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Directors Report of Goldstone Infratech Ltd.

Mar 31, 2014

The Members Goldstone Infratech Limited

The Directors have pleasure in presenting the 14th Annual Report together with the Audited Statements of Accounts of the Company for the financial year ended 31st March 2014.

Financial Results :

The summarized financial results (Standalone) of the Company for the year ended 31st March, 2014 as compared to the preceding year are as under:

Rs in Lakhs'' Particulars 2013-14 2012-13

Gross Sales 8738.96 7628.98

Net Sales 8032.47 7006.99

Other Income 69.77 123.09

Total Income 8102.24 7130.08

Total Expenditure 6933.33 5947.70

Operating Profit (PBIDT) 1168.91 1182.38

Interest 578.68 638.10

Depreciation and Write Offs 239.78 239.67

Profit before Tax 350.45 304.61

Provision for taxation

- Current 25.00 35.00

- Deferred 69.52 66.87

Profit after Tax 255.93 202.74

Extra-Ordinary Items

- Taxes pertains to previous year - -

- Prior period adjustments 44.10 (2.14)

Net Profit 211.83 200.60

Surplus brought forward from previous year 209.72 117.60

Balance available for appropriation 421.55 318.20

Appropriations:

-Proposed Dividend on Equity Shares - -

-Provision for Dividend Tax - -

-Transfer to General Reserves - -

-Others - 108.47

Surplus carried forward to Balance Sheet 421.55 209.72

Equity Share Capital(3,60,80,737 1443.23 1443.23 Shares of Rs 4/- each)

E.PS (After Prior Period Items) (Rupees) 0.59 0.56

Net Worth 7616.24 7404.41

Book Value in rupees (face Value of Rs. 4/- each) 21.11 20.52

Review of Operations:

During the year under review, your Company has achieved a gross turnover of Rs. 8738.96 lakhs as against Rs. 7628.98 Lakhs for the previous financial year. The Net Profit has increased from Rs. 200.60 Lakhs for the year ended 3151 March 2013 to Rs. 211.83 Lakhs during the Current Year. Though the turnover increased by 14.55% the increase in net profit was around 5.60% and the main reasons for this were appreciation of US Dollar vis-a-vis Indian Rupee and increase in the manufacturing costs.

During the year under review, the Company has successfully developed Insulators for market in African countries which has increased business opportunities in export market. Company has also got approval for its 765KV insulators for Transmission Lines and obtained orders from PGCIL.

Dividend:

In order to conserve resources for future requirements and development of export market the Board has decided to retain the profits generated and consequently, your Board has not recommend any dividend for the financial year 2013-14.

Consolidated Financial Statements:

In accordance with the Accounting Standard AS- 21 on Consolidated Financial Statements, the audited Consolidated Financial Statements are provided in the Annual Report.

Subsidiary Company:

TF Solar Power Private Limited is the wholly owned subsidiary of the Company. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary company are not being attached with the Balance Sheet of the Company. The Company will make available the

Annual Accounts of the subsidiary company and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary company will also be kept open for inspection at the registered office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary company.

Fixed deposits:

The Company has not accepted any fixed deposits from the public, and as such, no amount of principal or interest on public deposits was outstanding as on the date of the balance sheet.

Insurance:

All the properties of your Company including its building, plant & machinery and stocks have been adequately insured.

Management Discussion and Analysis:

Management Discussion and Analysis for the year under review as required under Clause 49 of the Listing Agreement entered with Stock Exchanges is given as a separate statement in the Annual Report.

Statutory Auditors:

M/s. P. Murali & Company (FRN: 007257S), Chartered Accountants, Hyderabad, Statutory Auditors of the Company holds office in accordance with the provisions of the Companies Act, 1956 up to the conclusion of forth-coming Annual General Meeting and are eligible for re-appointment. Pursuant to the provisions of the Section 139 (2) of the Companies Act, 2013 and based on recommendations of the Audit Committee they being eligible, offer themselves for re-appointment. They have furnished a certificate stating that their re-appointment, if made, will be within the limits laid down under Section 141 (3) (g) of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules 2014.

