MAHARASHTRA SEAMLESS LIMITED - Jindal · Total Quality Management (TQM), Cost Control and aggressive marketing have become integral part of the systems of your company. Currently,

1 7 T H A N N U A L R E P O R T 2 0 0 4 - 2 0 0 5

Expanding hor izon through the pursui t of perfect ion.

MAHARASHTRA SEAMLESS LIMITEDAN ISO 9001:2000 COMPANY

MAHARASHTRA SEAMLESS LIMITED

WORKS:

1. SEAMLESS & ERW PIPES: Pipe Nagar, Village - Sukeli,N.H.17, B.K.G. Road,Taluka Roha,Distt. Raigad - 402 126Maharashtra

2. WIND POWER:Village Nivkane, Taluka Patan,District Satara,Maharashtra

Website: www.jindal.com

BOARD OF DIRECTORS D.P. Jindal Chairman Saket Jindal Managing Director U.C. Agarwal D.K. Parikh S.D. Sharma H.K. Khanna

AUDIT COMMITTEEU.C. Agarwal ChairmanD.P. JindalH.K. Khanna

COMPANY SECRETARY Praveen Mudgal

AUDITORS Kanodia Sanyal & Associates Chartered Accountants New Delhi

BANKERS State Bank of Patiala State Bank of Bikaner & Jaipur Standard Chartered Bank HDFC Bank Limited

REGISTERED OFFICEPipe Nagar, Village-Sukeli, N.H.17, B.K.G. Road, Taluka Roha, Distt. Raigad - 402 126,Maharashtra

CORPORATE OFFICE Plot No. 30, Institutional Sector 44, Gurgaon – 122 002,Haryana

HEAD OFFICE 106, Nilgiri Apartments, 9, Barakhamba Road, New Delhi-110 001

MUMBAI OFFICE 402, Sarjan Plaza,100, Dr. Annie Besant Road,Opp. TELCO Showroom,Worli, Mumbai - 400 018

KOLKATA OFFICE Sukhsagar Apartment,Flat No. 8A, 8th Floor,2/5, Sarat Bose Road,Kolkata - 700 020

CHENNAI OFFICE 3A, Royal Court, 44, Venkatanarayan Road, T. Nagar,Chennai - 600 017


C O N T E N T S

Page No.

Chairman’s Statement 3

Message from the Managing Director 5

Selected Financial Indicators of last 10 Year 6

Notice 7-9

Directors’ Report 10-14

Corporate Governance Report 15-18

Shareholders’ Information 18-20

Management Discussion & Analysis 22-24

Auditors’ Report 25-27

Balance Sheet 28

Profit & Loss Account 29

Schedules & Notes on Accounts 30-46

Cash Flow Statement 47

Proxy Form & Attendance Slip Annexed

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“ With our established product range upto 7” dia. of Seamless Pipes and Tubes, we are now all set

to accept all requirements upto 14” dia.”

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D.P. Jindal

Chairman'sStatement

Dear Shareholders,

The world economy has seen lots of turnarounds in various sectors. In the last one year steel industry has witnessed the heights and also the changed trend. Maharashtra Seamless continued its path on the progress with the Gross Turnover of Rs.879 crores in the financial year 2004-05.

With our established product range upto 7” of Seamless Pipes and Tubes we are now all set to accept all requirements upto 14” in Seamless as our new mill has already gone into production in this higher dia range. Now we would meet the requirements of the entire range of Pipes in all alloy and non-alloy grades. With the committed teamwork we are confident to meet the challenges in the times to come in any market scenario.

However, we will not stop here. We are fully committed to enhance the scale, competitiveness, efficiency and the productivity at all levels and in all areas. With this motive only we have already decided to setup our own steel plant in Orissa, which will basically feed all of the raw material requirements of Maharashtra Seamless Ltd.

In line with the growth of the Indian Economy, your Company is also on its way to achieve its mission of growth and prosperity. The track record of consistent & impressive performance posted by the company year after year speaks about such growth.

Total Quality Management (TQM), Cost Control and aggressive marketing have become integral part of the systems of your company. Currently, the market for Seamless & ERW Pipes is growing at a rapid pace. With more emphasis being given on exploration, drilling and laying of cross country Line pipes, pipe Industry is having a very promising future outlook. The company is confident that with the combination of market growth and the expansion project, the company would be able to garner the major chunk of the growth in Pipe Industry.

There is competition from International players like China and East European countries. Reduction in Import Duty on pipes and tubes may pose some threat to Indian manufacturers in the coming years as Government may go for lower tariff structure in the future. Your company is ready to face this challenge. When the competition intensifies with price playing a major role, cost management which we are practicing continuously can contribute effectively to profitability. The ultimate challenge will be to manage intense competition and optimize the benefits of productivity and profitability improvement measures.

Our long-term goal is to maximize returns on shareholders' wealth for our esteemed shareholders, which is reflected in the financial performance achieved by the Company. We hope to receive the continued support and patronage of all of our associates, which will add to our determination to achieve spectacular results in the coming years.

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“The recent discoveries in the country by oil exploration companies both in the public and private domain have thrown in a substantial demand for both seamless and ERW pipes.”

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Saket JindalThank you,

Dear Shareholders,

Maharashtra Seamless Limited believes in attaining new frontiers of success and making its vision transform into reality. The commissioning of the 14” seamless mill is in line with the corporate philosophy of unparalleled growth and consolidation of our core competence. The appreciation of our stock on the bourses is a true reflection of our performance in the last financial year and we wish to continue this trend in the near future by diversifying into billet manufacturing as a measure of backward integration and to absorb the fluctuation of steel prices.

The oil & gas sector is particularly booming and showing a promising growth. The oil price breaking the $60 per barrel barrier and the appreciation in the rig count worldwide is a true reflection of the immense potential of this industry.

The recent discoveries in the country by oil exploration companies both in the public and private domain have thrown in a substantial demand for both seamless and ERW pipes. We wish to fulfill this demand by gearing up our facilities and by debottlenecking and benchmarking our systems and process.

Our new corporate office in Gurgaon shall have a state-of-the-art environment with the best conferencing & networking facilities and shall improve the productivity of our

employees and raise their motivation levels.

Our Joint Venture with Hydril, USA shall provide us a platform to market premium connections for high-pressure applications in the oil & gas sector.

We believe in growing with all our stakeholders and have thus declared a dividend of 50% for the last financial year.

Lastly, I would like to acknowledge & appreciate the support; we have received from our customers, bankers, suppliers and all our employees who have put in sincere efforts in their respective fields.

Messagefrom the

Managing Director

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SELECTED FINANCIAL INDICATORS OF LAST 10 YEARS

Particulars 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Gross Turnover (Rs. Lacs) 10758 13781 15094 18555 19243 26541 37272 43563 55529 86724

(Times) 1.00 1.28 1.40 1.72 1.79 2.47 3.46 4.05 5.16 8.06

EBIDTA (Rs. Lacs) 1832 1341 1208 1887 2682 4218 7468 8406 10031 12851

(Times) 1.00 0.73 0.66 1.03 1.46 2.30 4.08 4.59 5.48 7.01

PBT (Rs. Lacs) 1809 805 899 1405 2415 4042 7186 9007 10507 12624

(Times) 1.00 0.44 0.50 0.78 1.33 2.23 3.97 4.98 5.81 6.98

PAT (Rs. Lacs) 1809 700 801 1037 1756 3196 5001 6209 7146 8488

(Times) 1.00 0.39 0.44 0.57 0.97 1.77 2.76 3.43 3.95 4.69

Gross Block (Rs. Lacs) 6493 7361 7555 8171 8789 10594 14119 16064 26709 32768

(including WIP) (Times) 1.00 1.13 1.16 1.26 1.35 1.63 2.17 2.47 4.11 5.05

Net Block (Rs. Lacs) 5321 5893 5778 6057 6324 7734 10743 12023 21970 26992

(Times) 1.00 1.11 1.09 1.14 1.19 1.45 2.02 2.26 4.13 5.07

Equity Share Capital (Rs. Lacs) 2550 2550 2550 2550 2550 2882 2882 2882 2882 2882

(Times) 1.00 1.00 1.00 1.00 1.00 1.13 1.13 1.13 1.13 1.13

Reserves & Surplus (Rs. Lacs) 3480 3858 4334 5043 6416 9086 12239 15994 21527 28399

(Times) 1.00 1.11 1.25 1.45 1.84 2.61 3.52 4.60 6.19 8.16

Net Worth (Rs. Lacs) 6362 6740 7216 7925 9298 11968 15121 20317 24409 31281

(Times) 1.00 1.06 1.13 1.25 1.46 1.88 2.38 3.19 3.84 4.92

Book Value (Rs.) 24 25 27 30 35 42 52 65 85 109

(Times) 1.00 1.04 1.13 1.25 1.46 1.75 2.17 2.71 3.54 4.54

EPS (Rs.) 7.09 2.75 2.96 3.89 6.58 11.94 17.37 21.98 23.72 29.54

(Times) 1.00 0.39 0.42 0.55 0.93 1.68 2.45 3.10 3.35 4.17

Equity Dividend

- Amount (Rs. Lacs) 255 255 255 255 306 384 576 1009 1153 1441

- Percentage (%) 10% 10% 10% 10% 12% 15% 20% 35% 40% 50%


NOTICE

Notice is hereby given that the 17th Annual General Meeting of the Members of Maharashtra Seamless Limited will be held on Friday, the 9th September, 2005 at 11.30 A.M. at the Registered Office of the Company at Pipe Nagar, Village - Sukeli, N.H.17, B.K.G. Road, Taluka Roha, Distt. Raigad-402 126, Maharashtra to transact the following busines :

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Accounts for the year ended 31st March, 2005 and the Reports of Directors and Auditors thereon.

2. To declare dividend.

3. To appoint a Director in place of Shri D. P. Jindal, who retires by rotation and being eligible, offers himself for reappointment.

4. To appoint a Director in place of Shri S. D. Sharma, who retires by rotation and being eligible, offers himself for reappointment.

5. To appoint Auditors who shall hold office from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting and to fix their remuneration. The retiring auditors M/s Kanodia Sanyal & Associates, New Delhi are eligible for reappointment.

SPECIAL BUSINESS

6. To consider and, i f thought f i t , to pass wi th or wi thout modi f icat ions, the fo l lowing Resolut ion as a Specia l Resolut ion.

RESOLVED THAT pursuant to Clause 49 of the Listing Agreement, Section 309, 310 and all other applicable provisions of the Companies Act, if any, the Board of Directors of the Company be and is hereby authorized to decide the payment of sitting fees along with any other compensation and / or expenditure in that connection to its non executive directors within the limits as may be notified by the Central Government from time to time.

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Place : Gurgaon Dated : 15th June, 2005

Regd. Office:

Pipe Nagar, Village Sukeli, N.H.17,B.K.G. Road, Taluka - Roha,Distt. Raigad - 402 126,Maharashtra

Praveen Mudgal Company Secretary

By order of the Board

NOTES:1. An Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in relation to the Special Business of the Meeting

is annexed hereto and forms part of this Notice.2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND

VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. FORM OF PROXY IS SEPARATELY ANNEXED. THE PROXY FORM MUST BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING.

3. Members / Proxies should bring the attendance slip duly filled in for attending the meeting. 4. Members are requested to notify immediately any change in their address to the Registrar & Transfer Agent quoting their Folio

Number to the following address:Alankit Assignments Ltd.Alankit House, 2E/21, Jhandewalan Extension, New Delhi – 110 055

5. Members who have multiple ledger folios in identical names or joint names in same order are requested to intimate/send the concerned share certificates quoting their ledger folios of such accounts to enable the Registrar & Transfer Agent to consolidate all such shareholdings into one folio.

6. The Register of Members and Share Transfer Books of the Company will remain closed from Thursday, 1st September, 2005 to Friday, the 9th September, 2005 (both days inclusive).

7. Members intending to seek any information on the Annual Accounts at the meeting are requested to inform the company in writing at least one week prior to the date of the meeting.

8. In accordance with the provisions of the Companies Act, 1956, the amount of dividend which remains unpaid or unclaimed for a period of 7 years from the date of transfer to Unpaid Dividend Account of the Company are transferred to the Investor Education and Protection Fund constituted by the Central Government and shareholders are not able to claim any amount of dividend so transferred to the fund.As such, shareholders who have not yet encashed their dividend warrants are requested in their own interest to claim the outstanding dividend before it falls due for transfer to the aforesaid Fund.

