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Directors Report of Bharat Bijlee Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present their 68th Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended March 31, 2015.

GENERAL OUTLOOK OF INDUSTRY AND ECONOMY:

The economic recovery in our business segments has not materialized as anticipated. This has adversely affected the demand for our products and continues to put immense pressure on our margins. Given the pace of economic revival that we have seen during the past year, we expect a subdued business environment at least during the course of the financial year 2015-16. We would continue to take appropriate internal measures to mitigate the impact of the continued adverse macro factors.

During the year under review, there has been consistent focus to maintain our market shares although this has, in some cases, resulted in lower margins. As we await the impending capex cycle and the associated recovery of the business cycle, we will take efforts to balance our market presence while maintaining margins. To ensure that we do not lose sight of growth potential in the future, we have maintained our focus on building capabilities that will help us build better products. We continue to diligently focus on working capital optimization and collection recovery efforts. The Drives & Automation as well as the Elevator Systems business continue to do well.

FINANCIAL PERFORMANCE: (Rs. in Lakhs) Year Ended Year Ended March 31, March 31, 2015 2014

Income from Sales & Service 66,788.90 53,748.76

Less: Excise Duty 5,700.20 5,100.61

61,088.70 48,648.15

Other Income 1,818.04 1,814.98

62,906.74 50,463.13

Profit/(Loss) before Interest, Finance Charges, Depreciation, Exceptional

Items and Tax (253.75) 1,061.50

Less: Interest & Finance Charges 1,995.05 1,309.55

Less: Depreciation 1,194.34 1,094.07

Profit/(Loss) before Exceptional Item and Tax (3,443.14) (1,342.12)

Profit/(Loss) before Tax (3,443.14) (1,342.12)

Less: Provision for Taxes - (144.20)

Profit after Tax (3,443.14) (1,197.92)

Short(-)/Excess Provision of tax for earlier years 38.19 68.53

Profit after Taxation (3,404.95) (1,129.39)

Add: Profit brought forward from previous year 5,041.90 6,171.29

Less: Depreciation adjustment 138.38 -

Profit available for appropriation 1,498.57 5,041.90

APPROPRIATION :

Proposed Equity Dividend - -

Tax on Proposed Equity Dividend - -

General Reserve - -

Profit Carried Forward 1,498.57 5,041.90

Previous year's figures have been regrouped for comparison purposes with current year's presentation wherever necessary.

DIVIDEND:

In view of the loss during the financial year 2014-2015, the Directors have not recommended payment of dividend for the year ended March 31, 2015.

OPERATIONS:

For the third successive year, the economy and market conditions were dominated by demand gap, low price realisation, negative growth in the capital goods industry, low levels of investment by government/industry and delays in project execution. The Company had to maintain its operations against this background.

Income from Sales and Services for the Company increased from Rs. 53748.76 lakhs in the previous year to Rs. 66788.90 lakhs, a rise of 24%. However, the position of over-supply and intense competition took a toll on margins. Consequently in spite of increase in revenue, Company incurred a loss before exceptional items and tax of Rs. 3443.14 lakhs as against a loss before exceptional items and tax of Rs. 1342.12 lakhs in the previous year.

FINANCE:

Tight money market conditions, elongated working capital cycle and substantial erosion in profitability resulted in negative cash flows from operations and caused an increase of Rs. 685.50 lakhs in finance cost for the year. The Company ensured that there was no default in meeting its obligation and maintained a smooth flow of operations.

The Free Reserves of the Company as on March 31, 2015 decreased by Rs. 3543.33 lakhs to Rs. 25969.94 lakhs.

During the year Rs. 9.24 lakhs was transferred to the Investor Education and Protection Fund.

HUMAN RESOURCES AND EMPLOYEE RELATIONS:

There is an ongoing emphasis on building a progressive Human Resources culture within the organisation. Structured initiatives to nurture talent and create a working environment that fosters motivation, team-work and result- orientation continue to be addressed.

The long term wage agreement with the Union expired on December 31, 2014. Union submitted a new charter of demand for next wage agreement in November 2014. Negotiations for the same are in progress. Productivity levels continued to be subject to continuous monitoring.

Employee strength as on March 31, 2015 was 1378 as compared to 1436 in the previous year.

DEPOSITS:

As on March 31, 2015 the company had no outstanding Fixed Deposits. The Company has neither accepted nor renewed any deposits during the financial year 2014-2015 and in accordance with the provisions of Section 74(1)(b) of the Companies Act, 2013, repaid all its outstanding deposits as on March 31, 2014 aggregating to Rs. 2160.90 lakhs.