The Audit Committee of your Company meets periodically with Statutory Auditors and Internal Auditors to review the performance of the Internal Audit, to discuss the nature and scope of statutory auditors functions, and to discuss auditing, internal control and financial reporting issues. To ensure complete independence, the statutory auditor and the internal auditor have full access to the Members of the Audit Committee to discuss any matter of substance.

Cost Auditors:

The Board of Directors at their meeting held on 27th May, 2013 had appointed Sagar & Associates, Cost Accountants, as the Cost Auditor of the Company for the FY 2013-14. The Cost Auditors have submitted their Cost Audit Report and the Board has approved the said Report in the Board Meeting held on 04th August, 2014 and the due date for filing of this Cost Audit Report with the Central Government is 30th September 2014. As per the Companies (cost records and audit) Rules, 2014 which were notified on 30.06.2014, our company would not come under the ambit of the industry which is subject to maintenance of Cost Records and Cost Audit.

Directors:

Mrs. Mahitha Caddell, and Mr.S.Murali Krishna, Directors, who retires by rotation at the 14th Annual General Meeting and being eligible, offer themselves for re-appointment.

In terms of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors can hold office for a term of up to five (5) consecutive years on the Board of Directors of your Company and are not liable to retire by rotation and the tenure of the Independent Directors on the date of commencement of the Companies Act, 2013 (i.e., 01.04.2014) shall not be counted as term

for aforesaid period of 5 years. Accordingly, it is proposed to appoint Mr.S.Murali Krishna, Mr. M.Gopala Krishna and Mr. B.Appa Rao as Independent Directors of your Company from 27th September, 2014 up to 26th September, 2019.

Appropriate resolutions for the appointment of Directors are being placed before you for your approval at the ensuing Annual General Meeting. Your Directors recommend their reappointment as Directors of your Company.

Stock Exchange Listing:

Presently, the Equity Shares of the Company are listed on National Stock Exchange of India (NSE) and the Bombay Stock Exchange Limited (BSE). The Company confirms that it has paid Annual Listing Fees due to all the Stock Exchanges where the Company''s securities are listed for the year 2014-15.

Director''s Responsibility Statement :

In accordance with the Section 217(2AA) of the Companies (Amendment) Act, 2000, the Directors of the Company, in respect of the financial year ended 31st March, 2014, confirm that:

(a) in preparation of the Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) They have 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 at the end of the financial year and of the Profit of the Company for that year;

(c) They have taken proper care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, and the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregular -ities.

(d) They have prepared the Annual Accounts on a going concern basis.

Corporate Governance:

A report on Corporate Governance including Auditor Certificate thereon as per Clause 49 of the Listing Agreement is attached to this Report.

Managing Director and Finance Head Certification:

As required under the SEBI Guidelines, the Managing Director and the Finance Head Certification is attached to this Report.

Particulars of Conservation of energy / technology absorption, foreign exchange earnings and outgoings:

Information required to be furnished as per the Companies (Disclosure of particulars in the Directors Report) Rules 1998 is furnished below:

1. CONSERVATION OF ENERGY

a. Energy Conservation Measures taken or under implementation

During the period the company had:

1) Implemented the energy audit system as a part of waste and power control measures.

2) Introduced new material / processes to reduce power consumption.

3) Ensured proper and timely maintenance of plant & equipment.

b. Additional investment and proposals if any, being implemented for reduction of consumption of energy

Additional/new measures will be initiated for further reduction in energy consumption based on technical evaluation and study of the measures already implemented.

c. Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods

The measures taken during the year has ensured optimum use of energy and increased efficiency and ensured lower use of energy per insulator.

2. TECHNOLOGY ABSORPTION:

Research and Development:

a. Specific Areas in which R & D carried out by the company:

The Company has been continuing its Research and Development process to optimize the productivity and performance. The designs of Insulators have been

optimized for improvement in quality, standardization and value engineering. The continuous research has helped in introducing new material for higher performance and conservation of energy.

b. Benefits derived as results of the above R & D:

Successfully produced and supplied 765 KV insulators for transmission lines.

