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The Members of
GRAND FOUNDRY LIMITED
Your Directors present herewith the Twenty Third Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2015.
2. MANAGEMENT DISCUSSION AND ANALYSIS
a) INDUSTRY STRUCTURE AND DEVELOPMENTS:
Our Company is engaged in the business of manufacturing Bright Steel Bars and wires and is in the market to sell domestically and in exports since 1974. The Quality control and manufacturing process consist of in–house treatment and has standard quality name for more than 2 decades. Due to financial constraints, the company is been depending on business of processing steel on job work basis to maintain better economics and has successfully been able to achieve job work production. The Company also has indulged in the special heat treatment job in order to establish future market of Hardened & Tempered steel for exports as well as domestic, which will pave the path of revival and re–instating the strength of the company.
DOMESTIC MARKET: –
There has been a substantial change of steel requirement in the domestic as well as international market for the consumption of Bright Steel Bars and wires. Majority of Bright Steel Bars and wires are used for making the various kinds of components for Automotive industry, Machinery manufacturing industry, Dairy & food processing industry, chemical and fertilizer industry, electronics and electrical appliances industry along with computer industry. Due to global interaction and industrial change in domestic market, various companies have invested especially in automobile industry and electrical appliances industry along with computer industry.
As your company has been well versed with international business, quality specifications, end market trends, which will be convenient and easy for the company to capture such trends. Various trial orders and sample approvals and certain bulk supplies have been established during the year to continue the pace with domestic market.
INTERNATIONAL MARKET: –
The Company is well established for selling and marketing Stainless Steel Bright Bars internationally in most of the developing countries and has maintained their market share. In the international scenario for Stainless Steel Bright Bars business has been on the greater recessionary trend for more than 5 years due to which the company has to go through the constant survival problems. But, at the same time, due to long term standing in the market, the company has been able to maintain its market outside India for Stainless Bright Bars and capturing orders and executing the same with the various financial arrangements. Short term spurts of improved demand has been affecting the company to regain its position from time to time in the international market, but the consistent improvement has been lacking in the international market since long time. The company has still been able to remain in the market even with these trends as well recessionary trends. As known worldwide, Indian steel has faced a lot of anti–dumping suits for Bright Steel Bars from European Community, U.S.A., Canada, the company has successfully being able to fight such anti–dumping petition and retain reasonable supplies to these countries and struggle to retain its position even at low profitability.
b) OPPORTUNITIES AND THREATS
> The Company is engaged in the business since more than thirty years and has expertise for marketing and quality maintenance of international quality standards for more than 2 decades and enjoys the market share in developed countries like United States and European market.
> The Company is continuously sourcing economical raw materials from China & to compete the international market for exports. These efforts & expertise is been used for earning income by means of conducting Business for M/s D.H. Exports Private Limited for last few year.
> As the major product of the company is made of Stainless Steel carrying high nickel (metal) which is a sensitive item quoted in LME (London Metal Exchange), the fluctuation may affect the business opportunities and its profitability.
>• As company's major business is depending on exports the fluctuation in foreign currency may also affect the profitability.
c) SEGMENT– WISE PERFORMANCE
The Company has in the last 5 years developed various heat treatment processes and successfully supplied commercial lots of heat–treated bars to specific standards in the international market in American, German standards.
The scope of business is huge and normal, as this product is utilized and acceptable for various applications in the Engineering industries including Petro Chemical, Oil & Natural gas and Automotive industries worldwide. The company is looking for better profitability business and this kind of supplies keeping the edge over the other competitors. Stringent quality standards and method of processing has been introduced to achieve better reliability and traceability for these kind of products which is mandatory for extending marketing. The international players and competitors for such products are from Italy, Spain and Korea, but with such renowned and established competitors, the company has been able to stand in the international market, establishing its product range internationally.
