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NOTICE OF TWENTY SIXTH ANNUAL GENERAL MEETING
NOTICE is hereby given that the Twenty Sixth Annual General Meeting of the members of D & H Welding Electrodes (India) Limited will be held on Tuesday the
th20 day of September, 2011 at 10:00 a.m. at the Registered Office of the Company situated at A-204, Kailash Esplanade, Opposite Shreyas Cinema, L.B.S. Marg, Ghatkopar (West), Mumbai - 400086 to transact the following business: -
AS ORDINARY BUSINESS 1. To receive, consider and adopt the Audited Balance
stSheet as on 31 March, 2011 and Profit & Loss Account of the Company for the year and the Reports of the Board of Directors and Auditors thereon on that date.
2. To declare dividend on equity shares.3. To appoint a Director in place of Shri Sushil Rawka,
Director who retires by rotation and being eligible, offers himself for re-appointment.
4. To appoint a Director in place of Shri Vimal Lunia, Director who retires by rotation and being eligible, offers himself for re-appointment
5. To consider and if thought fit, to pass with or without modification(s) the following resolution as an Ordinary Resolution:“RESOLVED THAT pursuant to the provisions of the Section 224 and other applicable provisions, if any, of the Companies Act, 1956, M/s ABN & Co. (Firm Registration No 004447C). Chartered Accountants, Indore, the retiring Auditors of the Company, from whom a certificate under Section 224 (1B) of the Companies Act, 1956 has been obtained, be and are hereby re-appointed as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting of the Company, at such remuneration as may be fixed by the Board of Directors of the Company, from time to time based on the recommendation of Audit Committee plus service tax and such other tax(es) as may be applicable and reimbursement of out of pocket expenses incurred by them for carrying out the Audit”
AS SPECIAL BUSINESS6. To consider & if thought fit, to pass with or without
modification(s) the following resolution as a Special Resolution:“RESOLVED THAT pursuant to the provisions of Section 198, 269, 309, 311 and other applicable provisions, if any, of the Companies Act, 1956 read with Schedule XIII to the Act including any statutory amendment(s) or modification(s) or re-enactments thereof for the time being or from time to time in force and subject to the approval of Central Government, as may be required, and subject to such terms, conditions, modifications, and changes as Central Government may direct while according its approval and which the Directors be and are hereby authorized to accept at its sole and absolute discretion, the members hereby accord their approval for the re-appointment of Shri Harsh Kumar Vora as the Managing Director of the Company for a
thfurther period of Three Years (3 Years) w.e.f 29 October, 2011, on such terms and conditions as set out in the explanatory statement annexed to the notice convening this meeting.FURTHER RESOLVED THAT in the event of no profit or inadequacy of profits in any Financial Year, during the tenure of Shri Harsh Kumar Vora as Managing Director of the Company the ofersaid Remuneration as may be approved by the Member/ Central Government as the case may be shall be consider as the minimum remuneration payable by the company to the managing directors.FURTHER RESOLVED THAT the approval of the members of the Company be and is hereby accorded to the Board of Directors to alter/ revise the terms and conditions of the re-appointment of Shri Harsh Kumar Vora, including remuneration payable to him in accordance with the provisions of the Companies Act, 1956 as the Board of Directors may deem fit and as may be agreed by the Managing Director Shri Harsh Kumar Vora.RESOLVED FURTHER THAT Mr. Harsh Kumar Vora shall not be subject to retirement by rotation during his tenure as Managing Director.
FURTHER RESOLVED THAT the Board of Director of the Company be and is here by authorized to do all such acts, deeds and things as may be required in this regard to give effect to this resolution”.
NOTICE
1
7. To consider & if thought fit, to pass with or without modification(s) the following resolution as a Special Resolution:RESOLVED THAT pursuant to the provisions of Section 198, 269, 309 of the Companies Act, 1956, Schedule XIII thereto and other applicable provisions thereof, the approval of the members of the Company be and is hereby accorded for the re-appointment of Shri V.S. Bhate as the Whole-time director and be designated as the Technical Director of the Company for a further period of 3 years w.e.f.
th29 October, 2011 on the terms and conditions as mentioned in the Explanatory Statement to this resolution;
RESOLVED FURTHER THAT wherein any financial year during the currency of tenure of Shri V.S. Bhate, the Company has no profits or the profits are inadequate, the Company may pay remuneration as per the Parat II, section II of Schedule XIII to the Companies Act, 1956;RESOLVED FURTHER THAT the approval of the members of the company be and is hereby accorded to the Board of Directors to alter/revise the terms and conditions of the re-appointment of Shri V.S. Bhate, including remuneration payable to him in accordance with the provisions of the Schedule XIII to the Companies Act, 1956 as the Board of Directors may deem fit and as may be agreed to by Shri V.S. Bhate;RESOLVED FURTHER THAT Shri V.S. Bhate shall not be subject to retirement by rotation during his tenure as Technical Director.”RESOLVED FURTHER THAT the Board of Director of the Company be and is here by authorized to do all such acts, deeds and things as may be required in this regard to give effect to this resolution
NOTES:1. A MEMBER ENTITLED TO ATTEND AND VOTE AT
THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE AT THE MEETING. A PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXY IN ORDER TO BE VALID AND EFFECTIVE, MUST BE RECEIVED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN FORTY-EIGHT HOURS BEFORE THE COMMENCEMENT OF THE MEETING.
2. The Company has already notified closure of Register of Members and Share Transfer Books from
th th15 Sept., 2011 to 20 Sept., 2011 (both days inclusive) for the determining the names of members eligible for dividend on equity shares, if declared at the meeting. The Dividend on equity shares if declared at the meeting, will be credited/dispatched to those members whose names shall appear on the
thCompany's Register of Members on 20 Sept., 2011 in respect of the shares held in dematerialized form, the dividend will be paid to members, those names are furnished by NSDL/CDSL as beneficial owners as on that date.
3. Members holding shares in electronic form may note that bank particulars registered against their respective depository accounts will be used by the Company for payment of dividend, the Company or its Registrar and Transfer Agent cannot act on any request received directly from the members holding shares in electronic form for any change of bank particulars or bank mandates, such changes are to be advised only to the depository participant of the members.
4. Relevant documents referred into the accompanying notice are open for inspection by the members at the Registered office of the Company on all working days, except Saturdays between 11.00 A.M. to 1.00 P.M. up to the date of meeting.
5. Pursuant to the provisions of section 205A(5) and 205C of the Companies Act, 1956, the Company shall transfer the unpaid dividend amount for the year 2006-07 after expiry of 7 years period from transfer of the same to the Unpaid Dividend account. The Members are requested to please submit their request for revalidation of the dividend warrants for the unpaid divided if any for the year 2006-07 and onward.
PLACE : INDORE thDATE : 11 August, 2011
BY ORDER OF THE BOARD
RAJESH SEN(COMPANY SECRETARY)
2
6. There is no instance which require transferring of undelivered shares to the separate escrow account as required under the Listing Agreement.
7. Members are requested to send their queries, if any, at least seven days in advance of the meeting to enable the Company to keep the information ready at the meeting.
8. Members are requested to bring their copies of Annual Report with them since separate copies will not be distributed at the venue of the Meeting.
9. Members holding shares in dematerialized form are requested to intimate all changes pertaining to their bank details, mandates, nominations, power of attorney, change of address, change of name and e-mail address etc., to their Depository Participants. Changes intimated to the Depository Participants will be automatically reflected in the Company's record, which will help the Company and M/s. Ankit Consultancy Pvt. Ltd. to provide efficient and better services. Members holding shares in physical form are also requested to intimate such changes to M/s. Ankit Consultancy Pvt. Ltd. under the signatures of first/joint holder(s).
10. The Ministry of Corporate Affairs has introduced' Green Initiative' whereby the documents are Permitted to be served on the members through electronic mode i.e., e-mail. This initiative is a step towards protection of environment and enabling faster communication with the members. Accordingly, the Company proposed to serve all the documents to e-mail addresses of the members. Members are requested to provide/ update their e-mail addresses with their respective Depository Participants (DP) or send an e-mai at [email protected] to get the Annual Report and other documents on such e-mail address. Members holding shares in physical form are also requested to register their e-mail address on Website of M/s. Ankit Consultancy Pvt. Ltd. through login on http://www.wix.com/harsh_ng/ankitonline.
11. Pursuant to the Clause No.49 of the Listing Agreement, profile of the Directors proposed for appointment/re-appointment being given in a statement containing details of the concerned Directors is attached hereto.
PLACE : INDORE
thDATE : 11 August, 2011
BY ORDER OF THE BOARD
RAJESH SEN(COMPANY SECRETARY)
STATEMENT REGARDING THE DIRECTORS PROPOSED FOR APPOINTMENT
Mr. Harsh KumarVora(Managing Director)
Mr. V.S. Bhate(Whole TimeDirector)
Mr. Sushil Rawka(Non Executive Director)
Mr. Vimal Lunia(Non ExecutiveDirector)
49 YearCommerce graduate
75 YearScience graduate
59 YearCommercegraduate
51 YearSciencegraduate
26 years of experience in production & marketing & working of the company.
59 year experiencein the industry in the manufacturing and technical requirements.
He has richexperience in the Taxation filed.
