The Directors have pleasure in submitting the 22nd Annual Report togetherwith the Audited Accounts for the financial year ended 31st March 2015.
(Rs. in Lacs)
|Particulars ||Year ended 31.03.2015 ||Year ended 31.03.2014 |
|Gross Turnover ||3057.31 ||6937.61 |
|EBIDTA ||-922.18 ||-1461.74 |
|Profit After Tax (PAT) ||-3243.69 ||-5024.41 |
Financial Analysis / Review FY 2014-15
FY 14-15 and FY 13-14 continue to be difficult years for capital goods industry inIndia due to adverse factors which has shown no signs of improvement in the past twoyears. Some of the key factors which are responsible for this negative growth in theIndustry are:
Non implementation of policy initiatives by the Government leading to delay inupcoming projects in the infrastructure specially oil and gas and power sector.
The power sector did not show any sign of comeback from the slowdown. AlthoughGovernment has reallocated the coal blocks but the mining production and availability ofthe coal is yet to pick up.
Increase in the prices of key raw materials and other inputs.
Inadequate Bank Finance for implementation of projects.
With the Make-in-India initiative by the Government of India the Company expectsopportunities for growth in the manufacturing sector. With the coal block re-allocationmining and production activities in the power sector is likely to pick up in the nearfuture. Stalled projects held due to environment and financial reasons of tariff rates andfunding from lenders are likely to be revived. This would give a boost to Company'sturnover and profitability. The Company has initiated various measures to increase theorder book as well as to get into more profitable segments:
Measures to Increase the Order Book:
Focus on the Oil and Gas sector in the export markets especially Middle Eastwhere good opportunities exists for the Company.
Company has established itself as EPC Company and executing orders for NuclearPower Project. Company will explore opportunities in similar projects keeping focus on theNuclear Power.
Company is working to set up strategic alliance with potential partners forwidening the product range falling in core competence.
To offer engineering & technical services in its core area to clients withinand outside the Country where there is good potential for business in the new projectsrevamp and performance enhancement of Air Cooled Heat Exchanger and Air Cooled VacuumSteam Condensers of various existing projects executed by the Company and others.
Continued marketing efforts for ACSC packages for higher megawatt (300/660 MW)projects.
Measures to boost profitability:
Increased focus on exports. During 2014-15 company bagged an export order worth2.5m USD from Oman.
Increased focus on product lines like EPC Balance of Plant & Process skidsto increase profitability.
Standardize design to reduce inventory / procurement lead-time.
Reduction / Rationalization of work force across locations.
Reduction in Administration & selling expenses.
Engineering Procurement and Construction (EPC)
> Company has bagged order from Al Hassan Engineering Company Oman for supply ofAir Cooled Steam Condensers for Petroleum Development of Oman (PDO) for pilot project forenhanced oil recovery from Oil wells. This Is the first of its kind and then will be takenup for all such wells in Oman. This will open good opportunities for the Company.
> Successfully executed contract for Air Cooled Heat Exchangers with WinterizationScheme for the first time for cooling of low pour point fluids in the refinery. This isdesigned as per API 661 with Aluminium Louvers developed in house by GEI.
Export House Status
The Company continues its "Export House" status as recognised by the Ministryof Commerce & Industry Government of India.
The Company has not accepted deposits from the public during the year under review.There were no overdue deposits for repayment on the date of this report.
Mr. Ajitha kumar Kandampully Appu and Mrs. Perizad Ghosh has resigned from the Board ofDirectors w.e.f. 14 November 2014 and 16 April 2015. The Directors place on record theirappreciation of the valuable services rendered by Mr. Ajitha kumar Kandampully Appu duringtheir tenure.
Mr. Pannalal Mundhra and Mr. Robinson Fernandez retire by rotation and being eligibleoffer themselves for reappointment at the ensuing Annual General Meeting.
GEI Power Limited (Wholly Owned Subsidiary Company)
GEI Power is also adversely affected by the difficult situation in the new power plantsegment. The Company is hopeful that a revival of the power sector in the country willhelp it get significant orders and increase capacity utilization in a big way.
