Mar 31, 2016
The Directors present the Fifty-Fifth (55th) Annual Report together
with the Audited Financials of your Company for the 18 months period
ended March 31, 2016.
FINANCIAL RESULTS
(Rs. In Lakhs)
Eighteen
Eighteen Months
PARTICULARS Months Period Period
ended
ended March September
31 2016 30, 2014
Profit /(Loss) before (31,837.53) (19,019.26)
Depreciation and Taxation
Less : Depreciation 7,587.65 7,224.56
Less: Provision for Taxation - -
Profit / (Loss) after Taxation (39,425.18) (26,243.82)
Add : Balance brought forward (64,963.05) (38,719.23)
from previous year
Add : Adjustment on account of
depreciation (279.36) -
Balance carried to Balance Sheet (1,04,667.59) (64,963.05)
Basic and Diluted Earnings Per
Share of face value of Rs. 10/- (59.45) (65.07)
each. (in Rs.)
BUSINESS OPERATIONS
During the period under review, your Company''s net sales were Rs.
84,232 Lakhs compared to the net sales of Rs. 99,679 Lakhs for the
eighteen months period ended September 30, 2014. The operations
resulted in a loss of Rs. 39,425 Lakhs for the period under review
compared to a loss of Rs. 26,244 Lakhs in respect of the previous
eighteen months period.
The Company continued to face numerous challenges due to negative
growth of the OEM market for some period, uncertain power scenario and
sharp decline in the price of end products. The Sriperumbudur Unit
(SPU) ramp-up with debottlenecking of capacity constraints and
stabilization of production processes was slowed down.
MATERIAL CHANGES AND COMMITMENTS
Your Directors confirm that there are no material changes and
commitments affecting the financial position of the Company which have
occurred between the end of the financial year of the Company and the
date of this report.
DIVIDEND
In view of loss for the period under review, no dividend has been
recommended by the Board of Directors (Board).
TECHNOLOGY UPGRADATION/MODERNIZATION
The Company has invested substantially in energy efficient technologies
and has implemented various processes which minimize waste.
Commissioning of various equipment such as Maus Fettling Machine, Vent
Drilling Machine and the improved material handling of cores has
resulted in reduction of wastage, improved productivity and fewer
breakages.
Capacity was added in the machine shop to handle more castings in
finished form thereby increasing value addition and becoming a more
preferred supplier of castings as the OEMs get ready to assemble
components.
The particulars required under Rule 8 of the Companies (Accounts)
Rules, 2014 on conservation of energy, technology absorption and
foreign exchange earnings and outgo to the extent applicable are
furnished in Annexure - A to this report.
PUBLIC DEPOSITS
The Company has not accepted any fixed deposits from public within the
meaning of Section 73 (1) of the Companies Act, 2013 during the period
under review.
AUTHORISED CAPITAL
During the period under review, the Company had, with the approval of
members, increased its authorized capital from Rs. 550,00,00,000
(Rupees Five Hundred Fifty Crores only) to Rs. 1000,00,00,000 (Rupees
One Thousand Crores only).
FUND RAISING
(i) Global Depository Receipts (GDR)
Pursuant to the approval of the members of the Company vide a special
resolution passed through postal ballot, the Company had successfully
completed an Offering of 11,200 Global Depository Receipts (non -
voting) each representing 12,000 Equity Shares of par value of Rs. 10
at an Offering Price of U.S. $ 5,351.33701 per Global Depository
Receipt, aggregating 59,934,974.51 USD, equivalent to Rs. 3,998,400,000
Accordingly, your Company had issued and allotted 134.40 million equity
shares of face value of Rs. 10 each at a price of Rs. 29.75 per equity
share (including a premium of Rs. 19.75 per share) held by ICICI Bank
Limited as the domestic custodian to the order of The Bank Of New York
Mellon, Depository, such shares representing the underlying Equity
Shares to 11,200 GDRs (non - voting) of an aggregate value of Rs.
3,998.40 million issued to overseas investors.
(ii) Term Loan
During the period under review, the Company has borrowed monies
aggregating to Rs. 27,922 Lakhs.
(iii) Repayment
During the period under review, the Company has repaid Loans as follows
:
Term loan - Rs. 27,498 Lakhs
Decrease in working capital loans - Rs. 14,222 Lakhs
CORPORATE GOVERNANCE
Your Company is fully compliant with the norms on corporate governance
laid out in the notification dated September 2, 2015 of the Securities
and Exchange Board of India enacting the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 ("New Listing Regulations") which have replaced the erstwhile
Listing Agreement. All the Directors and the senior management
personnel have affirmed in writing their compliance with and adherence
to the Code of Conduct adopted by the Company. The details of the Code
of Conduct are furnished in the Corporate Governance Report attached as
Annexure-B to this Report. The Chief Executive Officer has given a
certificate of compliance with the Code of Conduct which forms part of
Annexure-B, as required under the New Listing Regulations.
The Statutory Auditors of the Company have examined the requirements of
Corporate Governance with reference to the New Listing Regulations and
have certified the compliance, as required under the New Listing
Regulations. The Certificate in this regard is attached as Annexure-C
to this Report. Management Discussion and Analysis Report is attached
in Annexure - D.
The certification by the Chief Executive Officer / Chief Financial
Officer (CEO/CFO) as required under the New Listing Regulations is
attached as Annexure-B to this Report..
MEETINGS OF BOARD OF DIRECTORS
Annual calendar of meetings of the Board/ Committees is finalized well
before the beginning of the year after seeking concurrence of all
Directors. Attempts are made to ensure that the scheduled meetings are
made convenient to attend by the Directors. Where circumstances
preclude the Chairman from attending the meeting, he entrusts an
Independent Director or a non-executive Director to chair the meeting.
Wherever possible, Directors who are not able to attend the meetings
physically, participate in the proceedings through video conferencing
or other audio visual means. Further, in order to facilitate the
smooth functioning of the Company and to address exigent matters, the
Board approves resolutions by circulation between two Board meetings.
During the period under review, the Board of Directors met ten times
viz. on November 20, 2014, January 27, 2015, February 9, 2015, March
11, 2015, May 13, 2015, August 13, 2015, November 3, 2015, January 13,
2016, January 25, 2016 and February 9, 2016. The time gap between any
two Board meetings did not exceed four months.
DIRECTORS
Changes that had taken place in the composition of the Board of
Directors of the Company during the period under review and subsequent
thereto are given below:
Appointments:
(i) Mr. Markus Wermers was appointed as Chief Executive Officer with
effect from February 1, 2015 and Managing Director with effect from
August 13, 2015.
(ii) Mr. Vijay Vaid was appointed as an Additional Director on March
11, 2015 and based on the declaration of independence received from him
as prescribed under Section 149 (7) of the Companies Act, 2013, he has
been classified as an Independent Director subject to the approval of
the members at the ensuing annual general meeting of the Company.
