ANNUAL REPORT 2011-2012
The Members of
Your Directors present this SIXTY EIGHTH ANNUAL REPORT and Audited Accounts
for the year ended on 31st March, 2012.
FINANCIAL RESULTS (Rs. in Lakhs)
Total Income 51047.82 38666.43
Profit before Finance
Cost and Depreciation 5486.89 4878.44
Less: Finance Cost 3680.27 2894.84
Profit before Depreciation 1806.62 1983.60
Less: Depreciation 690.82 451.81
Profit before Exceptional
Items 1115.80 1531.79
Exceptional Items (11.93) 10.14
Profit before Tax 1127.73 1521.65
Provision for Taxation-
Current Tax - 310.00
- Deferred Tax 281.52 25.35
- Tax expense for
earlier years 102.39 -
Balance of Profit
for the year 743.82 1186.30
Balance brought forward
from the previous year 2068.64 1150.89
Amount available for
appropriation 2812.46 2337.20
Proposed Dividend 171.29 205.55
Tax on proposed Dividend 27.79 33.35
Transferred to General Reserve - 29.66
Balance Profit carried to
Balance Sheet 2613.38 2068.64
The Directors are pleased to recommend a dividend of Rs. 1 per Equity Share
(i.e. 10%) (previous year Rs. 1.20 per Equity Share i.e. 12%) on
1,71,28,992 Equity Shares of Rs. 10 each for the Financial Year ended on
31st March, 2012.
This was the mile-stone year for the Company as it achieved the target of
Rs. 500 crores turnover inspite of adverse and challenging economic
The total income of the Company for the financial year under review was
Rs.510.48 crores as against Rs. 386.66 crores for the previous year
registering an increase of 32.02%. The Profit before Tax was Rs. 11.28
crores and the Profit after Tax was Rs. 7.44 crores for the financial year
under review as against Rs. 15.22 crores and Rs. 11.86 crores respectively
for the previous financial year.
The profitability of the Company during the year under review was mainly
affected due to increase in overall material cost, weakening of Rupee which
adversely affected import cost, scarcity of funds in the market due to
policy paralysis which increased cost of borrowing and delayed realisation
from customers. This problem has affected major infrastructure companies in
India and Jyoti, being in core sector of water and power, had to face these
The Company has pending orders worth Rs. 741 crores at the beginning of the
current year i.e. 1st April, 2012.
During the year under review, the Company faced considerable strain on
liquidity front due to difficult market conditions affecting the collection
from the customers. The Company could get substantial and timely support
from its bankers and other market players to meet this liquidity shortage.
It may be mentioned that while overall interest costs were going up in the
market, the Company could reduce its interest rates on various banking
facilities. This reduction in interest rates was more than off-set by
increase in total borrowings. The Company has already put intensive efforts
to shore up collection and to reduce the borrowings so that the Company`s
financial leverage can again be within reasonable levels.
DIVISIONAL PERFORMANCE ENGINEERED PUMPS & PROJECTS
During the year under review Engineered Pumps & Projects Division (EPPD)
has achieved a turnover of Rs. 340 crores which is 41% growth over the last
financial year. The division has manufactured and supplied 176 Nos. of
large pumps for various Lift Irrigation, Water Supply and Power Projects
which is 42% growth over the last financial year.
The Power Division of EPPD has entered into an exclusive agreement with
M/s. DMW Corporation, Japan for manufacturing and supply of Circulating
Water Pumps and other large pumps for Thermal and Nuclear Power Projects.
M/s. DMW Corporation is the leading Pumps manufacturer in Japan. They have
supplied and commissioned more than 300 circulating water pumps and are one
of the leading suppliers for Nuclear Power Stations. With this agreement,
the Company would be eligible to bid for power plants with single unit
capacity of 1000 MW.
The division, during the year has successfully commissioned CW systems for
two units of 500 MW at Aravali Thermal Power Station and the third unit is
under commissioning. Similarly, make up water system for Adani Power
Maharashtra Limited for their 3 Rs. 660 MW Tiroda Thermal Power Project
which includes make up water pump of 8000 cu. mtr/hr. and 75 mtr. head was
commissioned with motors of 2.2 MW along with balance of plant. Both these
projects were commissioned in record time as per customers` requirement.
