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Indian Steel Rolling Mills Ltd.

BSE: 513275 Sector: Metals & Mining
NSE: N.A. ISIN Code: N.A.
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Indian Steel Rolling Mills Ltd. (INDIANSTEELROL) - Director Report

Company director report

1995 THE INDIAN STEEL ROLLING MILLS LIMITED DIRECTOR'S REPORT 1. The Directors hereby present the 61st Annual Report on the business and operations of the Company and financial account for the year ended 31st March 1995. 2. Review of the Current year Operations 1. Consequent to closure of the Mills at Nagapattinam, the only operations that took place during the year were at Tiruninravur and at Ambattur. The rolling mill operations at Tiruninravur continued to be affected by erratic power supply and frequent break downs resulting in low productivity. Inspite of the efforts made to revive the unit by undertaking revamping work, the operations have proved to be unviable. The other factors which adversely affected the economic viability of operations were high fuel and power consumption, high labourcosts and frequent revision in raw material (billet) cost without any commensurate increase in the selling price of finished products. This matter was discussed at length by the Directors and a decision was arrived at to suspend operations of the units with effect from 31st January 1995. In line with legal requirements a notice was given to the labour and an application was filed with the Labour Commissioner seeking permission to close down the unit. This has, however, been turned down and an appeal is now pending before the High Court. The employees are yet to be paid their settlement pending an agreement with them. 2. Similarly the wire drawing operations at Ambattur were also suspended due to paucity of margins and the operation resulting in losses. 3. In the meantime, BIFR based on the reference made to them last year and confirming from the Company, the financial institutions and bankers that the unit was financially and commercially unviable, appointed ICICI as the Operating Agency and advised them to identify a potential buyer for purchase/takeover of the unit. As no concrete proposal was received by the Operating Agency or the Company from any party during the stipulated period, BIFR thought it a fit case for winding up and accordingly issued a public notice inviting objections from any party to such winding up. 4. No objections were received and consequently BIFR decided to forward its recommendation orders for winding up of the Company to the High Court of Madras. The High Court will now formally issue the orders for winding up and appoint a liquidator to manage the affairs of the company. 5. As already informed in the previous Annual General Meeting held last year the properties at Nagapattinam and Karaikal are being disposed of. While agreements were concluded, the actual process of sale are yet to be completed and are being carried out in a phased manner. The properties of the Company at Tiruninravur and Ambattur are yet to be disposed off, the realisation from which will go to liquidats the debts with Financial Institutions and Banks. 6. As mentioned earlier, the sale proceeds of assets are being utilised for repayment of term loans from Financial Institutions, whereas the institutions have adjusted the amounts paid so far against the unpaid interest leaving the principal amount to attract higher interest. This has resulted in a higher demand for interest by the Financial Institutions. 7. Notes 1(a), 2(v) and 2(vi) appearing in Schedule 12 of the Accounts, referred to in the Auditors Report are self explanatory. 4. Industrial Relations Consequent to the closure of Nagapattinam and Karaikal Unit last year, an agreement for settlement was arrived with workers of both these units and they have been settled. An agreement is yet to be entered into with the workers at Tiruninravur for settlement. 5. Directors 1. Mr. S.A. Sabavala has submitted his resignation from the Board in June 1995. The Board wishes to place on record the services of Mr. S.A. Sabavala during his tenure as a Director. 2. Life Insurance Corporation of India withdrew its nominee Mr. E. Ramanathan on the Board of this Company. The Board wishes to place on record the services of Mr. E. Ramanathan during his tenure as a Director. 3. The following Directors retire by rotation and are eligible for re- appointment Mr. S. Ramasubramaniam Mr. V.B. Gokarn 6. Acknowledgement The Directors wish to place on record the continuous support the Company has been receiving from Tata Iron and Steel Co. Ltd and its associate companies, Special Steels Ltd and Tata Metals and Strips Ltd. The Directors wish to place on record the support extended to the Company by the financial institutions viz. ICICI,IRBI,IFCI,UTI,PIPDIC and the Company s Bankers, State Bank of India. Details as required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure. The Company had no employees of the category mentioned in Section 217(2A) of the Companies Act 1956. ANNEXURE TO DIRECTORS' REPORT FORM A Form for disclosure of particulars with respect to conservation of energy A. POWER AND FUEL CONSUMPTION 1994-95 1993-94 1. Electricity a) Purchased Unit ('000 Kwh) 2410 3452 Total Amount ('000 Rs.) 8089 10264 Rate/Unit (in Rs./Kwh) 3.36 2.97 b) Own Generation Generated Unit ('000 Kwh) 190 378 Unit per litre of Diesel Oil/Gas 1.70 2.27 Cost/Unit (in Rs./Kwh) 5.62 3.42 2. Furnace Oil Quantity (K.Ltr) 899 874 Total Amount('000 Cums) 5250 5486 Avg. Rate (in Rs./'000 Cums) 5840 6880 3. Natural Gas Quantity ('000 Cum) -- 1165 Total Amount ('000 Rs.) -- 3953 Avg. Rate (in Rs./000 Cums) -- 3395 B. CONSUMPTION PER UNIT OF PRODUCTION Electricity (Kwh/Ton) Oil/Gas (M.Cal/Ton) 1994-95 1993-94 1994-95 1993-94 Bars/Rods 220 174 0.83 1.03 Billets/Ingots -- Nil -- Nil 1994-95 1993-94 Total Foreign Exchange used (excluding canalised imports) Nil Nil Value of production for exports in Rupees Nil Nil FORM B TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION 1. Efforts in brief, made towards technology absorption, adoption and innovation 2. Benefits derived as a result of the efforts, e.g. product improvement, cost reduction, product import substitution, etc. 3. Imported technology For and on behalf of the Board, ISHAAT HUSSAIN Chairman Place : Madras Dated : 30th June, 1995.