Download - Jindal Group of Companies

17TH ANNUAL REPORT 2004-2005 

Expanding horizon through the pursuit of perfection. 

MAHARASHTRA SEAMLESS LIMITED 

AN ISO 9001:2000 COMPANY


BOARD OF DIRECTORS 

D.P. Jindal Chairman 

Saket Jindal Managing Director 

U.C. Agarwal 

D.K. Parikh 

S.D. Sharma 

H.K. Khanna 

AUDIT COMMITTEE 

U.C. Agarwal Chairman 

D.P. Jindal 

H.K. Khanna 

COMPANY SECRETARY 

Praveen Mudgal 

AUDITORS 

Kanodia Sanyal & Associates 

Chartered Accountants 

New Delhi 

BANKERS 

State Bank of Patiala 

State Bank of Bikaner & Jaipur 

Standard Chartered Bank 

HDFC Bank Limited 

REGISTERED OFFICE 

Pipe Nagar, Village-Sukeli, 

N.H.17, B.K.G. Road, Taluka Roha, 

Distt. Raigad - 402 126, 

Maharashtra 

CORPORATE OFFICE 

Plot No. 30, Institutional Sector 44, 

Gurgaon – 122 002, 

Haryana 

HEAD OFFICE 

106, Nilgiri Apartments, 

9, Barakhamba Road, 

New Delhi-110 001 

MUMBAI OFFICE 

402, Sarjan Plaza, 

100, Dr. Annie Besant Road, 

Opp. TELCO Showroom, 

Worli, Mumbai - 400 018 

KOLKATA OFFICE 

Sukhsagar Apartment, 

Flat No. 8A, 8th Floor, 

2/5, Sarat Bose Road, 

Kolkata - 700 020 

CHENNAI OFFICE 

3A, Royal Court, 

44, Venkatanarayan Road, 

T. Nagar, 

Chennai - 600 017 

WORKS: 

1. SEAMLESS & ERW PIPES: 

Pipe Nagar, Village - Sukeli, 

N.H.17, B.K.G. Road, 

Taluka Roha, 

Distt. Raigad - 402 126 

Maharashtra 

2. WIND POWER: 

Village Nivkane, Taluka Patan, 

District Satara, 

Maharashtra 

Website: www.jindal.com


CONTENTS 

Page No. 

Chairman’s Statement 3 

Message from the Managing Director 5 

Selected Financial Indicators of last 10 Year 6 

Notice 7-9 

Directors’ Report 10-14 

Corporate Governance Report 15-18 

Shareholders’ Information 18-20 

Management Discussion & Analysis 22-24 

Auditors’ Report 25-27 

Balance Sheet 28 

Profit & Loss Account 29 

Schedules & Notes on Accounts 30-46 

Cash Flow Statement 47 

Proxy Form & Attendance Slip 

Annexed 

1

“ With our established product range upto 7” dia. 

of Seamless Pipes and Tubes, we are now all set 

to accept all requirements upto 14” dia.” 

2

Chairman's 

Statement 

Dear Shareholders, 

The world economy has seen lots of turnarounds in various sectors. In the last one 

year steel industry has witnessed the heights and also the changed trend. Maharashtra 

Seamless continued its path on the progress with the Gross Turnover of Rs.879 crores 

in the financial year 2004-05. 

With our established product range upto 7” of Seamless Pipes and Tubes we are now 

all set to accept all requirements upto 14” in Seamless as our new mill has already 

gone into production in this higher dia range. Now we would meet the requirements of 

the entire range of Pipes in all alloy and non-alloy grades. With the committed teamwork 

we are confident to meet the challenges in the times to come in any market scenario. 

However, we will not stop here. We are fully committed to enhance the scale, 

competitiveness, efficiency and the productivity at all levels and in all areas. With this 

motive only we have already decided to setup our own steel plant in Orissa, which will 

basically feed all of the raw material requirements of Maharashtra Seamless Ltd. 

In line with the growth of the Indian Economy, your Company is also on its way to 

achieve its mission of growth and prosperity. The track record of consistent & impressive 

performance posted by the company year after year speaks about such growth. 

Total Quality Management (TQM), Cost Control and aggressive marketing have become 

integral part of the systems of your company. Currently, the market for Seamless & 

ERW Pipes is growing at a rapid pace. With more emphasis being given on exploration, 

drilling and laying of cross country Line pipes, pipe Industry is having a very promising 

future outlook. The company is confident that with the combination of market growth 

and the expansion project, the company would be able to garner the major chunk of 

the growth in Pipe Industry. 

There is competition from International players like China and East European countries. 

Reduction in Import Duty on pipes and tubes may pose some threat to Indian 

manufacturers in the coming years as Government may go for lower tariff structure in 

the future. Your company is ready to face this challenge. When the competition intensifies 

with price playing a major role, cost management which we are practicing continuously 

can contribute effectively to profitability. The ultimate challenge will be to manage intense 

competition and optimize the benefits of productivity and profitability improvement 

measures. 

Our long-term goal is to maximize returns on shareholders' wealth for our esteemed 

shareholders, which is reflected in the financial performance achieved by the Company. 

We hope to receive the continued support and patronage of all of our associates, which 

will add to our determination to achieve spectacular results in the coming years. 

3 

D.P. Jindal

“The recent discoveries in the country by oil 

exploration companies both in the public and 

private domain have thrown in a substantial 

demand for both seamless and ERW pipes.” 

4

Message 

from the 

Managing Director 

Dear Shareholders, 

Maharashtra Seamless Limited believes in attaining new frontiers of success and 

making its vision transform into reality. The commissioning of the 14” seamless mill is 

in line with the corporate philosophy of unparalleled growth and consolidation of our 

core competence. The appreciation of our stock on the bourses is a true reflection of 

our performance in the last financial year and we wish to continue this trend in the near 

future by diversifying into billet manufacturing as a measure of backward integration 

and to absorb the fluctuation of steel prices. 

The oil & gas sector is particularly booming and showing a promising growth. The oil 

price breaking the $60 per barrel barrier and the appreciation in the rig count worldwide 

is a true reflection of the immense potential of this industry. 

The recent discoveries in the country by oil exploration companies both in the public 

and private domain have thrown in a substantial demand for both seamless and ERW 

pipes. We wish to fulfill this demand by gearing up our facilities and by debottlenecking 

and benchmarking our systems and process. 

Our new corporate office in Gurgaon shall have a state-of-the-art environment with the 

best conferencing & networking facilities and shall improve the productivity of our 

employees and raise their motivation levels. 

Our Joint Venture with Hydril, USA shall provide us a platform 

to market premium connections for high-pressure applications 

in the oil & gas sector. 

We believe in growing with all our stakeholders and have 

thus declared a dividend of 50% for the last financial year. 

Lastly, I would like to acknowledge & appreciate the support; we have received from 

our customers, bankers, suppliers and all our employees who have put in sincere efforts 

in their respective fields. 

Thank you, 

Saket Jindal 

5


SELECTED FINANCIAL INDICATORS OF LAST 10 YEARS 

Particulars 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Equity Dividend 

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

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

6


NOTICE 

Notice is hereby given that the 17th Annual General Meeting of the Members of Maharashtra Seamless Limited will be held on Friday, 

the 9th September, 2005 at 11.30 A.M. at the Registered Office of the Company at Pipe Nagar, Village - Sukeli, N.H.17, B.K.G. Road, 

Taluka Roha, Distt. Raigad-402 126, Maharashtra to transact the following busines : 

ORDINARY BUSINESS 

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

thereon. 

2. To declare dividend. 

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

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

5. To appoint Auditors who shall hold office from the conclusion of this Annual General Meeting until the conclusion of next Annual 

General Meeting and to fix their remuneration. The retiring auditors M/s Kanodia Sanyal & Associates, New Delhi are eligible for 

reappointment. 

SPECIAL BUSINESS 

6. To consider and, if thought fit, to pass with or without modifications, the following Resolution as a Special Resolution. 

RESOLVED THAT pursuant to Clause 49 of the Listing Agreement, Section 309, 310 and all other applicable provisions of the 

Companies Act, if any, the Board of Directors of the Company be and is hereby authorized to decide the payment of sitting fees 

along with any other compensation and / or expenditure in that connection to its non executive directors within the limits as may 

be notified by the Central Government from time to time. 

By order of the Board 

Place : Gurgaon 

Dated : 15th June, 2005 


Company Secretary 

Regd. Office: 

Pipe Nagar, Village Sukeli, N.H.17, 

B.K.G. Road, Taluka - Roha, 


Maharashtra 

7


NOTES: 

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

is annexed hereto and forms part of this Notice. 

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND 

VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER OF THE COMPANY. FORM OF PROXY IS SEPARATELY 

ANNEXED. THE PROXY FORM MUST BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 

48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. 

3. Members / Proxies should bring the attendance slip duly filled in for attending the meeting. 

4. Members are requested to notify immediately any change in their address to the Registrar & Transfer Agent quoting their Folio 

Number to the following address: 

Alankit Assignments Ltd. 

Alankit House, 

2E/21, Jhandewalan Extension, 

New Delhi – 110 055 

5. Members who have multiple ledger folios in identical names or joint names in same order are requested to intimate/send the 

concerned share certificates quoting their ledger folios of such accounts to enable the Registrar & Transfer Agent to consolidate 

all such shareholdings into one folio. 

6. The Register of Members and Share Transfer Books of the Company will remain closed from Thursday, 1st September, 2005 to 

Friday, the 9th September, 2005 (both days inclusive). 

7. Members intending to seek any information on the Annual Accounts at the meeting are requested to inform the company in writing 

at least one week prior to the date of the meeting. 

8. In accordance with the provisions of the Companies Act, 1956, the amount of dividend which remains 

unpaid or unclaimed for a period of 7 years from the date of transfer to Unpaid Dividend Account 

of the Company are transferred to the Investor Education and Protection Fund constituted by the 

Central Government and shareholders are not able to claim any amount of dividend so transferred 

to the fund. 

As such, shareholders who have not yet encashed their dividend warrants are requested in their own 

interest to claim the outstanding dividend before it falls due for transfer to the aforesaid Fund. 

9. Electronic Clearing Service (ECS) Facility: 

(a) Members holding shares in physical form who wish to avail ECS facility, may authorize the Company with their ECS mandate 

in the prescribed form, which can be downloaded from the Company’s website (www.jindal.com) or can be obtained from the 

Corporate Office of the Company. Requests for payment of dividend through ECS should be lodged latest by 25th August, 

2005 to the Company Secretary at Plot No. 30 Institutional Sector - 44, Gurgaon – 122001 Haryana. 

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

respective depository participant. 

10. Reappointment of Directors: 

Shri D.P. Jindal and Shri S. D. Sharma retire by rotation at the Annual General Meeting and being eligible offer themselves for 

reappointment. Brief resumes of the said directors are as under :- 

Name 

Age 

Expertise in specific functional area 

Date of appointment as Director 

of the Company 

Directorship of other companies 

Chairman / Member of Committees 

of other Companies 

Shri D. P. Jindal 

55 Years 

Prominent Industrialist having 

wide business experience 

10.05.1988 

Jindal Pipes Limited 

Jindal Drilling & Industries Limited 

Jindal Aluminium Limited 

Pragaun JAL Educational Organistion 

Chairman - Shareholders / Investors Share 

Transfer cum Grievance Committee 

Of Jindal Drilling & Industries Limited 

Shri S. D. Sharma 

65 Years 

Retired Senior Executive having vast 

experience in commercial areas 

24.03.1995 

-- 

-- 

8


ANNEXURE TO THE NOTICE 

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

ITEM NO. 6 

In terms of the revised clause 49 of the Listing Agreement with the Stock Exchanges, all fees / compensation to be paid to Non- Executive 

directors are to be fixed by the Board and require the prior approval of the shareholders in the general meeting. 