9. Electronic Clearing Service (ECS) Facility:(a) Members holding shares in physical form who wish to avail ECS facility, may authorize the Company with their ECS mandate

in the prescribed form, which can be downloaded from the Company’s website (www.jindal.com) or can be obtained from the Corporate Office of the Company. Requests for payment of dividend through ECS should be lodged latest by 25th August, 2005 to the Company Secretary at Plot No. 30 Institutional Sector - 44, Gurgaon – 122001 Haryana.

(b) Members holding shares in demat form who wish to avail ECS facility, may send ECS mandate in the prescribed form to their respective depository participant.

10. Reappointment of Directors:Shri D.P. Jindal and Shri S. D. Sharma retire by rotation at the Annual General Meeting and being eligible offer themselves for reappointment. Brief resumes of the said directors are as under :-


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Age

Jindal Pipes LimitedJindal Drilling & Industries Limited

Jindal Aluminium LimitedPragaun JAL Educational Organistion

24.03.1995

Shri D. P. Jindal Shri S. D. Sharma

Date of appointment as Directorof the Company

Directorship of other companies

Chairman / Member of Committeesof other Companies

Prominent Industrialist havingwide business experience

55 Years

10.05.1988

Chairman - Shareholders / Investors ShareTransfer cum Grievance CommitteeOf Jindal Drilling & Industries Limited

Expertise in specific functional area65 Years

Retired Senior Executive having vastexperience in commercial areas

--

--

Name


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ANNEXURE TO THE NOTICE

EXPLANATORY STATEMENT UNDER SECTION 173(2) OF THE COMPANIES ACT, 1956.

ITEM NO. 6

In terms of the revised clause 49 of the Listing Agreement with the Stock Exchanges, all fees / compensation to be paid to Non- Executive directors are to be fixed by the Board and require the prior approval of the shareholders in the general meeting.

For the purpose of administrative expediency, members are requested to authorize Board of Directors to decide the quantum of sitting fee / any other compensation payable to the Non- Executive directors up to the maximum limit prescribed under the Companies Act, 1956, as may be amended from time to time, after taking into consideration the expertise and wisdom they bring to the company and their contribution towards the performance of the company.

The Board recommends the resolution for your approval.

All the Non- Executive Directors of the company are deemed to be concerned or interested in passing of this resolution.

Place : Gurgaon Dated : 15th June, 2005

Regd. Office :

Pipe Nagar, Village Sukeli, N.H.17,B.K.G. Road, Taluka - Roha,Distt. Raigad - 402 126,Maharashtra

By order of the Board

Praveen Mudgal Company Secretary

Gross Turnover 879.28 569.01

Profit before Depreciation 136.74 112.06

Depreciation 10.50 6.98

Profit Before Tax 126.24 105.08

Provision for Taxation

- Current 32.77 33.31

- Deferred 8.59 0.31

Profit after Tax 84.88 71.46

Prior Period Adjustments/ Tax provision written back 0.27 0.29

Profit After Tax & Adjustments 85.15 71.75

Balance brought forward from previous year 13.20 12.28

Profit available for appropriations 98.35 84.03

Appropriations:

Transfer to Capital Redemption Reserve - 14.41

Dividends

- Interim (Declared subsequent to the year end) - 7.21

-10% Redeemable Cum. Pref.shares (paid / proposed) - 1.37

- Proposed on Equity shares 14.41 4.32

Tax on Dividend

- Interim - 0.93

- 10% Redeemable Cum. Pref.shares (paid / proposed) - 2.02

- Proposed on Equity Shares 2.02 0.57

Transfer to General Reserve 65.00 40.00

Balance carried to Balance Sheet 16.92 13.20

98.35 84.03


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DIRECTORS' REPORTTo the Members,Your Directors are pleased to present the Company’s 17th Annual Report alongwith Audited Accounts of the Company for the year ended 31st March, 2005.

FINANCIAL RESULTSDuring the year, Gross Turnover of the company increased to Rs. 879 crore from Rs. 569 crore in the previous year - a growth of 54% over previous year. The highlights of the financial results are as under :-

(Rs. in crores)

Year Ended Year Ended31.03.2005 31.03.2004

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Seamless Pipes Division has major contribution constituting 65% of turnover of the Company. This Division has contributed around 78% of the Profits Before Tax of the Company.

STATUS OF EXPANSION PROJECTDuring the year under review your company has completed an expansion project to manufacture seamless pipes of higher diameter from 7” to 14”OD . The expansion project has lead to an increased installed capacity by further one lac tonne. The company now would be able to get major share of higher dia seamless pipes market which is currently being regulated by imports. This would not only increase its overall market share in Seamless Pipes & Tubes Industry but would also lead to an improved financial performance in the coming years.

BACKWARD INTEGRATION PROJECTThe Company is implementing a strategic Backward Integration Project at Orissa to manufacture Billets, the main raw material for Seamless Pipes having a capacity of 5,00,000 TPA. The Project would be completed in two phases by the end of year 2007 at an aggregate capital outlay of Rs.550 crore and would be meeting its captive requirement fully. Requisite Land for the project has been allotted by the Government of Orissa. Project Enginnering Consultant has been appointed and various applications to the Govt. Authorities for various infrastructure needs have been filed. The Project, on implementation will further improve its competitive position as a low cost producer of seamless pipes and have a positive impact on profitability in the long run and ensure smooth availability of raw material

JOINT VENTUREDuring the year the company has entered into a Joint Venture with USA based Hydril LP to manufacture Premium Joint Connections. The Joint Venture is likely to commence operations during the year and will exclusively source Seamless Pipes from Maharashtra Seamless. The Joint Venture will facilitate Company’s consolidation in both Domestic and International market of Seamless Pipes by going into new export avenues. Your company’s presence in the seamless business would consolidate on global basis which would have a positive bearing on the improved financials and margins.

CREDIT RATINGYour Directors are pleased to inform the members that your company has been assigned AA Credit Rating by the Credit Rating Agency, CRISIL Limited and `AA (ind)’ by Fitch Rating India Pvt. Ltd. in relation to Rs. 150 million Long Term Debt Program of the Company.

FCCB ISSUEYour Company is planning to Launch an FCCB issue of USD 75 million in the current year to part finance the backward integration steel billet project. The necessary shareholders approval for the issue was obtained in the Extra Ordinary General Meeting dated 22.03.2005. Your company has also appointed Deutsche Bank as Lead Bank and Sole book runner for the issue.

INCREASE IN AUTHORISED SHARE CAPITALThe Authorised Share capital of the company has been increased from Rs. 55 crore to Rs. 60 crore by addition of 50 lacs Equity Shares of Rs. 10 each. The necessary shareholder’s approval for the increase was obtained in the Extra Ordinary General Meeting held on 22nd March, 2005.

DIRECTORSShri D.P. Jindal and Shri S.D. Sharma, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

DIRECTORS' RESPONSIBILITY STATEMENTAs required under Section 217(2AA) of the Companies Act, 1956, your Directors state :(i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed;(ii) that the accounting policies selected and applied are consistent and the judgements and estimates made are reasonable and

prudent so as to give a true and fair view of the state of affairs of the Company at the end of financial year and of the profit of the Company for that period;


DIVIDENDYour directors are pleased to recommend a dividend @ 50% on the paid up share capital of the company for the year 2004 - 2005. The proposed dividend including dividend tax will absorb Rs.16.43 crore.

RESULTS OF OPERATIONSYour Directors are pleased to inform that the company’s performance has been commendable during the year. The healthy growth for the Company’s products and its operating and cost efficiencies have led to a steady increase in turnover and profits. The profit before tax for the year was Rs.126 crore as against Rs.105 crore in the previous year showing a growth of 20 % over previous year. The profitafter tax & adjustments for the year had been Rs.85 crore as against Rs.72 crore in the previous year.

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Place : Gurgaon D. P. JINDALDated : 15th June, 2005 Chairman

ANNEXURE TO DIRECTORS' REPORT

INFORMATION AS PER 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 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2005.A. CONSERVATION OF ENERGY

a) Energy Conservation measures taken.1. Effective measures have been taken for reduction of fuel consumption by implementing change in operating parameters

and recovering more heat from the furnace by changing the material loading pattern.2. The energy meters have been installed at different locations to improve the general awareness regarding power consumption

at respective locations. The capacitor banks were splitted in zones for reducing power wastages in capacitor banks. 3. Frequency variable drives have been introduced wherever motors are not fully loaded resulting reduction in power

consumption.4. Furnace capacity has been properly utilized by bunching the Heat Treatment cycle tanks, loading pattern of furnace resulting

increase in output & reduction of power and fuel consumption.5. Energy conservation in the form of using furnace oil instead of LDO to reduce the cost is already implemented at 14” mill

and 7” mill.

For & on behalf of the Board

b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy.Continuous measures are being taken for reduction of consumption of energy. The Company is using the alternate fuel LDO / FO which is an alternative source of fuel in place of HSD. During the year, no specific investment has been earmarked

(iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) that the Annual Accounts have been prepared on a going concern basis.

CORPORATE GOVERNANCEAs per the requirement of Clause 49 of the Listing Agreement with the Stock Exchanges, a Compliance Report on Corporate Governance has been annexed as part of the Annual Report.

AUDITORSM/s. Kanodia Sanyal & Associates, Chartered Accountants, the auditors of the Company are retiring at the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

FIXED DEPOSITSThere are no overdue or unclaimed deposits with the Company at the close of the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGSAND OUTGOThe information in accordance with the 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 is Annexed hereto.

PARTICULARS OF EMPLOYEESThere is no employee in the Company drawing remuneration more than the limits prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

ACKNOWLEDGEMENTThe Board expresses its grateful appreciation of the assistance and co-operation received from Central Government, State Government of Maharashtra, SICOM, MSEB al l other Government agencies, ONGCL, OIL, Banks and Shareholders. Your Directors wish to place on record their deep sense of appreciation for the devoted contribution made by the employees at all levels.


FORM AFORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO :


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c) Impact of measures at a&b above for reduction of energy consumption and consequent impact on the cost of production of the goods.The measures taken by the Company have resulted in substantial reduction of power and fuel consumption.

d) Total energy consumption and energy consumption per unit of production.As per Form-A annexed.

B. TECHNOLOGY ABSORPTIONe) Efforts made in technology absorption are given as per Form - B annexed.

C. FOREIGN EXCHANGE EARNINGS AND OUTGOf) Activities relating to exports; initiatives taken to increase exports; development of new export

markets for products and services; and export plans.The Company's business does not directly result in physical exports but results in import substitution and conservation of valuable foreign exchange.

g) Total foreign exchange used and earnedUsed - Rs. 127.38 croreEarned * - Rs. 84.05 crore

* Supplies to Oil Sector by the Company result in import substitution & consequent saving of substantial Foreign Exchange for the country.

CONSERVATION OF ENERGYA. POWER AND FUEL CONSUMPTION

1. Electricity PurchasedUnits (KWH in lacs)* 414.82 365.85Total Amount (Rs. in lacs) 1787.03 1605.71

Rate Per Unit (Rs.) 4.31 4.39* Includes 100.82 lacs (previous year 93.49 lacs) units generated by Wind Power Project of the Company.

2. Fuel Consumption

a) LDOQuantity (KL) 15433.72 13263.00

Total Amount (Rs.in lacs) 3146.64 2248.72 Average Rate per KL (Rs.) 20388.07 16954.80

b) HSDQuantity (KL) 279.40 275.67 Total Amount (Rs. in lacs) 68.43 62.63 Average Rate per KL (Rs.) 24491.35 22718.48

c) LPG Quantity (MT) 692.26 526.74Total Amount (Rs. in lacs) 181.92 124.04 Average Rate Per MT (Rs.) 26279.40 23549.39

d) FURNACE OILQuantity (MT) 890.46 -Total Amount (Rs. in lacs) 100.69 -Average Rate Per MT (Rs.) 11307.30 -

3. Other / Internal generation / Wind Power(Kwh in lakhs) 108.77 96.79

Particulars Year Ended Year Ended31.03.2005 31.03.2004

RESEARCH AND DEVELOPMENT (R&D)

1. Specific areas in which R&D carried out by the Companyi) To improve the pipe quality a new concept of quencing by immersion type is under implementation.ii) R&D activities of the Company remained centered around the development of new products, improvement of existing products

and processes, problem solving, cost reduction, pollution control, energy conservation.

2. Benefits derived as a result of above R&DAs a result of the R&D activities, new products were developed, existing products and process were improved and costs were reduced through energy conservation and savings in the use of materials.

