Balaji Industrial Corporation Ltd. के निदेशक की रिपोर्ट

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting their Thirtieth Annual Report together with the Audited Accounts of the Company for the Financial Year ended March 31,2014.

1. Summary of Financial Results

The financial results of the company for the year ended 31.03.2014 are given below: (Rs. in Crores)

S. Particulars 2013-14 2012-13 No.

1 Loss before exceptional items (19.32) (13.21)

2 Exceptional items 54.90 1.92

3 Profit before tax 35.58 (11.29)

4 Tax expense (a) Deferred Tax (.35) (0.34)

5 Profit/(Loss) for the year 35.93 (10.95)

6 Basic & diluted EPS 5.77 (2.89)

2. DIVIDEND:

As the company incurred operational losses during the year though there is profit after exceptional items no dividend is recommended.

3. FUTURE OUTLOOK/PLANS:

Your Company could not restart various closed operations due to lack of funds. The entire future planning depends on the decision of BIFR in approving the revival scheme and the financial support and co-operation of the Banks / Financial Institutions.

4. COMPANY UNDER BIFR:

The Hon''ble Board for industrial and Financial Reconstruction (BIFR) has declared your company as a Sick industrial company within the meaning of Clause (o) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 vide its order dated 07.03.2007 and IFCI was appointed as Operating Agency (OA) under section 17 (3) of the Act with directions to prepare a revival scheme for the company.

After several hearings, the Board had directed the company to submit DRS to the operating agency and the company had submitted DRS and the case is pending before BIFR.

5. INDUSTRIAL RELATIONS:

Your Company maintains harmonious industrial relations at all levels in the organization. It will be the constant endeavour of your Company to continue to maintain the good industrial climate.

6. ENERGY, TECHNOLOGY, FOREIGN EXCHANGE:

Information in accordance with the provisions of Section 217(1 )(e) of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 do not arise as there are no operations during the year under review.

7. DIRECTORS:

Shri. V Saravanan director of the company retires by rotation at the forth coming annual general meeting and being eligible offers himself for reappointment. Board recommends his re-appointment.

8. PARTICULARS OF EMPLOYEES:

During the year, there were no employees drawing remuneration as per limits specified under section 217 (2A) of the Companies Act, 1956, read with Companies (Particular of Employees) Rules, 1975.

9. DIRECTORS'' RESPONSIBILITY STATEMENT:

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

i) that in the preparation of the annual accounts for the year ended March 31, 2014 the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) that in the accounting policies implemented by the Company have been applied consistently, judgements and estimates have been reasonable and prudent thereby giving a true and fair view of the state of affairs of the Company at the end of the year and of the profit of the Company for the year under review;

iii) 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;

iv) that the annual accounts were prepared for the year ended March 31,2014 on a ''going concern'' basis.

10. Listing of Shares with the Stock Exchanges

The shares of your Company are listed with the following Stock Exchanges:

The Madras Stock Exchange Limited BSE Limited

The Stock Exchange, Ahmedabad

Trading of company''s equity shares was suspended from Trading in Mumbai Stock Exchange due to non compliance of Clause 41 of the Listing Agreement and non-payment of Listing Fees.

11. Auditors

M/s PA Reddy & Co., Chartered Accountants, Nellore and M/s CNGSN & Associates, Chartered Accountants, Chennai Auditors of the company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

With respect to the various observations made by the Auditors in their Report, the Board of Directors wishes to express the following views:

i. The Company has closed most of the bank accounts which are not in operation over the years. Necessary steps are being taken to close the balance nine bank accounts which are not in operation. [Refer point no. iv (a) of Auditor''s Report]

ii. The Company has extended Corporate Guaranty to a Body corporate in the earlier years which has been invoked. The Company is confident that as per the Settlement Scheme offered by the said Body Corporate to their lenders, the amount due as perthe guarantee will be settled. Hence, the Company has not made any provisions for the same. [Refer point no, iv(b) of Auditor''s Report]

iii. As regards to the disputed Income Tax & Sales Tax, the company has appealed before various forums and the company is confident that would be in its favor. The company is seeking certain reliefs / concessions from Central / State Government. [Refer SI No. ix(b) of Annexure to Auditor''s Report].

12. Corporate Governance

A Report on Corporate Governance along with Auditor''s Certificate is annexed herewith.

13. Acknowledgement

The Board hereby acknowledge the support from various Government Departments and their Agencies, Hon''ble BIFR, Financial Institutions, Banks, Shareholders, Debenture Holders and Customers. The Directors have pleasure in placing on record their heartfelt appreciation to all the Employees of the Company.

