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Directors Report of EL Forge Ltd.

Mar 31, 2015

The Directors present the 79th Annual Report along with the Audited Accounts of the Company for the year ended 31st March, 2015.

1. Summarised Financial Results are given below

(Rs.in lakhs)

For the year ended For the 9 Months 31.03.2015 ended 31.03.2014

Gross Sales 5775.40 6358.89

Other Income 21.04 847.64

Profit/(Loss) before Depreciation (803.20) (430.21)

Profit/(Loss) after Depreciation (1777.04) (1135.59)

Net Profit/(Loss) after tax (1777.04) (1135.59)

2. Company Performance

During the year the company continued to work with constrained funds as the bankers had stopped all working capital assistance to the Company. With the minimum funds available and the support from customers and suppliers the company made a turnover of Rs.5374.66 lakhs as compared to Rs.6649.61 lakhs for the previous accounting period of 9 months. As the operations were below breakeven levels the company incurred a loss of Rs.1777.04 lakhs during the year.

The management is taking steps to revive the company. Efforts are being made to mobilize funds for operations to exploit at the full potential of the Company. The company has taken all steps to cut down costs wherever possible and improve efficiency levels.

3. Dividend

The Directors have not recommended any dividend for the year due to loss incurred .

4. Shakespeare Forgings Ltd

Shakespeare Forgings Ltd, UK has ceased to be a subsidiary company during the year. The business in UK had dropped due to the market conditions and it was not viable to continue manufacture in UK. There was also a need to infuse funds for maintaining the business at UK. Further the plant is required to be transferred from the present location to new location, which also require additional funds. Under these constraints the subsidiary company has found an investor to infuse required funds and continue operations.

The equity share capital of Shakespeare forgings Ltd was increased by GBP 250000 and the same was subscribed by the new investor. With the new infusion the shareholding of our company dropped to 37.5% compared to 100% holding previously. As it is no more a subsidiary of our company the accounts of Shakespeare forgings is not consolidated with our accounts and other details are no longer required to be furnished.

5. Borrowings

The total outstanding with the banks as on 31st March, 2015 has been Rs.139.54 Crores. During the year some of the Banks assigned their debts to Asset Reconstruction Companies. Export Import Bank of India had assigned their debts to Edelweiss Asset Reconstruction Co. ltd. last year. During the year Union Bank of India assigned its debts to Edelweiss Asset Reconstruction Co. Ltd and State Bank of India assigned its entire debts to Asset Reconstruction Company (India) Ltd, (Arcil), The borrowing, form IDBI Bank, Axis Bank Ltd and Royal Bank of Scotland still remain with the respective banks.

It is expected that consolidation of the debt with the Asset Reconstruction companies will happen in course of time. This is expected to facilitate obtaining fresh working capital loan, that will help to steer the company back to profitable operations and maximize value to all stake holders.

6. CORPORATE MATTERS

6.01 Human Resources

El Forge has always been a people driven Company and its employees remain its most valuable asset. Our employees have always extended full cooperation and support in good as well as difficult times, and have unstintingly put effects to deliver on all our commitments.

The Human Resources practices at your Company empowers the employees through greater knowledge, opportunity, responsibility, accountability and reward. Emphasis is laid on identifying & nurturing talent. Continuous improvement techniques are followed for betterment of the skills in the organisation by implementing TQM & other training programs and there exists an excellent system of assessment of the employees based on the sound HR practices.

During the year under review, the total number of employees on the rolls of the Company is 232

6.02 Particulars of Employees and Related Disclosures

In terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, there is no employee drawing remuneration in excess of the limits set out in the rules. Hence details and disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are not provided in this report.

6.03 Directors

Mr.V.Ramachandran, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-election.

Mrs.R.Sowmithri, was appointed as an Executive Director of the Company with effect from 30.03.2015. With this appointment the company has complied with the provisions of Companies Act, 2013 and Clause 49 of the Listing Requirements that had made it mandatory to appoint a woman director on the Board.