DISCLOSURE UNDER SECTION 134(3)(I) OF THE COMPANIES ACT, 2013:

Except as disclosed elsewhere in this Report, no material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year and the date of this Report.

DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the financial year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

SIGNIFICANT AND MATERIAL ORDERS BY THE REGULATORS OR COURTS OR TRIBUNAL:

There are no significant and / or material orders passed by the Regulator(s) or Court(s) or Tribunal(s) impacting the going concern status of the Company and its business operations in future.

PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTIES:

All contracts/arrangements/transactions entered by the Company during the financial year 2014-2015, with related parties, as defined under Section 188 of the Companies Act, 2013 and the rules made there under and Clause 49 of

the Listing Agreement entered into by the Company with the Stock Exchanges, were in the ordinary course of business and on arm's length basis. Consequently no particulars in Form AOC-2 have been furnished.

Further, during the year under review, the Company has not entered into any contracts/arrangements/transactions with related parties which could be considered material in accordance with the Related Party Transactions Policy of the Company, which can be accessed by using the following link: http://www.bharatbijlee.com/doc/RPT-Policy.pdf

Members can refer Note no. 41 to the financial statement which set out the related party disclosures.

PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:

Particulars of loans, guarantees, investments and securities provided during the financial year under review, covered under the provisions of Section 186 of the Companies Act, 2013, have been provided in the Financial Statements which forms part of this Annual Report. (Please refer Note No. 14, 15 and 17 to the Financial Statements).

DISCLOSURE UNDER SECTION 43(a)(ii) OF THE

COMPANIES ACT, 2013:

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.

DISCLOSURE UNDER SECTION 54(1)(d) OF THE

COMPANIES ACT, 2013:

The Company has not issued any sweat equity shares during the financial year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.

DISCLOSURE UNDER SECTION 62(1)(b) OF THE

COMPANIES ACT, 2013:

The Company has not issued any equity shares under Employees Stock Option Scheme during the financial year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.

DISCLOSURE UNDER SECTION 67(3) OF THE COMPANIES ACT, 2013:

During the financial year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 and hence no information has been furnished.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL:

There was no change in Directorship of the Company during the period under review. Your Company has Nine (9) Directors consisting of four (4) Independent Directors, Three (3) Executive Directors and Two (2) Non-Executive Directors as on March 31, 2015.

Further, in accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Shome N. Danani, being longest in the office shall retire at the ensuing 68th Annual General Meeting and being eligible, offers himself for re- appointment.

Information on Mr. Shome N. Danani, Director eligible for re-appointment, as required under Clause 49 of the Listing Agreement with Stock Exchanges, is disclosed as part of the Notice dated July 24, 2015 of the ensuing 68th Annual General Meeting.

As for the requirement under the provisions of Section 203 of the Companies Act, 2013, the Board of Directors noted that Mr. Nikhil J. Danani, Managing Director, Mr. Nakul P Mehta, Managing Director, Mr. Shome N. Danani, Executive Director, Mr. Durgesh N. Nagarkar, Company Secretary and Mr. Sandeep M. Tilak, Chief Financial Officer are the Key Managerial Personnel of the Company.

DECLARATIONS BY INDEPENDENT DIRECTORS:

Pursuant to the provisions of Section 149(7) of the Companies Act, 2013, the Company has received individual declarations from all the Independent Directors, whose names are appended herein below, confirming that they fulfill the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and the rules made there under to hold the office of Independent Director of the Company.

1. Mr. Prakash V. Mehta;

2. Mr. Sanjiv N. Shah;

3. Mr. Jairaj C. Thacker; &

4. Mr. Rajeshwar R. Bajaaj

DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:

NUMBER OF MEETINGS OF THE BOARD:

The Board of Directors met five (5) times during the financial year ended March 31, 2015 viz., on May 28, 2014, July 25, 2014, September 11, 2014, November 11, 2014 and January 23, 2015, in accordance with the provisions of the Companies Act, 2013 and rules made there under. All the Directors actively participated in the meetings and contributed valuable inputs on the matters brought before the Board of Directors from time to time. Detailed information on the meetings of the Board are included in the Report on Corporate Governance, which forms part of this Board's Report.

Additionally, during the financial year ended March 31,2015 the Independent Directors held a separate meeting in compliance with the requirements of Schedule IV of the Companies Act, 2013 and Clause 49(II)(B)(6) of the Listing Agreement.