The division has received prestigious order from M/s Marg Limited for 2 Rs.
250 MW Thermal Power Project at Bhavnagar in Gujarat, worth Rs. 53 crores.
This includes design, manufacturing, supply, erection & commissioning of CW
system, make up water system and raw water system for sea water application
in special material of construction. The division is also executing a very
prestigious order for Naval Dockyard along with Hindustan Construction Co.
Ltd. This project is for Dry Dock de-watering along with critical systems
and auxiliaries. This order is valued at Rs. 85 crores.
The division is executing various projects in the country in technical
collaboration with various partners. Four irrigation projects in Andhra
Pradesh are under execution along with CKD Blansko Engineering and Sigma
Group a.s. of Czech Republic. Similarly, the prestigious order for Sardar
Sarovar Narmada Nigam Limited, Gujarat is under execution in collaboration
with Hitachi, China.
The division is actively looking at establishing itself in the Power
Transmission and Distribution Sector which includes Switchyards and
Transmission upto 400 kV. This business is complimentary to the existing
business line of the division.
The division has a pending order position of Rs. 546 crores as on 31st
March, 2012 and expects a substantial improvement in the next financial
year in view of the expected tenders in the Power and irrigation sector.
The division achieved the turnover of Rs. 59 crores. The division has
excellent prospects in view of the major thrust being given to development
of renewable sources of energy by the Government. The division has decided
to expand its range from 10 MW to 50 MW and to support this vision, the
division has signed a Memorandum of Understanding with CKD Blansko
Engineering, Czech Republic for technical support for various tenders above
During the year, the division has successfully entered the higher range of
hydro equipments by bagging the prestigious order of 2 Rs. 40 MW Koyna
Hydro Project in the state of Mahrashtra from IVRCL Limited. This turbine
has been designed and engineered by CKD Blansko Engineering and the
stationary components are being manufactured by the Company. This will
improve the credentials of the division in support of their vision.
During the year, National Thermal Power Corporation Limited has been added
in the list of prestigious customers of the division. NTPC has placed an
order for Hydro equipments for 2 Rs. 4 MW Singrauli Project which includes
design, engineering, supply, erection, testing and commissioning of
turbines and generators and other electro-mechanical systems.
The division is continuing to maintain its strong presence in Indonesia by
receiving three prestigious orders from three different customers. Prior to
this, two projects have been successfully commissioned in Indonesia and
which are working satisfactorily.
The division is actively pursuing refurbishment market jobs considering its
added advantage of being a manufacturer of turbine, generator, H.T. panel
and other auxiliary equipments.
The division has already supplied 465 Nos. of turbines till date with the
installed capacity of 422 MW. With the pending order position of Rs. 149
crores as on 31st March, 2012, the division is looking out for better
growth in the years to come.
ROTATING ELECTRICAL MACHINES
During the year under review, the division has achieved a turnover of Rs.
41 crores which is 23% growth over the last financial year. The number of
H.T. machines manufactured during the year were 192 as compared to 116 in
the previous year which shows an increase of 65%. The division has
manufactured 827 L.T. machines as compared to 748 machines in the previous
The division has established itself as a reputed manufacturer of Wind
Energy Generators of 250 kW and 750 kW. These generators are designed for
dual speed operations.
The division has enhanced its infrastructure facilities for testing by
increasing test bed locations and adding dynamometer for type testing
motors upto 2500 kW. With this, the division is planning to improve its
productivity, quality and service to their customers with a goal for
sustained growth in the years to come.
The division has a pending order of Rs. 21 crores as on 31st March, 2012.
During the year under review, the division executed orders (including
exports) worth Rs. 56 crores which is 16% growth in sales compared to last
year. The Division executed major orders received from GETCO, HCPL, CPCL,
NCC, KOTA TPS among others.
During the year under review, the Division bagged the largest human safety
aspects modification supply and service order from GETCO for 1650 Nos.
panels worth Rs. 5.30 crores. The division developed 12 kV Vacuum Contactor
and has already supplied about 140 Nos.
In the year the total order booking was of Rs. 58.05 crores, which includes
a major order worth Rs. 10 crores from GETCO, Gujarat and M/s. Fernace,
Delhi worth Rs. 5.30 crores. At the year end, the division had orders on
hand worth Rs. 19 crores.
