Mar 31, 2015
To,
The Members,
The Directors have pleasure in presenting their 23rd Annual Report on
the business and operations of the Company and the accounts for the
Financial Year ended March 31, 2015.
FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANYS
(Rs. In Lacs)
Sr. Particulars 2014-15 2013-14
No. Standalone Consolidated Standalone Consolidated
(i) Total Income 8883.25 10083.79 10343.03 12193.37
(ii) Profit/(Loss)
before Tax (1392.27) (1671.31) (1263.63) (1495.48)
(iii) Provision
for Tax (101.00) (115.87) (71.64) (74.92)
(iv) Profit After
Tax (1291.27) (1555.44) (1191.99) (1420.56)
(v) Balance
Brought
forward from
Previous year (443.19) (802.53) 748.83 560.58
(vi) Balance
available for
appropriation (1734.43) (2289.34) (443.19) (802.58)
(vii) General Reserve 746.41 746.41 746.41 746.41
(viii) Surplus/
(Deficit)
Carried to
the next years (1734.43) (2289.34) (443.19) (802.58)
account.
DIVIDEND
In view of the losses for the year ended March 31, 2015, the Board of
Directors of your Company do not recommend dividend for the year.
RESERVES
As on March 31, 2015 the reserves and surplus stood at Rs. 1773.83 lac
as compared to Rs. 3066.50 in the previous year.
COMPANY'S WORKING DURING THE YEAR
During the year the Company earned total income of Rs. 8883.25 lacs as
compared to Rs. 10343.03 earned in the previous year showing a
reduction of 14%. The operations during the year has resulted in a loss
of Rs. 1291.27 lacs.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations. To maintain its objectivity and
independence, the Internal Audit function reports to the Chairman of
the Audit Committee of the Board.
The Internal Audit Department forming part of Accounts Department
monitors and evaluates the efficacy and adequacy of internal control
system in the Company, its compliance with operating systems,
accounting procedures and policies at all locations of the Company.
Based on the report of internal audit; owners undertake corrective
action in their respective areas and thereby strengthen the controls.
SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES
As on the date of Balance Sheet, the Company has one subsidiary viz.
Rishi Consfab Private Limited.
PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY INCLUDED IN THE
CONSOLIDATED FINANCIAL STATEMENT
The details of the financial position of the Subsidiary included in the
consolidated financial statement is annexed herewith as Annexure 'A' in
Form AOC-1.
DEPOSITS
During the year under report, the Company has not accepted deposits
from public under Chapter V of the Act.
STATUTORY AUDITORS
M/s. Alladi Krishnan & Kumar, Chartered Accountants, Statutory Auditors
of the Company (Firm Registration No. 100282W) retire and offer
themselves for re- appointment.
The Company has obtained the requisite certificate required under
Section 139 of the Companies Act, 2013 to the effect that their
re-appointment, if made, will be in conformity with the limits
specified in the said section and the criteria stipulated under section
141 of the Companies Act 2013.
As per the provisions of the Companies Act, 2013, the Auditors Report
forms part of Annual Report.
SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2015 was Rs. 919.26
Lacs. As on March 31, 2015, following two directors are holding shares
of the Company:
Mr. Harshad Patel Mr. Dinesh Mehta
EXTRACT OF THE ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form
MGT 9 is annexed herewith as Annexure 'B'.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information required to be disclosed is set out in Annexure 'C'.
DIRECTORS:
A. Changes in Directors and Key Managerial Personnel
Mr. Jayesh Sheth, Director of the Company resigned with effect from
01.12.2014. The Board of the Company comprise of three directors viz.
Mr. Harshad Patel, Managing Director and two other Independent
Directors.
B. Declaration by an Independent Director(s)
All 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.
C. Formal Annual Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the directors individually as well
as the evaluation of the working of its Audit, Nomination &
Remuneration and Compliance Committees. The manner in which the
evaluation has been carried out has been explained in the Corporate
Governance Report.
MEETINGS OF THE BOARD OF DIRECTORS
During the year, in all seven Board Meetings were held i.e. on 14th
April, 2014; 29th May, 2014; 13th August, 2014; 11th November, 2014;
19th December, 2014; 10th February, 2015 and 23rd March, 2015. The time
gap between any two meetings was not more than 120 days.
The details of Directors and their attendance record at Board Meetings
held during the year and at the last Annual General Meeting, number of
other directorships and chairmanships/memberships of committees, and
other Committees of the Company is given in Corporate Governance
Report.