For the purpose of administrative expediency, members are requested to authorize Board of Directors to decide the quantum of sitting 

fee / any other compensation payable to the Non- Executive directors up to the maximum limit prescribed under the Companies Act, 1956, 

as may be amended from time to time, after taking into consideration the expertise and wisdom they bring to the company and their 

contribution towards the performance of the company. 

The Board recommends the resolution for your approval. 

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

By order of the Board 





Regd. Office : 

Pipe Nagar, Village Sukeli, N.H.17, 

B.K.G. Road, Taluka - Roha, 


Maharashtra 

9


DIRECTORS' REPORT 

To the Members, 

Your Directors are pleased to present the Company’s 17th Annual Report alongwith Audited Accounts of the Company for the year ended 

31st March, 2005. 

FINANCIAL RESULTS 

During the year, Gross Turnover of the company increased to Rs. 879 crore from Rs. 569 crore in the previous year - a growth of 54% 

over previous year. The highlights of the financial results are as under :- 

(Rs. in crores) 

Gross Turnover 879.28 569.01 

Profit before Depreciation 136.74 112.06 

Depreciation 10.50 6.98 

Profit Before Tax 126.24 105.08 

Provision for Taxation 

- Current 32.77 33.31 

- Deferred 8.59 0.31 

Profit after Tax 84.88 71.46 

Prior Period Adjustments/ Tax provision written back 0.27 0.29 

Profit After Tax & Adjustments 85.15 71.75 

Balance brought forward from previous year 13.20 12.28 

Profit available for appropriations 98.35 84.03 

Appropriations: 

Transfer to Capital Redemption Reserve - 14.41 

Dividends 

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

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

- Proposed on Equity shares 14.41 4.32 

Tax on Dividend 

Year Ended 

Year Ended 

31.03.2005 31.03.2004 

- Interim - 0.93 

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

- Proposed on Equity Shares 2.02 0.57 

Transfer to General Reserve 65.00 40.00 

Balance carried to Balance Sheet 16.92 13.20 

98.35 84.03 

10


DIVIDEND 

Your directors are pleased to recommend a dividend @ 50% on the paid up share capital of the company for the year 2004 - 2005. 

The proposed dividend including dividend tax will absorb Rs.16.43 crore. 

RESULTS OF OPERATIONS 

Your Directors are pleased to inform that the company’s performance has been commendable during the year. The healthy growth for 

the Company’s products and its operating and cost efficiencies have led to a steady increase in turnover and profits. The profit before 

tax for the year was Rs.126 crore as against Rs.105 crore in the previous year showing a growth of 20 % over previous year. The profit 

after tax & adjustments for the year had been Rs.85 crore as against Rs.72 crore in the previous year. 

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

of the Profits Before Tax of the Company. 

STATUS OF EXPANSION PROJECT 

During the year under review your company has completed an expansion project to manufacture seamless pipes of higher diameter from 

7” to 14”OD . The expansion project has lead to an increased installed capacity by further one lac tonne. The company now would be 

able to get major share of higher dia seamless pipes market which is currently being regulated by imports. This would not only increase 

its overall market share in Seamless Pipes & Tubes Industry but would also lead to an improved financial performance in the coming years. 

BACKWARD INTEGRATION PROJECT 

The Company is implementing a strategic Backward Integration Project at Orissa to manufacture Billets, the main raw material for Seamless 

Pipes having a capacity of 5,00,000 TPA. The Project would be completed in two phases by the end of year 2007 at an aggregate capital 

outlay of Rs.550 crore and would be meeting its captive requirement fully. Requisite Land for the project has been allotted by the 

Government of Orissa. Project Enginnering Consultant has been appointed and various applications to the Govt. Authorities for various 

infrastructure needs have been filed. The Project, on implementation will further improve its competitive position as a low cost producer 

of seamless pipes and have a positive impact on profitability in the long run and ensure smooth availability of raw material 

JOINT VENTURE 

During the year the company has entered into a Joint Venture with USA based Hydril LP to manufacture Premium Joint Connections. 

The Joint Venture is likely to commence operations during the year and will exclusively source Seamless Pipes from Maharashtra 

Seamless. The Joint Venture will facilitate Company’s consolidation in both Domestic and International market of Seamless Pipes by 

going into new export avenues. Your company’s presence in the seamless business would consolidate on global basis which would have 

a positive bearing on the improved financials and margins. 

CREDIT RATING 

Your Directors are pleased to inform the members that your company has been assigned AA Credit Rating by the Credit Rating Agency, 

CRISIL Limited and `AA (ind)’ by Fitch Rating India Pvt. Ltd. in relation to Rs. 150 million Long Term Debt Program of the Company. 

FCCB ISSUE 

Your Company is planning to Launch an FCCB issue of USD 75 million in the current year to part finance the backward integration steel 

billet project. The necessary shareholders approval for the issue was obtained in the Extra Ordinary General Meeting dated 22.03.2005. 

Your company has also appointed Deutsche Bank as Lead Bank and Sole book runner for the issue. 

INCREASE IN AUTHORISED SHARE CAPITAL 

The Authorised Share capital of the company has been increased from Rs. 55 crore to Rs. 60 crore by addition of 50 lacs Equity Shares 

of Rs. 10 each. The necessary shareholder’s approval for the increase was obtained in the Extra Ordinary General Meeting held on 22nd 

March, 2005. 

DIRECTORS 

Shri D.P. Jindal and Shri S.D. Sharma, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being 

eligible, offer themselves for reappointment. 

DIRECTORS' RESPONSIBILITY STATEMENT 

As required under Section 217(2AA) of the Companies Act, 1956, your Directors state : 

(i) that in the preparation of the Annual Accounts, the applicable accounting standards have been followed; 

(ii) that the accounting policies selected and applied are consistent and the judgements and estimates made are reasonable and 

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

Company for that period; 

11


(iii) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions 

of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 

and 

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

CORPORATE GOVERNANCE 

As per the requirement of Clause 49 of the Listing Agreement with the Stock Exchanges, a Compliance Report on Corporate Governance 

has been annexed as part of the Annual Report. 

AUDITORS 

M/s. Kanodia Sanyal & Associates, Chartered Accountants, the auditors of the Company are retiring at the conclusion of the ensuing 

Annual General Meeting and are eligible for reappointment. 

FIXED DEPOSITS 

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

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS 

AND OUTGO 

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 Annexed hereto. 

PARTICULARS OF EMPLOYEES 

There is no employee in the Company drawing remuneration more than the limits prescribed under Section 217 (2A) of the Companies 

Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. 

ACKNOWLEDGEMENT 

The Board expresses its grateful appreciation of the assistance and co-operation received from Central Government, State Government 

of Maharashtra, SICOM, MSEB all other Government agencies, ONGCL, OIL, Banks and Shareholders. 

Your Directors wish to place on record their deep sense of appreciation for the devoted contribution made by the employees at all levels. 

For & on behalf of the Board 

Place : Gurgaon D. P. JINDAL 


Chairman 

ANNEXURE TO DIRECTORS' REPORT 

INFORMATION AS PER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (DISCLOSURE OF 

PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS' REPORT 

FOR THE YEAR ENDED 31ST MARCH, 2005. 

A. CONSERVATION OF ENERGY 

a) Energy Conservation measures taken. 

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

and recovering more heat from the furnace by changing the material loading pattern. 

2. The energy meters have been installed at different locations to improve the general awareness regarding power consumption 

at respective locations. The capacitor banks were splitted in zones for reducing power wastages in capacitor banks. 

3. Frequency variable drives have been introduced wherever motors are not fully loaded resulting reduction in power 

consumption. 

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

increase in output & reduction of power and fuel consumption. 

5. Energy conservation in the form of using furnace oil instead of LDO to reduce the cost is already implemented at 14” mill 

and 7” mill. 

b) Additional investments and proposals, if any, being implemented for reduction of consumption 

of energy. 

Continuous measures are being taken for reduction of consumption of energy. The Company is using the alternate fuel LDO / FO 

which is an alternative source of fuel in place of HSD. During the year, no specific investment has been earmarked 

12


c) Impact of measures at a&b above for reduction of energy consumption and consequent impact 

on the cost of production of the goods. 

The measures taken by the Company have resulted in substantial reduction of power and fuel consumption. 

d) Total energy consumption and energy consumption per unit of production. 

As per Form-A annexed. 

B. TECHNOLOGY ABSORPTION 

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

C. FOREIGN EXCHANGE EARNINGS AND OUTGO 

f) Activities relating to exports; initiatives taken to increase exports; development of new export 

markets for products and services; and export plans. 

The Company's business does not directly result in physical exports but results in import substitution and conservation of 

valuable foreign exchange. 

g) Total foreign exchange used and earned 

Used - Rs. 127.38 crore 

Earned * - Rs. 84.05 crore 

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

the country. 

FORM A 

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO : 

CONSERVATION OF ENERGY 

A. POWER AND FUEL CONSUMPTION 

Particulars Year Ended Year Ended 

31.03.2005 31.03.2004 

1. Electricity Purchased 

Units (KWH in lacs)* 414.82 365.85 

Total Amount (Rs. in lacs) 1787.03 1605.71 

Rate Per Unit (Rs.) 4.31 4.39 

* Includes 100.82 lacs (previous year 93.49 lacs) units 

generated by Wind Power Project of the Company. 

2. Fuel Consumption 

a) LDO 

Quantity (KL) 15433.72 13263.00 

Total Amount (Rs.in lacs) 3146.64 2248.72 

Average Rate per KL (Rs.) 20388.07 16954.80 

b) HSD 

Quantity (KL) 279.40 275.67 


Average Rate per KL (Rs.) 24491.35 22718.48 

c) LPG 

Quantity (MT) 692.26 526.74 


Average Rate Per MT (Rs.) 26279.40 23549.39 

d) FURNACE OIL 

Quantity (MT) 890.46 - 

Total Amount (Rs. in lacs) 100.69 - 

Average Rate Per MT (Rs.) 11307.30 - 

3. Other / Internal generation / Wind Power 

(Kwh in lakhs) 108.77 96.79 

13


B. CONSUMPTION PER UNIT OF PRODUCTION 

a) SEAMLESS PIPES (MT) 

Electricity (Units) 287.560 272.071 

LDO (KL) 0.126 0.117 

HSD (KL) 0.002 0.002 

LPG (MT) 0.006 0.005 

b) ERW PIPES (MT) 

Electricity (Units) 73.726 78.972 

HSD (KL) 0.001 0.001 

FORM B 

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO : 

RESEARCH AND DEVELOPMENT (R&D) 

1. Specific areas in which R&D carried out by the Company 

i) To improve the pipe quality a new concept of quencing by immersion type is under implementation. 

ii) R&D activities of the Company remained centered around the development of new products, improvement of existing products 

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

2. Benefits derived as a result of above R&D 

As a result of the R&D activities, new products were developed, existing products and process were improved and costs were 

reduced through energy conservation and savings in the use of materials. 