COMMITTEES OF THE BOARD:

NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee as constituted by the Board of Directors of the Company, has in accordance with the provisions of Section 178(3) of the Companies Act, 2013, formulated necessary policy on appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director. The details of "Nominations and Remuneration Policy" are explained in the Report on Corporate Governance, which forms part of this Report and are also available on the website of the Company (www.bharatbijlee.com).

AUDIT COMMITTEE:

An Audit Committee as constituted by the Board of Directors of the Company in accordance with the provisions of Section 177 of the Companies Act, 2013, comprises Independent Directors, namely Mr. Sanjiv N. Shah (Chairman), Mr. Prakash V. Mehta and Mr. Jairaj C. Thacker as Members of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

The Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee as per the provisions of Section 135 of the Companies Act, 2013. The Terms of Reference of the CSR Committee are to:

i. Formulate and recommend to the Board a Corporate Social Responsibility ('CSR') Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII and the prescribed Rules under Sections 135 of the Companies Act, 2013;

ii. Recommend the amount of expenditure to be incurred on the activities referred to in point (i) above;

iii. Monitor the CSR Policy of the Company from time to time;

iv. Ensure disclosure of CSR Policy in the Boards' Report and on the website of the Company;

v. Ensure activities as included in CSR Policy are undertaken and are monitored regularly;

vi. Ensure the CSR spend is made in terms of Section 135(5), i.e., at least 2% of the average net profits of the Company made during the 3 annually preceding financial years.

The CSR Committee comprises of Mr. Nakul P Mehta as Chairman and Mr. Shome N. Danani and Mr. Jairaj C. Thacker as Members.

The CSR Committee has met once in the financial year, i.e., on January 23, 2015, wherein all members were present.

The Board has also framed a CSR policy for the Company, on the recommendation of the CSR Committee. The Report on CSR activities as required under the Companies (Corporate Social Responsibility) Rules, 2014, including a brief outline of the Company's CSR Policy, total amount to be spent under CSR Policy for the financial year, amount unspent and the reason for the unspent amount, is set out at Annexure I, forming part of this Report.

ANNUAL EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the evaluation of all the Directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Report on Corporate Governance, which forms part of this Report.

RISK MANAGEMENT POLICY:

The Board of Directors of the Company have approved Risk Management Policy and Guidelines, wherein all material risks faced by the Company are identified and assessed. Moreover in the said Risk Management Policy the Board has defined a structured approach to manage uncertainty, cultivating the same in their decision making pertaining to all business divisions and corporate functions. For each of the risks identified, corresponding control are assessed and policies and procedures are put in place for monitoring, mitigating and reporting risks on periodic basis.

VIGIL MECHANISM POLICY:

The Board of Directors of the Company have, pursuant to the provisions of Section 178(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, framed "Vigil Mechanism Policy" for Directors and employees of the Company, to report their genuine concern of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports etc.

The details of "Vigil Mechanism Policy" are available on the website of the Company (http://www.bharatbijlee.com/doc/ BBL-WHISTLEBLOWER-POLICYpdf).

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

As per the requirement of Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made there under, the Board of Directors has constituted the Internal Complaints Committee ('ICC') at the Registered Office, Works and at all the Regional Offices of the Company to deal with the complaints received by the Company pertaining to gender discrimination and sexual harassment at workplace.

The ICC has been constituted covering the offices at Mumbai/Navi Mumbai, consisting of the following Members:

Sr. Name of Officer Designation Position in No. Committee

1. Ms. Aarti Madhankar General Manager, Presiding Human Resources Officer

2. Mr. Durgesh N. Nagar Company Secretary Member kar & Senior General Manager

3. Mr. Nitin R. Rathod General Manager, Member Employee Relations

4. Ms. Anjali Ranade Senior Manager, Member Design

Also, each branch of the Company, has its own ICC consisting of officers from Serial no. 1, 3 and 4, as mentioned herein above, along with two more members employed at the branches, one of them consisting of a woman employed in those respective branches.

As per the provisions of Section 21 & 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Report on the details of the number of cases filed under Sexual Harassment and their disposal is as under:

Sr. No. of cases pending No. of complaints No. of cases No. as on the beginning filed during the pending as on the of the financial year year end on the financial year

1. Nil Nil Nil

DIRECTORS' RESPONSIBILITY STATEMENT:

In terms of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Board of Directors hereby confirms 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. such accounting policies have been selected and applied consistently and the Directors have 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 March 31, 2015 and of the Profit and Loss of the Company for the year ended on that date;

c. proper and sufficient care has been taken 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. the annual accounts of the Company have been prepared on a going concern basis;

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

f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

REPORTING ON FRAUDS:

There were no frauds reported by the Auditors under sub section (12) of Section 143 of the Companies (Amendment) Act, 2015, to the Audit Committee, Board of Directors or to the Central Government and hence no information has been furnished in this regard.