AUDIT COMMITTEE
The Company has a Qualified Audit Committee as per the provisions of
the Companies Act, 2013 and Listing Agreement with Stock Exchange. The
necessary details in this regard form part of Corporate Governance
Report.
VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
The Company formulated Whistle Blower Policy as per the provisions of
Clause 49 of the Listing Agreement to raise any complaint, query and to
deal with instance of fraud and mismanagement, if any. The details of
the said policy are explained in the Corporate Governance Report and
circulated to the employees internally.
NOMINATION & REMUNERATION COMMITTEE
The Company has a Nomination & Remuneration Committee as per the
provisions of the Companies Act, 2013 and Listing Agreement with Stock
Exchange. The necessary details in this regard form part of Corporate
Governance Report.
LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 CONTRACTS OR
ARRANGEMENTS WITH RELATED PARTIES
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGE- MENTS WITH RELATED PARTIES
All related party transactions that were entered into during the
financial year were on an arm's length basis and were in the ordinary
course of business. There are no materially significant related party
transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large.
Pursuant to Section 134 read with rule of the Companies (Accounts)
Rules 2014, there are no transactions to be reported under section
188(1) of the Companies act, 2013. The related party policy as approved
by the Board is available on the website of the Company.
The disclosure in Form AOC-2 as per the provisions of Section 188 of
the Companies Act, 2013 and rules mad there under is not required since
there are no material contracts or arrangements entered into by the
Company as per the Policy of Materiality framed forming part of Related
Party Transaction policy of the Company.
Related Party Transactions as required under Accounting Standards are
reported under the notes to the financial statements.
PARTICULARS OF EMPLOYEES - MANAGERIAL REMUNERATION
The statement containing particulars of employees as required and the
ratio of remuneration of Managing Director to the median employees'
remuneration and other details in terms of Section 197 (12) of the
Companies Act, 2013 read with Rule 5 (1) and (2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014
forms part of this report as "Annexure D".
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Sudhanwa S. Kalamkar
& Associates, Company Secretary in practice to undertake the
Secretarial Audit of the Company. The Report of the Secretarial Auditor
is annexed herewith as "Annexure E".
EMPLOYEE STOCK OPTION PLAN
The Details required to be provided under the Securities and Exchange
Board of India (Employee Stock Option Scheme) Guidelines, 1999 and
Securities Exchange Board of India (Share Based Employee Benefits)
Regulations, 2014, Section 62(1) (b) of the Companies Act, 2013 read
with Rule 12(9) of the Companies (Share Capital and Debentures) Rules,
2014 are provided in Annexure 'F'.
RISK MANAGEMENT POLICY
The Company has developed a very comprehensive risk management policy
under which all key risks and mitigation plans are compiled into a Risk
Matrix. The same is reviewed quarterly by senior management and
periodically also by the Risk Management Committee of the Board.
CORPORATE SOCIAL RESPONSIBILITY POLICY (CSR)
CSR Policy is not applicable to the Company.
STATEMENT ON SALIENT FEATURES OF FINANCIAL STATEMENT
Statement on salient features of Financial Statement in Form AOC-3 is
not required since Entire Annual Report is being sent to all
Shareholders in the manner specified under Rule 11 of the Companies
(Accounts) Rules, 2014.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors' Responsibility Statement referred to in clause (c) of
sub-section (3) of Section 134 of the Companies Act, 2013, shall state
thatÂ
(a) In the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(b) The directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit and
loss of the company for that period;
(c) The directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on a going concern
basis; and
(e) The directors, had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
(f) 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.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis on the operations of the Company
is provided in a separate section and forms a part of the Annual
Report.
CORPORATE GOVERNANCE REPORT
Report on Corporate Governance as stipulated in Clause 49 of the
Listing Agreement with the Stock exchanges, is provided in a separate
section and forms part of the Annual Report.
CORPORATE GOVERNANCE CERTIFICATE
The Compliance certificate from the auditors regarding compliance of
conditions of corporate governance as stipulated in Clause 49 of the
Listing agreement is annexed to the Corporate Governance Report forming
part of Annual Report.
ACKNOWLEDGEMENTS
The Directors place on record their appreciation of the efficient and
loyal services rendered by the Staff and workmen as also help and
guidance received from Canara Bank.
On behalf of Board of Directors
Place : Mumbai Harshad B. Patel
Date : 29th May, 2015 Chairman &
Managing Director
Mar 31, 2014
Dear Members,
Directors present herewith the Annual Report and Audited Accounts for
F.Y. 2013-14.