He has richexperience in the various field
06/12/1990
29/10/1993
01/04/1995
20/09/2003
3
Nil
Nil
2
361745, i.e 5.21%
900, i.e 0.01%
63,300,i.e. 0.91%
Nil
Name and Designationof Appointee
Age / Qualifi-cations Year
Expertise/Experience
Date of appoint-ment
OtherDirect-orship
No of shares held & %age
3
EXPLANATORY STATEMENT UNDER SECTION 173(2) OF THE COMPANIES ACT, 1956
ITEM NO. 6:Shri Harsh Kumar Vora was re-appointed as Managing Director for a period of Three years by the Board of
ndDirectors at their meeting held on 22 August 2008 which was approved by the Shareholders of the Company at their Annual General Meeting held on 22nd September, 2008, therefore his tenure as Managing
thDirector shall be over on 28 October, 2011. Mr. Vora is a commerce graduate and having more than 26 years of experience in the industry. He is one of the core promoter of the Company and is key instrumental since the incorporation of the Company and the Company has grown under his dynamic leadership and strong management. Therefore the remuneration
thcommittee of the Board at its meeting held on 4 August, 2011 has considered and approved his re-appointment for a further period of 3 years on the remuneration, terms and conditions as mentioned herein under. The Board has also consider that re-appointment of Shri Harsh Kumar Vora, would of immense benefit to the Company and accepted the recommendation/approval of the Remuneration Committee at their meeting held on
th11 August 2011 and has approved re-appointment of Mr. Harsh Kumar Vora as Managing Director on the remuneration as below:-1. Gross Salary: Rs. 5,00,000/- p.m.2. Perquisites upto 150% or Rs.7,50,000/- p.m.
which ever is lowerThe Managing director shall be entitled for the following perquisites and other benefits within the above said limit as may be decided by the Board and the same may be by way of perquisites and allowances payable or reimbursement, such as;
(a) house rent allowance/rent free accommodation, house maintenance allowance,
(b) allowances for utilities such as gas, electricity, water, furnishing, repairs,
(c) servants' salaries, (d) medical reimbursement, (e) group medi claim/accidental insurance / life
insurance / keyman insurance, (f) leave travel concession for himself and his family, (g) club fees,
3. Other exempted benefits:In addition top above he shall be entitled for the
following benefits, which shall not be considered as
remuneration within the provisions of the Schedule
XIII of the Companies Act, 1956:(a) Payment of gratuity as per the rules of the Company.(b) Contribution to PF, FBF and Supper annuation funds
as per rules of the Company.(c) Leave encashment upto 15 days for every one year
completed in the employment, payable in each year
as per rules of the Company. 4. Facilities: (a) The Company shall provide a Company's Car with
driver for the Company's work and if the Car is not
provided, the company shall reimburse of car/taxi
expenses on actual basis.(b) The Company shall provide telephone at the
residence of the managing Director and a Cell phone
with internet facility.As per the provisions of the Schedule XIII to the
Companies Act, 1956, the Company proposes to pay
the remuneration in excess of the limit as prescribed
under Part II, Section II of the said Schedule and the
proposed aforesaid remuneration/salary may in
excess of the ceiling prescribed under section 198
read with section 309, i.e. more than 5% / 10%
or11% of the net profits of the Company, which can
be paid by way of approval of the members as special
resolution and subject to the approval of the Central
Government. Your directors submit the following
Information pursuant to Section II of Part II of
Schedule XIII to the Companies Act, 1956 for
consideration of the members:I. General Information:
The Company is engaged in the manufacturing and
dealing in welding electrodes which is being the
backbone of infrastructure industry. The Company is
in the manufacturing activities since Incorporation
and is pioneer in its field.The Company is growing under the dynamic
leadership and control of Shri Harsh Kumar Vora, the
Managing Director and the past financial
performance as well future projections are as under:
4
(6) The Company is manufacturing Welding Electrodes and pioneer in the industry and listed with the BSE and continuing paying dividend to its members since last four year with the sound financial track records. There is no comparable data for matching the remuneration of the Managing Director remuneration in the industry in the Country There has been phenomenal increase in the package of CEO/WTD all around the manufacturing industries in India and World; your industry is no more exception to it. In order to retain good talent, it is inevitable to increase the remuneration of Mr. Harsh Kumar Vora needs to be considered.
(7) Mr. Vora is the core promoter and holding 3,61,745 Equity Shares consisting 5.21 % of the paid up share capital in the Company and is not drawing any other benefits except the remuneration as the managing director and getting dividend together with the other members of the Company. Shri Madhusudan Jain, the Whole-time Director and promoter of the Company is a relative of Mr. Harsh Kumar Vora.
III.Other information:(1) The Company is a profit making, dividend paying
company, however, with the tremendous increase in cost of raw material, stiff competition from the domestic and China the Company's profitability is lower. Further that during the past three years due to worldwide financial recession including India, the new manufacturing units could not be set up in the country as per projections, resulting, the demand, margin and profitability has been affected.
(2) To increase the profitability, the Company is trying hard to pass on the increased cost of raw material to its customer, develop export market, improve in the quality and develop some more ranges in the manufacturing line, which will give positive results in the years to come.
(3) Your company is expecting to achieve the above said projected target in the next three years.
The explanatory statement together with the accompanying Notice should be treated as an abstract of the terms of contract of revised remuneration of the Managing Director in accordance with the provisions of sub-section(2) of the section 302 of the Companies Act,1956.
II. Information about the appointee:(1) Mr. Harsh Kumar Vora, aged about 49 year, is a
commerce graduate having more than 26 years of experience in the Company and he is the Managing Director of the Company since 1990 with his vision, your Company has come out with so many challenges in the domestic and international market and grown to this level. Shri Vora is also one of the core promoter of the Company and is associated since the incorporation of the Company. His vision is to make your company within top 10 welding electrodes manufacturer and achieve turnover of Rs.100 Crores in the year 2013-14.
(2) Mr. Harsh Kumar Vora was paid Rs.29,99,300/- during the year 2010-2011.
(3) Not Applicable.(4) Mr. Vora being the Managing Director, is managing
whole of the affairs of the Company under the supervision of the Board of Directors. He is assisted by two whole-time directors and the team of the qualified manager and engineers, technocrats. Mr. Vora is the most suitable and dedicated towards the growth of the Company. He is having capacity to accept the challenges of any nature and capable to achieve the visionary target to become one of the top 10 manufactures in the world for electrodes and achieve turnover of Rs.100 Crores.
(5) It is proposed to pay him, Gross remuneration upto of Rs. 12,50,000 p.m. during his tenure in the manner of Salary of Rs.5,00,000 p.m. and allowances and other perks upto Rs.7,50,000/- p.m. or 150% of the salary.
Particulars
Gross Turnover (Domestic)Gross Turnover (Export)Other IncomeTotal Turnover and ReceiptsProfits before Interest, Dep. & TaxInterestDepreciationTaxNet Profit after TaxCash Profits generatedPaid up Share CapitalDividend (amount/%)EPS
2009-10Actual
5643.205.27
10.175658.64
307.5012.9653.3176.75
164.48217.79635.96
5%2.66
2010-11Actual
6143.296.03
14.556163.87
325.5622.7069.2176.20
157.45226.66694.00
5%2.49
2011-12Projected
7397.0024.0020.00
7441.00646.46
10.0083.00
160.00393.46474.46
1000.0010%3.93
2012-13Projected
8876.0050.0026.00
8952.00837.12
7.5095.00
220.38514.46609.46
1000.0010%5.14
2013-14Projected10660.00
100.0035.00
10795.001047.70
5.00100.00282.81659.89759.89
1000.0010%6.60
(Rs. in Lacs)
5
The Board of Directors recommends the proposed
resolution for your approval as Special Resolution
subject to the prior approval of Central Government, if
required. The draft of the agreement to be entered into
with the Managing Director is available for inspection.None of the Directors except Mr. Harsh Kumar Vora,
Mr. Madhusudan Jain, Mr. Vimal Lunia & Mr. Nirmal
Lunia are deemed to be interested in this resolution.
ITEM NO. 7Shri V.S. Bhate was re-appointed as Technical Director
for a period of Three years by the Board of Directors at ndtheir meeting held on 22 August 2008 which was
approved by the Shareholders of the Company at their
Annual General Meeting held on 22nd September, 2008. th
As a Technical Director his tenure ends on 28 October,
2011. Shri V.S. Bhate is a science graduate having rich
experience in the industry. He has been associated with
the Company since long time. The Board consider that re-
appointment of Shri V.S. Bhate would of immense
benefit of the Company. Remuneration Committee at ththeir meeting held on 4 August 2011 & the Board of
Directors at their meeting held on 11th August 2011
have approved re-appointment of Shri V.S. Bhate as
Technical Director on the remuneration as below :-Gross Salary: Maximum upto a Rs. 2,00,000/- p.m. as
may be decided by the Board of Directors on the basis of
recommendation of Remuneration Committee of the
Company from time to time.Perquisites and Allowances : In addition to salary,
perquisites and allowances will also be payable or
reimburse, such as house rent allowance/rent free
accommodation, house maintenance allowance,
allowances for utilities such as gas, electricity,
water, furnishing, repairs, servants' salaries, medical
reimbursement, group mediclaim /accident insurance/life
insurance/keyman insurance, leave travel concession for
himself and his family, club fees, free use of vehicle,
telephone etc. and such other perquisites & allowances
and other benefits as per the policy of the Company,
which in aggregate will not exceed 100% of the total
annual salary.
As per Schedule XIII to the Companies Act, 1956 in case of absence of profits or inadequacy of profits, payment of prescribed remuneration requires approval of members of the Company by way of Special Resolution and hence this Special Resolution is proposed for approval.Information pursuant to Section II of Part II of Schedule XIII to the Companies Act, 1956I. General Information: Refer the relevant portion of the Explanatory statement given for the Item No. 6:II. Information about the appointee:(1) Shri V.S. Bhate is a science graduate having more
than 59 years of experience in the industry. He has been associated with the Company since long time. Board consider that re-appointment of Shri V.S. Bhate, would of immense benefit to the Company.
(2) Shri V.S. Bhate was paid Rs. 13,33,560/- during the year 2010-2011.
(3) It is proposed to pay him, Gross Salary upto a maximum of Rs. 2,00,000 p.m. during his tenure.
(4) Shri V.S. Bhate is managing Technical affairs of the Company.
(5) Non of the Directors are Related to Shri V.S. Bhate Remaining details are similar as disclosed in the Item No. 6 of the Explanatory statement.
III. Other information: As disclosed in the Item No. 6 of the notice:
The explanatory statement together with the accompanying Notice should be treated as an abstract of the terms of contract of revised remuneration of the Managing Director in accordance with the provisions of sub-section(2) of the section 302 of the Companies Act,1956. The Board of Directors recommends the proposed resolution for your approval as Special Resolution.None of the Directors except Mr. V.S .Bhate, none of the directors are deemed to be concerned or interested in this resolution.
PLACE : INDOREthDATE: 11 August, 2011
BY ORDER OF THE BOARD
RAJESH SEN(COMPANY SECRETARY)
6
A N N U A LR E P O R T2 0 1 0 - 1 1
D & H WELDING ELECTRODES (INDIA) LTD.
