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Grand Foundry Ltd.

BSE: 513343 Sector: Metals & Mining
NSE: GRANDFONRY ISIN Code: INE534A01010
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Grand Foundry Ltd. (GRANDFONRY) - Director Report

Company director report

The Members of

GRAND FOUNDRY LIMITED

Your Directors present herewith the Twenty Third Annual Report together with theAudited Statement of Accounts for the year ended March 312015.

1. FINANCIAL RESULTS

(Amount in Rs. in Lacs.)
2014-2015 2013-2014
Profit/(Loss) before Interest Depreciation and Taxation 2.16853 (7.29866)
Less : Interest & Finance Charges 27.10085 77.42621
Depreciation 21.52524 24.37208
Profit/(Loss) for the year 46.45756 (109.09695)
Less : Prior Period Expenses 6.48740 0.94200
Less : Deferred Tax Asset (Net) 180.38583 138.58313
Balance Brought Forward (1513.86036) (1628.54454)
Add: Provision for Subsidiary Company’s losses Nil Nil
Add: Dimunition of Value of Investments 0.00 0.00
Debit Balance carried to Balance Sheet (1745.65046) (1513.86036)

2. MANAGEMENT DISCUSSION AND ANALYSIS

a) INDUSTRY STRUCTURE AND DEVELOPMENTS:

Our Company is engaged in the business of manufacturing Bright Steel Bars and wires andis in the market to sell domestically and In exports since 1974. The Quality control andmanufacturing process consist of in-house treatment and has standard quality name for morethan 2 decades. Due to financial constraints the company is been depending on business ofprocessing steel on job work basis to maintain better economics and has successfully beenable to achieve job work production. The Company also has indulged In the special heattreatment job in order to establish future market of Hardened & Tempered steel forexports as well as domestic which will pave the path of revival and re-instating thestrength of the company.

DOMESTIC MARKET: -

There has been a substantial change of steel requirement in the domestic as well asinternational market for the consumption of Bright Steel Bars and wires. Majority ofBright Steel Bars and wires are used for making the various kinds of components forAutomotive industry Machinery manufacturing industry Dairy & food processingindustry chemical and fertilizer industry electronics and electrical appliances industryalong with computer industry. Due to global interaction and industrial change in domesticmarket various companies have invested especially in automobile industry and electricalappliances industry along with computer industry.

As your company has been well versed with international business qualityspecifications end market trends which will be convenient and easy for the company tocapture such trends. Various trial orders and sample approvals and certain bulk supplieshave been established during the year to continue the pace with domestic market.

INTERNATIONAL MARKET: -

The Company is well established for selling and marketing Stainless Steel Bright Barsinternationally in most of the developing countries and has maintained their market share.In the international scenario for Stainless Steel Bright Bars business has been on thegreater recessionary trend for more than 5 years due to which the company has to gothrough the constant survival problems. But at the same time due to long term standingin the market the company has been able to maintain its market outside India forStainless Bright Bars and capturing orders and executing the same with the variousfinancial arrangements. Short term spurts of improved demand has been affecting thecompany to regain its position from time to time in the international market but theconsistent improvement has been lacking in the international market since long time. Thecompany has still been able to remain in the market even with these trends as wellrecessionary trends. As known worldwide Indian steel has faced a lot of anti-dumpingsuits for Bright Steel Bars from European Community U.S.A. Canada the company hassuccessfully being able to fight such anti-dumping petition and retain reasonable suppliesto these countries and struggle to retain its position even at low profitability.

b) OPPORTUNITIES AND THREATS OPPORTUNITIES

• The Company is engaged in the business since more than thirty years and hasexpertise for marketing and quality maintenance of international quality standards formore than 2 decades and enjoys the market share in developed countries like United Statesand European market.

• The Company is continuously sourcing economical raw materials from China &to compete the international market for exports. These efforts & expertise is beenused for earning income by means of conducting Business for M/s D.H. Exports PrivateLimited for last few year.

THREATS

As the major product of the company is made of Stainless Steel carrying highnickel (metal) which is a sensitive item quoted in LME (London Metal Exchange) thefluctuation may affect the business opportunities and its profitability.

As company’s major business is depending on exports the fluctuation inforeign currency may also affect the profitability.

c) SEGMENT- WISE PERFORMANCE

The Company has in the last 5 years developed various heat treatment processes andsuccessfully supplied commercial lots of heat-treated bars to specific standards in theinternational market in American German standards. The scope of business is huge andnormal as this product is utilized and acceptable for various applications in theEngineering industries including Petro Chemical Oil & Natural gas and Automotiveindustries worldwide. The company is looking for better profitability business and thiskind of supplies keeping the edge over the other competitors. Stringent quality standardsand method of processing has been introduced to achieve better reliability andtraceability for these kind of products which is mandatory for extending marketing. Theinternational players and competitors for such products are from Italy Spain and Koreabut with such renowned and established competitors the company has been able to stand inthe international market establishing its product range internationally.

d) OUTLOOK

The manufacturing facility of the company has been now fully in operation and the newlocation for the business activity is defined at Nagpur/Bhandara. The Company is currentlyearning income from outsourcing manufacturing & marketing exports and earningcommission income from the same & doing dedicated job processing for M/s Sunfiag Iron& Steel Ltd well known Manufacturer of Alloy & Special Steel.

