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Directors Report of KLRF Ltd.

Mar 31, 2015

Dear Shareholders,

The Directors present their Fifty third Annual Report together with the audited statement of accounts for the year ended 31st March, 2015. The management discussion and analysis report have been included at the appropriate places in this report.

(in Lakhs) FINANCIAL RESULTS 31.3.2015 31.3.2014

Total Turnover (Net) 22193.77 24773.37

Profit before financial charges and depreciation 1267.21 1341.94

Less : Financial charges 799.23 746.53

Profit before depreciation 467.98 595.41

Less : Depreciation 307.06 541.27

Profit / (Loss) before tax 160.92 54.14

Add / (Less) Provision for tax - Current 32.20 96.47

- Deferred tax assets / (-) liabilities 44.60 (0.98)

Net Profit / (Loss) after tax carried to Balance sheet 173.32 (43.31)

The company has internal control procedures commensurate with its size and the nature of its business for purchase of raw materials, plant and machinery, components, other items and sale of goods.

SEGMENT-WISE AND PRODUCT – WISE PERFORMACE

Segment-wise and product-wise results are stated separately under segment reporting

FINANCE

Your company continued to avail need based working capital facilities from Canara Bank and HDFC Bank Limited

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Corporate governance and Management Discussion & Analysis Report form an integral part of this Report. A report on corporate governance is annexed to this report. The company has complied with the conditions relating to the above as stipulated in Clause 49 of the listing agreement.

The certificate from the statutory auditor relating to the above is annexed.

SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2015 was Rs. 5,02,06,440/-. During the year under review, the Company has not issued any shares.

DIVIDEND

Your directors are unable to recommend any dividend for the year ended 31st March, 2015

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company had transferred unpaid dividend amounts within the statutory period to the IEPF. During the financial year 2014-15, unpaid unclaimed dividends Rs. 2,10,065/- relating to financial year 2006 – 07 was transferred to the IEPF.

EXTRACT OF ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure - B and is attached to this Report.

MEETINGS

During the year six board meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed that;

i. In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii. The Directors 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 the year under review.

iii. The Directors have taken proper and sufficient care 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.

iv. The Directors have prepared the annual accounts for the financial year ended 31st March, 2015 on going concern basis.

v. The Directors had laid down internal financial controls to be followed by the company and ensured that such internal financial controls are adequate and were operating effectively.

vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DECLARATION GIVEN BY INDEPENDENT DIRECTORS

All the Independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and clause 49 of the Listing Agreement.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their Remuneration. The Remuneration Policy is stated in Annexure - D

AUDITORS

Sri.P.Marimuthu, Auditor of the Company will retire at the forthcoming annual general meeting and is eligible for re-appointment.

M/s Haribhakti & Co., LLP Chartered Accountants, branch auditors for the engineering division of the company will retire at the forthcoming annual general meeting and are eligible for re-appointment.

COST AUDITOR

Sri.M.Kannan, Cost Accountant has been appointed as Cost Auditor for the financial year 2014 – 2015 for the foundry division of the company and cost audit report will be filed on or before the due date.

Cost audit report for the year ended 31st March, 2014 has been filed on 26th September, 2014 before the time limit prescribed under the Act.

The Board of Directors at its meeting held on 29th May, 2015, based on the recommendation of the audit committee appointed Sri.M.Kannan, Cost Accountant as Cost Auditor for conducting the Cost Audit of the engineering division for the financial year 2015 – 2016.

As required under the provisions of Section 148 of the Companies Act, 2013, necessary resolutions seeking member's ratification for the remuneration to Sri.M.Kannan is included as item Number 5 of the Notice convening the Fifty Third Annual General Meeting.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Mr.M.D.Selvaraj, FCS, Proprietor of MDS & Associates, Company Secretaries, Coimbatore to conduct the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure-A"

There are no qualifications, reservations or adverse remarks or disclaimers made by the Auditors/ Secretarial Auditor in their/ his report on the financial statements/secretarial audit report of the Company for the financial year ended 31st March, 2015

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS U/S 186

There were no loans, guarantees or investments made by the Company under section 186 of the Companies Act, 2013 during the period under review and hence the said provision is not applicable.