1
BOARD OF DIRECTORS Mr. Jagdish C. Kapur - DirectorMr. Sushil Rawka - DirectorMr. Vimal Lunia - Director Mr. Nirmal Lunia - DirectorMr. Surjit Singh - DirectorMr. Basant Singh Johari - DirectorMr. Vasudeo S. Bhate - Director (Technical)Mr. Madhusudan Jain - Whole Time DirectorMr. Harsh Kumar Vora - Managing Director
COMPANY SECRETARY Mr. Rajesh Sen
REGISTERED OFFICE A - 204, Kailash Esplanade,Opposite Shreyas Cinema, L.B.S. Marg,Ghatkopar (West), Mumbai - 400086
ADMINISTRATIVE OFFICE Plot 'A', Sector 'A', Industrial Area, CUM WORKS Sanwer Road, Indore - 452015
Madhya Pradesh BANKERS State Bank of India
AUDITORS M/s. ABN & Co.Indore
REGISTRAR & SHARE M/s Ankit Consultancy Private LtdTRANSFER AGENT Plot No. 60, Electronic Complex
Pardeshipura, Indore (M.P.) 452 010
I N D E XPage No.CONTENTS
DIRECTORS' REPORT .....................................................................................2
ANNEXURE TO DIRECTORS' REPORT .............................................................4
MANAGEMENT DISCUSSION & ANALYSIS REPORT .......................................5
AUDITORS' REPORT......................................................................................12
BALANCE SHEET ..........................................................................................15
PROFIT & LOSS ACCOUNT ...........................................................................16
SCHEDULES ..................................................................................................17
CASH FLOW STATEMENT .............................................................................24
2
OPERATIONAL PERFORMANCE The operational performance of the Company for the period under review is as below: -
ToThe MembersYour directors have pleasure in presenting Twenty Sixth Annual Report on the business and operations of the Company together with the Audited Statement of
stAccounts for the year ended 31 March, 2011.
The sales performance of the Company has shown improvement over the last year. However the profit of the Company has been adversely affected, mainly on account of substantial increase in the prices of raw material.
DIVIDEND Your directors are pleased to recommend a dividend of 5 % (Re. 0.50 per share) absorbing a sum of Rs 34.70 Lacs. The dividend will be paid to all shareholders whose names appear in the Register of Members as on the book closure date.
EXPORTYour company has chalked out a plan to grow in the export market. This segment of the business is expected to grow at a faster rate, in the coming years.
EXPANSIONCompany is in the process of expanding its capacity and is also entering into allied business. The Company had already taken steps for the purpose of expansion and diversification and for this funds have been arranged through internal sources.
DIRECTORS Mr. Sushil Rawka and Mr. Vimal Lunia, Directors are liable to retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for the re-appointment. The Board of Directors recommends their re-appointment.
CORPORATE GOVERNANCEReport on Corporate Governance is enclosed and is forming part of the Directors' Report. A certificate from the Statutory Auditors of the Company regarding Compliance of the conditions of the Corporate Governance is attached to this report.
FIXED DEPOSITS Company has not accepted any deposits within the meaning of Section 58A and 58AA of the Companies Act, 1956 and the rules made there under.
DIRECTOR'S RESPONSIBILITY STATEMENTIn terms of provisions of Section 217(2AA) of the Companies Act, 1956 your directors confirm that: -
(i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
DIRECTORS' REPORT
Gross Sales and
other Income
Profit before Interest
& Depreciation
Interest and
Financial Charges
Depreciation
Net Profit for the year
Provision for Income tax
(Current)
Balance carried from
previous year
Profit available for
appropriation
Provision for dividend &
Dividend distribution tax
Transfer to
General Reserve
Balance carried to
Balance sheet
5658.64
307.50
12.96
53.31
241.23
76.75
539.66
698.67
37.08
50.00
611.59
6163.87
325.56
22.70
69.21
233.65
76.20
611.59
768.16
40.46
50.00
677.70
Year ended31.03.2011(Rs. in lacs)
Year ended31.03.2010(Rs. in lacs)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
3
(ii) the Directors had selected such accounting
policies and applied them consistently and made
judgments and estimates that they are
reasonable and prudent so as to give a true and
fair view of the state of affairs of your Company
at the end of financial year and of the profit of
your Company for that period;(iii) the Directors had taken proper and sufficient
care for the maintenance of adequate
accounting records in accordance with the
provisions of this Act for safeguarding the
assets of your Company and for preventing and
detecting fraud and other irregularities;(iv) the Directors had prepared the annual accounts
on a going concern basis.
CONSERVATION OF ENERGY, TECHNOLOGY AND
FOREIGN EXCHANGE Details of Conservation of Energy and Technology
Absorption under provisions of Section 217 (1)(e) of the
Companies Act, 1956 read with the Companies
(Disclosure of particulars in the report of Board of
Directors) Rules, 1988 are given as Annexure to this
report.Foreign Exchange earning was 6.03 Lacs and the outgo
was Rs.11.68 Lacs during the Year.
AUDITORSM/s ABN & Co. Chartered Accountants, Indore being
Statutory Auditors of the Company are liable to retire by
rotation at the ensuing Annual General Meeting and who
being eligible offer themselves for re-appointment. The
Board recommends their re-appointment.
AUDITOR'S REPORTReport of the Auditors and their observations on the
Accounts of the Company for the year under review is
attached herewith.
PARTICULARS OF EMPLOYEESThere is no information to be given in terms of section
217 (2A) of the Companies Act, 1956 read with the rules
framed there under.
ACKNOWLEDGMENT
FOR AND ON BEHALF OF THE BOARD
HARSH KUMAR VORAMANAGING DIRECTOR
VASUDEO S. BHATETECHNICAL DIRECTOR
PLACE : INDORE
DATE :
The Directors thank the customers, vendors, investors, business associates and bankers for their support to the Company.
The Directors also thank the Government of India, the Concerned State Governments and other Government Departments and Government Agencies for their cooperation.
th11 August, 2011
4
ANNEXURE TO DIRECTORS' REPORT
FORM 'A'FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
The company is not covered under the list of specified industries. However, required energy conservation measures were already taken to ensure optimum power consumption to the extent necessary.
FORM 'B'FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION
1. Specific areas in which R & D carried out by the company.2. Benefit derived as a result of above R & D 3. Future plan of action 4. Expenditure on R & D
a) Capital b) Recurring c) Total d) Total R & D expenditure as percentage of total turnover.
Technology absorption, adaptation and innovation.
1. Efforts in brief made towards technology absorption adaptation and innovation.2. Benefits derived as a result of the above efforts e.g. product improvement, product development, imports substitution etc.3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year)
a) Technologyb) Year of Importc) If not fully absorbed areas where this has not taken place,
reasons therefore and future plans of action.
No R&D carried out. Therefore no Expenses were Incurred on R&D
NIL
FOR AND ON BEHALF OF THE BOARD
PLACE : INDOREth
DATE : 11 August, 2011VASUDEO S. BHATE
TECHNICAL DIRECTORHARSH KUMAR VORAMANAGING DIRECTOR
5
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Performance
The overall production of the Company was increased by about 2.52 % and sales increased by 8.93 % to Rs.61.64
Crores, as against 56.59 Crores in the last year. However the Profit before Tax was Rs. 2.34 Crores.
Opportunities & Threats
Although the Company is facing a stiff competition from SSI Units, it is posed to enter into new ventures in the
welding line to add more products into its product range. The profit-oriented business is given a thrust and hopefully
Company is all positive to make in roads in market leading of first rung companies. The bigger problem is the
unsteady pricing factor of ferrous items of which prices are decided by London Metal Market.
Risks & Concerns
Dependability on raw material supplies continues to be a big risk for the Company to face. It is pertinent to ensure
easy availability of raw materials such as Rutile, Steel and Metals at fair prices.
Internal Control System
The company has adequate internal control systems commensurate with the nature and size of the business. All the
transaction are properly authorized and recorded. The Company has an Audit Committee, which regularly meets to
review the Financial Reports and Statements of the Company. It also invites the Statutory Auditors of the Company
to get their opinions and suggestions on the Company's system of preparing and maintaining financial statements
and on the adequacy of its internal control system.
Human Resources and Industrial Relations
The Company assigns a great deal of importance to its human resources. Industrial relations with the employees
remained cordial during the year. Human Resource Development activities had received considerable focus during
the year. The Directors wish to acknowledge the contribution of all the employees in raising the performance of the
Company.
Quality Management System ISO 9001: 2008
Your company's administrative office and works situated at Indore has been certified as ISO 9001: 2008 by
International Certification Services for Quality Management System. The above Certification is valid upto
December 2011.
6
CORPORATE GOVERNANCE
I. Company's Philosophy on Code of Corporate GovernanceThe Company believes in the practice of good Corporate Governance acting as a good corporate citizen. The spirit of Corporate Governance has been prevailing in the Company. The company believes in the values of transparency, professionalism and accountability. The Company recognizes the acceptability of the Board and importance of the decisions relating to its customers, dealers, employers, shareholders etc.The Company always strives to achieve performance at all levels by adhering to corporate governance practices.
II. Board of DirectorsstThe strength of Board of Directors as on 31 March, 2011 was 9 out of which 3 were Executive Directors, 3 were
Non Executive Directors and 3 were Non Executive Independent Directors.Shareholding of Non-Executive Directors in the Company as on 31.03.2011:Mr. Sushil Rawka : 63,300Mr. Jagdish C. Kapur : NILMr. Nirmal Lunia : NILMr. Vimal Lunia : NILMr. Basant Singh Johari : 3,300Mr. Surjit Singh : NILThe Board of Directors duly met seven times during the Financial Year 2010-2011 and the gap between two meetings did not exceed four months. Dates on which the Board meetings were held are: 05.04.2010, 30.04.2010, 31.07.2010, 17.08.2010, 13.11.2010, 14.02.2011 and 28.03.2011. Attendance of directors during Board Meetings is shown in Table A. The Categories of directors are also mentioned in the same table.
III. Audit CommitteeThe Audit Committee of the Company comprised of Mr. Surjit Singh, Director of the Company as Chairman, Mr. Sushil Rawka and Mr. Jagdish C. Kapur, Directors of the Company as its members. The members have financial and accounting knowledge. The Committee members duly met Five times during the Financial Year 2010-2011 on 19.04.2010, 22.07.2010, 07.08.2010, 25.10.2010 and 21.01.2011.
The attendance of members at the meeting of Audit Committee held during the Financial Year under review is shown in Table A.The Audit Committee has adequate powers and detailed terms of reference, to play effective role as required under the provisions of the Companies Act, 1956 and clause 49 of the Listing Agreement entered with Bombay Stock Exchange.
