Your Directors present the 101st Annual Report and the Audited Statement ofAccounts of the Company for the Year ended March 31 2013.
These statements are presented on the same basis as in previous year and not withreference to Companies Act 2013 pursuant to the directive in circular No.8/2014 dated 4thApril 2014 issued by the Ministry of Corporate Affairs New Delhi.
The Highlights of the financial performance for the year ended under review are asbelow:-
1. Financial Highlights
| || ||(Rs Lakhs) |
|Particulars ||Year ended March 31 2013 ||Year ended March 31 2012 |
|Total Income ||4927 ||6578 |
|Expenditure ||6508 ||6749 |
|Gross Profit/(Loss) ||(1581) ||(171) |
|Taxation ||(111) ||185 |
|Profit Loss) for the year ||(1470) ||(356) |
As your Company has accumulated losses your Directors are unable to recommend anydividend for the year ended March 31 2013.
IL& FS Financial Services Limited a Lender (your Company had availed a term loanof Rs.507000000/-) had filed a Winding up Petition against your Company for default inpayment of dues before the Hon'ble High Court of Madras which had passed an order on31.10.2013 against your Company appointing Provisional Liquidator. The Honble Courtafter considering the Affidavit filed by your Company granted on 21.11.2013 a Stay ofits order dated 31.10.2013. Your Company has proposed a Statement of Repaying Schedule andis making payments accordingly to IL & FS Financial Services Limited.
2. Performance of various Divisions of the company
2.1 Pump Division Chennai
The order inflow for pumps in the financial year 2012-13 continued to be robust and theorder booking in the industrial segment grew by a healthy 30% when compared to thefinancial year 2011-12. The revenue for the year 2012-13 was lower primarily because largeinfrastructure projects both in the government and private sector were shelved/deferreddue to various reasons. The EBITDA margins continued to be good and was at a healthy 17 %for the financial year.
Your company continues to be a preferred supplier of pumps to the Indian Navy andexpects to benefit from the Navys growth plan and its emphasis on greaterindigenisation in the coming years. Your company made fresh forays into the steel sectorby bagging orders from different Engineering Procurment Construction (EPC) contractors forvarious steel plants. The order book position continues to be healthy and the division isexpected to perform well in the current year.
2.2 Chennai Foundry
The performance of the foundry division during this period has been affected severelyby the steep market drop and the resultant lower sales and production. The foundrycontinued to face numerous challenges due to negative growth of the OEM market uncertainpower scenario and sharp increase in raw material and power prices which were notadequately compensated by the customer. The division continued to produce the Non Ferrouscastings needed to meet the in-house requirement of the pump division. With theimprovement in power supply scenario and the bounce back of the automotive sector theunit is expected to increase production levels and generate increased revenue in thecoming years.
2.3 Machinery Manufacturing Division
The electrical machine factory has bagged repeat orders from the railways for making4.5 Kw and 25 Kw alternators and has a healthy order book. The division achieved salesrevenue of Rs.2.09 Cr and it is expected that the division would make a higher turnover inthe coming year.
Plug and Socket Unit achieved a sales turnover of Rs.1.5 Crore. As the Power Sectorunit is on the growth path the performance of this unit is expected to improvesubstantially over the coming years.
2.4 Fabrication Division
The division has met the in-house fabrication requirements of the pump division and themachinery manufacturing division. It is expected that the division will be able to achieveoptimum levels of production in the next few years.
2.5 Bangalore Pump Factory
The division achieved net sales of Rs 3.47 Crore and a PBT of Rs.23 Lakhs in thisfinancial year. To cater to the growing needs of the transformer manufacturers thedivision has put greater emphasis on manufacture of transformer oil pumps and expects togrow its turnover and profitability in the coming years.
3. Fixed Deposits
No Fixed Deposits have been accepted by the Company. There was no outstanding depositat the close of the financial year.
4. Accounts of Subsidiaries
As per the Circular issued by the Ministry of Corporate Affairs Government of Indiaexemption has been granted to all Companies from attaching the Accounts of the SubsidiaryCompanies however a statement showing the particulars about the performance of theSubsidiary Companies forms part of this Annual Report. Your Company undertakes that theAnnual Accounts of the Subsidiary Companies and related information will be made availableto the Members of the Company if such request is made by them. The Annual Accounts of theSubsidiary Companies are also available for inspection at the Registered Office of theCompany.
5. Performance of Subsidiary Companies
5.1 Best & Crompton Apparels Limited
This Subsidiary due to lack of firm orders and working capital had to suspendoperations from April 1 2012. However in the recent trend the market has shown thesigns of recovery and there is potential demand for such products. As such your companyis considering the revival of the existing business and is under discussion with strategicinvestors for augmenting working capital requirements and restart operations of the unitbesides infusion of funds to the satisfaction of Debts Recovery Tribunal Chennai whereatthe recovery proceedings initiated by the Lenders against the Company are pending.
The Company at this stage is examining the various options viz: revival of theoperations of the subsidiary company by identifying a strategic partner or lease out theunit to an International Brand apparel manufacturer.
5.2 B & C Machinery Limited
The subsidiary is at the final stage of completion of the project. The delay caused wasdue to several factors. As a means of revival the company has submitted a comprehensiveproposal to the bankers and to commence commercial production within a time frame despitereference to Debts Recovery Tribunal Chennai whereat the recovery proceedings initiatedby the Lenders against the Company are pending.
The Company at this stage is examining the various options viz: possibledisinvestment of equity shares held by the company in the said subsidiary company orpossible revival by the operations of the subsidiary company by identifying a suitablestrategic investor.