FINANCIAL RESULTS
(Rs. In crores)
Sr. Particulars Standalone Consolidated
No. 2013-14 2012-13 2013-14 2012-13
(i) Gross Revenue 113.54 151.90 134.26 183.73
(ii) Net Revenue
(excluding excise duty) 103.43 137.04 121.93 165.22
(iii) Profit before
interest, depreciation
and tax 3.00 17.39 3.72 19.55
(iv) Interest 6.91 9.08 8.22 10.83
(v) Depreciation 8.73 8.84 10.46 10.48
(vi) Tax (0.72) (0.59) (0.75) (0.55)
(vii) Profit/loss after Tax (11.92) 6.75 (14.21) (1.21)
DIVIDEND
In view of the losses for the year ended March 31, 2014, the Board of
Directors of your Company is constrained to recommend any dividend for
the year under review.
OPERATING RESULTS
The standalone gross turnover for the year at Rs.113.54 crores was
lower by Rs.38.36 crores compared to Rs.151.90 crores in the previous
year. The demand from our primary market slowed down considerably in
the financial year under review. The second half year saw a negative
growth in demand from the earth moving industry as well as automotive
sector.
Earnings before Interest, Depreciation and Tax were lower at Rs.3.00
crores as compared to Rs.17.39 crores in the previous year.
FINANCE
During the year the Company raised Rs.40,00,000/- by issue of 200000
Equity Shares of Rs.10/- each at a premium of Rs.10/- per share under
ESOP.
CURRENT YEAR
Sales in the first two months of the current year at Rs.15.22 crores
are lower than Rs.20.12 crores achieved in the same period in the
previous year. This year will be very challenging as well as our major
customers are not expecting any growth. To improve profitability in
current situation company is reducing fixed cost by consolidation of
Capacity.
MARKETS
The Four Main verticals namely Construction Equipment, Automotive, Rail
Transportation and Power (Transmission and Distribution) cumulatively
contributed to Rs.61.41 crores compared to Rs.82.43 crores in the
previous year.
Dampening sales to Automotive vertical has been a major contributor for
drop in total net revenue for the year under review. Revenue from
Automotive vertical during FY 2013-14 has gone down drastically to
Rs.6.26 crores as against Rs.18.88 crores in the previous year.
Construction equipment vertical contributed Rs.39.48 crores compared to
Rs.41.86 crores in FY 2012-13. Sales from this vertical as a
percentage of net revenue increased from 30.55% in FY 2012-13 to 38.22%
in FY 2013-14 making it the highest contributor to sales. This was
achieved despite lower demand from exsiting customers. New Business
could compensate partly for the drop in sales to the previous
customers.
Sales from Power (Transmission and Distribution) vertical for the year
under consideration amounted to Rs.11.76 crores compared to Rs.15.19
crores in the previous year.
Revenue from Rail Transportation vertical has gone down from Rs.6.50
croes in the previous year to Rs.3.91 crores during FY 2013-14
representing a decrease of 40%. Decline in business from this vertical
has been due to delay in award as well as implementation of various
metro projects.
Other sector is second major contributor of drop in total net revenue
for the year under review. Revenue from Other Sector during FY 2013-14
has gone down to Rs.41.87 crores as against Rs.54.49 crores in the
previous year. Decline in business from this vertical has been due to
lower order from project based customer.
INSURANCE
All the properties of the Company have been adequately insured against
fire, riot, earthquake and various other risks.
FIXED DEPOSITS
During the year under report, the Company has not accepted deposits
from public.
DIRECTORS
Mr. Vandan Shah, Director of the Company resigned w.e.f. 10th March
2014. We would like to acknoweldge his contribution and guidance to the
Company during his period as the Director of the Company.
Mr. Jayesh Sheth retires by rotation and being eligible offer himself
for reappointment.
Mr. Harshad Patel, Managing Director of the Company is being
re-appointed for further period of three years commencing from 01st
April 2014.
Mr. Vasant Goray, Independent Director of the Company is being proposed
to be appointed as Independent Director of the Company for the period
of five years in terms of Section 149, 152 and other applicable
provisions, if any, of the Companies Act, 2013 read with Companies
(Appointment and Qualification of Directors) Rules, 2014, at the
ensuing Annual General Meeting of the Company.
Appropriate resolutions for the appointment/re- appointment of Director
are being placed for your approval at the ensuing Annual General
Meeting.