IV. Share Transfer and Investor Grievance CommitteeShare Transfer and Investor Grievance Committee consist of Mr. Sushil Rawka, Director of the Company as Chairman, Mr. Jagdish C. Kapur & Mr. Madhusudan Jain, Directors of the Company, as its members. Thirty Eight Shareholders' Complaints were received during the Financial Year. All of them were resolved within 30 days of receipt and no complaints were pending at the end of the year.The members duly met Four times during the Financial Year 2010-2011 on 15.04.2010, 17.07.2010, 27.10.2010 and 17.01.2011.The attendance of members at the meetings held during the Financial Year under review is shown in TABLE A.
Sr. No
Name of Director
Status Attendance of Board & Committee Meetings Annual General Meeting
Outside Directorship & Committee Positions
No of Board Meetings
No of Audit committee Meetings Attended
No of STCIGC Meetings Attended
No. of RC Meetings Attendence
Attended during the Year
Director Ship
Committee Positions
1 Mr. Harsh Vora Executive 7 N.A. N.A. N.A. Yes 3 Nil
2 Mr. Vasudeo S. Bhate Executive 7 N.A. N.A. N.A. No Nil Nil
3 Mr. Sushil Rawka Non -Executive 7 5 4 N.A. Yes Nil Nil
4 Mr. Nirmal Lunia Non -Executive Nil N.A. N.A. N.A. No 1 Nil
5 Mr. Jagdish C. Kapur Non Executive & Independent
7 5 4 2 No Nil Nil
6 Mr. Vimal Lunia Non -Executive Nil N.A. N.A. N.A. No 2 Nil
7 Mr. Madhusudan Jain Executive 7 N.A. 4 N.A. Yes 4 Nil
8 Mr. Surjit Singh Non -Executive & Independent
6 5 N.A. 2 No Nil Nil
9 Mr. Basant S. Johari Non -Executive & Independent
7 N.A. N.A. 2 No Nil Nil
7
V. Remuneration CommitteeThe Remuneration Committee of the Company comprised of Mr. Jagdish C. Kapur, Director of the Company as Chairman, Mr. Surjit Singh and Mr. B.S.Johari, Directors of the Company as its members. The Committee members duly met two times during the Financial Year 2010-2011 on 05.08.2010 and 01.11.2010.The attendance of members at the meeting of Remuneration Committee held during the Financial Year under review is shown in TABLE A.The Remuneration Committee has adequate powers and detailed terms of reference, to play effective role as required under the provisions of the clause 49 of the Listing Agreement entered with Bombay Stock Exchange.
Abbreviation : STCIGC = Share Transfer cum Investor Grievance Committee RC = Remuneration Committee
TABLE A
8
VI. Remuneration of DirectorsBreak-up of Directors' remuneration
VII. General Body Meeting:
b. during the last year, the Company had taken shareholders approval by way of special resolution through postal ballot for Alteration in object clause of the Memorandum of Association of the Company and Commencement of new business, as per the detail given below.
S. No.
Name of Directors Salary Including Employers Contribution to Provident fund
Perquisites Sitting Fees
1 Mr. Harsh Kumar Vora (Executive Director )
28,94,400 1,04,900 NIL
2 Mr. Vasudeo S. Bhate (Executive Director)
12,96,000 37,560 NIL
3 Mr. Madhusudan Jain (Executive Director)
27,60,000 2,39,520 NIL
4 Mr. Sushil Rawka NIL NIL 35000
5 Mr. Jagdish C. Kapur NIL NIL 35000
6 Mr. Nirmal Lunia NIL NIL NIL
7 Mr. B. S. Johari NIL NIL 35,000
8 Mr. Surjit Singh NIL NIL 30,000
9 Mr. Vimal Lunia NIL NIL NIL
Total 69,50,400 3,81,980 1,35,000
Financial Year
Date Location of Meeting Time Whether any special resolution passed
2010-2011 30.09.2010 At Registered Office at Mumbai 10:00 A.M. Yes
2009-2010 22.03.2010 At Registered Office at Mumbai 10:00 A.M. Yes
2008-2009 30.09.2009 At Registered Office at Mumbai 10:00 A.M. Yes
2007-2008 22.09.2008 At Registered Office at Mumbai 10:00 A.M. Yes
33,36,796(99.99%)
33,33,491(99.91%)
Date of Announcement of Results
Business for which postal ballotconducted
Total ValidVotes Cast
Votes cast infavor of theresolution
Votes castagainst theresolution
28.12.2010 a. Alteration in object clause of the Memorandum of Association of the Companyb. Commencement of new business
33,37,046
33,37,046
100(0.01%)
3005(0.09%)
VIII. Disclosures:a. Disclosures on materially significant related party transactions i.e. transaction of the Company of material
nature, with its promoters, directors or the management, their subsidiary or relatives etc. that may have potential conflict with the interests of the Company at large: NIL
b. Details of non-compliance by the company, penalties, and strictures imposed on the company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years.
The Company has complied with the requirements of regulatory authorities on capital markets and no penalties/stricture has been imposed against it during the last three years.
9
IX. Declaration of Code of ConductThe Company has adopted a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has already been posted on the website of the Company. All Board Members and Senior Members have affirmed compliance with the Code of Conduct. A declaration signed by the Chief Executive Officer is given below:“I hereby confirm that the Company has obtained from all the members of the Board and Senior Management, affirmation that they have complied with the Code of Conduct for Directors and Senior Management in respect of the Financial Year 2010-2011”
Harsh Kumar VoraManaging Director & CEO
th 11 August, 2011
X. Corporate Governance Compliance Certificate:The Certificate regarding compliance of condition of clause 49 of the Listing Agreement received from the Auditors of the Company is annexed hereto. XI. Shareholders' informationa. Regd. Office: A-204, Kailash Esplanade, Opp. Shreyas Cinema, Ghatkopar (W), Mumbai-400086
th Annual General Meeting: Date and Time: 20 September, 2011 at 10.00 A.M. Venue : At Registered Office of the Companyb. Financial Calendar: (Tentative) Financial reporting for:
Quarter ending June 30, 2011 : On or before August 15, 2011Half year ending September 30, 2011 : On or before November 15, 2011Quarter ending December 31, 2011 : On or before February 15, 2012Year ending March 31, 2012 : On or before May 15, 2012Annual General Meeting for year 2012 : End of September, 2012Date of Book Closure : In the month of September, 2012
c. List of Stock Exchanges: Presently the shares of the Company are listed at Bombay Stock Exchange, Mumbai Scrip Code: 517514
d. Market Price Data: The Stock Market data for the period from April, 2010 to March, 2011 are as below: - [As taken from the website of Bombay Stock Exchange Ltd., Mumbai (BSE)]
e. Performance of D & H (India) in comparison to BSE Sensex
Period High (Rs) Low (Rs) Period High (Rs) Low (Rs)
April, 2010 33.70 21.15 October, 2010 26.50 22.05
May, 2010 33.95 24.10 November, 2010 26.70 20.20
June, 2010 29.60 25.10 December, 2010 24.95 20.00
July, 2010 29.25 22.25 January, 2011 22.60 17.50
August, 2010 27.90 24.00 February, 2011 20.40 15.05
September, 2010 26.90 22.05 March, 2011 19.80 16.00
0
5000
10000
15000
20000
25000
1 2 3 4 5 6 7 8 9 10 11 12
M ONTHS
SE
NS
EX
0.00
10.00
20.00
30.00
40.00
SH
AR
EP
RIC
E
SENSEX SHARE PRICE
10
f. Distribution of Shareholding as on March 31, 2011
h. Dematerialization of shares:Trading in shares of D & H Welding Electrodes (India) Limited is permitted, only in dematerialized form, with effect from April, 2001 as per notification issued by the Securities and Exchange Board of India (SEBI)
stAt present the Company's share are available for dematerialization with both NSDL and CDSL. As on 31 March, 2011, an aggregate of 62, 48,275 Equity Shares, which amounts to 90.03 % of total Equity Share Capital of the Company exist under the Electronic form.The International Securities Identification Number (ISIN) allotted to the Company is INE589DO1018.
i. Registrar and Share Transfer Agents (Physical & Electronic Connectivity):M/s. Ankit Consultancy Pvt. Ltd. is the Company's Registrar and Share Transfer Agent having its office at the following address:Plot No. 60, Electronic Complex Pardeshipura, Indore (M.P.) 452 010 Tel.: 0731-3198601, 3198602 Fax no. : 0731-4065798Email: [email protected] Transfer Forms can be lodged with M/s Ankit Consultancy Pvt. Ltd. at its address mentioned above.
j. Address for Correspondence:Head Office: Plot A, Sector A, Industrial Area,Sanwer Road, Indore 452 015 (M.P.)
k. Pursuant to the provision of Section 205A of the Companies Act, 1956,dividend which remain unpaid or unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account, are required to be transferred to the Investor Education and Protection Fund of the Central Government.Section 205C of the Act declares that no claims shall lie against the fund of the Company in respect of individual amounts, which were unclaimed and unpaid for seven years as aforesaid and transferred to the fund.Shareholders are therefore, advised that those who have not encashed their dividend warrant(s) so far for the year 2006-2007, 2007-2008, 2008-2009 and 2009-2010 may send their dividend warrants to the Company at its Work and administrative office situated at Sanwer Road (M.P), for the issue of Demand draft(s) in lieu thereof before the respective amounts become due for transfer to the fund.
stg. Categories of shareholding as on 31 March, 2011 :
Category
No. of Share held
% of share holding
Promoters & Person acting in concertFinancial Institution, Mutual Fund and BanksPrivate Corporate BodiesNon Resident / OCBsIndian Public
33,13,3210.00
10,33,35366,538
25,26,788
47.740.00
14.890.96
36.41
TOTAL 69,40,000 100.00
Nominal value ofEquity share held (Rs.)
