pricol castings ltd Directors report

Report Of The Directors

Your Directors take pleasure in presenting the Twentieth Annual Report and Audited Accounts for the financial year ended 31^st March 2014.

WORKING RESULTS:

The working results of the Company are summarized as detailed below:

Rs. In Million

Particulars	2013-14	2012-13
Sales & Service Charges - Domestic	378.469	255.767
- Export	8.959	12.490
Total	387,428	268.257
Profit Before Interest, Depreciation & Other Income	(47.523)	28.809
Less : interest & Finance Charges	12.313	15.049
: Depreciation	17.484	12.739
Add: Other Income	0.798	3.622
Profit / (Loss) Before Tax	(76.522)	0.885
Add : Excess provision of income tax relating to earlier years	(1.421)	0.135
Profit / (Loss) After Tax	(77.944)	1.020
Balance brought forward	(71.677)	(72.698)
Balance Carried to Balance Sheet	(149.621)	(71.677)

REVIEW OF OPERATIONS & OUTLOOK:

During the year 2013-14, the company made a sales turnover of Rs.387 million against Rs. 268 million achieved during the previous year, an increase of 44.40% over previous year.

The increased power cuts in the State which compelled the company to generate its own power and increase in Diesel prices had resulted in higher power costs of generation. The depreciation of Indian Rupee against the USD has increased the cost of major input aluminum (the aluminum smelters importing scrap from overseas increased the prices due depreciation of rupee). Due to the above said factors the company incurred a loss of Rs. 78 million. The auto industry was going through recessionary phase and as result of which when we approached the customers for price increase they were unable to give any assistance due to price pressures on them. To mitigate the cash losses the holding company Pricol Limited brought in further funds of Rs. 152 million in the form of share capital.

The company in the year 2014-15 has embarked on several cost cutting measures and approaching the customers for price increases which will help to reduce the losses and aim for break even. The company has installed a Bio Gas plant (March 2014) to generate gas from coconut shells which will reduce the dependency on Generators using diesel and which will eventually result in reduced power cost.

DIRECTORS:

Mr.Vijay Mohan, Director retires by rotation at the ensuing meeting and is eligible for reappointment. Mr.D.Ravichandran and Mr.Vijay Raghunath are proposed to be appointed as Independent Directors pursuant to section 149 of the Companies Act, 2013 for a period of 5 years upto 31^st July 2019 subject to the approval of shareholders at the ensuing Annual General Meeting.

FIXED DEPOSITS:

The Company has not accepted any Deposits from the public. AUDITORS:

M/s.Haribhakti & Co, the Statutory Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting, M/s.Haribhakti & Co is eligible for re-appointment and have confirmed that their appointment, if approved, will be in compliance with Section 141 of the Companies Act, 2013.

As per Section 139 of the Companies Act 2013, a public company having paid up capital of Rs.10 crore or more shall not appoint / re-appoint an Audit Firm as Statutory Auditors for more than 2 terms of 5 consecutive years. M/s.Haribhakti & Co, who has aiready served as Companys Statutory Auditor for a period of 1 year, from 2013-14, is eligible for reappointment as Statutory Auditors of the Company for a further period of 9 (4 + 5) years.

In compliance with the said requirement, your Board recommends the re-appointment of M/s.Haribhakti & Co, as Statutory Auditors of the Company, for the financial year 2014-15 to 2017-18.

CONSERVATION OF ENERGY ETC:

Details of. Conservation of Energy, technology absorption, Foreign Exchange Earnings and Outgo in accordance with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules 1988, is annexed herewith and forms part of this report.

PARTICULARS OF EMPLOYEES:

The Company does not have employees drawing remuneration attracting the provisions of section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 and Companies (Particulars of Employees) Amendment Rules, 2011.

DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

a) in the preparation of annual accounts for the financial year ended 31st March 2014, the applicable accounting standards have been followed.

b) they had selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the company for the year under review;

c) they 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 and

d) they had prepared the annual accounts for the financial year ended 31st March 2014, on a going concern basis.

ACKNOWLEDGEMENT:

The directors wish to thank customers, vendors, banks / financial institutions and Pricol Limited for their continued support and co-operation during the year under review. They also wish to place on record their appreciation of the contribution made by the management team and the employees at all levels.

		By order of the Board
Coimbatore	Vijay Mohan	K.Udhaya Kumar
21st May 2014.	Chairman	Executive Director

ANNEXURE TO DIRECTORS REPORT FOR THE YEAR 2013-14

1. Particulars pursuant to section 217 (1)(e) of the Companies Act 1956 read with Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988.

a. CONSERVATION OF ENERGY:

a) Energy Conservation Measures Taken: In Die casting machines the electrical energy is conserved through integrated PLC programming of pressure and flow. In the tool room division heavy machines like Piano milling, boring machines are fitted with variable frequency drives to conserve power.

b) Energy Consumption as per Form -A :

PARTICULARS	Units	2013-14	2012-13
1) Electricity Charges	Rs. In Million	13.387	7.983
2) EB Units Purchased	Kwh.	1,947,624	1,100,214
3) Rate per Unit Purchased	Rs.	6.87	7.26
1) Generator - Diesel	Rs. In Million	12.128	14.648
2) Units Generated	Kwh.	718,930	946,250
3) Cost per Unit Generated	Rs.	16.87	15.48
1) Total Power & Fuel (Excl. LPG)	Rs. In Million	25.515	22.631
2) Units Purchased/generated	Kwh.	2,666,554	2,046,464
3) Cost per Unit Consumed	Rs.	9.57	11.06
1) Liquefied Petroleum Gas (LPG)	Rs. In Million	16.493	13.808
2) Kgs Consumed	Kgs.	212,963	167,586
3) Cost per Kg	Rs.	77.44	82.39

b. TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT:

The Company has developed die-cast parts which are being used in the pumps and valves especially for higher pressure applications. The Company has also developed in house facility to test the pressure parts.

C. FOREIGN EXCHANGE EARNING & OUTGO:

i. Earnings in Foreign Exchange (FOB): Rs.8.959 Million (Previous Year Rs.12.490 Million)

ii. Outgo in Foreign Currency (CIF) Rs.56.336 Million (Previous Year Rs. 21.764 Million)