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Directors Report of Automotive Axles Ltd.

Mar 31, 2016

The Directors have the pleasure in presenting the 35th Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the financial period ended 31st March 201 6:

FINANCIAL HIGHLIGHTS:

2015-2016 2014-2015

Particulars (12 months) (6 months)

Total Revenue 10,875.44 4,617.03

Profit before depreciation & tax 919.94 338.03

Less : Depreciation, amortization & Loss on assets discarded 404.70 173.21

Provision for Taxation 67.50 59.40

Profit After Tax 347.74 105.42

Balance of Profit from Previous Year 2,298.81 2,223.20

Profit available for appropriation 2,646.55 2,328.62

Appropriations :

Dividend for the year 83.12 15.11

Tax on dividend 6.98 4.16

Transfer to General Reserve - 10.54

Surplus retained in Profit & Loss Account 2,546.45 2,298.81

DIVIDEND

Your Directors are pleased to recommend a Dividend of X 5.50 per equity share of face value of X 1 0/- each for the period ended 31st March 2016 aggregating to X 83.12 million, excluding Dividend Distribution Tax.

The Dividend, subject to the approval of Members at the Annual General Meeting to be held on 12th August 2016, will be paid within 30 days from the date of declaration of dividend to the Members whose names appear in the Register of Members, as on the date of book closure, i.e. from 10th August 201 6 to 12th August 201 6 (both days inclusive).

In terms of the provisions of the Companies Act, a sum of X 304,635/- of unpaid/unclaimed dividends was transferred during the year to the Investor Education and Protection Fund.

PERFORMANCE OF THE COMPANY

The Sales and other income for the financial period (1 2 months) under review wasRs, 1 0,875.44 Million as against Rs,4,61 7.03 Million for the previous financial year (6 months). The Profit before tax (PBT) of X 51 5.24 Million and the Profit after tax (PAT) of X 347.74 Million for the financial period under review, as against Rs, 164.82 Million and Rs, 105.42 Million respectively for the previous financial year.

The Company in its journey towards world class manufacturing has further improved the quality standards towards Zero Chips, Oil & Coolant (COC) initiatives implemented last financial year in all plants, to make it clean from Chips, Oil and Coolant on floor. Further, to improve the standards of Organization Health and Safety, your organization implemented OHSAS 18001 and was certified for OHSAS 1 8001 2007 which is valid for three years.

BOARD OF DIRECTORS

Ms.Sudhasri.A resigned from the Board due to other pressing engagements effective 10th February 2016. The Board places its appreciation for her valuable contributions made during her tenure.

Pursuant to Sections 149 and 1 52 of the Companies Act, 201 3 and in terms of Regulation 1 7 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board of Directors has at its meeting held on 1 0th February 201 6, appointed Ms.Supriti Bhandary as an additional director, who is being proposed to be appointed as an Independent Director with effect from the date of ensuing Annual General Meeting. The requisite resolution for approval of her appointment as Independent Director is being proposed in the notice of the meeting for the approval of the members.

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Joseph A Plomin, Non-Executive Director of the Company retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013.

FIXED DEPOSITS

Your Company has not accepted any Public Deposits under Chapter V of Companies Act, 201 3, during the year.

POLICY ON NOMINATION & REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL (KMP) & OTHER EMPLOYEES

The Company has framed a policy on Nomination & Remuneration of Directors, KMP & other employees as per the requirement of the Companies Act, 2013 which formulates the criteria for determining qualifications, positive attributes & independence of a director and their remuneration. The Nomination and Remuneration Policy is annexed herewith as Annexure - A to this report.

AUDITORS & AUDITORS'' REPORT

The report given by the Statutory Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

M/s. Deloitte Haskins & Sells (Chennai), Bengaluru were appointed as Statutory Auditors of your Company in the Annual General Meeting held on 5th February 2015 for a term of three consecutive years. As per the provisions of Section 1 39 of the Companies Act, 201 3, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting.

No frauds have been reported by the Auditors in their reports.

The Secretarial Audit Report for 2015-16 in form MR-3 is annexed to this Report under Annexure - B

Explanation for observations made by the Company Secretary in Practice :

The compliances under Secretarial Standards on meetings of the Board of Directors have been largely met with but for certain minor improvements which would be complied henceforth.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under and based on the recommendation from the Audit Committee, CS. Pracheta M, Practicing Company Secretary has been appointed by the Board to conduct the secretarial audit of Company''s secretarial and related records for the financial year 201 6-1 7.

