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DIRECTORS’ REPORT
rectors are glad to present below the highlights of the company’s
erformance for the financial year ended March 31st March, 2006 :-
Dear Shareholders, Your Directors have pleasure in presenting the 24th Annual Report on the
operation of the company together with audited statement of accounts for the
year ended 31st March, 2006, Auditors’ Report and Review of Accounts by the
Comptroller & Auditor General of India.
Financial Results :
Your Di
p
(Rs. in Crores) Gross Sales / Income 1165.23 Net Sales / Income 1094.70 Total Expenditure 852.09 Operating Profit (PBIDT) 242.61
nd prior years adjustments 22.44 Less : Adjustment pertaining to earlier years 6.90
ax 15.54 Less : Provision for Tax 0.80
er the terms of the Corporate Debt Restructuring Package
anctioned by Financial Institutions and Banks, 5% of the restructured Debt
Less : Interest 130.59 Cash Profit 112.02 Less : Depreciation 89.58 Profit before Tax a
Profit before T
Net Profit after Tax 14.74
During the year under review, your company has posted a operating profit of
Rs. 242.61 crores and a net profit of Rs.14.74 crores after providing for interest,
depreciation and tax on a net turnover of Rs.1094.70 crores. Although there was
marginal growth in net turn over during the year, there was fall in profit mainly
due to increase in price of all major raw materials like iron ore, coal etc., and fall
in selling prices of the finished products viz. pig iron, coke etc, both in the
domestic & export market, which adversely affected the steel industry as a
whole. During the year, as p
s
amounting to Rs.43.03 crores has been transferred to advance against share
capital account. MMTC Ltd, the managing promoter of the company and NINL have opened
foreign and indigenous Letters of Credit amounting to Rs.127.28 crores in total
for supply of imported and indigenous equipments/services for the steel melting
shop of Phase –II of the project.
Production Performance : Your company continues to maintain the position of the largest pig iron producer
in the country for the second successive year. The high tempo of production in
all the production shops was maintained
produced 601527 t of Blast Furnace Coke which was * 66% higher than previous
year, 926765 t of gross sinter which was 14% more over the previous year and
679417 t of hot metal with an increase of 10.36% over the previous year. Pig
iron production was 614911 t and growth over previous year was 11.35% with
power generation at 244243 MWH recording a growth of 71.14% over the
previous year. The growth in production is attributed to better process
management, improvement in yields and improvement in specific raw materials &
input consumptions. The production performance for the year under review vis-à-vis the previous year
is depicted below :
through out the year. Your company
Production growth
6149
11
5522
16
9267
65
8126
39
6015
27
3623
00
2442
43
1427
14
11.35% growth over
last year
71.14% growth over
last year
14.04% growth over
last year
*66.03% growth over
last year
200000
300000
400000
500000
600000
700000
800000
900000
1000000
100000
0Pig Iron (t) Gross Sinter (t) BF Coke (t) * Power generation
(MWH)2005-06 2004-05
* Coke oven trial production commenced on 08.07.2004. Techno-economics : Apart from growth in production the operating parameters like yields,
productivities and specific consumptions have shown all round improvements
during the year. Specific coal consumption per ton of BF coke reduced by 17 kg.
With better operating parameters sinter plant productivity increased to 1.040
Furnace (BF) productivity to 1.115
1 t/cum/day (working volume) of the previous year. The dry
t/sqm/hr from 0.922 t/sqm/hr. Use of in-house coke, sinter and operational
provements have improved the Blastim
t/cum/day from 1.0
coke rate of 491 kg/t of hot metal compares well with the best in the country.
Gross coke consumption per ton of pig iron reduced by 78 kg over the previous
year. Nut coke consumption per ton of hot metal increased by 20 kg over the
previous year enabling the plant to cut production cost. Percentage use of sinter
in burden in Blast furnace also improved by 5.36% over the previous year.
Specific iron ore consumption per ton of hot metal was reduced by 57 kg over the
previous year and LDO consumption per ton of steam generation was reduced
by 3.88 lit compared to the previous year. Sales Performance : During the year under review, the company maintained its position of being the
largest pig iron producer & exporter in the country for the second successive
year. It witnessed growth in despatches of pig iron for exports at 312761 t which
was 12.40% higher than the previous year and to the domestic market at 313960
with an increase of 13.78% over the previous year. The Company despatched
f BF coke which was 110.32% more than the previous year with power
t Plant (CCP) with Argon Rinsing system & Gas Cleaning
lant (GCP) with gas recovery system. It has also completed the basic work for
The rfo both in production and
pro ilit utilization, better techno
economics and emerging opportunities to c
ales realization of the finished products.
t
247591 t o
export to GRIDCO at 71176 MWH showing increase of 196.69% over the
previous year. The company also despatched 39519 t of by products from coke
oven reflecting a rise of 82.93% over the previous year. The overall growth in despatch of all finished products from the plant during the year was 15.32% over the previous year. Future Outlook : Your company is all set to implement Phase – II of the project encompassing
steel melting shop, continuous casting plant and rolling mill facilities to produce
mild steel and special steel billets which will enhance value addition to its output.
In this regard, contracts with SMS Groups were amended during the year which
covers supply, erection, supervision & training for the Basic Oxygen Furnace
(BOF), Continuous Cas
P
development of iron ore mines for captive use in order to reduce its raw material
cost.
pe rmance of the company will be improved
fitab y in the year 2006-07 due to higher capacity
ontain raw materials cost and improve
s
Mining : The preliminary investigation report reveals that an estimated reserve of 110
Million Tons of iron ore is available to your company in the granted mining lease
e infrastructure study for development of 2 MTPA
apacity mine has been completed. Indian Bureau of Mines have already
and rehabilitation and resettlement
grante is
for despatch of iron ore from mines to
Various improvements in process parameter
implemented during the year. The most significant were
(a) (b) (c) (d) n in blast furnace. (e)
by BHEL. However, company with in-house technical expertise has achieved
8.12. he other measures taken by the company in
area of 1798.338 hectares. Th
c
approved mining plan and progressive mine closure plan of the granted mining
lease area of the company. The Environment Impact Assessment (EIA) /
Environment Management Plan (EMP) study
schemes have also been prepared. The geological investigation work in the
d mining area is expected to be completed by October, 2006. Action
also being taken to obtain railway siding
plant site at Duburi. The mining operation is likely to start within a year.
Energy Conservation :
s to effect energy conservation were
Reduction in LDO consumption in power plant Reduction in coal consumption in coke oven. Reduction in coke oven gas flaring Reduced coke consumptioUse of surplus coke oven gas instead of LPG for runner heating in blast furnace.
The boilers in power plant are designed to run with support of light diesel oil
‘Zero’ LDO consumption for 68 consecutive shifts from 06.12.05 B shift to
05 C shift during the year. T2
this regard are detailed in Annexure – 1.
Environment and Pollution : Your company has taken the following process measures during the year to
control pollution thereby protecting the environment which is an integral part of
the operation & maintenance of the project :
− Dust suppression in Fuel & Flux Crushing Building (FFCB) commissioned.
Dust suppression system in coke sorting plant is under implementation.
− State of the art BOD (Biological Oxygen Demand) plant was commissioned and stabilized.
− Water harvesting pond has been developed for collection and
conservation of water discharged from the plant. Plantation around the
pond has been carried out which has also resulted in a bird nesting place
inside the plant.
− Sludge ponds have been further developed to increase catchments area. ater discharged is used for irrigation of fruit garden where 300 fruit
orporate Social Responsibility :
the endeavour of your company to assist the community for
school development activities. Company has also
xtended financial support of Rs. 3 lakhs to District Red Cross Society for a
jpur Road and Rs. 1 lakh for assisting the victims of
.
L
o impart knowledge and improve management skills, various training
for
s. 59 employees participated in outside short-term
The wsaplings have been planted.
− Entire coke dust produced in coke oven is either consumed in Sinter plant or despatched to different customers.
− 11150 t of GCP pond sludge and 2625 to of flue dust generated at BF is consumed in Sinter plant.
− All the spillovers at various junction points are being collected and recycled in the Sinter plant.