3. Future plan of actionConcentration will remain in the development of new sizes and upgradation of the quality. The high priority will be given to the upgradation of technology, energy conservation, cost reduction and commission and establish the sizes for 14” Pipe Mill.

4. Expenditure on R&DExpenditure on R&D is not separately allocated and identified.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts in brief made towards technology absorption, adaptation and innovation.The production / Quality Control department absorbs the technology received from the collaborators, adopting the same to local conditions and uses its own experience to effect improvements to the product and manufacturing process.

2. Benefits derived as a result of the above efforts etc. Through above measures, the Company has continued to achieve product improvement / development, process improvement / development, commercialisation of technology, cost reduction, import substitution etc.

3. In case of imported technology (Imported during the last 5 years reckoned from the beginning of the financial year) prescribed information may be furnished:


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FORM BFORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO :

B. CONSUMPTION PER UNIT OF PRODUCTION

a) SEAMLESS PIPES (MT)Electricity (Units) 287.560 272.071LDO (KL) 0.126 0.117 HSD (KL) 0.002 0.002 LPG (MT) 0.006 0.005

b) ERW PIPES (MT)Electricity (Units) 73.726 78.972HSD (KL) 0.001 0.001

Sl. Technology Imported Year of Import Has Technolog If not fully absorbed,No. been fully areas where this

absorbed has not taken place

1 Technical know-how for machining, testing 2000 - 01 Yes Not applicable& otherwise forming threaded connectionsfrom M/s Hydril Company, USA.

2 Technical know-how and process 2003 - 04 Implemented during 14” Hot Milldetail for plug mill and classical rellers the yearwere received from USA

The report on Corporate Governance as per requirement under Clause 49 of the Listing Agreement is given below :

A. MANDATORY REQUIREMENTS

1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE

The Company’s philosophy on the code of Corporate Governance is:

(i) to ensure that adequate control systems exist to enable the Board to effectively discharge its responsibilities to all the stakeholders of the Company;

(ii) to ensure that the decision making process is systematic rational;

(iii) to ensure full commitment of the Management to maximize of shareholders value;

(iv) to ensure that the employees of the Company subscribe to the corporate values and apply them in their conduct.

2. BOARD OF DIRECTORS

COMPOSITION AND CATEGORY

The present strength of Board of Directors is 6 whose composition is given below :-

- 1 Promoter, Executive Director

- 1 Promoter, Non-executive Director

- 4 Non-promoter, Independent, Non-executive Directors.

The composition of Board of Directors and also number of other Board of Directors or Committees of the Board in which he is a member or Chairman are as under :-

ATTENDANCE OF DIRECTORS AT THE BOARD MEETINGS AND LAST ANNUAL GENERAL MEETING

During the financial year ended 31st March, 2005, seven Board Meetings were held on 20th April, 2004, 27th May, 2004, 22nd July, 2004, 20th September, 2004, 26th October, 2004, 20th January, 2005 and 11th February, 2005.


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CORPORATE GOVERNANCE REPORT

Name of Director Category of Directorship No. of Other No. of OtherDirectorships Committee of Board

(other than Maharashtra Seamless Limited)

Sh. D.P. Jindal Promoter, Non-executive 4 1Chairman

Sh. Saket Jindal Promoter, Executive 2 -Managing Director

Sh. U.C. Agarwal Independent, Non-executive 1 1

Sh. D.K. Parikh Independent, Non-executive - -

Sh. S.D. Sharma Independent, Non-executive - -

Sh. H.K. Khanna Independent, Non-executive 2 2

3. AUDIT COMMITTEE

BROAD TERMS OF REFERENCEThe terms of reference of this Committee covers the matters specified for Audit Committee under Clause 49 of the Listing Agreement as well as in Section 292A of the Companies Act, 1956.The terms of reference of Audit Committee include inter-alia the following:-- to review the quarterly, half-yearly and annual financial statements before submission to the Board for approval;- to discuss with Auditors about Internal Control System and to consider their observations and follow-up;- to ensure compliance of Internal Control System;- to investigate on any matter referred by the Board;- to make recommendation to the Board on any matter relating to the financial management of the Company, including the

Audit Report.


16

MEETINGS AND ATTENDANCE

During the financial year ended 31st March, 2005, four Audit Committee Meetings were held on 20th April, 2004, 22nd July, 2004, 26th October, 2004 and 20th January, 2005.The attendance at Audit Committee Meetings was as under :-

INTERNAL AUDITORS

The Company has appointed a firm of Chartered Accountants as Internal Auditors to review the internal control systems of the Company and to report thereon. The reports of the Internal Auditors are reviewed by the Audit Committee.

Name of the Members No. of Meetings Attended

Sh. U.C. Agarwal 4Sh. D.P. Jindal 3Sh. S.D. Sharma (upto 27.04.2005) 4

Name of the Members Category

Sh. U.C. Agarwal Chairman, Independent, Non-executiveSh. D.P. Jindal Member, Promoter, Non-executiveSh. H.K. KHANNA (w.e.f. 27.04.2005) Member, Independent, Non-executive

The attendance of each Director at the Board Meetings and the last Annual General Meeting was as under:

Sh. D.P. Jindal 5 YesSh. Saket Jindal 5 NoSh. U.C. Agarwal 6 NoSh. D.K. Parikh 6 YesSh. S.D. Sharma 6 NoSh. H.K. Khanna 7 Yes

Name of the Directors Board Meetings Attended Attendance at the lastAGM held on 20.09.2004

COMPOSITIONThe Audit Committee of the Company comprises 3 Directors of which all are Non-executive Directors, 2 are Independent Directors and 1 Promoter, Non-executive Director. All these Directors possess knowledge of Corporate Finance, Accounts and Company Law. The Chairman of the Committee is a Non-executive Independent Director nominated by the Board. The Statutory Auditors and Internal Auditors are also invitees to the meetings. The Company Secretary acts as a Secretary to the Committee.The minutes of the Audit Committee Meetings are noted by the Board of Directors at the subsequent Board Meeting.The constitution of the Audit Committee is as follows:

FUNCTIONSThe Board has constituted a Committee of three members under the Chairmanship of a Non-executive Director. The Committee meets generally twice a month, to approve inter-alia, transfer / transmission of shares, issue of duplicate share certificates and reviews the status of investors’ grievances and redressal mechanism and recommend measures to improve the level of investor services. Details of shares transfers/transmissions approved by the Committee are placed at the Board Meetings from time to time.

COMPOSITIONThe constitution of the Committee of Directors is as under:-


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5. SHAREHOLDERS / INVESTORS SHARE TRANSFER CUM GRIEVANCE COMMITTEE

Mr. S.D. Sharma was a member of the above Committee up to 27.04.2005

COMPLIANCE OFFICERThe Board has designated Shri Praveen Mudgal, Company Secretary as Compliance Officer.

DETAILS OF SHAREHOLDERS’ COMPLAINTS RECEIVED & REPLIED TO THE SATISFACTION OF SHAREHOLDERS The Company received 208 complaints of shareholders through SEBI and Stock Exchanges, which were duly replied & attended.

6. GENERAL BODY MEETINGSLocation and time, where last three Annual General Meetings were held is given below:-

Name of the Members CategorySh. D.P. Jindal Chairman, Promoter, Non-executiveSh. Saket Jindal Member, Promoter, ExecutiveSh. H.K. Khanna (w.e.f.27.04.2005) Member, Independent, Non-executive

An Extra Ordinary General Meeting was held on 22nd March, 2005 at 1.00 P.M. at the Registered Office of the Company at Pipe Nagar, Raigad.No Special Resolutions were put through postal ballot last year.

Financial year Date Location of the Meeting Time

2001-02 23rd September, 2002 Registered Office of the Company 12.30 P.M.at Pipe Nagar, Raigad

2002-03 8th September, 2003 Registered Office of the Company 12.30 P.M.at Pipe Nagar, Raigad

2003-04 20th September, 2004 Registered Office of the Company 11.30 A.M.at Pipe Nagar, Raigad

4. REMUNERATION OF DIRECTORS

Details of remuneration paid to the Directors during the financial year ended 31st March, 2005

1 Sh. D.P. Jindal - - 20,000 20,0002 Sh. Saket Jindal 4,80,000 1,80,000 - 6,60,0003 Sh. U.C. Agarwal - - 25,000 25,0004 Sh. D.K. Parikh - - 15,000 15,0005 Sh. S.D. Sharma - - 25,000 25,0006 Sh. H.K. Khanna - - 17,500 17,500

Sl. No. Name of the Directors Salary Perquisites and Sitting Fee Totalother benefits

(Rs.)

7. DISCLOSURESa. The Company has not entered into any transaction of material nature with the Promoters, Directors or Management, their

subsidiaries or relatives that may have potential conflict with the interest of the Company at large. Transactions with related parties are being disclosed separately in the Annual Report.

b. During the last three years, there were no strictures or penalties imposed either by SEBI or Stock Exchanges or any statutory authority for non-compliance of any matter related to the capital markets.

8. MEANS OF COMMUNICATIONThe company’s financial results are forthwith communicated to all the Stock Exchanges with whom the Company has listing arrangements as soon as they are approved and taken on record by the Board of Directors of the Company. Thereafter the results are published in the leading newspapers, namely, Financial Express, Business Standard and Tarun Bharat.

9. GENERAL SHAREHOLDERS INFORMATIONDetailed information in this regard provided in the shareholders information section forms part of this Report.

B NON-MANDATORY REQUIREMENTS1) CHAIRMAN OF THE BOARD

The Company has a Non-executive Chairman and expenses incurred in performance of his duties are paid by the Company.

2) REMUNERATION COMMITTEEThe Company does not have any Remuneration Committee. There are six members in the Board and only Managing Director gets remuneration which is being approved by the Board of Directors and shareholders.

3) SHAREHOLDERS RIGHTSAs the Company’s Financial results are published in English newspapers having circulation all over India and in a Marathi newspaper widely circulated in Maharashtra, the same are not sent to each household of shareholders.

4) POSTAL BALLOTThe provisions relating to Postal Ballot will be complied with in respect of matters wherever applicable.


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Date of Book Closure : 1st September, 2005 to 9th September 2005 (both days inclusive)Dividend Payment Date : 15th September, 2005 onwards

Listing on Stock Exchanges :Equity Shares of the Company are listed on Stock Exchanges at Mumbai, NSE, Kolkata, Delhi and Chennai.Stock Code : BSE - 500265

NSE - MAHSEAMLESNSDL / CDSL – ISIN - INE 271B01017BLOOMBERG - MHS@INREUTERS - MHSM.BO

SHAREHOLDERS INFORMATION

Registered Off ice : Pipe Nagar, Village Sukeli, N.H.17, B.K.G. Road,Taluka - Roha, Distt. Raigad, Maharashtra – 402 126

Annual General Meeting : Date and Time : 9th September, 2005 at 11.30 A.M.Venue : Registered Office of the Company at

Pipe Nagar, Village Sukeli, N.H.17, B.K.G. Road,Taluka-Roha, Distt.Raigad, Maharashtra – 402 126

Financial Calendar (Tentative):

* Financial reporting for the quarter ended 30th June, 2005 : July, 2005* Financial reporting for the quarter ending 30th September, 2005 : October, 2005* Financial reporting for the quarter ending 31st December, 2005 : January, 2006* Financial reporting for the quarter ending 31st March, 2006 : April, 2006


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Registrar and Share Transfer Agents:The Company has appointed Alankit Assignments Limited having its office at Alankit House, 2E/21, Jhandewalan Extension, New Delhi – 110 055 as Registrars & Transfer Agent for physical transfer and demat segment. Share Transfer System:Share transfer request received in physical form are registered within 15 days from the date of receipt and demat requests are normally confirmed within prescribed time on the date of receipt.

