hindusthan udyog ltd.€¦ · hindusthan udyog ltd. 1 notice of annual general meeting to the...

HINDUSTHAN UDYOG LTD.

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NOTICE OF ANNUAL GENERAL MEETING TO THE MEMBERS

NOTICE is hereby given that the Sixty-Fifth Annual General Meeting of the Members of HINDUSTHANUDYOG LIMITED will be held on Friday, the 31st day of August, 2012 at 10.00 a.m. at the Registered Officeof the Company at Trinity Plaza, 3rd Floor, 84/1A, Topsia Road (South), Kolkata-700046 to transact thefollowing business:-

ORDINARY BUSINESS :

I. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2012 and the Statementof Profit and Loss for the financial year ended on that date together with the Directors’ and Auditors’Reports thereon.

II. To appoint a Director in place of Mr. A.K. Ghosh, who retires by rotation at this Meeting and being eligibleoffers himself for re-appointment.

III. To re-appoint Messrs S. Ghose & Co., Chartered Accountants, the retiring Auditors to hold office fromthe conclusion of this Annual General Meeting until the conclusion of the next Annual General Meetingand to fix their remuneration.

SPECIAL BUSINESS:

IV. To consider and if thought fit, to pass with or without modification(s), the following resolutions asSPECIAL RESOLUTION:

“RESOLVED THAT pursuant to the provisions of Sections 198, 269, 309 and other applicableprovisions, if any, of the Companies Act, 1956 (the Act) read with Schedule XIII of the Act or anyamendment or re-enactment thereof, the Company hereby accords its consent and approval to the re-appointment of Mr. V.N. Agarwal as Managing Director of the Company for a period of three years witheffect from 01.01.2012 on the same terms and conditions and payment of remuneration and otherperquisites/benefits as was applicable during his previous tenure and also recommended by theRemuneration Committee of Directors and set out in the Explanatory Statement under this item to theNotice convening this Meeting.”

“RESOLVED FURTHER THAT in the event of any statutory amendment, modification or relaxationby the Central Government to Schedule XIII to the Act, the Board of Directors of the Company(hereinafter referred to as “the Board” which terms shall be deemed to include any Committee whichthe Board may constitute to exercise its powers, including powers conferred by this resolution) be andare hereby authorised to alter and vary the terms and conditions of re-appointment includingremuneration, if necessary, in such manner as may be agreed to by and between the Board and Mr.V.N. Agarwal within such prescribed limit(s) or ceiling without any further reference to the members ofthe Company in General Meeting.”

V. To consider and if thought fit, to pass with or without modification(s), the following resolutions asSPECIAL RESOLUTION:

“RESOLVED THAT pursuant to the applicable provisions of The Companies Act, 1956, the consentof the Company be and is hereby accorded for postponement of the date of redemption of 60,00,000,


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NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING MAYAPPOINT A PROXY TO ATTEND AND VOTE ON A POLL ON HIS/HER BEHALF AND SUCH PROXYNEED NOT BE A MEMBER OF THE COMPANY. PROXIES IN ORDER TO BE EFFECTIVE MUSTBE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURSBEFORE THE COMMENCEMENT OF THE MEETING.

2. THE REGISTER OF MEMBERS AND SHARE TRANSFER BOOKS WILL REMAIN CLOSED FROM27TH AUGUST, 2012 TO 31ST AUGUST, 2012 BOTH DAYS INCLUSIVE.

3. EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956SETTING OUT THEREIN THE MATERIAL FACTS IN RESPECT OF THE SPECIAL BUSINESSMENTIONED UNDER ITEM NOS. IV & V OF THE NOTICE IS ANNEXED

10% Cumulative Redeemable Preference Shares of ` 10/- each aggregating to Rs. 600 Lakhs andissued to V.N. Enterprises Limited from 9th March, 2012 to 9th March, 2017.”

“RESOLVED FURTHER THAT any Director and/or the Company Secretary be and are herebyauthorized to do all such acts, deeds and things as may be required in this connection.”

Registered Office:

Trinity Plaza, 3rd Floor,84/1A, Topsia Road (South),Kolkata - 700046

Date : 29th May, 2012

By Order Of The BoardFor Hindusthan Udyog Limited

Shikha BajajCompany Secretary


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EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956

ITEM NO. IV

Mr. V.N. Agarwal was re-appointed as the Managing Director of the Company for a period of three years witheffect from 01.01.2009 and his term of office was due to expire on 31.12.2011. Keeping in mind the significantcontribution to the growth and performance of the Company by Mr. V.N. Agarwal during the said tenure, theBoard of Directors of your Company at its meeting held on 29.10.2011, approved the re-appointment of Mr.V.N. Agarwal as the Managing Director of the Company for a further period of three years with effect from01.01.2012. The terms of his re-appointment including remuneration as approved by the RemunerationCommittee and the Board subject to the approval of the Members to be obtained at this Meeting are asfollows:-

1. PERIOD

Three years commencing from 01.01.2012.

2. REMUNERATION

Subject to overall limit laid down under Section 198 and 309 of the Companies Act, 1956, Mr. V.N.Agarwal shall be entitled to receive from the Company following remuneration:-

(a) Salary : ` 1,00,000/- per month

(b) Perquisites : In addition to the above, Mr. V.N. Agarwal shall be entitled to Perquisites likeFurnished Accommodation, gas, electricity, water and soft furnishings, medicalreimbursement and leave travel concession for self and family, club fees, medicalinsurance, personal accident insurance, leave encashment, benefits of ProvidentFund, Gratuity Fund, Car and telephone etc. in accordance with the Rules of theCompany. In case, no accommodation is provided by the Company to Mr. V.N.Agarwal, he may be paid House Rent Allowance at the rate of 60% of his basic salary.The aforesaid perquisites other than benefits of Provident Fund, Gratuity Fund andLeave Encashment shall be restricted to the annual salary of Mr. V.N. Agarwal.

Provided that the Total Remuneration payable to Mr. Agarwal by way of Salary, Perquisites, Contributionstowards Provident Funds and Gratuity Fund on his account shall not exceed 5% of the Net Profits of theCompany calculated in accordance with Sections 198 and 309 of The Companies Act, 1956.

Notwithstanding anything contained hereinabove, where in any financial year during the currency of histenure, the Company has no profits or profits of the Company are inadequate or in the event of loss, theCompany will pay remuneration to Mr. V.N. Agarwal by way of Salary, allowances, benefits, Perquisites etc.,as specified above as minimum remuneration.

3. TERMINATION

This re-appointment may be terminated by any party herein, by giving to the other party, a six monthsnotice in writing.

4. The Managing Director shall not be entitled to any Sitting Fees for attending the meetings of the Boardof Directors/ Committee of Directors and shall not be liable to retire by rotation.

5. The re-appointment of Mr. V.N. Agarwal as Managing Director and remuneration payable to him are inline with Schedule XIII to the Act subject to the approval of Members to be obtained at this Annual General


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Meeting and to the extent any of the provisions herein are inconsistent or contrary to the terms of suchapproval, the latter will prevail.

6. As required under the Act, the following further particulars pertaining to the Company and the appointeeare set out herein:-

I General Information

(a) Nature of Industry

The Company is engaged in the manufacturing of Alloy and Stainless Steel Castings with stringentquality requirements required in Turbines, Metal Shredding, Earth Moving and Mining Equipment,Power Plants, Pumps, Valves, Compressors and other Heavy Engineering Industries. It is alsoengaged in the manufacturing of Material Handling Equipments of varied nature required in the Mines,Cement Plants, Power Plants and Other General Engineering Sectors.

(b) Date or expected date of commencement of commercial production

The Company commenced its business on 3rd September, 1947.

(c) In case of new companies, expected date of commencement of activities as per project approvedby financial institutions appearing in the prospectus

Not Applicable

(d) Financial Performance

Performance of the Company during the last three years is set out as under:-

(` In Lakhs)

2010-11 2009-10 2008-09

Gross Turnover 5,388.21 5,058.97 6,507.15Profit before Tax 307.91 444.45 514.40Provision for Taxes — 6.17 25.73Profit after Tax 307.91 438.28 488.67Balance b/f from Previous Year (3,066.49) (3,504.77) (3,993.44)Balance at the end of the year (2,758.58) (3,066.49) (3,504.77)Share Capital 1,317.67 1,317.67 1,317.67Reserves & Surplus 1,489.87 1,182.43 744.67Loan Funds 2,776.52 2,931.06 3,466.88Fixed Assets 1,724.88 1,737.39 1,722.73Investments 462.60 447.10 569.47Net Current Assets 3,396.03 3,245.58 3,235.38Miscellaneous Expenditure 0.55 1.09 1.64

(e) Export Performance (` In Lakhs)

Export Earning on FOB Basis 1,437.97 1,695.51 2,935.70

(f) Foreign Investments or collaborators, if any

None


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II. Information about the Appointee

(a) Background Details

Mr. V.N. Agarwal is a Graduate in Mechanical Engineering from Banaras Hindi University. He hasgot in depth exposure to and involvement in steering diverse business activities and hasconsiderable experience and expertise in the marketing, management and operations of EngineeringIndustries.

(b) Past Remuneration

The remuneration drawn by Mr. V.N. Agarwal during the Financial Year ended 31st March, 2012 hasbeen mentioned in the Report of Board of Directors on Corporate Governance.

(c) Recognition or awards

None

(d) Job Profile and his suitability

Subject to the superintendence, control and direction of the Board, Mr. Agarwal will manage andsuperintend the business affairs and properties of the Company and do all such lawful acts and thingsin relation to such management and superintendence as he shall think fit and reasonable.

Mr. Agarwal has been in the Engineering Industry for more than 40 years and is well conversant withthe business operations of the Company as he is associated with it since its takeover in the year1972 and has been its Managing Director for more than 20 years.

(e) Remuneration proposed

As mentioned in foregoing pages.

(f) Comparative remuneration profile with respect to industry, size of the Company, profile of theposition and person (in case of expatriates, the relevant details would be w.r.t. the country oforigin)

The remuneration structure of Mr. V.N. Agarwal is not higher than what is drawn by his peers incomparable Companies.

(g) Pecuniary relationship directly or indirectly with the Company, or relationship with themanagerial personnel, if any

Mr. Agarwal being a Promoter Managing Director will not be entitled to remuneration under any otherhead. No relative of his is employed by the Company.

III Disclosures

(a) The remuneration package of Mr. V.N. Agarwal is already set out above.

(b) The necessary disclosure as required under Paragraph 1B(IV) of Section II, Part II of Schedule XIIIof the Act has already been made in the Report of Board of Directors on Corporate Governance.