RELATED PARTY TRANSACTIONS

All transactions entered into during the financial year ended 31st March, 2015 with Related Parties as defined under the Companies Act and Clause 49 of the Listing Agreement were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any transaction referred to in Section 188 of the Companies Act, with related parties which could be considered material under the Listing Agreement. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) of the Companies Act in Form AOC-2 is not applicable. Attention of Members is drawn to the disclosures of transactions with related parties set out in Notes to Accounts – Note No.16 forming part of the financial statements.

The Company has developed a policy on Related Party Transactions for identification and monitoring of transactions. The policy on related party transactions as approved by the Board is uploaded on the Company's website and can be accessed at http://www.klrf.in

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which the financial statements relate and the date of this Directors' Report.

RISK MANAGEMENT

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventorised and integrated with the management process such that they receive the necessary consideration during decision making.

CORPORATE SOCIAL RESPONSIBILITY

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.

BOARD EVALUATION

The Board has made a formal annual evaluation of its own performance, Committees of the Board, Independent Directors and Individual Directors of the Company.

The Board's performance was evaluated based on the criteria like Structure, Governance, Dynamics and Functioning, Approval and review of operations, Financials, Internal Controls etc.,

The performance of the Independent Directors as well as Individual Directors were evaluated based on the evaluation criteria laid down under the Nomination and Remuneration Policy and Code of Conduct as laid down by the Board.

The Committees of the Board were evaluated based on the terms of reference specified by the Board to the said Committee. The Board of Directors were satisfied with the evaluation process which ensured that the performance of the Board, its Committees, Independent Directors and Individual Directors adhered to their applicable criteria.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

At the Annual General Meeting of the Company held on 18th September, 2014, the Members had approved the appointment of Mr.Sudarsan Varadraj, Mr.K.Gnanasekaran as Independent Directors for a term of five years and Mr.S.Govindan as Independent Director upto 31st March, 2017.

The shareholders at the annual general meeting held on 18th September, 2014 appointed Mr.R.Kannan as Executive Director and Chief Financial Officer for a period of five years with effect from 1st July, 2014

The Board of Directors at their meeting held on 19th March, 2015 have appointed Mrs.Kalyani Balasubramanian as Additional Director and she holds upto the ensuing annual general meeting. Notice under Section 160 of the Act, has been received by the Company from a Member, signifying his intention to propose the candidature of Mrs.Kalyani Balasubramanian as an Independent Director of the Company. The Board of Directors have recommended the appointment of Mrs.Kalyani Balasubramanian as Director as per the provisions of Section 160 and other applicable provisions of the Companies Act, 2013.

The Board of Directors at their meeting held on 29th May, 2015 have re-appointed Mr.Suresh Jagannathan as Managing Director for a period of five years from 12th March, 2016, subject to approval of members at the ensuing annual general meeting.

Mr.R.Kannan, Executive Director and Chief Financial Officer is liable to retire by rotation at the ensuing annual general meeting and being eligible offers himself for re- appointment.

Your directors recommended their appointment / re-appointment.

A brief resume, expertise, shareholding in the Company and details of other Directorships of these Directors as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange form part of the Notice of the ensuing Annual General Meeting.

KEY MANAGERIAL PERSONNEL

Key Managerial Personnel of the company as required pursuant to Section 2 (51) of the Companies Act, 2013 are Sri.Suresh Jagannathan, Managing Director, Mr.R.Kannan, Executive Director and Chief Financial Officer and Mr.S.Piramuthu, Company Secretary

AUDIT COMMITTEE

The Audit Committee of the Board of Directors of the Company, comprises three members namely Mr.Sudarsan Varadaraj, Mr.K.Gnanasekaran and Mr.S.Govindan, all of them being Independent Directors. Mr.Sudarsan Varadaraj, an Independent Director, is the Chairperson of the Audit Committee.

