Your Directors have pleasure in presenting their Twenty-third Annual Report together
with the audited Statements of Accounts for the year ended 31st March, 2013.
||( Rs in Millions)
||Year ended 31.3.2013
||Year ended 31.3.2012
||Year ended 31.3.2013
|Profit before Depreciation, Interest & Tax
|Less: Depreciation & Prior Period adjustments
|Profit before Tax
|Provision for Tax
|Profit after Tax
|Add: Balance brought forward
|Net Profit Available for appropriation
Your Directors are pleased to recommend a higher dividend of 40% ( Rs 2/- per
share of Rs 5/- each) as against 27.5% paid for the previous year. The total payout on
account of dividend including tax thereon will be Rs 25.74 million. Dividend if declared
will be free of tax in the hands of the shareholders.
YEAR UNDER RETROSPECT
While during the year global economy remained dis-appointing, sovereign debt crisis in
Euro zone, political turmoil in Middle East and volatile crude prices further weakened the
growth prospect. In India inflation remained high for most of the year. It is pertinent to
note that whereas agriculture and service sectors continued to perform well, it was the
manufacturing sector that mostly attributed to economic slow down. Rising cost of credit
and activist monetary policy to check inflation further worsened the investment climate.
Even in odd economic situation, your Company turned out one more year of record
achievements. On a standalone basis, though the net sales and total income were higher by
13%, due to increased employee cost and higher depreciation, the pre-tax profit was
marginally lower compared to previous year. The Company recorded a net sale of Rs 4,314.31
million as against Rs 3,808.24 million in the previous year. The total income including
other income for the year under review was Rs 4,351.00 million as against Rs 3,841.75
million a year ago. Pre-tax profit was Rs 262.03 million as against Rs 279.60 million in
the last year.
Your Directors are pleased to report that the consolidation of overseas operations as
reported in the last year has commenced giving positive results. On consolidated basis
(inclusive of working of the overseas subsidiaries), the net sales for the year was Rs
5,237.94 million as against Rs 4,687.19 million in the previous year. The pre-tax profit
also increased by 8% at Rs 219.04 millions as against Rs 202.93 million a year ago.
During the year, the Company spent Rs 170.00 million towards addition in fixed assets
including plant and machinery and capital work in progress. The entire capital expenditure
was funded from the internal accruals.
Your Directors are hopeful that initiatives taken by the Reserve Bank of India will
fructify to combat the inflation. So far as Indian is concerned there is rise in income of
individuals and there is constant change in consumption pattern. This will definitely lead
to improvement in GDP. The Company is continuously developing new products for other
engineering and infra related industries. This will enable the Company to sustain the
growth in years to come.
MANAGEMENT DISCUSSION & ANALYSIS
A detailed review of the industrial growth vis--vis the growth of the Company
and the future outlook is given under the head Management Discussion and Analysis
Report, which forms part of this report.
Your Directors are pleased to report that the exercise undertaken for consolidating
operations of overseas subsidiaries as reported in the previous years
Directors Report was completed during the year. Accordingly, the entire
manufacturing operation in Austria was shifted to Slovakia. This exercise has fructified
and has resulted in improved overseas operation both in terms of sales and profit.
Consolidated Financial Statement pursuant to Clause 41 of the Listing Agreement with
the Stock Exchanges and prepared in accordance with the Accounting Standards prescribed by
the Institute of Chartered Accountants of India, are annexed.
A statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary
companies is attached to the accounts.
In terms of the general exemption granted by the Ministry of Corporate Affairs
vide circular No. 02/2011 dated 8th February, 2011 for not attaching the annual accounts
of subsidiaries and in compliance with the conditions enlisted therein, the report
and annual accounts of the subsidiary companies for the financial year ended
31st March, 2013 have not been attached to the Companys Accounts.
The annual accounts of the subsidiary companies and the related information are kept
open for inspection by any shareholders at the Registered Office of the Company and of the
concerned Subsidiary Company. Any shareholder, who wishes to obtain a copy of the said
documents of any of the subsidiary companies, may send a request in writing at the
Registered Office of the Company.
LISTING OF EQUITY SHARES
The Companys Equity Shares are listed on the Bombay Stock Exchange Ltd. and the
National Stock Exchange of India Ltd.
Your Company is committed to adhere to Corporate Governance guidelines set out by SEBI
and has complied with all the mandatory provisions of Clause 49 of the Listing Agreement.
A separate section on Corporate Governance together with Certificate from the
Companys Auditors confirming compliance is set out in the Annexure forming part of
DIRECTORS RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to information and explanations
provided to them, your Directors make the following statement, pursuant to Section
217(2AA) of the Companies Act, 1956 that:
1. In the preparation of annual accounts, the applicable accounting standards have been
followed and that no material departure have been made from the same;
2. Appropriate accounting policies have been selected and applied them
consistently and 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 financial year March
31, 2013 and of the profit of the Company for the year ended on that date;
3. 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, detecting fraud and
4. The annual accounts have been prepared on a going concern basis.
Mr. Asis Ray resigned as Director on 31st July, 2013. Your Directors wish to
place on record their appreciation for valued guidance and services rendered by Mr.