3. Future plan of action 

Concentration will remain in the development of new sizes and upgradation of the quality. The high priority will be given to the 

upgradation of technology, energy conservation, cost reduction and commission and establish the sizes for 14” Pipe Mill. 

4. Expenditure on R&D 

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

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 

1. Efforts in brief made towards technology absorption, adaptation and innovation. 

The production / Quality Control department absorbs the technology received from the collaborators, adopting the same to local 

conditions and uses its own experience to effect improvements to the product and manufacturing process. 

2. Benefits derived as a result of the above efforts etc. 

Through above measures, the Company has continued to achieve product improvement / development, process improvement / 

development, commercialisation of technology, cost reduction, import substitution etc. 

3. In case of imported technology (Imported during the last 5 years reckoned from the beginning of 

the financial year) prescribed information may be furnished: 

Sl. Technology Imported Year of Import Has Technolog If not fully absorbed, 

No. been fully areas where this 

absorbed has not taken place 

1 Technical know-how for machining, testing 2000 - 01 Yes Not applicable 

& otherwise forming threaded connections 

from M/s Hydril Company, USA. 

2 Technical know-how and process 2003 - 04 Implemented during 14” Hot Mill 

detail for plug mill and classical rellers 

the year 

were received from USA 

14


CORPORATE GOVERNANCE REPORT 

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

A. MANDATORY REQUIREMENTS 

1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE 

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

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

of the Company; 

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

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

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

2. BOARD OF DIRECTORS 

COMPOSITION AND CATEGORY 

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

- 1 Promoter, Executive Director 

- 1 Promoter, Non-executive Director 

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

The composition of Board of Directors and also number of other Board of Directors or Committees of the Board in which he is a 

member or Chairman are as under :- 

Name of Director Category of Directorship No. of Other No. of Other 

Directorships Committee of Board 

(other than Maharashtra 

Seamless Limited) 

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

Chairman 

Sh. Saket Jindal Promoter, Executive 2 - 

Managing Director 

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

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

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

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

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

During the financial year ended 31st March, 2005, seven Board Meetings were held on 20th April, 2004, 27th May, 2004, 22nd July, 

2004, 20th September, 2004, 26th October, 2004, 20th January, 2005 and 11th February, 2005. 

15


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

Name of the Directors Board Meetings Attended Attendance at the last 

AGM held on 20.09.2004 

Sh. D.P. Jindal 5 Yes 

Sh. Saket Jindal 5 No 

Sh. U.C. Agarwal 6 No 

Sh. D.K. Parikh 6 Yes 

Sh. S.D. Sharma 6 No 

Sh. H.K. Khanna 7 Yes 

3. AUDIT COMMITTEE 

BROAD TERMS OF REFERENCE 

The terms of reference of this Committee covers the matters specified for Audit Committee under Clause 49 of the Listing Agreement 

as well as in Section 292A of the Companies Act, 1956. 

The terms of reference of Audit Committee include inter-alia the following:- 

- to review the quarterly, half-yearly and annual financial statements before submission to the Board for approval; 

- to discuss with Auditors about Internal Control System and to consider their observations and follow-up; 

- to ensure compliance of Internal Control System; 

- to investigate on any matter referred by the Board; 

- to make recommendation to the Board on any matter relating to the financial management of the Company, including the 

Audit Report. 

COMPOSITION 

The Audit Committee of the Company comprises 3 Directors of which all are Non-executive Directors, 2 are Independent Directors 

and 1 Promoter, Non-executive Director. All these Directors possess knowledge of Corporate Finance, Accounts and Company Law. 

The Chairman of the Committee is a Non-executive Independent Director nominated by the Board. The Statutory Auditors and 

Internal Auditors are also invitees to the meetings. The Company Secretary acts as a Secretary to the Committee. 

The minutes of the Audit Committee Meetings are noted by the Board of Directors at the subsequent Board Meeting. 

The constitution of the Audit Committee is as follows: 

Name of the Members 

Sh. U.C. Agarwal 

Sh. D.P. Jindal 

Sh. H.K. KHANNA (w.e.f. 27.04.2005) 

Category 

Chairman, Independent, Non-executive 

Member, Promoter, Non-executive 

Member, Independent, Non-executive 

MEETINGS AND ATTENDANCE 

During the financial year ended 31st March, 2005, four Audit Committee Meetings were held on 20th April, 2004, 22nd July, 2004, 

26th October, 2004 and 20th January, 2005. 

The attendance at Audit Committee Meetings was as under :- 


INTERNAL AUDITORS 

The Company has appointed a firm of Chartered Accountants as Internal Auditors to review the internal control systems of the 

Company and to report thereon. The reports of the Internal Auditors are reviewed by the Audit Committee. 

16 

No. of Meetings Attended 

Sh. U.C. Agarwal 4 

Sh. D.P. Jindal 3 

Sh. S.D. Sharma (upto 27.04.2005) 4


4. REMUNERATION OF DIRECTORS 

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

(Rs.) 

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

other benefits 

1 Sh. D.P. Jindal - - 20,000 20,000 

2 Sh. Saket Jindal 4,80,000 1,80,000 - 6,60,000 

3 Sh. U.C. Agarwal - - 25,000 25,000 

4 Sh. D.K. Parikh - - 15,000 15,000 

5 Sh. S.D. Sharma - - 25,000 25,000 

6 Sh. H.K. Khanna - - 17,500 17,500 

5. SHAREHOLDERS / INVESTORS SHARE TRANSFER CUM GRIEVANCE COMMITTEE 

FUNCTIONS 

The Board has constituted a Committee of three members under the Chairmanship of a Non-executive Director. The Committee 

meets generally twice a month, to approve inter-alia, transfer / transmission of shares, issue of duplicate share certificates and 

reviews the status of investors’ grievances and redressal mechanism and recommend measures to improve the level of investor 

services. Details of shares transfers/transmissions approved by the Committee are placed at the Board Meetings from time to time. 

COMPOSITION 

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


Sh. D.P. Jindal 

Sh. Saket Jindal 

Sh. H.K. Khanna (w.e.f.27.04.2005) 

Category 

Chairman, Promoter, Non-executive 

Member, Promoter, Executive 

Member, Independent, Non-executive 

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

COMPLIANCE OFFICER 

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

DETAILS OF SHAREHOLDERS’ COMPLAINTS RECEIVED & REPLIED TO THE SATISFACTION OF SHAREHOLDERS 

The Company received 208 complaints of shareholders through SEBI and Stock Exchanges, which were duly replied & attended. 

6. GENERAL BODY MEETINGS 

Location and time, where last three Annual General Meetings were held is given below:- 

Financial year Date Location of the Meeting Time 

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

at Pipe Nagar, Raigad 

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


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


An Extra Ordinary General Meeting was held on 22nd March, 2005 at 1.00 P.M. at the Registered Office of the Company at Pipe 

Nagar, Raigad. 

No Special Resolutions were put through postal ballot last year. 

17


7. DISCLOSURES 

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

subsidiaries or relatives that may have potential conflict with the interest of the Company at large. Transactions with related 

parties are being disclosed separately in the Annual Report. 

b. During the last three years, there were no strictures or penalties imposed either by SEBI or Stock Exchanges or any statutory 

authority for non-compliance of any matter related to the capital markets. 

8. MEANS OF COMMUNICATION 

The company’s financial results are forthwith communicated to all the Stock Exchanges with whom the Company has listing 

arrangements as soon as they are approved and taken on record by the Board of Directors of the Company. Thereafter the results 

are published in the leading newspapers, namely, Financial Express, Business Standard and Tarun Bharat. 

9. GENERAL SHAREHOLDERS INFORMATION 

Detailed information in this regard provided in the shareholders information section forms part of this Report. 

B 

NON-MANDATORY REQUIREMENTS 

1) CHAIRMAN OF THE BOARD 

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

2) REMUNERATION COMMITTEE 

The Company does not have any Remuneration Committee. There are six members in the Board and only Managing Director 

gets remuneration which is being approved by the Board of Directors and shareholders. 

3) SHAREHOLDERS RIGHTS 

As the Company’s Financial results are published in English newspapers having circulation all over India and in a Marathi 

newspaper widely circulated in Maharashtra, the same are not sent to each household of shareholders. 

4) POSTAL BALLOT 

The provisions relating to Postal Ballot will be complied with in respect of matters wherever applicable. 

SHAREHOLDERS INFORMATION 

Registered Office 

Date of Book Closure 

Dividend Payment Date 

: Pipe Nagar, Village Sukeli, N.H.17, B.K.G. Road, 

Taluka - Roha, Distt. Raigad, Maharashtra – 402 126 

Annual General Meeting : Date and Time : 9th September, 2005 at 11.30 A.M. 

Venue : Registered Office of the Company at 

Pipe Nagar, Village Sukeli, N.H.17, B.K.G. Road, 

Taluka-Roha, Distt.Raigad, Maharashtra – 402 126 

Financial Calendar (Tentative): 

* Financial reporting for the quarter ended 30th June, 2005 : July, 2005 

* Financial reporting for the quarter ending 30th September, 2005 : October, 2005 

* Financial reporting for the quarter ending 31st December, 2005 : January, 2006 

* Financial reporting for the quarter ending 31st March, 2006 : April, 2006 

: 1st September, 2005 to 9th September 2005 (both days inclusive) 

: 15th September, 2005 onwards 

Listing on Stock Exchanges : 

Equity Shares of the Company are listed on Stock Exchanges at Mumbai, NSE, Kolkata, Delhi and Chennai. 

Stock Code : BSE - 500265 

NSE - MAHSEAMLES 

NSDL / CDSL – ISIN - INE 271B01017 

BLOOMBERG - MHS@IN 

REUTERS - MHSM.BO 

18


Stock Market Data 

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

B S E 

N S E 

MONTH HIGH (Rs) LOW (Rs) HIGH (Rs) LOW (Rs) 

April 2004 227.00 165.00 228.50 167.70 

May, 2004 218.00 172.25 220.00 167.10 

June 2004 200.00 182.75 200.00 180.00 

July 2004 213.90 190.85 212.00 189.10 

August 2004 249.00 195.00 220.00 194.50 

September 2004 236.50 202.05 250.00 202.00 

October 2004 264.00 217.05 264.00 218.25 

November 2004 275.00 230.10 272.00 236.00 

December 2004 340.00 253.50 345.00 254.10 

January 2005 323.35 263.10 323.00 265.00 

February 2005 375.00 297.00 367.85 297.10 

March 2005 365.00 312.00 353.80 312.50 

Share Performance Chart 

400 

350 

300 

250 

200 

150 

100 

500 

APR,04 

MAY,04 

JUNE,04 

JULY,04 

AUG,04 

SEP,04 

OCT,04 

NOV,04 

DEC,04 

JAN,05 

Price on BSE on the closing day of month 

FEB,05 

MAR,05 

Registrar and Share Transfer Agents: 

The Company has appointed Alankit Assignments Limited having its office at Alankit House, 2E/21, Jhandewalan Extension, New Delhi 

– 110 055 as Registrars & Transfer Agent for physical transfer and demat segment. 

Share Transfer System: 

Share transfer request received in physical form are registered within 15 days from the date of receipt and demat requests are normally 

confirmed within prescribed time on the date of receipt. 