CORPORATE GOVERNANCE

Your Company is renowned for exemplary governance standards since inception and continues to lay a strong emphasis on transparency, accountability and integrity.

The Companies Act, 201 3 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (LODR Regulations) have strengthened the governance regime in the Country. Your Company is in compliance with the governance requirements provided under the new law and has proactively adopted many provisions of the new law, ahead of time. Your Company is committed to embrace the new law in letter and spirit. In line with the requirements of new law, your Company has constituted Board Committees. Your Company has in place all the statutory committees required under the law. Details of Board Committees along with their terms of reference, composition and meetings of the Board and Board Committees held during the year, are provided in the Corporate Governance Report.

A Certificate from an Independent Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Regulation 34(3) (Schedule V(E)) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is attached to the Corporate Governance Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are provided as Annexure - C to this report.

ANNUAL RETURN 2015-16

The extract of annual return in MGT - 9 is annexed under Annexure -D

RELATED PARTY TRANSACTIONS (RPT)

In line with the requirements of the Companies Act, 2013 and LODR Regulations, your Company has formulated a Policy on Related Party Transactions which is also available on Company''s website at www.autoaxle.com/Policy.aspx. This Policy specifically deals with the review and approval of Material Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions on annual basis for transactions which are of repetitive nature and / or entered in the ordinary course of business and are at Arm''s Length.

All Related Party Transactions entered during the year were in ordinary course of the business and on arm''s length basis. The particulars on RPTs in AOC 2 is annexed to the Report as Annexure E

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Disclosure on CSR has been annexed to the Report under Annexure F

PARTICULARS OF REMUNERATION OF DIRECTORS & CERTAIN SPECIFIED EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of certain employees, who are covered by the said rules, are set out in the Annexure G to the Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) we have selected such accounting policies and applied them consistently and made 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 the financial year and of the profit and loss of the Company for that period;

(c) we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) we have prepared the annual accounts on a going concern basis; and

(e) we have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) we have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

RISK MANAGEMENT SYSTEM AND ITS POLICY

Your Company introduced the Risk Management System almost a decade back and it has attained the maturity whereby the Enterprise-wise Risk-log-cum-register is being maintained by the departmental head and is being periodically reviewed for adequacy and effectiveness by the Audit Committee and the Board. The Company''s Risk Management Committee is being assisted by Chief Risk-Coordinator. The Risk Management policy developed by the Company aims to cover all the business and other risks, which are revisited at reasonable intervals.

The Board level Committee on Risk Management is formed with the following directors as its members:

(a) Mr. B C Prabhakar, Chairman

(b) Dr. N Muthukumar, Member

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Regulation 34(2)(e) of LODR Regulations, the Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

BOARD ANNUAL EVALUATION

The Nomination & Remuneration Committee arranges for a performance evaluation of the Board, its Committees and its individual Directors on an annual basis. The Committee will conduct an annual review of the role of the Board, assess the performance of the Board over the previous 12 months and examine ways of assisting the Board in performing its duties more effectively.

The review will include:

(a) comparing the performance of the Board with the requirements of the Act;

(b) examination of the Board''s interaction with management;

(c) the nature of information provided to the Board by management; and

(d) management''s performance in assisting the Board to meet its objectives.

A similar review will be conducted for each Committee by the Board with the aim of assessing the performance of each Committee and identifying areas where improvements can be made. The Nomination & Remuneration Committee will oversee the performance evaluation of the Senior Management Team. This evaluation is based on specific criteria, including the business performance of the Company, whether strategic objectives are being achieved and the development of management personnel.

ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation of the positive co-operation received from the Central Government, the Government of Karnataka, Financial Institutions and the Bankers. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the Company resulting in the successful performance of the Company during the year.

Your Directors wish to place on record their appreciation for the continued co-operation and support received from the Kalyani Group, Pune, and Meritor Inc., USA

For and on behalf of the Board of Directors

Place: Pune Dr. B.N. Kalyani

Date: 1 Oth May 201 6 Chairman


Sep 30, 2014

To the Members,

The Directors have the pleasure in presenting the 33rd Annual Report on the business and operations of the Company and the audited accounts for the financial year ended 30th September, 2014.