(c) The Board considers that having regard to the significant contribution made by Mr. V.N. Agarwaltowards the growth of operational activities of the Company during his current tenure, his re-appointment as Managing Director for a further period of three years is fully justified. As such theBoard recommends the Special Resolution as set out in Item No. IV for approval of the Shareholders.

(d) Except Mr. V.N. Agarwal, Mr. Prakash Agarwal and Mrs. Ritu Agarwal, no other Director of theCompany is concerned or interested in the said resolution.


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(e) An abstract of the terms of re-appointment of Mr. V.N. Agarwal as Managing Director of the Companyand Memorandum of concern or interest had been circulated to the Members in terms of Section 302of the Companies Act, 1956.

ITEM NO. V

The Board of Directors of the Company at their Meeting held on 29th July, 2009 had allotted to V.N.Enterprises Limited 60,00,000, 10% Cumulative Redeemable Preference Shares of ̀ 10/- each in lieu of thePreference Shares held by it in ACC-Nihon Castings Limited (ANCL) pursuant to a Scheme of Amalgamationof ANCL with our Company. The said Preference Shares were due for redemption on 9th March, 2012.

In view of the brought forward unabsorbed accumulated losses, the Board of Directors at their Meeting heldon 30.01.2012 decided subject to the approval of both the Equity and Preference Shareholder(s) to postponethe period of redemption of the Preference Shares by five years to 9th March, 2017.

The Board has received the written consent from the Preference Shareholder in this respect in terms ofSection 106 of The Companies Act, 1956.

The postponement also requires the approval of the Equity Shareholders as a Special Resolution. The Boardtherefore recommends that the Proposed Resolution as set out in Item No. V be passed in the interest ofthe Company.

Except Mr. V.N. Agarwal and Mr. Prakash Agarwal, no other Director of the Company is interested orconcerned in the said Resolution.

Registered Office:

Trinity Plaza, 3rd Floor,84/1A, Topsia Road (South),Kolkata - 700046

Date : 29th May, 2012

By Order Of The BoardFor Hindusthan Udyog Limited

Shikha BajajCompany Secretary


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DISCLOSURE OF THE DETAILS OF DIRECTOR SEEKING RE-APPOINTMENT AT THE ANNUALGENERAL MEETING PURSUANT TO CLAUSE 49 (IVG) OF THE LISTING AGREEMENT

NAME OF THE DIRECTOR MR. A. K. GHOSH

Date of Birth 06.01.1941

Date of First Appointment 31.03.2007

Qualifications B.Com., LLB

No. of shares held NIL

Nature of Expertise Having in-depth exposure to International Business and vastexperience in overall Business Administration

Other Directorships 1. Tea Time Limited

2. Orient International Limited

3. Northern Projects Limited

4. Neptune Exports Limited

5. HSM International Private Limited

Other CommitteeMemberships/Chairmanships

(a) Audit Committee (i) Tea Time Limited – Member

(ii) Neptune Exports Limited – Member

(b) Investors’ Grievance Committee (i) Tea Time Limited – Chairman

(ii) Neptune Exports Limited – Chairman


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BOARD OF DIRECTORS

V. N. AGARWAL, Managing DirectorPRAKASH AGARWALRITU AGARWALASIM KUMAR GHOSHBINAYA KAPOOR

COMPANY SECRETARY

SHIKHA BAJAJ

AUDITORS

S. GHOSE & CO.Chartered AccountantsKOLKATA - 700 001

BANKERS

UNITED BANK OF INDIAIDBI BANK LIMITED

REGISTERED OFFICE

TRINITY PLAZA, 3RD FLOOR84/1A, TOPSIA ROAD (SOUTH)KOLKATA - 700 046

CORPORATE OFFICE

TEMPLE CHAMBER6, OLD POST OFFICE STREETKOLKATA - 700 001



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DIRECTORS’ REPORT

To the Members,

Your Directors have pleasure in presenting their 65th Annual Report together with the Audited Accounts of theCompany for the financial year ended 31st March, 2012.

2011 - 2012 2010 - 2011

`̀̀̀̀ in Lakhs `̀̀̀̀ in Lakhs

FINANCIAL RESULTS

Total Revenue 5,900.21 5,194.01

EBITDA 581.06 605.00

Less :

Finance Costs 135.82 106.18

Depreciation 180.87 190.91

Tax for Earlier Year 6.42 —

Profit after Tax (PAT) 257.95 307.91

Add : Opening Balance in Profit & Loss Account (2,758.58) (3,066.49)

Closing Balance (2,500.63) (2,758.58)

COMPANY PERFORMANCE:

During the year under review, the Total Revenue of the Company showed a significant growth of 14% from ̀ 5,194Lakhs to ` 5,900 Lakhs. However, the Export Sales of the Company during the current year was ̀ 1,255 Lakhsas against ̀ 1,438 Lakhs in the previous year, showing a decrease of 13%, which was because of low demandfrom the Overseas Customers.

There was a reduction in the PAT of the Company (which stood at 4.37%) as compared to the last year and thesame was due to an increase in the Finance Costs.

In view of the slowdown and the downtrend being witnessed in the Indian Economy too, the aforesaid Results andthe Performance of the Company is considered to be quite satisfactory.

The Current Year’s Profit has led to a further reduction in the Accumulated Losses of the Company from ̀ 2,758Lakhs to ` 2,500 Lakhs.

The Durgapur Unit continued to remain closed during the year.

DIVIDEND:

In view of the Brought forward unabsorbed accumulated losses, the Directors express their inability to recommendany dividend for the year under review.

PREFERENCE SHARES

The Board of Directors of your Company have obtained a written consent from the Preference Shareholder in termsof Section 106 of The Companies Act, 1956 for postponement of the date of redemption of 60,00,000, 10%Cumulative Redeemable Preference Shares of ̀ 10/- each from 9th March, 2012 to 9th March, 2017.

The necessary Resolution seeking Equity Shareholders’ approval to the aforesaid postponement forms part of theNotice of the ensuing Annual General Meeting of the Company.


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MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated in clause 49 of the ListingAgreements with the Stock Exchanges is appended below:-

A. BUSINESS

The Company is engaged in the manufacturing of Alloy and Stainless Steel Castings with stringent qualityrequirements required in Turbines, Metal Shredding, Earth Moving and Mining Equipment, Power Plants, Pumps,Valves, Compressors and other Heavy Engineering Industries. It is also engaged in the manufacturing of MaterialHandling Equipments of varied nature required in Mines, Cement Plants, Power Plants and Other GeneralEngineering Sectors. The manufacturing units are located in Kolkata and Nagpur.

B. REVIEW OF OPERATIONS & FUTURE PROSPECTS

During the year under review, your Company took the following steps leading to efficiency in its operations:-

● Development of Duplex Stainless Steel grade of 6 MT single piece casting weight primarily required in Oil andGas, Chemical Processing, Paper and Mining Industries.

● Development of Valve Bodies weighing 6.6 MT and 3MT single piece.

● Capability to pour 20 MT Liquid Metal at one time with the help of two ladles.

● Completion of Axle Housing Developmental Work

● Completion of SS410 Diaphragms (of 2 frame sizes) Developmental Work

● Erection of new machine shop shed

Further, the Company during the year continued its constant objective of creation of New Products and Customersand improvements in quality of its Existing Products with full commitment.

The aforesaid developments have resulted in significant Material and Product Development which will enable theCompany to continuously improve and enhance its margins in the years to come.

The Future prospects of the Foundry Industry (of which we are a part) seems bright as it is extensively focusingon the development of Industries dealing in Gas, Turbine, Power, Pumps, Compressors, Valves and Earth MovingEquipments. These Industries are already having good order bookings and expansion plans and have immensescope of growth in the next 10-15 years thereby creating a demand for the Foundry Products in substantialvolumes.

The Overall Foundry Industry would benefit from above as there are limited players in this Industry resulting inthe creation of a big gap between demand and supply.

C. OPPORTUNITIES AND THREATS, RISKS AND CONCERNS

The Company sees opportunity in the development and supply of high contribution items.

Further, good opportunity exists for catering new export markets which needs to be aggressively tapped.

For taking advantage of the aforesaid opportunities, the Company is continuously carrying on improvement in itsinfrastructure and other facilities and workings which will enable it to yield better results in the near future.

However, your Company is exposed to certain risks and areas of concern for it are:-

(i) Demand for Company’s highly sophisticated steel casting products in few critical segments only.

(ii) Stagnancy in the Market Demand due to General Economic conditions.

(iii) Dependence on Few Customers in the Export Market. Any change in their requirements will have a directimpact on the Exports Volume of the Company.

(iv) Currency Fluctuations in adverse direction.


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(v) Fluctuations in raw material prices in fixed price orders which will have a consequential effect on thebottomline.

(vi) Pressure on Pricing.

(vii) Increase in Prices of Power and various other Manufacturing Expenses.

D. INTERNAL CONTROL SYSTEM

The Company has internal control procedures commensurate with the nature of its business and size of itsoperations. The objective of these procedures are to ensure efficient use and protection of the Company’sresources, accuracy in financial reports and due compliance of statutes and Company policies and procedures.

The Internal Audit function is conducted by a Senior Management Team of the Company. The reports of such audit,the progress in implementation of recommendations contained in such reports and the adequacy of internal controlsystems are reviewed by the Audit Committee of the Board in its periodical meetings.

E. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Industrial Relations were cordial during the year under review. At all levels, employees of the Company arefully committed to the growth of the Company and there was no loss of work due to any industrial relation problemduring the year.

CORPORATE GOVERNANCE:

The principles of good Corporate Governance through professionalism, accountability, transparency, trusteeshipand control have always been followed by your Company and it has complied with all the applicable provisionsof Corporate Governance as per Clause 49 of the Listing Agreements with the Stock Exchanges.

A separate Report on Corporate Governance as prescribed by the Listing Agreement forms part of the AnnualReport 2011 - 2012 along with the Auditors’ Certificate on its compliance in Annexure “B”.

DIRECTORS:

Mr. A.K. Ghosh, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himselffor re-appointment.

A Brief Resume of the above named Director seeking re-appointment is attached to the Notice of the ensuingAnnual General Meeting.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 217(2AA) of The Companies Act, 1956, the Directors state as follows:-

(i) That in the preparation of the Annual Accounts for the financial year ended 31st March, 2012, the applicableaccounting standards had been followed along with proper explanation relating to material departures.

(ii) That the Directors had selected such accounting policies and applied them consistently and madejudgements and estimates that were reasonable and prudent so as to give a true and fair view of the stateof affairs of your Company at the end of the financial year and of the profit or loss of your Company for thatperiod.

(iii) That the Directors had taken proper and sufficient care to the best of their knowledge and ability for themaintenance of adequate accounting records in accordance with the provisions of The Companies Act, 1956.They confirm that there are adequate systems and controls for safeguarding the assets of your Companyand for preventing and detecting fraud and other irregularities.