Optimized designs to be competitive in the market with world class quality products.

Reduction in wastages and power costs.

Dependency on imports reduced.

c. Future Plan of Action:

New products have been identified for export market after a thorough study of the market

The designs for manufacturing the related products would be developed in the In- house R & D centre.

Focus to improve the existing process technology and development of new base input material.

Particulars of Employees:

None of the Employees are drawing remuneration prescribed in Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended by the Companies (Amendment) Act, 1988. Personnel:

Personnel relations have remained very cordial during the period.

Acknowledgements:

Your Directors convey their sincere thanks to State Bank of Hyderabad for their support, guidance and assistance.

Your Directors thank all the Employees of your company for their dedicated service. Your Directors thank the shareholders for their support and confidence reposed in the company and the management and look forward to their continued co-operation and support.



For and on behalf of the Board

Sd/- Sd/-

L P Sashikumar B. Appa Rao

Managing Director Director

Place: Secunderabad Date : 04-08-2014


Mar 31, 2013

To The Members of Goldstone Infratech Limited

The Directors have pleasure in presenting the 13th Annual Report together with the Audited Statements of Accounts of the company for the financial year ended 31st March 2013.

Financial Results:

The summarized financial results (Standalone) of the Company for the year ended 31st March, 2013 as compared to the preceding year are as under:

Rs.in Lakhs Particulars 2012-13 2011-12

Gross Sales 7628.98 6405.22 Net Sales 7006.99 5978.48

Other Income 235.97 119.75

Total Income 7242.96 6098.23

Total Expenditure 6060.58 5085.44

Operating Profit (PBIDT) 1182.38 1012.79

Interest 638.10 490.34

Depreciation and Write Offs 239.67 289.36

Profit before Tax 304.61 233.08

Provision for taxation

– Current 35.00 50.00

– Deferred 66.87 (1.88)

Profit after Tax 202.74 184.96

Extra-Ordinary Items

- Prior period adjustments (2.14) 5.55

Net Profit 200.60 190.51

Surplus brought forward from previous year 117.60 2751.71

Balance available for appropriation Appropriations: 318.20 2942.22

· Proposed Dividend on Equity Shares 72.16

· Provision for Dividend Tax 11.71

· Transfer to General Reserves 19.05

· Others 108.47 2721.70

Surplus carried forward to Balance Sheet 209.72 117.60

Equity Share Capital (3,60,80,737 Shares of Rs 4/-each) 1443.23 1443.23

E.P.S (After Prior Period Items) (Rupees) 0.56 0.53

Net Worth 7404.41 7312.29

Book Value in rupees (face Value of Rs. 4/- each) 20.52 20.27

Review of Operations:

During the year under review, your Company achieved a gross turnover of Rs. 7628.98 lakhs as against Rs. 6405.22 Lakhs during the previous financial year. The Net Profit increased from Rs. 190.51 Lakhs during the year ended 31st March 2012 to Rs. 200.60 Lakhs for the Current Year. Though the turnover increased by 19% the increase in net profit was only by 5% and the main reasons for this were appreciation of US Dollar vis-à-vis Indian Rupee and increase in Manufacturing and Power costs.

During the year under review, the Company had successfully developed and type tested the Cross Arm Insulators for FSC platforms as Import Substitution for the first time in India and further the company had also developed Horizontal Line Post Insulators and became the first company in the country to develop this and got approval of power utilities. Further the Company had successfully produced 765KV Insulators for Transmission Lines.

Dividend:

In order to conserve resources for future requirements, the Board has decided to retain the profits generated and consequently, your Board did not recommend any dividend for the financial year 2012-13.

Consolidated Financial Statements:

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements, the audited Consolidated Financial Statements are provided in the Annual Report.

Subsidiary Company:

TF Solar Power Private Limited is the wholly owned subsidiary of the Company. In accordance with the general circular issued by the Ministry of Corporate

Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary company are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary company and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary company will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary company.

Fixed deposits:

The Company has not accepted any Fixed Deposits, falling within the purview of Section 58A of the Companies Act, 1956.