FINANCIAL RESULTS

(Rsin Million) Particulars 2013-2014 2012-2013

Profit before Depreciation & Tax 553.41 470.87

Less : depreciation & amortisation 294.79 285.29

Provision for Taxation - Current/ Deferred/ Fringe Benefit Tax 76.83 58.60

Profit After Tax 181.79 126.98

Balance of Profit from Previous Year 2,103.79 2,024.87

Profit available for appropriation 2,285.58 2,151.85

Appropriations :

Dividend for the year 37.78 30.22

Tax on dividend 6.42 5.14

Transfer to General Reserve 18.18 12.70

Surplus retained in Profit & Loss Account 2,223.20 2,103.79

REVIEW OF PERFORMANCE

The Gross Sales and other income for the financial year under review was '' 7,576.72 Million as against '' 7,154.12 Million for the previous financial year. The Profit before Tax of '' 258.62 Million and the Profit After Tax of ''181.79 Million for the financial year under review as against '' 185.58 Million and '' 126.98 Million respectively for the previous financial year.

DIVIDEND

Your Directors are pleased to recommend a Final Dividend of '' 2.50 per Equity Share (25%) of the face value of '' 10/- each, aggregating to '' 37.78 (exclusive of tax on dividend) for the financial year ended on 30th September, 2014 for your consideration.

The dividend payout for the year under review has been formulated in accordance with shareholders'' aspirations. The Company''s policy to pay sustainable dividend linked to long term growth objectives of the Company to be met by internal cash accruals.

DIRECTORS

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Joseph A. Plomin Director of the Company, retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offers him for re-appointment.

Mr. Marco Bassi was appointed as an Additional Director based on nomination received from the Meritor Heavy Vehicle System LLC, one of the promoters, in the place of Mr. Chris Villavarayan who resigned from the Board. The Board places its appreciation for the valuable contributions made by Mr. Villavarayan during his tenure. Mr. Bassi holds the office upto the ensuing AGM and his appointment is being sought to be regularised at the ensuing AGM.

Pursuant to Sections 149 and 152 of the Companies Act, 2013 and in terms of Clause 49 of the Listing Agreement, the Board of Directors has, at its meeting held on 25th November, 2014, appointed the existing Independent Directors Mr. B B Hattarki, Mr. B C Prabhakar, and Mr. Satish Sekhri as Independent Directors for a term of five consecutive years with effect from the date of ensuing AGM, subject to approval of shareholders in their Meeting. The requisite resolutions for approval of their appointment as Independent Directors are being proposed in the notice of the ensuing AGM for the approval of the members.

The Company has received declarations from all the Independent Directors of the Company, confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

The Company is required to appoint two more Independent Directors and a Woman Director on the Board. The Company is under the process of identifying suitable candidatures for appointment.

AUDITORS & AUDITORS'' REPORT

M/s Deloitte Haskins & Sells (Chennai), Bangalore, Chartered Accountants, Statutory Auditors of the Company were holding office as Auditors, prior to the commencement of the Companies Act, 2013 ("the Act") and for more than 10 years now. In terms of the provisions of the Act and the related rules there under, in respect of rotation of auditors, M/s. Deloitte Haskins & Sells (Chennai), Bangalore are eligible for re-appointment for three consecutive financial years subject to ratification of the appointment by the members at every AGM held after the ensuing AGM.

The Directors, based on the recommendation of the Audit Committee, propose the appointment of M/s. Deloitte Haskins & Sells (Chennai), Bangalore for the period from the conclusion of ensuing 33rd AGM till the conclusion of the 36th AGM and seek authority for fixation of their remuneration for the year 2014-15.

The Company has received letter from Deloitte Haskins & Sells (Chennai), Bangalore to the effect that their appointment, if made, would be within the prescribed limits under the Companies Act, 2013, and the conditions prescribed read with the Rule 4 of Companies (Audit and Auditors) Rules, 2014 and that they are eligible for such appointment.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made there under and based on the recommendation from the Audit Committee, CS. Pracheta M, Practicing Company Secretary has been appointed to conduct a secretarial audit of Company''s Secretarial and related records for the financial year 2014-15. The Secretarial standards issued by the Institute of Company Secretaries of India (ICSI) from time to time are currently recommendatory in nature. The Company is, however, complying with most of them.

CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013 along with the Rules there under and revised Schedule VII to the Act, concerning Corporate Social Responsibility (CSR), have been effective from 1st April, 2014. The Company being covered under the provisions of the said section has taken necessary initial steps in this regard. A committee of the Directors, titled ''Corporate Social Responsibility Committee'', has been formed by the Board in its meeting held on 29th April, 2014, consisting of the following Directors:

a. Mr. Amit B. Kalyani, Chairman

b. Mr. B. C. Prabhakar, Member

c. Mr. N. Muthukumar, Member

A policy on CSR has been formulated for the Company and was approved by the Board in its meeting held on 14th August, 2014.

CHANGE IN FINANCIAL YEAR

The new Companies Act, 2013 has mandated the financial year to be in line with the Section 2(41) of the Act which is April to March as against our financial

year October to September. The Act also gives two years'' timeline from the date of its notification i.e., 12th September, 2013. Hence, we had option either to close the year 2013-14 on 31st March, 2014 or to close the year 2014-15 on 31st March, 2015. The Board in its meeting held on 10th February, 2014 decided to close the financial year by 6 months from October 2014 to March 2015, so as to comply with the Companies Act, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

The Company has adopted the Corporate Governance Policies and Code of Conduct which has set out the systems, processes and policy conforming to the best standards. The report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, forms part of the Annual Report.

A Certificate from an Independent Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION & PROTECTION FUND

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, the dividend which remained unclaimed for a period of seven years has been transferred by the Company to the Investor Education and Protection Fund.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 21 7(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as Annexure - A to this report.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are set out in the Annexure to the Directors'' Report. Having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act 1956, the Annual Report excluding the aforesaid information is being sent to all the members and others entitled thereto. Any member interested in obtaining such particulars, may write to the Company Secretary at the Registered Office of the Company.

During the year under review, pursuant to the new legislation "Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act 2013" introduced by the GOI, which came into effect from 9th December, 2013. The Company has constituted a Committee and framed a Policy on Prevention of Sexual Harassment at Workplace as per the applicable rules. So far no complaints have been received by the Committee.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the financial year ended 30th September, 2014 the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made 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 as at 30th September, 2014 and of the profit of the Company for the year under review;

(iii) the Directors had taken proper and sufficient care 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; and

(iv) the Directors had prepared the annual accounts for financial year ended on 30th September, 2014 on a ''going concern'' basis.

ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation of the positive cooperation received from the Central Government, the Government of Karnataka, Financial Institutions and the Bankers. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the Company resulting in the successful performance of the Company during the year.

Your Directors wish to place on record their appreciation for the continued cooperation and support received from the Kalyani Group, Pune, and Meritor Inc., USA for and on behalf of the Board of Directors

Place: Mysuru B. N. Kalyani Date: 25th November, 2014 Chairman


Sep 30, 2013

To the Members,

The Directors have the pleasure in presenting the 32nd Annual Report on the business and operations of the Company and the accounts for the financial Year, ended 30th September, 2013.

FINANCIAL RESULTS

(Rs. in Million)

2012-2013 2011-2012

Profit before Depreciation & Tax 470.87 939.63

Less : depreciation & amortisation 285.29 273.88

Provision for Taxation - Current/ Deferred/ Fringe Benefit Tax 58.60 215.57

Profit After Tax 126.98 450.18

Balance of Profit from Previous Year 2,024.87 1,795.43

Profit available for appropriation 2,151.85 2,245.61

Appropriations :

Dividend for the year 30.22 151.12

Tax on dividend 5.14 24.52

Transfer to General Reserve 12.70 45.10

Surplus retained in Profit & Loss Account 2,103.79 2,024.87

REVIEW OF PERFORMANCE

The Gross Sales and other income for the financial year under review was Rs. 7154.12 Million as against Rs. 10,445.63 Million for the previous financial year. The Profit Before Tax of Rs. 185.58 Million and the Profit After Tax of Rs. 126.98 Million for the financial year under review as against Rs. 665.75 Million and Rs. 450.18 Million respectively for the financial year.