The Board accepted the recommendations of the Audit Committee whenever made by the Committee during the year.

CONSERVATION OF ENERGY

a. Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

b. No specific investment has been made in reduction in energy consumption.

c. As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.

TECHNOLOGY ABSORPTION

Company's products are manufactured by using in-house know how and no outside technology is being used for manufacturing activities. Therefore no technology absorption is required.

FOREIGN EXCHANGE EARNINGS AND OUT GO

During the year under review, your Company has earned foreign exchange of Rs. 11.63 lakhs and incurred an out flow of Rs. 128.94 lakhs

SUBSIDIARY COMPANIES

The Company does not have any subsidiary , associate company or joint ventures.

FIXED DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. The total deposits remained unpaid or unclaimed as at 31st March, 2015 is Nil.

DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The requisite details relating to ratio of remuneration, percentage increase in remuneration etc. as stipulated under the above Rules are annexed as Annexure-C to this Report.

DISCLOSURE UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 does not apply to the Company as there were no employees who are in receipt of remuneration in the aggregate at the rate of not less than Rs. 60,00,000/- if employed throughout the year or Rs. 5,00,000/- per month if employed for part of the year.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Your Company has established a vigil mechanism for directors and employees to report their genuine concerns, details of which have been given in the Corporate Governance Report forming part of this Annual Report.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company believes that its people are a key differentiator, especially in a knowledge driven, competitive and a global business environment. Adapting work culture to suit the dynamic balancing of people requirements and employee needs is an ongoing process. Fundamental HR processes which enable higher performance orientation, speed, skill and competency development, talent management are corner stones for the success of any organization.

As in the past, the industrial relations continued to remain cordial in all the divisions of the Company.

LISTING

Your Company's shares are listed at BSE Limited. Necessary listing fees for the year have been paid.

ORDERS BY REGULATORS, COURTS OR TRIBUNALS

No significant and/or material orders were passed by any regulator or court or tribunal impacting the going concern status and the Company's operations in future.

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an anti sexual harassment policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy. The Company has not received any sexual harassment complaint during the year 2014 – 2015.

GENERAL

Your directors acknowledge with gratitude, the co-operation and assistance from banks and financial institutions.

Your Directors would like to thank all Shareholders, Customers and Employees in appreciation of their continued support.

May the Almighty Goddess Lakshmi continue to shower HER choicest blessings and continue to grant us prosperity in the years to come.

By Order of the Board Place : Coimbatore Sudarsan Varadaraj Suresh Jagannathan

Date : 29.05.2015 Director Managing Director

DIN : 00133533 DIN : 00011326


Mar 31, 2013

Dear Shareholders,

The Directors present their Fifty first Annual Report together with the audited statement of accounts for the year ended 31st March 2013. The management discussion and analysis report have been included at the appropriate places in this report.

(Rs.in lakhs)

FINANCIAL RESULTS 31.3.2013 31.3.2012

Total Turnover (Net) 21422.18 20334.25

Profit before financial charges and depreciation 1491.72 1055.72

Less : Financial charges 823.01 902.23

Profit before depreciation 668.71 153.49

Less : Depreciation 519.77 499.09

Profit / (Loss) before tax 148.94 (345.60)

Add/(Less): Provision for tax - Current -- --

- MAT credit entitlement 29.74 --

- Deferred (47.44) 124.61

Net Profit/ (Loss) after tax carried to Balance Sheet 131.24 (220.99)

INDUSTRY STRUCTURE AND DEVELOPMENTS

Results

The turnover of the company for the year is Rs.215 crores as against Rs.204 crores last year.

The Company has earned an EBIDTA of Rs.1492 lakhs.