PARTICULARS OF EMPLOYEES AND REMUNERATION:

Information as required under the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure II hereto, which forms part of this report.

CORPORATE GOVERNANCE:

A separate report on Corporate Governance along with Auditor's Certificate on its compliance, have been furnished in the Annual Report and forms part of this Board Report.

MANAGEMENT DISCUSSION AND ANALYSIS (MDA) REPORT:

A separate report on MDA forms part of the Annual Report.

AUDITORS AND THEIR REPORTS:

The matters pertaining to Auditors and their Reports are appended below

OBSERVATIONS OF STATUTORY AUDITORS ON THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED MARCH 31, 2015:

The Auditor's report does not contain any qualification, reservation or adverse remark or any Disclaimer.

STATUTORY AUDITORS:

M/s. Dalal & Shah, Chartered Accountants, bearing Firm Registration No. 102021W, have been appointed as Statutory Auditors of the Company for a period of three (3) years from the conclusion of the 67th Annual General Meeting upto the conclusion of the 70th Annual General Meeting. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, their appointment as Statutory Auditors upto the conclusion of 70th Annual General Meeting is required to be ratified by the members at every Annual General Meeting. Necessary resolution for ratification of appointment of the said Auditors is included in the Notice of the ensuing 68th Annual General Meeting.

The consent of the Auditors along with certificate under Section 139 of the Companies Act, 2013 have been obtained from the Auditors to the effect that their appointment, if made, shall be in accordance with the prescribed conditions and that they are eligible to hold the office of Auditors of the Company.

SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013, your Company has appointed M/s N. L. Bhatia & Associates, Practicing Company Secretaries, as its Secretarial Auditor to conduct the secretarial audit of the Company for the financial year 2014-2015.

The Report on Secretarial Audit for the financial year

2014- 2015, in Form MR-3 forms part of this Board Report. As regards the observation made by the Secretarial Auditor on CSR spend in the said secretarial audit report, please refer Annexure I - Annual Report on CSR Activities, the Board of Directors have explained that due to the loss incurred by the Company in the last three (3) financial years, the required amount of CSR spend has not been carried out.

COST AUDITORS:

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Notifications/Circulars issued by the Ministry of Corporate Affairs from time to time and as per the recommendation of the Audit Committee, the Board of Directors at their meeting dated May 15, 2015 have appointed M/s. PM. Nanabhoy, Cost Accountants as the Cost Auditors of the Company for the financial year 2015- 2016 to audit the cost records of electric motors, power transformers, drives and elevator system products.

A resolution for ratification of the payment to be made for such appointment is included in the Notice of the ensuing 68th Annual General Meeting.

It may be noted that the Board had appointed M/s. P.M. Nanabhoy, Cost Accountants as the Cost Auditors of the Company for the financial year 2014-2015 to carry out cost audit of the Company. However pursuant to the clarification provided by the Ministry of Corporate Affairs, the Cost Audit for the Company's products was not required for the financial year 2014-2015 and hence the same was not conducted.

EXTRACT OF ANNUAL RETURN:

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended March 31, 2015 made under the provisions of Section 92(3) of the Act is attached as Annexure III, which forms part of this Report.

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

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure IV which forms part of this Report.

ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation for the assistance and cooperation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors take on record their deep sense of appreciation to the contributions made by the employees through their hard work, dedication, competence, support and co- operation during this difficult period in the performance of the Company.

For and on behalf of the Board of Directors

Prakash V. Mehta DIN 00001366 Date : July 24, 2015 Chairman




Mar 31, 2014

Dear Members,

The Directors are pleased to present their 67th Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended 31st March, 2014.

The Indian economy continued to be sluggish during the year under review and this has adversely impacted the businesses of your Company. Investments in infrastructure and manufacturing will be the key for revival of our business prospects. We expect the macro-economic situation to improve steadily going ahead and are building internal capabilities to leverage on that.

During the year under review there was continued emphasis on improving customer reach, diversifi cation of customer and geographical mix while keeping strong focus on cost control. Concurrently, important steps have been taken to prepare your Company for the next phase of growth and expansion. The higher voltage motor facility inaugurated last year has successfully delivered its fi rst export order. This is an important milestone as we establish our capabilities in the market place. The Drives and Elevators Systems businesses also continue to grow profi tably as they scale up. Both the businesses have very good traction in the market and continue to see healthy growth.