Despite a volatile economic scenario, your Company launched two new products in 2012-13 - one in the lower variant of 5T axle and the higher variant of 18T reduction axle. Your Company also got a prestigious contract manufacturing order from TELCON for manufacturing the 100T dump truck axle. This places your Company in a completely new segment of axles, expanding our product range from 5T GVW to 100T GVW. Moreover, your Company launched prototypes for four new products: MS04 - 5T axle; HR 610 -18T hub reduction axles; and 6x6 and 8x8 axle for military application.

Your Company will continue to adapt to the evolving market trends and focus on creating a sustainable organisation. Moving ahead, AAL is determined to broaden the product portfolio to address a wider cross-section of auto component industry. You Company has strategically diversified into off-highway and military vehicles segments to try and mitigate the volatility in MHCV segment. Moreover, your Company with many global players eyeing to capitalise on the under-penetrated MHCVs market in India, it gives us an added opportunity to serve them as well.

DIVIDEND

The Directors recommend the payment of dividend of Rs. 2/- per share of Rs. 10/- each. The Dividend Distribution tax shall be paid by the Company and the dividend distributed to shareholders is exempt from tax.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND REPORT OF THE DIRECTORS ON CORPORATE GOVERNANCE

In accordance with Clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report and the Report of the Directors on Corporate Governance form part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided as Annexure - A to this report.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

DIRECTORS

Chris Villavarayan was appointed as a non-retiring Director based on nomination received from the Meritor Heavy Vehicle System LLC, one of the promoters, in the place of Pedro N. Ferro who resigned from the Board. The Board places its appreciation to Mr. Ferro for his valuable contributions during his tenure.

P C. Bhalerao resigned from the directorship of the company effective 25.11.2013. The Board accepted his resignation and thanked Mr. Bhalerao for the contribution made by him during his tenure on the Board.

Ashok Rao ceased to be a Whole Time Director effective 30.09.2013 consequent to his resignation from the employment with the company. The Board while accepting his resignation, placed on record its appreciation for the services rendered by him during his tenure on the Board.

N. Muthukumar was appointed Additional Director effective 01.10.2013. As he holds office upto the date of ensuing Annual General Meeting, members'' approval is being sought for his appointment and payment of remuneration as Whole Time Director.

Amit B. Kalyani and Joseph A. Plomin were appointed Additional Directors effective 25.11.2013 and hold office up to the date of the ensuing Annual General Meeting where their appointment is being sought as Directors retiring by rotation.

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, Bhalchandra B. Hattarki retires by rotation and being eligible, offers himself for re-appointment as Director.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

(i) in the preparation of the annual accounts for the financial year ended 30th September, 2013 the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made 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 as at 30th September, 2013 and of the profit of the Company for the year under review;

(iii) the Directors 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

(iv) the Directors had prepared the annual accounts for financial year ended on 30th September, 2013 on a ''going concern'' basis.

AUDITORS AND AUDITORS'' REPORT

M/s Deloitte Haskins & Sells (Chennai), Bangalore, Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of the ensuing AGM and are eligible for re-appointment. The Company has received a confirmation from M/s. Deloitte Haskins & Sells (Chennai) to the effect that their appointment if made, would be within the limits prescribed under Section 224(1B) of the companies Act, 1956.

COST AUDITORS

In Compliance with the Orders and Circulars issued by Ministry of Corporate Affairs (MCA) with respect to Cost Audit, M/s G.S.R & Associates, Mysore were appointed as Cost Auditors of the Company and the relevant filings with MCA with respect to maintenance of Cost Accounts were made well within in the prescribed time limit.

PARTICULARS OF EMPLOYEES

The Board of Directors wishes to express their appreciation to all the employees for their dedicated contribution to facilitate smooth operations during the year. The Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (particulars of employees) Rules, 1975, form part of this Report. In terms of Section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders of the Company excluding the aforesaid Annexure. Any member interested in obtaining a copy of the statement, may write to the Company Secretary of the Company None of the employees listed in the said Annexure is related to any Director of the Company

ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank the financial institutions, banks, central & state government authorities, regulatory authorities, stock exchanges and the stakeholders for their continued co-operation and support to the Company.