(iv) That the Directors had prepared the Annual Accounts for the financial year ended 31st March, 2012 on a“going concern” basis.


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AUDITORS:

Messrs S. Ghose & Co., Chartered Accountants, Auditors of the Company, hold office till the conclusion ofthis Annual General Meeting. They have expressed their willingness to continue as the Auditors of the Company,if so re-appointed and have furnished to the Company the requisite certificate to the effect that theirre-appointment, if effected, would be within the limits prescribed under section 224(1B) of the CompaniesAct, 1956. Accordingly, approval of the Shareholders will be sought at the ensuing Annual General Meeting of theCompany to the re-appointment of and remuneration payable to Messrs S. Ghose & Co., Chartered Accountantsas Auditors to hold office from the conclusion of this Annual General Meeting till the conclusion of next AnnualGeneral Meeting.

FIXED DEPOSIT:

Your Company has not invited and/or accepted any deposits from the General Public under Sections 58A and58AA of the Companies Act, 1956 and the Rules framed thereunder.

PARTICULARS OF EMPLOYEES

Information required to be given pursuant to the provisions of section 217(2A) of The Companies Act, 1956 readwith the Companies (Particulars of Employees) Rules, 1975 are not applicable to your Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO

Particulars relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo,as required under section 217(1)(e) of The Companies Act, 1956 read with Companies (Disclosure of Particularsin the Report of Board of Directors) Rules, 1988 are given in the Annexure “A”.

CODE OF CONDUCT:

Your Company has formulated a Code of Conduct which applies to Board Members and Senior ManagementPersonnel of the Company. Confirmations towards adherence to the Code during the Financial Year 2011-2012have been obtained from all the Board Members and Senior Management Personnel in terms of the requirementsof Clause 49 of the Listing Agreement and a declaration relating to compliance of this code during the year underreview by all Board Members and Senior Management Personnel has been given by the Managing Director of theCompany which accompanies this report.

ACKNOWLEDGEMENTS:

Your Directors would like to thank shareholders, customers, dealers, suppliers, bankers, employees union andall other business associates for the continuous support given by them to the Company and their confidence inits management.

FOR AND ON BEHALF OF THE BOARD

V. N. AGARWALRITU AGARWAL

DIRECTORSPlace: KolkataDate: 29th May, 2012


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ANNEXURE – “A”

PARTICULARS AS REQUIRED UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956 READ WITH THECOMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

ENERGY CONSERVATION MEASURES TAKEN :

All Units of the Company continues the endeavor to reduce the energy consumption per unit of production.

Energy Conservation Measures taken at the Units located in Kolkata are:

i) Replacement of motors/pumps/lighting with energy efficient models.

ii) Optimization of electrical distribution system.

iii) Improvements to reduce heat gain/cooling losses from building.

Energy Conservation Measures taken at the Unit located in Nagpur are:

i) Installation of Induction Furnaces for melting and the bulk production is done through these InductionFurnaces instead of Electric ARC Furnace.

ii) Rationalization of Pump Capacities and use in many areas of pumps with lower power ratings with the sameefficiency.

iii) Use of duplex billets instead of Loose Scrap for manufacturing of Duplex Steel Castings.

The above mentioned measures initiated across the Company’s business have resulted in savings in EnergyConsumption per unit of Production and has also helped in partially offsetting the inflationary trend in Power Costs.They have also helped to reduce the total Carbon Di-oxide emissions.

Even though the prices per unit of Electricity and Light Diesel Oil have increased during the year under review,the same are comparable with the Industry Standards.

POWER CONSUMPTION For the year For the yearended ended

31.03.2012 31.03.2011

1) Electricity

Units purchased (KWH in Lakhs) 83.10 86.25

Total Amount (` In Lakhs) 563.35 485.61

Rate/Unit (`) 6.78 5.63

2) Light Diesel OilUnits purchased (Ltrs. In Lakhs) 3.40 3.45

Total Amount (` In Lakhs) 141.81 113.23

Rate/Unit (`) 41.71 32.82

3) Consumption/Unit of production

Product (Units):

Steel, Alloy and Cast Iron Castings (MT) 2,735 2,783

Electricity (KWH/MT) 3,038 3,099

Light Diesel Oil (Ltrs./MT) 124 124


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TECHNOLOGY ABSORPTION :

Research and Development (R&D) :

Research and Development is continuously carried on for improvement in the quality of the existing products andproduction process so as to bring them in line with the requirements of Customers or Industry Standards and theCompany has succeeded in making out the improvements in the quality and efficiency in production.

Expenditure on Research and Development are charged under primary heads of accounts.

Technology absorption, adaptation and innovation

The Company has not imported any new technology during the last five years reckoned from the beginning of theCurrent Financial Year i.e. 1st April, 2011.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

Foreign Exchange earned ` 1,255.82 Lakhs

Foreign Exchange used ` 198.40 Lakhs


DIRECTORS


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ANNEXURE “B”

REPORT ON CORPORATE GOVERNANCE

The Directors present the Company’s Report on Corporate Governance :

1) THE COMPANY’S GOVERNANCE PHILOSOPHY

Corporate Governance is based on the principles of integrity, fairness, equity, transparency, accountabilityand commitment to values. Good Governance practices stem from culture and mind set of the organization.As stakeholders across the country evidence keen interest in the practices and performance of Companies,Corporate Governance has emerged on the centre stage.

The Company has always believed in conducting its affairs in a fair and transparent manner and in maintainingthe highest ethical standards in its dealings with all its constituents. It aims to constantly review its systemsand procedures at all levels to achieve the highest level of Corporate Governance in the overall interest ofall the Shareholders.

In terms of Clause 49 of the Listing Agreements with the Stock Exchanges, the details of compliances madeby the Company for the year ended 31st March, 2012 are as follows:

2) BOARD OF DIRECTORS

The Board of Directors is the apex body constituted by the shareholders for overseeing the overall functioningof the Company. The Board provides and evaluates the strategic direction of the Company, managementpolicies and their effectiveness and ensures that long term interests of the shareholders are being served.

The Company’s policy is to maintain an optimum combination of Executive and Non-Executive Directors. Ason 31.03.2012 the Company’s Board consisted of Five Directors out of which two were Independent Directorswho are eminent Professionals with experience and expertise in Business, Industry, Finance and Law.

The Composition of the Board as on 31.03.2012 are as follows:

Sl. Category No. of % ofNo. Directors Total

1. Executive Director & Promoter 1 20.00Managing Director

2. Non-Executive Director & Promoter 2 40.00

3. Non-Executive & Independent Director 2 40.00

TOTAL 5 100.00


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The further details relating to the Composition of the Board as on 31.03.2012 are as follows :

Sl. Name of Category No. of other No. of No. ofthe Board Directorships other Board other BoardMembers (including all Committee(s) Committee(s)

Indian and of which of whichForeign he/she is he/she is a

Companies) a Member Chairperson

1. Mr. V. N. Managing Director 12 7 2Agarwal & Promoter

2. Mr. Prakash Non - Executive 15 5 —Agarwal Director & Promoter

3. Mrs. Ritu Non - Executive 5 — —Agarwal Director & Promoter

4. Mr. Binaya Non - Executive & 2 2 —Kapoor Independent Director

5. Mr. A.K. Non - Executive & 5 4 2Ghosh Independent Director

Mr. Prakash Agarwal is the son of Mr. V.N. Agarwal and husband of Mrs. Ritu Agarwal.

3) DETAILS OF BOARD MEETINGS AND ANNUAL GENERAL MEETING HELD AND ATTENDED BY THEDIRECTORS DURING THE FINANCIAL YEAR 2011-2012

(i) During the Financial Year 2011-12 Six Board Meetings were held on:-

28th April, 2011, 30th May, 2011, 28th July, 2011, 29th October, 2011, 30th January, 2012 and 12thMarch, 2012.

(ii) Details of Attendance record of the Directors at the Board Meetings and the last Annual General Meetingare as follows:

Name of the No. of Board Attendance at theBoard Members Meetings Attended last AGM held on

16th September, 2011

Mr. V.N. Agarwal 5 Yes

Mr. Prakash Agarwal 4 Yes

Mrs. Ritu Agarwal 6 Yes

Mr. Binaya Kapoor 6 No

Mr. A.K. Ghosh 6 Yes

4) BOARD MEETINGS

i) The Company’s Governance policy requires the Board to meet at least four times in a year with a timegap between any two Board Meetings not exceeding four months.

ii) In terms of Company’s Corporate Governance Policy, all statutory, significant and material informationare placed before the Board to enable it to discharge its responsibility.

iii) The Internal Guidelines for Board Meetings facilitate the decision making process at the Meeting of theBoard in an informed and efficient manner.


10

5) BOARD AGENDA

Meetings are governed by structured Agenda. The Board Members in consultation with the Chairman maybring up any matter for the consideration of the Board.

6) INFORMATION PLACED BEFORE THE BOARD

Apart from the items that are required to be placed before the Board for its approval, both under the statutesand the Governance policy, the following are also tabled for the Board’s periodic review and information.

i) Quality performance against plan

ii) Treasury Policy

iii) Internal Audit Findings

iv) Status of business risk exposure and its management

v) Write offs/disposals

vi) Significant Court judgment and order

vii) Terms of reference of Board Committees

7) BOARD PROCEDURE

(i) The Members of the Board have been provided with the requisite information as required by Annexure 1Ato Clause 49 of the Listing Agreements well before the Board Meetings and the same were dealt withappropriately.

(ii) All Directors who are in various committees are within the permissible limits as stipulated in Clause 49(IC)of the Listing Agreements. The Directors from time to time have intimated to the Company theirMemberships/Chairmanships in various Committees in other Companies.

8) POST MEETING FOLLOW UP SYSTEM

The Governance process in the Company includes an effective post-meeting follow up, review and reportingprocess for action taken/pending on decision of the Board/Board Committees.

9) COMMITTEES OF THE BOARD

Currently there are three Board Committees - the Audit Committee, Investors’ Grievance Committee andRemuneration Committee. The Terms of reference of the Board Committees are determined by the Board fromtime to time. Meetings of each Board Committee are convened by the respective Committee Chairman.Signed Minutes of Board Committee Meetings are placed at the Board Meetings for the information of theBoard.

i) AUDIT COMMITTEE

Audit Committee of the Board, inter alias provides re-assurance to the Board on the existence of aneffective internal control environment that ensures:

(a) Overseeing the Company’s financial reporting process and the disclosures of its financial informationto ensure that the financial statements are correct, sufficient and credible.

(b) Compliance with Listing and legal requirements concerning financial statements.