FINANCIAL PERFORMANCE

Year Ended Year Ended 31st March 31st March 2014 2013 (Rs. In Lakhs) (Rs in lakhs)

Income from Sales & Service 53748.76 59401.25

Less: Excise Duty 5100.61 5148.52

48648.15 54252.73

Other Income 1814.98 1745.34

50463.13 55998.07

Profit before Interest, Finance Charges, Depreciation,

Exceptional Items and Tax 1061.50 1492.66

Less: Interest & Finance Charges 1309.55 1242.06

Less: Depreciation 1094.07 1069.93

Profit before Exceptional

Item and Tax (1342.12) (819.33)

Add : Exceptional Item - -

Profit before Tax (1342.12) (819.33)

Less: Provision for Taxes (144.20) (329.83)

Profit after Tax (1197.92) (489.50)

Short (-) / Excess

Provision of tax for earlier years 68.53 2.67

Profit after Taxation (1129.39) (486.83)

Add: Profit brought forward from previous year 6171.29 6823.42

Profit available for appropriation 5041.90 6336.59

APPROPRIATION

Proposed Equity

Dividend - 141.29

Tax on Proposed Equity

Dividend - 24.01

General Reserve - -

Profit Carried Forward 5041.90 6171.29

Previous year''s figures have been regrouped for comparison purposes with current year''s presentation wherever necessary.

DIVIDEND

In view of the net loss during the financial year 2013-2014, the Directors have not recommended payment of dividend for the year ended 31st March, 2014.

OPERATIONS

Income from Sales and Service for the Company reduced from Rs. 59401 lakhs in the previous year to Rs. 53749 lakhs, a drop of 10%. Revenues of the Power Systems remained under pressure due to sluggish market demand and delay in customer project execution timelines.

The Company incurred a loss before exceptional items and tax of Rs.1342 lakhs as against a loss before exceptional items and tax of Rs. 819 lakhs in the previous year mainly due to pressure on margins in the Industrial Systems segment.

FINANCE

In spite of tight money market conditions, adverse liquidity and substantial erosion in profi tability, the focus of the Company on the effi cient management of short-term and long-term funds through rigorous monitoring of deployment towards working capital, a comprehensive evaluation and execution process for capital expenditure, and prudent deployment of surplus funds helped it generate positive cash fl ow from operations. Although the Company incurred interest and fi nance costs of Rs.1309.55 lakhs, it also earned income of Rs.1413.29 lakhs from deployment of surplus funds and treasury operations.

The Company''s free reserves as on 31st March, 2014 decreased by Rs.1129.39 lakhs to Rs. 29513.27 lakhs.

As on 31st March, 2014, the Company had Fixed Deposits aggregating to Rs. 2160.90 lakhs. Out of the Fixed Deposits which matured for payment prior to 31st March, 2014, 54 deposits aggregating to Rs. 11.63 lakhs were neither renewed nor claimed till 31st March, 2014. Of these, 10 deposits aggregating to Rs. 1.80 lakhs have since been refunded on receipt of requests from the deposit holders. The balance 44 deposits aggregating to Rs. 9.83 lakhs have been neither claimed nor renewed till date of this report, in spite of the Company''s intimation to the deposit holders. There has been no default or delay in meeting any maturity payment obligations.

During the year Rs. 5.41 lakhs was transferred to the Investor Education and Protection Fund.

HUMAN RESOURCES AND EMPLOYEE RELATIONS

There is an ongoing emphasis on building a progressive Human Resources culture within the organisation. Structured initiatives to nurture talent and create a working environment that fosters motivation, team-work and result-orientation continue to be addressed.

The long term wage agreement with the Union was signed on January 15, 2014 and the same will be valid up to December 31, 2014. Employee Relations across the Company continued to be cordial, and issues were settled amicably. Productivity levels continued to be subject to continuous monitoring.

Employee strength as on March 31, 2014 was 1436 as compared to 1362 in the previous year.

CORPORATE GOVERNANCE:

A separate report on Corporate Governance along with Auditor''s Certifi cate on its compliance, is set out in Annexure "A" .

MANAGEMENT DISCUSSION AND ANALYSIS (MDA) REPORT:

A separate report on MDA forms part of the Directors'' Report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confi rm that:

a) In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures;

b) The Directors 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 31st March, 2014, and the profi t and loss for that period;

c) The Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

d) The Directors have prepared Annual Accounts on a going concern basis;

e) The Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operated effectively and;

f) The Directors have devised proper systems to ensure compliance with the processes of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS:

During the year, Mr. Jaisingh R. Danani, Director on the Board of the Company and who was a Managing Director of the Company for 35 years until 1990, passed away on August 5, 2013.