Insurance:

All the properties of your Company including its building, plant & machinery and stocks have been adequately insured.

Management Discussion and Analysis:

Management Discussion and Analysis for the year under review as required under Clause 49 of the Listing Agreement entered with Stock Exchanges is given as a separate statement in the Annual Report.

Statutory Auditors:

M/s. P. Murali & Company (FRN: 007257S), Chartered Accountants, Hyderabad, Statutory Auditors of the Company holds office in accordance with the provisions of the Companies Act, 1956 upto the conclusion of forth-coming Annual General Meeting and are eligible for re- appointment. They being eligible, offer themselves for re-appointment. They have furnished a certificate stating that their re-appointment, if made, will be within the limits laid down under Section 224(1B) of the Companies Act, 1956.

Cost Auditors:

The Board of Directors at their meeting held on 28th May, 2012 had appointed Sagar & Associates, Cost Accountants, as the Cost Auditor of the Company for the FY 2012-13. The Cost Auditors have submitted their Cost Audit Report and the Board has approved the said Report in the Board Meeting held on 12th August, 2013 and the due date for filing of this Cost Audit Report with the Central Government is 30th September 2013. For the financial year 2013-14, the Board at its meeting held on 27th May, 2013 had appointed Sagar & Associates, Cost Accountants, as the Cost Auditor of the Company.

Directors:

Mr. M.Gopalakrishna, Director, who retires by rotation at the 13th Annual General Meeting and being eligible, offer himself for re-appointment.

The Board of Directors in their Board Meeting held on 13th February 2013 have re-appointed subject to your approval, Mr.L.P.Sashikumar as Managing Director of the Company for three years with effect from 01st April 2013.

During the year under report, Mr. S.Murali Krishna has resigned from the Board on 01st April, 2013 and further he re- appointed as additional director with effect from 12th August 2013 and through the Notice of the 13th Annual General Meeting, the Management is seeking the approval of the Members for his appointment as Director of the Company liable to retire by rotation.

Stock Exchange Listing:

Presently, the Equity Shares of the Company are listed on National Stock Exchange of India (NSE) and the Bombay Stock Exchange Limited (BSE). The Company confirms that it has paid Annual Listing Fees due to all the Stock Exchanges where the Company''s securities are listed for the year 2013- 14.

Director''s Responsibility Statement:

In accordance with the Section 217(2AA) of the Companies Act, 1956, the Directors of the Company, in respect of the financial year ended 31st March, 2013, confirm that:

(a) in preparation of the Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) They have 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 at the end of the financial year and of the Profit of the Company for that year;

(c) They have taken proper 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) They have prepared the Annual Accounts on a going concern basis.

Corporate Governance:

A report on Corporate Governance including Auditor Certificate thereon as per Clause 49 of the Listing Agreement is attached to this Report.

Managing Director and Chief Financial Officer Certification:

As required under the SEBI Guidelines, the Managing Director and the Head of the Finance Function Certification is attached to this Report.

Particulars of Conservation of energy / technology absorption, foreign exchange earnings and outgoings:

Information required to be furnished as per the Companies (Disclosure of particulars in the Directors Report) Rules 1998 is furnished below:

1. CONSERVATION OF ENERGY

a. Energy Conservation Measures taken or under implementation

During the period the company had:

1) Improved the production process to reduce the cycle time;

2) Re-designed the product mix to reduce load on machines;

3) Re-designed the existing Chiller water lines to save the power consumption;

4) Reconditioned the existing Moulding Machines to save power consumption;

5) Reorganized the loads to run the entire plant on any one of the DG sets as per its connected load to save the diesel and power costs;

6) Ensured proper and timely maintenance of plant & equipment.

b. Additional investment and proposals if any, being implemented for reduction of consumption of energy

Additional/new measures will be initiated for further reduction in energy consumption based on technical evaluation and study of the measures already implemented.

c. Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods

The measures taken during the year has ensured optimum use of energy and increased efficiency and ensured lower use of energy per insulator.