As reported last year, the Company has entered into an agreement with
Elemecon Ltd., U.K. for engineering and design services to enable the
division to manufacture 12/17.5 kV Ring Main Unit (RMU) and associated
components. This year, division has successfully developed a prototype and
a few samples tested, have passed all internal tests.
In the Financial year 2012-13, the division is expected to do the
International Certification testing of RMU at Italy/Germany before
introducing the same in the market. The division intends to enter in the
market with this product by April 2013.
With the continuous thrust of the Government in the Power Sector, the
requirement of Medium Voltage Switchgear is bound to grow and the division
is expecting to improve its performance in the years to come.
During the year under review, the Company has total exports valued at
Rs.4.17 crores. The Company`s major exports are to Sultanate of Oman for
Switchgear, Vietnam and Indonesia for Hydel Turbines. In the years to come,
the Company is looking forward to enhancing its export market in other
Your Company has not accepted any deposits from the Public during the year
The observations made in the Auditors` Report are self explanatory and are
also clarified in the Notes forming part of the Accounts and therefore, do
not call for any further comments under Section 217(3) of the Companies
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
As required by the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988, the relevant data pertaining to
conservation of energy, technology absorption and foreign exchange earnings
and outgo are given in Annexure-A forming part of this Report.
PARTICULARS OF EMPLOYEES
The information required under Section 217 (2A) of the Companies Act,1956
and the Rules made thereunder, is given in the Annexure to this Report and
forms part of the Report. However, in terms of Section 219(1)(b)(iv) of the
Companies Act,1956, the Report and Accounts are being sent to the
shareholders excluding the aforesaid Annexure. Any Shareholder interested
in obtaining copy of the same may write to the Company Secretary at the
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges,
Management Discussion and Analysis, a Report on Corporate Governance and a
Certificate from the Auditors of the Company are given in the Annexure-B
and Annexure-C respectively which form part of this Report.
DIRECTORS` RESPONSIBILITY STATEMENT UNDER SECTION 217(2AA) OF THE COMPANIES
The Directors confirm that:-
(i) In the preparation of the annual accounts, the applicable accounting
standards have been followed by the Company;
(ii) Such accounting policies have been selected and consistently applied
and judgements and estimates made 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, 2012 and of the Profit of the Company for the year ended on that
(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 and for
preventing and detecting fraud and other irregularities;
(iv) Annual accounts have been prepared on a `going - concern` basis.
Your Directors are very sad to inform you about the sudden and untimely
demise of Ms. Keki R. Patel, Wholetime Director of the Company on 27th
Ms. Keki R. Patel was a Graduate in Commerce and had considerable
experience in the areas of General Management, Finance and Internal Audit.
She had been working with the Company for the last 34 years in various
capacities. She was serving in the Company as a Wholetime Director since
30th July, 2003. Throughout her association with the Company, she made
significant contribution towards the achievement of the objectives and
growth of the Company.
Your Directors appreciate the valuable services and tireless efforts put in
by Ms. Keki R. Patel during her tenure with the Company.
We pray the Almighty to let her enlightened soul remain in peace and to
give patience and strength to her family to bear this untimely loss.
In accordance with the provisions of the Companies Act, 1956 and Articles
of Association of the Company, Dr. M. Ramamoorty and Dr. M.H. Mehta retire
by rotation at the forthcoming Annual General Meeting and being eligible,
offer themselves for re-appointment.
Brief details about Dr. M. Ramamoorty and Dr. M.H. Mehta as required under
the Corporate Governance Code, are given hereunder:
Dr. M. Ramamoorty (75) is B.E. (Hons.) from Andhra University in 1957 and
M.E. from IISc, Bangalore in 1959. He obtained his MASc and Ph.D. from
Toronto University in 1965 and 1967 respectively. In 1967, he joined IIT
Kanpur as a Faculty Member in the Electrical Engineering Department where
he became Professor in 1972. He established for the first time in India a
graduate programme in Power Electronics at IIT, Kanpur in the year 1968. He
has also worked with Hindustan Brown Boveri Ltd. (now M/s. ABB) as Chief of
Research. In ABB, he was responsible for development of a number of
prototypes in Switchgear, relays and instrumentation. He joined the Central
Power Research Institute (CPRI) as its first Director General in 1983. He
retired from services in 1994. During his tenure, CPRI became a well-
recognised research and testing laboratory in the Power Sector.