As on date the total manufacturing capacity of GEI and GEI Power is approx. 2000-2500MW of Air Cooled Vacuum Steam Condensers or equivalent equipments. This does not includecapacity available for Air Cooled Heat Exchanger for Oil and Gas Sector.
In view of the general exemption granted by the Ministry of Corporate AffairsGovernment of India under Section 129 of the Companies Act 2013 the Audited Statementsof Accounts Directors' Report etc. of the wholly owned subsidiary company - GEI PowerLimited are not annexed to this report. However the same will be made available tomembers of the Company on request and can also be inspected at the Registered Office ofthe Company as well as the subsidiary. Pursuant to the condition of the general exemptiona statement of the summarised financials of the subsidiary is attached along with theConsolidated Financial Statements. Pursuant to Accounting Standard AS-21 issued by theInstitute of Chartered Accountants of India Consolidated Financial Statements presentedby the Company include the financial information of its subsidiary.
Due to inadequacy of profit your Directors regret their inability to recommend anydividend on Equity Shares for the financial year 2014-15.
Directors Responsibility Statement
Pursuant to the requirement under Section 134 sub-section (3) clause (c) of theCompanies Act 2013 with respect to the Directors' responsibility statement it is herebyconfirmed that:
(i) In the preparation of the accounts for the financial year ended 31st March 2015the applicable accounting standards have been followed along with proper explanation;
(ii) The Directors have selected such accounting policies and applied them consistentlyand made judgment 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 loss of the Company for the year;
(iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) The Directors have prepared the accounts for the financial year ended on 31stMarch 2015 on a going concern basis.
(v) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
Information in accordance with the provisions of Section 134 (1) (m) of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 regarding conservation of energytechnology absorption and foreign exchange earnings and outgo is given in Annexure-Aforming part of this report.
Particulars of Employees
Disclosure requirement in accordance with Section 134 of the Companies Act 2013regarding salary particulars of employees is not applicable as they are within thethreshold limits.
As required under the Companies Act 2013 and the Listing Agreement with the StockExchanges the Company adheres to the principles of Corporate Governance and continues tofocus on adopting the best Corporate Governance practices. A detailed report dulycertified by the Practising Company Secretary forms part of this report.
Secretarial Audit Report
As a measure of good Corporate Governance Secretarial Audit of the Company wasconducted by CS Dhanraj Singh Thakur Practising Company Secretary and their report isattached. The Secretarial Auditor has given their comments on the various statutory pointsabout compliance with the requirements of Companies Act 2013 Listing Agreement with theStock Exchanges and other applicable laws.
The management reply on the qualifications given by the Secretarial Auditor in hisreport is as follows:
Company did not receive the data relating to Statement of Unclaimed and Unpaidamounts of Dividend from the bank after so many reminders therefore the Company has notfiled Form INV-5.
Due to unavailability of proper and efficient proposal for the post of CompanySecretary the company was unable to appoint the Company Secretary in its previous Boardmeetings .However the board decided to review the proposals received along with somefresh applications so as to fill the vacancy at its earliest and appoint the candidate asthe Company secretary of the company as per Section 203 of the Companies Act 2013subject to the approval of all or majority of the Directors in the forthcoming BoardMeeting.
After appointing Company Secretary in the forthcoming Board Meeting the CompanySecretary will be appointed as the Compliance Officer of the Company as per Clause 47(1)of the Listing Agreement.
The Company in its Board Meeting held on 21st August 2015 appointedthe Internal Auditor as per Section 38 of the Companies Act 2013 and Cost Auditor as perSection 148 of the Companies Act 2013.
The Company had complied with the provisions of Clause 31 of the ListingAgreement and the Annual report for the year 2013-14 was filed with a fine of Rs. 21618/-to both of the Stock Exchanges (NSE and BSE).