2. TECHNOLOGY ABSORPTION: Research and Development:

a. Specific Areas in which R & D carried out by the company:

The Company has been continuing its Research and Development process to optimize the productivity and performance. New simulation software has been procured to optimize and redesign the mechanical parts. The designs of Insulators have been optimized for improvement in quality, standardization and Value engineer. c

b. Benefits derived as results of the above R & D:

- Optimized designs to be competitive in the market with world class quality products

- Developed Cross arm insulators for FSC platforms for the first time in India as Import substitution and type testing also completed.

- Developed Horizontal Line insulators for the first time in India.

- Successfully produced 765 KV insulators for Transmission Lines.

- Reduction in wastages.

- Dependency on imports reduced.

- Achieved better quality control. c. Future Plan of Action:

- New products have been identified for export market after a thorough study of the market.

- The designs for manufacturing the related products would be developed in the In-house R & D centre.

- Focus to improve the existing process technology.

Goldstone Infratach Limited

Particulars of Employees:

None of the Employees are drawing remuneration in excess of the limits prescribed in Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended by the Companies (Amendment) Act, 1988.

Personnel:

Personnel relations have remained very cordial during the period.

Acknowledgements:

Your Directors convey their sincere thanks to State Bank of Hyderabad, Syndicate Bank, and Technology Development Board for their support, guidance and assistance.

Your Directors thank all the Employees of your company for their dedicated service. Your Directors thank the shareholders for their support and confidence reposed in the company and the management and look forward to their continued co-operation and support.

For and on behalf of the Board

Sd/- Sd/-

L P Sashikumar B. Appa Rao

Managing Director Director

Place: Secunderabad

Date: 12th August, 2013


Mar 31, 2011

The Members

Goldstone Infratech Limited

The Directors have pleasure in presenting the 11th Annual Report together with the Audited Statements of Accounts of the company for the financial year ended 31st March 2011.

Financial Results

The summarized financial results (Standalone) of the Company for the year ended 31st March, 2011 as compared to the preceding year are as under:

Rs. in Lakhs

Particulars 2010-11 2009-10

Gross Sales 7295.39 7035.09

Net Sales 6804.08 6560.70

Other Income 122.61 205.67

Total Income 6926.69 6766.37

Total Expenditure 5788.08 5304.03

Operating Profit (PBIDT) 1138.61 1462.35

Interest 372.26 263.82

Depreciation and Write Offs 289.82 288.99

Profit Before Tax 476.52 909.53

Provision for taxation -

- Current 100.00 200.00

- Deferred 51.94 40.68

Profit after Tax 324.58 668.85

Extra-Ordinary Items

- Taxes pertains to previous year (0.02) (2.15)

- Prior period adjustments (1.10) 6.53

Net Profit 323.47 673.23

Surplus brought forward from previous year 2544.46 2022.69

Balance available for appropriation 2867.92 2695.93

Appropriations:

- Proposed Dividend on Equity Shares 72.16 72.16

- Provision for Dividend Tax 11.71 11.99

- Transfer to General Reserves 32.35 67.32

Surplus carried forward to Balance Sheet 2751.71 2544.46

Equity Share Capital (3,60,80,737 Shares of Rs. 4/- each) 1443.23 1443.23

E.P.S (After Prior Period Items) (Rupees) 0.90 1.87

Net Worth 9914.40 9667.83

Book Value in rupees (face Value of Rs. 4/- each) 27.48 26.79

Review of Operations

During the year under review, your Company has achieved a gross turnover of Rs. 7295.39 Lakhs as compared to Rs. 7035.09 Lakhs during the previous financial year. Inspite of slight increase in the turnover, the Net Profit has come down to Rs. 323.47 lakhs from Rs. 673.23 lakhs. This was mainly due to the reduction in selling prices of the products, increased competition and higher interest costs.

To achieve forward integration and to reduce the dependency on outside suppliers for End Fittings, which is crucial for manufacture of Insulators, the Company has set up a foundry in its manufacturing unit no. 2 at Plot No. 8, IDA, Gaddapotharam Village, Jinnaram Mandal, Medak District. The Management is working to bring this foundry into operation by April, 2012. When the foundry becomes fully operational, the company would be having all the facilities (end to end) under one roof and any excess production from this foundry could also be sold, which will give a contribution to the bottom line.