(iii) Mr. Sudhanshu K Tripathi and Mr. Sridharan Kesavan were appointed
as Additional Directors on August 13, 2015 to hold office till the
conclusion of the 55th Annual General Meeting.
(iv) Dr. C. Bhaktavatsala Rao and Ms. Bhumika Batra were appointed as
Additional Directors on November 3, 2015 and based on the declarations
of independence received from them as prescribed under Section 149 (7)
of the Companies Act, 2013, they have been classified as Independent
Directors subject to the approval of the members at the ensuing annual
general meeting.
(v) Mr. A.R. Chandrasekharan was appointed as an Additional Director on
May 11, 2016 to hold office till the conclusion of the 55th Annual
General meeting. He was also appointed as an Executive Director.
The Independent Directors of the Company have declared that they meet
the criteria of independence in terms of Section 149(6) of the
Companies Act, 2013 and that there is no change in their status of
independence as on date.
We seek your confirmation for appointment of Mr. Vijay Vaid, Dr. C
Bhaktavatsala Rao and Ms. Bhumika Batra as Independent Directors for a
term of three consecutive years on a non-rotational basis and Mr.
Sudhanshu K Tripathi and Mr. Sridharan Kesavan as Directors of the
Company, liable to retire by rotation. Your approval is also sought
for the appointment of Mr.A.R.Chandrasekharan as Executive Director for
a period of 3 years with effect from May 11, 2016.
Resignation :
(i) Mr. GRV Rajan resigned as a member of the Board and Managing
Director of the Company with effect from March 11, 2015.
(ii) Mr. R Seshasayee resigned from the Board and Chairmanship of the
Company on June 12, 2015.
(iii) Mr. S Ragothaman, an independent Director resigned from the Board
on November 18, 2015.
(iv) Mr. Markus Wermers resigned as a member of the Board and Managing
Director of the Company with effect from April 4, 2016.
The Board of Directors wish to place on record their sincere
appreciation for the valuable contributions made by Mr.GRV Rajan, Mr.R.
Seshasayee, Mr.S. Ragothaman and Mr. Markus Wermers during their
tenure as Directors.
The casual vacancies caused by the resignations were not filled-up.
Director retiring by rotation:
In terms of Article 106 of the Articles of Association of the Company,
Mr. Dheeraj G Hinduja is liable to retire by rotation at the ensuing
Annual General Meeting (AGM) and being eligible, offers himself for
re-appointment.
KEY MANAGERIAL PERSONNEL
Mr. D M Reddy was appointed as Chief Executive Officer and Key
Managerial Personnel on April 4, 2016.
Mr. D M Reddy, Chief Executive Officer, Mr. K R Ravi Shankar, Chief
Financial Officer and Mr. S Venkatasubramanian are the whole-time Key
Managerial Personnel of the Company.
COST AUDIT0RS
As per Section 148 of the Companies Act, 2013, the Company is required
to have the audit of its cost records conducted by a Cost Accountant in
practice. The Board of Directors of the Company has, on recommendation
of the Audit Committee, approved the appointment of M/s. Geeyes & Co.
(Firm Registration Number 000044) as the Cost Auditor of the Company to
conduct cost audits pertaining to product(s) Steel (Castings) in
compliance with the Companies (Cost Records and Audit) Rules, 2014, for
the 18 months period ended March 31, 2016. As required under the
Companies Act, 2013, the remuneration payable to the cost auditor is
required to be placed before the members in a general meeting for their
ratification. Accordingly, a resolution seeking ratification of the
members for the remuneration payable to M/s Geeyes & Co., Cost Auditors
is included at Item No. 10 of the Notice convening the Annual General
Meeting.
Cost Audit Reports for the financial year ended September 30, 2014 were
filed in a timely manner. The Cost Audit Reports for the 18 months
period ended March 31, 2016 will be filed with the Ministry of
Corporate Affairs in a timely manner.
The Board of Directors, subject to the approval of the Central
Government, has appointed M/s. Geeyes & Co. as Cost Auditors for
conducting cost audit for the financial year 2016-17.
INTERNAL CONTROL:
The Company has an internal control system commensurate with the size,
scale and complexity of its operations. Internal control systems
comprising of policies and procedures are designed to ensure
reliability of financial reporting, timely feedback on achievement of
operational and strategic goals, compliance with policies, procedures,
applicable laws and regulations and that all assets and resources of
the Company are safeguarded against loss from wastage, unauthorised use
and removal. The Internal Auditors are an integral part of the internal
control mechanism of the Company. To maintain its objective and
independence, the Internal Auditors report to the Audit Committee of
the Board of Directors.
The internal control system of the Company is supplemented by
documented policies, guidelines and procedures. The Internal Auditors
monitor and evaluate the efficacy and adequacy of internal control
systems in the Company, its compliance with the operating systems,
accounting procedures and policies at all locations of the Company and
its subsidiaries. Based on the report of the Internal Auditors, process
owners undertake corrective action in their respective areas and
thereby strengthen the controls. Significant audit observations and
corrective actions thereon are presented to the Audit Committee of the
Board.
The Audit Committee oversees the adequacy of the internal control
systems. The Company reviews its policies, guidelines and procedures of
internal control on an ongoing basis in view of the ever changing
business environment.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the regulators or
courts which would impact the going concern status of the Company and
its future operations.
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
Ms. B. Chitra, Company Secretary in Practice, Chennai to conduct the
secretarial audit of the Company for the 18 months period ended March
31, 2016.
The Secretarial Audit Report (in Form MR-3) is attached as Annexure-E
to this Report. The report is unqualified.
STATUTORY AUDITORS
M/s. B S R and Company, Chartered Accountants, retire at the close of
this Annual General Meeting and are eligible for re-appointment.
The Company has received a letter from M/s. B S R and Company that
they are unwilling to be considered for re-appointment.
In their place, the Company has proposed the appointment of B S R & Co.
LLP who are also a member firm of B S R and Affiliates network of
firms, registered with ICAI and who have given consent and confirmed
their eligibility under Section 139 and 141 of the Companies Act, 2013
read with the Companies (Accounts) Rules, 2014 for appointment as the
Auditors of the Company.
The Audit Committee and the Board of Directors have recommended B S R &
Co. LLP, a Limited Liability Partnership Firm for appointment as
Auditor of the company for a term of 5 years subject to ratification by
the members at every Annual General Meeting.
The necessary resolution is being placed before the members for
approval.
EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Companies Act, 2013, the details
forming part of the extract of the Annual Return in Form MGT-9 are
furnished in Annexure - F.
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of our knowledge and belief and on the basis of the
information and explanations obtained by us, your Directors make the
following statements in terms of Section 134(3)(c) of the Companies
Act, 2013:
a) in the preparation of the annual financial statements for the 18
months period ended March 31, 2016, the applicable Accounting Standards
had been followed. There are no material departures.
b) for the 18 months period ended March 31, 2016, such accounting
policies as mentioned in the Notes to the financial statements have
been applied consistently and judgments and estimates that are
reasonable and prudent have been made so as to give a true and fair
view of the state of affairs of the Company and of the Profit and Loss
and Cash Flow of the Company for the 18 months period ended March 31,
2016.
c) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
d) the annual financial statements have been prepared on a going
concern basis.
e) that 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 devised and that such systems were adequate and
operating effectively.