No. of Share Holders
Share Amount
in (Rs.)% of share
holding
Up to 10001001 to 20002001 to 30003001 to 40004001 to 50005001 to 1000010001 to 2000020001 to 3000030001 to 4000040001 to 5000050001 to 100000100000 aboveTOTAL
36151141
378134350390209
5943313149
6430
336488022245601097330
5206501738310332630032921101473470150157014693102222300
471692106,94,00,000
4.853.211.580.752.504.794.742.122.162.123.20
67.97100.00
11
CEO/CFO CERTIFICATION AS PER CLAUSE 49 OF THE LISTING AGREEMENTth
To, 11 August, 2011The Board of Directors,D & H Welding Electrodes (India) Limited,Mumbai
CERTIFICATE a. We have reviewed financial statements and the Cash Flow Statement for the year and that to the best of our
knowledge and belief:i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;ii) these statements together present a true and fair view of the company's affairs and are in compliance with
existing accounting standards, applicable laws and regulations.b. There are to the best of our knowledge and belief, no transactions entered into by the company during the year
which are fraudulent, illegal or violative of the company's code of conduct.c. We accept the responsibility for establishing and maintaining internal controls and that we have evaluated the
effectiveness of the internal control systems of the company and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of the internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
d. We have indicated to the auditors and the Audit Committee:i) significant changes in internal control during the year;ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes
of the financial statements; andiii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the
management or an employee having a significant role in the company's internal control system. Harsh Kumar Vora Sanat Jain Managing Director /CEO G.M.Finance/CFO
Cc: Audit Committee D & H Welding Electrodes(India) Limited
AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCETo,The Members D & H WELDING ELECTRODES (INDIA) LIMITEDWe have reviewed the compliance of conditions of Corporate Governance by D & H Welding Electrodes (India) Ltd. for
stthe Financial Year ended 31 March, 2011 as stipulated in Clause 49 of the Listing Agreement of the said Company with Bombay Stock Exchange. We have conducted our review on the basis of the relevant records and documents
stmaintained by the Company for the year ended 31 March,2011 and furnished to us for the purpose of the review and the information and explanation given to us by the Company during the course of such review.The Compliance of conditions of Corporate Governance is the responsibility of the management .Our review was limited to procedure and implementation thereof, adopted by the Company for ensuring the compliance of the condition 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 the best of our information and according to the explanation given to us, and the representation made by the Directors and management.We hereby certify that the Company has complied with the condition of Corporate Governance as stipulated in the above-mentioned Listing Agreement.As required by the Guidance note on certification of Corporate Governance issued by the Institute of Chartered
stAccountants of India, we state that no investor grievance is pending for the period exceeding one month as on 31 March, 2011 against the Company as per the records maintained by the Share Transfer and Investor Grievance Committee of the Company.We further state that such Certification 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.
B.M.BhandariPartner
PLACE: INDOREth
DATE: 11 August, 2011
For and on behalf of ABN & Co. Chartered Accountants
12
To,The Members,D & H WELDING ELECTRODES (INDIA) LTD.
stWe have audited the attached Balance Sheet of D & H WELDING ELECTRODES (INDIA) LTD as at 31 March 2011 and also the Profit and Loss Account and the Cash Flow Statement 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.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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.1. As required by the Companies (Auditors' Report) Order, 2003 as amended by the Companies (Auditor's Report)
Amendment Order, 2004 issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we give in the annexure, a statement on the matters specified in the paragraph 4 & 5 of the said order.
2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that: (a) We have obtained all the information and explanations, which to the best of our knowledge and belief 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 the books.(c) The Balance Sheet, Profit & 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 & Loss Account and Cash Flow Statement have been prepared
in compliance with the Accounting standards referred to in sub-section 3C of section 211 of the Companies Act, 1956, to the extent applicable and mandatory in nature.
(e) In our opinion and on the basis of information obtained and taken on record by the Board of Directors, we report that none of the directors of the company is disqualified as on 31.03.2011 from being appointed as the director of the company in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956.
(f) 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 other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011.(ii) In the case of the Profit and Loss Account, of the PROFIT for the year ended on that date.(iii) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
AUDITORS' REPORT
For and on behalf of ABN & Co.Chartered Accountants
B.M. BHANDARIPartner
(Mem.No.071232)Firm Reg.No.004447C
Place: IndorethDate : 11 August, 2011
13
ANNEXURE TO THE AUDITORS' REPORTst
(Referred to in paragraph 1 of our report of even date on the accounts for the year ended 31 March 2011 of D & H Welding Electrodes (India) Ltd.)I a. The proper records showing full particulars including quantitative details and situation of the fixed assets are
being maintained by the company. b. All the fixed assets have been physically verified by the management during the year, which in our opinion is
reasonable having regard to the size of the company and the nature of its assets. As per information and explanations given to us, no material discrepancies were noticed.
c. In our opinion and according to the information and explanations given to us, any substantial part of fixed assets has not been disposed off by the company during the year and the going concern status of the company is not affected.
II a. The inventory of the company has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.
b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable & adequate, in relation to the size of the company & nature of its business.
c. On the basis of our examination of records of inventory, in our opinion, the company has maintained proper record of inventory and as explained to us, the discrepancies noticed on physical verification of inventory, as compared to book records were not material and have been properly dealt with in the books of account.
III a. The company has not granted any loan secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence clause (a) to (d) is not applicable to the company.
e. The company has taken unsecured loan from one director, one other persons and one body corporate, during the year, the maximum amount involved during the year was Rs.1,59,06,600/- and year-end balance of loan was Rs.5,29,040/-.
f. The rate of interest and other terms and conditions of unsecured loans taken by the company, are prima-facie not prejudicial to the interest of the company.
g. The unsecured loan taken from director and other persons has been squared up during the year except interest portion, hence no comments on regularity of payment of interest and principal of the loan.
IV In our opinion and according to information & explanations given to us, there is adequate internal control system commensurate with the size of the company & nature of its business with regard to the purchase of inventory & fixed assets & for the sale of goods. Further on the basis of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have been informed of any instances of major weaknesses in the internal control system.
V a. Based on audit procedures applied by us, to the best of our knowledge & belief and according to the information & explanations given to us. We are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.
b. In our opinion and according to information & explanations given to us, transactions made in pursuance of contracts or arrangement entered in the register maintained under section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.
VI In our opinion and according to the information & explanations given to us, the company has not accepted deposit from public, within the meaning of provisions of section 58A & 58AA of Companies Act, 1956 & Rules framed there under.
VII In our opinion, the company has an internal audit system commensurate with the size and nature of its business.
VIII As informed to us and in our opinion the maintenance of cost records has not been prescribed by the Central Government U/s 209(1)(d) of the Companies Act, 1956 for any product of the company.
IX a. According to the records of the company examined by us and the information & explanations given to us, in our opinion the company is, generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investors Education & Protection Fund, Employees State Insurance, Income Tax, Sales Tax, service tax Excise Duty, Wealth Tax, Custom Duty, cess and other statutory dues applicable to it. No undisputed amount payable as at 31.03.2011 for a period of more than 6 month from the date they became payable.
14
Place : Indore th
Date : 11 August, 2011
For and on behalf of ABN & Co. Chartered Accountants
CA B.M. Bhandari Partner
(Mem.No.071232)
b. According to records of the company examined by us and the information & explanations given to us, there are no statutory dues which have not been deposited on account of any dispute.
X The Company does not have accumulated losses at the end of the financial year and it has not incurred any cash losses in the current year and immediately preceding financial year.
XI Based on our audit procedure & on the basis of information & explanations given by the management, we are of the opinion that the company has not defaulted in payment of dues to the financial institution or bank during the year. The company does not have any borrowing by way of debentures.
XII The company has not granted any loans & advances on the basis of security by way of pledge of shares, debentures and other securities.
XIII In our opinion and according to the information & explanations given to us, the company is not a chit fund and nidhi / mutual benefit fund / society. Therefore, provisions of this clause is not applicable to the company.
XIV Based on our examination of records and the information & explanations given to us, the company has maintained proper records of the transactions & contracts in respect of dealing & trading in shares, securities, debentures and other investments and timely entries have been made. All the investments have been held by the company in its own name.
XV According to the information & explanations given to us, the company has not given any guarantee for loans taken by others from the banks and financial institutions during the year.
XVI According to the records of the company, examined by us and the information & explanations given to us, no term loans taken by the company during the year.
XVII According to the information & explanations given to us and on the basis of an overall examination of balance sheet of the company, in our opinion no funds raised by company on short term basis, have been used for long term investments.
XVIII During the year company has converted 5,80,400 convertible warrants into equal number of fully paid equity shares of Rs.10/- each at a premium of Rs.12/- per share on preferential basis to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.
XIX As explained to us, during the period covered by our audit, the company has not issued any debentures. XX The Company has not raised any money through public issue during the year. XXI According to the information & explanation given to us, no fraud on or by the company has been noticed or
reported during the course of our audit.
Note: The above figures are shown net of advance payment made under protest.