− Tar sludge produced in coke oven decantation is mixed with coke dust and used in the coke oven battery along with coal blend.
C It has been
promotion of health, education and to extend support in the peripheral
development of the nearby area. The notable activities during the year in this
regard are contribution of Rs. 10 lakhs to the Multi Disciplinary Center (MDC) for
augmentation of infrastructure facilities and Rs. 2 lakhs donation to St. Marry’s
School, Jajpur Road towards
e
blood bank building in Ja
Kalinga Nagar police tribal clash. The company has also contributed Rs
80,000/- to Jajpur District Athletic Association to organize state level “NIN
GREEN CUP” football tournament.
Training :
T
programmes were arranged in-house and participants were also sent outside
technical training programme
training programmes. 233 employees were trained in internal training
rnal faculties. Safety training was given
raining for first aid was organized through Multi Disciplinary
omm
participants were trained.
Perso
cordial
the em
Compa
Rules,
po Your C
term sustainable value to all its stakeholders. These practices includes transparency,
accountability, Professionalism, Social responsiveness, ethical Business Practices,
stakeholders including employees, customers and shareholders.
vernance is placed at Annexure-II
that in the preparation of the annual accounts for the financial year ended
e directors had selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
programmes with external as well as inte
to 508 regular employees in 50 programmes and to 498 contract workers in 36
programmes. T
C ittee (MDC) on safety, Health and Environment in July’ 05 where in 23
nnel : At the industrial relations front, your company continued to have peace and
relations with the employees. During the financial year 2005-06 none of
ployees was covered under the purview of Section 217 (2A) of the
nies Act, 1956 read with the Companies (Particulars of Employees)
1975, as amended.
Cor rate Governance:
ompany is committed to good Corporate Governance practices that create long
compliance with applicable rules & regulations, fair & equitable treatment to all its
separate report of the Directors on Corporate GoA
and forms a part of this report.
Directors Responsibility Statement : Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956 your
Directors state :
31st March, 2006, the applicable accounting standards have been followed
along with proper explanation relating to material departures; that th
Company at the end of the financial year and of the profit & loss account
of the Company for the year under review; that the directors had taken proper and sufficient care 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; that the directors had prepared the accounts for the financial year ended
31
ts of C & AG and Statutory Auditors observations :
he comments of C & AG under Section 619 (4) of the Companies Act, 1956
(Works) has been appointed as Director
, 23.08.2006.
onsequent to relinquishment by Shri S. K. Sarna from the office of Managing
i B. P. Modi has been authorized to exercise the power of Managing
Subramanya nominee Director of NMDC, Shri V. K. Jain, Director
roduction), NMDC has been nominated by NMDC as Director in his place. Shri
, Principal Secretary, Steel & Mines Department, Govt. of
st March, 2006 on a ‘going concern’ basis. Energy, Technology & Foreign Exchange : Details of energy conservation and research & development activities undertaken
by the Company along with the 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
given in Annexure - I.
Commen T
along with the Management Replies thereto on the Accounts of the Company for
the year ended 31st March’ 2006 are also annexed to this report.
Directors : Shri B. P. Modi, Executive Director
(Operation) of the Company with effect from 16.02.2006, subject to approval of
the shareholders at the ensuing Annual General Meeting. Shri S. K. Sarna
relinquished the office of Managing Director of the Company w.e.f.
C
Director, Shr
Director till a regular Managing Director is appointed. Shri Adarsh R. Goyal,
Director (Marketing), MMTC has been nominated as Director by MMTC in place
of Shri S. Batra, Ex- Director (Marketing), MMTC. Consequent to the sad demise
of Dr. H. R.
(P
Bhaskar Chatterjee, IAS
Orissa ceased to be a Director w.e.f., 29.06.2006 and Shri L. N. Gupta, IAS,
by rotation at the ensuing Annual
for th valu by
hri S. . Sa a, Sh S. B ra, D H. R. Subramanya, Shri M. P. Gupta and Shri
B. Chatterjee, IAS during their tenure as Directors of the company.
uditors :
ffairs vide Letter No. CA.3V / COY / CENTRAL GOVT. NISPAT(1)/341 dtd.
01.09.2005.
Acknowledgements : Your Director
and co-opera
express their gratitude to all the stake holders including Ministry of Commerce,
Govt. of I i
Govt. of Orissa, other Central and State Govt. agencies, Railways, Ports, Banks
and Finan
operation and valuable support. Your Direct
support and co-operation in the coming years.
For and on behalf of the Board
Date: Chairman
Commissioner-cum-Secretary, Steel & Mines Department, Govt. of Orissa was
nominated by the Govt. of Orissa as Director in his place. Shri M. P. Gupta
relinquished the post of Director on 31.03.2006 on his superannuation from
MMTC.
In accordance with the provisions of the Companies Act, 1956 and Articles of
Association of the Company, Shri S. D. Kapoor, Dr. S. R. Jain and Shri S.
Chopra, IAS retire from the Board of Directors
General Meeting and are eligible for re-appointment.
Your Directors record their appreciation e able services rendered
S K rn ri at r.
A M/s A. K. Kar & Co., Chartered Accountants, Bhubaneswar have been appointed
as Auditors for the Financial year 2005-2006 by the Department of Company
A
s wish to place on record their deepest appreciation for the support
tion extended by every member of the NINL family. Your Directors
nd a, Ministry of Steel, Govt. of India, Department of Steel & Mines,
cial Institutions, Shareholders and Business associates for their co-
ors look forward to their continued
Place:
S. D. Kapoor
Annexure - I
ANNEXURE TO THE DIRECTORS’ REPORT Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in Report of the Bo of ard Directors) Rules, 1988 and forming part of Directors’ Report for the year ended 31st March, 2006.
. Conservation of Energy :
(a) vation measures taken :
sumption as against minimum LDO support design by the manufacturer.
− oven gas for steam generation in flaring of coke oven gas.
coke and better
process management, gross coke rate per ton of pig iron reduced by 78 kg.
− CDCP steam used as process steam is now used for power
generation.
− Runner heating is being carried out by surplus coke oven gas
) Additional investments and proposals, if any, being implemented for n of energy :
c)
t of production of
(d) f production as per Form A of the Annexure in respect of industries specifies in schedule thereto :
− Form A enclosed.
A
Energy conser
− LDO consumption reduced in power plant by 3.88 lit/ton of steam generation by optimizing process parameters and in-house development of ‘Zero’ LDO con
Increased the utilization of cokeboilers thereby reduction in
− With increased percentage use of sinter, in-house
instead of LPG. (b
reduction of consumptio
− Commissioning of ladle heating in Blast furnace by coke oven gasinstead of wood.
Impact of the measures at (a) and (b) above for reduction of energy (consumption and consequent impact on the cosgoods :
− Total saving of Rs. 8.89 crores achieved against reduced LDOconsumption.
Total energy consumption and energy consumption per unit o
B. bsorption :
(f) Efforts made in technology absorption as per Form B :
FORM B
1. Specific areas in which R&D carried out by the company : 2. Expenditure on R & D :
− There was no separate expenditure made under R&D head. However, the expenditure for all the R&D activities were charged under revenue account.
3. Technology absorption, adaptation & innovation :
− Dv/Dt relay was installed in power plant to reduce black-outs during grid disturbances.
− Indigenisation of snort valve system including electrics in blast furnace.