6.04 Key Managerial Personnel

Mr.K.V.Ramachandran, Vice Chairman & Managing Director and Mrs.R.Sowmithri, ED(Finance) & Secretary of the Company both of them within the meaning of Section 2(18) of the Companies Act, 2013 hold the office of Key Managerial Personnel respectively.

7. Corporate Governance

With reference to Corporate Governance guidelines as laid at in Clause 49 of the Listing Agreement, the Company ha s complied all possible requirements. Due to circumstances beyond its control the company, It has not been able to fill in the vacancies caused by the resignation of all independent directors during last year. The Company seeks time to fill in the vacancies. Annexure A contains report on corporate governance enclosed herewith.

At present the Company has four directors of which two are executive directors and two non executive promoter directors. As a result the audit committee, remuneration committee etc which need to be constituted with independent directors is not possible in the present circumstance. All the 4 directors have carried out the duties of the audit committee & remuneration committee. Due to this fact provisions of sections 177 and 178 of the Companies Act, 2013 have not been complied in full. Barring the aforesaid non compliance, all other stipulations have been complied with by the Company. The detailed report on Corporate Governance is annexed. The compliances have been reported and the Certificate from the Statutory Auditors have also been annexed to the Report on Corporate Governance.

8. Internal Control System and their adequacy

The Company has adequate system of internal control with reference to the financial statements. All the transactions are properly authorised, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by your Company. The Company ensures proper and adequate systems and procedures commensurate with its size and nature of its business.

9. Conservation of Energy, Technology Abosorption and Foreign Exchange Earnings and Outgo

Information as per Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules 2014 relating to Conservation of Energy, technology absorption and foreign exchange earnings and outgo for the financial year 2014-15 are annexed as Annexure B which forms part of this Report.

10. Management Discussion and Analysis

Management Discussion and Analysis report for the year under review as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges in India is enclosed herewith please refer Annexure C.

11. Research & Development

R&D in El Forge is a continuous process. All efforts in product design and process development are directed at Customer's satisfaction, competitiveness, quality and responsiveness. This includes focus on material wastage reduction by improvement in technology and equipment with major emphasis at the Tool Room for value engineered die design and manufacture. Simultaneous efforts are made at the shop floor to improve manufacturing efficiency to sustain the development efforts. Annexure A to this report contains the details thereof.

12. Industrial Relations

Employees at all levels have contributed to the performance of your Company. Your directors place on record the co- operation of employees during the year under report. The Directors also place on record the unstinted cooperation extended by the staff members during the period under review.

13. Fixed Deposits

The Company has not accepted any fixed deposits during the year. The deposits are being repaid to the deposit holders as and when the deposit holders send their Fixed Deposit Receipts issued to them claiming their refund. As on 31st March, 2015, the outstanding deposits amount to Rs.104.26 lakhs .

14. Applicability of Section 197(12) of Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014

None of the employees come within the purview of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014

15. Directors Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that

a) In the preparation of Annual Accounts the applicable accounting standards had been followed.

b) The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the Profit or Loss of the Company for that period.

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets 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.

e) that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively.

f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

16. Remuneration Policy of the Company

The remuneration policy of the Company comprising the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company including criteria of determining qualifications, positive attributes, independence of a director and other related matters have been provided in the Corporate Governance report which is attached.

17. Extract of the Annual Return:

Extract of the Annual Return in the presence form is enclosed herewith in Annexure F.

18. Secretarial Audit

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, your Company engaged the Services of Mrs.B.Venkatalakshmi, Company Secretary in Practice, to conduct the Secretarial Audit of the Company for the financial year ended 31st March, 2015.

The Secretarial Audit report (in Form MR-3) is attached as Annexure to this Report. Please refer Annexure G in this report.

19. Related Party Transactions

All transaction entered by the Company with Related Parties were in the ordinary course of business and at Arm's Length pricing basis. The Audit Committee granted omnibus approval for the transaction (which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors.

There were no materially significant transactions with Related Parties during the financial year 2014-15 which were in conflict with the interest of the Company. Suitable disclosures as required under AS 18 have been made in Item No.20 of Note no.28 of financial statement.