Distribution of shareholding as on 31st March, 2005

Stock Market DataThe monthly high and low quotations of equity shares traded on BSE & NSE are as under :-

B S E N S EMONTH HIGH (Rs) LOW (Rs) HIGH (Rs) LOW (Rs)

Apr i l 2004 227 .00 165 .00 228 .50 167 .70May, 2004 218 .00 172 .25 220 .00 167 .10June 2004 200 .00 182 .75 200 .00 180 .00Ju ly 2004 213 .90 190 .85 212 .00 189 .10Augus t 2004 249 .00 195 .00 220 .00 194 .50September 2004 236 .50 202 .05 250 .00 202 .00October 2004 264 .00 217 .05 264 .00 218 .25November 2004 275 .00 230 .10 272 .00 236 .00December 2004 340 .00 253 .50 345 .00 254 .10January 2005 323 .35 263 .10 323 .00 265 .00February 2005 375 .00 297 .00 367 .85 297 .10March 2005 365 .00 312 .00 353 .80 312.50

No.of Equity No.of % of No.of % ofShares held Shareholders shareholders Shares held Shareholding

Upto 500 21904 97.00 2634515 9.14

501 to 1000 347 1.54 280374 0.97

1001 to 2000 132 0.59 193292 0.67

2001 to 3000 40 0.18 105532 0.37

3001 to 4000 16 0.07 58153 0.20

4001 to 5000 21 0.09 101533 0.35

5001 to 10000 45 0.20 348534 1.21

10001 and above 75 0.33 25100627 87.09

GRAND TOTAL 22580 100.00 28822560 100.00

Share Performance Chart

Price on BSE on the closing day of month

400350300250200150100

500

APR,04

MAY,04

JUNE,04

JULY

,04

AUG,04

SEP,04

OCT,04

NOV,04

DEC,04

JAN,05

FEB,05

MAR,05

Outstanding GDR / Warrants and Convertible Bonds, conversion date and l ikely impact on equity:

There is no outstanding GDR / Warrants and Convertible Bonds etc.


Shareholding Pattern as on 31st March, 2005

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Plant Locations:

1. Seamless & ERW Pipes : Pipe Nagar, Village Sukeli,N.H.17, B.K.G. Road, Taluka-Roha,Distt.Raigad – 402 126, Maharashtra

2. Wind Power : Village Nivkane, Taluka Patan,District Satara, Maharashtra

For any assistance regarding dematerialisation of shares, share transfers, transmissions, change of address and any other query relating to the shares of the Company, please write to Company or Registrar and Transfer Agent at :

Alankit Assignments Limited,Alankit House,2E/21, Jhandewalan Extension, New Delhi- 110 055Phone : 011-51540060 – 63Fax : 011-51540064E-mail : [email protected]

Shareholders holding shares in electronic mode should address all their correspondence to their respective Depository Participant.

Dematerial isation of Shares and Liquidity

About 31% of the shares have been dematerialized as on 31st March, 2005. The Company’s shares are compulsorily traded in dematerialized form.The equity shares of the Company are actively traded on BSE and NSE.

CATEGORY No.of Shares held % Age of Holding

A. Promoter’s holding 13,129,135 45.55B. Non-Promoters holding

1. Institutional InvestorsMutual Funds, UTI and Banks 2,169,765 7.53

2. Othersi. Private Corporate Bodies 9,408,047 32.64ii. Indian Public 3,594,199 12.47iii. NRIs / OCBs 521,414 1.81

Sub-Total (B) 15,693,425 54.45

Grand Total 28,822,560 100.00

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We have examined the compliance of conditions of Corporate Governance by Maharashtra Seamless Limited, for the year ended on 31st march 2005, as stipulated in Clause 49 of the Listing Agreement of the said company with stock exchange(s).

The compliance of conditions of the Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of 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 explanation given to us, we certify that the Company has complied with the condit ions of Corporate Governance as st ipulated in Clause 49 of the said List ing Agreement.

As required by the Guidance Note issued by the Institute of Chartered Accountants of India we have to state that in respect of investor grievances received during the year ended 31st march 2005, no investor grievance are pending against the Company exceeding one month as per record maintained by the Company which are presented to the shareholder / investor Grievance Committee.

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.

Place : New DelhiDated : 15th June, 2005

To The Members of

Maharashtra Seamless Limited

AUDITORS’ CERTIFICATE

For KANODIA SANYAL & ASSOCIATESChartered Accountants

R.K KanodiaPartner

Membership No. 16121

Maharashtra Seamless enjoys leadership in Seamless Pipe industry, a higher and Capital intensive and technology driven industry. The company enjoys enviable position in all segments of Seamless and ERW Pipes industry with a limited domestic competition.

Both Seamless and Higher Dia ERW Pipes find major applications in Hydrocarbon and Infrastructure sectors. Besides, the products also find applications in various other Industries such as Fertilizers, Boilers, Automotives and General Engineering.

The company also has 20 Wind Mills aggregating to 7 MW capacity for captive consumption, which accounts for 26% of its total power requirement.

Oil & Gas Sector is heading for robust growth in both domestic as well as international market, which would result in substantial growth for Pipes and Tubes Industry. Besides, the spurt in infrastructure sector would further augment demand for Seamless and ERW Pipes. In Oil & Gas Sector, apart from laying Cross Country Linepipes, Exploration and Drilling activities are witnessing an unprecedented growth in both domestic as well as international market. Recent discoveries of Natural Gas on East Coast will necessitate laying of pipe lines from the East Coast to major demand centers in rest of the country. It is expected that the country’s pipes line net work will get doubled from the one existing over the next five years. Pipelines are the most cost effective mode of transportation, globally, for petroleum products. Further domestic refining capacity is also expected to increase, which will boost the demand for pipes. Strong growth expected in Infrastructure and Power sectors would also be one of the growth driver for seamless pipes industry. The boom witnessed in construction and housing sector will further lead to substantial demand for the ERW Pipes.

Besides catering to Indian market, the products of the Company are being exported to USA, Kuwait, Bangladesh, Singapore, Australia, Indonesia, Dubai, Myanmar, Mauritius, Iran, Saudi Arabia and African Region among others. The trend of growth in international markets is likely to go up further.

Healthy cash accruals coming from steady growth in business and increase in revenues with conservative debt policies have enabled the company to have one of the highest credit ratings that are amongst the best in the Industry. Both Credit Rating agencies viz. CRISIL and FITCH have awarded AA Rating with a positive stable outlook to the company for its long term debt programme.

OPPORTUNITIES & THREATSWith more focus being given to Oil & Gas sector by the Govt. of India, the demand from this sector is likely to boost further. Apart from that, there is also huge export potential of seamless pipes in the global market. With the completion of expansion project, the company has rightly poised itself to meet growing demand of its product in both India and International Market. The strong growth expected in Infrastructure and other allied sectors would also push up and provide substantial boost to Seamless Pipes industry. Boom in Power, Water supply, Construction and Housing sector will further lead to substantial demand for the Company’s Seamless and ERW Pipes.

Competition from international players may pose some pricing pressures for the company’s products. Reduction in Import Duty on pipes and tubes may also affect margins for the Company.

Company’s margins are dependent on steel price movements. Any steep increase in Input costs may affect operating margins adversely. The company is currently implementing its backward integration project of manufacturing round steel billets. This would not only insulate the company against any price escalation risk on its input, but would also assure regular supplies of right quality of billets for its seamless plant.

FUTURE OUTLOOKHydrocarbon Sector is one of the largest consumer of Seamless Pipes in India as well as in international market. The outlook for the sector is strongly linked to growth in Exploration and Production (E&P) activities in both domestic and international market which is being driven up by strong crude oil prices. The company expects crude oil prices to remain high in the near future, which will push up the demand for its products. Demand in domestic market is, however, relatively insulated from crude oil price movements, as there is currently significant low levels of domestic production of oil and gas. This has prompted GOI to focus on self reliance in Oil and Gas sector by inviting private players as well.

Apart from E&P activity, there is also significant interest in deep sea drilling. Continuous high crude oil prices are spurring players like ONGC, Reliance industries etc. to make substantial investments in deepwater drilling. Moreover, strong growth expected in Infrastructure, power, construction and housing sector will only lead to substantial demand. With the completion of its higher dia seamless plant, the Company is well positioned to meet the growing requirement of the market.

SEGMENT-WISE PERFORMANCEThe Company has primarily three segments – Seamless, ERW and Wind Power. All the three segments contribute positively to the profitability. Seamless Pipes Division constitutes 65% of turnover of the Company. The contribution of the Seamless Pipes Division is over 78% of the total Profit Before Tax. ERW Division, constitutes around 34% of turnover of the company. 7 MW Wind Power Project of the Company is meeting around 26% of Power requirement and has helped in reducing over all cost of power. The company is also enjoying various fiscal incentives from the state of Maharashtra.


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MANAGEMENT DISCUSSION AND ANALYSIS

MAHARASHTRA SEAMLESS’S APPROACH TO BUSINESSMSL’s Vision is to;

* Maintain & strengthen leadership position in Seamless Industry with continued focus on innovation and value addition.* A highly respected industry leader with which all stakeholders are proud to be associated. Constantly endeavour to make all its

stakeholders and customers to be proud of their association with the company.All manufacturers provide some form of value to their customers – MSL aspires to be the partner of choice for its Seamless and ERW pipe customers through adding extra value to its customers than other competitors.MSL has a wide range of stakeholders including its shareholders, the investment community, customers, suppliers, employees & their families and the local community within which its operation are situated. MSL always strives to make all its stakeholders proud of their relationship with the company.Business strategy that will take the company towards its Vision is :

* Deliver better value products to customers* “Solution partnership strategy” through proactive approach towards customers* Constant upgradation of technology so as to expand product applications and highest quality standards. The only true and ultimate

measure of MSL’s success is the extent to which it improves the business performance of its customers. The way in which MSL strives to achieve this is through its “Solutions Partner strategy” wherein MSL and its customers:

* Work in partnership to address performance improvement opportunities of highest priority to the customer. * Combine customer’s expertise with MSL’s proprietary technology, process and product application knowledge.

In addition to its Vision and Business Strategy , at the core of MSL’s approach to business is:

AN ORGANISATONAL CULTURE BASED ON KEY VALUES

All MSL employees strive to “live’ the company’s set of values :

1. Customer Always First – everyone owns customer satisfaction and strives to deliver it.

2. High Performance – an ambitious organization in which everyone aspires for excellence.

3. Employee Focus – an organization that provides fulfillment, stretch and development for its employees.

4. Responsiveness – employees respond with speed, proactiveness and a sense of urgency to satisfy external and internal customers.

5. Team- working – our collective knowledge and experience when harnessed through strong team-working results in higher performance and customer satisfaction.

6. Empowerment – decentralization and delegation supports faster and better decision making.


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FINANCIAL PERFORMANCEDuring the year the company has shown commendable growth. Turnover of the company increased to Rs. 879 crore from Rs. 569 crore in the previous year – a growth of 54%. The profit before tax for the year was Rs. 126 crore as against Rs. 105 crore in the previous year showing a growth of 20%. The profit after tax & adjustments for the year had been Rs. 85 crore as against Rs. 72 crore in the previous year.

FINANCE COSTThe interest and finance charges for the year ended 31st March, 2005 were Rs. 3.81 crore as against Rs. 1.97 crore in the previous years.

SHARE CAPITALShare Capital of the company comprises Equity Share Capital of Rs. 28.82 crore. The Authorised share capital of the Company has been increased form Rs. 55 Crore to Rs. 60 Crore by addition of 50 lac equity shares of Rs.10/- each.

RESERVES & SURPLUS

Reserves & Surplus of the Company were Rs. 284 crore as on 31st March, 2005 as against Rs. 215 crore as on 31st March, 2004.

EARNING PER SHARE

Earning per share for the financial year 2004-05 improved to Rs. 29.54 from Rs 23.72 in the previous year.

7. Lead by Example – set standards and bench mark for the industry .

8. Deliver the Promise - a commitment made is a personal promise to be delivered on-time and first-time right.

9. Continuous Improvement – pursuit of excellence and highest standards of quality through learning, innovation and the search for best practice is a journey without end.

10. Safety, Health and the Environment – protection of the health and safety of all people who have a relationship with MSL is critical. MSL must ensure that its activities have no negative impact on the environment in which its products are manufactured or used. Infact through various local community programmes MSL continues to provide better quality of life to surroundings.

TOTAL QUALITY MANAGEMENTThe very foundation of MSL’s activities is Total Quality Management. TQM means that all employees strive for excellence in every aspect of the company’s operations. MSL is an organization constantly seeking better ways of doing things to improve quality, efficiency and to reduce cost and thereby ultimately to provide greater customer satisfaction. TQM will be part of every activity and every process that the company operates, an integral part of the way that every employee works. The Company is accredited to the international ISO :9001 :2000 standards.

KEY FEATURES OF THE COMPANY’S PERFORMANCE DURING THE YEAR WERE:* Record turnover and profits.* Continued focus on cost effectiveness * Prudent management of working capital.* Strong cash generation, thereby making sufficient provision for future capital investments, enabled the company to reward its

shareholders with record dividends.