C. Foreign Exchange Earnings and Outgo :
(f) Total foreign exchange earnings & outgo during 2005-06 ( Rs. in
Thousand) :`
i) CIF Value of imports : Rs. 53,14,344
ii) Expenditure in Foreign Exchange : Rs. 8,208
iii) Total Foreign Exchange earned : NIL
Technology A
Research & Development (R&D)
ANNEXURE
FORM A
( See rule 2)
Form for disclosure of particulars with respect to conservation of energy A. Power and fuel consumption
2005 – 06 (01.04.05 to
31.03.06)
2004 – 05 (01.04.04 to
31.03.05) 1. Electricity (a) Purchased Unit (Kwh) 6783600 29429000 Total amount ( Rs. Lakhs) 197 810 Average rate / unit ( Rs./Kwh) 2.90 2.90 (b) Own generation (i) Through diesel generation unit (Kwh) NIL NIL Unit per – Ltr. of diesel oil NIL NIL Average cost / unit NIL NIL (ii) Through Steam turbine / generator (Kwh) 173067000 112875000 Units per – Ltr. of fuel oil / gas - - Average cost per unit ( Rs.) 2.19 2.33 2. Coke used in blast furnace(skip) Quantity (Tons) 335442 333478 Total cost ( Rs. Lakhs) 25967 27505 Average rate ( In Rs./t) 7741 8248 3. LPG Quantity (Tons.) NIL 601.49 Total amount (Rs. Lakhs) --- 131.39 Average rate ( In Rs./t) --- 21844 4. LDO Quantity ( Kilo Liters) 265 740 Total cost (Rs. Lakhs) 59.09 151.34 Average rate ( In Rs./ kl.) 22300 20452 5. BF gas (internal generation) Quantity (‘000 cum) 989813 639968 Total cost (Rs. Lakhs) 2917.45 1919.90 Average rate (Rs./’000cum) 295 300 6. Coking Coal Quantity (Tons.) 1008200 547981
Total cost (Rs. Lakhs) 55512 22367 Average rate (Rs./t) 5506 4082
B) Consumption per unit of production Standards
(If any) 2005 – 06
(01.04.05 to 31.03.06)
2004 – 05 (01.04.04 to
31.03.05) 1 2
Products (with details) Electricity Kwh/t HM 35.50 36.68 Furnace oil NIL NIL Coke (dry) Kg./t HM 491 533 BF gas cum/t HM 728 614 L.P.G Kg./t GS NIL 0.732 Coking Coal Kg./t BF Coke 1415 1460 LDO Lit/t steam
generation 0.26 1.22
Data related to coke oven and power plant for 2004-05 is w.e.f. 01.09.04 to 31.03.05.
Annexure - II
CORPORATE GOVERNANCE The company’s Corporate Governance practice is based on the principles of integrity, fairness, equity, transparency, accountability and commitment to values that governs relationship with all of its stakeholders. The said practice of Corporate Governance stem from the culture and mindset of the company.
Board of Directors:
Presently NINL Board of Directors is comprised of 13 Directors out of which 3 Directors are Independent. Except the Managing Director and Director (Operation) all other Directors including Chairman are Non-executive Directors. All the Directors are highly qualified and experienced professionals. Four Nos of Board Meetings were held during the year under review. The Composition of the Board of Directors and their attendance in the Meeting during the year and also number of other Directorship held by Directors in other Board are given below:
Attendance of Directors at the Board Meetings held during 2005 – 06.
Sl. No.
Name of the Director Category of Directorships
No. of Board
Meetings held
No. of Board
Meetings attended
No. of Directorships
in other Boards
1. S. D. Kapoor Chairman (01.04.05 to 31.03.06)
Non-Executive 4 4 5
2. S. K. Kar (01.04.05 to 31.03.06)
Non-Executive 4 4 3
3. Dr. S. R. Jain Independent 4 4 2
(01.04.05 to 31.03.06) 4. S. Batra
(01.04.05 to 18.08.05) Non-Executive 1 - 3
5. A. R. Goyal (20.09.05 to 31.03.06)
Non-Executive 3 2 3
6. D. P. Bagchi (01.04.05 to 31.03.06)
Non-Executive 4 4 4
7. M. P. Gupta (01.04.05 to 31.03.06)
Non-Executive 4 4 2
8. Dr. S. N. Dash, IAS (01.04.05 to 13.07.05)
Independent 1 - 4
9. P. Patnaik, IAS (01.04.05 to 31.03.06)
Non-Executive 4 1 7
10. B. Chatterjee, IAS (01.04.05 to 31.03.06)
Non-Executive 4 2 1
11. S. Chopra, IAS (01.04.05 to 31.03.06)
Non-Executive 4 1 3
12. M. N. Buch (01.04.05 to 31.03.06)
Independent 4 4 -
13. Dr. H. R. Subramanya (01.04.05 to 06.12.05)
Non-Executive 3 1 2
14. S. K. Sarna Managing Director (01.04.05 to 31.03.06)
(Executive) 4 4 1
Audit Committee of Directors: The Board of Directors of the Company has constituted the Audit Committee of Directors to oversee the company’s financial reporting process and disclosure of financial information. The Audit Committee of Board of Directors met 3 times during the year under review and the attendance of the members at the meetings were as follows :
A
ttendance of Members at the Audit Committee Meetings held during 2004 – 05:
Sl. No.
Name of the Member Status Period No. of Meetings
held
No. of Meetings attended
1. M. N. Buch Chairman 01.04.05 to 31.03.06
3 3
2. Dr. S. R. Jain Member 01.04.05 to 31.03.06
3 3
3. P. Patnaik, IAS Member 01.04.05 to 31.03.06
3 1
4. Dr. S. N. Dash, IAS Member 01.04.05 to 13.07.05
1 -
5 D. P. Bagchi Member 24.06.05 to 31.03.06
3 3
Chairman, Managing Director and Executive Director (F&A) of the company also attended the above meetings to assist the committee in its deliberations. The minutes of the above meetings were submitted for the information of the Board. Share and Bond / Debenture Committee of Directors: The Board of Directors have constituted Share and Bond/Debenture Committee of Directors comprising of three Directors to expeditiously consider and approve allotment / issue, transfer, transmission, consolidation & splitting of shares and bonds of the Company. During the year, the committee met twice. Pursuant to merger of erstwhile KMCL with the company, the committee allotted 7,00,000 equity shares of Rs. 10/- each fully paid up in the ratio of 1 : 1 to M/s. Bhilai Engineering Corporation Limited, the shareholder of erstwhile KMCL upon receipt of duly executed Indemnity Bond and Affidavit in connection with loss of their Share Certificate. The Bond / Debenture Committee appointed M/s. Indian Bank as Trustee to NINL Bonds 2012 in lieu of M/s. Canara Bank and approved for creation of mortgage on specific immovable property purchased in Gujurat to secure the said bonds.