Distribution of shareholding as on 31st March, 2005 

No.of Equity No.of % of No.of % of 

Shares held Shareholders shareholders Shares held Shareholding 

Upto 500 21904 97.00 2634515 9.14 

501 to 1000 347 1.54 280374 0.97 

1001 to 2000 132 0.59 193292 0.67 

2001 to 3000 40 0.18 105532 0.37 

3001 to 4000 16 0.07 58153 0.20 

4001 to 5000 21 0.09 101533 0.35 

5001 to 10000 45 0.20 348534 1.21 

10001 and above 75 0.33 25100627 87.09 

GRAND TOTAL 22580 100.00 28822560 100.00 

19


Shareholding Pattern as on 31st March, 2005 

CATEGORY No.of Shares held % Age of Holding 

A. Promoter’s holding 13,129,135 45.55 

B. Non-Promoters holding 

1. Institutional Investors 

Mutual Funds, UTI and Banks 2,169,765 7.53 

2. Others 

i. Private Corporate Bodies 9,408,047 32.64 

ii. Indian Public 3,594,199 12.47 

iii. NRIs / OCBs 521,414 1.81 

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

Grand Total 28,822,560 100.00 

Dematerialisation of Shares and Liquidity 

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

form. 

The equity shares of the Company are actively traded on BSE and NSE. 

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

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

Plant Locations: 

1. Seamless & ERW Pipes : Pipe Nagar, Village Sukeli, 

N.H.17, B.K.G. Road, Taluka-Roha, 

Distt.Raigad – 402 126, Maharashtra 

2. Wind Power : Village Nivkane, Taluka Patan, 

District Satara, Maharashtra 

For any assistance regarding dematerialisation of shares, share transfers, transmissions, change of address and any other query relating 

to the shares of the Company, please write to Company or Registrar and Transfer Agent at : 

Alankit Assignments Limited, 

Alankit House, 

2E/21, Jhandewalan Extension, New Delhi- 110 055 

Phone : 011-51540060 – 63 

Fax : 011-51540064 

E-mail : rta@alankit.com 

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

20

AUDITORS’ CERTIFICATE 

To The Members of 

Maharashtra Seamless Limited 

We have examined the compliance of conditions of Corporate Governance by Maharashtra Seamless Limited, for the year ended on 

31st march 2005, as stipulated in Clause 49 of the Listing Agreement of the said company with stock exchange(s). 

The compliance of conditions of the Corporate Governance is the responsibility of the management. Our examination was limited to 

procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate 

Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. 

In our opinion and to the best of our information and according to the explanation given to us, we certify that the Company has complied 

with the conditions of Corporate Governance as stipulated in Clause 49 of the said Listing Agreement. 

As required by the Guidance Note issued by the Institute of Chartered Accountants of India we have to state that in respect of investor 

grievances received during the year ended 31st march 2005, no investor grievance are pending against the Company exceeding one 

month as per record maintained by the Company which are presented to the shareholder / investor Grievance Committee. 

We further state that such compliance is neither an assurance as to the future viability of the Company, nor the efficiency or effectiveness 

with which the management has conducted the affairs of the Company. 

For KANODIA SANYAL & ASSOCIATES 


Place : New Delhi 


R.K Kanodia 

Partner 

Membership No. 16121 

21


MANAGEMENT DISCUSSION AND ANALYSIS 

Maharashtra Seamless enjoys leadership in Seamless Pipe industry, a higher and Capital intensive and technology driven industry. The 

company enjoys enviable position in all segments of Seamless and ERW Pipes industry with a limited domestic competition. 

Both Seamless and Higher Dia ERW Pipes find major applications in Hydrocarbon and Infrastructure sectors. Besides, the products also 

find applications in various other Industries such as Fertilizers, Boilers, Automotives and General Engineering. 

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

Oil & Gas Sector is heading for robust growth in both domestic as well as international market, which would result in substantial growth 

for Pipes and Tubes Industry. Besides, the spurt in infrastructure sector would further augment demand for Seamless and ERW Pipes. 

In Oil & Gas Sector, apart from laying Cross Country Linepipes, Exploration and Drilling activities are witnessing an unprecedented growth 

in both domestic as well as international market. Recent discoveries of Natural Gas on East Coast will necessitate laying of pipe lines 

from the East Coast to major demand centers in rest of the country. It is expected that the country’s pipes line net work will get doubled 

from the one existing over the next five years. Pipelines are the most cost effective mode of transportation, globally, for petroleum products. 

Further domestic refining capacity is also expected to increase, which will boost the demand for pipes. Strong growth expected in 

Infrastructure and Power sectors would also be one of the growth driver for seamless pipes industry. The boom witnessed in construction 

and housing sector will further lead to substantial demand for the ERW Pipes. 

Besides catering to Indian market, the products of the Company are being exported to USA, Kuwait, Bangladesh, Singapore, Australia, Indonesia, 

Dubai, Myanmar, Mauritius, Iran, Saudi Arabia and African Region among others. The trend of growth in international markets is likely to go up further. 

Healthy cash accruals coming from steady growth in business and increase in revenues with conservative debt policies have enabled 

the company to have one of the highest credit ratings that are amongst the best in the Industry. Both Credit Rating agencies viz. CRISIL 

and FITCH have awarded AA Rating with a positive stable outlook to the company for its long term debt programme. 

OPPORTUNITIES & THREATS 

With more focus being given to Oil & Gas sector by the Govt. of India, the demand from this sector is likely to boost further. Apart from 

that, there is also huge export potential of seamless pipes in the global market. With the completion of expansion project, the company 

has rightly poised itself to meet growing demand of its product in both India and International Market. The strong growth expected in 

Infrastructure and other allied sectors would also push up and provide substantial boost to Seamless Pipes industry. Boom in Power, 

Water supply, Construction and Housing sector will further lead to substantial demand for the Company’s Seamless and ERW Pipes. 

Competition from international players may pose some pricing pressures for the company’s products. Reduction in Import Duty on pipes 

and tubes may also affect margins for the Company. 

Company’s margins are dependent on steel price movements. Any steep increase in Input costs may affect operating margins adversely. 

The company is currently implementing its backward integration project of manufacturing round steel billets. This would not only insulate 

the company against any price escalation risk on its input, but would also assure regular supplies of right quality of billets for its seamless plant. 

FUTURE OUTLOOK 

Hydrocarbon Sector is one of the largest consumer of Seamless Pipes in India as well as in international market. The outlook for the sector is 

strongly linked to growth in Exploration and Production (E&P) activities in both domestic and international market which is being driven up by 

strong crude oil prices. The company expects crude oil prices to remain high in the near future, which will push up the demand for its products. 

Demand in domestic market is, however, relatively insulated from crude oil price movements, as there is currently significant low levels of domestic 

production of oil and gas. This has prompted GOI to focus on self reliance in Oil and Gas sector by inviting private players as well. 

Apart from E&P activity, there is also significant interest in deep sea drilling. Continuous high crude oil prices are spurring players like 

ONGC, Reliance industries etc. to make substantial investments in deepwater drilling. Moreover, strong growth expected in Infrastructure, 

power, construction and housing sector will only lead to substantial demand. With the completion of its higher dia seamless plant, the 

Company is well positioned to meet the growing requirement of the market. 

SEGMENT-WISE PERFORMANCE 

The Company has primarily three segments – Seamless, ERW and Wind Power. All the three segments contribute positively to the 

profitability. Seamless Pipes Division constitutes 65% of turnover of the Company. The contribution of the Seamless Pipes Division is 

over 78% of the total Profit Before Tax. ERW Division, constitutes around 34% of turnover of the company. 7 MW Wind Power Project 

of the Company is meeting around 26% of Power requirement and has helped in reducing over all cost of power. The company is also 

enjoying various fiscal incentives from the state of Maharashtra. 

22


FINANCIAL PERFORMANCE 

During the year the company has shown commendable growth. Turnover of the company increased to Rs. 879 crore from Rs. 569 crore in 

the previous year – a growth of 54%. The profit before tax for the year was Rs. 126 crore as against Rs. 105 crore in the previous year 

showing a growth of 20%. The profit after tax & adjustments for the year had been Rs. 85 crore as against Rs. 72 crore in the previous year. 

FINANCE COST 

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

SHARE CAPITAL 

Share Capital of the company comprises Equity Share Capital of Rs. 28.82 crore. The Authorised share capital of the Company has been 

increased form Rs. 55 Crore to Rs. 60 Crore by addition of 50 lac equity shares of Rs.10/- each. 

RESERVES & SURPLUS 

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

EARNING PER SHARE 

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

MAHARASHTRA SEAMLESS’S APPROACH TO BUSINESS 

MSL’s Vision is to; 

* Maintain & strengthen leadership position in Seamless Industry with continued focus on innovation and value addition. 

* A highly respected industry leader with which all stakeholders are proud to be associated. Constantly endeavour to make all its 

stakeholders and customers to be proud of their association with the company. 

All manufacturers provide some form of value to their customers – MSL aspires to be the partner of choice for its Seamless and ERW 

pipe customers through adding extra value to its customers than other competitors. 

MSL has a wide range of stakeholders including its shareholders, the investment community, customers, suppliers, employees & their 

families and the local community within which its operation are situated. MSL always strives to make all its stakeholders proud of their 

relationship with the company. 

Business strategy that will take the company towards its Vision is : 

* Deliver better value products to customers 

* “Solution partnership strategy” through proactive approach towards customers 

* Constant upgradation of technology so as to expand product applications and highest quality standards. The only true and ultimate 

measure of MSL’s success is the extent to which it improves the business performance of its customers. The way in which MSL 

strives to achieve this is through its “Solutions Partner strategy” wherein MSL and its customers: 

* Work in partnership to address performance improvement opportunities of highest priority to the customer. 

* Combine customer’s expertise with MSL’s proprietary technology, process and product application knowledge. 

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

AN ORGANISATONAL CULTURE BASED ON KEY VALUES 

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

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

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

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

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

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

performance and customer satisfaction. 

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

23


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

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

9. Continuous Improvement – pursuit of excellence and highest standards of quality through learning, innovation and the search 

for best practice is a journey without end. 

10. Safety, Health and the Environment – protection of the health and safety of all people who have a relationship with MSL 

is critical. MSL must ensure that its activities have no negative impact on the environment in which its products are manufactured 

or used. Infact through various local community programmes MSL continues to provide better quality of life to surroundings. 

TOTAL QUALITY MANAGEMENT 

The very foundation of MSL’s activities is Total Quality Management. TQM means that all employees strive for excellence in every aspect of 

the company’s operations. MSL is an organization constantly seeking better ways of doing things to improve quality, efficiency and to reduce 

cost and thereby ultimately to provide greater customer satisfaction. TQM will be part of every activity and every process that the company 

operates, an integral part of the way that every employee works. The Company is accredited to the international ISO :9001 :2000 standards. 

KEY FEATURES OF THE COMPANY’S PERFORMANCE DURING THE YEAR WERE: 

* Record turnover and profits. 

* Continued focus on cost effectiveness 

* Prudent management of working capital. 

* Strong cash generation, thereby making sufficient provision for future capital investments, enabled the company to reward its 

shareholders with record dividends. 

INTERNAL CONTROL SYSTEMS 

The company has strong systems of internal controls and procedures commensurate with the size and nature of its business. These 

procedures are designed to ensure the following : 

* that all assets and resources are optimized, used efficiently and are adequately protected. 

* that all internal policies and statutory guidelines are complied with. 