REMUNERATION POLICY OF THE COMPANY
The Remuneration policy of the Company comprising the policy followed
by the Company on the appointment and remuneration of its Directors,
Key Managerial Personnel and Senior Executives including criteria for
determining qualifications, positive attributes, independence of a
Director and other related matters has been provided in the Corporate
Governance Report which is attached as Annexure-B to this Report.
In terms of Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the Directors of the Company are
entitled to a sitting fee of Rs. 20,000 for every meeting of Board/
Committee attended by them. In the absence of profits, no commission
was paid to them. The median remuneration of employees for the same
period was Rs. 4 Lakhs. The ratio of median remuneration of employee to
the remuneration of Managing Director was 1:30.
The Company had 1647 permanent employees on the rolls of the Company as
on March 31, 2016.
The Company has effected increment in general on the remuneration to
all employees after a span of three years. The average increase per
employee was Rs. 6,750 p.m.
During the period under review, the Company also made a revision of
remuneration to the Chief Financial Officer [CFO] and Company Secretary
[CS] to reflect the market/industry standards to the extent possible
commensurate with the performance of the Company and individual. The
above remuneration is as per Remuneration policy of the Company.
RISK MANAGEMENT POLICY
Risks are events, situations or circumstances which may negatively
impact the Company''s business. Risk management is a structured approach
to manage uncertainty. The Company is adopting a formal approach to
risk management in such a way that key risks be managed within a
unitary framework.
The Company has constituted a Risk Management Committee which met on
August 13, 2015 and reviewed that the Company has an appropriate and
effective Enterprise Risk Management system with appropriate policies
and processes which carries out risk assessment.
The details of Risk Management as practiced by the Company are provided
as part of Management Discussion and Analysis Report attached as
Annexure - D to this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
Pursuant to Section 135 of the Companies Act, 2013, your Company is not
required to constitute Corporate Social Responsibility Committee.
However, as part of social initiative, the Company has undertaken a
programme known as B.VOC degree(3 year work integrated programme
conducted by Tata Institute of Social Sciences approved by AICTE/ GOI)
in order to enhance the skill of the society to enable them to get
employed.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and the New
Listing Regulations, Independent Directors at their meeting without the
participation of the Non-independent Directors and Management,
evaluated the Board''s performance, performance of the Chairman and
other Non- independent Directors.
The Board subsequently evaluated its own performance, the working of
its Committees (Audit, Nomination and Remuneration and Stakeholders
Relationship Committee) and Independent Directors (without
participation of the relevant Director).
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) Rules, 2014 and the
New Listing Regulations, the Board of Directors had approved the Policy
on Vigil Mechanism/ Whistle Blower and the same has been hosted on the
website of the Company. This 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. Brief details about the policy are
provided in the Corporate Governance Report attached as Annexure-B to
this Report.
POLICY ON PREVENTION OF SEXUAL HARASSMENT
The Board of Directors have approved the "Sexual Harassment Policy" in
terms of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. The said policy is uploaded on
the website of the Company.
During the year under review, there were no complaints received from
any regular/contract employee or from any of the outsiders who visited
our office for official purpose.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Your Company has successfully implemented a voluntary retirement scheme
at the Company''s unit located at Ennore, Tamilnadu. All employees of
the Company''s Ductron casting unit located at Hyderabad, Telangana had
sought voluntary separation from the Company, which was agreed and
implemented. Consequently the unit had to be closed down. Your Company
has successfully concluded Long Term Settlement (LTS) with workers at
Sriperumbudur (SPU) and Ennore units.
In terms of the 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, a statement showing
the names and other particulars of the employees drawing remuneration
in excess of the limits set out in the said Rules are provided in the
Annexure forming part of the Annual Report.
Disclosure pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 are
furnished in Annexure-G.
FORWARD LOOKING STATEMENTS
This Report together with the annexures contains forward looking
statements that involve risks and uncertainties. When used in this
report, the words "anticipate", "believe", "estimate", "expect",
"intend", "will", and other similar expressions as they relate to the
Company and/or its business are intended to identify such forward
looking statements. Neither the Company nor the Directors undertake any
obligation to publicly update or revise any forward looking statements,
whether as a result of any new information, future events, or
otherwise.
We cannot, of course, guarantee that these forward looking statements
will be realized, although we believe we have been prudent in our
assumptions. The achievement of results is subject to risks,
uncertainties and even inaccurate assumptions. Should known or unknown
risks or uncertainties materialize, or should underlying assumptions
prove inaccurate, actual results could vary materially from those
anticipated, estimated or projected.
ACKNOWLEDGEMENT
The Directors wish to acknowledge and place on record their
appreciation of the valuable advice and support received from Hinduja
Automotive Ltd., UK (formerly LRLIH Limited) and Ashok Leyland Limited.
The Directors wish to express their gratitude to the Government of
India, Government of Tamil Nadu, Government of Telangana and other
Government agencies. They also thank the Company''s Bankers, members,
Customers and Suppliers and all the employees for their continued
support.
By Order of the Board
Chennai Dheeraj G Hinduja
May 11, 2016 Chairman
Sep 30, 2014
THE MEMBERS:
The Directors present the Fifty Fourth Annual Report together with the
audited accounts of your Company for the 18 months period ended
September 30, 2014.
FINANCIAL RESULTS
(Rs. In Lakhs)
2013-14 2012-13
PARTICULARS (18 Months) (6 Months)
Profit/(Loss) before Depreciation and Taxation 19019.26 7874.84
Less: Depreciation 7224.56 2033.07
Less: Provision for Taxation _ 470.45
Profit / (Loss) after Taxation (26243.82) (10378.36)
Add : Balance brought forward from previous year 38719.23 28340.87
Balance carried to Balance Sheet (64963.05) (38719.23)
Basic and Diluted Earnings Per Share of face (65.07) (39.13)
value of Rs. 10/- each, (in Rs.)
DIVIDEND
In view of loss for the period under review, no dividend has been
recommended by the Board of Directors.
BUSINESS OPERATIONS
The Company''s Net Sales for the 18 months period ended September 30,
2014 was Rs.96,679 Lakhs and the loss incurred during the same period
was Rs. 26,244 Lakhs. The corresponding Net Sales and Loss figures of
the previous year comprising six months period October 1, 2012 to March
31, 2013 was Rs. 30,422 Lakhs and Rs. 9,908 Lakhs respectively.
The slow down of the economy coupled with negative growth of Auto
sector has severely impacted your company
TheCompany continued to face numerouschallenges due to negative growth
of the OEM market, uncertain power scenario, and sharp unremunerative
price of end products. The Sriperumbudur Unit (SPU) Ramp- up with
debottlenecking of capacity constraints and stabilization of production
processes was slowed down.