The Directors also take this opportunity to express their gratitude and appreciation to all its executives, officers, workers and staff of the Company

Your Directors wish to place on record their appreciation for the continued co-operation and support received from the Kalyani Group, Pune, and Meritor Inc., USA for and on behalf of the Board of Directors

Place: Mysore Dr. B. N. Kalyani

Date: 25th November, 2013 Chairman


Sep 30, 2012

To the Members,

The Directors have the pleasure in presenting the 31st Annual Report on the business and operations of the Company and the accounts for the financial Year, ended 30th September, 2012.

FINANCIAL RESULTS

(Rs. in Million)

2011-2012 2010-2011

Profit before Depreciation & Tax 939.63 1,105.28

Less : depreciation & amortisation 273.88 233.93

Provision for Taxation - Current/ Deferred/ Fringe Benefit Tax 215.57 295.78

Profit After Tax 450.18 575.57

Balance of Profit from Previous Year 1,795.43 1,453.09

Profit available for appropriation 2,245.61 2,028.66

Appropriations :

Dividend for the year 151.12 151.12

Tax on dividend 24.52 24.52

Transfer to General Reserve 45.10 57.56

Surplus retained in Profit & Loss Account 2,024.87 1,795.43

REVIEW OF PERFORMANCE

The Gross Sales and other income for the financial year under review was Rs.10,445.60 Million as against Rs. 11,144.87 Million for the previous financial year. The Profit Before Tax of Rs. 665.75 Million and the profit After tax of Rs. 450.18 Million for the financial year under review as against Rs. 871.35 Million and Rs. 575.56 Million respectively for the financial year

DIVIDEND

The Directors recommend the payment of dividend of Rs. 10/- per share of Rs. 10/- each. The Dividend Distribution tax shall be paid by the Company and the dividend distributed to shareholders is exempt from tax.

FIXED DEPOSITS

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

WIND MILL

During the year the Company took up the initiative, along with other group companies, to generate power from Green Energy sources and installed one Wind Turbine Generator with 2.00 MW generation capacity at Tithwa, Gujarat. Total Generation of power from the wind mill during the year was 1742 Lacs KwH (April to September, 2012) which was in turn sold to Gujarat Urja Vikas Nigam Limited.

AUDITORS'' REPORT

The Auditors'' Report to the Shareholders does not contain any qualification.

DISCLOSURE OF PARTICULARS

Information as per the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earning and outgo is provided in the Annexure " A " forming part of this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND REPORT OF THE DIRECTORS ON CORPORATE GOVERNANCE

In accordance with Clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report and the Report of the Directors on Corporate Governance form part of this report.

PARTICULARS OF EMPLOYEES

The Board of Directors wishes to express their appreciation to all the employees for their dedicated contribution to facilitate smooth operations during the year. The Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (particulars of employees) Rules, 1975, form part of this Report. In terms of Section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders of the Company excluding the aforesaid Annexure. Any member interested in obtaining a copy of the statement, may write to the Company Secretary of the Company None of the employees listed in the said Annexure is related to any Director of the Company

DIRECTORS'' RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms that:

- In the preparation of the annualaccounts, the applicable accounting standards have been followed and there has been no material departure.

- Appropriate accounting policies have been selected and applied consistently, and judgments and estimates that have been made 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 the financial year and of the profit of the Company for that period.

- 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.

- The annualaccounts have been prepared on an ongoing concern basis.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Articles of Association of the Company, M/s. B C Prabhakar & Satish Sekhri retires by rotation and being eligible, offer themselves for re-appointment.

AUDITORS

M/s. Deloitte Haskins & Sells (Chennai), Bangalore, Chartered Accountants, Statutory Auditors of the Company hold office until the conclusion of ensuing AGM and are eligible for Reappointment. The Company has received a confirmation from M/s. Deloitte Haskins & Sells (Chennai) to the effect that their appointment if made, would be within the limits prescribed under Section 224(1B) of the companies Act, 1956.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank the financial institutions, banks, central & state government authorities, regulatory authorities, stock exchanges and the stakeholders for their continued co-operation and support to the Company.

Your Directors wish to place on record their appreciation for the continued co-operation and support received from the Kalyani Group, Pune, and Meritor Inc., USA for and on behalf of the Board of Directors.

Place: Mysore B. N. Kalyani

Date: 29th November, 2012 Chairman

 
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