Note.28 of the Notes on financial statements. Accordingly there are no transactions that are required to be reported in Form AOC-2 and as such does not form part of the report.

20. Corporate Social Responsibility

Our company does not fall under the criteria laid for Corporate Social Responsibility under section 135 of the Companies Act,2013 and hence the section is not applicable.

21. Particulars of Loans, Guarantees or Investments

Your Company has not made any loan or given any Guarantees or made any investment under Section 186 of the Companies Act, 2013

22. Vigil Mechanism / Whistle Blower Policy

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its powers) Rule 2014 and Clause 49 of the Listing Agreement, the Board of Directors had approved the policy on Vigil Mechanism / Whistle Blower and the same is hosted on the Website of the Company. The policy inter-alia provides a direct access to the Chairman of the Audit Committee.

Your Company hereby affirms that no Director / employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year.

23. Auditors

The Statutory Auditors M/s P.Rajagopalan & Co, Chartered Accountants, retire at the close of this Annual General Meeting and are eligible for re-appointment. The Company has received confirmation from the firm that their reappointment will be within the limits prescribed under Section 141(3)(g) of the Companies Act, 2013. The Board has recommended their re- appointment/ratification for a term of three years from 2014-15 to 2016-17. The necessary resolution is being placed before the shareholders for approval. The explanation to the audit remarks / qualification is given separate in addendum to the Directors Report.

24. Information as per Section 217(1)(e) of the Companies Act, read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules 1988

In terms of the above rules, your Board is pleased to give the particulars of the Conservation of energy, Technology absorption and the Foreign Exchange earnings and outgo as prescribed therein, in the Annexure which forms part of the Directors Report.

25. Acknowledgements

The Company places on record the co-operation of Bankers, State Bank of India, Axis Bank Limited, Union Bank of India, IDBI Bank Ltd, Royal Bank of Scotland (RBS), Export Import Bank of India, Indusind Bank, Kotak Mahindra Bank Ltd and Bank of Baroda and Asset Reconstruction companies - Asset Reconstruction Company(India) Ltd and Edelweiss Asset Reconstruction company ltd..We also thank all our Customers, Suppliers and others connected with the business for their co- operation. We sincerely thank the shareholders for their support.

For and on behalf of the Board of Directors

Place : Chennai V.SRIKANTH

Date : 13.08.2015 CHAIRMAN


Mar 31, 2014

Dear Members,

The Directors present the 78th Annual Report along with the Audited Accounts of the Company for the 9 months period ended 31st March, 2014.

For the 9 Months For the year ended ended 31.03.2014 30.06.2013 (12 months) (Rs.In Lakhs)

Gross Sales 6358.89 8298.07

Other Income 847.64 103.98

Profit/(Loss) before Depreciation (430.21) (2595.67)

Profit/(Loss) after Depreciation (1135.60) (3382.03)

Net Profit/(Loss) after tax (1135.60) (3382.03)

Year in Retrospect

The past year was very tough for the operations of the company. The company''s efforts to infuse long term funds by sale of non core assets could not be achieved as the value for these assets could not be unlocked due to the economic situation. The restructure of debts were conditional on the funds raised and, since this could not be done the restructure proposal was not be taken up. The consequent non availability of funds and reduced operations resulted in loss during 2013-14.

The company is continuing the efforts to achieve profitable levels by looking at all possible solutions available in this situation.

Dividend

The Directors have not recommended any dividend for the nine month ended 31st March, 2014.due to loss.

Subsidiary Company

The subsidiary Company Shakespeare Forgings Ltd has made a profit of Rs.74.63 lakhs during the 9 months period and does not depend on the Parent Company for its operations. Pursuant to the provisions of Section 212(8) of the Companies Act, 1956 (Act) read with General Circular No.8 of 2014 issued in No.1/19/2013-CL-V & its General Circular No.2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs vide, has granted a general exemption subject to certain conditions to holding Companies from complying with provisions of Section 212 of the companies Act,1956, which requires the attaching of Balance Sheet, Profit & Loss account and other documents of its subsidiary companies to its Balance Sheet. Accordingly, the said documents are not being included in this Annual Report. The main financial summaries of the subsidiary companies are provided under the section ''Subsidiary Companies . The Company will make available the said annual accounts and related detailed information of the Subsidiary Companies upon the request by any member of the Company or its subsidiary companies. These accounts will also be kept open for inspection by any member at the Registered Office of the Company.