TECHNOLOGY UPGRADATION/MODERNIZATION
The Company has invested substantially in energy efficient technologies
and has implemented various processes which minimize waste.
Commissioning of various equipment such as Maus Fettling Machine, Vent
Drilling Machine and the improved material handling of cores has
resulted in reduction of wastage, improved productivity and fewer
breakages.
Capacity was added in the machine shop to handle more castings in
finished form thereby increasing value addition and becoming a more
preferred supplier of castings as the OEMs get ready to assemble
components.
The particulars required under the Companies (Disclosure of Particulars
in the Report of the Board of Directors) Rules 1988 to the extent
applicable are furnished in Annexure - A to this report.
PUBLIC DEPOSITS
The Company has not accepted any fixed deposits from public within the
meaning of Section 73 (1) of the Companies Act, 2013 during the period
under review.
EXTENSION OF FINANCIAL YEAR 2013-14
The Financial Year 2013-14 was extended by six months upto September
30, 2014 with the permission of Registrar of Companies, Chennai
BORROWINGS
During the period, your Company has made an additional borrowings of
Rs. 23,025 Lakhs and repaid Rs. 12,818 Lakhs of loans, on due dates.
CORPORATE GOVERNANCE
Your Company is fully compliant with the Corporate Governance
requirements laid down in Clause 49 of the Listing Agreement. All the
Directors (and also the members of the Senior Management of the rank
General Managers and above) have confirmed in writing their compliance
with and adherence to the Code of Conduct adopted by the Company.
Many of the Corporate Governance Voluntary Guidelines 2009, issued by
the Ministry of Corporate Affairs are being followed by the Company. A
detailed Report on Corporate Governance together with Certification
of the Managing Director and the Chief Financial Officer is furnished
in Annexure - B. The certification of the Managing Director, on the
adherence to the Code of Conduct, specified in said clause is provided separately.
The Statutory Auditors of the Company have examined the contents of the
Corporate Governance with reference to Clause 49 of the Listing
Agreement and have certified the compliance as required under the SEBI
guidelines. The Certificate of the Statutory Auditors on Company''s
compliance with the Corporate Governance requirements is attached in
Annexure - C. The Management Discussion and Analysis Report is attached
in Annexure - D.
As required under Section 217(2AA) of the Companies Act, 1956 and
Section 134(5) of the Companies Act, 2013 the Directors'' Responsibility
Statement is furnished in Annexure - E to this Report.
Related party disclosures/transactions are detailed in Notes forming
part of the Accounts.
ISSUE OF SHARES
Pursuant to the approval of the shareholders at an Extraordinary
General Meeting held on January 17, 2014, your Company has raised
capital by the issue and allotment of:
1) 1,78,18,448 Equity Shares of the Company by way of Preferential
Allotment to Hinduja Foundries Holding Limited, Mauritius, forming part
of the "promoter" and "promoter group" of the Company at a price per
equity share of Rs.34.15 aggregating Rs.60,84,99,999.
2) 2,61,05,417 Equity Shares of the Company of Rs.10/- each at a price
of Rs.31.00 by way of Qualified Institutional Placement ("QIP")
aggregating Rs.80,92,67,927.
MEETINGS OF BOARD OF DIRECTORS
Annual calendar of meetings of the Board/ Committees is usually
finalized well before the beginning of the year after seeking
concurrence of all Directors. The meetings are scheduled only if most
of the directors agree for the same, in case any of the directors have
a subsequent change of plan
and are not available for the meeting, effort is made to re-schedule
the meeting provided the other Directors are available and willing to
re-schedule. Where circumstances preclude the Chairman from attending
the meeting, he entrusts an independent Director or a non-executive
Director to chair the meeting. Wherever possible, Directors who are not
able to attend the meetings, join the proceedings through video / audio
conference. Further, in order to facilitate the smooth functioning of
the company and out of necessity the board approves resolutions by
circulation between two board meetings.
During the period ended September 30, 2014, the Board of Directors met
seven times viz. on May 11, 2013, July 17, 2013, November 7, 2013,
January 22, 2014, May 6, 2014, May 21, 2014 & July 26, 2014.
The time gap between any two Board Meetings did not exceed four months
DIRECTORS
In terms of Article 106 of the Articles of Association of the Company,
Mr. R Seshasayee is liable to retire by rotation at the ensuing Annual
General Meeting (AGM) and being eligible, offer himself for
reappointment.
During the period, Mr. F Sahami stepped down from the Board and the
casual vacancy caused by his resignation was not filled up. Mr. T
Anantha Narayanan was appointed as an Additional Director w.e.f. March
28, 2014, who holds office till the conclusion of the ensuing Annual
General Meeting. The Company has received a notice proposing the name
of Mr. T Anantha Narayanan for the Directorship. Mrs. Mohana
Srinivasan was appointed as an Additional Director w.e.f. September 17,
2014 who holds office till the conclusion of the ensuing Annual General
Meeting. Based on the declaration, she is being appointed as an
independent director for a term of three consecutive years on a non
rotational basis.
Pursuant to provisions of Section 149 and other applicable provisions /
rules of Companies Act, 2013 and based on their eligibility, Mr. D J
Balaji Rao, Mr. S Ragothaman and Mr. Sridhar Venkiteswaran, Directors
are being recommended for appointment as an Independent Director for a
term upto three consecutive years i.e. upto December 21, 2017, on a
non-rotational basis.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed both under sub-section (6) of Section 149 of
the Companies Act, 2013 and under Clause 49 of the Listing Agreement
with the Stock Exchanges.
Mr. Jean Brunol has resigned from the directorship of the company w.e.f
November 10, 2014. The casual vacancy caused by his resignation was not
filled-up.
Details of the proposals including profiles of the Directors for
appointments / re-appointment as applicable are mentioned in the
Explanatory Statement under Section 102 of the Companies Act, 2013 in
the Notice to the 54th Annual General Meeting. Necessary resolutions
are being placed before the shareholders for approval.
KEY MANAGERIAL PERSONNEL
Managing Director, Chief Financial Officer and Company Secretary are
recognized as Key Managerial personnel with effect from April 1, 2014.
Mr. K R Ravi Shankar, Chief Financial Officer has been designated as
whole time Key Managerial Personnel with effect from April 1, 2014 as
per Section 203 of the Companies Act, 2013.
COST AUDITORS
Pursuant to the Industry vide Order No. 52/26/ CAB/2010 dated
30.06.2011 issued by Ministry of Corporate Affairs, Cost Audit Branch,
the Company, after obtaining due approval from the Central Government,
has appointed M/s. GEEYES & CO; (Firm Registration Number 00044) as
Cost Auditors for the audit of Cost Accounts (relevant to "Steel"
Industry covering Chapter Heading 72 and 73 of Central Excise Tariff
Act, 1985) in compliance with The Companies (Cost Audit Report) Rules
2011 and The Companies (Cost Accounting Record Rules) 2011 for the
period ended September 30, 2014 (18 months). The Cost Audit Reports for
the 18 months period ended September 30, 2014 will be filed with the
MCA before due date.