* Transparency and timely reporting of financial reports and management information. 

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

HUMAN RESOURCES 

During the year company has added new qualified professionals and also maintained high motivation through teamwork, collaboration 

and multi skill development opportunities i.e. being able to contribute to all parts of the production process. 

At the very heart of MSL’s success and its ability to deliver customer satisfaction is the considerable skill and motivation of its employees. 

On behalf of all the company’s stakeholders who benefit from the hard work of the employees, the Board would like to express its sincere 

appreciation and gratitude. 

ENVIRONMENT CONSCIOUSNESS 

The Company is conscious of its responsibility towards creating, maintaining and ensuring a safe and clean environment. Strict adherence 

to all regulatory requirements and guidelines is maintained continuously. The Company stresses strict compliance with all applicable rules 

and regulations and therefore takes measures on continuous basis for effective implementation of environment management system with 

focus on minimization of water resource utilization, reduction in energy consumption & waste generation and other environment friendly 

measures. The Company also takes continuous measures for social development by catering to the basic needs of health, education, 

supply of water to nearby villages, housing for staff and labour and creating employment opportunities. 

24

AUDITORS’ REPORT 

To The Members of 

Maharashtra Seamless Limited 

We have audited the attached Balance Sheet of M/S MAHARASHTRA SEAMLESS LIMITED as at 31st March 2005 and also the annexed 

Profit and Loss Account and the Cash Flow Statement for the year ended on that date (together referred to as ‘financial statements’). 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these 

financial statements based on our audit. 

We have conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we 

plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 

An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also 

includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall 

financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 

As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A), 

of the Companies Act 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said order. 

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

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes 

of our audit. 

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination 

of such books. 

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of 

account. 

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash flow Statement dealt with by this report have been prepared 

in compliance with the Accounting standards referred to in Sub Section (3C) of Section 211 of the Companies Act, 1956. 

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, we report 

that none of the said directors are disqualified as on 31st March 2005, from being appointed as directors in terms of clause (g) of 

sub-section (1) of Section 274 of the Companies Act, 1956. 

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read 

together with significant accounting policies and notes thereon in Schedule ‘20’ give the information required by the Companies Act, 

1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: 

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

ii. 

iii. 

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

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





R.K Kanodia 

Partner 


25

ANNEXURE TO AUDITORS’ REPORT OF MAHARASHTRA SEAMLESS LIMITED 

(Annexure referred to in our report of even date) 

1. (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. 

(b) The company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having 

regard to the size of the Company and the nature of its assets. As explained to us, the management during the year has 

physically verified all the fixed assets of the Company and no material discrepancies between the book records and the physical 

verification were noticed on such verification. 

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

2. (a) As explained to us, the inventories of finished goods, semi finished goods, stores, spare parts and raw materials except raw 

material in transit, lying with the third parties, have been physically verified by the management during the year. In our opinion, 

the frequency of verification is reasonable. 

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventories 

followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. 

(c) The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed 

on physical verification of inventory as compared to the book records. 

3. In respect of loans, secured or unsecured, granted or taken by the company to / from companies, firms or other parties covered in 

the register maintained under section 301 of the Companies Act, 1956: 

(a) The company has granted loans to one Company. The maximum amount involved during the year was Rs. 353,597,327/- and 

the year-end balance of loan granted to such company was Rs. 10,599,636/-. The company has taken loan from two companies. 

The maximum amount involved during the year was Rs. 535,205,307/-and the year end balance of loan taken from such 

companies was Rs.21,385,591/-. 

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions 

are not prima facie prejudicial to the interest of the company. 

(c) In respect of loans granted by the company the interest payments are regular and the principal amounts are being received 

/renewed on the due dates. In respect of loans taken by the company, the interest payments are regular and the principal 

amount is repayable on demand. 

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

4. In our opinion, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its 

business for the purchase of stores, raw material including components, plant and machinery, equipment and other assets, and for 

the sale of goods. Further, on the basis of our examination of the books and records of the company in accordance with the generally 

accepted auditing practices, we have neither come across, nor have we been informed the existence of major weakness in the 

internal control procedures and systems. 

5. (a) As per the audit procedures applied by us, and according to the information and explanations given to us by the management, 

the transactions which are required to be entered in the register maintained under section 301 of the Act have been so entered. 

(b) As per the audit procedures applied by us and as per the information and explanations given to us, with respect to the 

transactions as entered in the register maintained under section 301, exceeding the value of five lac rupees in respect to any 

party during the financial year, the prices at which these have been made are reasonable having regard to the prevailing, 

market prices at that time. 

6. According to the information and explanations given to us, the company has not accepted any deposits during the year from the 

public within the provisions of Section 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposit) rules 

1975 have been complied with. 

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

8. We have broadly reviewed the cost records maintained by the company pursuant to the order made by the Central Government 

for the maintenance of cost records, u/s 209(1)(d) of the Companies Act, 1956 and are of opinion that prima –facie the prescribed 

records and accounts have been maintained by the company. However, we have not made a detailed examination of these records 

to verify whether they are accurate or complete. 

9. (a) The company is regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection 

Fund, Employees State Insurance, Income-Tax, Sales Tax, Wealth-tax, Custom Duty, Excise Duty, Cess and other statutory 

dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed 

amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2005 for a period of more than six months 

from the date of becoming payable. 

26

(b) 

According to the information and explanations given to us, details of dues of income tax, Sales tax, Custom Duty, Wealth Tax, 

Excise Duty and Cess which have not been deposited as on 31st March, 2005 on account of any dispute are given below : 

Name of 

the Statue 

Sale Tax Act 

Income Tax Act 

1961 

Centarl Excise & 

Customs act 

Nature of Dues 

Demand for 

Sales Tax 

Demand for 

Tax Liability 

Demand for 

Excise Duty 

Amount 

(Rs. in Lacs) 

4.48 (Out of the above 

Rs. 2.00 lacs have 

been deposited) 

264.37 (Out of the 

above Rs. 75.00 lacs 

have been deposited) 

Period of which the 

amount relates 

Forum where 

dispute is pending 

1992-1993 Maharashtra Sales Tax 

Authority (Appellate Tribunal) 

2001- 2002 CIT (Appeal), 

New Delhi 

9.06 Jan. 98 To June 98 Commissioner Appeal 

6.73 May 98 To Feb. 99 Commissioner Appeal 

0.84 Feb. 99 To March 99 Asst. Commissioner 

2.42 Dec.99 CESTAT 

6.30 Sept. 99 To March 03 Joint Commissioner 

5.03 April 00 To July 00 CESTAT 

1.79 Dec. 00 To March 03 Asst. Commissioner 

3.74 May 00 To Aug. 01 CESTAT 

13.18 Jan. 01 To Nov.01 Commissioner Appeal 

0.37 Oct. 02 Asst. Commissioner 

0.32 April 03 To Aug. 03 CESTAT 

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

preceding financial year. 

11. According to the information and explanations given to us and as per the books of accounts examined by us, the company has not 

defaulted in the repayment of dues to the financial institutions / banks. 

12. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of 

security by way of pledge of shares, debentures and other securities. 

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

Report) Order 2003 is not applicable to the company. 

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the 

provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. 

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

from banks & financial institutions. 

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

obtained. 

17. According to the information and explanations given to us and as per the books and records examined by us, as on the date of 

balance sheet, the funds raised by the Company on short-term basis have not been applied for long-term investments and vice 

versa. 

18. According to the information and explanations given to us, during the period covered by our audit report, the Company has not made 

any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies 

Act, 1956. 

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

not applicable. 

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

applicable. 

21. According to the information and explanations given to us, and on the basis of our examination of the books and records of the 

company carried out in accordance with the generally accepted auditing practices in India, we have not come across any such 

instance of fraud on or by the company, noticed and reported during the year. 





R.K Kanodia 

Partner 


27


BALANCE SHEET 

I. SOURCES OF FUNDS 

1. Shareholders’ Funds 

a) Share Capital 1 288,225,600 288,225,600 

b) Reserves and Surplus 2 2,839,855,999 2,152,735,917 

2. Loan Funds 

3,128,081,599 2,440,961,517 

a) Secured Loans 3 374,122,366 172,884,355 

b) Unsecured Loans 4 731,390,818 1,098,534,170 

1,105,513,184 1,271,418,525 

3. Deferred Tax Liabilities 342,272,000 256,329,000 

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

II. APPLICATION OF FUNDS 

1. Fixed Assets 5 

a) Gross Block 2,868,857,483 1,521,046,512 

Less : Depreciation 577,615,558 473,830,785 

Net Block 2,291,241,925 1,047,215,727 

b) Capital work in progress 407,923,683 1,149,827,377 

2,699,165,608 2,197,043,104 

2. Investments 6 192,977,500 256,533,800 

3. Current Assets, Loans & Advances 

a) Inventories 7 1,330,875,185 855,143,791 

b) Sundry Debtors 8 961,951,775 709,608,117 

c) Cash and Bank Balances 9 42,856,021 27,995,841 

d) Loans and Advances 10 169,465,460 494,173,285 

2,505,148,441 2,086,921,034 

Less : Current Liabilities & Provisions 11 821,424,766 571,788,896 

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

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

Significant Accounting Policies & Notes on Accounts 20 

As per our report of even date attached 

Schedules As At As At 

31.03.2005 31.03.2004 

Rs. 

Rs. 



R.K Kanodia 

Partner 






For & on Behalf of the Board 


Chairman 


Manging Director 

U.C. Agarwal 

D.K. Parikh 

H.K. Khanna 

28


PROFIT & LOSS ACCOUNT 

INCOME 

Sales & Income From Operations 12 8,672,447,680 5,552,935,376 

Less : Excise Duty 978,298,513 640,136,593 

Net Sales & Income From Operations 7,694,149,167 4,912,798,783 

Other Income 13 120,355,205 137,161,239 

Increase in Stock 14 332,617,028 55,829,661 

8,147,121,400 5,105,789,683 

EXPENDITURE 

Materials, Manufacturing & Operating Expenses 15 6,503,571,929 3,736,547,950 

Employees’ Remuneration & Benefits 16 105,945,249 86,501,029 

Administrative Expenses 17 47,909,587 36,065,958 

Selling & Distribution Expenses 18 84,179,363 106,360,747 

Interest & Financial Charges 19 38,133,308 19,719,082 

Depreciation 104,951,969 69,849,106 

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

Profit before tax 1,262,429,995 1,050,745,811 

Provision for taxation - Current 327,700,000 333,100,000 

- Deferred 85,943,000 3,063,000 

Profit after tax 848,786,995 714,582,811 

Prior period adjustments / Tax Provision Written Back 2,657,707 2,898,145 

Profit after tax and adjustment 851,444,702 717,480,956 

Balance brought forward from previous year 132,048,701 122,775,751 

Profit available for appropriation 983,493,403 840,256,707 

APPROPRIATIONS 

Schedules Year Ended Year Ended 

31.03.2005 31.03.2004 

Rs. 

Rs. 