ANNUAL A CO S20 5-06
EELACHAL IS A NIGAM LIMITED
C UNT 0
N P T
2006
Balance Sheet as at 31st. March, thousand)
Schedule (Rupees in
No. As at 31st. March,2006 A 2005
SOUR ES
s at 31st. March,
C OF FUNDS Share ldho ers' Fund a
Sh re Capital 1 4,137,765
Res3,563,529
erves & Surplus 2 1,212,610 Loan n
5,350,375 1,065,225 4,628,754Fu d
Secured Loans 3 14,403,491 14,873,894 s 4 Un ecured Loans 61,131 14,46 -
4,622 14,873,894 19,814,997 19,502,648
APPL AIC TION OF FUNDS Fixed ss
A ets
Gross Block
5 18,149,384 17,467,301 s
Le s Depreciation 1,
t707,435 812,320
Ne Block 16,4 1641,949 ,654,981 pCa ital Work-in-Progress 6 2,430,074 2,249,315 18,904,296
18,872,023
Current Assets, Loans & Advances 7
Inventories 1,367,062 1,194,424 nSu dry Debtors 8 380,035 712,815 s 9
Ca h & Bank Balances 117,725 87,477
Loa
ns & Advances 10 615,616 455,284 2,480,438 2,450,000 Less Current Liabilities & Provisions rCu rent Liabilities 11 1,553,053 1,851,381 Provisions 12
26,918 56,542
1,579,971 1,907,923 Net Cu e 9 542,07700,467 rr nt Assets Misce nlla eous Expenditure 13 56,275(to the xt
42,507 e ent not written off or adjusted)
19, 814,997 19,502,648Significant Accounting Policies & Notes on Accounts 30
Schedules referred to above form an integral part ofBalanc Se heet 0.00 0.00
As er our For and on ehalf of Board of rectop report of even date b Di rs Fo .K. Kr A ar & Co. Ch tered
ar Accountants
Sd/- Sd/- Sd Sd/- Sd/-
/- D.P. Parij S.P. Padhi S. Ka S.K. Sarna
(Aa K. r
.K. Kar) Company Secretary E.D. (F & A) Director Managing Director Partner Place : Bhubaneswar
te : 29.06.2006 Da
Profit & Loss Account for the year ended 31st. March, 2006 (Rupees in thousand)
Schedule No. For the year ended 31st. M ch,2006
ar
For t ended 31st ch,200
INCOME:
he year. Mar 5
Sal es 14 11,652,351 11,380,737 Les 15 710,108 s: Excise Duty 528,349
10,942,243 10,852,388 Interest earned 16 3,208 1,255
17 1,564 10,947,015 Other revenues 4,691 10,858,334
EXPE NDITURE: (-)A retion) / (+)Depletion in stock 18 -23,502 cc 339,564
19 7,043,102 Raw materials consumed 5,908,081 Employees' Remuneration & Benefits 20 247,512 178,523 Stores & Spares Consumed 21 266,756 152,810 Power & Utilities 22 83,367 283,686 Repairs & Maintenance 23 81,483 122,462
24 86,268 Office & Administrative Expenses 91,590 Rent, Rates & Taxes 25 3,098 3,260 Remuneration to Auditors 26 95 107 Selling Expenses 27 540,574 478,872
28 192,161 Other expenses & provisions 152,147 nancing charges 29 1,305,879 Interest & fi 1,249,575
Depreciation 5 895,841 10,722,634 746,456 9,707,133 224,381 1,151,201 (Add) / Less : Adjustments pertaining to earlier years 68,995 1,020
155,386 Profit for the year before tax 1,150,181 Less: Provision for Current Tax 13,617 90,189
Provision for Frienge Benefit Tax 2,028 Provision for tax - Others 5,432
- -
13,076 Add: MAT Credit Entitlement - 147,385 Profit after tax 1,059,992 1,065,225 Balance brought forward 5,233
1 Balance carried to Balance Sheet ,212,610 1,065,225Earnings per Share (in Rupees) 0.438 3.415(Basic and Diluted)
er Share) (Face Value Rupees 10/- p Significant Accounting Policies & Notes on Accounts 30 Schedules referred to above form an integral part of Profit &
Loss Account
For and on behalf of Board of Directors As per our report of even date For A.K. Kar & Co. Chartered Accountants
Sd/- Sd/- Sd/- Sd/- D.P. Parija S.P. Padhi Sd/- S. K. Kar S.K. Sarna Company Secretary E.D.(A.K. Kar) (F & A) Director Managing Dire
ctor
Partner
r Place : Bhubaneswa Date : 29.06.2006
Cash Flow Statement (Rupees in thousand )
2005-06 2004-05 Operating Activities :
fit & Loss Account 147,385 992 (After adjustment) 895,841 283
harges 1,305,879 575 fore working capital
2,349,105 3,055,850
A. Cash Flow from Net profit as per Pro 1,059, Add Depreciation 746, Add Interest & Financing C 1,249,
change Operating Cash Flow be
Revenue ExAddition (-) to / Writing off (+) of Deferred
penditure 13,768 6,551 orking Capital : Changes in W
rease (+) in Inventory -172,638 839 n Sundry Debtors 332,780 12,815
ecrease (+) in Loans & Advances -160,332 6 ,973 ) / Decrease (-) in Current Liabilities
Increase (-) / Dec
155,
Increase (-) / Decrease (+) i -7 Increase (-) / D -1 2 Increase (+ -298,328 773 Increase (+) / Decrease (-) in Provisions 29,624 -328,14 -22,567 -616,74
125,- 2 3
Net Cash from Operating Activities 2,034,731 2,445,658
B. Cash Flow from Investing Activities :
Purchase / Capitalisation of Fixed Assets -682,825 -
5,711,282 Sale / Transfer of Fixed Assets 16 94,139
Reduction in / Addition to Capital Work in Progress
- -180,759 1,807,296
Net Cash used in Investing Activities -863,568 -
7,424,439
C. Cash Flow from Financing Activities : Received against equity 574,236 1,327,229
-
et Cash from Financing Activities -1,140,91
Working Capital Loan from Banks 9,879 -272,869
Proceeds from borrowings other than Bond & Working Capital -419,151 5,235,200
Interest & Financing Charges Paid -1,305,879 1,249,575 N 5 5,039,985
(A+B+C) Net Increase in Cash & Cash Equivalent
30,248 61,204
Cash & Cash Equivalents (Opening) 87,477 Cash & Cash Equivalents (Closing) 117,725 87,477 (Represented by Cash & Bank balances) Notes : 1) Th above Cash Flow Statement has been prepared under the indirect method set out in AS - 3 issued b
26,273
e ythe Institute o Chartered Accountants of India.
2) Figures in negative indicate cash outflow. 3) Significan ing Policies & Notes on Accounts (Schedule - 29) form an integral part of the Cash Flo
f
t Account wStatement.
er our report o even da For and on behalf of Boar of Director
For A.K. Kar & Co. Chartered Accountants Sd /- S
Partner
eswar
06.2006
FORMING PART (Rupees in thousand)
at rch,20
Schedule - 1
As p f te d s
d/-
Sd Sd/- Sd/- /-
(A.K. Kar)
Place : Bhuban
Date :29.
SCHEDULES OF THE BALANCE SHEET
As at 31st. March,2006 As 31st. Ma 05
SHARE CAPITAL
Authorised : us year 100,00,0 Equ .10/- ,000,000
,000,000 100,00,00,000 (previo 0,000) ity Shares of Rs each 10 10
Issued, subscribed and paid up : 32,98,28,233 (previous year 32,9 s of which 15,52,28,370 Equity Shares are allotted as fully paid-up for consideration other than cash (previous year 15,52,28,370)} 3,298,282 3,298,282 1,38,52,000
8,28,233) Equity Share of Rs.10/- each {out
(previous year 1,38,52,000) Equity Shares of Rs.10 each are allottedas partly paid-up of Rs.5/- 69,260 69,260
Share Deposit: Share Deposit pending allotment 770,223 195,987
Total 4,137,765 3,563,529Schedule - 2 RESERVES & SURPLUS Profit & Loss Account 1,212,610 1,065,225
Total 1,212,610 1,065,225Schedule - 3 SECURED LOANS Secured Non-convertible Redeemable Bond * 854,000 854,000Loans and advances:
D.P. Parija Company Se
S. K. Kar S.K. SarnaManaging D r
S.P. PadhiE.D. (F & A) Director cretary
irecto
F 1,3 62 3, 21 10.40% Restructured Loan 68 4,357,105 4,364,829 Loan Awaiting Conversion to Shares 84,273 350,931 Working Capital Borrowings *** 24,362 14,483 F 770,472 774,422 1, 72 2, 24 Loan Awaiting Conversion to Shares 84Other loans and advances: F 30,989 37,198
Total 894
* 13.35 % Secured Non-convertible Bonds amounting to Rs. 35.80 Crores, 10 ecured Non-Convert amounting to Rs. es,10.0 nds amounting to Rs. 24 crores and 8.40% Secured Non-convertible Bonds amounting to Rs. 16 Crores. Each bon
rom Banks -
Term Loans ** Zero Coupon Loan 64,932 1,384,2 8% Restructured Loan 168,804 3,174,4
261,668 261,6 14% Rupee Term Loan
rom Financial Institutions -
Term Loans ** Zero Coupon Loan 8% Restructured Loan 466,603 1,463,0 14% Rupee Term Loan 016,579 2,011,7
3,704 182,8
rom HUDCO **** 14,403,491 14,873,
.15% S ible Bonds 9.60 Cror0% Secured Non-convertible Bo d
is having the face value of Rs.5 lakh each except 8.40% Bonds having the face value of Rs. 10 lakh each. The earliest date of redemption of each bondis on the end of 6th. year. Bonds will be redeemed in 3 equal installments at the end of th., 7th. and 8th. 6 year and are having put / call option at the endof 5th. year. Bonds are secured by registered mortgage on a specific immovable property and also secured by extention of the scope of mortgage /charge on the entire immovable property and plant & machinery attached to the earth or permanently fastened to anything attached to the earth of thecompany with Indian Bank (as Trustee for 13.35% Bond Holders) and Canara Bank (as Trustees for all other Bond Holders) ranking pari pasu with otherterm lending Financial Institutions and Banks.