Borrowings

The total outstanding with the banks as on 31st March, 2014 is Rs.139.57 Crores. The account has been classified as Non Performing Asset by all the Banks. During the nine months period, the company could not make any payments to the banks for the dues. The company is trying to find funds to repay the banks and re structure the debts by roping in investor/ new lender/ sale of non-core assets.

Directors

The tenure of the executive Chairman Mr.V.Srikanth ended on 30th June,2014. He has opted to continue as Chairman of the Company without drawing any remuneration.

During the year Export Import Bank of India had replaced the existing nominee Director with Mr.P.J.Manjunaath . Subsequently the Bank had assigned and transferred the loan along with the underlying securities to Edelweiss Asset Reconstruction Company. Due to this the Bank withdrew its nominee director from the Board. We do not have any nominee Director at present.

Corporate Governance

With reference to Corporate Governance guidelines as laid at in Clause 49 of the Listing Agreement, the Company has not been able to fill in the vacancies caused by the resignation of all independent directors during this year.

The Company seeks time to fill in the vacancy.

At present the Company has three directors of which two are executive directors and one non executive promoter director. As a result the audit committee, remuneration committee etc which need to be constituted with independent directors is not possible in the present circumstance. All the 3 directors have carried out the duties of the audit committee & remuneration committee. Apart from this all other stipulations have been complied with by the Company. The detailed report on Corporate Governance is annexed. The compliances have been reported and the Certificate from the Statutory Auditors have also been annexed to the Report on Corporate Governance.

Management Discussion and Analysis

Management Discussion and Analysis report for the year under review as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

Research & Development

R&D in El Forge is a continuous process. All efforts in product design and process development are directed at Customer''s satisfaction, competitiveness, quality and responsiveness. This includes focus on material wastage reduction by improvement in technology and equipment with major emphasis at the Tool Room for value engineered die design and manufacture. Simultaneous efforts are made at the shop floor to improve manufacturing efficiency to sustain the development efforts.

Industrial Relations

Employees at all levels have contributed to the performance of your Company. Your directors place on record the co-operation of employees during the year under report. The Directors also place on record the unstinted cooperation extended by the staff members during the period under review.

Fixed Deposits

The Company has as on 31st March, 2014 deposits amounting to Rs.140.67 lakhs. Subsequent to the last Annual General Meeting , the company has not accepted fresh deposits or renewed existing deposits. The refunds are made as and when refund requests are received.

Applicability of Section 217(2A) of Companies Act, 1956

None of the employees come within the purview of Section 217(2A) of the Companies Act, 1956.

Listing of Shares

Your Company''s share are listed on the following Stock Exchanges namely,

1. Madras Stock Exchange Limited (As per MSE / NSE agreement, your Company''s shares are allowed for trading in NSE Platform).

2. Bombay Stock Exchange Limited

Directors Responsibility Statement under Section 217(2AA) of the Companies Act, 1956

The Directors state that

a) In the preparation of Annual Accounts the applicable accounting standards had been followed.

b) The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the Profit or Loss of the Company for that period.

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets 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.

Auditors

M/s P.Rajagopalan & Co, Chartered Accountants, retire at the close of this Annual General Meeting and are eligible for re-appointment. The Company has received confirmation from the firm that their reappointment will be within the limits prescribed under Section 141(3)(g) of the Companies Act, 2013. The Board has recommended their re-appointment for a term of three years from 2014-15 to 2016-17. The necessary resolution is being placed before the shareholders for approval.