Transfer to Capital Redemption Reserve - 144,112,800 

Dividends 

- Interim (Declared subsequent to the year end) - 72,056,400 

- 10 % Redeemable Cumulative Preference Shares (Paid / Proposed) - 13,702,529 

- Proposed on Equity Shares 144,112,800 43,233,840 

Tax on Dividends 

- Interim - 9,232,226 

- 10 % Redeemable Cumulative Preference Shares (Paid / Proposed) - 20,220,089 

- Proposed on Equity Shares 20,211,820 5,650,122 

Transfer to General Reserve 650,000,000 400,000,000 

Balance carried to Balance Sheet 169,168,783 132,048,701 

983,493,403 840,256,707 

Earning Per Share (Basic / Diluted) 29.54 23.72 

Significant Accounting Policies & Notes on Accounts 20 




R.K Kanodia 

Partner 








Chairman 



U.C. Agarwal 

D.K. Parikh 

H.K. Khanna 

29


SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS 

SCHEDULE : 1 

As At 

As At 

31.03.2005 31.03.2004 

Rs. 

Rs. 

SHARE CAPITAL 

Authorised 

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

20,000,000 (Previous Year - 20,000,000) Preference shares of Rs. 10 each 200,000,000 200,000,000 

600,000,000 550,000,000 

Issued, Subscribed and Paid up 

Equity Capital 

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

fully paid up 288,225,600 288,225,600 

SCHEDULE : 2 

RESERVES & SURPLUS 

Capital Redemption Reserve 144,112,800 144,112,800 

Share Premium 115,791,216 115,791,216 

Capital Investment Subsidy 2,500,000 2,500,000 

General Reserve: 

As per last Balance Sheet 1,758,283,200 1,358,283,200 

Add : Transferred from Profit & Loss Account 650,000,000 400,000,000 

2,408,283,200 1,758,283,200 

Profit and Loss Account 169,168,783 132,048,701 

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

SCHEDULE : 3 

SECURED LOANS 

Term Loan 

From Banks 

- Rupee Loan 185,000,000 - 

- Foreign Currency Loan 131,790,000 - 

Working Capital Borrowings 

From Banks - Cash Credit 56,096,688 172,731,930 

Other Loans 1,235,678 152,425 

374,122,366 172,884,355 

30


SCHEDULES FORMING PART OF THE FINANCIAL STATEMENTS 

SCHEDULE : 4 

As At 

As At 

31.03.2005 31.03.2004 

Rs. 

Rs. 

UNSECURED LOANS 

Fixed Deposits 800,000 4,825,000 

Deferred Sales Tax 709,205,227 576,003,863 

Loans 21,385,591 517,705,307 

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

SCHEDULE : 5 

FIXED ASSETS 

(Rs.) 

GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK 

DESCRIPTION 

AS AT 

01.04.2004 

ADDITIONS 

SALES/ 

ADJUST- 

MENT 

AS AT 

31.03.2005 

UPTO 

31.03.2004 

FOR THE 

YEAR 

SALES/ 

ADJUST- 

MENT 

UPTO 

31.03.2005 

AS AT 

31.03.2005 

AS AT 

31.03.2004 

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

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

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

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

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

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

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

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

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

CAPITAL WORK IN PROGRESS 

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

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

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

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

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

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

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

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

31


SCHEDULE : 6 

As At 31.03.2005 As At 31.03.2004 

Number of 

Number of 

Shares / Units Rs. Shares / Units Rs. 

INVESTMENTS 

(Fully paid up unless otherwise specified) 

I. LONG TERM 

A. Trade 

Un-Quoted 

a) Equity Shares 

Rs. 10 each of Jindal Pipes Ltd. 300,000 1,507,500 1,370,000 6,884,250 

Rs. 10 each of Hydril Jindal International Pvt. Ltd. 1,350,000 13,500,000 - - 

(Pending Allotment of 860,000 Equity Shares) 

B. Non-trade 

Un-Quoted 

a) Government Securities 

National Saving Certificates VIII Issue - 75,000 

(Pledged as security) 

b) Equity Shares 

Rs. 10 each of Whitepin Tie-up Ltd. - - 27,000 164,550 

c) Bonds 

8.75% Housing & Urban Development Corp. Ltd. - - 200 20,640,000 

8.00% National Highways Authority of India 2,700 27,000,000 2,700 27,000,000 

7.00% National Highways Authority of India 2,200 22,000,000 2,200 22,000,000 

10.00% Housing & Urban Development Corp. Ltd. 200 21,590,000 200 21,590,000 

7.99% Housing & Urban Development Corp. Ltd. 500 51,180,000 500 51,180,000 

6.75% Rural Electrification Corp. Ltd. 1,100 11,000,000 1,100 11,000,000 

5.60% Rural Electrification Corp. Ltd. 2,000 20,000,000 2,000 20,000,000 

5.15% Rural Electrification Corp. Ltd. 2,520 25,200,000 - - 

II CURRENT 

Non-trade 

Quoted 

Mutual Funds 

Grindlays Super Saver Income Fund Investment Plan - - 2,084,954.97 30,000,000 

Principal Income Fund - - 1,410,596.40 20,000,000 

IL & FS Bond Fund - Bonus Units - - 579,232.58 6,000,000 

LICMF Bond Fund - - 601,167.47 10,000,000 

Sundaram Bond Saver - - 506,280.41 10,000,000 

192,977,500 256,533,800 

Aggregate Value of Unquoted Investments 192,977,500 180,533,800 

Aggregate Value of Quoted Investments - 76,000,000 

Market Value of Quoted Investments - 83,139,343 

32


SCHEDULE : 7 

As At 

As At 

31.03.2005 31.03.2004 

Rs. 

Rs. 

INVENTORIES 

(As Verified, Valued and Certified by the Management) 

Raw Materials 471,778,299 366,718,026 

Finished Goods 486,895,539 285,008,339 

Work in Process 225,392,437 104,310,254 

Scrap 20,321,134 10,673,489 

Stores & Spares 126,487,776 88,433,683 

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

SCHEDULE : 8 

SUNDRY DEBTORS 

(Unsecured, Considered Good) 

Debts outstanding for a period exceeding six months 32,221,106 57,536,138 

Other debts 929,730,669 652,071,979 

961,951,775 709,608,117 

SCHEDULE : 9 

CASH AND BANK BALANCES 

Cash in hand 432,194 659,844 

Silver Coins & Utensils 16,638 14,539 

Balances with Scheduled Banks : 

- In Cash Credit Accounts 6,395,681 - 

- In Current Accounts 20,617,965 4,663,667 

- In Unclaimed Dividend Accounts 12,242,768 20,564,482 

- In Fixed Deposit Accounts 3,150,775 2,093,309 

42,856,021 27,995,841 

SCHEDULE : 10 

LOANS AND ADVANCES 

(Unsecured, Considered Good) 

Loans 19,611,337 337,453,447 

Advances Recoverable in Cash or in kind or for value to be received 136,256,489 147,850,692 

Security Deposits 13,595,925 8,867,775 

Balances with Government Authorities 1,709 1,371 

33 

169,465,460 494,173,285


SCHEDULE : 11 

As At 

As At 

31.03.2005 31.03.2004 

Rs. 

Rs. 

CURRENT LIABILITIES & PROVISIONS 

Current Liabilities 

Acceptances - 29,000,000 

Sundry Creditors 458,033,271 269,244,688 

Other Liabilities 95,879,998 61,793,645 

Advance From customers 55,320,150 15,698,029 

Investor Education and Protection Fund : 

(Appropriate amount shall be transferred to Fund as & when due) 

- Unclaimed Dividend 10,476,707 9,525,842 

- Unclaimed Redemption Amount of Preference Shares 1,766,061 11,038,640 

Interest accrued but not due on loans 5,331 970 

621,481,518 396,301,814 

Provisions 

Taxation ( Net of Advance Tax & TDS) 35,618,628 45,314,494 

Proposed Dividend - Equity Shares 144,112,800 43,233,840 

Interim Dividend - 72,056,400 

Tax on Dividend - Interim - 9,232,226 

- Proposed 20,211,820 5,650,122 

199,943,248 175,487,082 

821,424,766 571,788,896 

Year Ended 

Year Ended 

31.03.2005 31.03.2004 

Rs. 

Rs. 

SCHEDULE : 12 

SALES & INCOME FROM OPERATIONS 

Manufacturing 8,493,934,666 5,461,647,688 

Trading - 3,050,586 

Scrap 178,087,834 87,545,502 

Job Work Services 425,180 691,600 

SCHEDULE : 13 

OTHER INCOME 

Dividend Received 

- Trade 2,055,000 2,260,500 

- Non Trade - 1,305,688 

Interest received (TDS Rs. 1,960,902/-, Previous Year Rs. 8,309,542 /-) 

- Long Term Investments - Non Trade 12,368,226 13,295,369 

- Others 12,628,117 38,621,454 

Profit on Sale of Current (Non Trade) Investments 7,972,734 69,577,328 

Profit on Sale of Long Term (Trade) Investments 58,823,250 - 

Foreign Exchange Fluctuation (Net) 312,930 - 

Miscellaneous Income 26,194,948 12,100,900 

34 

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

120,355,205 137,161,239


SCHEDULE : 14 

Year Ended 

Year Ended 

31.03.2005 31.03.2004 

Rs. 

Rs. 

INCREASE IN STOCK 

Closing Stock 



Scrap 20,321,134 10,673,489 

732,609,110 399,992,082 

Opening Stock 



Scrap 10,673,489 2,554,882 

399,992,082 344,162,421 

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

SCHEDULE : 15 

MATERIALS, MANUFACTURING & OPERATING EXPENSES 

Raw Materials Consumed 

Opening Stock 366,718,026 186,684,111 

Add : Purchases 5,849,070,752 3,278,479,595 

6,215,788,778 3,465,163,706 

Less : Closing Stock 471,778,299 366,718,026 

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

Trading Purchases - 3,042,828 

Manufacturing Expenses 

Stores & Spares Consumed 147,277,187 164,765,370 

Power & Fuel 528,470,835 404,110,474 

Water Charges 6,686,106 3,712,848 

Repairs to Machinery 9,652,305 8,946,955 

Repairs to Building 2,710,305 1,035,407 

Job Work Charges 52,764,712 31,207,635 

Leave & License Fees 12,000,000 21,000,000 

Royalty - 280,753 

SCHEDULE : 16 

EMPLOYEES’ REMUNERATION & BENEFITS 

Salaries, Wages & Other Allowances 88,246,640 73,344,618 

Contribution to Provident & Other Funds 9,786,841 7,789,840 

Staff Welfare Expenses 7,911,768 5,366,571 

35 

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

105,945,249 86,501,029


SCHEDULE : 17 

Year Ended 

Year Ended 

31.03.2005 31.03.2004 

Rs. 

Rs. 