Surge Arrestors

As informed to the Members in the previous annual report, the Company sold a small quantity of this product during the year under review. The Company is expecting to increase the volume of this product during the years to come.

Solid Core Insulators

Substation Equipments like Solid Core and Hollow Core insulators are presently being manufactured by the other players in the market with Porcelain material which has certain disadvantages like causing heavy losses to the transmission sector, low level of resistance to bad weather conditions, frequent maintenance, etc.

With a view to expand the operations in this area and to offer high quality product, the Management is proposing to manufacture Solid Core Insulators. The company has already completed feasibility study and the in-house R&D is working on this Project with an aim to commence the commercial production of Solid core Insulators during the current financial year. Keeping in view the existing market for this product and the advantages that the product is having, the Management is confident that once the commercial production commences, it will further improve the financial performance of the Company in the years to come. After successful commencement of commercial production of this product, the Company is planning to go for the production of hollow core insulators, which may take one more year.

High Voltage Insulators

Your Management is happy to inform that with the objective to manufacture high voltage insulators (which are more profitable), the Company had entered into a Technical Collaboration Agreement with a reputed foreign company (Technology Provider). This collaboration consists of transfer of technological details for the manufacture of Silicon Rubber Polymer Insulators from and above 400KV to 1100 KV of AC and DC of all combinations of mechanical-strengths as may be required by your Company. The Technology Provider will offer activation or installation support, including assisting with the implementation of any Licensor software, diagrams or technological upgradation, wherever applicable. Once the remaining formalities are over, your Management is of the opinion that the Company would be in a position to commence commercial production of high voltage insulators and thereby increase the profitability of the company.

Dividend

Keeping in view the funds requirement for reduction of interest costs, expansion and diversifications plans of the Company, your Directors have recommended a dividend of Rs. 0.20 (i.e. 5%) per equity share of Rs. 4/- each for the year ended 31st March 2011. The payment of dividend, if approved by the Shareholders at the ensuing Annual General Meeting, will entail an outflow of Rs. 83,86,786 inclusive of Corporate Dividend Tax.

Transfer to Reserves

The Board has transferred a sum of Rs. 32,34,675/- lacs to the General Reserve from the undistributed profits.

Consolidated Financial Statements:

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements, the audited Consolidated Financial Statements are provided in the Annual Report.

Subsidiary Company:

TF SolarPower Private Limited is the wholly owned subsidiary of the Company. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary company are not being attached with the Balance Sheet of the Company. The Company will make available the Annual Accounts of the subsidiary company and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary company will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary company.

Fixed deposits

The Company has not accepted any Fixed Deposits, falling within the purview of Section 58A of the Companies Act, 1956.

Insurance

All the properties of your Company including its building, plant & machinery and stocks have been adequately insured.

Management Discussion and Analysis

Management Discussion and Analysis for the year under review as required under Clause 49 of the Listing Agreement entered with Stock Exchanges is given as a separate statement in the Annual Report.

Auditors

M/s. P. Murali & Company (FRN: 007257S), Chartered Accountants, Hyderabad, Statutory Auditors of the Company holds office in accordance with the provisions of the Companies Act, 1956 upto the conclusion of this Annual General Meeting and are eligible for reappointment. They being eligible, offer themselves for re-appointment. They have furnished a certificate stating that their reappointment, if made, will be within the limits laid down under Section 224(1B) of the Companies Act, 1956.

Directors

Mr. S Murali Krishna and Mr. M Gopalakrishna retire by rotation and being eligible offer themselves for re-appointment.

The Board of Directors in their Meeting held on 13th May 2011 has appointed Mr. S.D. Rama Krishna as Additional Director w.e.f 13.05.2011

Stock Exchange Listing

Presently, the Equity Shares of the Company are listed on National Stock Exchange of India (NSE), Bombay Stock Exchange Limited (BSE) and Madras Stock Exchange (MSE). As informed to the members in the previous Annual Report, the de-listing approval from Madras Stock Exchange is still awaited. The Company confirms that it has paid Annual Listing Fees due to all the Stock Exchanges where the Company's securities are listed for the year 2011-12, except to the Madras Stock Exchange.