Dr. M. Ramamoorty took over as Director of ERDA in 1995 and left in 2006 to
take over as Advisor of ERDA. He has worked as visiting Professor in a
number of Universities abroad which include University of Sydney,
Washington State University, Worcester Polytechnic Institute, University of
British Columbia, etc.
He is Fellow of IEEE and Indian National Academy of Engineering. He is also
the recipient of number of awards which include the Vasvik award, Bimal
Bose award, Jawaharlal Nehru Birth Centenary award, Visveswariah Memorial
award, Pandit Madan Mohan Malavya award, National Design award, Power
Engineers National award, IISc Alumnus award, N.P.S.C. award, Life Time
Achievement Award from IEEMA and was distinguished lecturer for Region 10
of IEEE. He was also awarded "Hari Om Ashram Prerit Lecture award" from
SPRERI, Vallabh Vidyanagar.
He has published more than 200 technical papers in reputed Journals and has
been actively associated with Power Sector for over three decades. Under
his Directorship, ERDA received many recognitions and accreditations and
has become one of the few self supporting research and testing institutions
in the country.
He has been awarded Honorary Life Membership of Society of Power Engineers
for his contribution to the Power Sector.
Dr. M.Ramamoorty is not a Director in any other Company.
Dr. M.H.Mehta, (70), is B.Tech and Ph.D. from IIT, Mumbai. Currently, he is
the Chairman of the Science Ashram/Gujarat Life Sciences Pvt. Ltd. and
President of National Bioshield Society. He was awarded Padma Shri Award in
2011 by the President of India.
He was a visiting Scientist at the Universities of Arizona and California,
in USA. He worked at Bhabha Atomic Research Centre from 1972 to 1976 on
Waste treatment project. He worked at Gujarat State Fertilizer Co. Ltd.
(GSFC), one of the largest Agro Industrial Complexes in India as Executive
Director. He was also Vice Chancellor of Gujarat Agriculture University in
2002-03. He has been an invitee speaker at leading
institutions/Universities in USA, Japan, Sweden, Bangladesh, Poland,
Australia, etc. He holds 15 patents and has authored 3 books and 150
He was also the invitee member of Steering Committee of Planning
Commission, Govt. of India, New Delhi. He is also the President, Indian
Association for IT in Agriculture (IAITA) and appointed as Hon. Chairman-
National Committee for Agriculture Technologies-NRDC, New Delhi.
Dr. M.H. Mehta is not a Member of any Committee of Directors of any other
The Members are requested to appoint Statutory Auditors at the ensuing
Annual General Meeting to hold office from the conclusion of the said
meeting until conclusion of the next Annual General Meeting. M/s. V.H.
Gandhi & Co., Chartered Accountants, Vadodara, the existing Auditors have,
under Section 224 (1B) of the Companies Act, 1956, furnished Certificate of
their eligibility for re-appointment.
As per the requirement of Central Government and pursuant to Section 233B
of the Companies Act, 1956, your Company carries out an audit of cost
records relating to Electric Motors and Power Driven Pumps every year.
Subject to the approval of the Central Government, the Company has
appointed R.K.Patel & Co., Cost Accountants, the existing Cost Auditors
having their head office at 314, Phoenix Complex, Nr. Suraj Plaza,
Sayajigunj, Vadodara, as Cost Auditors to audit the cost records of Motors
and Pumps of the Company for the Financial Year 2012-13 in compliance of
Cost Audit Order No.52/26/CAB-2010 dated 24th January, 2012.
As per Cost Audit Order No.52/26/CAB-2010 dated 24th January, 2012, the
Company is subject to cost audit under industry specific order and is now
required to get its cost records relating to Engineering products such as
Generator, Turbine, Switch Gear and Relay Panels for the Financial Year
2012-13. Subject to the approval of the Central Government, the Company has
appointed Y.S.Thakar & Co., Cost Accountants having their head office at
SF-7, Vrund Complex, Productivity Road, Akota,Vadodara, for auditing the
cost records relating to Engineering products for the Financial Year 2012-
The Cost Audit Reports for the Financial Year 2010-11 which was due to be
filed with the Ministry of Corporate Affairs on September 27, 2011 was
filed on 23rd September, 2011.