The manufacturing facility of the company has been now fully in operation and the new location for the business activity is defined at Nagpur/Bhandara. The Company is currently earning income from outsourcing, manufacturing & marketing exports and earning commission income from the same & doing dedicated job processing for M/s Sunflag Iron & Steel Ltd well known Manufacturer of Alloy & Special Steel.
e) INTERNAL CONTROL SYSTEMS
The Company has adequate Internal Control systems, which provide, interalia, reasonable assurance of recording the transactions of its operations in all material respects and providing protection against misuse or loss of Company assets.
f) FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
Total Income achieved during the year under review is Rs. 106.057 lacs as against Rs. 280.86 lakhs in the previous year. During the previous year the major source of income consisted of exports /sales whereas in the current year commission has been derived from the exports/sales passed onto fellow industries to maintain the marketing strength of the company. Further with the latest update available, the Hon'ble BIFR has examined the ORS and circulated the same. In the hearing to be held in the month of November 2014, the order for the same would be passed and subject to the direction of BIFR, the paid up share capital of the Company of Rs. 104300000 consisting of 10430000 equity shares of Rs. 10/– each fully paid up shall be written off to Rs. 41720000 consisting of 10430000 equity shares of Rs. 4/– each by effecting a reduction of Rs. 62580000 from the paid up capital of the company by Rs. 6/– per equity share of Rs. 10/– each. Simultaneously with writing down of existing equity share capital of Rs 1043 lacs by 60% through write of accumulated losses against face value of share and thus reduce Face Value of share from Rs 10 to Rs. 41–. Thereafter, fresh issue of equity shares of Rs 600 lacs (150 lacs shares at Rs. 4 per share) to the promoters for expansion of business. And subject to the approval of this scheme of Rehabilitation and subject to the direction of BIFR, the BSE/NSE to open the trading which has been suspended by the stock exchanges and also to list the further issued capital as provided in the scheme.
3. ACCEPTANCE OF DEPOSIT (SEC – S8A)
The Company has not invited/accepted any deposits from public coming under the purview of section 73 to 76 read with Rules of the Companies Act, 2013.
4. CORPORATE GOVERNANCE
Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, a compliance report on Corporate Governance together with a Certificate from Practicing Company Secretaries is annexed as part of the Annual Report.
5. COST AUDIT
The company is not required to undertake the cost audit as required under Section 148 of the Companies Act, 2013.
6. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanation obtained by them, your Directors make the following statement in terms of Section 134(5) of the Companies Act, 2013 that
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 devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively
In accordance with the Articles of Association of the Company and provisions of the Companies Act, 2013 Mr. Hiten Jangla retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re–appointment. Your Directors recommend his re–appointment.
8. STATUTORY AUDITORS
You are requested to appoint Auditors for the current year and fix their remuneration. The Auditors of the Company, THAKER BUTALA DESAI, Chartered Accountants retire at ensuing Annual General Meeting of the Company and are eligible for reappointment.
9. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information pursuant to Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 Rules, 2014
There were no foreign exchange earnings and outgo during the period under the consideration.
10. SECURITY EXCHANGE BOARD OF INDIA (SEBI) to consider:
To grant exemption to the company from the provisions of SEBI Guidelines for Preferential Allotment of Shares, SEBI (Substantial Acquisition of shares &Takeovers) Regulations, 1997, SEBI (Disclosure & Investor Protection) Guidelines, 2000, SEBI (Central Listing Authority) Regulations, 2003 and ceiling on promoters holding and any other applicable Rules and Regulations for the issue of equity shares to the 23rd Annual Report 2014–2015
Promoters as envisaged under the Scheme, provided such equity shares shall be locked in for a period of three years in case allottees are non–promoters.
11. NATIONAL STOCK EXCHANGE/BOMBAY STOCK EXCHANGE to consider:
Stock Exchange(s) on which the shares of the company are listed shall:
i. Revoke the suspension of trading of the equity shares forthwith and list the reduced shares as well as shares allotted in terms of the sanctioned scheme without any cost of charges;
ii. Exempt the Company from the provisions of the Companies Act, SEBI Guidelines and the listing requirements
iii. Waive listing fee and other arrears including interest and penalties; and
iv. Allow trading of shares
12. PARTICULARS OF EMPLOYEES
Since none of the employees of the Company was drawing remuneration in excess of limits laid down pursuant to the provisions of the Companies Act, 2013 read with the Rules, details herewith are not furnished.
Your Directors place on record their appreciation to the sincere and dedicated services put in by the employees of the Company at all the levels and in the departments of the Company.
The Directors place on the record their appreciation for the support and co–operation received from all the Bankers.
For and on behalf of the Board of Directors
Hiten D. Jangla
Date: September 05, 2015
327, Arun Chambers, 3rd Floor, Tardeo, Mumbai – 400034