Your Directors have pleasure in placing before you the TWENTY SECOND
ANNUAL REPORT of the Company for the year ended 31st March, 2001
together with the Audited Balance Sheet as at 31st March, 2001 and the
Profit and Loss Account for the year ended that date.
FINANCIAL RESULTS 31.03.2001 31.03.2000
(Rupees in Lakhs)
Sales and other Receipts 1866 1680
Profit before Interest & Depreciation 343 333
Interest 147 155
Depreciation 144 138
Net Profit for the year 52 44
Less : Expenses of prior year 2 43
Add : Excess provision for Expenditure
written-back 1 2
Income relating to prior year - 23
Profit Before Tax 51 26
Add : Balance brought forward from
preceding year 66 43
Less : Appropriations :
Provision for Taxation 4 3
Proposed Dividends - -
Balance to be carried forward 113 66
COURSE OF BUSINESS
During the year under review, the production of Ferro Silicon has
marginally increased to 7836 MT as compared to the previous year
production of 7028 MT; correspondingly the turnover of the Company has
increased by 11%. However, the increase in the turnover has not
resulted increase in profitability in view of the continuous poor price
realisation due to sluggish market conditions and increased in product
The unit at Pondicherry & Avanashi continued to be remained closed for
the whole year in view of the heavy power tariff increase by the
respective Electricity Boards.
The steel industries sector continues to be in bad shape because of
very low indigenous production and dumping of imports.
The Ferro Alloy Industries which depend upon the fortune of steel
industries also suffered a lot owing to the non-favourable conditions
of Steel Industries.
Notwithstanding the fact, your Company, made a net profit of Rs.52
Lakhs before prior period adjustments and provision for Taxation.
The Company could not make any further progress towards
Bhoothathankettu Hydro Electric Project since the portion of land by
the Irrigation Department for the project has not been handed over to
the Company. The Company has approached the Hon'ble High Court of
Kerala requesting their intervention and direction to the concerned
authorities to hand over the land to the Company immediately. The
matter is still pending.
Further, no significant progress has been achieved in both the Power
Projects due to paucity of funds. The Company is on the look out for
external commercial borrowings.
The Company's request to the Government of Kerala and Kerala State
Electricity Board to provide Power at Pre-92 Tariff till the
commissioning of Bhoothathankettu Hydro Electric Project, was in vain.
The Company has approached the Hon'ble High Court of Kerala for the
same along with a Petition for handing over of Land. The Company's
performance depends upon the early implementation of the Hydro Electric
Projects. The Directors of the Company are working in this direction.
No Dividend has been recommended for the year since the Company has not
earned sufficient Cash Profits.
The observation made in the Auditors' Report have been dealt within
item No.2(c) and 16 of Schedule 27 - Notes forming parts of Accounts.
These are self explanatory and do not call for further comments.
The Company has been maintaining cordial relationship with the
The Company has neither accepted nor renewed any deposits during the
year and has no overdue or unclaimed deposits of any kind.
ENERGY CONSERVATION, TECHNOLOGY-ABSORPTION, FOREIGN-EXCHANGE EARNINGS
Particulars of Conservation of Energy Technology-Absorption, Foreign
Exchange earnings and outgo in terms of requirement of Section
217(1)(e) of the Companies Act, 1956 are set out in the Annexure-A in
the prescribed format, forming part of this report.
Listing Agreement with Stock Exchanges have been amended to include
Corporate Governance Code as per SEBI directives. The said Corporate
Governance Code will become applicable to your Company by March, 2002.
However, your Company has already initiated steps to put in place the
system of Corporate Governance and all the mandatory provisions will be
fully complied with before the deadline prescribed. The Audit Committee
and Share Transfer Committee have already been set-up. The other
information on Corporate Governance are given in Annexure-B.
PARTICULARS OF EMPLOYEES
No employee of the Company is covered under the provisions of Section
217(2A) of the Companies Act, 1956.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 217(2AA) of the Companies Act, 1956 introduced
by the Companies (Amendment) Act 2000. your Directors state that :
i) in the preparation of the annual accounts for the year ended
31.03.2001, the applicable accounting standards have been followed
along with proper explanation relating to material departures.
ii) that the accounting policies adopted in the preparation of the
annual accounts have been applied consistently and reasonable and
prudent judgements and estimates have been made 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 or loss of the Company for the year
ended that date.
iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company for
preventing and detecting fraud and other irregularities.
iv) the annual accounts for the year ended 31.03.2001 have been
prepared on a going concern basis.
M/s. Indian Renewable Energy Development Agency Ltd., (IREDA) has also
filed a case against the Company with Debt Recovery Tribunal (DRT) in
line with M/s. Industrial Investment Bank of India (IIBI) which is
already pending before DRT for the recovery of outstanding. The Company
has requested time for making payment on the plea that the Company has
incurred losses on account of continuous power-cuts imposed by the
Kerala State Electricity Board. As reported in the previous year, one
of the project creditors has filed a case in Hon'ble High Court of
Chennai for winding-up of the Company for non-payment of the dues to
them. The Company is contending the case since this is not a fit case
for winding-up. In the meantime, the said creditor has also initiated
Arbitration Proceedings claiming damages.
Sri. K. Chandran and Sri. C.V. Krishnaswamy, Directors of the Company,
retire at the ensuing Annual General Meeting and, being eligible, offer
themselves for re-appointment. Smt. M. Roopa Rajalakshmi has been
co-opted as Director of the Company till the ensuing Annual General
Meeting. The Company has received notice from a member of his intention
to propose Smt. M. Roopa Rajalakshmi as Director of the Company whose
office is subject to retirement by rotation at the forthcoming Annual
Sri. S. Ranganathan (Nominee of IREDA) & Smt. N. Amsaveni, Directors of
the Company have resigned from the Board during the year. Your
Directors place on record their deep appreciation for the services
rendered by them during their tenure.
M/s. T. Nagarajan & Co., Chartered Accountants, Coimbatore retire at
the forthcoming Annual General Meeting and being eligible, offer
themselves for re-appointment.
Your Directors acknowledge with gratitude the co-operation and
assistance given by the Financial Institutions and Banks during the
year under review.
Your Directors also wish to place on record their sense of appreciation
of the devoted services rendered by Executives, Staff and Workers of
Your Directors are constantly striving to improve the performance and
strength of the Company with the help of Lord Almighty.
BY ORDER OF THE BOARD
COIMBATORE C. R. NARAYANASWAMY
11.09.2001 MANAGING DIRECTOR
ANNEXURE TO DIRECTORS' REPORT
INFORMATION UNDER SECTION 217(1)(e) OF THE COMPANIES ACT 1956, READ
WITH COMPANIES DISCLOSURE OF PARTICULARS RULES, 1988 AND FORMING PART
OF THE DIRECTORS' REPORT FOR THE YEAR ENDED 31st MARCH, 2001.
I. Conservation of Energy
a) Energy conservation measures taken
The specific energy consumption of various products is being
continuously monitored and effective steps are being taken to reduce
b) Additional investments and proposals, if any.
The company has been spending huge amounts every year for conservation
of energy and reduction in consumption of Units of Power. In view of
the impending Hydel Projects presently, no additional investments have
c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production.
The measures have started yielding results in reduction in the power
d) Total energy consumption and energy consumption per unit of
production as per Form-A of the Annexure.
II. Technology Absorption
The process know-how & product-mix has been modified to improve and
optimise the performance of the Plant.
III. Foreign Exchange Earnings and Outgo :
Earnings - Nil Lakhs
Outgo - 14.08 Lakhs