The Board of Directors, subject to the approval of the Central
Government, appointed M/s. GEEYES & CO as Cost Auditors for conducting
Cost Audit for the financial year 2014-15. Cost Audit Reports for the
financial year ended March 31, 2013 (from October 1, 2012 to March 31,
2013) were filed on due date.
SECRETARIAL AUDIT
As directed by Securities and Exchange Board of India (SEBi), a
qualified Practicing Company Secretary carries out a Share Capital
Audit on a quarterly basis to reconcile the total admitted capital with
National Securities Depository Limited (NSDL) and Central Depository
Services Limited (CDSL) and the total issued and listed capital. The
audit confirms that the total issued / paid up capital is in agreement
with the total number of shares in physical form and the total number
of dematerialized shares held with NSDL and CDSL. The findings of the
secretarial audit were entirely satisfactory. Further to the above, the
Company has complied with all the provisions of listing agreement in
the current year under review.
STATUTORY AUDITORS
M/s. BSR and Company Chartered Accountants, retire at the close of this
Annual General Meeting and are eligible for re-appointment. The Company
has received confirmation from them that their appointment will be
within the limits prescribed under Section 141(3) (g) of the Companies
Act, 2013. The Audit Committee of the Board has recommended their
re-appointment for the year 2014-15. The necessary resolution is being
placed before the shareholders for approval.
VOLUNTARY RETIREMENT SCHEME
The Company has implemented a Voluntary Retirement Scheme to the
employees of company''s Ductron Castings Unit located at Uppal,
Hyderabad with an outgo of Rs. 1,129.53 Lakhs.
PERSONNEL
The Company continues to enjoy cordial relationship with its employees
at all levels. The details of employee(s) as prescribed under Section
217(2A) of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules,1975 as amended are furnished in Annexure - F.
FORWARD LOOKING STATEMENTS
This Report together with the annexures contains forward looking
statements that involve risks and uncertainties. When used in this
report, the words "anticipate", "believe",
"estimate","expect"/''intend", "will", and other similar expressions as
they relate to the Company and/or its business are intended to identify
such forward looking statements. Neither the Company nor the Directors
undertake any obligation to publicly update or revise any forward
looking statements, whether as a result of any new information, future
events, or otherwise.
We cannot, of course, guarantee that these forward looking statements
will be realized, although we believe we have been prudent in our
assumptions. The achievement of results is subject to risks,
uncertainties and even inaccurate assumptions. Should known or unknown
risks or uncertainities
materialize, or should underlyingassumptions prove inaccurate, actual
results could vary materially from those anticipated, estimated or
projected.
ACKNOWLEDGEMENT
The Directors wish to acknowledge and place on record their
appreciation of the valuable advice and support received from Hinduja
Automotive Ltd., UK (formerly LRLIH Limited) and Ashok Leyland Limited.
The Directors wish to express their gratitude to the Government of
India, Government of Tamil Nadu, Government of Telangana and other
Government agencies. They also thank the Company''s Bankers,
Shareholders, Customers and Suppliers and all the employees for their
continued support.
By Order of the Board
Chennai R.Seshasayee
November 20, 2014 Chairman
Mar 31, 2013
To THE MEMBERS:
The Directors present the Fifty Third Annual Report together with the
audited accounts of your Company for the year ended (6 months) March
31, 2013.
FINANCIAL RESULTS
(Rs. In Lakhs)
2012-13 2011-12
PARTICULARS (6 Months) (18 Months)
Profit/(Loss) before Depreciation and Taxation
Less: Depreciation 2033.07 5166.02
Less: Provision for Taxation 470.45 (1004.19)
Profit/(Loss) after Taxation (10378.36) (29133.95)
Add : Balance brought forward (28340.87) 793.08
from previous year
Balance carried to Balance Sheet (38719.23) (28340.87)
Basic and Diluted Earnings Per
Share of face value of Rs. 10/- (39.13) (102.21)
each, (in Rs.)
DIVIDEND
In view of loss for the period under review, your Directors regret
their inability to recommend any dividend for the year.
BUSINESS OPERATIONS
The Company''s Sales Revenue for the six months period 1st October 2012
to 31st March, 2013 was Rs. 30422 Lakhs and the loss incurred during
the same period was Rs. 9,908 Lakhs. The corresponding Sales Revenue
and Loss figures of the previous year comprising of 18 months period
from 1st April 2011 to 30th September 2012 was Rs. 102936 Lakhs and Rs.
30138 Lakhs respectively.
Total Net Sales of Ferrous and Non Ferrous Castings at 37359 MT were
proportionately lower in the current accounting period as compared to
130750 MT in the previous accounting period. Gross production of
Ferrous and Non Ferrous Castings at 42100 MT was proportionately lower
in the current accounting period as compared to 157408 MT in the
previous accounting period.
In the period under review, the Company consolidated its position as a
principal supplier of castings to various Original Equipment
Manufacturers (OEMs) namely Tata Cummins, Renault, New Holland, John
Deere etc., meeting their exacting standards of quality and delivery
schedules. Necessary infrastructure and tooling have been put in place
and technical knowhow has been developed to become supplier of choice
to all major OEMs in the Commercial Vehicle, Passenger Vehicle,
Tractors and Construction Equipment segments. The company is well
poised to take advantage of opportunities that will arise on revival of
the market.
The Company continued to face numerous challenges due to negative
growth of the OEM market, uncertain power scenario, and sharp increase
in raw material and power prices which were not adequately compensated
by the customers. Sriperumbudur Unit (SPU) Ramp-up is proceeding at a
rapid pace with debottlenecking of capacity constraints and
stabilization of production processes.
TECHNOLOGY UPGRADATION/MODERNIZATION
The Company has invested substantially in energy efficient technologies
and has implemented various processes which minimize waste.
Commissioning of various equipment such as Maus Fettling Machine, Vent
Drilling Machine and the improved material handling of cores has
resulted in reduction of wastage, improved productivity and fewer
breakages.
Capacity was added in the machine shop to handle more castings in
finished form thereby increasing value addition and becoming a more
preferred supplier of castings as the OEMs get ready to assemble
components.
The particulars required under the Companies (Disclosure of Particulars
in the Report of the Board of Directors) Rules 1988 to the extent
applicable are furnished in Annexure A to this report.
PUBLIC DEPOSITS
The Company has not accepted any fixed deposits from public within the
meaning of Section 58 A of the Companies Act, 1956 during the year
under review. However, the amount of matured and unclaimed deposits &
unclaimed interest on fixed deposits as of March 31, 2013 was Rs. 0.02
lakhs & Rs.0.52 lakhs respectively.
