment for : Trade and Other Receivables -876.21 341.27 Inventories 233.28 -865.44 Trade Payables & Provisions 1767.46 448.77
1124.53 -75.40
Cash Generated from Operation 4048.42 1165.43 Interest Paid -439.23 -294.62 Direct Taxes paid -66.65 -62.98
-505.88 -357.60
Cash Flow before Extraordinary Items 3542.54 807.83 Net Cash Flow from Operating Activities 3542.54 807.83 (B) CASH FLOW FROM INVESTING ACTIVITIES : Purchase of Fixed Assets -4432.99 -1183.73 Adjustment of CWIP and Capital Advances -2375.66 -56.98 Sale of Fixed Assets 15.90 11.37 Purchase of Investments -3.58 0.00 Interest Received 52.84 40.85 Dividend Received 0.06 0.06
Net Cash used In Investing activities -6743.42 -1188.43 (C) CASH FLOW FROM FINANCING ACTIVITIES Proceeds/(Repayments) from Term Borrowings 3739.16 138.05 Proceeds from Preferential Allotment 0.00 452.02 Dividend Paid -101.53 -66.07
Net Cash used in Financing Activities 3637.63 524.00 Net increase in Cash and Cash Equivalents 436.75 143.41 Cash and Cash Equivalents as at 01.04.2004 358.97 215.56 Cash and Cash Equivalents as at 31.03.2005 795.72 358.97 As per our report attached S. SOLANKI Chairman P. M. SANGHVI Managing Director For Mehta Lodha & Co. Chartered Accountants J. M. SANGHVI Wholetime Director S. M. SANGHVI Wholetime Director PRAKASH D. SHAH D. C. ANJARIA Director Partner DR. V. M. AGRAWAL Director P. M. MEHTA Director Ahmedabad, V. C. BHAGAT Company Secretary 27th June, 2005 S. S. TALATI Finance Controller 25 BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE (As per Schedule VI, Part (iv) to the Companies Act, 1956) I REGISTRATION DETAILS (RMTL) Registration No. 6460 State Code 4 Balance Sheet Date 31ST MARCH,2005 II CAPITAL RAISED DURING THE YEAR (Rs. in Lacs) Public Issue — Rights Issue — Private Placement — Bonus Issue — III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Rs. in Lacs) Total Liabilities 11546.70 Total Assets 11546.70 SOURCES OF FUNDS Paid-up Capital 900.00 Reserves & Surplus 4167.62 Secured Loans 4258.96 Unsecured Loans 784.54 Deferred Tax Liability 1435.58 APPLICATION OF FUNDS Net Fixed Assets 10675.28 Investments 3.84 Net Current Assets 867.58 IV PERFORMANCE OF THE COMPANY (Rs. in Lacs) Turnover including other incomes 18099.52 Total Expenditure 15996.59 Profit Before Tax 2102.93 Profit After Tax 1325.21 Earnings Per Share (Rs.) 14.72 Dividend Rate(%) 20 V GENERIC NAMES OF PRINCIPAL PRODUCTS/SERVICES OF THE COMPANY ITEM CODE NO.(ITC CODE) STAINLESS STEEL WELDED TUBES & PIPES 73051229/73059099/73064000 STAINLESS STEEL SEAMLESS TUBES & PIPES(COLD-FINISH) 73049000 SAW CARBON STEEL PIPES 73051129 S. SOLANKI Chairman P. M. SANGHVI Managing Director J. M. SANGHVI Wholetime Director S. M. SANGHVI Wholetime Director D. C. ANJARIA Director DR. V. M. AGRAWAL Director P. M. MEHTA Director Ahmedabad, V. C. BHAGAT Company Secretary 27th June, 2005 S. S. TALATI Finance Controller 26 METALS & TUBES LIMITED Regd. Office : 17, Rajmugat Society, Naranpura Char Rasta, Naranpura, Ahmedabad - 380 013. ATTENDANCE SLIP Please complete this Attendance Slip and hand it over at the entrance of the Hall. Full Name of the Shareholder (BLOCK LETTERS) No. of Shares held Client Id / Folio No.
I hereby record my presence at the TWENTYFIRST ANNUAL GENERAL MEETING of the Company held at the Conference Hall of The Ahmedabad Textile Mill's Association, Near "Gurjari", Ashram Road, Ahmedabad - 380 009 on Wednesday, the 28th September, 2005 at 10.00 a.m. Signature of the Shareholder Note : Only Shareholders of the Company or their Proxies will be allowed to attend the Meeting.
METALS & TUBES LIMITED Regd. Office : 17, Rajmugat Society, Naranpura Char Rasta, Naranpura, Ahmedabad - 380 013. PROXY FORM Client Id/Folio No. : No. of Shares held :
I/We of in the District of being a Member/Members of the above named Company, hereby appoint Shri of in the District of or failing him Shri of in the district of or failing him Shri
of in the
District of as my/our proxy to vote for me/us on my/our behalf at the TWENTYFIRST ANNUAL GENERAL MEETING of the Company to be held at the Conference Hall of The Ahmedabad Textiles Mill's Association, Near "Gurjari", Ashram Road, Ahmedabad - 380 009 on Wednesday, 28th September, 2005 at 10.00 a.m. and at any adjournment there of.
As witness my/our hand(s) this day of 2005. Affix Rs. 1 Signature Revenue Stamp here
Note : The Proxy must be deposited at the Registered Office of the Company not less than 48 hours before the time for holding the Meeting.