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Directors hereby Report:
a. That in the preparation of Annual Accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departure, if any.
b. That the directors have selected such Accounting Policies and
applied them consistently and made judgement and estimates that are
reasonable and prudent so as to give a true and fair view of the State
of Affairs of the Company as at 31st March, 2014.
c. That the Directors have taken the proper and sufficient care for
the maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
d. That the Directors have prepared the Accounts on a going concern
basis.
MANAGEMENT DISCUSSION AND ANALYSIS
The management discussion and analysis on the operations of the Company
is provided in a separate section and forms a part of this report.
CORPORATE GOVERNANCE REPORT
Report on Corporate Governance and Certificate of the Auditors of your
Company regarding compliance of the conditions of Corporate Governance
as stipulated in Clause 49 of the Listing Agreement with the Stock
exchanges, are enclosed.
PARTICULARS OF EMPLOYEES
During the year under report, no employees have drawn remuneration in
excess of the limits laid down under section 217(2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees)
(Amendment) Rules, 2011.
THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES, 1988.
The information is set out in Annexure  A.
EMPLOYEES STOCK OPTION PLAN
The information required to be disclosed under SEBI (ESOS & ESPS)
Guidelines is given in Annexure B to the Directors'' Report.
AUDITORS
M/s. Alladi Krishnan & Kumar, Chartered Accountants, Statutory Auditors
of the Company (Firm Registration No. 100282W) retire and offer
themselves for re- appointment.
The Company has obtained the requisite certificate required under
Section 139 of the Companies Act, 2013 to the effect that their
re-appointment, if made, will be in conformity with the limits
specified in the said section and the criteria stipulated under section
141 of the Companies Act 2013.
ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation of
the sustained and dedicated efforts put in by all the employees
collectively and concertedly as a Team. The Directors would also like
to thank the shareholders, customers, suppliers, bankers and all the
other business associates for the continuous support given by them to
the Company and their confidence in its management.
On behalf of Board of Directors
Place : Mumbai Harshad B. Patel
Date : 29th May 2014 Chairman & Managing Director
Mar 31, 2011
Dear Members,
Directors have great pleasure in presenting the Annual Report and
Audited Accounts for FY. 2010-11
FINANCIAL RESULTS
(Rs. in crores)
Sr. Standalone Consolidated
Particulars :
No. 2010-11 2009-10 2010-11 2009-10
(i) Gross Revenue 155.09 121.27 191.52 137.77
(ii) Net Revenue (excluding
excise duty) 145.61 112.99 178.05 127.83
(iii) Profit before interest,
depreciation and Tax 21.50 14.92 26.05 17.34
(excluding other income)
(iv) Interest 8.01 9.10 9.85 10.24
(v) Depreciation 7.93 6.10 9.25 6.65
(vi) Tax 0.84 0.72 1.65 0.83
(vii) Profit after Tax 5.05 1.25 5.52 0.15
DIVIDEND
In view of the improved financial performance during the year under
review, the Directors recommend a dividend of Rs. 1.25/- per Equity
Share of Rs. 10 each.
OPERATING RESULTS
The standalone gross turnover for the year at Rs. 155.09 crores were in
line with projections and registered an increase of 28% over the
previous year. The off take from our primary markets was very slow in
the first two quarters and only picked up significantly in the last
quarter.
Earnings before interest, depreciation and tax (excluding extraordinary
items and other income) climbed up by 44% to Rs. 21.50 crores compared
to Rs. 14.92 crores in previous year. Improvement in margin and
repayment of sizable term debt during the year resulted in higher
Return on capital Employed (ROCE) of 8.65% as against 6.23% in the
previous year. Our balance sheet has become stronger with gross Debt to
Equity ratio coming down to 1.05 times compared to 1.26 times in the
previous year. The debt Asset ratio during the year improved
significantly to 38.04% from 41.57% in the previous year.
The overall results are satisfactory in view of the tough conditions in
the first two quarters. If market conditions remain stable then we
should be able to maintain the growth momentum. The Ahmedabad plant was
established and has stabilized. We expect good growth from this plant.
EXPANSION
In view of the uncertain market conditions and prohibitive interest
costs, the Company has deferred its plan to set up a machining shop for
machining parts for the Power generation sector. This will be reviewed
in September 2011 for further action.
The Company will be expanding its cutting capacity at various locations
by adding new generation of Plasma cutting machines at various
locations. This will complement our Laser cutting facilities and we
will be able to offer the appropriate technology to the customers at
appropriate price.
The Company does not have manufacturing facility in Eastern India and
looking at the potential this region offers we are exploring the
possibility of setting up a plant in eastern India.