INTERNAL CONTROL SYSTEMSThe company has strong systems of internal controls and procedures commensurate with the size and nature of its business. These procedures are designed to ensure the following :

* that all assets and resources are optimized, used efficiently and are adequately protected.* that all internal policies and statutory guidelines are complied with.* Transparency and timely reporting of financial reports and management information.

All internal audit reports and progress in implementing any matters arising from them are reviewed by the Audit Committee of the Board.

HUMAN RESOURCESDuring the year company has added new qualified professionals and also maintained high motivation through teamwork, collaboration and multi skill development opportunities i.e. being able to contribute to all parts of the production process.At the very heart of MSL’s success and its ability to deliver customer satisfaction is the considerable skill and motivation of its employees. On behalf of all the company’s stakeholders who benefit from the hard work of the employees, the Board would like to express its sincere appreciation and gratitude.

ENVIRONMENT CONSCIOUSNESSThe Company is conscious of its responsibility towards creating, maintaining and ensuring a safe and clean environment. Strict adherence to all regulatory requirements and guidelines is maintained continuously. The Company stresses strict compliance with all applicable rules and regulations and therefore takes measures on continuous basis for effective implementation of environment management system with focus on minimization of water resource utilization, reduction in energy consumption & waste generation and other environment friendly measures. The Company also takes continuous measures for social development by catering to the basic needs of health, education, supply of water to nearby vi l lages, housing for staff and labour and creat ing employment opportunit ies.


24

Further to our comments in the Annexure referred to 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 such 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 and Loss Account and Cash flow Statement dealt with by this report have been prepared in compliance with the Accounting standards referred to in Sub Section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, we report that none of the said directors are disqualified as on 31st March 2005, from being appointed as directors in terms of clause (g) of sub-section (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 financial statements read together with significant accounting policies and notes thereon in Schedule ‘20’ 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:

25

AUDITORS’ REPORT

To The Members of

Maharashtra Seamless Limited

We have audited the attached Balance Sheet of M/S MAHARASHTRA SEAMLESS LIMITED as at 31st March 2005 and also the annexed Profit and Loss Account and the Cash Flow Statement for the year ended on that date (together referred to as ‘financial statements’). 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 have conducted our audit in accordance with the auditing standards generally accepted in India. These 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.

As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A), of the Companies Act 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.

i. In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2005 and,

ii. In the case of the Profit & Loss Account, of the Profit of the Company for the year ended on that date.

iii. In case of the Cash Flow Statement, of the cash flows for the year ended on that date.



R.K KanodiaPartner


1. (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.(b) The company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having

regard to the size of the Company and the nature of its assets. As explained to us, the management during the year has physically verified all the fixed assets of the Company and no material discrepancies between the book records and the physical verification were noticed on such verification.

(c) Fixed assets disposed off during the year, were not substantial and, therefore, it does not affect the going concern assumption.

2. (a) As explained to us, the inventories of finished goods, semi finished goods, stores, spare parts and raw materials except raw material in transit, lying with the third parties, have 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 procedure of physical verification of inventories 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 has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the company to / from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956:(a) The company has granted loans to one Company. The maximum amount involved during the year was Rs. 353,597,327/- and

the year-end balance of loan granted to such company was Rs. 10,599,636/-. The company has taken loan from two companies. The maximum amount involved during the year was Rs. 535,205,307/-and the year end balance of loan taken from such companies was Rs.21,385,591/-.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions are not prima facie prejudicial to the interest of the company.

(c) In respect of loans granted by the company the interest payments are regular and the principal amounts are being received /renewed on the due dates. In respect of loans taken by the company, the interest payments are regular and the principal amount is repayable on demand.

(d) There is no overdue amount in respect of the above loans.

4. In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of stores, raw material including components, plant and machinery, equipment and other assets, and for the sale of goods. Further, on the basis of our examination of the books and records of the company in accordance with the generally accepted auditing practices, we have neither come across, nor have we been informed the existence of major weakness in the internal control procedures and systems.

5. (a) As per the audit procedures applied by us, and according to the information and explanations given to us by the management, the transactions which are required to be entered in the register maintained under section 301 of the Act have been so entered.

(b) As per the audit procedures applied by us and as per the information and explanations given to us, with respect to the transactions as entered in the register maintained under section 301, exceeding the value of five lac rupees in respect to any party during the financial year, the prices at which these have been made are reasonable having regard to the prevailing, market prices at that time.

6. According to the information and explanations given to us, the company has not accepted any deposits during the year from the public within the provisions of Section 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposit) rules 1975 have been complied with.

7. In our opinion the company has an internal audit system commensurate with the nature and size of its business.

8. We have broadly reviewed the cost records maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records, u/s 209(1)(d) of the Companies Act, 1956 and are of opinion that prima –facie the prescribed records and accounts have been maintained by the company. However, we have not made a detailed examination of these records to verify whether they are accurate or complete.

9. (a) The company is regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales Tax, Wealth-tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2005 for a period of more than six months from the date of becoming payable.

ANNEXURE TO AUDITORS’ REPORT OF MAHARASHTRA SEAMLESS LIMITED(Annexure referred to in our report of even date)

26

10. There are no accumulated losses as at the end of the year. There are no cash losses during the financial year and the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books of accounts examined by us, the company has not defaulted in the repayment of dues to the financial institutions / banks.

12. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the company is not a Chit Fund/Nidhi/Mutual Fund/ Society. Therefore, clause 4(xiii) of the Companies (Auditor’s Report) Order 2003 is not applicable to the company.

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantees against loans taken by others from banks & financial institutions.

16. In our opinion, the terms loans availed by the Company during the year have been applied for the purpose for which they were obtained.

17. According to the information and explanations given to us and as per the books and records examined by us, as on the date of balance sheet, the funds raised by the Company on short-term basis have not been applied for long-term investments and vice versa.

18. According to the information and explanations given to us, during the period covered by our audit report, the Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The company does not have any debentures outstanding, as on the Balance Sheet date, hence, the clause 4(xix) of the order is not applicable.

20. The company has not raised any money through the public issue during the year. Accordingly, clause 4(xx) of the order is not applicable.

21. According to the information and explanations given to us, and 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 not come across any such instance of fraud on or by the company, noticed and reported during the year.



R.K KanodiaPartner


Name ofthe Statue

Nature of Dues Amount(Rs. in Lacs)

Period of which theamount relates

Forum wheredispute is pending

Sale Tax Act Demand forSales Tax

1992-1993 Maharashtra Sales TaxAuthority (Appellate Tribunal)

Income Tax Act1961

Demand forTax Liability

2001- 2002 CIT (Appeal),New Delhi

Centarl Excise &Customs act

Demand forExcise Duty

9.06 Jan. 98 To June 98 Commissioner Appeal6.73 May 98 To Feb. 99 Commissioner Appeal0.84 Feb. 99 To March 99 Asst. Commissioner 2.42 Dec.99 CESTAT6.30 Sept. 99 To March 03 Joint Commissioner5.03 April 00 To July 00 CESTAT1.79 Dec. 00 To March 03 Asst. Commissioner 3.74 May 00 To Aug. 01 CESTAT

13.18 Jan. 01 To Nov.01 Commissioner Appeal0.37 Oct. 02 Asst. Commissioner 0.32 April 03 To Aug. 03 CESTAT

4.48 (Out of the aboveRs. 2.00 lacs havebeen deposited)264.37 (Out of theabove Rs. 75.00 lacshave been deposited)

27

(b) According to the information and explanations given to us, details of dues of income tax, Sales tax, Custom Duty, Wealth Tax, Excise Duty and Cess which have not been deposited as on 31st March, 2005 on account of any dispute are given below :

I. SOURCES OF FUNDS1. Shareholders’ Funds

a) Share Capital 1 288,225,600 288,225,600b) Reserves and Surplus 2 2,839,855,999 2,152,735,917

3,128,081,599 2,440,961,5172. Loan Funds

a) Secured Loans 3 374,122,366 172,884,355b) Unsecured Loans 4 731,390,818 1,098,534,170

1,105,513,184 1,271,418,5253. Deferred Tax Liabilities 342,272,000 256,329,000

TOTAL 4,575,866,783 3,968,709,042

II. APPLICATION OF FUNDS1. Fixed Assets 5

a) Gross Block 2,868,857,483 1,521,046,512Less : Depreciation 577,615,558 473,830,785Net Block 2,291,241,925 1,047,215,727

b) Capital work in progress 407,923,683 1,149,827,3772,699,165,608 2,197,043,104

2. Investments 6 192,977,500 256,533,8003. Current Assets, Loans & Advancesa) Inventories 7 1,330,875,185 855,143,791b) Sundry Debtors 8 961,951,775 709,608,117c) Cash and Bank Balances 9 42,856,021 27,995,841d) Loans and Advances 10 169,465,460 494,173,285

2,505,148,441 2,086,921,034Less : Current Liabilities & Provisions 11 821,424,766 571,788,896

Net Current Assets 1,683,723,675 1,515,132,138

TOTAL 4,575,866,783 3,968,709,042Significant Accounting Policies & Notes on Accounts 20

As per our report of even date attached


28

Schedules As At As At31.03.2005 31.03.2004

Rs. Rs.

BALANCE SHEET

For & on Behalf of the Board

D.P. JindalChairman

Saket JindalManging DirectorU.C. Agarwal

D.K. ParikhH.K. Khanna

Praveen MudgalCompany Secretary

Place : GurgaonDated : 15th June, 2005


R.K KanodiaPartnerMembership No. 16121

INCOMESales & Income From Operations 12 8,672,447,680 5,552,935,376Less : Excise Duty 978,298,513 640,136,593Net Sales & Income From Operations 7,694,149,167 4,912,798,783Other Income 13 120,355,205 137,161,239Increase in Stock 14 332,617,028 55,829,661

8,147,121,400 5,105,789,683EXPENDITUREMaterials, Manufacturing & Operating Expenses 15 6,503,571,929 3,736,547,950Employees’ Remuneration & Benefits 16 105,945,249 86,501,029Administrative Expenses 17 47,909,587 36,065,958Selling & Distribution Expenses 18 84,179,363 106,360,747Interest & Financial Charges 19 38,133,308 19,719,082Depreciation 104,951,969 69,849,106

6,884,691,405 4,055,043,872

Profit before tax 1,262,429,995 1,050,745,811 Provision for taxation - Current 327,700,000 333,100,000 - Deferred 85,943,000 3,063,000 Profit after tax 848,786,995 714,582,811 Prior period adjustments / Tax Provision Written Back 2,657,707 2,898,145Profit after tax and adjustment 851,444,702 717,480,956Balance brought forward from previous year 132,048,701 122,775,751Profit available for appropriation 983,493,403 840,256,707APPROPRIATIONS

Transfer to Capital Redemption Reserve - 144,112,800Dividends

- Interim (Declared subsequent to the year end) - 72,056,400- 10 % Redeemable Cumulative Preference Shares (Paid / Proposed) - 13,702,529- Proposed on Equity Shares 144,112,800 43,233,840

Tax on Dividends- Interim - 9,232,226 - 10 % Redeemable Cumulative Preference Shares (Paid / Proposed) - 20,220,089- Proposed on Equity Shares 20,211,820 5,650,122

Transfer to General Reserve 650,000,000 400,000,000Balance carried to Balance Sheet 169,168,783 132,048,701

983,493,403 840,256,707


29

Schedules Year Ended Year Ended31.03.2005 31.03.2004

Rs. Rs.

PROFIT & LOSS ACCOUNT






D.P. JindalChairman



Earning Per Share (Basic / Diluted) 29.54 23.72Significant Accounting Policies & Notes on Accounts 20As per our report of even date attached

SCHEDULE : 1

SHARE CAPITAL

Authorised

40,000,000 (Previous Year - 35,000,000) Equity shares of Rs. 10 each 400,000,000 350,000,00020,000,000 (Previous Year - 20,000,000) Preference shares of Rs. 10 each 200,000,000 200,000,000

600,000,000 550,000,000Issued, Subscribed and Paid up

Equity Capital

28,822,560 (Previous Year - 28,822,560) Equity Shares of Rs.10 each 288,225,600 288,225,600fully paid up 288,225,600 288,225,600

SCHEDULE : 2

RESERVES & SURPLUS

Capital Redemption Reserve 144,112,800 144,112,800Share Premium 115,791,216 115,791,216 Capital Investment Subsidy 2,500,000 2,500,000General Reserve:As per last Balance Sheet 1,758,283,200 1,358,283,200Add : Transferred from Profit & Loss Account 650,000,000 400,000,000

2,408,283,200 1,758,283,200 Profit and Loss Account 169,168,783 132,048,701

2,839,855,999 2,152,735,917

SCHEDULE : 3

SECURED LOANS

Term Loan

From Banks - Rupee Loan 185,000,000 - - Foreign Currency Loan 131,790,000 -

Working Capital Borrowings

From Banks - Cash Credit 56,096,688 172,731,930Other Loans 1,235,678 152,425

374,122,366 172,884,355


30

SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS

As At As At31.03.2005 31.03.2004

Rs. Rs.

GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK

DESCRIPTION AS AT01.04.2004

ADDITIONS SALES/ADJUST-

MENT

AS AT31.03.2005

UPTO31.03.2004

FOR THEYEAR

SALES/ADJUST-

MENT

UPTO31.03.2005

AS AT31.03.2005

AS AT31.03.2004

Land - Freehold 10,464,384 10,650,442 - 21,114,826 - - - - 21,114,826 10,464,384

Shed & Building 238,378,466 268,087,289 - 506,465,755 41,744,712 9,611,695 - 51,356,407 455,109,348 196,633,754

Plant & Machinery* 1,244,296,242 1,061,185,039 5,610,000 2,299,871,281 419,709,698 92,781,168 - 512,490,866 1,787,380,415 824,586,544

Office Equipments 12,514,966 2,343,586 - 14,858,552 5,865,507 943,603 - 6,809,110 8,049,442 6,649,459

Furniture & Fixtures 3,482,764 2,687,011 - 6,169,775 2,220,862 421,475 - 2,642,337 3,527,438 1,261,902

Vehicles 11,909,690 9,751,634 1,284,030 20,377,294 4,290,006 1,194,028 1,167,196 4,316,838 16,060,456 7,619,684

Total (A) 1,521,046,512 1,354,705,001 6,894,030 2,868,857,483 473,830,785 104,951,969 1,167,196 577,615,558 2,291,241,925 1,047,215,727

Previous Year 1,447,622,348 74,003,493 579,329 1,521,046,512 404,123,259 69,849,106 141,580 473,830,785 1,047,215,727 1,043,499,089

* Deduction in Plant & Machinery represents foreign exchange fluctuation on account of outstanding liability as on 31.03.2005.

CAPITAL WORK IN PROGRESS

Shed & Building 190,524,834 125,434,987 144,729,635 171,230,186 - - - - 171,230,186 190,524,834

Plant & Machinery 828,269,070 198,744,156 815,370,567 211,642,659 - - - - 211,642,659 828,269,070

Preoperative Expenses 53,259,853 56,465,275 92,831,677 16,893,451 - - - - 16,893,451 53,259,853

Capital Advances 77,773,620 117,430,500 187,046,733 8,157,387 - - - - 8,157,387 77,773,620

Total (B) 1,149,827,377 498,074,918 1,239,978,612 407,923,683 - - - - 407,923,683 1,149,827,377

Previous Year 158,753,921 993,562,875 2,489,419 1,149,827,377 - - - - 1,149,827,377 158,753,921

Current Year (A+B) 2,699,165,608 2,197,043,104

Previous Year 2,197,043,104 1,202,253,010


31

SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS

SCHEDULE : 4

UNSECURED LOANS

Fixed Deposits 800,000 4,825,000Deferred Sales Tax 709,205,227 576,003,863Loans 21,385,591 517,705,307

731,390,818 1,098,534,170

As At As At31.03.2005 31.03.2004

Rs. Rs.

SCHEDULE : 5

FIXED ASSETS(Rs.)

SCHEDULE : 6

INVESTMENTS(Fully paid up unless otherwise specified)

I. LONG TERM

A. Trade

Un-Quoteda) Equity Shares

Rs. 10 each of Jindal Pipes Ltd. 300,000 1,507,500 1,370,000 6,884,250 Rs. 10 each of Hydril Jindal International Pvt. Ltd. 1,350,000 13,500,000 - - (Pending Allotment of 860,000 Equity Shares)

B. Non-trade

Un-Quoteda) Government Securities

National Saving Certificates VIII Issue - 75,000(Pledged as security)

b) Equity SharesRs. 10 each of Whitepin Tie-up Ltd. - - 27,000 164,550

c) Bonds8.75% Housing & Urban Development Corp. Ltd. - - 200 20,640,0008.00% National Highways Authority of India 2,700 27,000,000 2,700 27,000,0007.00% National Highways Authority of India 2,200 22,000,000 2,200 22,000,00010.00% Housing & Urban Development Corp. Ltd. 200 21,590,000 200 21,590,0007.99% Housing & Urban Development Corp. Ltd. 500 51,180,000 500 51,180,0006.75% Rural Electrification Corp. Ltd. 1,100 11,000,000 1,100 11,000,0005.60% Rural Electrification Corp. Ltd. 2,000 20,000,000 2,000 20,000,0005.15% Rural Electrification Corp. Ltd. 2,520 25,200,000 - -

II CURRENT

Non-tradeQuotedMutual FundsGrindlays Super Saver Income Fund Investment Plan - - 2,084,954.97 30,000,000Principal Income Fund - - 1,410,596.40 20,000,000IL & FS Bond Fund - Bonus Units - - 579,232.58 6,000,000LICMF Bond Fund - - 601,167.47 10,000,000Sundaram Bond Saver - - 506,280.41 10,000,000

192,977,500 256,533,800

Aggregate Value of Unquoted Investments 192,977,500 180,533,800Aggregate Value of Quoted Investments - 76,000,000Market Value of Quoted Investments - 83,139,343


32

As At 31.03.2005 As At 31.03.2004Number of Number of

Shares / Units Rs. Shares / Units Rs.

SCHEDULE : 8

SUNDRY DEBTORS

(Unsecured, Considered Good)

Debts outstanding for a period exceeding six months 32,221,106 57,536,138Other debts 929,730,669 652,071,979

961,951,775 709,608,117


33

As At As At31.03.2005 31.03.2004

Rs. Rs.

SCHEDULE : 7

INVENTORIES

(As Verified, Valued and Certified by the Management)

Raw Materials 471,778,299 366,718,026Finished Goods 486,895,539 285,008,339Work in Process 225,392,437 104,310,254Scrap 20,321,134 10,673,489Stores & Spares 126,487,776 88,433,683

1,330,875,185 855,143,791

SCHEDULE : 9

CASH AND BANK BALANCES

Cash in hand 432,194 659,844Silver Coins & Utensils 16,638 14,539

Balances with Scheduled Banks :

- In Cash Credit Accounts 6,395,681 -- In Current Accounts 20,617,965 4,663,667- In Unclaimed Dividend Accounts 12,242,768 20,564,482- In Fixed Deposit Accounts 3,150,775 2,093,309

42,856,021 27,995,841

SCHEDULE : 10

LOANS AND ADVANCES

(Unsecured, Considered Good)

Loans 19,611,337 337,453,447Advances Recoverable in Cash or in kind or for value to be received 136,256,489 147,850,692Security Deposits 13,595,925 8,867,775Balances with Government Authorities 1,709 1,371

169,465,460 494,173,285

SCHEDULE : 11

CURRENT LIABILITIES & PROVISIONSCurrent LiabilitiesAcceptances - 29,000,000Sundry Creditors 458,033,271 269,244,688Other Liabilities 95,879,998 61,793,645Advance From customers 55,320,150 15,698,029Investor Education and Protection Fund :(Appropriate amount shall be transferred to Fund as & when due)

- Unclaimed Dividend 10,476,707 9,525,842- Unclaimed Redemption Amount of Preference Shares 1,766,061 11,038,640

Interest accrued but not due on loans 5,331 970

621,481,518 396,301,814ProvisionsTaxation ( Net of Advance Tax & TDS) 35,618,628 45,314,494Proposed Dividend - Equity Shares 144,112,800 43,233,840Interim Dividend - 72,056,400Tax on Dividend - Interim - 9,232,226

- Proposed 20,211,820 5,650,122 199,943,248 175,487,082

821,424,766 571,788,896


34

As At As At31.03.2005 31.03.2004

Rs. Rs.

SCHEDULE : 13OTHER INCOMEDividend Received

- Trade 2,055,000 2,260,500- Non Trade - 1,305,688

Interest received (TDS Rs. 1,960,902/-, Previous Year Rs. 8,309,542 /-)- Long Term Investments - Non Trade 12,368,226 13,295,369- Others 12,628,117 38,621,454

Profit on Sale of Current (Non Trade) Investments 7,972,734 69,577,328Profit on Sale of Long Term (Trade) Investments 58,823,250 -Foreign Exchange Fluctuation (Net) 312,930 -Miscellaneous Income 26,194,948 12,100,900

120,355,205 137,161,239

SCHEDULE : 12SALES & INCOME FROM OPERATIONSManufacturing 8,493,934,666 5,461,647,688Trading - 3,050,586Scrap 178,087,834 87,545,502Job Work Services 425,180 691,600

8,672,447,680 5,552,935,376


Rs. Rs.

SCHEDULE : 14

INCREASE IN STOCK

Closing StockFinished Goods 486,895,539 285,008,339Work in Process 225,392,437 104,310,254Scrap 20,321,134 10,673,489

732,609,110 399,992,082Opening StockFinished Goods 285,008,339 217,333,226Work in Process 104,310,254 124,274,313Scrap 10,673,489 2,554,882

399,992,082 344,162,421

Increase in Stock 332,617,028 55,829,661


35

SCHEDULE : 16

EMPLOYEES’ REMUNERATION & BENEFITS

Salaries, Wages & Other Allowances 88,246,640 73,344,618Contribution to Provident & Other Funds 9,786,841 7,789,840Staff Welfare Expenses 7,911,768 5,366,571

105,945,249 86,501,029

SCHEDULE : 15

MATERIALS, MANUFACTURING & OPERATING EXPENSES

Raw Materials Consumed

Opening Stock 366,718,026 186,684,111Add : Purchases 5,849,070,752 3,278,479,595

6,215,788,778 3,465,163,706Less : Closing Stock 471,778,299 366,718,026

5,744,010,479 3,098,445,680Trading Purchases - 3,042,828

Manufacturing Expenses

Stores & Spares Consumed 147,277,187 164,765,370Power & Fuel 528,470,835 404,110,474Water Charges 6,686,106 3,712,848Repairs to Machinery 9,652,305 8,946,955Repairs to Building 2,710,305 1,035,407Job Work Charges 52,764,712 31,207,635Leave & License Fees 12,000,000 21,000,000Royalty - 280,753

6,503,571,929 3,736,547,950


Rs. Rs.

SCHEDULE : 17

ADMINISTRATIVE EXPENSESRent 1,788,000 1,440,000Rates & Taxes 3,895,273 1,801,733Postage, Telegram & Telephone 3,768,617 3,474,023Printing & Stationery 2,201,001 1,841,215Travelling & Conveyance:

- Directors 2,881,856 897,411- Others 9,912,042 6,997,690

Vehicle Upkeep & Maintenance 2,087,657 2,207,789Directors’ Fee 102,500 85,000Insurance 6,394,133 3,294,469Staff Recruitment & Training Expenses 884,192 161,305Repair & Maintenance (Others) 3,561,176 2,024,315Legal & Professional Charges 2,574,520 1,383,158Filing Fees 5,812 3,000Fees & Subscription 2,116,444 2,133,395Electricity Charges 1,135,401 960,223Auditors’ Remuneration :

- Audit Fee 137,750 135,000- Tax Audit Fee 27,000 27,000- Company Law Matters 47,266 87,480- Other Expenses 31,979 43,368

Internal Auditors’ Remuneration 101,417 54,813Foreign Exchange Fluctuation (Net) - 5,416,252Miscellaneous Expenses 3,577,167 1,447,270Loss on Sale of Long Term Investments :

- Non Trade 642,550 14,300Loss on sale of Fixed Assets (Net) 35,834 135,749

47,909,587 36,065,958


36

SCHEDULE : 18

SELLING & DISTRIBUTION EXPENSESCommission & Discount 23,117,174 57,831,512Freight Outward & Claims 49,350,944 43,585,315Testing & Inspection Fees 5,103,823 2,317,835Advertisement & Business Promotion 6,063,361 2,333,185Tender Fees 544,061 292,900

84,179,363 106,360,747SCHEDULE : 19

INTEREST & FINANCIAL CHARGESInterest

- Term Loan 3,023,984 -- Cash Credit 6,456,718 3,029,021- Others 8,617,412 2,061,774

Bank Charges 20,035,194 14,628,287

38,133,308 19,719,082


Rs. Rs.