The Company has paid the Annual Listing fees to Bombay Stock Exchange (BSE) andNational Stock Exchange of India Limited (NSE) for the year 2014-15 on a later date.
As the office of Compliance Officer remained vacant for the year the Company wasunable to comply with the provisions of SEBI (PIT) Regulations 1992 due to inadvertence.Now that the Company Secretary will be appointed in the forth coming Board Meeting wewill ensure future compliances.
The members are requested to ratify the appointment of Auditors for the period from theconclusion of the ensuing Annual General Meeting until the conclusion of the next AnnualGeneral Meeting and to fix their remuneration.
A.K. Khabya & Co. Chartered Accountants the Statutory Auditors of your Companyholds office until conclusion of the ensuing Annual General Meeting and is eligible forreappointment.
The management reply on the qualifications given by the Statutory Auditor in his reportis as follows:
Clause No fii) (a) of Annexure to Audit Report - Relating to Physicalverification of inventory: -
Management Response: Verification of inventories has been carried out by the managementas weil '. ihe Financial Institutions.
Clause No fvifl (a) of Annexure to Audit Report - Relating to payment toStatutory Dues:-
Manaaement Response: The Company is facing cash flow pressure due to losses during thepast three years. The company proposes to clear all statutory dues as soon as the cashflow position improves after the bankers restructuring.
Health Safety & Environment
The Company continues to maintain the highest standards of health safety andenvironment. It emphasises preventive philosophy in respect of these matters andrecognises significance of creating awareness through training & development on acontinuous basis. Eliminating potential risks in all the areas of operations is carriedout with the aim of total safety.
As a responsible corporate citizen your Company believes in being environment friendlythat manifests in all the areas of its working and operations. Not only its technologyhelps environment protection but adopts the culture of sustainability in every sphere ofits activities.
During the year under review industrial relations continued to remain harmonious.
Your Directors take this opportunity to thank the Financial Institutions BanksCentral and State Government Authorities Regulatory Authorities Stock Exchanges andStakeholders for their continued co-operation and support to the Company. Your Directorsalso wish to record their appreciation for the committed services rendered by theExecutives Staff and Workmen of the Company.
| ||For and on behalf of the Board |
|Place: Bhopal ||C E Fernandes |
|Date: 21.08.2015 ||Chairman & Managing Director |
Annexure to Directors Report for the year ended 31st March. 2015
Information as required under Section 134(3) (m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014.
A. CONSERVATION OF ENERGY:
a. Measures Taken:
Company has undertaken following steps for conservation of energy:
i) Strict vigil on Power Light and Air conditioning load.
ii) Optimizing power factor by maintaining adequate power capacitors.
iii) Reduction in daily running time of ACs. along with switching off lights and ACsduring lunch break.
b. Additional Investments and proposals if any for reduction in consumption of energy- Automatic power factor control panel and Servo Voltage Stabilizer are proposed.
c. Impact of a & b - Saving in Light & Power Load
d. Total energy consumption - As per Form - A below
POWER & FUEL CONSUMPTION
| ||Year Ended 31.03.2015 ||Year Ended 31.03.2014 |
|(a) Purchased || || |
|Unit-Kwh ||46180 ||693360 |
|Total Amount (Rs) ||5528362 ||7745207 |
|Rate/Unit (Rs) ||11.98 ||11.17 |
|(b) Own Generation || || |
|Through Diesel Unit-Kwh ||2016 ||2856 |
|Cost/Unit (variable) Rs. ||30.79 ||29.42 |
RESEARCH AND DEVELOPMENT
|1. Expenditure on R&D * || || |
|(a) Capital ||Nil ||Nil |
|(b) Recurring ||Nil ||Nil |
|(c) Total ||Nil ||Nil |
|(d) Total R&D Expenditure as a percentage of total turnover ||Nil ||Nil |
* Project specific R&D expenses were accounted in the respectiveprojects/intangible assets under development.
2. Foreign Exchange Earnings & Outgo
Details of foreign exchange earnings and outgo for the year are given under Notes 24.3and 24.4.