FINANCE
During the year the Company allotted 91,800 Equity Shares of Rs. 10/-
each at a premium of Rs. 10/- per share under ESOP to employees of the
Company. The total amount received from the employees amounted to Rs.
18,36,000/-.
CURRENT YEAR
The current year has begun on an optimistic note and we expect to see a
15% growth in the first quarter. Some of our customers are expanding
and this may result in additional business from the third quarter
onwards.
MARKETS
The four main verticals namely Construction Equipment, Automotive, Rail
Transportation and Power (Transmission and Distribution) cumulatively
contributed 75% of the total revenue amounting to Rs. 109.48 crores.
Robust demand of commercial vehicles resulted in increased sales to
automotive verticals to Rs. 37.30 crores or 25.62% of net sales
compared to Rs. 24.48 crores or 21.66% in the previous year.
Revenue from Rail Transportation vertical has gone up from Rs. 11.37
crores in previous year to Rs. 21.80 crores representing an increase of
91.73%.
Construction equipment vertical contributed Rs. 33.50 crores as against
Rs. 32.70 crores in the previous year. Sales from this vertical as a
percentage of net revenue declined from 28.94% in the previous year to
23.01% in the current year though it remained flat in absolute terms.
Revenue from Power (transmission and distribution) vertical has been
disappointing during the year as it recorded a negative growth of 9.92%
from Rs. 18.74 crores in previous year to Rs. 16.88 crores during the
current year.
Our Rail transportation business is expected to see a sharp drop in
this year as further orders are expected only in the third quarter of
this year. The shortfall from this sector should get covered from the
Construction equipment sector which is expected to see robust demand.
The delays in execution of infrastructure projects along with high
interest rates will affect demand and is worrying.
INSURANCE
All the properties of the Company have been adequately insured against
fire, riot, earthquake and various other risks.
FIXED DEPOSITS
During the year under report, the Company has not accepted deposits
from public.
DIRECTORS
Mr. Jayesh K. Sheth retires by rotation and being eligible offer
himself for re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors hereby Report:
A) That in the preparation of Annual Accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departure, if any.
B) That the directors have selected such Accounting Policies and
applied them consistently and made judgement and estimates that are
reasonable and prudent so as to give a true and fair view of the State
of Affairs of the Company as at 31st March, 2011 and of Profit and Loss
Account for the year ended 31st March, 2011.
C) That 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.
D) That the Directors have prepared the Accounts on a going concern
basis.
PARTICULARS OF EMPLOYEES
During the year under report, no employees have drawn remuneration in
excess of the limits laid down under Section 217(2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees)
(Amendment) Rules, 2011.
THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES, 1988.
The information is set out in Annexure - A.
EMPLOYEES STOCK OPTION PLAN
During the year Company allotted 91,800 Equity Shares under the Stock
Option Scheme. The information required to be disclosed under SEBI
(ESOS & ESPS) Guidelines is given in Annexure B to the Directors'
Report.
AUDITORS
M/s. Alladi Krishnan & Kumar, Chartered Accountants, Statutory Auditors
of the Company retire and offer themselves for re-appointment.
The Company has obtained the requisite certificate required under
Section 224 of the Companies Act, 1956 to the effect that their
re-appointment, if made, will be in conformity with the limits
specified in the said section.
ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation of
the sustained and dedicated efforts put in by all the employees
collectively and concertedly as a Team.
The Directors would also like to thank the shareholders, customers,
dealers, suppliers, bankers, Government and all the other business
associates for the continuous support given by them to the Company and
their confidence in its management.
On behalf of Board of Directors
Place : Mumbai Harshad B. Patel
Date : 30th May, 2011 Chairman
Mar 31, 2010
Directors have great pleasure in presenting the Annual Report and
Audited Accounts for F.Y.2009-10 FINANCIAL RESULTS:
Particulars 2010 2009
Total Income 12,127.41 12,737.78
Profit before Interest and 1,728.58 1,538.20
Depreciation & Tax
Interest 909.90 1,047.61
Depreciation 609.63 675.10
Tax 72.69 (25.73)
Profit after tax 136.36 (158.78)
DIVIDEND:
In order to conserve resources, your Directors have not recommended
dividend for the year.
OPERATING RESULTS:
The first quarter of 2009-10 started on a very low note similar to the
last two quarters of 2008-09. Thereafter Company had growth in the next
three consecutive quarters. In the fourth quarter Company achieved an
all time high turnover. This was despite poor offtake from some of our
major customers in the Earthmoving and Power Industries.