(c) Recommending to the Board the appointment/re-appointment of Statutory Auditors, fixation of theirAudit Fees, and approving payments made for any other services rendered by them.

(d) Reviewing with the Management the Quarterly and the Annual Financial Statements beforesubmission to the Board for approval.

(e) Reviewing with the management the performance of the Statutory Auditors and the adequacy ofinternal control function.

(f) Discussion with the Statutory Auditors before the audit commences, about the nature and scope ofaudit as well as post-audit discussions to ascertain any area of concern.


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(g) Reviewing the Internal Audit function and the progress in the implementation of recommendationscontained in the Internal Audit Report.

(h) Efficiency and effectiveness of operations.

(i) Safeguarding of the assets and adequacy of provision made for all liabilities.

(j) Reliability of financial and other management information and adequacy of disclosures.

(k) Compliance with all relevant statutes.

(l) Reviewing of the Statement of Related Party transactions as submitted by the Management.

The composition of the Audit Committee as on 31.03.2012 is as follows:-

Name of the Director Chairman/Member Category

Mr. A. K. Ghosh Chairman Non Executive & Independent

Mr. Prakash Agarwal Member Non Executive & Promoter

Mr. Binaya Kapoor Member Non Executive & Independent

During the Financial Year 2011-2012 Four Audit Committee Meetings were held and the Attendanceof the Members at the said Meetings is given below:

Name of the Director No. of meetings attended

Mr. A.K. Ghosh 4

Mr. Prakash Agarwal 3

Mr. Binaya Kapoor 4

ii) INVESTORS’ GRIEVANCE COMMITTEE

The Investors’ Grievance Committee oversees redressal of Shareholders/ Investors grievances relatingto transfer of shares, non-receipt of Balance Sheet etc.

The Investors’ Grievance Committee consists of Mr. A.K. Ghosh and Mr. Prakash Agarwal of whichMr. A.K. Ghosh is the Chairman.

Miss Shikha Bajaj, Company Secretary acts as the Compliance Officer of the Company.

During the year ended 31st March 2012, no complaints/queries were received and no complaint/query waspending to be resolved as on 31st March, 2012. There were no transfer of shares pending for registrationas on 31st March 2012 and all transfers had been effected within a period of 30 days from the date of theirlodgment.

iii) REMUNERATION COMMITTEE

● The Remuneration Committee determines on behalf of the Board of Directors and the Shareholders,the Company’s policy on specific remuneration packages for Executive Directors. The terms ofreference of the Committee covers fixation of remuneration, perquisites, increments etc. of theManaging Director.

● The Composition of the Remuneration Committee as on 31.03.2012 is as follows:

Name of Director Chairman/Member

Mr. A. K. Ghosh Chairman

Mr. Prakash Agarwal Member

Mr. Binaya Kapoor Member


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● During the Year one Remuneration Committee Meeting was held on 29.10.2011 which was attendedby all its Members.

● The Board of Directors of the Company, subject to the approval of the Members to be obtained at theensuing Annual General Meeting, re-appointed Mr. V.N. Agarwal as the Managing Director of theCompany for a period of three years with effect from 1st January, 2012. The terms and conditionsof his re-appointment as Managing Director including payment of remuneration and other perquisites/benefits was recommended by the Remuneration Committee and approved by the Board at theirrespective Meetings held on 29.10.2011.

● Details of Remuneration paid/payable to Mr. V.N. Agarwal as Managing Director from 1st April 2011to 31st March 2012 are as follows:

Salary Perquisites Total

Rs. 12,00,000/- — Rs. 12,00,000/-

● No Commission is payable to any Director.

● Apart from Sitting fees, no other remuneration is paid/payable to the Non-Executive Directors.

● Sitting fees paid to the Non-Executive Directors for the financial year ended 31st March, 2012 wereas follows :

Name of the Director Sitting Fees paid

Mr. Prakash Agarwal Rs. 4,000/-

Mrs. Ritu Agarwal Rs. 6,000/-

Mr. Binaya Kapoor Rs. 6,000/-

Mr. A. K. Ghosh Rs. 6,000/-

10) GENERAL MEETINGS

i) Details of Annual General Meeting (AGM) held in the last three years are as under :

Financial Year Location Date Time

2010 - 2011 Registered Office at : 16th September, 2011 10 a.m.Trinity Plaza, 3rd Floor,

2009 - 2010 84/1A, Topsia Road (South), 23rd July, 2010 11 a.m.Kolkata-700046.

2008 - 2009 29th July, 2009 11 a.m.

ii) Whether any Special Resolutions were passedin the previous Three Annual General Meetings : Yes

Two Special Resolutions were passed in each of thetwo AGMs preceding the last one.

They were:-

In the AGM held on 23.07.2010

(a) Alteration of Articles of Association so as toalter the Article in respect of the Fees payable toNon-Executive Directors for attending Board/Committee Meetings

(b) Keeping of Registers and Index of Membersand Annual Returns at the Office Premises of the


13

Registrars and Share Transfer Agents instead ofbeing kept at the Registered Office of the Company

In the AGM held on 29.07.2009

(a) Re-appointment of Mr. V. N. Agarwal as aManaging Director for a period of Three Yearscommencing from 01.01.2009

(b) Alteration of Articles of Association so as toinclude therein a Chapter on ‘Dematerialization ofSecurities’

iii) Whether Special Resolutions wereput through Postal Ballot last year : No

iv) Are Special Resolutions proposed tobe put through Postal Ballot this year : No

v) Procedure to be followed for Postal : In accordance with the provisions of Section 192A ofBallot (if applicable) the Companies Act, 1956 read with the Rules made

thereunder and Guidelines issued by The Institute ofCompany Secretaries of India.

11) DISCLOSURES

i) There are no materially significant transactions with the Related Parties viz. Promoters, Directors or theManagement, their Subsidiaries or Relatives etc. that may have potential conflict with the interests of theCompany at large.

ii) No penalties or strictures have been imposed on the Company by the Stock Exchanges or SEBI or anyStatutory Authority on any matter related to the capital markets during the last three years.

iii) Your Company has a well laid out Code of Conduct and Business Ethics for the Board of Directors andSenior Management Personnel. It is one of the best means for increasing the transparency in the workingof the Companies. The Board Members and the Senior Management Personnel of the Company adhereto this principle and compliance with the same is affirmed by each of them annually.

iv) The Company is in compliance with the requirements of the Corporate Governance, which reflects in thisReport. The Company can assure to adopt the residual non-mandatory requirements, not covered underthis report, in the coming years. The details of compliance status are given herein under:

Particulars Clause of Compliance RemarksListing Status

Agreement (Yes/No)

I. Board of Directors Clause 49 (I)

(A) Composition of Board Clause 49 (IA) Yes

(B) Non-Executive Directors’Compensation & Disclosures Clause 49 (IB) N.A.

(C) Other provisions as to Clause 49 (IC) YesBoard and Committees

(D) Code of Conduct Clause 49 (ID) Yes Declaration as necessaryhas been made in theDirectors Report

II. Audit Committee Clause 49 (II)

(A) Qualified & Independent Clause 49 (IIA) YesAudit Committee


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(B) Meeting of Audit Committee Clause 49 (IIB) Yes

(C) Powers of Audit Committee Clause 49 (IIC) Yes

(D) Role of Audit Committee Clause 49 (IID) Yes

(E) Review of Information byAudit Committee Clause 49 (IIE) Yes

III. Subsidiary Companies Clause 49 (III) N.A. The Company does nothave any SubsidiaryCompany

IV. Disclosures Clause 49 (IV)

(A) Basis of related partytransactions Clause 49 (IVA) Yes

(B) Disclosure of Accounting Clause 49 (IVB) Yes Not required as there is noTreatment deviation from Accounting

Standards

(C) Board Disclosures Clause 49 (IVC) Yes

(D) Proceeds from Public Issues, Clause 49 (IVD) N.A. The Company has notRights Issues, Preferential made any such issueIssues etc. in the recent past

(E) Remuneration of Directors Clause 49 (IVE) Yes Disclosures as necessaryhave been made in theCorporate GovernanceReport forming part ofAnnual Report.

(F) Management Clause 49 (IVF) Yes Management Discussionand Analysis Reportforms part of respectiveyear’s Directors’ Report

(G) Shareholders Clause 49 (IVG) Yes

V. CEO/CFO Certification Clause 49 (V) Yes The Certificate as requiredhas been provided to theBoard for the year ended31st March, 2012.

VI. Report on Corporate Clause 49 (VI) Yes Report on CorporateGovernance Governance forms part

of the Annual Report

VII. Compliance Clause 49 (VII) Yes Certificate regardingcompliance with theconditions of CorporateGovernance forms partof the Annual Report

12) MEANS OF COMMUNICATIONS

(i) Quarterly Results : Quarterly Results were announced within a period of 45 days from the end of therelevant Quarter (except for the last quarter) and were published in The Financial Express (English) and


15

the Dainik Statesmen or Ek Din (Bengali) Newspapers. In place of the results for the last quarter, theCompany opted to submit the Audited Financial results for the entire financial year.

(ii) Annual Reports : Annual Reports containing, interalia Audited Annual Accounts, Directors’ Report,Auditors’ Report and other important information are circulated to members and others entitled thereto.The Management Discussion and Analysis Report forms part of the Annual Report.

(iii) Website : The Quarterly Results are not displayed on the Website of the Company.

(iv) Official News Releases: Official News Releases, if any, are not displayed on the Website of theCompany.

(v) Displays, Presentations etc : Displays, presentations etc are not made to Institutional Investors/Analysts and hence not displayed on the Company’s Website.

13) GENERAL SHAREHOLDERS’ INFORMATION

(i) Company Registration Details

The Company is registered in the State of West Bengal. The Corporate Identification Number (CIN)allotted to the Company by the Ministry of Corporate Affairs is L27120WB1947PLC015767.

(ii) Annual General Meeting to be held – Day, Date, Time and Venue :

Sl. No. Particulars Remarks

A. Day Friday

B. Date 31st August, 2012

C. Time 10.00 a.m.

D. Venue Registered Office at :Trinity Plaza, 3rd Floor,84/1A, Topsia Road (South),Kolkata-700046.

(iii) Financial Calendar for the Year 2012-2013:

Sl. Particulars Remarks

A. 1st Quarter ending 30th June, 2012 Before 14th August, 2012

B. 2nd Quarter and Half-year ending Before 14th November, 201230th September, 2012

C. 3rd Quarter ending 31st December, 2012 Before 14th February, 2013

D. 4th Quarter and Annual Results for the Before 30th May, 2013year ending 31st March, 2013

(iv) Dates of Book Closure : 27th August, 2012 to 31st August, 2012 (Both days inclusive for the purposeof AGM)

(v) Dividend payment date : Not applicable since no dividend has been recommended for the year ended31st March, 2012.