Asis Ray during his tenure as Director of the Company.
To comply with the requirement of the Companies Act, 1956 Mr. Junichi Suzuki shall
retire by rotation and being eligible, offers himself for re-appointment. Details
of Director seeking re-appointment are included in the Corporate Governance Report.
Relations between the management and the employees remains cordial throughout the year.
Information as required in pursuance of Section 217(2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975, is annexed and forms part of
CONSERVATION OF ENERGY, ETC:
Information pertaining to conservation of energy, technology absorption and foreign
exchange earnings and outgo pursuant to Section 217(1(e) of the Companies Act, 1956 is set
out in the Annexure forming part of this report.
The observations made in the Auditors Report and details provided in Notes to the
Accounts are self-explanatory and therefore, do not call for any further comments under
the Companies Act, 1956.
Asit Mehta & Associates, Statutory Auditors of the Company shall retire at the
forthcoming Annual General Meeting and are eligible for re-appointment. Members are
requested to appoint Auditors for the current financial year and fix their remuneration.
Pursuant to the various circulars issued by the Ministry of Corporate Affairs, the
Company is required to maintain cost records and get the same audited by cost auditor. Mr.
Francis Xavier Nelson Leo, a qualified Cost Accountant, has been appointed to conduct the
cost audit and submit his report.
YOUR DIRECTORS WISh TO ThANk ENkEI CORPORATION, JAPAN, OUR TEChNICAL COLLABORATOR, FOR
ThEIR vALUED SUPPORT AND GUIDANCE FOR DEvELOPMENT OF NEW PARTS. YOUR DIRECTORS ALSO WISh
TO PLACE ON RECORD ThEIR DEEP APPRECIATION FOR EXEMPLARY CONTRIBUTION MADE BY EMPLOYEES AT
ALL LEvELS. YOUR DIRECTORS TAkE ThIS OPPORTUNITY TO EXPRESS ThEIR GRATITUDE FOR UNSTINTED
SUPPORT EXTENDEDBY CUSTOMERS, SUPPLIERS, BANkERS AND OThER BUSINESS ASSOCIATES, AND AT
LAST BUT NOT LEAST ThE ShAREhOLDERS FOR ThE CONFIDENCE REPOSED IN ThE MANAGEMENT.
|On behalf of the Board of Directors
Place: Shikrapur, Pune
Date: 31st July, 2013
PARTICULARS REQUIRED UNDER THE COMPANIES ACT (DISCLOSURE OF PARTICULARS IN THE REPORT
OF THE BAORD OF DIRECTORS) RULES, 1988
A. CONSERVATION OF ENERGY
During the year ISO 14001-2004, surveillance Audit was carried out by / TUv Reinland
and auditors recommended continuation of the ISO 14001 for the year.
The various steps taken for energy conservation during the year were:
Installation of capacitor banks to improve power factor
Installation of automatic voltage regulators
Energy efficient compressor system
Utilization of natural light for factory lighting during day time
Details of energy consumption : Form A
A) POWER AND FUEL CONSUMPTION :
||For the year ended 31.03.2013
||For the year ended 31.03.2012
|a) Purchased Quantity
|Average rate per unit
|b) Generated Quantity
|Average rate per unit
|2. LDO/ FURNACE OIL
|Average rate per unit
|B) CONSUMPTION PER UNIT OF PRODUCTION
|2. LDO/ Furnace Oil
B. TECHNOLOGY ABSORPTION
FORM B, Form for disclosure of particulars with respect to
RESEARCH AND DEVELOPMENT
Expenditure on R&D for the year ended 31st March, 2013
|A. Capital Expenditure
|B. Recurring Expenditure
|Total R&D expenditure as a percentage of total income
Technology absorption, adoption and innovation
The Company has successfully absorbed technology obtained from the foreign
collaborators for aluminum die castings.
C. FOREIGN EXCHANGE EARNING AND OUTGO
|Total foregin exchange earned :
||Rs 262.60 Million
|Total foreign exchange used :
||Rs 304.48 Million
Detailed information on foreign exchange earnings and outgo is also furnished in the
notes to accounts.
STATEMENT PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT, 1956 READ WITH THE
(PARTICULARS OF EMPLOYEES) RULES, 1975 AND FORMING PART OF THE DIRECTORS REPORT
FOR THE YEAR ENDED 31.03.2013.
||Remuneration Gross (Rs Million)
||Date of Employment
||Total Experience (Years)
||Age in Years
||Particulars of Last Employment
|1 Mr. Rajeev Sikand
||Mother son Sumi Systems Ltd.
||head International Business
Employment in the Company is non-contractual.
Remuneration includes salary, allowances and value of perquisites.
Employee mentioned above does not hold (by himself or along with his spouse
& dependent children) more than two percent of equity shares of the Company.
The employee mentioned above is not related to any of the directors of the