SCHEDULE: 20

SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS

SIGNIFICANT ACCOUNTING POLICIES

a. Basis of Preparation of Financial StatementsThe financial statements are prepared under the historical cost convention and are in accordance with the requirements of the Companies Act, 1956, and accepted accounting standards.

b. Revenue RecognitionAll revenues, costs, assets and liabilities are accounted for on accrual basis. Sales are inclusive of excise duty. Inter divisional transfer of goods for captive consumption / internal uses are at market value.

c. Fixed Assets & Depreciation

i) Fixed AssetsFixed Assets are stated at cost of acquisition, construction less accumulated depreciation. The cost comprises of purchase price and any other directly attributable cost of bringing the assets to working condition for its intended use. Depreciation on assets have been provided on pro-rata basis, for the period of use, on straight line method at the rates prescribed under Schedule XIV to the Companies Act, 1956, as amended till date.

ii) Expenditure during construction periodExpenditure incurred during implementation of new / expansion project is included under Capital Work in Progress and the same is allocated to the respective Fixed Assets on the completion / erection.

d. Investments Investments are classified as long term or current based on the Management intention at the time of purchase. Long-term investments are valued at their acquisition cost. Current investments are stated at lower of cost or fair market value. The provision for diminution in the value of long- term investments is made only if such a decline is other than temporary in the opinion of the management.

e. Inventories Raw Materials are valued at lower of cost (FIFO basis) or market value.

Finished goods are valued at lower of cost or market value. Cost for this purpose includes direct material, staff cost, and appropriate overhead. Excise Duty on goods manufactured by the Company and remaining in inventory is included as a part of valuation of finished goods.Work-in-process are valued at estimated cost.Stores & Spare parts are valued at lower of cost or market value.Scrap is valued at realisable value.

f. Retirement BenefitsRetirement benefits to employees have been accounted for on accrual basis.Gratuity liability of Employees is covered under the Group Gratuity Policy, taken from Life Insurance Corporation of India and payment is made through a trust as per the scheme of the companyContribution to Superannuation Fund is being made to Life Insurance Corporation of India through a trust as per the scheme of the company.Estimated liability on account of leave encashment benefit of employees is charged to profit and Loss Account on accrual basis in conformity with the Accounting Standard for retirement benefits issued by the Institute of Chartered Accountants of India.

g. Research & Development ExpensesResearch & Development Expenses of revenue nature, if any are charged to Profit and Loss Account in the year in which it is incurred. Expenditure of capital nature, if any is being capitalised.

h. Foreign Currency TransactionsTransactions denominated in foreign currency are recorded at the exchange rate prevailing at the time of transaction.At the end of the financial year, foreign exchange transactions which are not covered by forward contracts are translated at year


37


38

NOTES ON ACCOUNTS

1. CONTINGENT LIABILITIESa) Letters of Credit - Rs. 519,357,121/- (Previous Year of Rs. 246,097,450/-)b) Bank Guarantees - Rs. 515,279,161/- (Previous Year Rs. 501,077,515/-)c) Sales Tax demand under appeal - Rs. 448,047/- (Previous year Rs.448, 047/-)d) Income Tax demand under appeal - Rs. 26,436,755/- (Previous Year Nil)e) Excise Duty Demand under Appeal - Rs. 4,978,453/- (Previous Year Rs. 4,311,563/-)

2. The company has imported capital goods under the export promotion capital goods scheme of the Government of India, at concessional rates of duty against an undertaking to fulfil exports obligations. The duty saved on such capital goods amounts to Rs. 36,956,573/- and for this the company is required to export goods amounting to Rs. 295,652,584/-, within a period of eight years.Non – fulfilment of such future export obligations, entails government to enforce the EPCG Bonds executed by us to the extent of Rs. 94,267,604/- to Custom Department against the various EPCG licences

3. Estimated amount of contracts remaining to be executed on Capital Account, net of advances, and not provided for is Rs. 10,223,765/- (Previous Year Rs. 188,091,816/-)

4. Excise duty in respect of finished goods lying in factory premises and custom duty on goods lying in custom bonded warehouse are provided and included in the valuation of inventory. This accounting treatment has no impact on the profit for the year. CENVAT benefit is accounted for by reducing the purchase cost of the materials and fixed assets.

end rates and which are covered by forward contracts are translated at the rate prevailing at the date of transaction, as adjusted by the difference between the forward rate and exchange rate on the date of transaction over the life of the contract. Foreign currency loans for financing fixed assets are stated at the contracted/prevailing rate of exchange at the year-end and the resultant gains/losses are adjusted to the cost of assets.Any profit or loss on account of exchange difference on settlement/translation is recognised in the Profit and Loss Account, except those relating to acquisition of fixed assets, which are adjusted in the cost of assets.

i. Borrowing CostBorrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of such asset upto the date when such asset is ready for its intended use. Other borrowing costs are treated as revenue / deferred revenue expenditure as considered appropriate.

j. Income-TaxThe current Income Tax liability is calculated by the company, in accordance with relevant tax provision and tax advices wherever considered necessary.Deferred tax assets and liabilities are recognised for future tax consequences attributable to the timing differences that results between the profits offered for income tax and profit as per the financial statements. Deferred tax assets and liabilities are measured as per the tax rates/laws that have been enacted or substantively enacted by the Balance Sheet date.

The above information regarding Small Scale Industrial Undertakings has been determined to the extent such parties have been identified on the basis of information available with the company. The Auditors have relied upon the same.

Excise duty shown in profit and loss account includes the excise duty in respect of goods lying in factory premises amounted to Rs. 64,073,950/- (Previous Year Rs. 38,662,408/-).

5. a) Term loans from banks are secured by first charge by way of mortgage on the Company’s’ immovable properties and by way of hypothecation on moveable properties both present and future (save and except book debts & stock).

b) The borrowings for working capital are secured by hypothecation of inventories, book debts & all other current assets other than those specifically excluded and second charge on fixed assets ranking pari passu.

c) Other loans represent vehicle loans taken from ICICI Bank Ltd. are secured by hypothecation of vehicles with all accessories and additions to or in the vehicle (s) present or future by way of specific charge to the respective vehicle.

6. Term Loans due within one year is Rs. 75,000,000/- (Previous Year Nil)7. Total amount due to Small Scale Industrial Undertakings is Rs. 1,993,257/- (Previous year Rs. 2,201,876/-). The name of the

Small Scale Industrial Undertakings to whom the company owes a sum of more than Rs. One lac, which is outstanding for more than 30 days are:

Excise duty amounting to Rs. 978,298,513/- shown as deductions from sales include duty on stock.

Name of the Party AmountTashkent oil Pvt. Ltd. 513,166Anand Engineers Pvt. Ltd. 191,117

(Rs.)

12. Segment Reporting PoliciesIdentification of SegmentsPrimary SegmentBusiness segment: The company’s operating businesses are organised and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products. The three identified segments are Seamless Pipes, ERW Pipes and Wind Power.Inter Divisional transfers of goods, as marketable products produced by separate divisions of the company for captive consumption are made as if sales were to third parties at current market prices and are included in turnover.Segment InformationSegment Revenues, Results and Other Information:


Particulars As At 31.03.2005 As At 31.03.2004Amount Brought Forward From Last Year 53,259,853 3,815,319Addition During The Year 56,465,275 49,444,534Amount Capitalised During The Year (92,831,677) -Closing Balance 16,893,451 53,259,853Amount Brought Forward From Last Year - 3,815,319Power & fuel 1,532,700 3,492,708Stores & spares 8,855,913 6,150,845Salaries, Wages & Other Allowances 172,450 8,530,869Travelling & Conveyance 670,115 5,211,182Interest & Financial Charges 3,459,275 24,085,604Depreciation - 588,687Miscellaneous Expenses 2,202,998 1,384,639Total 16,893,451 53,259,853

(Rs.)

39

Figures in bracket are for previous year.

(Rs. in lacs)

8 Stock of raw material includes material in transit.9. In the opinion of the company, the value on realisation of current assets, loans & advances in the ordinary course of the business

shall not be less than the amount at which they are stated in the Balance Sheet.10. The company has entered into a joint venture arrangement with Hydril LP, USA on 50:50 basis in the name and style of Hydril Jindal

International Pvt. Ltd. at Village Sukeli, Dist. Raigad in the State of Maharashtra (India). The main object of the Joint Venture company is to manufacture premium thread connections and the company is expected to starts its commercial production during the year. The company had contributed till 31st March 2005 Rs. 1,3500,000/- towards equity contribution.

11. Pre-operative expenses forming part of capital work in progress consists as follows:

Net External Sales / Income from operations 49,955 26,562 424 1,197 78,138(35,053) (13,677) (397) (1,372) (50,499)

Inter-Segment Sales - - 424 - 424(-) (-) (397) (-) (397)

Segment Results (PBIT) 10,897 3,085 201 1,197 15,380(9,526) (1,921) (176) (1,372) (12,995)

Interest & Financial Charges 309 72 - - 381(175) (22) (-) (-) (197)

Other un-allocable expenditure 1,929 419 27 - 2,375(1,876) (389) (26) (-) (2,291)

Profit before tax 8,659 2,594 174 1,197 12,624(7,475) (1510) (150) (1,372) (10,507)

Segment Assets (Including Capital Work In Progress) 37,702 11,080 4,785 2,144 55,711(27,225) (9,011) (4,375) (5,583) (46,194)

Segment Liabilities 14,585 2,657 1,759 5,429 22,756(14,542) (1,701) (1,175) (4,366) (21,784)

Capital Employed 23,117 8,423 3,026 - 3,285 31,281(12,683) (7,310) (3,200) (1,217) (24,410)

Particulars Seamless ERW Wind Others TotalPipe Pipe Power

Particulars 31-03-2005 31-03-2004

a. Purchase & Other Services from related partiesAssociated Company 42,577,381 53,710,855Relatives of Key Management Personnel 86,468 88,544

b. Sales & Other Services to related partiesAssociated Company 4,538,406 1,815,057Joint Venture Company 3,075,273 NilRelatives of Key Management Personnel 162,000 Nil

c. Investment in related partiesJoint Venture Company 13,500,000 Nil

d. Loans / Inter corporate deposits given (Maximum Outstanding)Associated Company 353,597,327 396,500,000

e. Loans / Inter corporate deposits taken (Maximum Outstanding)Associated Company 479,938,424 479,938,424

f. Interest received from related partiesAssociated Company 8,091,588 31,568,965

g. Interest paid to related partiesAssociated Company 25,270,408 23,821,918Relatives of Key Management Personnel 17,668 22,625

h. Rent paid to related partiesAssociated Company 1,188,000 1,134,000Relatives of Key Management Personnel 120,000 120,000

i. RemunerationKey Management Personnel 660,000 660,000

j. Balance as at 31st March 2005 Payable by the CompanyAssociated Company 25,749,927 479,938,424Relatives of Key Management Personnel 40,128 21,307

k. Balance as at 31st March 2005 Receivable by the CompanyAssociated Company 10,599,636 334,046,574Joint Venture Company 2,507,235 Nil

No amount has been provided as doubtful debts or advances / written or written back in the year in respect of debts due from or to above related parties.


40

13. Related Parties Disclosures as per Accounting Standard – 18.

List of Related Parties with whom transactions have taken place during the year :

a. Associated CompanyJindal Pipes Limited

b. Joint Venture CompanyHydril Jindal International Pvt. Ltd.

c. Key Management PersonnelShri Saket Jindal

d. Relatives of Key Management PersonnelShri D.P. JindalSmt. Savita Jindal

Details of Transactions are as follows: (Rs.)

Particulars 2004-05 2003-04

Net Profit available for equity shareholders 851,444,702 683,558,338

Weighted average number of equity shares of Rs. 10/- each 28,822,560 28,822,560

Outstanding during the year

Basic/Diluted Earning per share (a / b) 29.54 23.72


41

Deferred Tax Liability

16. Disclosure required by Clause 32 of Listing Agreement :-The Company has granted loan to its associate company during the year and amount outstanding as on 31st March 2005 amounts to Rs. 10,599,636/-. The maximum amount outstanding during the year was Rs. 353,597,327/-. The company has made an investment in Joint Venture company amounting to Rs. 13,500,000/-.

Deferred Tax Assets

15. Earning Per Share

I. CAPACITY AND PRODUCTION

Seamless Pipe

17. Additional information pursuant to the provisions of paragraph 3 & 4 of part II of Schedule VI to the Companies Act, 1956.