Cost Auditor

S.Sundar& Associates, Cost Accountants,Chennai, Cost auditor of the company under section 233 of the Companies Act,1956 has been reappointed as the company''s Cost Auditor for the Financial year 2014-15.

Information as per Section 217(1)(e) of the Companies Act, read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules 1988

In terms of the above rules, your Board is pleased to give the particulars of the Conservation of energy, Technology absorption and the Foreign Exchange earnings and outgo as prescribed therein, in the Annexure which forms part of the Directors Report.

Addendum to Directors'' Report

In response to the Audit Emphasis matters and qualification the directors state the following :

Statutory Dues

The Company is facing funds constraint, due to this the Company has not been able to make regular payments for statutory dues. The Management is taking steps to clear the dues. During the year under report, the company has paid dues for 15months,related to earlier periods

Gratuity Fund

The contribution to the gratuity fund is pending due to funds constraint. The Management is taking steps to comply with the requirement and regularize the fund.

Going Concern

The Management has prepared the accounts on a going concern as there has been no stoppage in the manufacturing operations or sale of our products. The world class plant attracts the auto majors and others with no let up in the orders. Due to working capital inadequacies, we are not able to service all the orders on hand. Our forging products are known for their quality and the fact that customers returns rejections are negligible confirms the quality.

Change in Accounting Policy

The Banks have classified our account (the borrowings by the company) as Non performing Asset and have stopped charging interest. We have decided to adopt the same and have changed our accounting policy on interest on banks borrowings. We have decided not to charge interest since banks have not charged the same on the company. Therefore the Company has changed the method of accounting of interest on bank borrowings from mercantile to cash basis.

Our Company is in forging business from 1964 and this is the fiftieth year of operations and endured many business cycles. The management is taking steps to address the financial requirements and is confident of addressing the same and move to profitable levels. The current assets position will be strengthened once the company generate profits from operations. The management is confident of resolving the issues and hence prepared the financial statements on going concern basis.

Change of Accounting Year

The Companies Act, 2013 had made it necessary for all Companies to follow a uniform accounting year to end on 31st March every year. The Board decided to fall in line and hence closed the financial year 2013-14 for 9(nine) months ending of 31.03.2014

Acknowledgements

The Company places on record the co-operation of Corporate Debt Restructure (CDR), IDBI Mumbai and Bankers, State Bank of India, Axis Bank Limited, Union Bank of India, IDBI Bank Ltd, Royal Bank of Scotland (RBS), Export Import Bank of India, Indusind Bank, Kotak Mahindra Bank Ltd and Bank of Baroda. We also thank all our Customers, Suppliers and others connected with the business for their co-operation. We sincerely thank the shareholders for their support.

By Order of the Board

Place : Chennai V.SRIKANTH

Date : 11.08.2014 EXECUTIVE CHAIRMAN


Jun 30, 2013

The Directors have pleasure in presenting the 77th Annual! Report along with the Audited Accounts of the Company for the year ended 30ln June, 2013.

For the year ended For the year ended 30.06.2013 30.08.2012

(RS.IN LAKHS)

Gross sales 8298.07 9170.75

Other Income 103-98 1397.37

"Profit/{Loss) before Depredation (2595.87) -

Profit/{Loss) after Depreciation (3382.03) -

Net Profit/(Loss) after tax (3382.03) (918.12}

Year in Retrospect

The past year was very tough for the operations of the company. The company''s efforts to inures long term funds by sale of non core assets could not be achieved as the value for these assets could not be unlocked due to the economic situation. The restructure of debts were conditional on the funds raised and, since this could not be done the restructure proposal was not be taken up. The consequent non availability of funds and reduced operations resulted in loss during 2012-13.

The company is continuing the efforts to achieve profitable levels by looking at all possible solutions available in this situation.

Subsidiary Company

Shakespeare Forgings Ltd achieved a gross turnover of Rs 4266.20 lakhs for the year ended 30.06,2013 and incurred a marginal loss of Rs.27.34 lakhs for the staid period. The UK economy is recovering and Shakespeare Forgings has been able to stabilize its manufacturing operations and will be in a position to carry on its operations on its own.