e) INTERNAL CONTROL SYSTEMS

The Company has adequate Internal Control systems which provide inter- aliareasonable assurance of recording the transactions of its operations in all materialrespects and providing protection against misuse or loss of Company assets.

f) FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Total Income achieved during the year under review is Rs. 106.057 lacs as against Rs.280.86 lakhs in the previous year. During the previous year the major source of incomeconsisted of exports /sales whereas in the current year commission has been derived fromthe exports/sales passed onto fellow industries to maintain the marketing strength of thecompany. Further with the latest update available the Hon’ble BIFR has examined theDRS and circulated the same. In the hearing to be held in the month of November 2014 theorder for the same would be passed and subject to the direction of BIFR the paid up sharecapital of the Company of Rs. 104300000 consisting of 10430000 equity shares of Rs. 10/-each fully paid up shall be written off to Rs. 41720000 consisting of 10430000 equityshares of Rs. 4/- each by effecting a reduction of Rs. 62580000 from the paid up capitalof the company by Rs. 6/- per equity share of Rs. 10/- each. Simultaneously with writingdown of existing equity share capital of Rs 1043 lacs by 60% through write of accumulatedlosses against face value of share and thus reduce Face Value of share from Rs 10 to Rs.4/-. Thereafter fresh issue of equity shares of Rs 600 lacs (150 lacs shares at Rs. 4 pershare) to the promoters for expansion of business. And subject to the approval of thisscheme of Rehabilitation and subject to the direction of BIFR the BSE/NSE to open thetrading which has been suspended by the stock exchanges and also to list the furtherissued capital as provided in the scheme.

3. ACCEPTANCE OF DEPOSIT (SEC - 58A)

The Company has not invited/accepted any deposits from public coming under the purviewof section 73 to 76 read with Rules of the Companies Act 2013.

4. CORPORATE GOVERNANCE

Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges a compliancereport on Corporate Governance together with a Certificate from Practicing CompanySecretaries is annexed as part of the Annual Report.

5. COST AUDIT

The company is not required to undertake the cost audit as required under Section 148of the Companies Act 2013.

6. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanation obtained by them your Directors make the following statement in terms nfSection 134/81 nf the Cnmnanies Act. 2013 that

a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis; and

e) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively

7. DIRECTORS

In accordance with the Articles of Association of the Company and provisions of theCompanies Act 2013 Mr. Hiten Jangia retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment. Your Directors recommendhis re-appointment.

8. STATUTORY AUDITORS

You are requested to appoint Auditors for the current year and fix their remuneration.The Auditors of the Company THAKER BUTALA DESAI Chartered Accountants retire at ensuingAnnual General Meeting of the Company and are eligible for reappointment.

9. PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

Information pursuant to Section 134 (3)(m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 Rules 2014 is as follows; POWER &FUEL OIL CONSUMPTION

1. Electricity Consumption 2014-2015 2013-2014
Purchased units Total amount Rs. Lacs Rate/unit Rs. KHz NIL NIL
2. LDO
Quantity (KL) NIL NIL
Total amount Rs. Lacs Rate Rs/KL * (As recovered from party)

There were no foreign exchange earnings and outgo during the period under theconsideration.

10. SECURITY EXCHANGE BOARD OF INDIA (SEBI) to consider:

To grant exemption to the company from the provisions of SEBI Guidelines forPreferential Allotment of Shares SEBI (Substantial Acquisition of shares & Takeovers)Regulations 1997 SEBI (Disclosure & Investor Protection) Guidelines 2000 SEBI(Central Listing Authority) Regulations 2003 and ceiling on promoters holding and anyother applicable Rules and Regulations for the issue of equity shares to the

Promoters as envisaged under the Scheme provided such equity shares shall be locked infor a period of three years in case allottees are non-promoters.

11. NATIONAL STOCK EXCHANGE BOMBAY STOCK EXCHANGE to consider: Stock Exchange(s) onwhich the shares of the company are listed shall:

i. Revoke the suspension of trading of the equity shares forthwith and list the reducedshares as well as shares allotted in terms of the sanctioned scheme without any cost ofcharges;

ii. Exempt the Company from the provisions of the Companies Act SEBI Guidelines andthe listing requirements

iii. Waive listing fee and other arrears including interest and penalties; and

iv. Allow trading of shares

12. PARTICULARS OF EMPLOYEES

Since none of the employees of the Company was drawing remuneration in excess of limitslaid down pursuant to the provisions of the Companies Act 2013 read with the Rulesdetails herewith are not furnished.

13. PERSONNEL

Your Directors place on record their appreciation to the sincere and dedicated servicesput in by the employees of the Company at all the levels and in the departments of theCompany.

14. BANKERS

The Directors place on the record their appreciation for the support and co-operationreceived from all the Bankers.

For and on behalf of the Board of Directors
Hiten D. Jangla
Place: Mumbai Chairman
Date: September 05 2015
Reaistered Office:
327 Arun Chambers
3rd Floor Tardeo
Mumbai - 400034