The Food Division earned an EBIDTA of Rs.1108 lakhs on milling of 56940 Metric tons of wheat accounting for 55 % of the turnover of the company.

The Textile Division has earned an EBIDTA of Rs. 400 lakhs and Engineering Division has incurred an EBIDTA of Rs.(-) 16 lakhs.

DIVIDEND

Your Directors are unable to recommend a dividend on the paid-up equity share capital of the Company for the year ended 31st March, 2013.

FINANCE

Your company continued to avail need based working capital facilities from Canara Bank and Indian Overseas Bank.

CORPORATE GOVERNANCE

A report on corporate governance is annexed to this report. The Company has complied with the conditions relating to the above as stipulated in Clause 49 of the listing agreement.

The certificate from the statutory auditor relating to the above is annexed.

FIXED DEPOSITS

The Company continued to accept fixed deposits during the year and there were no unclaimed deposits as on 31.3.2013.

DIRECTORS

Mr. K.Gnanasekaran and Mr.Sudarsan Varadaraj, Directors of the company retire by rotation at the ensuing Annual General Meeting of the Company and are eligible for re- appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Sec 217 (2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed that;

i. In the preparation of the annual accounts for the financial year ended 31 March 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures

ii. The Directors 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 the year under review.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

Iv. The Directors have prepared the annual accounts for the financial year ended 31st March, 2013 on a going concern basis.

AUDITORS

Mr.P.Marimuthu, Auditor of the Company will retire at the forthcoming annual general meeting and is eligible for re-appointment.

M/s Haribhakti & Co., Chartered Accountants, branch auditors for foundry and sheet metal divisions of the company will retire at the forthcoming annual general meeting and are eligible for re-appointment.

Mr.M.Kannan, Cost Accountant has been appointed as Cost Auditor for the year 2012-2013 for the textile and foundry divisions of the company and cost audit report will be filed on or before the due date. Cost audit report for the year ended 31.3.2012 has been filed on 28.2.2013 before the time limit prescribed under the Act. Cost compliance report for the financial year ended 31.3.2012 was submitted to the Central Government on 28.2.2013.

PERSONNEL

Particulars under Section 217 (2A) are not applicable, as no employee has been paid more than prescribed limits. Statement in accordance with the Companies (Disclosure of particulars in the Report of Directors) Rules, 1988 is annexed.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company believes that its people are a key differentiator, especially in a knowledge driven, competitive and a global business environment. Adapting work culture to suit the dynamic balancing of people requirements and employee needs is an ongoing process. Fundamental HR processes which enable higher performance orientation, speed, skill and competency development, talent management are corner stones for the success of any organization.

As in the past, the industrial relations continued to remain cordial in all the divisions of the Company.

LISTING

Your Company''s shares are listed at Bombay Stock Exchange Limited, Madras Stock Exchange Ltd and traded in National Stock Exchange Ltd., under permitted category.

Necessary listing fees for the year have been paid. Company has filed de-listing application with Coimbatore Stock Exchange (CSX) for de-listing of our equity shares. Company has received a letter dated 10.5.2013 from the CSX stating that the CSX ceased to be a recognized stock exchange.

CAUTIONARY STATEMENT

Management Discussion and Analysis forming part of this Report is in compliance with Corporate Governance Standards incorporated in the listing agreement with Stock Exchanges and such statements may be "forward looking" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations include economic conditions affecting demand / supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors.

GENERAL

Your Directors acknowledge with gratitude, the co-operation and assistance from Canara Bank, Indian Overseas Bank, IDBI Bank Ltd., and Punjab National Bank.

Your Directors would like to thank all Shareholders, Fixed Deposit Holders, Customers and Employees in appreciation of their continued support.

May the Almighty Goddess Lakshmi continue to shower HER choicest blessings and continue to grant us prosperity in the years to come.