Nature of Statute Nature of the dues
Period to which the amount relates
Amount in Rs. (see note below)
Forum where the dispute is pending
CST Regular Assessment
F.Y. 2006-07
722254
Dy. Commissioner Appeal of commercial tax Div.2, Indore -------------DO-------------
Entry Tax Regular Assessment
F.Y. 2006-07
F.Y.2005-06 F.Y.2004-05
323447
111968 111551
Dy. Commissioner Appeal of commercial tax Div.2, Indore -------------DO------------- -------------DO-------------
Entry Tax Penalty F.Y.04-05 TO 06- 07 4919427 Dy. Commissi oner Appeal of commercial tax Div.1, Indore
CST Penalty F.Y.05-06 AND 06-07 1843297 Dy. Commissioner Appeal of commercial tax Div.1, Indore
Significant Accounting Policies and Notes to the Accounts - Schedule 17Schedules referred herein above form integral part of the Balance Sheet.As per our Report of even date attached
For and on behalf of ABN & Co. For and on behalf of the BoardChartered Accountants V.S.Bhate Harsh Kumar Vora (B.M.Bhandari) Technical Director Managing Director Partner M.No.071232
Rajesh Sen Sushil Rawka Place : Indore Company Secretary Director
Date : th
11 August, 2011
st AS AT 31 MARCH , 2011
BALANCE SHEET
15
As at As at 31.03.2011 31.03.2010 Sch. No. Rupees Rupees SOURCES OF FUNDS Shareholder's funds Share Capital 1 86230000 76743200 Reserves & Surplus 2 128734463 110159027 Deferred Tax (Net) 10278305 7258001 Loan Funds Secured Loans 3 18082589 4047599 Unsecured Loans 0 0 Total: 243325357 198207827 APPLICATION OF FUNDS Fixed Assets Gross Block 4 179008829 124034200 Less: Depreciation 46004424 39535338 Net Block 133004405 84498862 Investments 5 10929002 1254399 Current Assets,Loans & Advances 6 Inventories 89863051 70750720 Sundry Debtors 96201659 104481147 Cash & Bank Balances 364893 5394227 Loans & Advances 23732978 32365399 210162582 212991494 Less: Current Liabilities & Provisions 7 Current Liabilities 106677521 96793003 Provisions 4093111 3743925 110770632 100536928 Net Current Assets 99391950 112454566 Total: 243325357 198207827
16
For and on behalf of ABN & Co. For and on behalf of the BoardChartered Accountants
(B.M.Bhandari) Harsh Kumar VoraPartnerM.No.071232
Place : Indore Sushil RawkathDate : 11 August, 2011 Director
Rajesh SenCompany Secretary
V.S.BhateTechnical Director Managing Director
st FOR THE YEAR ENDED 31 MARCH , 2011
PROFIT & LOSS ACCOUNT
As at As at 31.03.2011 31.03.2010 Sch. No. Rupees Rupees INCOME Gross Sales 614931293 564847197 Less: Excise Duty 57042366 43955392 Net Sales 557888927 520891805 Increase (Decrease) in Stock 8 9035629 (12893372) Other Income 9 1455207 1017911 Total: 568379763 509016344 EXPENDITURE Cost of Trading Sales 10 1455826 2163980 Materials consumed 11 399065855 362477241 Manufacturing Expenses 12 24156189 19505467 Employee's Remuneration & Benefits 13 49617951 36325282 Financial Charges 14 2269896 1295737 Administrative & Other Expenses 15 13815431 13383452 Selling & Distribution Expenses 16 29634314 28004870 Duties & Taxes 18078076 16406386 Depreciation 4 6920928 5331300 Total: 545014465 484893715 Net Profit For The Year 23365298 24122629 Provision for Income Tax (Current) 4602000 7675000 Provision for Deferred Tax Liability/(Assets) 3020303 765216 Profit After Tax 15742995 15682413 Balance brought forward from previous year 61159027 53965949 Income Tax of Less/(Add) adjusted 0 0 Previous years adjustment (Net) 86035 (218590) Total: 76815987 69866952 APPROPRIATIONS Proposed Dividend on Equity Shares 3470000 3179800 Dividend Distribution Tax 576324 528125 Transfer to General Reserves 5000000 5000000 Surplus Carried to the Balance Sheet 67769663 61159027 Total: 67769663 61159027 Earnings per share (EPS) par value Rs.10/- each Basic 2.49 2.58 No. of shares used in computing Basic EPS 6365961 5983573 Earnings per share (EPS) par value Rs.10/- each Diluted 1.58 1.55 No. of shares used in computing Dilutede EPS 10000000 10000000 Significant Accounting Policies and Notes to the Accounts - Schedule 17 Schedules referred herein above form integral part of the Profit & Loss Account As per our Report of even date attached
17
Note:1. Cash Credit Loan from State Bank of India is secured
by hypothecation of stocks, book debts, equitable mortgage of Land & Building of the Company at Plot A , Sector A , Industrial Area, Sanwer Road , Indore and a flat of Director, Pledge of existing and future plant & machinery and personal guarantee of two directors of the Company.
2. Factoring facilities from SBI Factors and Commercial Services Pvt.Ltd. is secured by hypothecation of book debts, equitable mortgage of Land and Building at Ghatabillod and Plot 'B' , Sector 'A', Ind. Area Sanwer Road ,Indore and personal guarantee of two director of the Company.
3. Term Loan From HDFC Bank is secured by way of Hypothecation by First and exclusive charges of PlantMachinery.
SCHEDULE 01 TO 17 ANNEXED TO AND FORMING PART OF THE BALANCE st
SHEET AS AT 31 MARCH , 2011 AND THE PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED ON THAT DATE.
Gross Block Depreciation Net Block
ParticularsAs On
01.04.10Rupees
Addition
Rupees
Adjustment
Rupees
As On31.03.11Rupees
Up To31.03.10Rupees
Adjustment
Rupees
Rate
%
For TheYear
Rupees
Up To31.03.11Rupees
As On 31.03.11Rupees
As On 31.03.10Rupees
Lease Hold LandFree Hold LandOffice BuildingFactory BuildingPlant & MachineryElectric InstallationLaboratory Equip.VehiclesFurniture & FixturesOffice EquipmentComputers
Total
Previous Year
89750 1093326 2504370
29032835 69388401
5077862 757256
8522779 2789401 1937292 2840929
124034200
102496797
0 3759970
0 22680890 24277288
2782683 54962
1468850 229801 631269 227603
56113316
22226784
775889
362798
1138687
689380
89750 4853296 2504370
51713725 92889800
7860545 812218
9628831 3019202 2568561 3068532
0 179008829
124034200
0 0
185012 7692226
23425466 1150806
338552 2240420 1565649
744786 2192421
39535338
34461480
0 0 0
194044 0 0
257798 0 0 0
451842
257442
0.00 0.00 1.63 3.34 4.75 4.75 4.75 9.50 6.33 4.75
16.21
0.00 0.00
40821.00 1307174.00 3649417.00
289022.00 36375.00
833585.00 185449.00 105480.00 473605.00
6920928
5331300
0 0
225833 8999400
26880839 1439828
374927 2816207 1751098
850266 2666026
46004424
39535338
89750 4853296 2278537
42714325 66008961
6420717 437291
6812624 1268104 1718295
402506
133004405
84498862
89750 1093326 2319358
21340609 45962935
3927056 418704
6282359 1223752 1192506
648508
84498862
68035316
SCHEDULE - 4FIXED ASSETS
As at31.03.2011
Rupees
As at31.03.2010
Rupees
As at31.03.2011
Rupees
As at31.03.2010
Rupees
SCHEDULE - 3LOAN FUNDSSECURED LOANS
Working Capital Loans
SBI Global Factors Pvt.Ltd.
Term LoanHDFC Bank Ltd.ICICI Bank Ltd.Total:
0
18082589 0
18082589
3990004
0 57595
4047599
SCHEDULE - 1SHARE CAPITALAUTHORISED
10000000 Equity Shares of Rs.10/- Each
Issued, Subscribed & Paid-up
6940000 Equity Shares of Rs.10/- each (Fully Paid up)
(Previous Yr.63,59,600 equity Shares of Rs.10/- each)
(Ref.Point 17 of Notes to Accounts)
3060000 Partly Paid Share Covertible Warrant
(Previous Yr.2390400)
100000000
69400000
16830000
86230000
100000000
63596000
13147200
76743200 Total:
Total:
SCHEDULE - 2RESERVES & SURPLUSGENERAL RESERVE
Opening Balance
Add: Transfer From Profit & Loss Account
Add: Balance in Profit & Loss Account
Share Premium
1330400 Equity Shares of Rs.12/- Each
(Pr.Year 750000 Equity Share of Rs.12/-Each)
40000000
5000000
45000000
67769663
112769663
15964800
128734463
35000000
5000000
40000000
61159027
101159027
9000000
110159027
As at31.03.2011
Rupees
As at31.03.2010
Rupees
As at31.03.2011
Rupees
As at31.03.2010
Rupees
18
SCHEDULE - 5INVESTMENTSQuoted SharesTata Consultancy Services Face Value Rs. 1.00Hindalco Industries National AluminiumJ.K.Agri Genetics Ltd.(Market Value of quoted shares as on 31.03.11 is Rs.23,34,874.00) Units of Mutual Fund SBI One IndiaUnits of Mutual Fund Tata Equity Fund HDFC Top 200 FundIDFC Premier Equity Fund Reliance Banking Reliance Pharma Fund(NAV as on 31.03.11 is Rs. 53,02,696 ) Unquoted SharesCommonwealth Mining Pvt.Ltd.V&H Fabricators Pvt. Ltd. Total :
Qty.616 200 400
3137
10000
60876 27331 21949
1000 140000
130900 8810
14689 1599603
100000
0 0
1475000 2440000
950000
10000 4200000
10929002
Qty.616 200 100
10000
12895 10735
130900 8810
14689
100000
500000 500000
0 0 0
0 0
1254399
SCHEDULE - 6CURRENT ASSETS, LOANS AND ADVANCES[A] CURRENT ASSETS INVENTORIES (As taken, valued & certified by the management) Raw Materials Finished goods Semi -Finished Goods Stores & Spares Trading Stocks Total: SUNDRY DEBTORS (Unsecured considered Good) Out Standing Exceeding six months Others Total: CASH & BANK BALANCES Cash in hand (As certified by the Management) With scheduled banks in India: Current Account Fixed Deposit Total: Total:[A] [B] LOANS AND ADVANCES [Recoverable in cash or kind for value to be received, considered good] Sundry deposits Advances Total:[B] Total:[A+B]
50684875 28465406
7985159 1649994 1077617
89863051
9472023 86729636 96201659
390561
(638851)613183 364893
186429604
952585 22780393 23732978
210162582
39431119 21474974
7017579 1407222 1419826
70750720
10736408 93744739
104481147
145310
1466292 3782625 5394227
180626095
636137 31729262 32365399
212991494
SCHEDULE - 7CURRENT LIABILITIES & PROVISIONS
SCHEDULE - 8INCREASE (DECREASE) IN STOCKS
A. CURRENT LIABILITIES
Creditors for goods supplied and expenses
Sundry Deposits (from Dealers)
Other Liabilities
Outstanding Expenses
Total:[A]
B. PROVISIONS
Provision for Income Tax(Net of Advance Tax)
Provision for Proposed Dividend
Provision for Dividend Distribution Tax
Provisions for Wealth Tax
Total:[B]
Total:[A+B]
Closing Stock
Finished Goods
Semi Finished Goods
Total:[A]
Less : Opening Stock
Finished Goods
Semi Finished Goods
Total:[B]
Increase (Decrease) in Stock Total:[A-B]
91345971
2317911
3987749
9025891
106677521
3470000
576324
46787
4093111
110770632
28465406
9062776
37528182
21474974
7017579
28492553
9035629
78731905
1912911
8484466
7663721
96793003
0
3179800
528125
36000
3743925
100536928
21474974
7017579
28492553
31600808
9785117
41385925
(12893372)
19
As at31.03.2011
Rupees
As at31.03.2010
Rupees
As at31.03.2011
Rupees
As at31.03.2010
Rupees
Misc. & Other Receipts (Net)Profit on sale of assetsInsurance Claim Received Bad Debt RecoveredInterest ReceivedProfit on sale of Equity ShareSale of units of Mutual Fund Petty Balance W/o (Credit)Dividend ReceivedIntt.on Income Tax Refund Total:
34923520752
1500231000090909
0 307547
4761 189173 332808
1455207
570971 1652
197301 120000 101123
95 0
17107 9662
1017911