(vi) Name of the Stock Exchanges at which Equity Shares are listed and Scrip Code assigned to theCompany’s shares at the respective Stock Exchanges :

The Equity Shares of the Company are listed on the following Stock Exchanges :

1. The Calcutta Stock Exchange Limited (CSE)7, Lyons Range, Kolkata – 700001Scrip Code: 18142


16

2. The Bombay Stock Exchange Limited (BSE)Phiroze Jeejeebhoy Towers,25th Floor, Dalal Street, Mumbai - 400001Scrip Code: 513039

The Company has paid the listing fees for the Financial Year 2012-2013 to both the Stock Exchanges.

(vii) Market Price Data :

There was no trading of the shares of the Company at the BSE and CSE during the year ended 31stMarch, 2012.

(viii) Registrars and Share Transfer Agents :

M/s Link Intime India Private Limited are the Registrar and Share Transfer Agents (RTA) of theCompany.

Shareholders may address all their correspondences/queries relating to Dematerialization of Shares,transfer/transmission of physical securities, change of address, non-receipt of dividend or any otherquery relating to the Shares of the Company to them at the below mentioned Address :

LINK INTIME INDIA PRIVATE LIMITED

Fort Burlow59C, Chowringhee Road, 3rd FloorRoom No. 5, Kolkata - 700020.Tel : 033 2289 0540Fax No: 033 2289 0539E-mail ID : [email protected] Person: Mr. Kalyan S. Chakraborty

(ix) Share Transfer System:

All work relating to transfer of Physical Shares are processed by the Company’s RTA at their abovementioned Address.

The same are registered and returned within a period of 30 days from the date of receipt if the documentsare clear in all respects.

In terms of the requirement of Clause 47(c) of the Listing Agreement with Stock Exchanges, theCompany obtains half yearly Certificates from a Company Secretary in practice for due compliance ofshare transfer formalities.

(x) Distribution Schedule:

The Distribution Pattern of the Equity Shares of the Company as on 31st March, 2012 is given below:

Sl. No. No. of Equity No. of Percentage of No. of % ofShares held Holders total holders Shares Shareholding

1. 1 - 1000 9 10.34 1,713 0.02

2. 1001 - 2000 2 2.30 2,325 0.03

3. 2001 - 3000 1 1.15 2,400 0.03

4. 3001 - 4000 - - - -

5. 4001 - 5000 3 3.45 15,000 0.21

6. 5001 - 10000 2 2.30 19,052 0.27

7. 10001 - above 70 80.46 71,36,235 99.44

Total 87 100.00 71,76,725 100.00


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(xi) Shareholding Pattern as on 31st March, 2012 :

Sl. Category No. of Equity Percentage ofNo. Shares held holding

A. Promoters’ holding :

1. Promoters

— Indian 43,30,210 60.34

— Foreign — —

2. Persons acting in concert — —

Sub-Total 43,30,210 60.34

B. Non-Promoters’ holding :

1. Institutional Investors — —

2. Others :

— Private Corporate Bodies 1,73,117 2.41

— Indian Public 26,73,398 37.25

Sub-Total 28,46,515 39.66

GRAND TOTAL 71,76,725 100.00

(xii) Dematerialization of Equity Shares :

The Equity Shares of the Company are admitted with Central Depository Services (India) Limited (CDSL)and National Securities Depository Limited (NSDL) for enabling the Investors to hold and trade in theshares of the Company in dematerialized form.

The ISIN Number as activated by both CDSL and NSDL in respect of our Equity Shares isINE582K01018.

As on 31st March, 2012, 10,07,969 Equity Shares representing 14.04% of the Company’s Total EquityShares were held in dematerialized form.

The Company has paid the Custodial Fees for the Financial Year 2012-2013 to both the Depositories.

(xiii) Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, conversion dates and likeimpact on Equity:

NOT APPLICABLE [The Company has not issued any GDRs/ADRs/ Warrants or any other ConvertibleInstruments]

(xiv) Plant Locations:

(a) 19, Dakshindari Road,Kolkata – 700048.

(b) Biren Roy Road (West) Ganipur,Mahestala, 24 Parganas (S)Pin – 700141

(c) A-1/2, Butibori Industrial Area,Ruikhairi, MIDC-Butibori,Dist. Nagpur – 441122


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(xv) Address for correspondence:

Shareholders should address their correspondence to the Company’s RTA at their above mentionedAddress or to the Secretarial Department of the Company at the following address :

HINDUSTHAN UDYOG LIMITEDTrinity Plaza, 3rd Floor84/1A, Topsia Road (South),Kolkata – 700046Tel : 033 3021 6800/6808Fax No: 033 3021 6863E-mail ID : [email protected]

The above report has been placed before the Board at its Meeting held on 29th May, 2012 and the samewas approved.


DIRECTORSPlace: KolkataDate: 29th May, 2012

DECLARATION BY THE MANAGING DIRECTOR ON THE CODE OF CONDUCT

I hereby confirm that the Company has obtained from all the Board Members and the Senior Management Personnelaffirmation that they have complied with the Code of Business Conduct and Ethics for Directors and SeniorManagement Personnel in respect of the Financial Year 2011- 2012.

For Hindusthan Udyog Limited

V. N. Agarwal

Managing DirectorPlace: KolkataDate: 29th May, 2012


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AUDITORS’ CERTIFICATE

CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE UNDERCLAUSE 49 OF THE LISTING AGREEMENT(S)

TO

THE MEMBERS OF HINDUSTHAN UDYOG LIMITED

We have examined the compliance of conditions of Corporate Governance by HINDUSTHAN UDYOG LIMITEDfor the year ended 31st March 2012 as stipulated in Clause 49 of the Listing Agreement of the said Company withthe Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of Management. Our examination waslimited to the procedures and the implementation thereof, adopted by the Company for ensuring the complianceof the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financialstatements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representationmade by the Directors and the Management, we certify that the Company has complied with the conditions ofCorporate Governance as stipulated in Clause 49 of the Listing Agreements.

We state that no investor grievances are pending for a period exceeding one month as on 31st March, 2012 as perrecords maintained by the Shareholders’/Investors’ Grievance Committee.

We further state that such compliance is neither an assurance as to future viability of the Company nor the efficiencyor effectiveness with which the management has conducted the affairs of the Company.

For S. GHOSE & CO.Chartered Accountants

Registration No. 302184E

Chandan ChattopadhyayPartner

Membership No. 051254Place: KolkataDate: 29.05.2012


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AUDITORS’ CERTIFICATE

We have examined the above Cash Flow Statement of HINDUSTHAN UDYOG LIMITED for the year ended 31stMarch, 2012. The Statement has been prepared by the Company in accordance with the requirements of Clause32 of the Listing Agreements with the Stock Exchanges and is based on and in agreement with the correspondingProfit and Loss Account and Balance Sheet of the Company covered by our Report of 29th May, 2012.




Membership No. 051254Place: KolkataDate: 29.05.2012


21

AUDITORS’ REPORT

TO THE MEMBERS OF HINDUSTHAN UDYOG LIMITED

1.0 We have audited the attached Balance Sheet of Hindusthan Udyog Limited as at 31st March, 2012 and also theProfit and Loss Account and the Cash Flow statement for the year ended on that date annexed thereto. Thosefinancial statements are the responsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.

2.0 We have conducted our audit in accordance with auditing standards generally accepted in India. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by the management, as well as evaluating theoverall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3.0 As required by the Companies (Auditor’s Report) Order, 2003 as amended by Companies (Auditor’s Report)(Amendment) Order, 2004 issued by the Central Government in terms of Section 227(4A) of the CompaniesAct, 1956, and on the basis of such checks of the books and records of the company as we consideredappropriate and according to the information and explanations given to us, we enclose in the Annexure astatement on the matters specified in paragraphs 4 and 5 of the said Order.

4.0 Further to our comments in the Annexure referred to above, we report that :

4.1 We have obtained all the information and explanations, which to the best of our knowledge and belief werenecessary for the purposes of our audit;

4.2 In our opinion, proper books of account as required by law have been kept by the company so far as appearsfrom our examination of those books;

4.3 The Balance Sheet, Profit and loss account and Cash Flow Statement dealt with by this report are inagreement with the books of account;

4.4 In our opinion, the Balance Sheet, Profit and loss account and Cash Flow Statement dealt with by this reportcomply with the Accounting Standards referred to in section 211(3C) of the Companies Act, 1956;

4.5 On the basis of written representations received from the directors, as on 31st March, 2012, and taken onrecord by Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 frombeing appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act,1956;

4.6 The Company, in the absence of any notification, as stated in the Note No. B-5 of Notes on Accounts(Schedule-P), has neither paid any cess payable under section 441A of the Companies Act, 1956 nor providedfor the same in the accounts;

4.7 In our opinion and to the best of our information and according to the explanations given to us, the said BalanceSheet and Profit and Loss Account read together with the Accounting Policies, Notes on Accounts and OtherSchedules (From A to P) attached thereto give the information required by the companies Act, 1956, in themanner so required and give a true and fair view in conformity with the accounting principles generallyaccepted in India;

(a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2012 ; and

(b) in the case of the Profit and Loss Account, of the profit for the year ended on that date.

(c) in the case of the Cash Flow Statement, of the Cash flows for the year ended on that date.

For S. GHOSE & CO. Chartered Accountants


Chandan ChattopadhyayPlace: Kolkata PartnerDate : 29th May, 2012 Membership No. 051254


22

ANNEXURE TO THE AUDITORS’ REPORT

TO THE MEMBERS OF HINDUSTHAN UDYOG LIMITED

(Referred to in paragraph 3.0 of our report of even date)

1. (a) The Company has maintained proper records showing full particulars including quantitative details andsituation of fixed assets.

(b) The fixed assets of the Company have been physically verified by the management at reasonableintervals and no material discrepancies have been noticed on such verification.

(c) The Company has not disposed off any part of fixed assets during the year.

2. (a) The inventory has been physically verified during the year by the management. In our opinion, thefrequency of verification is reasonable.

(b) In our opinion and according to information and explanation given to us, the procedure of physicalverification of inventories followed by the management is reasonable and adequate in relation to the sizeof the company and nature of its business.

(c) The company is maintaining proper records of inventory and discrepancies found in physical verificationhave been properly dealt with in the accounts.

3. As per information and explanations given to us, the company has neither granted nor taken any loans, securedor unsecured, to/from companies, firms or other parties covered in the register maintained under section 301of the Companies Act, 1956. Consequently, clauses (iii)(b), (iii)(c), (iii)(d), (iii)(f) and (iii)(g) of paragraph 4 ofthe Order are not applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internalcontrol system commensurate with the size of the Company and the nature of its business for the purchaseof inventory, fixed assets and sale of goods. During the course of our audit, we have not observed anycontinuing failure to correct major weaknesses in Internal Control System.