Particulars As At 31.03.2004 During the Year As At 31.03.2005

Fixed Assets 257,552,346 85,357,306 342,909,652

Includes Production of Pipe Fittings of 27.781 MT (Previous Year 2.447 MT).

Installed Capacity 225,000 125,000

Production- Seamless Pipes 122,457 113,547

Particulars Year Ended 31.03.2005 Year Ended 31.03.2004

Includes production of 7,243 MT pipe by third party on job work basis.

ERW Pipe

Installed Capacity 200,000 100,000

Production - ERW Pipes 85,020 61,101


(MT)

14. In compliance with the Accounting Standard – AS 22 relating to Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India, the company has adjusted the deferred tax liability (net) arising out of timing differences accruing during the year aggregating to Rs. 85,943,000/- has been recognised in the Profit & Loss Account.

Particulars As At 31.03.2004 During the Year As At 31.03.2005

Brought forward unabsorbed Losses 200,483 (200,483) -

Others 1,022,863 (385,211) 637,652

Total 1,223,346 (585,694) 637,652

Net Deferred Tax Liability 256,329,000 85,943,000 342,272,000

(Rs.)

(Rs.)

(MT)

Opening Stock 3,967 110,329,622 5,362 111,021,713

Turnover 84,061 2,943,278,667 62,496 1,486,823,693

Closing Stock 4,926 171,017,738 3,967 110,329,622

Items Year Ended 31.03.2005 Year Ended 31.03.2004

Qty. (MT) Amt. (Rs) Qty. (MT) Amt. (Rs.)


42

II. OPENING STOCK, CLOSING STOCK & TURNOVER OF MANUFACTURED GOODS

Seamless Pipe

Turnover includes captive consumption of Rs. 7,056,950/- (270.677 MT) (Previous Year Rs. 4,321,605/- (317.490 MT)

Turnover Includes Rs. 2,516,032/- (25.512 MT) (Previous Year Nil) of Pipe Fittings.

Closing Stock Includes Rs. 445,083/- (4.716 MT) (Previous Year Rs. 207,104/-) (2.447 MT) of Pipe Fittings.

Turnover includes captive consumption of Rs. 4,010,178/- (194.110 MT) (Previous Year Rs. 3,400,460/- (297.190 MT)

III. OPENING STOCK, CLOSING STOCK & TURNOVER OF TRADING MATERIAL, STEEL PIPES/TUBES & OTHERS

Seamless Pipes

The installed capacity is as certified by the Management.

Wind Power (Kwh)

Installed Capacity 61,320,000 61,320,000

Units Generated 10,877,328 9,679,283


Opening Stock 6,265 174,678,717 4,761 106,311,513

Turnover 119,687 5,508,234,420 112,043 3,935,138,934

Closing Stock 9,035 315,877,801 6,265 174,678,717



ERW Pipe

Wind Power

Income from Power Generation 10,877,328 42,421,579 9,679,283 39,685,061


Qty. (KWH) Amt. (Rs) Qty. (KWH) Amt. (Rs.)

Opening Stock Nil Nil Nil Nil

Purchases Nil Nil 141 3,042,828

Turnover Nil Nil 141 3,050,586

Closing Stock Nil Nil Nil Nil



Stores & Spare Parts Consumed

Imported 30.70 45,209,604 19.84 32,695,231Indigenous 69.30 102,067,583 80.16 132,070,139

Total 100.00 147,277,187 100.00 164,765,370

Items Year Ended 31.03.2005 Year Ended 31.03.2004(%) Amt. (Rs) (%) Amt. (Rs.)


43

IV. RAW MATERIALS CONSUMED

Round Steel Billets 135,976 3,368,781,931 118,260 1,959,206,245HR Coil 88,685 2,357,342,757 63,184 1,139,239,435Zinc 238 14,785,870 - -Others - 3,099,921 - -

Total 5,744,010,479 3,098,445,680

Items Year Ended 31.03.2005 Year Ended 31.03.2004Qty. (MT) Amt. (Rs) Qty. (MT) Amt. (Rs.)

VI. CIF VALUE OF IMPORTS

Raw Materials 1,237,243,966 415,698,768Stores & Spares 27,115,861 40,108,217Capital Goods 4,503,325 467,767,151

Items Year Ended 31.03.2005 Year Ended 31.03.2004(Rs.)

VII. EXPENDITURE IN FOREIGN CURRENCY

Royalty Nil 227,209Travelling 2,044,266 2,198,723Others 2,905,227 248,014


VIII. EARNING IN FOREIGN CURRENCY

Supplies to Oil Sector 840,469,348 1,463,006,425


V. VALUE OF IMPORTED & INDIGENOUS RAW MATERIALS, STORES & SPARE PARTS CONSUMEDRaw Materials

Imported 21.79 1,251,755,287 15.17 469,993,753Indigenous 78.21 4,492,255,192 84.83 2,628,451,927

Total 100.00 5,744,010,479 100.00 3,098,445,680

Items Year Ended 31.03.2005 Year Ended 31.03.2004(%) Amt. (Rs) (%) Amt. (Rs.)

IX. MANAGERIAL REMUNERATIONThe Detail of Managerial Remuneration is as under: (Rs.)

Salary 480,000 480,000Contribution to PF & other Funds 129,600 129,600Perquisites 50,400 50,400Total 660,000 660,000


Alliance Cash Manager - Growth - - -(1555341.144) (23,545,532) (23,559,374)

Birla Bond Plus Retail Plan - - - -Dividend Reinvestment (2697755.468) (30,187,669) (30,223,224)

Birla Cash Plus Retail Plan - Growth - - -(1421257.190) (24,154,976) (24,160,235)

Deutsche Short Maturity Fund - - - -Weekly Dividend Plan (1976828.679) (20,175,098) (20,266,843)

DSP Merrill Lynch Liquidity Fund - Growth - - -(790843.823) (12,087,573) (12,090,499)

GSSIF - Short Term - Monthly Dividend - - -(2956953.501) (30,351,743) (30,329,768)

Grindlays Cash Fund - Growth 1264915.461 15,000,000 15,018,468(-) (-) (-)

Grindlays Cash Fund - Institutional 2867536.213 35,000,000 35,013,191Plan B - Growth (-) (-) (-)

Grindlays Floating Rate - Short Term - 17920980.558 195,000,000 195,225,617Institutional Plan B - Growth (-) (-) (-)

HDFC Short Term Plan - Dividend - - -Reinvestment (1981766.030) (20,028,497) (20,047,942)

IL&FS Liquid Account - Institutional Plan - - -Dividend Option (4005592.822) (40,055,928) (40,055,928)

Kotak Liquid Regular Plan - Growth - - -(978304.064) (12,261,378) (12,264,020)

LICMF Short Term Plan - Dividend - - -Reinvestment (4009929.303) (40,100,000) (40,518,663)

Prudential ICICI Liquid Plan - Growth - - -(2309663.018) (35,860,059) (35,863,754)

Sun F & C Value Fund -Liquid - - - -Daily Dividend (3008455.209) (30,084,552) (30,084,552)

Templeton India Short Term Income - - -Plan Weekly Dividend Reinvestment (18599.382) (20,278,003) (20,286,478)

Templeton India Liquid Fund - - - -Weekly Dividend Reinvestment (3003370.181) (30,044,198) (30,048,719)

UTI - Liquid Advantage Fund - 4617929.320 55,000,000 55,390,677Institutional Growth Plan (-) (-) (-)

NAME OF THE SCHEME NO. OF UNITS PURCHASE SALE VALUE VALUE (Rs.) (Rs.)


44

X. INVESTMENTS PURCHASED AND SOLD DURING THE YEAR

III. Position of Mobilisation and Deployment of Funds

Total Liabilities Total Assets

4,575,867 4,575,867


45

Additional Information pursuant to Part IV of Schedule VI to the Companies Act, 1956.

Balance Sheet Abstract and Company’s General Business Profile

(Rupees in thousand)

II. Capital Raised during the year

Public Issue Right Issue

Nil Nil

Bonus Issue Private Placement

Nil Nil

I. Registration Details

Registration No. 80545 State Code 11

Balance Sheet Date 31-03-2005

Sources of Funds

Paid Up Capital Reserves & Surplus

288,226 2,839,856

Secured Loans Unsecured Loans & Deferred Tax

374,122 1,073,663

Application of Funds

Accumulated Losses

Nil

Net Current Assets Misc. Expenditure

1,683,724 Nil

Net Fixed Assets Investments

2,699,166 192,977


46

19. Paise have been rounded off to the nearest rupee.

20. Previous years’ figures have been re-grouped / re-arranged wherever considered necessary.

21. Schedule 1 to 20 are annexed to and form part of the Statement of Accounts.

V. Generic Names of Three Principal Products of Company (as per monetary terms)

Signatures to Schedules 1 to 20

As per our report of even date attached


Turnover (including other income) Total Expenditure

7,814,504 6,552,074

Profit before tax Profit after tax & adjustment

1,262,430 851,445

Earning per share (Rs) Dividend (%)

29.54 50

IV. Performance of Company

Item Code No. (ITC Code) 7304.00Product Description Seamless Pipes & Tubes

Item Code No. (ITC Code) 7305.11, 7306.10Product Description ERW Pipes & Tubes

Item Code No. (ITC Code) 7307.00Product Description Pipe Fittings

Item Code No. (ITC Code) 8502.31Product Description Wind Power





D.P. JindalChairman



A. Cash Flow from Operating ActivitiesNet Profit before tax and extraordinary items 1,262,429,995 1,050,745,811Adjusted for:

Depreciation 104,951,969 69,849,106Dividend Received (2,055,000) (3,566,188)Misc Exp. written off - -Prior Period Adjustments / Tax Provision Written Back 2,657,707 2,898,145Interest Received (24,996,343) (51,916,823)Interest Paid 15,074,130 5,090,795Profit/Loss on sale of assets 35,834 135,749Profit on Sale of Investments (7,972,734) (69,577,328)Loss on Sale of Investments 642,550 14,300

Operating Profit before Working Capital Changes 1,350,768,108 1,003,673,567Adjusted for :

Trade & Other Receivables 77,685,152 (401,072,245)Inventories (475,731,394) (257,464,031)Trade Payables & Others 233,501,418 215,931,264

Cash Generated from operations 1,186,223,284 561,068,555Direct taxes Paid (337,395,866) (288,342,252)

Cash Flow before extraordinary items 848,827,418 272,726,303Extraordinary item - -

Net Cash From Operating Activities A 848,827,418 272,726,303B. Cash Flow from Investing Activities

Purchase of Fixed Assets (612,801,307) (1,065,076,949)Redemption Of Redeemable Cumulative Preference Shares - (144,112,800)Sale of assets 5,691,000 302,000Purchase of Investments (297,520,538) (389,215,207)Sale of Investments 368,407,022 743,142,985Interest Received 19,675,358 51,884,489Dividend Received 2,055,000 3,566,188

Net Cash used in Investing Activities B (514,493,465) (799,509,294)C. Cash Flow from Financing Activities

Proceeds from Long Term Borrowings 449,991,364 95,559,647Proceeds from Short Term Borrowings (615,896,705) 592,170,727Interest Paid (15,074,130) (5,090,795)Dividend Paid (123,611,954) (115,752,115)Tax paid on dividend (14,882,348) (33,575,200)

Net Cash used in Financing Activities C (319,473,773) 533,312,264

Net increase in Cash & Cash Equivalents (A+B+C) 14,860,180 6,529,273Opening Balances of Cash and Cash Equivalents 27,995,841 21,466,568Closing Balances of Cash and Cash Equivalents 42,856,021 27,995,841Change in Cash and Cash Equivalents 14,860,180 6,529,273


47

CASH FLOW STATEMENT ANNEXED TO THE BALANCE SHEETYear Ended Year Ended31.03.2005 31.03.2004

Rs. Rs.






D.P. JindalChairman



CORPORATE OFFICE:Plot No. 30, Institutional Sector-44, Gurgaon-122 002Tel.: +91 124 2574325 / 26, Fax: +91 124 2574327

e-mail:[email protected]: www.jindal.com

REGD.OFF. & WORKS:Pipe Nagar, Village Sukeli, Taluka Roha, N.H.-17, B.K.G. Road, Distt. Raigad-402 126 (Maharashtra) India

Tel.: +91 2194 238511 / 12 / 16 Fax: +91 2194 238513

Documents

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