Mr. Mukul Harkisondass who joined the Board on August 29, 1972 also passed away on June 14, 2013.

The Company has suffered an irreparable loss due to their demise and the Board of Directors place on record their appreciation for the immense contribution, valuable guidance and commitment rendered by Mr. Jaisingh R. Danani and Mr. Mukul Harkisondass during their tenure as Directors.

During the year, Mr. Harish Chandra Mishra resigned from the Board w.e.f. July 25, 2013. The Board of Directors place on record their appreciation for the invaluable advice and guidance given by Mr. Harish Chandra Mishra during his association with the Company.

Mr. Ravishanker Prasad was appointed as an Additional Director with effect from January 22, 2014 and holds offi ce up to the date of the forthcoming Annual General Meeting. Notice has been received under Section 160 of the Companies Act, 2013 from a member proposing his candidature for offi ce of Director and such appointment has been proposed at Item No. 5 of the Notice dated July 25, 2014.

Ms. Mahnaz A. Curmally was appointed as an Additional Director with effect from July 25, 2014 and holds offi ce upto the date of the forthcoming Annual General Meeting. Notice has been received under Section 160 of the Companies Act, 2013 from a member proposing her candidature for offi ce of Director and such appointment has been proposed at Item No. 4 of the Notice dated July 25, 2014.

Mr. Anand J Danani retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment.

Mr. Prakash V Mehta, Mr. Sanjiv N. Shah and Mr. Jairaj C. Thacker, Non-executive Directors of the Company have submitted declaration under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence prescribed for Independent Directors as stipulated under Section 149(6) of the said Act.

Notices have been received from members under Section 160 of the Companies Act, 2013 proposing their appointment as Independent Directors. The Independent Directors are proposed to be appointed for a period of 5 years from the date of the ensuing meeting and they shall not retire by rotation.

Notice has been received under Section 160 of the Companies Act, 2013 from a member proposing the candidature of Mr. Rajeshwar R. Bajaaj as an Independent Director who has also confi rmed that he meets the criteria of independence prescribed for Independent Directors as stipulated under Section 149(6) of the said Act and such appointment has been proposed at Item No. 9 of the Notice dated July 25, 2014.

Information on the Directors eligible for reappointment/ appointment as required under Clause 49 of the Listing Agreement with Stock Exchanges is disclosed in the profi les of the Directors under Item Nos. 4 to 9 forming part of the Notice dated July 25, 2014 circulated along with the Annual Report 2013-14.

AUDITORS:

The Company''s auditors, M/s. Dalal & Shah, bearing Firm Registration No. 102021W, hold offi ce till the date of the ensuing Annual General Meeting and, being eligible, are recommended for reappointment. The Company has received a confi rmation from M/s. Dalal & Shah to the effect that their appointment, if made at the ensuing Annual General Meeting would be in terms of Section 139 and 141 of the Companies Act, 2013 and rules made thereunder. The Board on the recommendation of the Audit Committee proposes to appoint M/s. Dalal & Shah as Statutory Auditors of the Company for a period of 3 years from the conclusion of the ensuing Annual General Meeting, subject to ratification by members of the Company at each Annual General Meeting. This item of business is covered under Item No. 3 of the accompanying Notice dated July 25, 2014.

COST AUDITORS:

M/s. P. M. Nanabhoy & Co. an independent firm of Cost Accountants having an arm''s length relationship with the Company and who are free from any disqualifi cation as specifi ed under Section 141(3) have been appointed by the Board as Cost Auditors of the Company, for electric motors, power transformers, drives and elevator system products for the Financial Year ending 31st March, 2015, subject to the approval of the Central Government at a remuneration of Rs. 72,000/- which is subject to approval by members. Their appointment is in accordance with the limits specifi ed in Section 141 (3) (g) of the Companies Act, 2013.

PARTICULARS OF EMPLOYEES:

The information required under Section 217 (2A) of the Companies Act, 1956, read with Company''s (Particulars of Employees) Rules, 1975, and forming part of this Report, are annexed to this Report. However, as per the provisions of Section 219 (1)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all Shareholders of the Company, excluding the Statement of Particulars of Employees. Any shareholder interested in the Particulars of Employees, may write to the Company Secretary at the Registered Offi ce of the Company for a copy of the Statement.

Additional information as required by Department of Companies Affairs is presented on Page No. 8 of this Annual Report.

COMPANIES ACT, 2013

The Companies Act, 2013 was notified in the Official Gazette of the Government of India on August 29, 2013. On September 12, 2013 the Ministry of Corporate Affairs (MCA) notified 98 sections and on March 27, 2014, the MCA notified another 198 sections, which were deemed to come into force with effect from April 1, 2014.

