| The Directors present the 79th Annual Report along with the Audited
Accounts of the Company for the year ended 31st March, 2015.
1. Summarised Financial Results are given below
(Rs.in lakhs)
For the year
ended For the 9 Months
31.03.2015 ended 31.03.2014
Gross Sales 5775.40 6358.89
Other Income 21.04 847.64
Profit/(Loss) before Depreciation (803.20) (430.21)
Profit/(Loss) after Depreciation (1777.04) (1135.59)
Net Profit/(Loss) after tax (1777.04) (1135.59)
2. Company Performance
During the year the company continued to work with constrained funds as
the bankers had stopped all working capital assistance to the Company.
With the minimum funds available and the support from customers and
suppliers the company made a turnover of Rs.5374.66 lakhs as compared
to Rs.6649.61 lakhs for the previous accounting period of 9 months. As
the operations were below breakeven levels the company incurred a loss
of Rs.1777.04 lakhs during the year.
The management is taking steps to revive the company. Efforts are being
made to mobilize funds for operations to exploit at the full potential
of the Company. The company has taken all steps to cut down costs
wherever possible and improve efficiency levels.
3. Dividend
The Directors have not recommended any dividend for the year due to
loss incurred .
4. Shakespeare Forgings Ltd
Shakespeare Forgings Ltd, UK has ceased to be a subsidiary company
during the year. The business in UK had dropped due to the market
conditions and it was not viable to continue manufacture in UK. There
was also a need to infuse funds for maintaining the business at UK.
Further the plant is required to be transferred from the present
location to new location, which also require additional funds. Under
these constraints the subsidiary company has found an investor to
infuse required funds and continue operations.
The equity share capital of Shakespeare forgings Ltd was increased by
GBP 250000 and the same was subscribed by the new investor. With the
new infusion the shareholding of our company dropped to 37.5% compared
to 100% holding previously. As it is no more a subsidiary of our
company the accounts of Shakespeare forgings is not consolidated with
our accounts and other details are no longer required to be furnished.
5. Borrowings
The total outstanding with the banks as on 31st March, 2015 has been
Rs.139.54 Crores. During the year some of the Banks assigned their
debts to Asset Reconstruction Companies. Export Import Bank of India
had assigned their debts to Edelweiss Asset Reconstruction Co. ltd.
last year. During the year Union Bank of India assigned its debts to
Edelweiss Asset Reconstruction Co. Ltd and State Bank of India assigned
its entire debts to Asset Reconstruction Company (India) Ltd, (Arcil),
The borrowing, form IDBI Bank, Axis Bank Ltd and Royal Bank of Scotland
still remain with the respective banks.
It is expected that consolidation of the debt with the Asset
Reconstruction companies will happen in course of time. This is
expected to facilitate obtaining fresh working capital loan, that will
help to steer the company back to profitable operations and maximize
value to all stake holders.
6. CORPORATE MATTERS
6.01 Human Resources
El Forge has always been a people driven Company and its employees
remain its most valuable asset. Our employees have always extended full
cooperation and support in good as well as difficult times, and have
unstintingly put effects to deliver on all our commitments.
The Human Resources practices at your Company empowers the employees
through greater knowledge, opportunity, responsibility, accountability
and reward. Emphasis is laid on identifying & nurturing talent.
Continuous improvement techniques are followed for betterment of the
skills in the organisation by implementing TQM & other training
programs and there exists an excellent system of assessment of the
employees based on the sound HR practices.
During the year under review, the total number of employees on the
rolls of the Company is 232
6.02 Particulars of Employees and Related Disclosures
In terms of provisions of Section 197(12) of the Companies Act, 2013
read with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules 2014, there is no employee
drawing remuneration in excess of the limits set out in the rules.
Hence details and disclosures pertaining to remuneration and other
details as required under Section 197(12) of the Companies Act, 2013
read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules 2014 are not provided in this report.
6.03 Directors
Mr.V.Ramachandran, Director retires by rotation at the ensuing Annual
General Meeting and being eligible offers himself for re-election.