Power & FuelStores & Spare Parts & OthersRepairs to MachineryRepair's to others Repair's to Building Laboratory expensesPacking & other ExpensesDifference in Excise Duty on Opening / Closing Stock
Total:
SCHEDULE - 12MANUFACTURING EXPENSES
15485389 491542
5239198 821615 872605 485815
2468
757556
24156189
12730162 464924
4040072 688413
1122171 869750
8255
(418280)
19505467
(Wire, Chemical & Packing Material)Opening StockAdd: Purchase During the year (Net) Expenses on Purchase
Less: Closing stock
Total:
39431119 397986336
12333275 449750730
50684875
399065855
26921675 360947623
14039062 401908360
39431119
362477241
SCHEDULE - 11MATERIAL CONSUMED
Opening Stock Add: Purchased During the Year Less: Closing Stock
Total:
1419826 1113617 2533443 1077617
1455826
1701670 1882136 3583806 1419826
2163980
SCHEDULE - 10COST OF TRADING SALES
SCHEDULE - 9OTHER INCOME
Salary, Wages & BonusAllowancesContribution to P.F. & E.S.I.Workmen & Staff Welfare Expenses
Total:
32684910 12704542
3061956 1166543
49617951
24193169 8923465 2304365
904283
36325282
Rent Rates & TaxesPrinting & StationeryPostage & TelegramTelephone ChargesTravelling Exp. (Directors)Travelling Exp. Staff & othersVehicle ExpensesAudit FeesLegal & Professional ChargesMembership & Testing FeesInsurance ExpensesOffice General & Misc. Exp.Loss on sale of assetsDirector's Sitting FeesDonationPenaltyForeign Exchange Diff.CurrencyTotal:
368762 645234 397939
1186244 963990
3029938 2215490
55150 750696
1328306 836027
1584272 259689 135000
32950 0
25743 13815431
230329 647011 304990 985091 572947
2423401 1915434
55150 1035453 2500574 1018371 1309419
239840 139000
1000 5442
0 13383452
SCHEDULE - 15ADMINISTRATIVE AND OTHER EXPENSES
Bank ChargesInterest on Working Capital LoansInterest to others
Total:[A]
755499 0
1514397
2269896
1229754 65983
0
1295737
SCHEDULE - 14FINANCIAL CHARGES
SCHEDULE - 13EMPLOYEES REMUNERATION & BENEFITS
Freight & Cartage OutwardAdvertisement & Publicity Sales Promotion etc.Commission & Discount Bad Debts Written off
Total:
10688802 81112
3449397 14630703
784300
29634314
10719657 595058
1895243 13575899
1219013
28004870
SCHEDULE - 16SELLING & DISTRIBUTION EXPENSES
20
SCHEDULE - 17SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS.A. SIGNIFICANT ACCOUNTING POLICIES.01. METHOD OF ACCOUNTING
The Company follows the mercantile system of accounting and all significant items of incomes and expenditure are accounted for on accrual basis. Claims / lodgments / refunds not ascertainable with certainty are accounted for on cash basis.
02. FIXED ASSETS AND CAPITAL WORK IN - PROGRESSAll fixed assets are stated at historical cost, net of CENVAT if availed, less accumulated depreciation. Historical cost comprise the purchase price and all direct costs attributable to bring the assets to its working condition for intended use.
03. DEPRECIATIONDepreciation on all fixed assets is provided on the straight line method at the rate specified in schedule XIV of the Companies Act, 1956.Depreciation is not been charged on fixed assets sold during the year.
04. VALUE OF INVENTORIESInventories of Raw Material, Stores & Spares, Work-in-Progress, Finished Goods and Trading stocks are valued at lower of cost and net realizable value. The cost of work in progress & finished goods is determined on absorption cost basis. Raw material, Stores & Spares and trading stocks is valued on FIFO method.
05. INVESTMENTLong Term Investments are carried at cost less provision for diminution, only if, decline is other than temporary, in the opinion the management.
06. IMPAIRMENT OF ASSETSAn asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit & Loss account in the year in which an assets is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
07. REVENUE RECOGNITIONRevenue on sale of goods is recognized on passes of title to the customers, Sales (gross) are inclusive of vat/sales tax , excise duty , and adjustment for rate difference .
08. PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS.Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events & it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to the accounts. Contingent assets are neither recognized nor disclosed in the financial statements.
09. CASH FLOW STATEMENTCash flow are reported using indirect method. The cash flow from regular revenue generating, financing and investing activities of the company are segregated.
10. EMPLOYEES BENEFITSShort term employee benefits have been charged to Profit & Loss Account on accrual basis. Post employment benefits such as Gratuity liability is funded as per group gratuity scheme of Life Insurance of Corporation of India.
11. TAXATIONTaxation comprise current Income tax, deferred tax , wealth tax .Current Income Tax provision has been determined on the basis of relief, deductions available under the Income Tax Act. Deferred Tax is recognized for all timing differences subject to the consideration of prudence, applying the tax rates that have been substantially enacted by the Balance Sheet date. Wealth Tax is calculated on the basis of carrying value of wealth liable to tax after deducting basic exemption available.
12. FOREIGN CURRENCY TRANSACTIONS(i) Transactions denominated in foreign currencies are
normally recorded at the exchange rate prevailing at the time of the transaction.
(ii) Monetary items denominated in foreign currencies, if any , at the end of the year are restated at year end rates.
(iii) Non monetary foreign currency items are carried at cost.
(iv) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss Account, except in cases where they relate to acquisition of fixed assets, in which case, they are adjusted to the carrying cost of such assets.
B. NOTES TO THE ACCOUNTS : -01. Pursuant to accounting standard 28 “ Impairment of Assets” issued by the Institute of Chartered
Accountants of India, the company has reviewed its carrying cost of assets with value in use (determined based on future earnings ) and Net realizable value on an approximate basis. Based on such review, the management is of the view that in the current financial year, Provision for impairment of assets is not considered necessary.
02. Previous year figures are regrouped and rearranged wherever found necessary to make them comparable. Figures have been rounded off to the nearest Rupee.
03. Various items included under the head Current Assets, Loan & Advances, as well as Current Liabilities are subject to confirmation / reconciliation.
04. In the opinion of the Management, the value on realization of loans and advances, and other current assets will be at least equal to the amounts stated in the books of accounts, if realized in the ordinary course of the business.
05. In the absence of information from suppliers of their status being small scale/ ancillary undertakings amount overdue and interest payable there on cannot be quantified.
06. Loans and Advances includes Rs 4,29,827/-(Pr.Yr 57,00,960/-) for advance to Firms/ Companies in which Directors are interested.
07. Amortization of lease hold land is not being done as the same is on perpetual lease.08. The Excise duty related to the difference between the closing stock and opening stock Rs.7,57,556/-)
[Previous Year Rs.(4,18,280/-) has been shown in other manufacturing expenses and excise duty related to sales amounting to Rs.5,70,42,366/- .(Pr.Yr. Rs.4,39,55,392/-) has been reduced from gross sales.
09. The Break- up of deferred tax assets and liabilities into major components at the year end is as under: -
Particulars 31.03.2011 31.03.2010 (Rs.) (Rs.)
(I) Deferred Tax Liability For timing difference on account of difference between written down value of fixed assets underthe companies Act, 1956 and the Income Tax Act, 1961 1,12,24,231 74,25,906
(II) Deferred Tax Asset
Expenditure U/s 43B of Income Tax Act.,1961 9,45,926 1,67,905Deferred Tax (Net) 1,02,78,303 72,58,001
10. Director's Remunerations (Included in Employees Remuneration & Benefits)1. Salary and allowances 69,50,400 50,54,4002. Perquisites and benefits 3,81,980 10,17,041
11. Earning Per Share a) No. of equity shares at the beginning / at the end of year 63,59,600/69,40,000b) Net Profit / (Loss) after tax reported Rs 1,57,42,995.00c) Adjusted profit / (Loss) for the year Rs. 1,58,29,030.00d) Basic earning per share Rs. 2.49e) Diluted earning per share Rs. 1.58
12. Segment Reporting (a)Business Segment : The Company is mainly engaged in the business of welding consumables. All other activities of the Company revolve around the main business and as such there is no separate reportable business segment. b) Geographical Segment:Since all the operations of the Company are conducted within India as such there is no separate reportable geographical segment.
21
22
13. Related Party DisclosuresIn accordance with accounting standard 18 “ Related Party Disclosure” issued by the Institute of Chartered Accountant of India, the Company has compiled the required information is as under :-
17. PREFERENCIAL ALLOTMENT OF EQUITY SHARES AND CONVERTIBLE WARRANTSThe Company has issued and allotted 36,40,400 (Thirty Six Lacs Forty Thousand Four Hundred) Convertible
thWarrants on 5 April,2010 at a price of Rs.22.00 each to the promoter and non-promoter bodies corporate on preferential basis. The Holders are entitled to exercise their option to convert the same into fully paid up Equity shares of Rs.10.00 each at a premium of Rs. 12.00 per share at any time within a period of 18 months from the date of allotment. The application money i.e Rs. 5.50 per warrant, in respect of 23,90,400 & 12,50,000 convertible warrants have been received before 31.03.2010 & on 05.04.2010 respectively.The Company has converted 5,80,400 (Five Lacs Eighty Thousand Four hundred) Convertible Warrants of Rs.22.00 (Rupees Twenty Two Only), into equal number of fully paid Equity Shares of Rs.10.00 (Rupees Ten
thonly ) each at a premium of Rs.12.00 ( Rupees Twelve only) each on 28 March,2011.
Key Managerial Persons :Shri Harsh Kumar Vora - Managing DirectorShri V . S. Bhate - Director - Technical Shri Madhusudan Jain - Whole Time Director
Transactions with related Parties
Associates :Vora Wires Industries (India) LimitedInternational Steel Good Creation Inv.& Fin.Ltd.V & H Fabricators Pvt.Ltd.Smt.Suchita Kakrecha
16. CONTINGENT LIABILITIES
15. AUDITOR'S REMUNERATION
14. SALES INCLUDES TRADING SALES
a)b)c)d)
Audit feesTax audit feesOther ServicesCertificate Fees
33,09011,03011,030 7,123
33,09011,03011,03012,686
31.03.2010( Rs.)