Your Company has applied to the Company Law Board under Section 212(8) of the Companies Act, 1956 seeking exemption from attaching a copy of the Balance Sheet, Profit and Loss Account Report of the Boart of Directors and the Report of the Auditors of the subsidiary company along with the financial statements of your company. These documents can be requested for by any member, investor of the company. Further, in line with the Listing Agreement and in accordance with the Accounting Standard 21 (AS 21), Consolidated Financial Statements, prepared by the Company include financial information of its subsidiary,

Directors .

During the year Mr.P.L Reddy our director for 32 years expired on 28.02.2013. The directors wish to place on record his valuable contribution to the company. This has left a casual vacancy in the Board.

During the year Mr.K.J.Ramasamy resigned from the Board on 30.08.2013 and Mr.Balraj Vasudevan resigned from the directorship on 10.09.2013 due to personal preoccupation. The directors thank them for their support and guidance during their term with the company.

Management Discussion and Analysis .

Management Discussion and Analysis report for the year under review as stipulated under Clause 49 ot the Listing Agreement with Stock Exchanges in India, is presented in a separate section forming part oi the Annual Report.

Research & Development

R&D in EL Forge is a continuous process. All efforts in product design and process development are directed at Customer''s satisfaction, competitiveness, quality and responsiveness. This includes rocus on material wastage reduction by improvement in technology and equipment with major emphasis at the Tool Room for value engineered die design and manufacture. Simultaneous efforts are made at the shop floor to improve manufacturing efficiency to sustain the development efforts.

industrial Relations

Employees at all levels have contributed to the performance of your Company. Your directors place on record "the co-operation of employees during the year under report.

That company has as on 30th June, 2013 deposits amounting to Rs.137,26 Lakh. The provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposit Rules) 1975 have been complied with in respect of the acceptance of deposits and ail deposits that have matured and claimed during the year were paid on the due dates.

Statement pursuant to Section 217(2A) of the Companies Act, 1956 _

None of the employees come within the purview of Section 217(2A) of the Companies Act, 1956.

Listing of Shares

Your Company''s share are listed on the following Stock Exchanges namely,

1. Madras Stock Exchange Limited (As per MSE / NSE agreement, your Company s shares are allowed for trading in NSE Platform).

2. Bombay Stock Exchange Limited

3. Ahmadabad Stock Exchange Limited

Delisting of Shares with Ahmadabad Stock Exchange _

It has been observed that there have been no transactions in our scrip for the last few years m Ahmadabad Stock Exchange . The board in their meeting on 29th November 2013 decided to delist the shares from the Ahmadabad stock exchange without exit opportunity in accordance with ,The Securities and Exchange Board of India (Delisting of Securities) Guidelines 2003,

The Company''s equity shares are one of the scraps which the Securities and Exchange Board of India has specified for settlement only in dematerialized form by all investors. With the extensive networking of BSE, investors have access to on-line trading in equity shares of the Company across the Country.

The proposed delisting of the Company''s Equity Shares from the said Stock Exchange, as and when takes place will not affect the Investors adversely. The Company''s equity shares will continue to be listed on the Bombay Stock Exchange Ltd. The delisting will take effect after receiving the consent from Ahmadabad Stock Exchange,

Corporate Governance

Your Directors are pleased to report that your Company is fully compliant as on June 30. 2013 with the SEBI Guidelines on Corporate Governance as incorporated in Clause 49 of the Listing Agreement with the Stock Exchange,

A detailed report on this subject forms part of this report.

Directors Responsibility Statement under Section 217{2AA) of the Companies Act, 1958 The Directors state that

a) In the preparation of Annual Accounts the applicable accounting standards had been followed.

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30''lh June, 2013 and of the Profit or Loss of the Company for that period.

c} The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets 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.

Auditors . .

Mis P. Rajagopaian& Co., Chartered Accountants, Chennai, Statutory Auditors of the Company retire at the conclusion of the ensuing Annual Genera! Meeting and being eligible offer themselves for reappointment. The declaration under Section 224{1-B) of the Companies Act, 1956 has been received from them to this effect.