ALIGNMENT OF FINANCIAL YEAR 2012 - 13
The previous financial year 2011-12 comprised of 18 months period ended
September 30, 2012. With a view to adopt uniform accounting year i.e.
from April to March, the Board of Directors at their meeting held on
February 27, 2013, has aligned the current financial year 2012-13 to
end on March 31, 2013 (6 months) and accordingly, the Accounts for the
Financial Year 2012 - 13 has been prepared for a period of six months
from October 1, 2012 to March 31, 2013.
The accounting period for the next financial year (i.e. 2013-14) would
be for a period of 12 months commencing from April 01, 2013 to March
31, 2014.
CORPORATE GOVERNANCE
Your Company has been practicing the principles of good corporate
governance over the years and lays strong emphasis on transparency,
accountability and integrity in spirit and not just the letter of law.
The Company is fully compliant with the Corporate Governance
stipulations as laid down in Clause 49 of the Listing Agreement. All
the Directors (and also the members of the Senior Management of the
rank General Managers and above) have confirmed in writing their
compliance with and adherence to the Code of Conduct adopted by the
Company.
Many of the Corporate Governance Voluntary Guidelines 2009, issued by
the Ministry of Corporate Affairs are being followed by the Company. A
detailed Report on Corporate Governance together with Certification of
the Managing Director and the Chief Financial Officer is furnished in
Annexure - B. The certification of the Managing Director, on the
adherence to the Code of Conduct, specified in said clause is provided
separately.
The Statutory Auditors of the Company have examined the contents of the
Corporate Governance with reference to Clause 49 of the Listing
Agreement and have certified the compliance as required under the SEBI
guidelines. The Certificate of the Statutory Auditors on Company''s
compliance with the
Corporate Governance requirements is attached in Annexure - C. The
Management Discussion and Analysis Report is attached in Annexure - D.
As required under Section 217(2AA) of the Companies Act, 1956, the
Directors'' Responsibility Statement is furnished in Annexure - E to
this Report.
Related party disclosures / transactions are detailed in Notes forming
part of the Accounts.
CHANGES IN CAPITAL STRUCTURE
During the year under review, the Company allotted 2,25,00,000, 9%
Redeemable, Non-Convertible, Cumulative Preference Shares of Rs.100/-
each of an aggregate nominal amount of Rs. 225 Crores to Ashok Leyland
Limited. With the above allotment, the total Preference Share Capital
of the Company increased to Rs. 321.67 Crores as at March 31, 2013
(Previous Year Rs. 96.67 Crores). There was no change in paid-up equity
share capital of the Company.
REFERENCE TO THE BOARD OF INDUSTRIAL AND FINANCIAL RECONSTRUCTION
During the year under review, the Company obtained the approval of the
shareholders through Postal Ballot process pursuant to section 192 A of
the Companies Act, 1956 read with the Companies (Passing of Resolutions
by Postal Ballot) Rules, 2011 in compliance with Section 23 of Sick
Industrial Companies (Special Provisions) Act, 1985 which obligates a
company to report the fact of potential sickness to BIFR within 60 days
of adoption of audited financial results and a resolution from the
shareholders of the company, when the accumulated losses of a company
as at the end of any financial year have resulted in erosion of fifty
per cent or more of its peak net worth during the immediately preceding
four financial years.
While Hinduja Foundries is not a sick company, the above reference to
BIFR was made only as a matter of statutory compliance and has no other
implications. The operational recovery of the Company and the
commitment of the promoters to support the Company in line with the
committed plans, remain intact.
DIRECTORS
In terms of Article 106 of the Articles of Association of the Company,
Mr. R Seshasayee, Mr. D.G. Hinduja and Mr. Sridhar Venkiteswaran,
Directors of the Company are liable to retire by rotation at the
ensuing Annual General Meeting (AGM) and being eligible, offer
themselves for re- appointment. The brief resume of these Directors and
other information have been detailed in the notice convening the AGM of
the Company. Necessary resolutions are being placed before the
shareholders for approval. The Board recommends their re-appointment.
Mr. B.Swaminathan, whose contract of employment expired on April 30,
2013 was re-appointed by the Board as the Managing Director for a
further period of one year w.e.f. May 01, 2013. Subsequently, Mr.
B.Swaminathan resigned from his position of Managing Director w.e.f.
the close of business hours of July 17, 2013. Mr. Jorma Antero Halonen
resigned as an Independent Director effective from July 07, 2013. The
Board places on record their warm appreciation and gratitude for the
valuable contribution made by Mr.B.Swaminathan and Mr.Jorma Antero
Halonen during their association with the Company.
In terms of Article 101 of the Articles of Association and Section 260
of the Companies Act, 1956, Mr. G.R.V. Rajan was appointed as an
Additional Director in the first stance and as Managing Director
(Designate) and CEO effective June 24, 2013. Based on the
recommendations of the Remuneration Committee and approved by the
Board, he was appointed as Managing Director and CEO effective July 17,
2013. The necessary resolution proposing his appointment and the
remuneration payable to him is placed before the shareholders for
approval. The Board recommends his appointment.
COST AUDITORS
Pursuant to the Industry vide Order No. 52/26/ CAB/2010 dated
30.06.2011 issued by Ministry of Corporate Affairs, Cost Audit Branch,
the Company, after obtaining due approval from the Central Government,
has appointed M/s. GEEYES & CO;
(Firm Registration Number 00044) as Cost Auditors for the audit of Cost
Accounts (relevant to "Steel" Industry covering Chapter Heading 72 and
73 of Central Excise Tariff Act, 1985) in compliance with The Companies
(Cost Audit Report) Rules 2011 and The Companies (Cost Accounting
Record Rules) 2011 for the financial year ended September 30, 2012 (18
months). The Cost Audit Reports for the financial year ended September
30, 2012 were duly filed with the MCA on June 10, 2013 (due date March
31, 2013).
The Board of Directors, subject to the approval of the Central
Government, appointed M/s. GEEYES & CO as Cost Auditors for conducting
Cost Audit for the financial year 2012-13 (6 months). The Audit
Committee of the Directors recommended their appointment subject to the
compliance of all the requirements as stipulated in Circular No.
15/2011 dated 11.04.2011 issued by the MCA. The Central Government has
also accorded its approval for the appointment.
SECRETARIAL AUDIT
As directed by Securities and Exchange Board of India (SEBI), a
qualified Practicing Company Secretary carries out a Share Capital
Audit on a quarterly basis to reconcile the total admitted capital with
National Securities Depository Limited (NSDL) and Central Depository
Services Limited (CDSL) and the total issued and listed capital. The
audit confirms that the total issued / paid up capital is in agreement
with the total number of shares in physical form and the total number
of dematerialized shares held with NSDL and CDSL. The findings of the
secretarial audit were entirely satisfactory. Further to the above, the
Company has complied with all the provisions of listing agreement in
the current year under review.