ADMINISTRATIVE EXPENSES 

Rent 1,788,000 1,440,000 

Rates & Taxes 3,895,273 1,801,733 

Postage, Telegram & Telephone 3,768,617 3,474,023 

Printing & Stationery 2,201,001 1,841,215 

Travelling & Conveyance: 

- Directors 2,881,856 897,411 

- Others 9,912,042 6,997,690 

Vehicle Upkeep & Maintenance 2,087,657 2,207,789 

Directors’ Fee 102,500 85,000 

Insurance 6,394,133 3,294,469 

Staff Recruitment & Training Expenses 884,192 161,305 

Repair & Maintenance (Others) 3,561,176 2,024,315 

Legal & Professional Charges 2,574,520 1,383,158 

Filing Fees 5,812 3,000 

Fees & Subscription 2,116,444 2,133,395 

Electricity Charges 1,135,401 960,223 

Auditors’ Remuneration : 

- Audit Fee 137,750 135,000 

- Tax Audit Fee 27,000 27,000 

- Company Law Matters 47,266 87,480 

- Other Expenses 31,979 43,368 

Internal Auditors’ Remuneration 101,417 54,813 

Foreign Exchange Fluctuation (Net) - 5,416,252 

Miscellaneous Expenses 3,577,167 1,447,270 

Loss on Sale of Long Term Investments : 

- Non Trade 642,550 14,300 

Loss on sale of Fixed Assets (Net) 35,834 135,749 

SCHEDULE : 18 

36 

47,909,587 36,065,958 

SELLING & DISTRIBUTION EXPENSES 

Commission & Discount 23,117,174 57,831,512 

Freight Outward & Claims 49,350,944 43,585,315 

Testing & Inspection Fees 5,103,823 2,317,835 

Advertisement & Business Promotion 6,063,361 2,333,185 

Tender Fees 544,061 292,900 

SCHEDULE : 19 

84,179,363 106,360,747 

INTEREST & FINANCIAL CHARGES 

Interest 

- Term Loan 3,023,984 - 

- Cash Credit 6,456,718 3,029,021 

- Others 8,617,412 2,061,774 

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

38,133,308 19,719,082


SCHEDULE: 20 

SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS 

SIGNIFICANT ACCOUNTING POLICIES 

a. Basis of Preparation of Financial Statements 

The financial statements are prepared under the historical cost convention and are in accordance with the requirements of the 

Companies Act, 1956, and accepted accounting standards. 

b. Revenue Recognition 

All revenues, costs, assets and liabilities are accounted for on accrual basis. 

Sales are inclusive of excise duty. Inter divisional transfer of goods for captive consumption / internal uses are at market value. 

c. Fixed Assets & Depreciation 

i) Fixed Assets 

Fixed Assets are stated at cost of acquisition, construction less accumulated depreciation. The cost comprises of purchase 

price and any other directly attributable cost of bringing the assets to working condition for its intended use. Depreciation on 

assets have been provided on pro-rata basis, for the period of use, on straight line method at the rates prescribed under 

Schedule XIV to the Companies Act, 1956, as amended till date. 

ii) Expenditure during construction period 

Expenditure incurred during implementation of new / expansion project is included under Capital Work in Progress and the 

same is allocated to the respective Fixed Assets on the completion / erection. 

d. Investments 

Investments are classified as long term or current based on the Management intention at the time of purchase. Long-term investments 

are valued at their acquisition cost. Current investments are stated at lower of cost or fair market value. The provision for diminution 

in the value of long- term investments is made only if such a decline is other than temporary in the opinion of the management. 

e. Inventories 

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

Finished goods are valued at lower of cost or market value. Cost for this purpose includes direct material, staff cost, and appropriate 

overhead. Excise Duty on goods manufactured by the Company and remaining in inventory is included as a part of valuation of 

finished goods. 

Work-in-process are valued at estimated cost. 

Stores & Spare parts are valued at lower of cost or market value. 

Scrap is valued at realisable value. 

f. Retirement Benefits 

Retirement benefits to employees have been accounted for on accrual basis. 

Gratuity liability of Employees is covered under the Group Gratuity Policy, taken from Life Insurance Corporation of India and 

payment is made through a trust as per the scheme of the company 

Contribution to Superannuation Fund is being made to Life Insurance Corporation of India through a trust as per the scheme of 

the company. 

Estimated liability on account of leave encashment benefit of employees is charged to profit and Loss Account on accrual basis 

in conformity with the Accounting Standard for retirement benefits issued by the Institute of Chartered Accountants of India. 

g. Research & Development Expenses 

Research & Development Expenses of revenue nature, if any are charged to Profit and Loss Account in the year in which it is 

incurred. Expenditure of capital nature, if any is being capitalised. 

h. Foreign Currency Transactions 

Transactions denominated in foreign currency are recorded at the exchange rate prevailing at the time of transaction. 

At the end of the financial year, foreign exchange transactions which are not covered by forward contracts are translated at year 

37


end rates and which are covered by forward contracts are translated at the rate prevailing at the date of transaction, as adjusted 

by the difference between the forward rate and exchange rate on the date of transaction over the life of the contract. 

Foreign currency loans for financing fixed assets are stated at the contracted/prevailing rate of exchange at the year-end and the 

resultant gains/losses are adjusted to the cost of assets. 

Any profit or loss on account of exchange difference on settlement/translation is recognised in the Profit and Loss Account, except 

those relating to acquisition of fixed assets, which are adjusted in the cost of assets. 

i. Borrowing Cost 

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of such 

asset upto the date when such asset is ready for its intended use. Other borrowing costs are treated as revenue / deferred revenue 

expenditure as considered appropriate. 

j. Income-Tax 

The current Income Tax liability is calculated by the company, in accordance with relevant tax provision and tax advices wherever 

considered necessary. 

Deferred tax assets and liabilities are recognised for future tax consequences attributable to the timing differences that results 

between the profits offered for income tax and profit as per the financial statements. Deferred tax assets and liabilities are measured 

as per the tax rates/laws that have been enacted or substantively enacted by the Balance Sheet date. 

NOTES ON ACCOUNTS 

1. CONTINGENT LIABILITIES 

a) Letters of Credit - Rs. 519,357,121/- (Previous Year of Rs. 246,097,450/-) 

b) Bank Guarantees - Rs. 515,279,161/- (Previous Year Rs. 501,077,515/-) 

c) Sales Tax demand under appeal - Rs. 448,047/- (Previous year Rs.448, 047/-) 

d) Income Tax demand under appeal - Rs. 26,436,755/- (Previous Year Nil) 

e) Excise Duty Demand under Appeal - Rs. 4,978,453/- (Previous Year Rs. 4,311,563/-) 

2. The company has imported capital goods under the export promotion capital goods scheme of the Government of India, at 

concessional rates of duty against an undertaking to fulfil exports obligations. The duty saved on such capital goods amounts to 

Rs. 36,956,573/- and for this the company is required to export goods amounting to Rs. 295,652,584/-, within a period of 

eight years. 

Non – fulfilment of such future export obligations, entails government to enforce the EPCG Bonds executed by us to the extent of 

Rs. 94,267,604/- to Custom Department against the various EPCG licences 

3. Estimated amount of contracts remaining to be executed on Capital Account, net of advances, and not provided for is 

Rs. 10,223,765/- (Previous Year Rs. 188,091,816/-) 

4. Excise duty in respect of finished goods lying in factory premises and custom duty on goods lying in custom bonded warehouse 

are provided and included in the valuation of inventory. This accounting treatment has no impact on the profit for the year. CENVAT 

benefit is accounted for by reducing the purchase cost of the materials and fixed assets. 

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

Excise duty shown in profit and loss account includes the excise duty in respect of goods lying in factory premises amounted to 

Rs. 64,073,950/- (Previous Year Rs. 38,662,408/-). 

5. a) Term loans from banks are secured by first charge by way of mortgage on the Company’s’ immovable properties and by way 

of hypothecation on moveable properties both present and future (save and except book debts & stock). 

b) The borrowings for working capital are secured by hypothecation of inventories, book debts & all other current assets other than 

those specifically excluded and second charge on fixed assets ranking pari passu. 

c) Other loans represent vehicle loans taken from ICICI Bank Ltd. are secured by hypothecation of vehicles with all accessories 

and additions to or in the vehicle (s) present or future by way of specific charge to the respective vehicle. 

6. Term Loans due within one year is Rs. 75,000,000/- (Previous Year Nil) 

7. Total amount due to Small Scale Industrial Undertakings is Rs. 1,993,257/- (Previous year Rs. 2,201,876/-). The name of the 

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

than 30 days are: 

(Rs.) 

Name of the Party 

Amount 

Tashkent oil Pvt. Ltd. 513,166 

Anand Engineers Pvt. Ltd. 191,117 

The above information regarding Small Scale Industrial Undertakings has been determined to the extent such parties have been 

identified on the basis of information available with the company. The Auditors have relied upon the same. 

38


8 Stock of raw material includes material in transit. 

9. In the opinion of the company, the value on realisation of current assets, loans & advances in the ordinary course of the business 

shall not be less than the amount at which they are stated in the Balance Sheet. 

10. The company has entered into a joint venture arrangement with Hydril LP, USA on 50:50 basis in the name and style of Hydril Jindal 

International Pvt. Ltd. at Village Sukeli, Dist. Raigad in the State of Maharashtra (India). The main object of the Joint Venture company 

is to manufacture premium thread connections and the company is expected to starts its commercial production during the year. 

The company had contributed till 31st March 2005 Rs. 1,3500,000/- towards equity contribution. 

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

(Rs.) 

Particulars As At 31.03.2005 As At 31.03.2004 

Amount Brought Forward From Last Year 53,259,853 3,815,319 

Addition During The Year 56,465,275 49,444,534 

Amount Capitalised During The Year (92,831,677) - 

Closing Balance 16,893,451 53,259,853 

Amount Brought Forward From Last Year - 3,815,319 

Power & fuel 1,532,700 3,492,708 

Stores & spares 8,855,913 6,150,845 

Salaries, Wages & Other Allowances 172,450 8,530,869 

Travelling & Conveyance 670,115 5,211,182 

Interest & Financial Charges 3,459,275 24,085,604 

Depreciation - 588,687 

Miscellaneous Expenses 2,202,998 1,384,639 

Total 16,893,451 53,259,853 

12. Segment Reporting Policies 

Identification of Segments 

Primary Segment 

Business segment: The company’s operating businesses are organised and managed separately according to the nature of products, 

with each segment representing a strategic business unit that offers different products. The three identified segments are Seamless 

Pipes, ERW Pipes and Wind Power. 

Inter Divisional transfers of goods, as marketable products produced by separate divisions of the company for captive consumption 

are made as if sales were to third parties at current market prices and are included in turnover. 

Segment Information 

Segment Revenues, Results and Other Information: 

(Rs. in lacs) 

Particulars Seamless ERW Wind Others Total 

Pipe Pipe Power 

Net External Sales / Income from operations 49,955 26,562 424 1,197 78,138 

(35,053) (13,677) (397) (1,372) (50,499) 

Inter-Segment Sales - - 424 - 424 

(-) (-) (397) (-) (397) 

Segment Results (PBIT) 10,897 3,085 201 1,197 15,380 

(9,526) (1,921) (176) (1,372) (12,995) 

Interest & Financial Charges 309 72 - - 381 

(175) (22) (-) (-) (197) 

Other un-allocable expenditure 1,929 419 27 - 2,375 

(1,876) (389) (26) (-) (2,291) 

Profit before tax 8,659 2,594 174 1,197 12,624 

(7,475) (1510) (150) (1,372) (10,507) 

Segment Assets (Including Capital Work In Progress) 37,702 11,080 4,785 2,144 55,711 

(27,225) (9,011) (4,375) (5,583) (46,194) 

Segment Liabilities 14,585 2,657 1,759 5,429 22,756 

(14,542) (1,701) (1,175) (4,366) (21,784) 

Capital Employed 23,117 8,423 3,026 - 3,285 31,281 

(12,683) (7,310) (3,200) (1,217) (24,410) 

Figures in bracket are for previous year. 

39


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

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

a. Associated Company 

Jindal Pipes Limited 

b. Joint Venture Company 

Hydril Jindal International Pvt. Ltd. 

c. Key Management Personnel 

Shri Saket Jindal 

d. Relatives of Key Management Personnel 

Shri D.P. Jindal 

Smt. Savita Jindal 

Details of Transactions are as follows: 

(Rs.) 