** The Term Loans from Banks and Financial Institutions are secured by pari passu first charge on the assets of the company both present & future save& ex
*** S
cept book debts.
ecured by hypothecation of Company's inventories, book debts and other current assets and also secured by extensi of mortgage / cha theentire immovable properties and plant & machiner
on rge on y attached to the earth or permanently fastened to anything to the earth of the co attached mpany on
seco
**** Loans from HUDCO is secured by equitable mortgage on 14.70 acres of separate lease hold land alongwith all buildings, structures and fixture
nd charge basis.
sther
Sch UNS Zero Rated Unsecured Instruments -
Total -
eon.
edule - 4 ECURED LOANS
61,13161,131
SCHEDULES FORMING PART OF THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT edule - 5
FIXED AS
Sch
SETS: (Rupees in
Gross Block (At Cost) Depreciation Nthousand)
et Block Description
31st.March,2005
Additions &Adjustment
s
Sales &Adjustmen
ts
As at As at31st.
March,2006
Upto31st.
March,2005
Transferred fromKMCL
For theyear
On Sales /A
Upto31st.
March,2006djustmen
ts
As31
March,20
atst.06
As atarch,200531st. M
Land (including cost of developments)
- Freehold Land 1,417 325 - 1,742
-
-
-
-
- 1,742 1,417
,083 3,480 - 3,376
- 6,856 278,22 279,103 - Leasehold Land 282,583 2,500- 285
7
Railway Lines & Sidings 287,281 6,497- 293,778 4 - 13,955
- 28,419 265,35 272,817
14,46
9
Roads, Bridges & Culverts 30,504 40,069 - 70,573 463
- 1,128
- 1,591 68,982 30,041
Buildings 1,050,636 50,473 1,101,109 29,69 33,58 - 63,280 1,020,940
- 6-
4 1,037,829
Water 2 5,570
862,002 43,73 40,77
- 84,508 777,49 2,697 Supply 856,43 - 5- 3 4 81
Plant & Machinery 14,111,835 565,718
7,553 - 756,264
- 1 13,2 7,808
- 14,67 654,027
1,410,29 67,262 13,45
Power Supply & Distribution 3,089 - ,
- 550,154 4,085623,815 626 904 39,730
- 37,020 76,750 58
Furniture & Fittings 10,576 1,276 - ,
- 3,432 2,795
11 852 7,781
- 639 8,420
Vehicles 128,095 742 127,484 8,23 6,11 -726 13,625 113,859 119,862131 3-
8Compound Wall, Water Supply & Sewerage 72,841 897
- 73,738 3,222- 2,445
- 5,667 68,071 69,619
Office Equipments 6,048 1,152 - 7,200 4,610
- 317
- 4,927 2,273 1,438
Miscellaneous Equipments 2,879 - 222
- 3, 2,3595,238 5,128
- 10,366 101 7,265
Total 17,467,301 682,825 742 18,149,384 812,320 - 26 1,707,435 ,654,981
895,841 -7 16,441,949 16
Figures for the previous year 11,850,1585,711,282 94,139 17,467,301 66,037 436 746,456 -609 812,320 16,654,981 11,784,121
Schedule - 6 IN - PROGRESS
d Erection work in progress 2,052,265 1,97Stock of Construction Material 2 9
ntractors # 313,367 186,620Totall 2,430,074 2,249,315
onsidered Good
res [ including stock in transit amounting to 85,800 68,578r Rs.13,773 thousand)]
erials [ including stock in transit amounting to ,952 thousand (previous year Rs.6,32,478 thousand)] 959,717
ed Goods 5 Totall 2 1,1
- 8 RY DEBTORS
r six months - 380,035 712,8
Totall 5 71Particulars of Sundry Debtors :
CAPITAL WORK - Construction an 0,648
64,44 2,047Advance to Co
# Unsecured , CSchedule - 7 INVENTORIES (As Certified by the Management) Stores and SpaRs.14,708 thousand (previous yeaRaw MatRs.5,38 899,480Semi / Finish 321,54 226,366
1,367,06 94,424Schedule SUNDDebts ove - Other Debts 15
380,03 2,815
sidered good 380,035 712,815
Banks :
In Current Account 2 5 In Deposit Account 8
Totall 117,725 87,477
1,046rs for Stores Spares & Raw Materials 6
e to Others 18,097 Deposit with Govt. Department 3
hers 28,081 28,06313,373 9,447
eceivable 9 2 Money 0
ncentive Receivable 137edit Entitlement 6
6 for Doubtful Loans & Advances 875
Totall 615,616 455,284 Advances:-
Unsecured, conSchedule - 9 CASH & BANK BALANCES Cash balance on hand 45 72Balances with scheduled 58,51 7,842
59,16 29,563
Schedule - 10 LOANS & ADVANCES Advances recoverable in cash or in kind or for value to be received : Advance to Employees 713Advance to Supplie 12,63 10,254Advanc 52,966
22,75 2,882Deposit with OtPrepaid Expenses Claims R 339,99 14,036Deposit for Margin 100,00 - Export I 66,888 ,465MAT Cr 13,07 -
615,61 456,159Less: Provision -
Particulars of Loans & 6 45
ubtful - Totall 6 45
BILITIES
Due to SSI Units 0
Unsecured, considered good 615,61 5,284Unsecured, considered do 875
615,61 6,159Schedule - 11 CURRENT LIASundry Creditors - 35 1,985
Sundry Creditors - Other than SSI Units 6 36ontracts 9 9
Security Deposits 1 not due on Loans 6 2
Advance from Customer 4 4 171,625 101,162
Total 1,553,053 1,851,38112
9 15
et of advance tax paid & tax deducted at source) 9 4l 8 5
SCHEDULE - 13 MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
435,60 8,737Retention Money on C 751,88 18,745Earnest Money and 22,373 6,405Interest Accrued but 21,40 1,294
149,80 23,053Other Liabilities
Schedule - PROVISIONS For Accrued Leave Laibility 18,89 ,686For Income Tax (n 8,01 0,856
Tota 26,91 6,542
(Rupees inthousand)
Par Balance as at31st. March, 2005
ticulars Addition du gthe year
Total Amount charged ofrin fduring the year
Balance as at31st 06. March, 20
Tr 7,260 - 7,26 1,815 5aining Expenses 0 5,44Financing Charges on Working Capital 42,787 - 42,78 10,697 0Others 6,228 - 6,228 1,256 4,972To 56,275 - 56,275 13,768 42,507
7 32,09
tal Pr 62,826 6,014 68,840 12,565 5evious Year 56,27
ORMING PART OF THE PROFIT & LOSS ACCOUNT (Rupees in thousand)
SCHEDULES F
For the year 31st. March
ended For the , 2006
year 31st. Marc
endedh,2005
Schedule - 14 SALES
8 63,21 4,17
centive 1 1Others
11,652,351 11,380,737Schedule - 15 EXCISE DUTY Excise Duty 710,108 528,349 Schedule - 16 INTEREST EARNED On Term Deposits 905 1,244From debtors 317 11Others 1,986 -
Total 3,208 1,255Schedule - 17 OTHER REVENUES Sale of Tender Paper 143 14Sale of Empty Bags 5 78
Domestic ,331,715 ,973,553Export 4,067 8,680Export In 06,569 63,564
Total
-
64,940
Forfeiture of EMD / SD 873 1,329Sale of Steel Scrap 150 492Misc. Receipts 393 2,778
Total 1,564 4,691Schedule - 18 (ACCRETION) / DEPLETION IN STOCKS Opening Stock Less: Closing Stock 321,546 226,366(Accretion) / Depletion to stock -23,502 339,564 Schedule - 1 RAW MATERIALS CONSUMED Iron Ore 1,333,009 584,906Coke 2,972,052Coking Coal 2,236,726Dolomite 49,886Limestone 53,145Sand 1,915Quartzite 833 2,103Manganese 30 95Sulphuric Ac 30,970 7,253
5,908,081Schedule - 2EMPLOYEES' REMUNSalaries, Wages and A 137,974Company's Contribution to Provident & Other Funds 25,075 15,733Staff Welfare Expense 41,272 20,812Gratuity 4,004
178,523Schedule - 21 STORES & S S CConsumption res 152,810 Schedule - 22 POWER & UTILITIES Power purchased 193,820Others - 89,866
Total 83,367 283,686Schedule - 2REPAIRS & MAINTEN Building 10,548 14,342Plant & Mach 104,895Vehicle 141Others 3,084
122,462Schedule - 2OFFICE & ADMINISTR Printing & St 1,890 1,873Postage, Tel 4,025 3,480Advertisemen blic 1,861Travelling Ex -I 3,548Training Expenses 320 510Bank Charge 5,085 2,894Security expenses 6,249 6,152
298,044 565,930
9
- 5,551,169
59,839 66,213
1,039
id Total 7,043,102
0 ERATION & BENEFITS llowances 177,294
s 3,871
Total 247,512
PARE ONSUMED of Sto & Spares 266,756
83,367
3 ANCE
inery 70,053 73
809 Total 81,483
4 ATIVE EXPENSES
ationery egram & Telephone t & Pu ity 1,045
penses nland 3,733