Your Directors place on record their appreciation for the excellent support
the Company has received from its employees, customers and shareholders.
They also express their sincere thanks to the Bankers and various State
Governments for the valuable support extended to the Company.
On Behalf of the Board of Directors
Rahul N. Amin
Chairman & Managing Director
Date : 24th May, 2012
ANNEXURE `A` TO DIRECTORS` REPORT
Statement containing particulars pursuant to Companies (Disclosure of
Particulars in the report of Board of Directors) Rules, 1988 and forming
part of Directors` Report.
A. CONSERVATION OF ENERGY: Energy Conservation Measures taken:
i) T5 28W energy saver Tube Light installed in place of 40 W Tube Light.
ii) Metal-hailed lights installed in place of high bay mercury lights in
iii) Old window air-conditioners replaced by new split air-conditioners for
iv) Awareness about the need for energy conservation at all levels of
employees is being created through posters, hoardings, etc.
B. TECHNOLOGY ABSORPTION
(a) Research & Development
1. Specific core areas in which R&D was carried out by the Company:
- Medium Voltage Switchgear
- Rotating Electrical Machines (Motors and Generators)
- Hydraulic Turbines and Pumps, including Micro-Turbines
- Electronic Control System (including Automatic Voltage Regulators)
- Direct drive wind energy converter using Permanent Magnet Generator
2. Benefits derived as a result of above R&D:
Increasing technical and price competition from the overseas MNCs and also,
to some extent, from within the country, have been partially overcome by
the internal R&D work, through up-gradation and improvement of various core
product designs and processes. Every effort for cost reduction has been
made through Value Engineering. The technical competitiveness has been
tackled through re-engineering product range extension with value addition
in the core products.
3. Future Plan of Action:
The future R&D activities will be directed towards the consolidation of
existing product range through up-gradation, addition of new products to
enhance the range with special focus on performance & cost effectiveness
thus creating value addition by various means. Considering the business
potential, competitors` product range and market niche, new technologies/
processes and new state-of-the-art software will be introduced with the
help of in-house R&D development or, if necessary, acquiring technologies
from known external sources. Increased use of advanced and latest state-of-
the-art softwares like Pro/e, CFX, ANSYS-Mechanical, RMXprt, Maxwell,
Magnet and ThermNet for design/development and also improvement in
performance parameters; alongwith cost reduction will be the top priority.
4. Expenditure on R&D:
(Rs. in Lakhs)
a) Capital 107.72
b) Recurring 556.06
c) Total 663.78
d) Total R&D expenditure as percentage
of total turnover 1.30%
(b) Technology Absorption, Adaptation and Innovation
1. Efforts in brief, made towards technology absorption, adaptation and
a) In the area of medium voltage switchgear, the activities were directed
towards up-gradation of existing switchgear to meet the latest IEC
Standards. In addition, cost reduction and Retrofitting and finally type-
testing as per the latest version of IEC: 62271-100 was continued and
successfully type tested at PEHLA Test Laboratory at Ratingen and Berlin,
Germany. In addition, R&D is continuously carried out, in the areas of
applied research and use of alternative materials and processes.
b) In the rotating machines group, major work was mainly directed towards
indigenous development of larger rating motors and generators for various
applications in core industries. New product development and cost reduction
in the existing designs, processes and process-time reduction in the
existing products are undertaken. New Die Casting plant for better
productivity and Hydraulic Dynamometer for type-testing of motors has been
installed. Gearbox for testing vertical motors with dynamometer has been
planned. New products like Direct-drive Permanent Magnet-Wind Energy
Generators are being planned. Improved version of Wind Energy Generator
750kW / 200 kW 1500/1000 RPM CTFG-450Lx dual speed Wind Induction Generator
is developed & supplied.
c) In the pump group, the major effort was towards consolidation,
standardisation and extension of the existing range of pumps. Extensive use
of CFD Analysis software has been the thrust area to improve efficiencies
for all pump ranges.
