Directors` Report to the Shareholders
Your Directors present their Fifty Fourth Annual report and the Audited Accounts of
your Company for the year ended March 31, 2013.
Sales for the year under review were Rs. 1,897 crores compared to Rs. 2,051 crores in
the last year. The financial results of your Company for the year under review are as
(Rs. in Lakhs)
|Gross profit before finance cost and depreciation
|Profit before tax for the year
|Profit after tax for the year
|Transfer to General Reserve
Your Directors are pleased to recommend, out of the profits of the current year, a
dividend of Rs. 8.10 per share on the paid-up capital of the Company as at 31st March,
2013. The dividend will be paid to all the shareholders whose names appear in the Register
of Members as on the Book closure date.
If the dividend recommended is approved at the Fifty Fourth Annual General Meeting, a
sum of Rs. 7,99,42,496.40 will become payable. A dividend tax of 16.995% (including
surcharge) will be paid on the dividend declared.
Management Discussion and Analysis
The growth in the global economy was weak in 2012 and is expected to stay sluggish in
2013, as fiscal adjustments are expected to slow growth in advanced economies and delay
cyclical recovery in emerging economies. In India, the GDP growth in the last fiscal was
at 5%, the lowest levels in the last decade. The persistent high levels of inflation
adversely impacted consumption while structural bottlenecks affected investments. The last
financial year saw the second consecutive year of decelerating growth and the uncertainty
in the business environment affected all major industry segments serviced by your Company.
The passenger vehicle segment was affected by these macroeconomic factors and
registered only a marginal growth last year. The passenger car sub-segment was affected by
the escalation of labour issues in the first half of last year and the price gap between
diesel and petrol, and saw negative growth in the last year. This was offset by a strong
performance by the diesel dominated utility vehicle market. The utility vehicle segment
sales were also boosted by popular new models. The small truck segment continued to grow
albeit at a slower pace with customers segmenting the market with new products in both
goods and passenger applications.
The medium and heavy commercial vehicle segment was badly affected by the slowdown in
the Indian economy. The slowing down of infrastructure projects, the stoppage of mining
activities in some states and the general slowing down of demand in the economy resulted
in under utilization of trucks. The last three quarters of the year under review saw a
steep decline in truck production in the country as the medium and heavy commercial
vehicle segment had a negative growth of 29% over the year. There was also a marginal
negative growth in the light commercial vehicle sector.
After a number of years of robust growth, the agricultural tractor market in India saw
a negative growth of 8% last year, due to deficit rainfall in some states, high interest
rates and at the same time huge grain stocks with the Government. The tractor in rural
India is used not only for agriculture but also for haulage where demand was affected by
The slowdown in the global economy last year affected the demand for construction and
mining equipment significantly especially towards the second half of the year. In this,
the mining sector globally was especially hard hit as commodity prices remained at low
levels through the year. The coal industry which is one of the major users of mining
equipment, was severely hit by the movement from coal to shale gas as an energy source in
The power equipment sector which is serviced by your Company was very badly hit last
year as project clearances slowed down significantly. The sector was also affected by coal
linkages and environmental clearance issues. The gap between demand and supply widened
resulting in a significant increase in power tariff across the country.
The slowing down in growth in all major industry segments affected the growth of your
Company last year, and saw the sales decline by 7.5%. The decline in sales was more
towards the second half of the year as sales to commercial vehicle and construction and
mining equipment customers fell steeply during this period. The slowing down of the
economy in a competitive environment, with high inflation especially in manpower and
energy costs adversely affected the performance of your Company. Nevertheless, in the
passenger vehicle segment, your Company was able to increase its share of business and
grow in a sluggish market. Similarly, your Company was able to increase its fabrication
business supplying energy equipment manufacturers in spite of the adverse business
environment in that sector. In all other segments, your Company top-line was in line with
the respective industry segments. Your Company launched an after-market brand WILGO in the
last year and hopes to build this business in the years to come. In the year under review,
your Company received a number of awards from its valued customers both domestic and
international, recognising our performance as their suppliers.
In spite of the difficult business environment, your Company has continued its internal
drive towards operational efficiencies and cost management. The review mechanism of
internal projects and processes has been made more robust. Your Company has also
re-organized itself internally into business units to bring better focus to the specific
requirements of business segments. It is only with this relentless focus on our internal
processes that we have been able to tackle the significant obstacles in the last financial
The year ahead is likely to see the Indian economy growing at around the same level as
last year. The passenger vehicle and commercial vehicle segments are expected to grow only
marginally in the current year. The expectations of a good monsoon, are likely to result
in some growth in the agricultural tractor segment. However, the construction and mining
industry worldwide continues to be depressed. Your Company is likely to benefit from the
JNNURM scheme as the government plans to purchase city buses with air suspension systems
under the scheme in the coming year. Similarly, we do expect some movement in the power
equipment segment, especially in the second half of the year.