Particulars 31-03-2005 31-03-2004 

a. Purchase & Other Services from related parties 

Associated Company 42,577,381 53,710,855 

Relatives of Key Management Personnel 86,468 88,544 

b. Sales & Other Services to related parties 


Joint Venture Company 3,075,273 Nil 

Relatives of Key Management Personnel 162,000 Nil 

c. Investment in related parties 


d. Loans / Inter corporate deposits given (Maximum Outstanding) 


e. Loans / Inter corporate deposits taken (Maximum Outstanding) 


f. Interest received from related parties 


g. Interest paid to related parties 



h. Rent paid to related parties 



i. Remuneration 

Key Management Personnel 660,000 660,000 

j. Balance as at 31st March 2005 Payable by the Company 



k. Balance as at 31st March 2005 Receivable by the Company 



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

above related parties. 

40


14. In compliance with the Accounting Standard – AS 22 relating to Accounting for Taxes on Income issued by the Institute of Chartered 

Accountants of India, the company has adjusted the deferred tax liability (net) arising out of timing differences accruing during the 

year aggregating to Rs. 85,943,000/- has been recognised in the Profit & Loss Account. 

Deferred Tax Liability 

Particulars As At 31.03.2004 During the Year As At 31.03.2005 

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

Deferred Tax Assets 

Particulars As At 31.03.2004 During the Year As At 31.03.2005 

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

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

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

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

(Rs.) 

(Rs.) 

15. Earning Per Share 

Particulars 2004-05 2003-04 

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

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

Outstanding during the year 

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

16. Disclosure required by Clause 32 of Listing Agreement :- 

The Company has granted loan to its associate company during the year and amount outstanding as on 31st March 2005 amounts 

to Rs. 10,599,636/-. The maximum amount outstanding during the year was Rs. 353,597,327/-. The company has made an investment 

in Joint Venture company amounting to Rs. 13,500,000/-. 

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

Companies Act, 1956. 

I. CAPACITY AND PRODUCTION 

Seamless Pipe 

Particulars Year Ended 31.03.2005 Year Ended 31.03.2004 

Installed Capacity 225,000 125,000 

Production- Seamless Pipes 122,457 113,547 

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

ERW Pipe 


Installed Capacity 200,000 100,000 

Production - ERW Pipes 85,020 61,101 

(MT) 

(MT) 

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

41


Wind Power 

(Kwh) 


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

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

The installed capacity is as certified by the Management. 

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

Seamless Pipe 

Items Year Ended 31.03.2005 Year Ended 31.03.2004 

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

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

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

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

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

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

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

ERW Pipe 



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

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

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

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

Wind Power 


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

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

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

Seamless Pipes 



Opening Stock Nil Nil Nil Nil 

Purchases Nil Nil 141 3,042,828 

Turnover Nil Nil 141 3,050,586 

Closing Stock Nil Nil Nil Nil 

42


IV. RAW MATERIALS CONSUMED 



Round Steel Billets 135,976 3,368,781,931 118,260 1,959,206,245 

HR Coil 88,685 2,357,342,757 63,184 1,139,239,435 

Zinc 238 14,785,870 - - 

Others - 3,099,921 - - 

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

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

Raw Materials 


Stores & Spare Parts Consumed 


(%) Amt. (Rs) (%) Amt. (Rs.) 

Imported 30.70 45,209,604 19.84 32,695,231 

Indigenous 69.30 102,067,583 80.16 132,070,139 

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

VI. CIF VALUE OF IMPORTS 

(%) Amt. (Rs) (%) Amt. (Rs.) 

Imported 21.79 1,251,755,287 15.17 469,993,753 

Indigenous 78.21 4,492,255,192 84.83 2,628,451,927 

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


Raw Materials 1,237,243,966 415,698,768 

Stores & Spares 27,115,861 40,108,217 

Capital Goods 4,503,325 467,767,151 

(Rs.) 

VII. EXPENDITURE IN FOREIGN CURRENCY 


Royalty Nil 227,209 

Travelling 2,044,266 2,198,723 

Others 2,905,227 248,014 

VIII. EARNING IN FOREIGN CURRENCY 


(Rs.) 

(Rs.) 

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

IX. MANAGERIAL REMUNERATION 

The Detail of Managerial Remuneration is as under: 


Salary 480,000 480,000 

Contribution to PF & other Funds 129,600 129,600 

Perquisites 50,400 50,400 

Total 660,000 660,000 

(Rs.) 

43


X. INVESTMENTS PURCHASED AND SOLD DURING THE YEAR 

NAME OF THE SCHEME NO. OF UNITS PURCHASE SALE VALUE 

VALUE (Rs.) 

(Rs.) 

Alliance Cash Manager - Growth - - - 

(1555341.144) (23,545,532) (23,559,374) 

Birla Bond Plus Retail Plan - - - - 

Dividend Reinvestment (2697755.468) (30,187,669) (30,223,224) 

Birla Cash Plus Retail Plan - Growth - - - 

(1421257.190) (24,154,976) (24,160,235) 

Deutsche Short Maturity Fund - - - - 

Weekly Dividend Plan (1976828.679) (20,175,098) (20,266,843) 

DSP Merrill Lynch Liquidity Fund - Growth - - - 

(790843.823) (12,087,573) (12,090,499) 

GSSIF - Short Term - Monthly Dividend - - - 

(2956953.501) (30,351,743) (30,329,768) 

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

(-) (-) (-) 

Grindlays Cash Fund - Institutional 2867536.213 35,000,000 35,013,191 

Plan B - Growth (-) (-) (-) 

Grindlays Floating Rate - Short Term - 17920980.558 195,000,000 195,225,617 

Institutional Plan B - Growth (-) (-) (-) 

HDFC Short Term Plan - Dividend - - - 

Reinvestment (1981766.030) (20,028,497) (20,047,942) 

IL&FS Liquid Account - Institutional Plan - - - 

Dividend Option (4005592.822) (40,055,928) (40,055,928) 

Kotak Liquid Regular Plan - Growth - - - 

(978304.064) (12,261,378) (12,264,020) 

LICMF Short Term Plan - Dividend - - - 

Reinvestment (4009929.303) (40,100,000) (40,518,663) 

Prudential ICICI Liquid Plan - Growth - - - 

(2309663.018) (35,860,059) (35,863,754) 

Sun F & C Value Fund -Liquid - - - - 

Daily Dividend (3008455.209) (30,084,552) (30,084,552) 

Templeton India Short Term Income - - - 

Plan Weekly Dividend Reinvestment (18599.382) (20,278,003) (20,286,478) 

Templeton India Liquid Fund - - - - 

Weekly Dividend Reinvestment (3003370.181) (30,044,198) (30,048,719) 

UTI - Liquid Advantage Fund - 4617929.320 55,000,000 55,390,677 

Institutional Growth Plan (-) (-) (-) 

44


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

Balance Sheet Abstract and Company’s General Business Profile 

I. Registration Details 

(Rupees in thousand) 

Registration No. 80545 State Code 11 

Balance Sheet Date 31-03-2005 

II. Capital Raised during the year 

Public Issue 

Nil 

Right Issue 

Nil 

Bonus Issue 

Nil 

Private Placement 

Nil 

III. Position of Mobilisation and Deployment of Funds 

Total Liabilities 

Total Assets 

4,575,867 4,575,867 

Sources of Funds 

Paid Up Capital 

Reserves & Surplus 

288,226 2,839,856 

Secured Loans 

Unsecured Loans & Deferred Tax 

374,122 1,073,663 

Application of Funds 

Net Fixed Assets 

Investments 

2,699,166 192,977 

Net Current Assets 

Misc. Expenditure 

1,683,724 Nil 

Accumulated Losses 

Nil 

45


IV. Performance of Company 

Turnover (including other income) 

Total Expenditure 

7,814,504 6,552,074 

Profit before tax 

Profit after tax & adjustment 

1,262,430 851,445 

Earning per share (Rs) Dividend (%) 

29.54 50 

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

Item Code No. (ITC Code) 7304.00 

Product Description 

Seamless Pipes & Tubes 

Item Code No. (ITC Code) 7305.11, 7306.10 


ERW Pipes & Tubes 



Pipe Fittings 



Wind Power 

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

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

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

Signatures to Schedules 1 to 20 




R.K Kanodia 

Partner 






Chairman 



U.C. Agarwal 

D.K. Parikh 

H.K. Khanna 



46


CASH FLOW STATEMENT ANNEXED TO THE BALANCE SHEET 

A. Cash Flow from Operating Activities 

Net Profit before tax and extraordinary items 1,262,429,995 1,050,745,811 

Adjusted for: 

Depreciation 104,951,969 69,849,106 

Dividend Received (2,055,000) (3,566,188) 

Misc Exp. written off - - 

Prior Period Adjustments / Tax Provision Written Back 2,657,707 2,898,145 

Interest Received (24,996,343) (51,916,823) 

Interest Paid 15,074,130 5,090,795 

Profit/Loss on sale of assets 35,834 135,749 

Profit on Sale of Investments (7,972,734) (69,577,328) 

Loss on Sale of Investments 642,550 14,300 

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

Adjusted for : 

Trade & Other Receivables 77,685,152 (401,072,245) 

Inventories (475,731,394) (257,464,031) 

Trade Payables & Others 233,501,418 215,931,264 

Cash Generated from operations 1,186,223,284 561,068,555 

Direct taxes Paid (337,395,866) (288,342,252) 

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

Extraordinary item - - 

Net Cash From Operating Activities A 848,827,418 272,726,303 

B. Cash Flow from Investing Activities 

Purchase of Fixed Assets (612,801,307) (1,065,076,949) 

Redemption Of Redeemable Cumulative Preference Shares - (144,112,800) 

Sale of assets 5,691,000 302,000 

Purchase of Investments (297,520,538) (389,215,207) 

Sale of Investments 368,407,022 743,142,985 

Interest Received 19,675,358 51,884,489 

Dividend Received 2,055,000 3,566,188 

Net Cash used in Investing Activities B (514,493,465) (799,509,294) 

C. Cash Flow from Financing Activities 

Year Ended Year Ended 

31.03.2005 31.03.2004 

Rs. 

Rs. 

Proceeds from Long Term Borrowings 449,991,364 95,559,647 

Proceeds from Short Term Borrowings (615,896,705) 592,170,727 

Interest Paid (15,074,130) (5,090,795) 

Dividend Paid (123,611,954) (115,752,115) 

Tax paid on dividend (14,882,348) (33,575,200) 

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

Net increase in Cash & Cash Equivalents (A+B+C) 14,860,180 6,529,273 

Opening Balances of Cash and Cash Equivalents 27,995,841 21,466,568 

Closing Balances of Cash and Cash Equivalents 42,856,021 27,995,841 

Change in Cash and Cash Equivalents 14,860,180 6,529,273 



R.K Kanodia 

Partner 








Chairman 



U.C. Agarwal 

D.K. Parikh 

H.K. Khanna 

47

CORPORATE OFFICE: 

Plot No. 30, Institutional Sector-44, Gurgaon-122 002 

Tel.: +91 124 2574325 / 26, Fax: +91 124 2574327 

e-mail:contact@mahaseam.com 

Website: www.jindal.com 

REGD.OFF. & WORKS: 

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

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

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