d) In the turbine group, major efforts towards design/development related
to high head Francis turbine range and vertical Semi/Full Kaplan Turbine
and use of CFD Analysis software package for evaluation of Hydraulic
Performance and use of ANSYS-Mechanical software to evaluate structure
design of Kaplan and Francis Turbines enabling cost effective turbine
2. Benefits derived as a result of above efforts.
(a) Medium Voltage Switchgear
- Type testing and recertification of 36kV 25kA, 1250, Amp indoor circuit
breakers with VD36 panel as per IEC 62271-100 and IEC62271-200 at PEHLA,
Germany and ERDA.
- Type testing and recertification of 36kV 25kA, 1250 Amp outdoor circuit
breaker as per IEC 62271-100 at PEHLA, Germany and ERDA.
- Development and successful type testing of 7.2kV, 400Amp 8kA Contactor.
- Development and successful type testing of 12kV, 400Amp 8kA Contactor.
- As per latest IEC 62271-200 human safety compliance is specified in the
standard. Jyoti has supplied more than 2000 panels in past few years to
support the customer and comply with the safety requirement. Jyoti has
developed safety interlocks that can be installed at site to comply with
the human safety aspects. GETCO has appreciated the proposal and awarded
for modification in existing1650 panels.
- Development and successful commissioning of 12kV, 1600 and 2500 Amp 40kA
retrofit breaker for NGEF MOCB type EKU-5016 and EKU-5016 along with
(b) Rotating Electrical Machines
- Design, development and testing of large rating, low speed, vertical /
horizontal motors for Lift Irrigation Schemes.
- Improved version of Wind Energy Generators.
- Process-time reduction through modular construction of stator and rotors
for larger rating motors.
- Cost reduction designs through Value Engineering Analysis, of 415 Volts,
3.3kV, 6.6kV and 11kV motors on demand.
- Design and development of larger rating, high speed, Hydel generator for
- Design & development of larger rating generators for Hydel Application.
- 1000 VM pumps in 2 stage developed for first time for KNNL project.
- 1400 VM pumps developed for SSNNL (largest pump developed so far)
- 300 VP axial flow pumps developed and supplied to Haryana Irrigation
The following activities have been carried out by Hydel R&D.
- New Francis turbine model (with specific speed 85) developed and included
for high head ranges.
- Design and stress analysis of Pelton bucket has been checked and
methodology verified by third party.
- Two stage closing system and governor control for guide vane operating
mechanism is introduced for long penstock installations.
- Successfully designed and developed four Jet Vertical Pelton Turbine for
export project. It is the first vertical multi jet Pelton turbine unit in
impulse turbine range.
- Introduced and successfully tested coating for Pelton bucket to prevent
erosion of bucket due to silt contents in the water.
- ANSYS-Mechanical software is extensively used for structural analysis of
turbine components enabling material control.
- Turbine systems (cooling water, drainage, dewatering and oil piping
system) are standardised.
- Turbine OPU developed for two stage closing of guide vane.
- Successfully designed, manufactured and tested DN 600 (PN36) & DN1000 (PN
32) spherical valves.
3. Technology imported and status of absorption
(i) Vacuum Circuit Breakers from Toshiba Corporation, Japan. The technology
has been fully absorbed for 12 kV and 36 kV Vacuum Circuit Breakers.
(ii) SF6 prototype Ring Main Unit is under development based on designs
received under technical agreement with ELMECON Ltd., U.K.
(iii) High head Francis turbine model design for head range upto 260
C. Foreign Exchange Earnings and Outgo:
a) Exports (including deemed Exports) Rs. 416.73 Lakhs
b) Total Foreign Exchange used and earned
i) Total Foreign Exchange used Rs. 11525.55 Lakhs
ii) Total Foreign Exchange earned Rs. 372.15 Lakhs
MANAGEMENT DISCUSSION AND ANALYSIS
Industry Structure and Developments
Jyoti Ltd. is a leading engineering Company offering high quality products
and services to clients in India and in the international market.
Established in 1943, today Jyoti Ltd. is serving the vital fields of
national and international economy such as:
- Power (Thermal, Hydel & Nuclear) Generation, Transmission and
- Agriculture, providing irrigation through pumping systems.