Cost Auditor

S.Sundar& Associates, Cost Accountants, Chennai, Cost auditor of the company under section 233 or the Companies Act, 1956 has been reappointed as the company''s Cost Auditor for the Financial year 2013-14.

information as per Section 217(1)(e) of the Companies Act, read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules 1988

In terms of the above rules, your Board is pleased to give the particulars of the Conservation of energy, Technology absorption and the Foreign Exchange earnings and outgo as prescribed therein, in the Annexure which forms part of the Directors Report.

Addendum to Directors'' Report

in response to the Audit Emphasis matters and qualification the directors state the following:

Statutory Dues

The Company is facing funds constraint, due to this the Company has not been able to make regular payments for statutory dues. The Management is taking steps to clear the dues.

Gratuity Fund _

The contribution to the gratuity fund is pending due to funds constraint. The Management is taking steps to comply with the requirement and regularize the fund.

Going Concern

The Management has prepared the accounts on a going concern as there has been no stoppage in true manufacturing operations or sale of our products. The world class plant attracts the auto majors and others with no let up in the orders. Due to working capital inadequacies, we are not able to service all the orders on hand. The forgings are known for their quality and the fact that customer returns are negligible, confirms the quality.

Our Company is in forging business from 1964 and this is the fiftieth year of operations and endured many business cycles. The management is taking steps to address the financial requirements and is confident oj addressing the same and move to profitable levels. The current assets position will be strengthened once the company generate profits from operations. The management is confident of resolving the issues and hence prepared the financial statements on going concern basis.

Acknowledgements

The Company places on record the unstinted co-operation of Corporate Debt Restructure (CUK) dub Mumbai and Bankers, State Bank of India, Axis Bank Limited, Union Bank of India, IDBI Bank Ltd Royal Bank of Scotland (RBS), Export Import Bank of India, Inducing Bank Ltd and Kotak Mahindra Bank Ltd. We also thank all our Customers, Suppliers and others connected with the business for their co-operation, we sincerely thank the shareholders for their unstinted support.

By Order of the Board

Place: Chennai V.SRIKANTH

Date :29.11.2013 EXECUTIVE CHAIRMAN


Mar 31, 2010

The Directors have pleasure in presenting the 74th Annual Report along with the Audits Accounts of the Company for the year ended 31 st March, 2010.

Year ended Year ended

31.03.2010 31.03.2009 (RS.IN LAKHS)

Sales & Other Income (Gross) 8374.77 9862.88

Profit/(Loss) before Depreciation 424.93 (1220.28)

Profit/(Loss) after Depreciation (269.22) (1790.38)

Net Profit/(Loss) after tax (274.65) (1805.38)

Year in Retrospect

The year under review saw strain in the operations of the Company due to the difficult situatic on cash flow front.

The auto market improved substantially after September of 2009, but the Company could m keep pace with the auto growth due to the above mentioned reason.

Steel, which constitutes a major input of our Companys production, increased In value froi November of last year and rose substantially till April of this year, and in keeping with the pric increase, they have reduced the credit terms thus making a dual impact on the cash flows.

The banking consortium took up our request for enhancing the credit limit for the purchasing < steel by instating letters of credit. We trust that this facility will go a long way in addition to th performance of the Company.

The power problem in Tamilnadu, however has not had any respite. The environment prevailin is the same for the long established industries of Tamilnadu. We are however, managing I circumvent the problem by adjusting our working hours and ensuring maximum productivity in th available time frame.

The sales was consequently lower by 15% and the net loss for the year was Rs.274.64 lakh after adjusting the income from sale of property.

The market situation has drastically changed from April of this year and trust we can grow froi the Quarter of October this year having addressed the factors that constrain the operations.

We are highly confident that the worst is behind us and the future can only be highly beneficial fc us and the auto industry.

Subsidiary Company

Shakespeare Forgings Ltds operations in UK has been affected by the global meltdown and volumes during the period from April 2009 to March 2010 were only at GBP 3.295 Million as against GBP 4.648 Million of previous year.