31.03.2011(Rs.)
a)b)
Welding Equipments Wire
2,68,3263,55,065
7,85,74220,19,902
a)b)c)
Guarantees given on behalf of the CompanyCST Demand (in appeal)Entry Tax Demand (in appeal)
1,49,36625,65,55153,54,842
4,07,4569,32,6483,59,447
6,96,640----
1,24,91,133----
4,03,446 2,02,06,600 2,02,06,600
5,24,04073,32,380
-------
12,08,866 6,69,788
Sale of GoodsSale of AssetsPurchase of Capital GoodsPurchase of Raw Material Receiving of ServicesUnsecured Loan TakenRepayment of Unsecured LoanInterest PaidManagerial RemunerationAdvance GivenOutstanding BalancesAs on 31.03.2011Debit Rs. Credit Rs.
8,32,426----
25,09,686----
93,601 23,50,000 23,50,000 18,288
60,71,441 60,00,000
62,85,178 8,85,519
Associates/Key Management Persons31.03.2011
Associates/Key Management Persons31.03.2010
23
For and on behalf of ABN & Co. For and on behalf of the Board Chartered Accountants B.M.Bhandari V.S.Bhate Harsh Kumar Vora Partner Technical Director Managing Director (M.No.071232) Place : Indore Rajesh Sen Sushil Rawka
thDate : 11 August, 2011 Company Secretary Director
18. Additional information pursuant to the Provisions of Paragraph 3 and 4 Part II of the Schedule VI of the Companies Act, 1956.
Unit Qty. Amount (Rs.).
Qty. Amount (Rs.).
A. Licensed and Installed capacity and production (Welding Electrodes, Fluxes etc.) Licensed capacity Installed capacity (As certified by the management) (Electrodes are converted in weight approximately)
M.T. M.T.
N.A 17402
TPA
N.A 10400
TPA
B Production M.T. 9148.92 8923.28
C. Turnover (Sales)
Electrodes, flux ,Wire etc.. M.T. 9096.76 61,43,07,902 9053.34 56,20,41,553
Wires (Trading) M.T. 5.86 3,55,065 26.03 20,19,902
Welding Equipments (Trading) Nos. 10 2,68,326 14 7,85,742
Machine (Trading ) Nos. -- ---
D. Raw Material Consumed (Indigenous/ Imported)
Wires & Chemicals M.T 9573.34 36,23,49,299 9429.16 33,05,95,739
Packing Material ----- 3,67,16,556 3,18,81,502
E. Opening Stock
Electrodes, flux, etc. M.T. 376.38 2,14,74,974 506.63 3,16,00,808
Welding Equipments (Trading) Nos. 29 5,80,300 33 6,51,100
Wire (Trading) M.T. 13.23 8,39,526 18.27 10,50,570
F. Closing Stock
Electrodes, flux etc.. M.T 428.54 2,84,65,406 376.38 2,14,74,974
Welding Equipments (Trading) Nos. 21 5,03,969 29 5,80,300
Wire Trading M.T 9.83 5,73,648 13.23 8,39,526
G. Opening Stock in process
Electrodes, Wires etc,. M.T. 110.82 36,13,674 227.09 55,07,485
Flux M.T. 98.73 34,03,905 93.72 42,77,632
H. Closing Stock in process
Electrodes, Wires etc,. M.T. 167.61 41,47,419 110.82 36,13,674
Flux M.T. 54.03 38,37,740 98.73 34,03,905
I Value of Imports on (CIF basis)
Raw Material 14,19,849 50,18,668
Capital Goods ------ 45,86,678
Trading Goods ------ 9,92,961
J Value of Raw Material
Imported 0.30% 3.33%
Indigenous 99.70% 96.67%
K. Expenditure in Foreign Exchange 14,19,849 1,05,98,307
L Earning in Foreign Exchange 20,20,013 5,27,483
31.03.2011 31.03.2010
24
For and on behalf of ABN & Co. For and on behalf of the Board Chartered Accountants B.M.Bhandari V.S.Bhate Harsh Kumar Vora Partner Technical Director Managing Director (M.No.071232) Place : Indore Rajesh Sen Sushil Rawka
thDate : 11 August, 2011 Company Secretary Director
CASH FLOW STATEMENT31.03.2010Rs. in Lacs
31.03.2011Rs.in Lacs
A. Cash flow from Operating Activities
Net profit before tax & Extraordinary items 233.65 241.23
Adjustment for : Depreciation 69.21 53.31
Deferred Revenue Expenditure 0.00 0.00
Preliminary Expenditure 0.00 0.00
Loss/(Profit) on sale of fixed assets 2.60 2.38
Other Income (14.34) (10.16)
Interest Paid / Bank Charges 22.70 12.96
Operating Profit before working Capital Changes Adjustment for: 313.81 299.72
Trade & other receivable 82.79 (95.59)
Inventories (191.12) 2.72
Trade Payables 102.34 296.96
Cash generated from Operations 307.82 503.81
Direct Tax paid (76.75) (123.60)
Cash flow before extraordinary items 231.07 380.21
Extraordinary items (0.86) 2.19
Net Cash from Operating Activities 230.21 382.40
B. Cash Flow from Investing Activities
Purchase of fixed assets (561.13) (222.27)
Loans & Advances 115.61 (201.17)
Sale of fixed Assets 2.33 1.94
Interest received / Misc Receipts 14.34 10.16
Purchase/ Sale of Investments (96.75) (10.00)
Net cash used in Investing Activities (525.59) (421.34)
C. Cash Flow from Financing Activities
Proceeds from issue of Share Capital 164.52 230.47
Proceeds from long term borrowings 140.35 (108.80)
Interest Paid (22.70) (12.96)
Dividend (37.08) (68.55)
Net cash used in Financing Activities 245.09 40.16
Net increase in Cash and Cash equivalent (A+B+C) (50.29) 1.21
Cash & Cash Equivalents As at 01.04.2010 53.94 52.73
Cash & Cash Equivalents As at 31.03.2011 3.65 53.94
25
For and on behalf of ABN & Co. For and on behalf of the Board Chartered Accountants B.M.Bhandari V.S.Bhate Harsh Kumar Vora Partner Technical Director Managing Director (M.No.071232)
Place : Indore Rajesh Sen Sushil Rawka thDate : 11 August, 2011 Company Secretary Director
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE(i) Registration Details
Registration No. 1 1 0 3 5 8 2 2 State Code 1 1
Balance Sheet Date 3 1 0 3 2 0 1 1
(ii) Capital Raised during the Year ( Amount in Rs. Thousand)
Public Issue Right IssueN I L N I LBonus Issue Private Placement
N I L 9 4 8 7
(iii) Position of Mobilization and Deployment of funds.
Total Liabilities Total Assets
2 4 3 3 2 5 3 5 7 2 4 3 3 2 5 3 5 7
Sources of Funds
Paid - up Capital Reserv & Surplus
8 6 2 3 0 0 0 0 1 2 8 7 3 4 4 6 3
Secured Loans Unsecured Loans
1 8 0 8 2 5 8 9 N I L
Deferred Tax
1 0 2 7 8 3 0 5
Application of Funds
Net fixed Assets Investments
1 3 3 0 0 4 4 0 5 1 0 9 2 9 0 0 2
Net Current Assets Misc. Expenditure
9 9 3 9 1 9 5 0 N I L
(iv) Performance of the Company
(Turnover including other income) Total Expenditure
5 6 8 3 7 9 7 6 3 5 4 5 0 1 4 4 6 5
Profit before tax Profit after tax
2 3 3 6 5 2 9 8 1 5 7 4 2 9 9 5
Earning per Share Rs. Dividend Rate %
2 . 4 9 5
(v) Generic Name of Principal Production / Service of the Company (as per monetary terms)
Item Code No. 8 3 1 1Product Description W E L D I N G E L E C T R O D E S
Equity Folio No. :DP ID* :Client ID* :
No. of Shares held. :
thI hereby record my presence at the 26 Annual General Meeting of the Company being held at A-204, Kailash Esplanade, Opp. Shreyas Cinema, L.B.S. Marg, Ghatkopar (W), Mumbai- 400086 on Tuesday the
th20 September, 2011 at 10.00 A.M.
Name of the Member__________________________________________________________(In block letters)
Name of the Proxy holder_____________________________________________________(In block letters)
Signature of the Member / ProxyNote : A member/ proxy wishing to attend the meeting must complete this Admission slip before coming to the
meeting and hand it over at the entrance. * Applicable for shares held in electronic form------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
I/We__________________________________________of_______________________________
be ing a member / members of D & H WELDING ELECTRODES ( INDIA) L IMITED hereby appo int
Shri / Smt/ Ku. ____________________________ of _____________________________ or failing him
Shri/ Smt/ Ku.____________________________ of ___________________________ as my / our proxy thin my / our absence to attend and vote for me / us and on my/ our behalf at the 26 Annual General Meeting
thof the Company to be held on 20 September, 2011 at 10.00 a.m. and at any adjournment thereof..
Signed this ____________________________ day of ___________________ 2011.
Equity Folio No. :DP ID* :
Client ID* :
No. of Shares held :Signature (s)
* Strike out whichever is not applicable.Note: The Proxy, in order to be effective, should be duly completed, stamped, and signed and must be deposited at the Registered Office of the Company not less than 48 hours before the time fixed for the Meeting.
D & H WELDING ELECTRODES (INDIA) LTD.Regd.Office: A-204, Kailash Esplande, Opp.Shreyas Cinema
L.B.S. Marg, Ghatkopar (West) Mumbai -400086
D & H WELDING ELECTRODES (INDIA) LTD. Regd. Office: A-204, Kailash Esplanade, Opp. Shreyas Cinema,
L. B. S. Marg, Ghatkopar (W), Mumbai- 400 086.
ADMISSION SLIP
PROXY FORM
AffixRe. 1/-RevenueStamp
If Undelivered, please return to :
D & H WELDING ELECTRODES (INDIA) LTD.Plot 'A', Sector 'A', Industrial Area,Sanwer Road, Indore - 452 015 (M.P.)
BOOK-POST
To,