- Water Supply & Sewerage Schemes.
- Defence-particularly Naval & Marine Establishments.
- Core Industries like Steel, Cement, Paper, Sugar, Fertilisers, Chemicals
It also undertakes turnkey contracts involving civil and electrification
projects. Mainly, it has 4 Divisions: Engineered Pumps & Project Division
(EPPD), Hydel Systems, Rotating Electrical Machines (REM) and Switchgear &
Switchboards. All Divisions are ISO 9001 certified.
The Company has achieved the record turnover of Rs. 501 crores for the year
under review inspite of adverse and challenging economic conditions.
Opportunities and Threats
Power is a strategic input and a prime mover for economic and social
development of a country. With increased infrastructure spending by
Government of India coupled with numerous power projects anticipated in the
country, your Company foresees sustainable growth opportunities in the
years to come. The Company has a major presence in the small Hydro and Lift
Irrigation sectors where a stronger business potential is anticipated as
the Company`s products are geared up for this sector.
With the globalisation, new international players are making a thrust in
the Indian market by creating additional manufacturing capacities. This
would result in further intensification of competition leading to price
The Company expects long term outlook to be positive in water and power
sector with the Government addressing specific issues and fostering
investments to boost these sectors. The Government also envisages
significant capacity additions in the coming years thereby creating a huge
demand for supply of Power generation equipments.
Risk and Concerns
The Competition is expected to be more aggressive leading to price
pressures. Long execution period of large Irrigation Projects with extended
cycle time of cash flows is another area of concern. Uncertainty in Global
economic growth coupled with inflationary pressures is expected to impact
the growth rate in India and consequently the Company`s operations. It is
surmised that sustained investment in infrastructure, stability of
Government policies, increasing the productivity through latest state-of-
art techniques and processes, better working capital management and
efficient inventory control are pre-requisites for restoring health and
normal growth of any industry.
This is not applicable to the Company as there is only one identified
Internal Control Systems
The Company is under process of strengthening own Internal Audit
Department, besides taking the help of external agency for system audit and
for other aspects of operation. Pre-audits are carried out in certain
important areas. There are adequate checks and internal controls for
compliance of various statutory requirements. The Audit Committee of the
Board of Directors reviews regularly the Internal Audit Reports.
Financial Performance and Operational Efficiency
On the net sales of Rs. 501 Crores (31% increase over previous year), the
EBIDTA margin was Rs. 52 crores and PBT margin was Rs. 11 crores. It was
the milestone achievement for the Company as it crossed the sales target of
Rs. 500 crores. However, the bottom-line was affected due to increase in
overall material cost, interest and depreciation.
The Company is in capital goods industry having EPC contracts undertaken
for large Irrigation Projects and small to medium Hydro Projects, where
erection and commissioning of contracts, many a times, are delayed beyond
six months due to various reasons beyond the Company`s control. Secondly,
the Company`s sales are much higher in last quarter of January to March
(about 40% -45%). This results into heavy amount of receivables at year
end. The year under review has seen much higher level of receivables as
there was considerable delay in collection pattern due to liquidity
constraints with our customers. It is expected that this high level of
receivables will be brought to more reasonable level once the difficult
market situation improves in the current year. All the same, the Company
has stepped up its efforts to monitor the collection aspects with regard to
The Company`s R&D efforts not only drive new product development, but also
finding the ways to reduce the material contents. It has also been
endeavored to improve the products-mix so that there would be better profit
The Company considers its employees as its valuable assets. The Company has
a total manpower of 1031 as on 31st March, 2012. The Company has embarked
on a transformational talent attraction, retention and development program.
Developing performance oriented culture, succession planning, Mentor
development, creating leadership pipeline, developing high potentials are
few of the HR initiatives taken which are aligned with the Business goals
of the Company.
The Company is proud of its training and development programs for all its
employees and has allotted a major budget to enhance competencies of all
During the year under review, the Company continues to have cordial and
harmonious relation with employees with a number of employee involvement
The Company is implementing various HR Initiatives like Kaizen-5S: A change
for better, Balance Scorecard, etc. to improve the motivation levels of the
employees keeping in view the tough business environment and the need to
retain the talent.