In our previous years Directors Report we had anticipated to get back
on track in the third quarter of 2009-10. This has come true. The
Company returned to profitability in third quarter of 2009-10.
Our focus on improving productivity and addition of more value to the
jobs resulted in improvement of our operating parameters. The EBIDT
margin has marginally improved by 172 basis points to 15.20%. ROCE has
marginally improved by 150 basis points to 6.23% but is still well
below that of 9.67% achieved in 2008. Our Balance Sheet has improved
with Debt Equity ratio coming down to 1.26 from 1.89 in the previous
year.
With improvement in sales and reduction in debt the profitability
ratios should significantly improve going forward.
EXPANSION:
Company will have to expand capacities at its Ahmedabad and Pune plants
to take care of the increased requirements of customers. This will
mainly involve installation of equipments to balance capacity. We
expect to utilise our capacities fully, at most plants, only in2011-12
and hence capital expenditures will mainly be to de-bottleneck or to
add to technical capabilities in welding and forming.
Wear Plate Division: The Company has decided to set a plant to
manufacture "Wear Plates" at Savli, Gujarat. The plant will be
commissioned in June 2010. Wear Plates have high abrasion resistance
and are used in equipments where there is high wear and tear of
equipment.
FINANCE:
During the year the Company allotted 47840 equity shares of Rs.10/- each
at a premium of ?10/- per share under ESOP to employees of the Company.
The total amount received from the employees amounted to Rs.9,56,800.
The Company raised Rs.2,09,00,000 by way of issue of 5,50,000 equity
shares of Rs.10/- each at a premium of Rs.28 per share to the promoters and
others on preferential basis.
CURRENT YEAR:
Current year has begun on an optimistic note. Sales during the first
two months of the current year are Rs.22.46 crores as compared to ?16.35
crores in the same period in the previous year
MARKETS:
There has been a significant shift in the percentage of sales to
different markets in 2009-10 as compared to 2008-09. The sale to
Construction Equipment (CE) sector has gone down from 34% of total
sales in 2008-09 to 24% of total sales in 2009-10.
As against this sale to Rail Transportation (RT) has gone up from 4% to
11%, sale to Power Generation and Distribution (PGD) from 13% to 18%
and sale to Automotive from 7% to 23%. Ideally we would prefer sales to
CE, RT, PGD and Automotive to each range between 20% to 25% of total
sales.
Of the four major segments served only the Automotive Sector has
bounced back strongly after the downturn. Business from PGD & CE is
still very sluggish and far below peak levels seen in 2007-08.
INSURANCE:
All the properties of the Company have been adequately insured against
fire, riot, earthquake, and various other risks.
FIXED DEPOSITS
During the year under report, the Company has not accepted deposits
from public.
DIRECTORS
Mr.Vandan Shah retires by rotation and being eligible offer himself for
reappointment.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors hereby Report:
A) That in the preparation of Annual Accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departure, if any.
B) That the directors have selected such Accounting Policies and
applied them consistently and made judgment and estimates that are
reasonable and prudent so as to give a true and fair view of the State
of Affairs of the Company as at March 31, 2010 and of Profit and Loss
Account for the year ended March 31, 2010.
C) That 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.
D) That the Directors have prepared the Accounts on a going concern
basis.
PARTICULARS OF EMPLOYEES:
The statement of particulars required pursuant to Section 217(2A) of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) (Amendment) Rules, 2002, forms part of this Report and is
set out in Annexure-A.
THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES, 1988.
The information is set out in Annexure - B.
EMPLOYEES STOCK OPTION PLAN
During the year Company allotted 47840 Equity Shares under the Stock
Option Scheme. The information required to be disclosed under SEBI
(ESOS & ESPS) Guidelines is given in Annexure C to the Directors
Report.
AUDITORS
M/s. Alladi Krishnan & Kumar, Chartered Accountants, Statutory Auditors
of the Company retire and offer themselves for re-appointment.
The Company has obtained the requisite certificate required under
section 224 of the Companies Act, 1956 to the effect that their
re-appointment, if made, will be in conformity with the limits
specified in the said section.
ACKNOWLEDGENENT
Your Directors wish to place on record their sincere appreciation of
the sustained and dedicated efforts put in by all the employees
collectively and conceitedly as a Team.
The Directors would also like to thank the shareholders, customers,
suppliers, bankers, Government and all the other business associates
for the continuous support given by them to the Company and their
confidence in its management.
Place : Mumbai On behalf of Board of Directors
Date : 21st June, 2010 Harshad Patel
Chairman
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