5. According to the information and explanations given to us, there is no contract or agreement during the year,the particulars of which are required to be entered in the register maintained under section 301 of the CompaniesAct, 1956. Consequently, clause (v)(b) of paragraph 4 of the Order is not applicable.

6. In our opinion and according to the information and explanations given to us, the Company has not acceptedany deposits from the public in terms of section 58A and 58AA of the Companies Act, 1956 and the rules framedthereunder.

7. The Company does not have any internal audit system commensurate with its size and nature of its business.

8. The Central Government has not prescribed maintenance of cost records under section 209 (I)(d) of theCompanies Act, 1956.

9. (a) In our opinion and according to the information and explanations given to us, the Company is regular indepositing with appropriate authorities undisputed statutory dues including provident fund, employees’state insurance, income tax, sales tax, custom duty, excise duty, service tax, cess and other materialstatutory dues applicable to it.

(b) According to the information and explanations given to us, there are no disputed dues in respect of incometax, custom duty, wealth tax, excise duty, service tax and cess. However, the details of sales tax liabilitieswhich have not been deposited by the Company on account of dispute are shown in Enclosure-I.

10. The Company has no accumulated losses as on 31st March, 2012, and has not incurred cash losses in thecurrent financial year and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaultedin repayment of dues to any financial institution or bank or debenture holders.


23

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

13. The Provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are notapplicable to the Company.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares,securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the Company has not given anyguarantee for loans taken by others from banks or financial institutions.

16. In our opinion and according to information and explanations given to us, the Company has not taken any termloan during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheetof the Company, we report that no short term funds have been used for long term purposes.

18. According to the information and explanations given to us, the Company has not made any preferentialallotment of shares to parties and companies covered in the register maintained under section 301 of theCompanies Act, 1956.

19. The Company has not issued any debenture.

20. The Company has not raised any fund by public issue.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticedor reported during the course of our audit.

For S. GHOSE & CO. Chartered Accountants


Chandan ChattopadhyayPlace: Kolkata PartnerDate : 29th May, 2012 Membership No. 051254


24

STATEMENT OF DISPUTED LIABILITIES FOR SALES TAX

Period of which Wherethe amount Dispute is

Sl. No. Name of Statue Nature of Dues Amount (Rs.) relates pending

1. West Bengal Assessed Dues 414,263.00 2004-2005 WBCT (A/R) BoardSales Tax Act1994

2. Central Sales Assessed Dues 1,81,067.00 2004-2005 WBCT (A/R) BoardTax Act 1956

3. West Bengal Assessed Dues 1,25,993.00 2005-2006 WBCT (A/R) BoardVat Tax Act 2003



6. Central Sales Assessed Dues 10,03,200.00 2008-2009 AdditionalTax Act 1956 Commissioner

7. Central Sales Assessed Dues 54,969.00 2008-2009 AdditionalTax Act 1956 Commissioner

8. Central Sales Assessed Dues 16,34,285.00 1998-1999 Registrar MaharashtraTax Act 1956 Sales Tax Tribunal, Mumbai

9. Central Sales Assessed Dues 59,26,481.00 1999-2000 Deputy Commissioner ofTax Act 1956 Sales Tax (Appeal), Nagpur

10. Bombay Sales Assessed Dues 10,44,631.00 2000-2001 Deputy Commissioner ofTax Act 1959 Sales Tax (Appeal), Nagpur


12. Central Sales Assessed Dues 12,02,194.00 2001-2002 Registrar MaharashtraTax Act 1956 Sales Tax Tribunal, Mumbai

13.. Bombay Sales Assessed Dues 9,49,067.00 2002-2003 Deputy Commissioner ofTax Act 1959 Sales Tax (Appeal), Nagpur


2,31,28,750.00


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Balance Sheet as at 31st March, 2012

I. EQUITY AND LIABILITIES Notes As at 31st As at 31st March 2012 March 2011

(1) Shareholder's Funds(a) Share Capital 3 131,767,250 131,767,250(b) Reserves and Surplus 4 174,740,902 148,986,631

306,508,152 280,753,881

(2) Non-Current Liabilities(a) Long-term borrowings 5 432,981 1,639,431(b) Long-term Liabilities 6 7,849,109 7,849,109

8,282,090 9,488,540(3) Current Liabilities

(a) Short-term borrowings 7 178,234,567 276,012,251(b) Trade payables 8 112,952,338 104,416,343(c) Other current liabilities 9 210,311,457 125,199,516(d) Short-term provisions 10 16,626,835 14,231,814

518,125,197 519,859,924

Total 832,915,439 810,102,345II. ASSETS(1) Non-current assets

(a) Fixed assets(i) Tangible assets 11 159,541,235 171,624,752(ii) Capital Work In Progress 18,010,665 863,000

(b) Non-current Investments 12 46,059,733 46,259,728(c) Long term Loans and advances 13 17,656,976 15,088,742(d) Long term Trade Receivables 14 44,816,161 39,476,282

286,084,770 273,312,504(2) Current assets

(a) Inventories 15 174,262,406 203,896,360(b) Trade Receivables 16 203,994,356 178,462,603(c) Cash and Bank Balances 17 30,227,943 45,490,731(d) Short-term Loans and Advances 18 138,331,702 108,871,155(e) Other Current Assets 19 14,262 68,992

546,830,669 536,789,841

Total 832,915,439 810,102,345

Significant Accounting Policies &Notes on Financial Statements 1 to 29

For S. GHOSE & CO.Chartered AccountantsFirm Regn. No. 302184E

Chandan ChattopadhyayPartnerMembership No. : 051254Place : KolkataDate : 29th May, 2012

SHIKHA BAJAJCompany Secretary

For and on behalf of the BoardV. N. AGARWALRITU AGARWAL

Directors


26

Statement of Profit & Loss for the year ended 31st March, 2012

Particulars Notes For the year ended For the year ended March 2012 March 2011

I. Revenue from Operations 20 562,260,997 488,653,314II. Other Income 21 27,760,307 30,747,794

III. Total Revenue (I + II) 590,021,304 519,401,108IV. Expenses:

Cost of Materials Consumed &Other Manufacturing Expenses 22 318,520,251 324,200,449Purchase of Traded Goods 15,040,165 5,931,787Changes in Inventories of Finished goods,Work-in-progress and Stock-in-Trade 23 28,126,269 (26,258,323)Employee Benefit Expenses 24 69,328,424 63,091,500Finance Costs 25 13,581,765 10,617,727Depreciation and Amortisation Expenses 26 18,086,966 19,091,599Other Expenses 27 100,899,789 91,935,556

Total Expenses 563,583,629 488,610,295

V. Profit/ (Loss) Before Prior Period adjustments,Exceptional items and Tax (III - IV) 26,437,675 30,790,813

VI. Prior Period Adjustments — —

VII. Profit/(Loss) before exceptional items and tax (V - VI) 26,437,675 30,790,813

VIII.Exceptional Items — —

IX. Profit/(Loss) before tax (VII - VIII) 26,437,675 30,790,813

X. Tax expense:(1) Current Tax — —(2) Deferred tax — —(3) Tax for Earlier Year 641,641 —

XI. Profit/(Loss) after Tax (IX - X) 25,796,034 30,790,813

XII. Earning per equity share 28 3.59 4.29

Significant Accounting Policies &Notes on Financial Statements 1 to 29





Directors


27

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2012

For the year ended For the year ended31.03.2012 31.03.2011

A) Cash Flow from Operating ActivitiesNet Profit before Interest & Tax 2,64,37,675 3,07,90,812Adjustments for :

Provision for gratuity 15,85,498 26,43,647Provision for Leave Encashment 8,09,523 6,27,424Depreciation 1,80,86,965 1,90,91,599Loss/(Profit) on Sale of Investments — —Loss/(Profit) on Fixed Assets — (2,67,146)Dividend Received (77,41,318) (77,41,318)Interest Received (5,75,631) (6,46,049)Interest Paid 1,35,81,765 1,06,17,727Misc exps W/Off 54,730 54,888

Operating Profit before Working Capital Changes 5,22,39,207 5,51,71,584

Adjustments for :Trade & Other Receivables (6,29,00,413) (6,98,37,948)Inventories 2,96,33,954 (3,77,23,994)Trade Payables 9,36,47,932 10,40,63,362Cash Generated from/(used) in Operations 11,26,20,680 5,16,73,004Interest Paid (1,35,81,765) (1,06,17,727)Income Tax Paid/Adjusted (6,41,641) —

Net Cash From/(used in) operating activities 9,83,97,274 4,10,55,277

B) Cash Flow from Investing Activities

Purchase of Fixed Assets (2,31,92,872) (1,82,20,260)Sale of Fixed Assets — 6,00,500Purchase of Investments (1,51,755) (15,50,000)Sale of Investments 3,51,750 —Dividend Received 77,41,318 77,41,318Interest Received 5,75,631 6,46,049

Net Cash used in Investing Activities (1,46,75,928) (1,07,82,393)

C) Cash Flow from Financing Activities

Proceeds from Long Term Borrowings (Net) (12,06,450) (1,64,26,709)Proceeds from Short Term Borrowings (Net) (9,77,77,684) 9,71,977

Net Cash from Financing Activities (9,89,84,134) (1,54,54,732)

Net Increase/(Decrease) in cash and

Cash Equivalents (A + B + C) (1,52,62,788) 1,48,18,152

Cash and Cash Equivalents as at the beginning of the year(Opening Balance) – Cash and Bank Balances 4,54,90,731 3,06,72,579Cash and Cash Equivalents as at the end of the year(Closing Balance) – Cash and Bank Balances 3,02,27,943 4,54,90,731



Place : KolkataDate : 29th May, 2012



Directors


28

NOTES FORMING PART OF THE FINANCIAL STATEMENTS

NOTE : 1 CORPORATE INFORMATION

The Company is engaged in the manufacturing of Alloy and Stainless Steel Castings with stringent qualityrequirements required in Turbines, Metal Shredding, Heavy Earth Equipment, Valves and Compressors and otherHeavy Engineering Industries. It is also engaged in the manufacturing of Material Handling Equipments of variednature required in the Mines Cement Plants, Power Plants and other General Engineering Sectors. Themanufacturing units are located in Kolkata and Nagpur.

NOTE : 2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Accounting Convention:

i) The Financial Statements are prepared under the historical cost convention, on accrual basis inaccordance with the provisions of The Companies Act, 1956.

ii) Liquidated damages or claims are accounted for on settlement of claim.

iii) Commission on sales is accounted for on submission of claim by / receipt of confirmation from agents/principals.