Under Article 94(3) of the Company, Mr S Prasad and Mr J M A Akers retire by rotation
and being eligible offer themselves for re-election.
Your Board of Directors at the meeting held on 05.02.2013, re-appointed Mr Srivats Ram
as Managing Director for a period of 5 years with effect from 01.05.2013 subject to the
approval of members in the ensuing Annual General Meeting.
In pursuance to Clause 49 of the Listing Agreement with the Stock Exchange, Corporate
Governance Report is given elsewhere and forms part of this Report.
Directors` Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956 and Corporate Governance
Voluntary Guidelines, 2009 issued by the Ministry of Corporate Affairs, your Directors
1. in the preparation of the annual accounts, the applicable accounting standards have
2. such accounting policies have been selected and applied consistently and judgments
and estimates made that are reasonable and prudent so as to give a true and fair view of
the state of affairs of your Company as at 31st March, 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 for safeguarding the assets
of the Company and for preventing and detecting fraud and other irregularities;
4. the annual accounts have been prepared on a going concern basis and
5. proper systems are in place to ensure compliance with all laws applicable to the
M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai retire at the conclusion
of the Fifty Fourth Annual General Meeting and are eligible for re-appointment. The
Directors recommend their re-appointment.
Internal Control and Audit
The Company`s internal control system provides for adequate documentation of policies,
guidelines, authorities and approval procedures, which helps in ensuring that the assets
of the Company are properly protected.
The effectiveness of the internal control system is constantly monitored by the
internal audit department along with the external audit firms appointed to carry out the
internal audit of the various units of the Company.
The highlights of the internal control and internal audit reports are placed before
each Audit Committee meeting along with the recommendations and responses of the
management. Besides, statutory auditors also present their suggestions to the members for
improvements in control and compliance.
Pursuant to the circular dated 24th January, 2012 of the Ministry of Corporate Affairs,
your Company has appointed M/s Geeyes & Co, Cost Accountants, Chennai, (Firm
Registration No. 00044) as Cost Auditor for the year 2012-13, with the consent of the
Central Government, for the audit of cost accounts maintained by the Company.
Your Company has always attached a high degree of importance to safety, health and
environment standards, wherein the objective is to excellence in Safety without any
Your Company is working with DuPont, the world leader in industrial safety, to
implement several initiatives for achieving excellence in safety. Your Company anticipates
such implementation will see an all-round improvement in various essentials of Safety in
By persistent efforts in Safety management, the Company was able to achieve
considerable reduction in incidents.
The Central Safety Committee of the Company, continues to monitor safety, health and
environment performance and provides necessary direction for improvement through regular
monthly reviews, which includes proper training to the employees, creating awareness on
safety to all the employees. The Central Safety Committee is also supported by several
subcommittees, which also co-ordinates and monitors Safety management in the Company.
Corporate Social Responsibility
Your Company believes that working with the local communities is an integral part of
business. Towards this, your Company has taken sustainable initiatives in the field of
health and supplementary education in the year under review to underprivileged children in
rural areas around the Company`s plants.
Particulars of Employees
None of the employees of the Company was in receipt of remuneration in excess of the
limits prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies
(Particulars of Employees) Rules, 1975.
Open Offer by Titan
Consequent to the acquisition of shares by Titan International Inc., in Titan Europe
Plc., an Open Offer was made by Titan Europe Plc. (Acquirer) along with Titan
International Inc., the Person Acting in Concert (PAC) with the Acquirer to acquire equity
shares of Rs.10/- each of Wheels India Limited, in order to comply with the SEBI
Pursuant to the above Open Offer Titan Europe acquired 5,74,170 equity shares of Rs.
10/- each in the Company.
Particulars prescribed by the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 are enclosed in the annexure and forms part of this
The Directors wish to thank United Bank of India, State Bank of India, Standard
Chartered Bank, HDFC Bank Limited, and other Banks for their continued support.
Your Company continues to have the full co-operation of all its employees. The
Directors would like to place on record the appreciation of the efforts of the employees
in controlling costs and improving the profitability of the Company.
||On behalf of the Board of Directors
|May 27, 2013