5.3 Crombest Precast Buildings Limited
In terms of market analysis the potential demand for the existing products is on theincrease and thus your company is contemplating the revival of the existing business.Thecompany is in discussions with the potential investors for augmenting working capitalrequirements of the company. Besides a comprehensive proposal is being made to thebankers for reschedulement/ restructuring/settlement of their dues to the satisfaction ofDebts Recovery Tribunal Chennai whereat the recovery proceedings initiated by the Lendersagainst the Company are pending.
5.4 B & C Tech. Services Limited
Since the market conditions are not conducive it would be wise not to infuse fundsinto this project at this juncture. A creditor has filed a petition for winding up of thecompany and the High Court has appointed under its Order dated 08.09.2014 theOfficial Liquidator as Provisional Liquidator to take charge of the assets of the Companyand the Company is under Liquidation proceedings.
The Madras Stock Exchange has since dropped the listing and trading of shares includingthe equity shares of the Company. While the shares are listed in the Bombay Stock ExchangeLimited it has suspended the listing and trading and dealing of the Companys sharesdue to nonfulfilment of the listing requirements. Corrective steps are being initiated.
Mr. M. Sinivasan retires by rotation and being eligible offers himself forre-appointment.
Mr. S.V.Venkatesan retires at this Annual General Meeting. It is proposed to appointhim as an Independent Director of the Company not liable to retire by rotation for aterm of five consecutive years upto 31st March 2019.
Mr. K.Prakash holds office upto this Annual General Meeting. It is proposed to appointhim as an Independent Director of the Company not liable to retire by rotation for aterm of five consecutive years upto 31st March 2019.
Mr. Ravindranath Gupta holds office upto this Annual General Meeting. It is proposed toappoint him as an Independent Director of the Company not liable to retire by rotationfor a term of five consecutive years upto 31st March 2019.
Mr. A. Annamalai Director resigned form the Board effective from 19thJanuary 2013 Mr.N.Srinivasan resigned on 12th June 2014 andMr.S.Sathiyamurthy resigned on 9th October 2014. The Board placed on record thevaluable services rendered by them during their tenure as Directors of the Company.
8. Directors Responsibility Statement
Pursuant to the requirements under Section 217 (2 AA) of the Companies Act 1956 withrespect to the Directors' Responsibility Statement it is hereby confirmed-
(i) that in preparation of the Accounts for the financial year from April 1 2012 toMarch 31 2013 the applicable Accounting Standards have been followed along with properexplanations relating to material departures;
(ii) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial period and of the Profit or Loss of the Company for the financial period underreview;
(iii) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 1956for safe-guarding the assets of the Company and for preventing fraud and otherirregularities;
(iv) that the Directors prepared the accounts for the financial year from April 1 2012to March 31 2013 on a 'going concern basis for reasons stated in note no.39 on theaccounts of the Company.
9. Audit Committee
The Audit Committee comprises of the following Directors:-
|Mr. S. V. Venkatesan - ||Chairman |
|Mr. M. Sinivasan - ||Member |
|Mr. Ravindranath Gupta - ||Member |
|Mr. N.Srinivasan - ||Permanent Invitee |
10. Corporate Governance
A separate section on Corporate Governance and a Certificate from the Auditors of theCompany regarding compliance of conditions of Corporate Governance as stipulated by theListing Agreement with the Stock Exchanges form part of the Annual Report for thefinancial year ended March 31 2013. The Management Discussion and Analysis Report is alsoenclosed.
The Auditors CNGSN & Associates LLR Chartered Accountants Chennai retire at theensuing Annual General Meeting and it is proposed to appoint the reconstituted firm vizCNGSN and Associates LLP Chartered Accountants Chennai as auditors for the ensuingfinancial year 2013-14.
With reference to the observations in the Auditors Report the relevant financialnotes on investment in subsidiaries loans and advances including provision for doubtfuldebts and advances are self explanatory.
Further the Companies ability to carry on its business as a going concern'has also been amplified in the appropriate financial note.
With reference to the observations in the Auditors Report of the Subsidiariesthe Board of the respective subsidiaries have adequately respondend to the observations intheir report.
Particulars of Employees
The information required under Section 217(2A) of the Companies Act 1956 and the Rulesmade thereunder would be made available to the Members on request.
The particulars required pursuant to Section 217(2A) of the Act read with the Companies(Particulars of Employees) Rules 1975 as amended forms part of this Report. However interms of the provisions of Section 219(l)(b)(iv) of the Act the Directors' Report(excluding the Statement of Particulars of Employees) is being sent to all theshareholders of the Company. Any shareholder interested in obtaining a copy of the saidStatement may write to the Registered Office of the Company.
13. Conservation of Energy Research & Development Technology Absorption ForeignExchange Earnings and Outgo
There is no material development to report relating to conservation of Energy Research& Development and Technology Absorption as required under Section 217 (1) (e) of theCompanies Act 1956. Information pertaining to Foreign Exchange Earnings and Outgo are ascontained in Item Nos. 32 and 33 of the Notes on Accounts respectively.
The Board places on record its appreciation to the Bankers to the Company and itsSubsidiaries for their continued support. The Board also places on record its appreciationfor the guidance and support extended by host of consultants and advisors. The Boardacknowledges gratefully the continuing relationship with customers and business partners.Your Directors express their appreciation of the co-operation and assistance extended bythe Central Government and the State Governments and the various Governmental Agencies.The forbearance and support of shareholders and the co-operation of employees aregratefully acknowledged.
| ||For and on behalf of the Board of Directors |
|Chennai ||M. Sinivasan |
|December 15 2014 ||Chairman |