By Order of the Board

Place : Coimbatore Sudarsan Varadaraj Suresh Jagannathan

Date : 28.05.2013 Director Managing Director


Mar 31, 2010

The Directors present their Fortyeighth Annual Report together with the audited statement of accounts for the year ended 31st March 2010. The management discussion and analysis report have been included at the appropriate places in this report.

(Rs.in lakhs)

FINANCIAL RESULTS 31.03.2010 31.03.2009

Profit before financial charges and depreciation 1360.89 659.95

Less : Financial charges 755.22 629.77

Profit before depreciation 605.67 30.18

Less : Depreciation 540.43 533.99

Profit/Loss before tax 65.24 (503.81)

Less : Provision for tax - Current - -

- Deferred 16.27 (74.95)

- Fringe Benefit Tax - 5.91

- For prior years (2.65) -

Net Profit/Loss after tax available for appropriation 51.62 (434.77)

Appropriations

Proposed Dividend - -

Provision for Dividend Tax - -

Transfer to General Reserve - -

Balance adjusted in Profit and Loss Account 51.62 (434.77)

Total 51.62 (434.77)



INDUSTRY STRUCTURE AND DEVELOPMENTS RESULTS

The turnover of the company for the year is Rs.162 crores as against Rs.150 crores last year.

The Company has earned a profit of Rs.65 lakhs after charging Rs.104 lakhs as Voluntary Retirement Scheme Compensation and terminal benefits to employees, public issue expenses and amalgamation expenses to the extent written off during the year.

The Food Division earned a net profit of Rs.337 lakhs

The Food Division milled 46999 Metric tons of wheat and accounted for 51% of the turnover of the company.

The Textile Division has sustained a net loss of Rs.150 lakhs.

Engineering Division has sustained a net loss of Rs.122 lakhs after charging Rs.82 lakhs as Voluntary Retirement Scheme Compensation and terminal benefits.

DIVIDEND

Your Directors are unable to recommend a dividend on the paid-up equity share capital of the Company for the year ended 31st March, 2010.

CAPITAL INVESTMENT

We have made a total capital investment of Rs.448 lakhs. An amount of Rs.384 lakhs was invested in engineering division, Rs.33 lakhs in Food Division and Rs.31 lakhs was invested in Textile Division. These investments will result in increase of production and improvement in quality.

ECONOMIC OUTLOOK FOR THE YEAR

Liberal monetary policies and economic stimulus package extended by the government has resulted in earlier revival of the economy.

G.D.P reached a level of 8.6 % in the last quarter of 2009 - 2010

Growth in exports, increase in agricultural and industrial production, gives confidence that the economic growth will be sustained and improve further.

Opportunities, Challenges, Risks & Concerns

Food Division

Wheat production in the crop year has been satisfactory at 78 million tons.

Ample food grain stocks are available with the government. Import of wheat also continues to be permitted.

This ensures continuous supply of raw material at stable prices, leading to profitable operation of this division.

Further, in view of the comfortable wheat stock level, government might allow export of wheat products which will result in better capacity utilization.

Textile Division

Production of raw cotton is expected to be higher by 6 to 7% this year, leading to supply of raw material at stable and favourable price.

It is gratifying that global economy has seen a revival and demand for both apparel and yarn increased considerably. Policies announced by government is conducive for the satisfactory growth and profitability of Textile Industry.

However, availability of quality power continues to be a major concern.

Unfavourable economic condition in Europe and volatility of Euro currency may impact the export markets adversely.

Engineering Division

Demand for the products of Foundry and Sheet Metal Division continues to be good.

Modernisation, addition of balancing equipment and quality control instrumentation has been completed in this Division.

Benefit of these efforts will accrue this year leading to better profitability.

Power being a major input in the foundry operation, uncertainity in power availability might affect the operations of this division.

Unbridled growth in inflation leading to stringent government measures may affect availability and cost of finance adversely.

This may have grave impact on operations and profitability of all Divisions.