The MCA vide Circular No. 08/2014 dated April 4, 2014 clarified that the financial statements and the documents required to be attached thereto, the auditors'' and directors'' report in respect of the fi nancial year under reference shall continue to be governed by the relevant provisions of the Companies Act, 1956, schedules and rules made thereunder.

The Company has accordingly prepared this balance sheet, statement of profi t and loss, the schedules and notes thereto and the Directors'' Report in accordance with the relevant provisions of the Companies Act, 1956, schedules and rules made thereunder.

The Company has taken cognizance of the new legislation and shall comply with the provisions of the Companies Act, 2013, as applicable.

ACKNOWLEDGEMENTS:

The Directors would like to accept and convey their sincere appreciation to all employees of the Company for their continued hard work, dedication and commitment to the Company. The Directors also acknowledge and are grateful to the Bankers, Government Authorities, Shareholders, Vendors and other Stake-Holders for their continued support, confi dence and co-operation in the performance of the Company.

For and on behalf of the Board of Directors

Bansi S. Mehta Chairman

Date: July 25, 2014


Mar 31, 2013

The Directors are pleased to present their 66th Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended 31st March 2013.

The economic environment continued to be hostile during the year under review. Concerns over growth, inflation and capital investment resulted in underperformance by core industrial sectors; this has had a direct bearing on the businesses of your Company. Lower demand and relative overcapacity have further increased competitive intensity and margin pressures and it is expected that these conditions will persist during the current year as well. Implementation of the next phase of reforms and effective management of structural bottlenecks for infrastructural and industrial growth will be the key triggers for revival of a favourable business environment. While we keenly follow the macroeconomic trends, we continue to evaluate options and take measures to address current challenges while building organizational capabilities for the future.

During the year under review there was ongoing emphasis on improving market share and margins in our existing businesses while focusing on all possible opportunities to eliminate wasteful expenditure. Concurrently, your Company has taken important steps to prepare itself for the next phase of growth and expansion. In May 2012, a new facility to manufacture Medium Voltage and traction motors was inaugurated. This will expand our product range and help to build capabilities in the higher voltage range of motors; the first Medium Voltage motor from this facility was delivered during the year. A new plant to assemble and test AC Drives was also commissioned during the year under review. This will enable us to cater to our customers'' needs for specialized automation solutions, quicker deliveries and high service standards while maintaining stringent product quality at a more competitive price.

FINANCIAL PERFORMANCE

Year Ended Year Ended 31st March 2013 31st March 2012 (Rs. In Lakhs) (Rs in lakhs)

Income from Sales & Service 59401.25 78111.99

Less: Excise Duty 5148.52 6334.10

54252.73 71777.89

Other Income 1745.34 1959.67

55998.07 73737.56

Profit before Interest, Finance Charges, Depreciation, Exceptional Items and Tax 1492.66 6291.84

Less: Interest & Finance Charges 1242.06 1337.48

Less: Depreciation 1069.93 960.77

Profit before Exceptional Item and Tax (819.33) 3993.59

Add : Exceptional Item - 2608.92

Profit before Tax (819.33) 6602.51

Less: Provision for Taxes (329.83) 1235.28

Profit after Tax (489.50) 5367.23

Short (-) / Excess Provision of tax for earlier years 2.67 0.00

Profit after Taxation (486.83) 5367.23

Add: Profit brought forward from previous year 6823.42 3648.29

Profit available for appropriation 6336.59 9015.52

APPROPRIATION

Proposed Equity Dividend 141.29 1412.89

Tax on Proposed Equity Dividend 24.01 229.21

General Reserve - 550.00

Profit Carried Forward 6171.29 6823.42

Previous year''s figures have been regrouped for comparison purposes with current year''s presentation wherever necessary.

DIVIDEND

The Directors recommend a Dividend of Rs. 2.50 per Equity Share for the year ended 31st March, 2013 on 56,51,560 Equity Shares of Rs. 10/- each. The Dividend payout, including Dividend Tax of Rs. 24.01 lakhs, will be Rs. 165.30 compared to Rs. 1642.10 lakhs in the previous year.

OPERATIONS

Income from Sales and Service for the Company declined from Rs. 781 crore in the previous year to Rs. 594 crore, a drop of 24%. Revenues of the Power Systems as well as the Industrial Systems segments reduced significantly due to sluggish market demand and reduced price realizations.