STATUTORY AUDITORS
M/s. B S R and Company, Chartered Accountants, Chennai, retire at the
close of the ensuing Annual General Meeting and are eligible for re-
appointment. They have expressed their willingness to act as Auditors
of the Company, if appointed, and have further confirmed that the said
appointment would be in conformity with the provisions of Section
224(IB) of the Companies Act, 1956. The Company''s Statutory Auditors
have also furnished us with a certificate from the Peer Review Board of
the ICAI that they have undergone the process of peer review.
The Audit Committee of the Board has recommended their re-appointment
for the FY 2013-14. The necessary resolution is placed before the
shareholders for approval. The Board recommends their re-appointment.
PERSONNEL
The Company continues to enjoy cordial relationship with its employees
at all levels. The details of employee(s) as prescribed under Section
217(2A) of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules,1975 as amended are furnished in Annexure - F.
FORWARD LOOKING STATEMENTS
This Report together with the annexures contains forward looking
statements that involve risks and uncertainties. When used in this
report, the words "anticipate", "believe",
"estimate","expect","intend", "will", and other similar expressions as
they relate to the Company and/or its business are intended to
''identify such forward looking statements. Neither the Company nor the
Directors undertake any obligation to publicly update or revise any
forward- looking statements, whether as a result of any new
information,future events, or otherwise.
We cannot, of course, guarantee that these forward looking statements
will be realized, although we believe we have been prudent in our
assumptions. The achievement of results is subject to risks,
uncertainities and even inaccurate assumptions. Should known or unknown
risks or uncertainities materialize, or should underlying assumptions
prove inaccurate, actual results could vary materially from those
anticipated, estimated or projected.
ACKNOWLEDGEMENT
The Directors wish to acknowledge and place on record their
appreciation of the valuable advice and support received from Hinduja
Automotive Ltd., UK (formerly LRLIH Limited) and Ashok Leyland Limited.
The Directors wish to express their gratitude to the Government of
India, Government of Tamil Nadu, Government of Andhra Pradesh and other
Government agencies. They also thank the Company''s Bankers,
Shareholders, Customers and Suppliers and all the employees for their
continued support.
By Order of the Board
Chennai R.Seshasayee
July 17, 2013 Chairman
Mar 31, 2011
The Members:
The Directors present the Fify First Annual Report together with the
audited Accounts of your Company for the year ended March 31, 2011.
Financial Results (Rs. Lakhs)
2010-11 2009-10
Profit before tax/ (Loss) 844.84 64.61
Less: Provision for Taxaton 97.19 30.00
Profit/(Loss) afer Tax 747.65 34.61
Less : Transfer to General Reserve 747.65 34.61
Balance brought forward from last year 45.43 10.82
Less : Transfer to Capital Redempton Reserve - -
Balance available for appropriaton 793.08 45.43
Appropriaton:
Dividend on preference shares - -
Tax thereon - -
Proposed dividend on equity shares - -
Tax thereon - -
Balance carried to balance sheet 793.08 45.43
Earnings per share 2.09 (0.48)
Dividend
In view of the carried forward losses and marginal Profit, your
Directors regret their inability to recommend any dividend for the
year.
Business Operatons:
Your Company earned a sales revenue for the year at Rs. 55116.35 lakhs
compared to Rs. 39154.46 lakhs in the previous year and earned a Profit
before tax of Rs. 844.84 lakhs against the Profit before tax of Rs.
64.61 lakhs in the previous year. Total sales of ferrous and
non-ferrous castngs was higher at 73,170 tonnes compared to 57,701
tonnes in the previous year. Gross Producton of ferrous and non-
ferrous castngs during the year increased to 88,545 tonnes from 66,235
tonnes in 2009-10.
Your company has expanded the customer base, which now includes Global
OEMs in commercial vehicle, constructon and passenger car industries.
Your company has been successful in increasing its domestc market share
in the commercial vehicles, tractors and constructon equipments and
with supplies to internatonal OEMs commencing in second half of
2011-12, it will be strengthening its market share in the passenger car
segment as well.
Development of new products for new and existng customers is
progressing as per schedule. In line with the latest developments,
project implementatons have been suitably planned based on customer
requirements.
However, the company faced several challenges during the year,
including severe power cuts, industrial relatons and skill
availability.
Technology Upgradaton/Modernizaton
Your Company's drive for technology upgradaton to gain an advantageous
positon in the market is moving ahead. Sriperumbudur unit is now
producing contemporary blocks and heads for both commercial vehicles
and tractor segments. Modernisaton of Ennore (Eastland) plant has
commenced in a modest way.
The company has commenced sale of machined castngs , leading to beter
value realizaton.
The partculars required under Companies (Disclosure of Partculars in
the Report of the Board of Directors) Rules, 1988 to the extent
applicable are furnished in Annexure - A to this report.
Your company is planning to bring an additonal capital infusion of Rs.
125 crores to meet the funding requirements. It proposes to issue
1,66,63,812 shares of Rs.10 /- each at a premium of Rs.65/- per share
on Rights basis in the rato of 29 shares for every 50 shares presently
held to all members whose names appear in the Register of Members as on
Record Date to be fixed by the Board of Directors. This issue is
expected to bring in funds of around Rs. 124.98 crores.
The resolutons for the proposed Rights Issue are placed for your
approval.
Corporate Governance
With the appointment of Mr. R. Seshasayee as Chairman in place of Mr.
R.J. Shahaney on 21st October, 2010, one half of the Board should
comprise of Independent Directors.
As on 31st March, 2011, the company had 9 Directors on its Board, out
of whom 4 were independent Directors. The company thus had tme tll 19th
April, 2011 to comply with Clause 49(I)(C)(iv) of the Listng Agreement.
The company however, was not in compliance with Clause 49 of the Listng
Agreement for a period of 12 days from 19th April, 2011. During this
period the company did not hold any Board meetng and hence did not take
any decisions. The company subsequently appointed an independent
Director with efect from 01st May, 2011 thereby increasing the
compositon of independent Directors and hence complying with the Listng
requirements.
A detailed Report on Corporate Governance together with Certfcaton of
the Managing Director and Chief Financial Ofcer is furnished in
Annexure à B. The certfcaton of the Managing Director onthe adherence
to the Code of Conduct specifed in said clause is provided separately.
The certfcate of the Statutory Auditors on the Company's Compliance
with the Corporate Governance requirements is atached in Annexure à C.
The Management Discussion and Analysis Report is atached in Annexure D.
As required under Secton 217(2AA) of the Companies Act, 1956, the
Directors' Responsibility Statement is furnished in Annexure E to this
report.
Fixed Deposits
The amount of matured and unclaimed deposits as on March 31, 2011 was
Rs. 0.10 lakhs.
Directors
Mr. Sridhar Venkiteswaran, Mr. B. Swaminathan and Mr. Jorma Antero
Halonen have been appointed as Additonal Directors of the Company and
will hold ofce tll the ensuing Annual General Meetng (AGM). otces have
been received from Members proposing their appotment as Directors of
the Company at the AGM.