Mrs.R.Sowmithri, was appointed as an Executive Director of the Company
with effect from 30.03.2015. With this appointment the company has
complied with the provisions of Companies Act, 2013 and Clause 49 of
the Listing Requirements that had made it mandatory to appoint a woman
director on the Board.
6.04 Key Managerial Personnel
Mr.K.V.Ramachandran, Vice Chairman & Managing Director and
Mrs.R.Sowmithri, ED(Finance) & Secretary of the Company both of them
within the meaning of Section 2(18) of the Companies Act, 2013 hold the
office of Key Managerial Personnel respectively.
7. Corporate Governance
With reference to Corporate Governance guidelines as laid at in Clause
49 of the Listing Agreement, the Company ha s complied all possible
requirements. Due to circumstances beyond its control the company, It
has not been able to fill in the vacancies caused by the resignation of
all independent directors during last year. The Company seeks time to
fill in the vacancies. Annexure A contains report on corporate
governance enclosed herewith.
At present the Company has four directors of which two are executive
directors and two non executive promoter directors. As a result the
audit committee, remuneration committee etc which need to be
constituted with independent directors is not possible in the present
circumstance. All the 4 directors have carried out the duties of the
audit committee & remuneration committee. Due to this fact provisions
of sections 177 and 178 of the Companies Act, 2013 have not been
complied in full. Barring the aforesaid non compliance, all other
stipulations have been complied with by the Company. The detailed
report on Corporate Governance is annexed. The compliances have been
reported and the Certificate from the Statutory Auditors have also been
annexed to the Report on Corporate Governance.
8. Internal Control System and their adequacy
The Company has adequate system of internal control with reference to
the financial statements. All the transactions are properly authorised,
recorded and reported to the Management. The Company is following all
the applicable Accounting Standards for properly maintaining the books
of accounts and reporting financial statements. The internal auditor
of the company checks and verifies the internal control and monitors
them in accordance with policy adopted by your Company. The Company
ensures proper and adequate systems and procedures commensurate with
its size and nature of its business.
9. Conservation of Energy, Technology Abosorption and Foreign Exchange
Earnings and Outgo
Information as per Section 134(3)(m) of the Companies Act, 2013 read
with the Companies (Accounts) Rules 2014 relating to Conservation of
Energy, technology absorption and foreign exchange earnings and outgo
for the financial year 2014-15 are annexed as Annexure B which forms
part of this Report.
10. Management Discussion and Analysis
Management Discussion and Analysis report for the year under review as
stipulated under Clause 49 of the Listing Agreement with Stock
Exchanges in India is enclosed herewith please refer Annexure C.
11. Research & Development
R&D in El Forge is a continuous process. All efforts in product design
and process development are directed at Customer's satisfaction,
competitiveness, quality and responsiveness. This includes focus on
material wastage reduction by improvement in technology and equipment
with major emphasis at the Tool Room for value engineered die design
and manufacture. Simultaneous efforts are made at the shop floor to
improve manufacturing efficiency to sustain the development efforts.
Annexure A to this report contains the details thereof.
12. Industrial Relations
Employees at all levels have contributed to the performance of your
Company. Your directors place on record the co- operation of employees
during the year under report. The Directors also place on record the
unstinted cooperation extended by the staff members during the period
under review.
13. Fixed Deposits
The Company has not accepted any fixed deposits during the year. The
deposits are being repaid to the deposit holders as and when the
deposit holders send their Fixed Deposit Receipts issued to them
claiming their refund. As on 31st March, 2015, the outstanding deposits
amount to Rs.104.26 lakhs .
14. Applicability of Section 197(12) of Companies Act, 2013 read with
Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules 2014
None of the employees come within the purview of Section 197(12) of the
Companies Act, 2013 read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules 2014
15. Directors Responsibility Statement
Pursuant to Section 134 (5) of the Companies Act, 2013, the Board of
Directors of the Company hereby state and confirm that
a) In the preparation of Annual Accounts the applicable accounting
standards had been followed.
b) The Directors had selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at 31st March, 2015 and of the Profit or Loss of the
Company for that period.
c) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities.
d) The Directors had prepared the Annual accounts on a going concern
basis.
e) that proper internal financial controls were followed by the Company
and that such internal financial controls are adequate and were
operating effectively.
f) that proper systems to ensure compliance with the provisions of all
applicable laws were in place and that such systems were adequate and
operating effectively.