By Order of the Board For BALAJI INDUSTRIAL CORPORATION LIMITED

Place: Chennai S V NAGARAJA REDDY V SARAVANAN Dated: 27th May, 2014 DIRECTOR (00124414) DIRECTOR (00068562)

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Mar 31, 2011

The Directors have pleasure in presenting their Twenty- Seventh Annual Report together with the Audited Accounts of the Company for the Financial Year ended March 31, 2011.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1. Summary of Financial Results (Rs. In Crores)

The financial results of the company for the year ended 31.03.2011 are given below: (Rs. in Crores)

S. No. Particulars 2010-11 2009-10

1 Profit/(Loss) before depreciation 2.90 5.60

2 Less: Depreciation 1.28 1.39

3 Profit/(Loss) before tax & Exceptional items 1.62 4.21

4 Provision for Tax 0.00 0.00

5 Deferred Tax 0.16 0.16

6 Profit/(Loss) after tax 1.78 4.37

7 Prior period adjustments 0.23 0.00

8 Profit /(Loss) after adjustments 2.01 4.37

9 Deficit from previous years (708.73) (713.10)

10 Loss carried to Balance sheet (706.72) (708.73)

2. OPERATIONS:

Your Company had sold 17,174 Metric Tonnes (18,391 MT) of Steel Products earning a gross revenue of Rs.55.46 crores (Rs. 53.63 crores).

During the year the company has earned Rs.17.14 crores (Rs.26.87 crores) from sale of Empty Bottles, Corrugated Boxes / Partitions, Printed Labels & PP Caps used in IMFL Industry.

The IMFL Manufacturing Unit at Jeedimetla, Hyderabad is not in operation.

3. DIVIDEND:

Your directors do not recommend dividend this year in view of the carried forward accumulated losses.

4. FUTUREOUTLOOK/PLANS:

Your Company could not restart various closed operations due to lack of funds and litigations. The entire future planning depends on the decision of BIFR and the financial support and co-operation of the Banks / Financial Institutions.

5. REFERENCETOBIFR:

The Hon'ble Board for Industrial and Financial Reconstruction (BIFR) has declared your company as a Sick industrial company within the meaning of Clause (o) of the sub-section (1) of the Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 vide its order dated 07.03.2007 on the basis of company's reference registered with the said Hon'ble BIFR as Case Nos.13/2004 and 22/2005. Further the Hon'ble BIFR has appointed IFCI as Operating Agency for formulating revival package. The revival process is in progress. During the year your Company has settled dues to some of banks under one time settlement. So far, your Company has settled dues of more than 80% of the secured creditors. Your Company has given improved OTS offer to remaining unsettled creditors.

6. INDUSTRIAL RELATIONS:

Your Company maintains harmonious industrial relations at all levels in the organization. It will be the constant Endeavour of your Company to continue to maintain the good industrial climate.

7. ENERGY, TECHNOLOGY, FOR EIGNEXCHANGE:

Information in accordance with the provisions of Section 217(1)(e) of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in theAnnexure-1.

8. DIRECTORS:

Shri R Viswanathan, resigned from the Board with effect from 11/08/2011. Board records their appreciation for the services rendered by him during his tenure as director of the company.

Shri M Durga Prasad Reddy, director of the company, retire by rotation at the forth coming annual general meeting and being eligible offers himself for reappointment. Board recommends his re-appointment.

Shri. V Saravanan was appointed as an additional director of the company with effect from 11/08/2011 and he vacates office at the commencement of the forth coming Annual General Meeting and the Board recommends his re-appointment.

9. PARTICULARSOFEMPLOYEES:

During the year, there were no employees drawing remuneration as per limits specified under section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

10. DIRECTORS'RESPONSIBILITYSTATEMENT:

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it Is hereby confirmed:

i) that in the preparation of the annual accounts for the year ended March 31, 2011 the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) that in the accounting policies implemented by the Company have been applied consistently, judgments and estimates have been reasonable and prudent thereby giving a true and fair view of the state of affairs of the Company at the end of the year and of the profit of the Company for the year under review;

iii) 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;

iv) that the annual accounts were prepared for the year ended March 31, 2011 on a 'going concern' basis.

11. LISTING OF SHARES WITH STOCK EXCHANGES:

The shares of your Company are listed with the following Stock Exchanges:

- The Hyderabad Stock Exchange Limited

- The Madras Stock Exchange Limited

- The BSE limited, Mumbai

- The Ahmedabad Stock Exchange Limited, Ahmedabad

Company's equity shares have been suspended from Trading in Mumbai Stock Exchange due to non compliance of Clause 41 of the Listing Agreement and non-payment of Listing Fees.