Your Company has applied to the Company Law Board under Section 212(8) of the Companies Act, 1956 seeking exemption from attaching a copy of the Balance Sheet, Profit and Loss Account Report of the Board of Directors and the Report of the Auditors of the subsidiary company along with the financial statements of your company. These documents can be requested for by any member, investor of the company. Further, in line with the Listing Agreement and in accordance with the Accounting Standard 21 (AS 21), Consolidated Financial Statements, prepared by the Company include financial information of its subsidiary.

Issue of Shares

The Board has decided to issue equity shares of Rs. 10/- each to the existing shareholders on e Rights Basis aggregating to Rs.26 Crores. The terms of the issue is being finalized and shall be submitted for the approval of SEBI. The letter of offer shall then be circulated to the shareholders. A Special Resolution u/s 81 is being placed at the Annual General Meeting foi granting approval to the Rights Issue.

In order to facilitate the issue the Authorised Capital and changes in the Clauses to the Memorandum & Articles of Association is proposed.

Research & Development

R&D in El Forge is a continuous process. All efforts in product design and process developmeni are directed at Customers satisfaction, competitiveness, quality and responsiveness. This includes focus on material wastage reduction by improvement in technology and equipment with major emphasis at the Tool Room for value engineered die design and manufacture. Simultaneous efforts are made at the shop floor to improve manufacturing efficiency to sustain the development efforts.

industrial Relations

Employees at all levels have contributed to the performance of your Company. Your directors place on record the co-operation of employees during the year under report.

Fixed Deposits

The Company has as on 31st March, 2010 deposits amounting to Rs.68.93 lakhs. The provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposit Rules) 1975 have been complied with in respect of the acceptance of deposits and all deposits that have matured and claimed during the year were paid on the due dates.

Statement pursuant to Section 217(2A) of the Companies Act, 1956

None of the employees come within the purview of Section 217(2A) of the Companies Act, 1956.

Information as per Section 217(1)(e) of the Companies Act, read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules 1988

in terms of the above rules, your Board is pleased to give the particulars of the Conservation of energy, Technology absorption and the Foreign Exchange earnings and outgo as prescribed therein, in the Annexure which forms part of the Directors Report.

Listing of Shares

Your Companys shares are listed on the following Stock Exchanges namely,

1. Madras Stock Exchange Limited (As per MSE / NSE agreement, your Companys shares are allowed for trading in NSE Platform.

2. Bombay Stock Exchange Limited

3. Ahmedabad Stock Exchange Limited

Corporate Governance

Your Directors are pleased to report that your Company is fully compliant as on March 31, 2010 with the SEBI Guidelines on Corporate Governance as incorporated in Clause 49 of trie Listing Agreement with the Stock Exchange.

A detailed report on this subject forms part of this report.

Directors

Mr.V.Ramachandran and Mr.KJ.Ramaswamy, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-election.

Directors Responsibility Statement under Section 217(2 A A) of the Companies Act, 1956

The Directors state that

a) In the preparation of Annual Accounts the applicable accounting standards had been followed.

b) The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the Profit or Loss of the Company for that period.

c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets 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.

Auditors

M/s P.Rajagopalan & Co..Chartered Accountants, Chennai, Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment. The declaration under Section 224(1 -B) of the Companies Act, 1956 has been received from them to this effect.

Acknowledgements

The Company places on record the unstinted co-operation Corporate Debt Restructure (CDR), IDBI Mumbai and Bankers, State Bank of India, Axis Bank Limited, Union Bank of India, IDBI Bank Ltd, Royal Bank of Scotland (RBS), Export Import Bank of India, Indusind Bank Ltd, Kotak Mahindra Bank Ltd and SBI Global Factors Ltd. We also thank all our Customers, Suppliers and others connected with the business for their co-operation. We sincerely thank the shareholders for their unstinted support.

By Order of the Board

Place: Chennai V.SRIKANTH

Date : 15-07-2010 EXECUTIVE CHAIRMAN

 
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