16. Remuneration Policy of the Company
The remuneration policy of the Company comprising the appointment and
remuneration of the Directors, Key Managerial Personnel and Senior
Executives of the Company including criteria of determining
qualifications, positive attributes, independence of a director and
other related matters have been provided in the Corporate Governance
report which is attached.
17. Extract of the Annual Return:
Extract of the Annual Return in the presence form is enclosed herewith
in Annexure F.
18. Secretarial Audit
Pursuant to provisions of Section 204 of the Companies Act, 2013 read
with Rule 9 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules 2014, your Company engaged the Services of
Mrs.B.Venkatalakshmi, Company Secretary in Practice, to conduct the
Secretarial Audit of the Company for the financial year ended 31st
March, 2015.
The Secretarial Audit report (in Form MR-3) is attached as Annexure to
this Report. Please refer Annexure G in this report.
19. Related Party Transactions
All transaction entered by the Company with Related Parties were in the
ordinary course of business and at Arm's Length pricing basis. The
Audit Committee granted omnibus approval for the transaction (which are
repetitive in nature) and the same was reviewed by the Audit Committee
and the Board of Directors.
There were no materially significant transactions with Related Parties
during the financial year 2014-15 which were in conflict with the
interest of the Company. Suitable disclosures as required under AS 18
have been made in Item No.20 of Note no.28 of financial statement.
Note.28 of the Notes on financial statements. Accordingly there are no
transactions that are required to be reported in Form AOC-2 and as such
does not form part of the report.
20. Corporate Social Responsibility
Our company does not fall under the criteria laid for Corporate Social
Responsibility under section 135 of the Companies Act,2013 and hence
the section is not applicable.
21. Particulars of Loans, Guarantees or Investments
Your Company has not made any loan or given any Guarantees or made any
investment under Section 186 of the Companies Act, 2013
22. Vigil Mechanism / Whistle Blower Policy
Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7
of the Companies (Meetings of Board and its powers) Rule 2014 and
Clause 49 of the Listing Agreement, the Board of Directors had approved
the policy on Vigil Mechanism / Whistle Blower and the same is hosted
on the Website of the Company. The policy inter-alia provides a direct
access to the Chairman of the Audit Committee.
Your Company hereby affirms that no Director / employee has been denied
access to the Chairman of the Audit Committee and that no complaints
were received during the year.
23. Auditors
The Statutory Auditors M/s P.Rajagopalan & Co, Chartered Accountants,
retire at the close of this Annual General Meeting and are eligible for
re-appointment. The Company has received confirmation from the firm
that their reappointment will be within the limits prescribed under
Section 141(3)(g) of the Companies Act, 2013. The Board has recommended
their re- appointment/ratification for a term of three years from
2014-15 to 2016-17. The necessary resolution is being placed before the
shareholders for approval. The explanation to the audit remarks /
qualification is given separate in addendum to the Directors Report.
24. Information as per Section 217(1)(e) of the Companies Act, read
with Companies (Disclosure of particulars in the Report of Board of
Directors) Rules 1988
In terms of the above rules, your Board is pleased to give the
particulars of the Conservation of energy, Technology absorption and
the Foreign Exchange earnings and outgo as prescribed therein, in the
Annexure which forms part of the Directors Report.
25. Acknowledgements
The Company places on record the co-operation of Bankers, State Bank of
India, Axis Bank Limited, Union Bank of India, IDBI Bank Ltd, Royal
Bank of Scotland (RBS), Export Import Bank of India, Indusind Bank,
Kotak Mahindra Bank Ltd and Bank of Baroda and Asset Reconstruction
companies - Asset Reconstruction Company(India) Ltd and Edelweiss Asset
Reconstruction company ltd..We also thank all our Customers, Suppliers
and others connected with the business for their co- operation. We
sincerely thank the shareholders for their support.
For and on behalf of the Board of Directors
Place : Chennai V.SRIKANTH
Date : 13.08.2015 CHAIRMAN |