12. AUDITORS:

M/s P A Reddy & Co., Chartered Accountants, Nellore and M/s CNGSN &Associates, Chartered Accountants, Chennai, Statutory Auditors of the company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

With respect to the various observations made by the Auditors in their Report, the Board of Directors wishes to express the following views:

I. It has been a consistent practice of the Company to account for gratuity / leave encashment payments as and when they arise. The Company has settled Gratuity for the left employees of the company and the closed division. However, the company has ascertained the liability and will be included in the Rehabilitation scheme as per the direction of BIFR. [ReferSlNo.4(d)of Auditor's Report].

II. The company has huge accumulated losses; hence the company was not in a position to redeem the preference shares / debentures on the due dates and is initiating negotiations with the bankers for redemptions of the said securities at the earliest. [Refer Sl No.4(e) of Auditor's Report].

III. It has been a consistent practice of the Company to account for gratuity / leave encashment payments as and when they arise. The Company has settled Gratuity for the left employees of the company and the closed division. However, the company has ascertained the liability and will be included in the Rehabilitation scheme as per the direction of BIFR. [Refer Sl No. 4(f)(a) of Auditor's Report].

IV. Your company has initiated negotiations as per the proposed scheme submitted to Operating Agency appointed by BIFR for waiver / concessions in interest / principal in respect of some loans from banks / Financial Institutions / other lenders where payment of interest / principal is in arrears. The Company has settled majority of the banks and institutions outstanding through one time settlement. The company is hopeful of settling all institutional/banks dues whereby the said non provision of interest will not arise in future. [Refer Sl No.4(f)(b) of Auditor's Report].

V. The Company has already closed most of the bank accounts, which are inoperative over the years. Some of the bank accounts have been attached by Income Tax Department. Hence the Company is not in a position to close such accounts. However, the necessary steps will be taken to close the accounts which are not in operation over the years. [Refer Sl No.4(f)(c) of Auditor's Report].

VI. As informed in earlier years, with respect of deposit of Rs.2.40 lakhs with IDBI Bank (Erstwhile United Western Bank Limited), the Bank has filed a case in DRT for recovery of dues. We are not in a position to ascertain whether the deposit along with interest has been adjusted towards dues of the Bank or deposit lies as such. [Refer Sl No.4(f)(d) of Auditor's Report].

VII. Your company proposes to take up negotiations as per the proposed scheme submitted to Operating Agency as directed by BIFR for waiver / concessions in interest / principal in respect of some Hire Purchase Agreements where payment of interest / principal is in arrears. The Company has settled majority of the Lenders outstanding through one time settlement scheme. [Refer Sl No.4(f)(e) of Auditor's Report].

VIII. The Company has extended Corporate Guarantees to the Group Companies and one guarantee given by the Company has been invoked. The Company is confident that as per the Settlement Scheme offered by the Group Company to their lenders, the amount due as per the guarantee will be adjusted/settled. Hence, the Company has not made any provisions for the same. [Refer Sl.No.4(f)(f) of Auditor's Report]

IX. The Company is confident that the loans availed from banks and Financial Institutions will be restructured as per the directions of Hon'ble BIFR and mutual discussions with the lenders. As such, the existing securities offered by the Company to the various lenders will be adequate to the proposed liabilities included in the scheme. [Refer Sl.No.4(f)(g) of Auditor's Report]

X. The effect of Audit qualifications has been summarized. [Refer Sl No.4(f)(h) of Auditor's Report].

XI. As regards to the undisputed Income Tax & Sales Tax, the company has appealed before various forums and the company is confident that would be in it's favor and the same has been included in the scheme as directed by Hon'ble BIFR. The company is seeking certain reliefs / concessions from Central / State Government. [Refer Sl No. ix(b)&(c) of Annexure to Auditor's Report].

13. CORPORATEGOVERNANCE:

A Report on Corporate Governance along with Auditor's Certificate is annexed herewith.

14. ACKNOWLEDGEMENT:

The Board hereby acknowledges the support from various Government Departments and their Agencies, Hon'ble BIFR, Financial Institutions, Banks, Shareholders, Debenture Holders and Customers. The Directors have pleasure in placing on record their heartfelt appreciation to all the Employees of the Company.

For and on behalf of the Board For BALAJI INDUSTRIAL CORPORATION LIMITED

Place : Chennai M. SREENIVASULU REDDY

Dated: August 11, 2011 Chairman