2.2 Capital Subsidy:

Capital Subsidy not specifically related to Fixed Assets is credited to Capital Reserve and retained till therequisite conditions are fulfilled.

2.3 Fixed Assets & Depreciation:

Fixed assets are stated at their original cost of acquisition or construction and other incidental expenses,less accumulated depreciation.

Depreciation on Fixed Assets is charged on Written Down Value Method (On Straight Line Method for NagpurUnit) at the rate specified in Schedule XIV to the Companies Act. 1956.

2.4 Investments:

Investments of the Company are held as Long Term Investment and are carried over at Cost.

2.5 Inventories:

Tools and Implements are written off at the rate of 25% every year.

The quantity of stock-in-trade is determined from time to time by physical verification carried out by themanagement and the verification of raw materials has been done at lower of cost and net realisable value.The cost formula used is FIFO (Weighted Average for Nagpur Unit). The valuation of Semi-finished Goodsand Finished Goods/Trading Items has been done at lower of cost and net realizable value.

2.6 Foreign Currency Transactions :

Transaction in Foreign Currency is recorded at the rate of exchange prevailing at the date of the transactions.Monetary items denominated in Foreign Currencies at the Balance Sheet date are translated at the BalanceSheet date rates. Any income or expenses on account of exchange difference either on settlement or ontranslation at the Balance Sheet date is recognised in Profit and Loss Account in the year in which it arises.


29

2.7 Retirements Benefits :

Provision for Gratuity and Leave Encashment liability to employees are made on the basis of ActuarialValuation basis as per the requirement of the Accounting Standard – 15 (Revised) issued by the InstituteOf Chartered Accountants Of India.

2.8 Impairment of Asset :Impairment loss is recognized wherever the carrying amount of an asset is in excess of its recoverableamount and the same is recognised as an expense in the statement of Profit & Loss and carrying amountof the asset is reduced to its recoverable amount.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that theimpairment losses recognised for the asset no longer exist or have decreased.

2.9 Taxation :

Income tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is madewith reference to taxable income computed for the accounting period, for which the financial statements areprepared by applying the tax rates as applicable. The deferred tax charge or credit is recognised using currenttax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognisedonly if there is virtual certainty of realization of such assets. Other deferred tax assets are recognised onlyto the extent there is reasonable certainty of realization in future. Deferred tax assets / liabilities are reviewedas at each balance sheet date based on developments during the year and available case law, to reassessrealization / liabilities.

2.10 Miscellaneous expenditure :

a) Preliminary and Share Issue Expenses are written off over a period of ten years.


30

3.2 Aggregate number of Bonus share issued & share issued for consideration other than cash.

As at 31st As at 31stEquity Shares Nos. March, 2012 Nos March, 2011

Equity share alloted as fully paid bonus share bycapitalisation of reserve NIL NIL NIL NILAt the beginning of the year NIL NIL NIL NILIssued during the year NIL NIL NIL NIL

Outstanding at the end of the year — — — —

Equity share alloted as fully paid up pursuant to contracts for consideration other than Cash

At the beginning of the year 849,625 8,496,250 849,625 8,496,250 Issued during the year — — — —

Outstanding at the end of the year 849,625 8,496,250 849,625 8,496,250

3.1 Reconciliation of shares outstanding at the beginning & at the end of the reporting period

As at 31st As at 31stEquity Shares Nos. March, 2012 Nos March, 2011

At the beginning of the period 7,176,725 71,767,250 7,176,725 71,767,250Issued during the period NIL NIL NIL NILShares bought back during the year NIL NIL NIL NILOutstanding at the end of the period 7,176,725 71,767,250 7,176,725 71,767,250

As at As atNote : 3 SHARE CAPITAL 31st March, 2012 31st March, 2011

Authorised Shares

485,00,000 Equity Shares of Rs 10/- each 485,000,000 485,000,00060,00,000 10% Cumulative ReedeeemablePreference shares of Rs 10/- each 60,000,000 60,000,000

545,000,000 545,000,000Issued, Subscribed & Paid-Up Shares

71,76,725 Equity Shares of Rs 10/- each 71,767,250 71,767,25060,00,000 10% Cumulative RedeemablePreference shares of Rs 10/- each 60,000,000 60,000,000(Due for Redemption on 9th March, 2017) (*)

Total 131,767,250 131,767,250


31

3.3. Details of Shareholders holding more than 5% Shares in the Company

As at 31st As at 31stParticulars Nos. March, 2012 Nos March, 2011

% Holding % Holdingin the class in the class

Equity Shares of Rs. 10 Each

1. V.N.Enterprises Limited 13,04,625 18.18 9,49,625 13.232. Poonam Jhaver 10,00,000 13.93 10,00,000 13.933. Bengal Steel Industries Limited 5,98,600 8.34 5,98,600 8.344. Tea Time Limited 5,94,600 8.29 5,94,600 8.295. Neptune Exports Limited 5,90,000 8.23 5,90,000 8.236. Orient International Limited 5,46,850 7.62 5,46,850 7.627. Asutosh Enterprises Limited 4,57,500 6.37 4,57,500 6.37

TOTAL 50,92,175 70.96 47,37,175 66.01

(*) No Preference Dividend is payable to Preference Shareholder in respect of aforesaid Preference Shares as they have waivedtheir right in respect of any Preference Diidend from the date of allotment of these Shares till the date of their redemption.

As at As atNote : 4 RESERVE & SURPLUS 31st March, 2012 31st March, 2011

a) Capital ReserveOpening Balance 39,08,27,590 39,08,27,590Addition — —Deduction — —Closing Balance 39,08,27,590 39,08,27,590

b) Share Premium AccountOpening Balance 1,38,41,000 1,38,41,000Addition — —Deduction — —Closing Balance 1,38,41,000 1,38,41,000

c) Revaluation Reserve (**)Opening Balance 50,14,164 50,60,944Addition — —Deduction 41,762 46,780Closing Balance 49,72,402 50,14,164

d) Special Capital IncentiveOpening Balance 30,00,000 30,00,000Addition — —Deduction — —Closing Balance 30,00,000 30,00,000

e) General ReserveOpening Balance 1,21,62,074 1,21,62,074Addition — —Deduction — —Closing Balance 1,21,62,074 1,21,62,074

f) Deficit (Profit & Loss Account)Opening Balance (27,58,58,198) (30,66,49,009)Addition 2,57,96,034 3,07,90,812Deduction — —Closing Balance (25,00,62,164) (27,58,58,197)

Total 17,47,40,902 14,89,86,631

(**) Depreciation amounting to Rs. 41,762/- ( Previous Year 46,780/-), being the amount of depreciation attributed to the revaluationhas been debited to the Revaluation Reserve.


32

Note : 5 LONG TERM BORROWINGS As at 31st March, 2012 As at 31st March, 2011

Non-Current Current Total Non-Current Current Total(a) (b) (a + b) (a) (b) (a + b)

Long Term LoansSecured

- From Bank * 315,953 — 315,953 1,522,403 1,522,403Deferred Sales Tax Loan 117,028 117,028 117,028 117,028

Total 432,981 — 432,981 1,639,431 — 1,639,431

The Loan is secured by hypothecation of Motor vehicles and is repayable in monthly installments.

Note : 7 SHORT TERM BORROWINGS As at 31st March, 2012 As at 31st March, 2011

Non-Current Current Total Non-Current Current Total(a) (b) (a + b) (a) (b) (a + b)

Short Term LoansUnsecured- From Body Corporate — 155,000,000 155,000,000 — 155,000,000 155,000,000

Working Capital Loan From Bank

Secured - Cash Credit From Banks ** — 23,234,567 23,234,567 — 121,012,251 121,012,251

Total — 178,234,567 178,234,567 — 276,012,251 276,012,251

** The loan is repayable on demand and is secured by way of Hypothecation of Book Debts, Raw Materials, Work in Process and Finished Goods, Stores and Spares and Other Current assets, both Present and Future.

As at As atNote : 6 LONG TERM LIABILITIES 31st March, 2012 31st March, 2011

Advance from Customers 7,849,109 7,849,109

Total 7,849,109 7,849,109

As at As atNote : 8 TRADES PAYABLES (#) 31st March, 2012 31st March, 2011

Sundry Creditors for Goods and Services 11,29,52,338 10,44,16,343

Total 11,29,52,338 10,44,16,343

Note : 9 OTHER CURRENT LIABILITIESAdvance from Customers 1,103,898 374,297Payable to employees 2,786,963 2,647,261Other Payables 206,420,596 122,177,958

Total 210,311,457 125,199,516

Note : 10 SHORT TERM PROVISIONS

Provision For Income Tax — —Provision For Gratuity 12,145,348 10,559,850Provision For Leave Encashment 4,481,487 3,671,964

Total 16,626,835 14,231,814

(#) There are no Micro enterprises or Small scale enterprises to whom the Company owes any due which areoutstanding as at 31st March, 2012. [31.03.2011 - NIL]

The above information, as required to be disclosed under the Micro, Small and Medium Enterprises DevelopmentAct, 2006 has been determined to the extent such parties are identified on the basis of the information availablewith the Company.