FOREIGN EXCHANGE DERIVATIVE CONTRACT

A forex derivative contract entered for a value of Rs.500 lakhs which was unwound during May-2009 resulting in a loss of Rs.9788700/- which included interest during the financial year 2009-2010

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Planned periodic reviews are carried out resulting in identification of control deficiencies and formulation of time bound action plans to improve efficiency. The adequacy of the internal control systems are reviewed by the Audit Committee of the Board of Directors. This, supplemented with existing periodical management reviews, will enable the company to improve its monitoring system at all levels.

The company has internal control procedures commensurate with its size and the nature of its business for purchase of raw materials, plant and machinery, components and other items and sale of goods.

SEGMENT-WISE AND PRODUCT-WISE PERFORMANCE

Segment-wise and product-wise results are given separately under segment reporting.

FINANCE

Your company continued to avail need based working capital facilities from Canara Bank and Indian Overseas Bank.

CORPORATE GOVERNANCE

A report on corporate governance is annexed to this report. The Company has complied with the conditions relating to the above as stipulated in Clause 49 of the listing agreement. The certificate from the statutory auditor relating to the above is annexed.

FIXED DEPOSITS

The Company continued to accept fixed deposits during the year and there were no unclaimed deposits as on 31.03.2010.

DIRECTORS

Mr.Sudarsan Varadaraj and Mr.K.Gnanasekaran retire by rotation at the ensuing Annual General Meeting of the Company and are eligible for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Sec 217 (2AA) of the Companies Act, 1956 with respect to Directors Responsibility Statement, it is hereby confirmed that;

(i) In the preparation of the annual accounts for the financial year ended 31st March 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The Directors 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 the year under review.

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) The Directors have prepared the annual accounts for the financial year ended 31st March 2010 on a going concern basis.

AUDITORS

Mr.P.Marimuthu, Auditor of the Company will retire at the forthcoming Annual General Meeting and is eligible for re-appointment.

The Board proposed M/s Haribhakti & Co., Chartered Accountants as branch auditor for foundry and sheet metal division of the company in the place of retiring auditors M/s Suri & Co., and M/s Srivatsan & Gita, Chartered Accountants to hold office from the conclusion of the annual general meeting to until the conclusion of the next annual general meeting.

The Board of Directors placed on record their appreciation of the valuable contribution contributed by M/s Suri & Co., and M/s Srivatsan & Gita, Chartered Accountants during their association with the company.

Mr.M.Kannan, Cost Accountant has been appointed as Cost Auditor for the year 2010-2011 subject to approval by the Central Government.

PERSONNEL

Particulars under Section 217 (2A) are not applicable, as no employee has been paid more than prescribed limits. Statement in accordance with the Companies (Disclosure of particulars in the Report of Directors) Rules, 1988 is annexed.

CAUTIONARY STATEMENT

Management Discussion and Analysis forming part of this Report is in compliance with Corporate Governance Standards incorporated in the listing agreement with Stock Exchanges and such statements may be forward looking" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand / supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors.

GENERAL

Your Companys shares are listed at Bombay Stock Exchange Limited, Madras Stock Exchange Ltd and traded in National Stock Exchange Ltd., under permitted category. Necessary listing fees for the year have been paid. Company has filed de-listing application with Coimbatore Stock Exchange for de-listing of our equity shares. Necessary acknowledgement has not been received till date.

During the year under review industrial relations continued to be cordial.

Your Directors acknowledge with gratitude, the co-operation and assistance from Canara Bank, Indian Overseas Bank, IDBI Bank Ltd., IREDA and Punjab National Bank.

Your Directors would like to thank all Shareholders, Fixed Deposit Holders, Customers and Employees in appreciation of their continued support.

May the Almighty Goddess Lakshmi continue to shower HER choicest blessings and continue to grant us prosperity in the years to come.

By Order of the Board

Place : Coimbatore K .Gnanasekaran Suresh Jagannathan

Date :27th May, 2010 Director Managing Director





 
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