Mr. D.J. Balaji Rao, Mr. D.G. Hinduja and Mr. R. Seshasayee retre at
the ensuing AGM and being eligible ofer themselves for re-electon.
Auditors
M/s. B S R and Company, Chartered Accountants, Chennai retre at the
close of the ensuing AGM and are eligible for reappointment.
Personnel
Overall the Company enjoys good relatonship with its employees. The
details of employees as prescribed under Secton 217(2A) of the
Companies Act, 1956 read with Companies (Partculars of employees)
Amendment Rules, 2011 are furnished in Annexure à F.
Forward Looking Statements
This Report together with the annexures contains forward looking
statements that involve risks and uncertaintes. When used in this
report, the words "antcipate", "believe", "estmate", "expect",
"intend", "will", and other similar expressions as they relate to the
Company and/or its business are intended to identfy such forward
looking statements. Neither the Company nor the Directors undertake any
obligaton to publicly update or revise any forward-looking statements,
whether as a result of any new informaton, future events, or otherwise.
Actual results, performances or achievements could difer materially
from those expressed or implied in such forward-looking statements due
to risks, uncertaintes or even inaccurate assumptons. No undue reliance
should be placed on these forward- looking statements that speak only
as of their dates. This Report should be read in conjuncton with the
financial statements included herein and the notes thereto.
Acknowledgement
The Directors wish to acknowledge and place on record their appreciaton
of the valuable advice and support received from Hinduja Automotve
Ltd., UK (formerly LRLIH Limited) and Ashok Leyland Limited.
The Directors wish to express their grattude to the Government of
India, the Government of Tamil Nadu, Government of Andhra Pradesh and
other government agencies. They also thank the Company's Bankers,
Shareholders, Customers, Suppliers and all the employees for their
contnued support.
On behalf of the Board of Directors
Chennai R Seshasayee
May 20, 2011 Chairman
Mar 31, 2010
The Directors present the Fiftieth Annual Report together with the
Audited Accounts of your Company for the year ended March 31, 2010.
Financial Results (Rs. in lakhs)
2009-10 2008-09
Profit before tax/ (Loss) 64.61 (1859.06)
Less: Provision for Taxation 30.00 (661.00)
Profit/(Loss) after Tax 34.61 (1198.06)
Less : Transfer to General Reserve - -
34.61 (1198.06)
Balance brought forward from last year 10.82 1542.21
Less : Transfer to Capital Redemption - (333.33)
Reserve
Balance available for appropriation 45.43 10.82
Appropriation:
Dividend on preference shares - -
Tax thereon - -
Proposed dividend on equity shares - -
Tax thereon - -
Balance carried to balance sheet 45.43 10.82
Earnings per share (0.63) (7.30)
Dividend
In view of the carried forward losses and marginal profit, your
Directors regret their inability to recommend any dividend for the
year.
Business Operations:
Your Company earned as a sales revenue for the year at Rs.39154.46
lakhs compared to Rs.36312.53 lakhs in the previous year and earned a
profit of Rs.64.61 lakhs before tax against the loss before tax of
Rs.1859.06 lakhs in the previous year.
Total sales volume of ferrous and non-ferrous castings was higher at
57,701 tonnes compared to 49,130 tonnes in the previous year. Gross
Production of ferrous and non-ferrous castings during the year
increased to 66,985 tonnes from 58,166 tonnes in 2008-09.
From the second half of 2009-10, demand from the commercial vehicles
segment has been growing and there is a general expectation that this
trend would continue in the year 2010-11.
Development of new products for new and existing customers is
progressing as per schedule. Your Company has received orders from
leading international customers for which deliveries would commence in
the second half of 2010- 11.
In line with the latest developments, project implementations have been
suitably planned and commencement of commercial production has been
suitably re-scheduled based on customer requirements.
Technology Upgradation/Modernization
Your Companys drive for technology updation to gain advantageous
position, continues. New Foundry has started producing thin water
jacket cores from cold box process for the first time. Modernisation
of all units is being taken up for ensuring consistency in quality and
for cost optimization.
The Design Centre and Pattern Shop have been added with new machines to
improve quality of tools made.
The particulars required under Companies (Disclosure of Particulars in
the Report of the Board of Directors) Rules, 1988 to the extent
applicable are furnished in Annexure - A to this report.
Corporate Governance
Your Company has complied with the requirements of the Code of
Corporate Governance as stipulated under Clause 49 of the listing
agreements with the stock exchanges. A detailed Report on Corporate
Governance together with Certification of the Managing Director and
Chief Financial Officer is furnished in Annexure - B. The certification
of the Managing Director on the adherence to the Code of Conduct
specified in said clause is provided separately.
The certificate of the Statutory Auditors on the Companys Compliance
with the Corporate Governance requirements is attached in Annexure-C.
The Management Discussion and Analysis Report is attached in Annexure
D.
As required under Section 217(2AA) of the Companies Act,
1956,theDirectors Responsibility Statement is furnished in Annexure-E
to this report.
Fixed Deposits
The amount of matured and unclaimed deposits as on March 31, 2010 was
Rs.0.25 lakhs.
Directors
Mr. Jean Brunol has been appointed as Additional Director of the
Company and will hold office till the ensuing Annual General Meeting
(AGM).
Mr. R J Shahaney, Mr. S Ragothaman and Mr F Sahami retire at the
ensuing AGM.
Auditors
M/s Fraser and Ross, Chartered Accountants and M/s S R Batliboi &
Associates, Chartered Accountants, retire at the close of the ensuing
AGM and are eligible for reappointment.
Personnel
The Company continued to enjoy cordial relationship with its employees.
The details of employees as prescribed under Section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of employees)
Rules, 1975 are furnished in Annexure - F.
Forward Looking Statements
This Report together with the annexures contains forward looking
statements that involve risks and uncertainties. When used in this
report, the words "anticipate", "believe", "estimate",
"expect", "intend", "will", and other similar expressions as they
relate to the Company and/or its business are intended to identify such
forward looking statements. Neither the Company nor the Directors
undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of any new information,
future events, or otherwise. Actual results, performances or
achievements could differ materially from those expressed or implied in
such forward-looking statements due to risks, uncertainties or even
inaccurate assumptions. No undue reliance should be placed on these
forward-looking statements that speak only as of their dates. This
Report should be read in conjunction with the financial statements
included herein and the notes thereto.
Acknowledgement
The Directors wish to acknowledge and place on record their
appreciation of the valuable advice and support received from Hinduja
Automotive Ltd., UK (formerly LRLIH Limited) and Ashok Leyland Limited.
The Directors wish to express their gratitude to the Government of
India, the Government of Tamil Nadu, the Government of Andhra Pradesh
and other government agencies. They also thank the Companys Bankers,
Shareholders, Customers, Suppliers and all the employees for their
continued support.
On behalf of the Board of Directors
Chennai RJ Shahaney
April 30, 2010 Chairman
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