s
Law charges 4,902Other Misc Expenses 51,982 57,211Electricity Charges 39 1,174Vehicle hirecharges 7,985
91,590Schedule - 25 RENT, RATE XRent Office 312Rent Transit uest H 140Rent leased accommodations 118 412Rates and Taxes 2,417 2,396
Total 3,098 3,260Schedule - 26 REMUNERAAudit Fee 75Tax Audit Fee 32
107Schedule - 27 SELLING EXPENSES Sales Comm 295,615Other Selling Expense 183,257
478,872
Schedule - 28 OTHER EXP SES & Water Charg 1,352 1,703Other Expen 190,809 150,444
Total 192,161 152,147
Schedule - 29 INTEREST & C Foreign Curr 2,121No converti 75,127Bank Borrow er 816,465 765,730 - Working Capital 30,294Financial Institutions B 347,692Finance Charges 2,435 2,291Others 26,226 26,320
Total 1,305,879 1,249,575
3,340
8,560 Total 86,268
S & TA ES 392
ouse 171 / G
TION TO AUDITORS 75 20
Total 95
ission 312,080 s 228,494
Total 540,574
PROVISIONS ENes ses
FINAN ING CHARGES ency Loans - ble Bonds 84,013 n-ings - T m Loans
8,582 orrowings 368,158
NEELACHAL ISPAT NIGAM LIMITED
BHUBANESWAR
CHED
ULE-30S : SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
A. SIGNIFICANT ACCOUNTING POLICIES 1.0 BASIS OF ACCOUNTING
torical cost convention on
2.1
eight, duties, taxes, allocated incidental expenditure during construction and net of CENVAT credit wherever
es
e tal
work in progress.
.4 t cost on
capitalized on an appropriate basis to different fixed assets before those are put into use.
.6 Expenses on development of land including leasehold land are capitalized
3.1 n
e Companies Act, 1956.
1.1 The financial statements are prepared under his
accrual basis of accounting, in accordance with the generally accepted accounting principles, accounting standards issued by The Institute of Chartered Accountants of India, as applicable, and the relevant provisions of the Companies Act, 1956.
2.0 FIXED ASSETS
Fixed assets are stated at historical cost less Depreciation. Cost of acquisition is inclusive of fr
applicable.
2.2 Expenses of capital nature incurred on assets laid on land not belonging to the company are capitalized under appropriate asset heads.
2.3 All capital expenditure not yet capitalised, including works / Capital Stor/ Materials received, inspected, accepted and certified on the basis of bills, advances paid to suppliers / contractors for capital works, unallocated pre-operative expenses and effect of foreign currency fluctuations on thtransactions not yet capitalized are accumulated and shown as capi
2 Stock of construction materials and scrap have been valued a
weighted average basis. 2.5 Trial run expenditure, net of revenue, if any, are
2
as part of cost of land. 3.0 DEPRECIATION
Depreciation is provided on straight line method at the rates specified iSchedule XIV to th
3.2 ciation on addition / deletion during the year is provided on pro-rata basis. Depre
mpany are depreciated over a period of five years.
3.4
4.0 4.1 are directly attributable to the acquisition,
r production of qualifying assets have been capitalized as
4.2 Bo
ing assets but eligible for capitalization are determined by applying a capitalization rate based on
rate of the borrowing costs in accordance with
.3 All other borrowing costs are charged to revenue.
5.1
mi/Finished products are valued at lower of cost & net realizable value.
on scraps are valued at cost determined at 75% of pig iron cost.
rocess rejects are valued at net realizable value.
3.3 Assets laid on land not belonging to the co
Cost of leasehold land including development expenses thereon is amortised on straight line method over the remaining period of lease.
BORROWING COST
Borrowing costs that
construction o
part of cost of such assets in accordance with Accounting Standard-16.
rrowing costs that are not directly attributable to the acquisition,construction and production of qualify
the weighted average Accounting Standard-16.
4
5.0 INVENTORIES
Semi /Finished goods:
Se
5.2 Raw materials :
Raw materials are valued at lower of cost and net realizable value, net of cenvat credit wherever applicable.
5.3 Scrap :
Ir
5.4 Process Rejects:
P5.5 Stores & spares :
Stores & spares are valued at weighted average cost and net of cenvat credit wherever applicable.
6.0 DEFERRED REVENUE EXPENDITURE 6.1
projec years. Preliminary expenses, training expenses and other expenses related to
ts spent upto 01.04.2003 are amortised over a period of five
7.0 IR 7.1 Contrib cognised on the basis of actual
ability. 7.2 The C ce Corporation of
dia for coverage of gratuity liabilities of the employees on actuarial basis. 7.3 The p
valuati 8.0 FOREIGN CURRENCY TRANSACTIONS
.1 Transactions for both capital and revenue during the year in foreign currencies are being recognised at the rate prevalent in force on the date
tions.
.1
atch of
9.4 it earned under Duty Entitlement Pass
Book Scheme are treated as income in the year of export at estimated d on exports made during the year.
9.6 vables are accounted on certainty of realization.
10.0
0.1 Claims for liquidated damages are accounted for as and when these are
RET EMENT BENEFITS
ution to Provident Fund is reli
ompany has an arrangement with Life InsuranIn
rovision for leave encashment liabilities is made on actuarial on.
8
of settlement of transac 8.2 All foreign currency assets and liabilities as on the date of balance sheet
are converted at the year end exchange rates and loss or gain thereon, is adjusted in the carrying amount of fixed assets or charged to profit & loss account, as the case may be.
9.0 RECOGNITION OF REVENUE
9 Sales include excise duty and are net of rebates / price concessions / Entry Tax/ other taxes.
Sales in the domestic market are recognized at the time of desp9.2 materials to the buyer.
9.3 Export sales are recognized at the time of despatch of goods to the agents for
the purpose of export with proper documents.
Export incentives in the form of cred realizable value / actual credit earne 9.5 Claims are accounted on certainty of their realization.
Interest recei
CLAIMS FOR LIQUIDATED DAMAGES / ESCALATION
1deducted and / or considered recoverable by the company. These are adjusted to capital cost or recognized in the profit and loss account, as the case may be, on final settlement.
10.2 Suppliers’/contractors’ claims for price escalation are accounted for,
11.0 TAXES ON INCOME
mprises of current tax and deferred tax charged or realized. Deferred tax is recognized, subject to consideration of
inate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax
virtual certainty that sufficient future taxable income will be available, against which such deferred tax
12.0 PR
s are recognized when the company has a present legal or constructive
bligation, as a result of past events, for which it is probable that an outflow of conomic benefits will be required to settle the obligation a e
can be made for the amount of the obligation. B. NOTES ON ACCOUNTS
to the extent such claims are accepted by the company.
ACCOUNTING FOR 11.1 Provision for income tax co
prudence on timing differences, being the differences between taxable and accounting income/expenditure that orig
assets are not recognized unless there is
assets will be realized.
