ESL INDUSTRIES LIMITED
ANNUAL REPORT 2004-2005
The Members of
ESL INDUSTRIES LIMITED,
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.
The overall performance of the Company for the financial year 2003-2004 is
summarized as under:
(Rs. in Lakhs)
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 -
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.
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.
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.
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.
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
There are no employees whose particulars are to be disclosed pursuant to
the provisions of Section 217(2A) of the Companies Act, 1956.
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
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.
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
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
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.
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
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
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
During the year under review company has not allotted any shares.
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 (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.
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.
The Company has not employed any work force during the year except Tow
For and on behalf of the Board
D. Mohan Raj
Place : Hyderabad
Date : 29.08.2005