33

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35

As at As atNote 13 : LONG TERM LOANS AND ADVANCES 31st March, 2012 31st March, 2011

LOANS :Advances to Staff (Unsecured - Considered Good) 2,768,566 1,941,685Capital Advances 1,254,161 65,393

ADVANCES RECOVERABLE IN CASH OR IN KIND

Considered Good 417,140 437,140Considered Doubtful — —

SECURITY DEPOSITS :

Unsecured, Considered Good : 13,217,109 12,644,524

Total 17,656,976 15,088,742

Note : 14 LONG TERM TRADE RECEIVABLES

Unsecured, Considered Good : 44,816,161 39,476,282Unsecured, Considered Doubtful 21,993,305 21,993,305Less : Provision for Doubtful Debts (21,993,305) (21,993,305)

44,816,161 39,476,282

Note : 15 INVENTORIES

Raw Material 79,353,069 79,152,045Work-In progress 60,926,719 86,004,621Finished Goods 23,039,197 26,087,564Tools & Implements 10,943,421 12,652,130

Total 174,262,406 203,896,360

Note : 16 TRADE RECEIVABLES

Outstanding for a period exceeding six months


OTHERS :


Total 203,994,356 178,462,603

Note : 17 CASH & CASH EQUIVALENTS

Balances With Banks

a) In Current Account 24,896,934 37,425,640b) In Fixed Deposit Account 4,636,307 7,260,006

29,533,241 44,685,646

Cash On Hand 694,702 805,085

Total 30,227,943 45,490,731


36

As at As atNote :18 SHORT TERM LOANS & ADVANCES 31st March, 2012 31st March, 2011

Advance Income Tax and Other Taxes 3,390,077 4,147,510

Advances recoverable in Cash or in kind :

Unsecured, Considered Good 133,143,673 98,555,848Unsecured, Considered Doubtful — —Prepaid Expenses 321,664 349,817

Security Deposits :


Total 138,331,702 108,871,155

Note : 19 OTHER CURRENT ASSETS

Interest Accrued 14,262 14,262Miscellaneous Expenditure ( To the extent of not written off or adjusted) — 54,730

Total 14,262 68,992


37

For the year ended For the year endedNote : 20 REVENUE FROM OPERATIONS 31st March, 2012 31st March, 2011

Sale of Products(a) Sale of Products 602,015,451 523,568,031(b) Other Operating Income 3,837,622 487,577

Gross Revenue from OperationsLess : Excise Duty recovered on Sales 43,592,076 35,402,294

Total 562,260,997 488,653,314

Note : 21 OTHER INCOME

(a) Dividend Income(i) From Long Term Investments 7,741,318 7,741,318(ii) From Current Investments — —

(b) Rent Recipts 6,235,457 6,840,192(c) Interest Received on Deposits 575,631 646,049(d) Profit on Sale of Capital Assets (net of loss on assets sold/written off) — 267,146(e) Duty Exemption Pass-Book Entitilements 7,774,476 12,912,365(f) Gain on Foreign Exchange Fluctuation 5,433,425 2,340,724

Total 27,760,307 30,747,794

Note : 22 COST OF MATERIALS CONSUMED & OTHER MANUFACTURING EXPENSES

Raw Material Consumed 204,685,235 220,363,950Stores Consumed 54,769,344 51,711,889Power & Fuel 56,546,556 48,650,552Carriage Inward 2,519,116 3,474,058

Total 318,520,251 324,200,449

Note : 23 (INCREASE)/DECREASE IN INVENTORIES

Inventories at the end of the yearWork in Progress 60,926,719 86,004,621Finished goods 23,039,197 26,087,564

83,965,916 112,092,185Inventories at the beginning of the yearWork in Progress 86,004,621 62,969,960Finished goods 26,087,564 22,863,902

112,092,185 85,833,862

Total 28,126,269 (26,258,323)

Note : 24 EMPLOYEE BENEFIT EXPENSES

Salary, Wages, Bonus, Gratuity & Allowances 58,264,085 53,048,294Contribution to Provident Fund , ESI & Other Fund 5,936,749 5,295,560Staff Welfare Expenses 5,127,590 4,747,646

Total 69,328,424 63,091,500


38

For the year ended For the year endedNote : 25 FINANCE COST 31st March, 2012 31st March, 2011

(a) Interest Expenses 13,508,595 10,435,434(b) Finance Charges on Finance leases 73,170 182,293

Total 13,581,765 10,617,727

Note : 26 DEPRECIATION & AMORTISATION EXPENSES

Depreciation 18,128,728 19,138,379Adjusted Out of Revaluation Reserve 41,762 46,780

Total 18,086,966 19,091,599

Note : 27 OTHER EXPENSES

Component Processing Expenses 34,144,770 34,703,473Repair to Buliding 326,044 1,134,459Repair to Machinery 10,475,786 8,474,723Inspection & Testing 2,377,643 910,913Excise Duties 1,063,751 548,513Sales Tax 7,939,743 6,658,032Commission, Discounts and Rebates 406,611 378,856Transportation and Freight 13,577,489 12,899,509Directors Remuneration 1,200,000 1,200,000Directors Meeting Fees 22,000 18,000Service Charges 4,845,803 4,660,043Liquidated Damages 2,889,466 2,362,250Electric Charges 597,897 587,027Rent 1,342,406 1,427,836Rates & Taxes 1,707,961 1,180,193Bank Charges 1,105,728 959,183Travelling Expenses 4,123,483 3,460,750Conveyance Charges 1,166,776 1,295,903Foreign Travelling Expenses 1,778,040 268,442Vehicle Maintenance 1,675,946 1,723,397Other Repairs 3,300,256 2,137,375Postage, Telegram & Telephone 736,408 868,211Printing & Stationery Items 482,448 436,153Insurance Charges 566,473 460,652

Payment to Auditors– As Auditors 75,000 75,000– For Taxation matters 35,000 35,000– For Certification/Limited review 62,500 59,545Miscellaneous Expenditure written off. 54,730 54,888Listing Fees 42,500 43,530Subscription & Donation 667,961 769,609Advertisement 100,547 82,153Miscellaneous Expense 2,008,623 2,061,938

Total 100,899,789 91,935,556

Note : 28 EARNINGS PER EQUITY SHARES

Profit after Taxation 25,796,034 30,790,813Weighted average number of Equity Shares outstanding 7,176,725 7,176,725Basic & Diluted earnings per Share (Face value Rs. 10/-) 3.59 4.29


39

29.3 Opening Stock Current Year Previous YearQty. Rs. Qty. Rs.

i) Semifinished ProductsSteel Structure & Goods 33,00,000 33,00,000Steel Casting Goods 8,27,04,621 5,96,69,960

8,60,04,621 6,29,69,960

ii) Finished ProductsTea 6,507 6,507Steel Casting Goods 147.216 M/T 2,60,81,057 164.380 M/T 2,28,57,395

2,60,87,564 2,28,63,902

29.4 Closing Stock Current Year Previous YearQty. Rs. Qty. Rs.

i) Semifinished ProductsSteel Structure & Goods 33,00,000 33,00,000Steel Casting Goods 5,76,26,720 8,27,04,621

6,09,26,720 8,60,04,621

ii) Finished ProductsTea 6,507 6,507Steel Casting Goods 116.198 M/T 2,30,32,690 147.216 M/T 2,60,81,057

2,30,39,197 2,60,87,564

29.4 Actual Production

Production

Current Yr Previous Yr

Steel Castings 2,735 M/T 2,783 M/T

Note : 29

NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012. (contd.)

29.1 Contingent Liabilities :

a) Letters of Guarantee outstanding as at 31.03.12 Rs. 61.16 Lacs (Previous year 62.51 Lacs).

b) Claim not acknowledged as debts: Disputed demand for Sales Tax, Rs. 231.29 Lacs (Previous yearRs. 280.95 Lacs) appealed against.

29.2 In the absence of any Gazette notification as required under section 441A(1) of the Companies Act 1956, noprovision for payment of cess has been made in the accounts.


40

29.6 Raw Materials Consumed

Current Year Previous YearQty Rs. Qty Rs.

Steel Materials — — 24.04 M/T 10,11,949Sundry Stores & Consumables 9,81,59,912 11,69,12,207Components 14,81,473 30,27,979Scrap 2991.22 M/T 15,96,94,382 3016.56 M/T 15,10,62,514Packing Materials 1,18,812 61,190

25,94,54,579 27,20,75,839

Indigeneous 97.87% 25,39,17,153 92.48% 25,16,05,787

Imported 02.13% 55,37,426 07.52% 2,04,70,052

29.7 Sale of Goods Current Year Previous Year

Qty. Rs. Qty. Rs.

Steel Castings 2,832.46 M/T 58,98,19,709 2,760.190 M/T 50,24,21,024Spares & Others for Conveyors 19,41,952 88,68,237Others 1,02,53,790 1,22,78,770

60,20,15,451 52,35,68,031

29.8 Expenses in Foreign CurrencyCurrent Year Previous Year

1) Travelling (Foreign) 15,46,287 2,68,4412) Import of Stores & Consumables 55,37,426 2,04,70,0523) Import of Trading Goods 1,27,56,197 59,31,787

29.9 Earnings in Foreign ExchangeCurrent Year Previous Year

1) F.O.B value of Exports 12,11,66,164 13,97,87,8072) Freight & Insurance Recovered 44,16,029 40,09,595

29.10 Foreign exchange currency exposures not covered by derivative instruments as at March 31, 2012amounts Receivable for export of goods

Current Year Previous Year

Foreign Currency Amount in Foreign Amount Amount in Foreign AmountCurrency (Rs.) Currency (Rs.)

US DOLLAR 4,16,279 2,11,09,524 3,81,127 1,68,57,249GREAT BRITAIN POUND 3,20,181 2,58,57,818 2,50,986 1,78,17,496EURO 1,03,843 70,03,172 96,432 60,13,500


41

29.11 Related Party Disclosure :

a) Associated Company :WPIL Limited

b) Key Management Personnel & their Relatives :

Mr. V N Agarwal Managing DirectorMr. Prakash Agarwal Director – Son of Mr. V. N. AgarwalMrs. Ritu Agarwal Director – Wife of Mr. Prakash Agarwal

Transactions with Related Parties :

Transaction Associated Company Key Management Personnel

Sales & Services 26,00,22,199 —Purchase of Goods 85,58,716 —Rent Received 30,80,000 —Remuneration (Mr. V. N. Agarwal) — 12,00,000Sitting Fees — 10,000

29.12 Segment Reporting :

The Operation of the Company relates to Single Primary Business Segment i.e. Engineering (Steel Casting).Accordingly, there is no primary business segment. However, information about Secondary Segment basedon Geographically locations of the Customers in Domestic & Exports Sales have been provided.

Information about Secondary Segments: - Geographical

Rs. Lakhs(i) Revenue by Geographical Market

– India 4,764.33– Outside India 1,255.82

6,020.15

(ii) Addition to Fixed Assets and Intangible Assets– India 60.45– Outside India —

60.45

(iii) Carrying Amount of Segment Assets– India 7,834.65– Outside India —

7,834.65

29.13 The Company has unabsorbed depreciation and carried forward losses available for set-off under the IncomeTax Act, 1961. However, in view of present uncertainty regarding generation of sufficient future taxableincome, net deferred tax assets at the year end including related debit for the year have not been recognisedin these accounts on prudent basis.


42

29.14 Considering the external and internal impairment indicators, the management is of the opinion that no assethas been impaired as at 31st March 2012. Consequently, no impairment loss has been recognised in thestatement of Profit & Loss for the year ended 31st March 2012.

29.15 The Ministry of Corporate Affairs has notified the Revised Schedule VI on 28th February, 2011 which hasreplaced the existing Schedule VI in respect of Balance Sheet and Profit and Loss Account from the financialyear commencing 1st April 2011. Accordingly the company has adopted the Revised Schedule VI from 1stApril 2011 which does not impact recognition and measurement of principles followed for preparation offinancial statements. However it significantly impacts presentation and disclosures made in the financialstatements. Previous year figures have been reclassified for comparison and conforms to current year’sclassification.

Significant Accounting Policies & Notes on Financial Statements 1 to 29





Directors


43

Notes


44

Notes

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