OVISIONS
rovisionPoe nd a reliable estimat
1.0 FIXED ASSET LAND 1.1 Value of leasehold land includes advance payment to IDCO for acquisition
was taken over by the company but lease deeds are pending for execution.
2.0 BORROWING COST 2.1 Borrowing cost capitalized during the year amounting to Rs. 1,17,462
thousand (Previous year Rs.2,02,600 thousand). 3.0 OUTGO 3.1 oreign Currency outgo during the year is Rs. 1,49,368 thousand
revious year Rs.2,80,682 thousand ). 4.0 4.1
Rs. 10,94,803 thousand (Previous Year Rs. 14,991 thousand)
5,21,264 thousand (Previous year Rs.4,52,012 thousand)
of land, possession of which
FOREIGN CURRENCY
F(P
CONTINGENT LIABILITIES
The Company is Contingently liable in respect of :
(i) Letter of Credit issued
(ii) Guarantees / Counter Guarantees issued by the Company Rs.
(iii) Estimated amount of contracts remaining to be executed on Capital
Account but not provided for Rs. 29,65,118 thousand (Previous Rs. 3,76,419 thousand).
thousand (Previous year Rs.5,09,117 thousand)
(v) Commissioner of Central Excise & Customs have disallowed the
ated 26.09.2002. The company has preferred an appeal against the order of the Commissioner before
5.0
.1 and advances, receivables, creditors, capital stores are reconciled as per accounts. The
a on of parties and hence these are subject to consequential
adjustments, if any.
6.0
D he T e II) of having 19. ity capitalized w.e.f.1st July 2005 along with ll ex d on t id asset til th June 2
.0 ISSUE OF SHARES AGAINST ACQUISITION OF LAND
.1 Paid up Share Capital include issue of shares amounting to Rs.2,50,000
8.0
Company owes 30 days as on
The total amount outstanding to SSI units as on 31st March, 2006 stands 85 thousand).
.0 INCOME TAX MATTERS
year
(iv) Claims against Company not acknowledged as debts Rs. 2,10,400
availment of CENVAT credit relating to Power Plant for Rs.1,64,375 thousand vide their order d
CEGAT.
RECONCILIATION 5 The balances shown under secured loans, loans
company is in process of obtaining confirm ti balances from theconcerned
CAPITALISATION OF ASSETS
uring t year Steam
25 MW capacurbine Gen has been
rator –II (STG- Power plant
a penses incurre he sa l 30 005.
7 7
thousand to IPICOL on account of land acquired from IDCO as per the order of Government of Orissa.
AMOUNTS DUE TO SSI UNITS 8.1 There is no Small Scale Industrial Unit (SSI) to whom the
a sum exceeding Rs. 100 thousand for more than 31.03.2006.
at Rs. 350 thousand (Previous year Rs. 19
The above information regarding small scale industrial undertakings has been determined to the extent such parties have been identified and is based on the information available with the Company.
9
9.1 In absence of taxable profit as per Income Tax Act, 1961, Minimum
Alternate Tax (MAT) U/S 115 JB amounting to Rs.13,076 thousand has for.
units as one segment and also
11.0
st
The company as a matter of prudence does not recognize deferred tax assets. Accordingly, net deferred tax assets amounting to Rs.1306192 thousand as of 31.03.2006 have not been accounted for.
2.0 IMPAIRMENT OF ASSETS
2.1 The entire plant has been considered as a Cash Generating Unit . As recoverable amount of Cash Generating Unit , being its value in use, is in
on 31
been provided 10.0 SEGEMENT REPORTING
Company is considering its manufacturing10.1 there is no separate geographical segment.
ACCOUNTING FOR TAXES ON INCOME
Net deferred tax assets / liabilities as on 31 March, 2006 have been derived in accordance with AS-22 on ‘Accounting for taxes on Income’ issued by the Institute of Chartered Accountants of India, as detailed below :
As st March, 2006
(Rs. / Thousands)
Tax o oo 441215
Tax on unabsorbed depreciation 1741046
Others 6361
Net Deferred tax Assets
Deferred tax liabilities
n b k profits
Deferred tax Assets
1747408
1306192
1 1
excess of its carrying amount, there is no impairment loss in terms of the Accounting Standard (AS) - 28.
13.1 LTC / LLTC benefits payable to yees are acc n cash basi
14.0 EXCISE DUTY 14.1 he exc e duty f Rs.7,10 ousand xcise du
s.24,12 thou and on s ck.
15.1 andard – AS 18 – ‘Related Party disclosures’ issued y t f C arte unt ts of India, the name o
parties are given below ; me of re art ey Mana ement Shri S.K. Sarna Managing Director
Personnel ransacti ns betwe n the co pany and the related parties, as defined in
the Accounting Standard, are given below;
Sl.No. Name of the Transaction
Amount in ousa
Ref. Schedule Account Head
13.0 LTC / LLTC
emplo ounted o s.
T is o ,108 th includes e ty of R 5 s to
15.0 RELATED PARTY
As per Accounting Stb he Institute o h red Acco
an f the related
Nature of relationship Na the lated p ies.
K g
T o e m
Th nd 1 Remu tion 758 plo mu n
an nefitsnera 20 Em yees re
eneratio
d b 16.0 ORP TE D RES CTU G
16.1 The company has entered into a Master Restructuring Agreement (MRA) with the nders on 30. 6 and on 12.05.20 through deed sion to give ffect the Cor ebt Restructurin ilities sanct company. Irms of M A the co pany has ansferr Rs.4,30 19 thousan from loa to
pital
17.0 ME 17.1 he is f m f the ny AIL is un er active co sideratio of
Government of India.
8.0 DJU
18.1 nt d c o the yea s 2003-0 2004-0 and 005 mo to ,1 ousand ave bee paid b the
company pending conversion of equity of IPICOL as per decision of Government of Orissa.
C ORA EBT TRU RIN (CDR)
le 03.200 06 of accese porate D g fac ioned to the n te R m tr ed ,3 d nAdvance against Share Ca
Account.
RGER WITH STEEL AUTHORITY OF INDIA LTD. (SAIL)
T sue o erger o compa with S d n n
1
A STMENT OF ENTRY TAX WITH EQUITY
E2
ry Tax ues on apital g ods for r 4, 5-06 a unting Rs.21 49 th h n y
19.0 GENERAL
As per Section 441A of the Companies Act, 1956, Cess on turnover is leviable.
ence no ount ha been prov ed or p 19.2 ower & tilities d es not in lude expenses for generation of power and
ements produced by the plants which have ry head of acc t.
19.3 uring th year e penditure and in ome pertaining to earlier year as
etailed elow ha e been ccount under ‘Adjustment pertaining to ye rs’ head:
No. P rticulars Amount (Rs. In
19.1
Government of India has not yet framed any rules / guidelines in this regard and h am s id aid.
P U o cconsumption of certain fuel el
een included under the primb a s oun
D e x cd b v a edearlier a
Sl. a thousand )
1 Interest adjustment on Term Loan / Cash Credit 14,9112 Employee Related Cl ms` 28,342ai3 Raw Materials 3254 S lling exp nses for 0 -04 & - 19,269e e 3 04 05 4 Commissioning Expenses 2,2125 Sales adjustment for 2004-05 13,6286 Administrative Expenses 1,0467 Interest adjustment on TDRs 5588 Sales Tax 1,2709 CENVAT (12,576)10 Stores & Spares (10)11 Tax Audit F e for 200 20e 4-05
Total 68,995 19.4 revious ear’s fig res hav
herever elt nece to ma figur mp ith rrent ear’s fig es.
