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ESL Industries Ltd.

BSE: 512583 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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ESL Industries Ltd. (ESLINDS) - Director Report

Company director report

ESL INDUSTRIES LIMITED ANNUAL REPORT 2004-2005 DIRECTORS' REPORT To The Members of ESL INDUSTRIES LIMITED, Hyderabad Your Directors take pleasure in presenting the 17th report on the affairs of the Company for the financial year 2004-2005 together with the Audited Financial Statements and Report of the Auditors thereon. BUSINESS PERFORMANCE: Financial Results: The overall performance of the Company for the financial year 2003-2004 is summarized as under: (Rs. in Lakhs) Particulars 2004-05 Sales (Net) - Increase / (Decrease) in Stocks - Other Income 0.75 Total Revenue 0.75 Administrative : Operating Expenses 1.29 Profit/Loss before Financial Expenses & Depreciation -0.54 Interest & Financial Expenses - Depreciation 0 Net Profit / (Loss) after Financial Expenses & Depreciation 0.54 During the year 2004-05, the Company has posted a turnover of Rs.0.75 lacs on other Income since business operations were completely stopped. Due to inadequacy of profits, the Board has not recommended any dividend nor any transfer to reserves. Future outlook: The line of business of the Company, as a part of Pollution control equipments, has been subdued due to total black out on major industrial projects. With no orders in hand, working capital eroded due to stuck payments from customers and unilateral freezing of Bank accounts by the Banks and subsequent order of Debt Recovery Tribunal forced the Company to stop business operations which are not likely to start after the Auction sale by the Bankers. DIRECTORS: During the period, Shri S.K.Saida retires by rotation and being eligible offers himself for reappointed. There is no change in Directors during the period under review. DIRECTORS' RESPONSIBILITY STATEMENT: In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, Your Directors state: (i) That tile accounting standards to the extent applicable to the Company have been followed n the preparation of then annual accounts. There are no material departures there from. (ii) That the accounting policies selected by the Board for the purpose of preparation and presentation of the financial statement have been and are being applied consistently and reasonable and prudent judgments and estimates (wherever applicable) have been made for the said purpose so as to give a true and fair view of the affairs of the Company as at the end of the financial year under review and of the profit/loss for the said year. (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 to your company and for preventing and detecting fraud and other irregularities. (iv) That the annual Accounts have been prepared on a going concern basis. AUDITORS: M/s.P.Murali & Co. Chartered accountants, Hyderabad, the Auditors of the company was expressed their inability to continue, hence M/s S. Suresh & Co., Chartered Accountants are appointed up to conclusion of the ensuing Annual General Meeting and are eligible for reappointment. The Board recommends their reappointment. LISTING: The shares of your company are listed on Mumbai, Ahmedabad and Hyderabad Stock Exchanges. Given the NIL trading volumes on all Stock Exchanges and complete closure of business operations, the Company proposes to delist is shares from Mumbai, Hyderabad and Ahmedabad Stock Exchanges subject to your approval. EMPLOYEES: There are no employees whose particulars are to be disclosed pursuant to the provisions of Section 217(2A) of the Companies Act, 1956. FIXED DEPOSITS: During the year under review, the company has not accepted any deposits under Section 58A & 58AA of the Companies Act 1956 read with Companies (Acceptance of Deposits) Rules, 1975. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Information retarding Energy Conservation, Technology Absorption, Foreign Exchange Earnings and outgo in accordance with Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of Board of Directors) Rules 1988, forming part of the Directors Report for the year ended 31st March, 2003 is as follows: 1. Conservation of Energy : There have been no business operations, there was no use of energy of any form except for Office lighting. 2. Technology Absorption: a. Research & Development There is no specific Research and Development activity carried out by the Company during the year. b. Technology Absorption Nil 3. Foreign Exchange Earning and Outgo: Nil CORPORATE GOVERNANCE: The company has implemented the Code for Corporate Governance as stipulated under Clause 49 of the Listing Agreement. A separate report on Corporate Governance is annexed to this report. DEMATERIALISATION OF SHARES: M/s. Aarti Consultants Private Limited, Hyderabad were appointed as Depository Registrars for dematerialization of shares and for physical shares also the transfer work was entrusted to them. The Company made an application to NSDL and CDSL for demat of shares but the Depositories have not granted the ISIN number till date. Since Company purposes to delist from Stock Exchanges, Demat will no longer be required. ACKNOWLEDGEMENTS: The Board takes this opportunity to express its deep gratitude for the continued co-operation of the shareholders, business associates and employees during the year under review. On behalf of the Board of Directors Place : Hyderabad Sd/- Date : 29.08.2005 D. MOHAN RAJ MANAGING DIRECTOR Annexure - B to Report of the Directors Management Discussion & Analysis Industry structure and developments: The India manufacturing industry has demonstrated impressive growth in the last few months after a prolonged slump of almost five years. However, large scale new projects are still at planning stages which is the prerequisite for the Company's revival. There are only few companies into the line of activity of the Company for manufacture o Pollution control equipments. Opportunities and Threats: The Company is a the only such manufacturer in the State of Andhra Pradesh with diverse capabilities in the areas of a range of products. However, due to uttar lack of orders and non availability of working capital from Banks, the business operations have been closed. Outlook: During last years, the Management of the Company trade efforts to review by pumping money into the working capital which also got stuck due to non payments by customers resulting in complete of work. This led to exodus of employees having no room for revival. The Bankers have approached Debt Recovery Tribunal which has passed an Order for auction of assets of the Company. The shareholders value is completely eroded by unilateral action taken by the Bankers. Risks and concerns: Since the business operations have been completely closed down owing to the order of Debt Recovery Tribunal, the Company and its shareholders are saddled with the net worth completely eroded and leaving the only option for the Company to be would up. Internal control systems and their adequacy: The internal control systems are aimed at promoting operational efficiencies. The Company had been conducting internal audit at regular intervals to ensure that: a) Transactions are executed in accordance with the Company's policies and autorizations. b) Development of funds are in accordance with the company's policies. The internal audit is now stopped due to complete closure of business operations. The Audit Committee though existing is rendered incapable and non-operative. The Audit committee with three independent and non-executive directors has had a meeting only once in the year under review for approval of Audited Accounts. Financial Condition: Share Capital: During the year under review company has not allotted any shares. Secured Loans: The Credit facilities of the Company from Bank stand frozen following the order of Hon'ble Debt Recovery Tribunal dated 12.10.2001 and, this has resulted into complete closure o business activity of the Company during the year 2004-05. The Loans outstanding are Rs.485.12 lacs. Fixed Assets: Fixed Assets (Net block) stood at Rs.400.67 at the year end as against Rs.400.67 lacs in the previous year. No Depreciation is provided since no operations in the company. Current Assets: The Net current assets of the Company have increased to Rs.647.04 lacs as on 31st March 2005 from Rs.604.82 lacs last year. The increase is due to decreasee in current liability. Human Resources: The Company has not employed any work force during the year except Tow employees. For and on behalf of the Board D. Mohan Raj Managing Director Place : Hyderabad Date : 29.08.2005