Director's Responsibility Statement

In accordance with the Section 217(2AA) of the Companies Act, 1956, the Directors of the Company, in respect of the financial year ended 31st March, 2011, confirm that:

(a) in preparation of the Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) They have 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 at the end of the financial year and of the Profit of the Company for that year;

(c) They have taken proper 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) They have prepared the Annual Accounts on a going concern basis.

Corporate Governance

A report on Corporate Governance including Auditor Certificate thereon as per Clause 49 of the Listing Agreement is attached to this Report.

Managing Director and Chief Financial Officer Certification

As required under the SEBI Guidelines, the Managing Director and the Head of the Finance Function Certification is attached to this Report.

Balance Sheet Abstract and Company's General Business Profile

Information pursuant to notification issued by the Ministry of Corporate Affairs relating to the Balance Sheet Abstract and Company's General Business Profile is given in the Annual Report for information of the Shareholders.

Particulars of Conservation of energy/ technology absorption, foreign exchange earnings and outgoings:

Information required to be furnished as per the Companies (Disclosure of particulars in the Directors Report) Rules 1998 is furnished below:

1. CONSERVATION OF ENERGY

a. Energy Conservation Measures taken or under implementation

During the period the company had 1) Installed Energy Meters to each and every machine to analyze power consumption on daily basis; 2) Installed new software in Desma 400 ton machines to save power consumption at the time of mould curing period. Arranged Hydraulic Motor OFF option at the time of curing time; 3) Installed star Delta starters in the place of normal D.O.L starters to reduce power consumption on water pumps which are using at water chillers; 4) Installed Variable frequency drive for Air Compressor Motor and saved energy at loading and unloading time; 5) Reconditioned the Moulding m/c - 1 screw and increased its efficiency. Now its production has been increased by utilizing the same energy; 6) Arranged additional chilled water line from 30 TR chiller to injection moulding machines so that the 85

TR chiller can be stopped while running less no of machines and 7) Increased FRP rods production from 2 rods to 4 rods(M/c-2) and increased FRP machine efficiency by using same power.

b. Additional investment and proposals if any, being implemented for reduction of consumption of energy

Additional/new measures will be initiated for further reduction in energy consumption based on technical evaluation and study of the measures already implemented.

c. Impact of measures at (a) and (b) for reduction of energy consumption and consequent impact on the cost of production of goods

The measures taken during the year has ensured optimum use of energy and increased efficiency.

2. TECHNOLOGY ABSORPTION : Research and Development

a. Specific Areas in which R&D carried out by the company

The Company has taken up Research and Development in Solid Core Insulators and High Voltage insulators with a view to offer most viable and efficient product to the market. Research activity has been focused on backward integration to reduce dependence on outside suppliers, to reduce the process loss so as to be more competitive in the market.

b. Benefits derived as results of the above R & D:

- Achieved higher productivity in distribution class insulators

- Able to reduce wastages

- Able to increase efficiency

- Dependency on imports reduced

- Achieved better quality control

c. Future Plan of Action

- Manufacture of Silicon Rubber Polymer Insulators of 400 KV and above up to 1100 KV and manufacture of Solid Core Insulators.

- A few new products have been identified after a thorough study of the market; and the technology for manufacturing the related products would be developed in the In house R & D Lab

- Focus to improve the existing process technology

Particulars of Employees

None of the Employees are drawing remuneration prescribed in Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended.

Personnel

Personnel relations have remained very cordial during the period.

Acknowledgements

Your Directors convey their sincere thanks to State Bank of Hyderabad, Syndicate Bank, Allahabad Bank and Technology Development Board for their support, guidance and assistance.

Your Directors thank all the Employees of your company for their dedicated service. Your Directors thank the shareholders for their support and confidence reposed in the company and the management and look forward to their continued co-operation and support.

For and on behalf of the Board

Sd/- Sd/-

L P Sashikumar B Appa Rao

Managing Director Director

Place: Secunderabad

Date: 30th August, 2011



 
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