19.5 Figures have been rounded off to the nearest rupees in thousand.
P y u e been re-arranged / re-grouped / re-cast w f ssary ke the es co arable w the cuy ur
, P duction : ity in tonnes)Own Products Licensed
CapacityInstalledCapacit
20(a) Licensed Capacity, Installed Capacity ro (Quant
y
(Hot Metal)
Production(Pig Iron)
Notapplicable 10,99,000 TPA 6,14,911 TP
A
(10,99,000
TPA) (5,52,216
TPA)
k, rchases, rnover an Closing St k : (Quantity in tonnes)
(Value in Rs./thousand)Opening Stock Purchases Sales Closing Stock Own Products
Qt
20(b) Opening Stoc
Pu Tu d oc
y. Value Qty. Value Qty. Value Qty. Value
n 81,257 Nil 12,950 144,987 ( ,565) (337,960) (Nil) (Nil) (573,417) (8,616,744) (6,364) (81,257)
ranulated Slag 4,868 4,238 Nil Nil 194,463 31 29,210 3
( ,582) (10 (Nil) 3,734) (44 (34,868)
2,524 24,174 Nil Nil 50,288 557,090 2,799 23,499,721) (25,021) (Nil) (Nil) (48,263) (603,298) (2,524) (24,174)
2,100 14,155 Nil Nil 247,592 2,742,730 2,664 21,839
(Nil) (Nil) (Nil) (Nil) (117,722) (1,486,321) (2,100) (14,155) Crude Tar 261 2,280 Nil Nil 29,722 278,322 167 1,350 (Nil) (Nil) (Nil) (Nil) (16,753) (148,778) (261) (2,280) Ammonium Sulphate 133 515 Nil Nil 9,797 41,085 248 1,055
(Nil) (Nil) (Nil) (Nil) (4,852) (19,718) (133) (515)Total 126,619 Nil 11,270,739 196,196 (373,138) (Nil) (10,919,298) (126,619) 20(c) Finished Goods Quantitative Reconciliation : (Quantity in tonnes) Own Products Openin
Pig Iro 6,364 Nil 608,325 7,620,175 27 G 3 ,337 ,466 51 ,157) (Nil) (20 ,438) (4,238) Scrap (2 BF Coke
gStock
Production Sales &Consumption
ClosingStock
Pig Iron 6,364 614,911 608,325 12,950 (27,565) (552,216) (573,417) (6,364) Granulated Slag 34,868 188,805 194,463 29,210 (51,582) (187,020) (203,734) (34,868) Scrap 2,524 50,563 50,288 2,799 (2,721) (48,066) (48,263) (2,524) BF Coke 2,100 601,528 600,964 2,664
(Nil) (362,300) (360,200) (2,100) Crude Tar 261 29,628 29,722 167 Ammonium Sulphate 133 9912 (Rupees in thousands) (Nil) (4,852)
r n Y
(Nil) (17,014) (16,753) (261)
9,797 248(4,984) (133)
Cu re t ear Prev
aio
Yeus
r
. E e d r in rred in ore n c rre y a co nt ow
tere 3 0
aini e e e & yments -
Forei Technicians 8,208 5 6
9 6
21 xp n itu e cu f ig u nc on c u of Kn -how Nil Nil In
st
Nil
,6 0
Tr ng xp ns s pa to gn 10 ,6 1 Others Nil
Total 8,208Nil
10 ,2 1 22. V e f p io :
alc t Csis
aw Materials 4 9 1
apit 1 ,1 2 5
aluula
oed
imon
oIF
rts during the per d (Cba ) R
5,186,170
,66 ,4 7
C al Goods 28 74 ,4 8 Total 5,314,344 4,671,875
te co
. Va e y ar
) .
s % %por 5,551,169 78.82 ,20 7 8 1
digeno s 1 ,3 1 8
ot , 0 0
23 lue of raw ma rials nsumed during th e
Rs
(a /thousa
nd Rs./thousands Im ted 5 8, 78 8. 6 In
,491,933 21.18 69
4
u 9 02 1.
T al 7 043,102 100.00 5,908,080 1 0. 0 (b) Cok C kin Coal Q olom aIron Ore e o g uartzite Lime Stone D ite M nga s
rnd
ty. ( ) 1,054,060
- 1,687 83,538 84,294 1 12,668,98 677) (77,828) ( 8 ,0 )
lue s n o an 1,333,009
- 33 66,213 59,839 3 , 097 52 ,2 ,72 (49,886) 5 ,2 ) (1,915)
. Va ng e
./t sa
s % % ported 12,986 4.87 12,415 1
neO
ee
Sulphuric Acid Sa
Q MT
1,008,200 8 8,709 (917,134) (219,939) (54
7 1) (5,952) (76, 11 ) (4 43 (19,994)
Va (R . I th us d)
5,551,169 8 0 30 97 1,039 (584,905) (2, 2,0 ) (2 36 6) (2,103) (53,145) (9 ) (7 53
/sp s & m e s
r
24 lue of stores are co pon nts con umed duri th
Rs yho
eau
nd Rs./thousandsIm
8. 2
Indigen s 253,770 140,395 9 8 Total 66,756 100.00 152,810 0 0
ou 95.13 1. 8 2 1 0. 0 25. Parti u (Rupees in thousands)
ur nt Yea
c lars of Directors' Remuneration
C re r Prev us
Yeaio
r
laries 0 779
Company's contribution to provident fund & other funds 70 6
edic ne 2
Provision r accrued
ave
- 37 758 08
Sa
67
7 M
al be fits 18
5
fole
Total 9 As per our report of even
te For and on behalf of Board of Directors r A.K. K r & Co
harte ed cc un /- Sd/- Sd/-
D.P. Parija S.P. Padhi S.K. Kar S.K. Sarna (A.K. Kar) Company Secretary Executive Director (F & A)
daFoC
a A
. tants
r o
Sd/- SdSd/-
Director Managing Director rtner
ace : Bhuba swar
Date : 29.06.2006
Pa
Pl
ne
ALANCE SH E ACT AN CO P N NER BUSINESS PROFILE
I. Registration Details Registration No. 1 0 5 0 State Code 1 5 (Refer Code List)
B E T ABSTR D M A Y'S GE AL
Balance Sheet Date 3 1 0 3 2 0 0 6 Date Month Year II Capital raised during the year (Amount in Rs. Thousands) Public Issue Rights Issue N I L N I L Bonus Issue Private Placement N I L N I L III Position of Mobilisaiton and Deployment of Funds (Amount in Rs. Thousands) Total Liabilities Total Assets 1 9 8 1 4 9 9 7 1 9 8 1 4 9 9 7 Source of Funds Paid-up Capital Reserves & Surplus 3 3 6 7 5 4 2 1 2 1 2 6 1 0 Secured Loans Unsecured Loans 1 4 4 0 3 4 9 1 6 1 1 3 1 Others (Advances Against Equity) 7 7 0 2 2 3 Application of Funds Net Fixed Assets Investments 1 8 8 7 2 0 2 3 N I L Net Current Assets Misc Expenditure
9 0 0 4 6 7 4 2 5 0 7 Accumulated Losses N I L IV Performance of Company (Amount in Rs. thousands)
Turnover Other Income Total
Expenditure 1 1 6 5 2 3 5 1 4 7 7 2 1 1 5 0 1 7 3 7 Profit / Loss before tax Profit / Loss after tax + 1 5 5 3 8 6 + 1 4 7 3 8 5 (Please tick Appropriate box + for Profit, - for Loss) Earning per Share in Rs. Dividend rate % 0 . 4 3 8 N I L V Generic Names of Three Principal Products/Services of Company (as per monetary terms) Product Description Item Code I P I G I R O N 2 0 1 1 0 0 0 II B I L L E T S 7 2 0 7 1 9 0 5 III W I R E R O D S 2 1 3 0 0 0 0 IV I R O N S C R A P 7 2 0 4 1 0 0 0 V G R A N U L A T E D S L A G 2 6 1 8 0 0 0 0 VI B F C O K E 2 7 0 4 0 0 0 2 VII C R U D E T A R 2 7 0 6 0 0 VIII A M M O N I U M S U L P H A T E 3 1 0 2 2 1 IX E L E C T R I C P O W E R 7 3 0 8 9 0 For NEELACHAL ISPAT NIGAM LIMITED
Sd/- Sd/- Sd/- Sd/-
[ D.P. Parija ] [ S. P. Padhi ] [ S. K. Kar]
[ S. K. Sarna ]
Company Secretary Executive Director (F & A) Director Managing Director