The company incurred a loss before exceptional items and tax of Rs. 8.19 crore as against a profit before exceptional items and tax of Rs. 39.94 crore in the previous year mainly due to reduced volumes and poor price realizations in the Transformer and Motor businesses and cost overruns in Project operations.

FINANCE

In spite of tight money market conditions, adverse liquidity and substantial erosion in profitability, the focus of the Company upon on the efficient management of short-term and long-term funds through rigorous monitoring of deployment towards working capital, a comprehensive evaluation and execution process for capital expenditure, and prudent deployment of surplus funds helped it generate positive cash flow from operations. Although the Company incurred interest and finance costs of Rs.12.42 crore, it also earned income of Rs. 14.66 crore from deployment of surplus funds and treasury operations.

The Company''s free reserves as on 31st March, 2013 decreased by Rs. 652.13 lakhs to Rs. 30642.66 lakhs.

As on 31st March, 2013, the Company had Fixed Deposits aggregating to Rs 1949.81 lakhs. Out of the Fixed Deposits which matured for payment prior to 31st March, 2013, 56 deposits aggregating to Rs 17.25 lakhs were neither renewed nor claimed till 31st March, 2013. Of these 10 deposits aggregating to Rs 2.60 lakhs have since been renewed or refunded on receipt of requests from the deposit holders. The balance 46 deposits aggregating to Rs 14.65 lakhs have been neither claimed nor renewed till date of this Report, in spite of the Company''s intimation to the deposit holders. There has been no default or delay in meeting any maturity payment obligations.

During the year Rs 3.91 lakhs was transferred to the Investor Education and Protection Fund.

HUMAN RESOURCES AND EMPLOYEE RELATIONS

There is an ongoing emphasis on building a progressive Human Resources culture within the organisation. Structured initiatives to nurture talent and create a working environment that fosters motivation, team-work and result-orientation continue to be addressed.

The long term wage agreement with the Union expired on 31st December 2011, and negotiations will commence in due course. Employee Relations across the Company continued to be cordial, and issues were settled amicably. Productivity levels continued to be subject to continuous monitoring.

Employee strength as on 31st March 2013 was 1362 as compared to 1381 in the previous year.

CORPORATE GOVERNANCE:

A separate report on Corporate Governance along with Auditor''s Certificate on its compliance, is set out in Annexure "A".

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that:

i) In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures.

ii) The Directors 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 31st March, 2013, and the profit for that period.

iii) Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956, for safeguarding of assets of the Company and for preventing and detecting frauds and other irregularities.

iv) The Directors have prepared Annual Accounts on a going concern basis.

DIRECTORS:

Mr. Anand J Danani, Mr. Bansi S Mehta, and Mr. Jaisingh R Danani retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

During the year Mrs D Vijayalakshmi resigned from the Board on 31st July, 2013. The Board of Directors place on record their appreciation for the invaluable advice and guidance given by Mrs Vijayalakshmi during her association with the Company.

Mr. Harish Chandra Mishra was appointed as an Additional Director with effect from 19th October 2012 and holds office up to the date of the forthcoming Annual General Meeting. Notice has been received under Section 257 of the Companies Act, 1956 from a member proposing his candidature for office of Director and such appointment has been proposed at Item No 7 of the Notice dated 17th May, 2013.

The appointments of Mr. N J Danani and Mr. N P Mehta as Managing Directors expire on 19th June, 2013. The Board of Directors'' at their meeting held on 17th May, 2013 have reappointed them subject to approval of Shareholders for a further period of 3 years, w.e.f. 20th June, 2013. Appropriate Special Resolutions have been proposed for their appointment and remuneration at Item No. 8 & 9 of the Notice dated 17th May, 2013.

Information on the Directors eligible for reappointment as required under Clause 49 of the Listing Agreement with Stock Exchanges is disclosed in the profiles of the Directors under Item Nos. 3, 4, 5 , 7 ,8 and 9 forming part of the Notice dated 17th May, 2013 circulated along with the Annual Report 2012-13.

AUDITORS:

The Company''s auditors, M/s. Dalal & Shah, bearing Firm Registration No. 102021W, hold office till the date of the ensuing Annual General Meeting and, being eligible, are recommended for reappointment. This item of business is covered under Item No. 6 of the accompanying notice.

COST AUDITORS:

M/s. P. M. Nanabhoy & Co. an independent firm of Cost Accountants having an arm''s length relationship with the Company and who are free from any disqualification as specified under Section 233 B(5) read with Section 224 and sub section 3 and sub section 4 of Section 226 of the Companies Act, 1956, have been appointed by the Board as Cost Auditors of the Company, for electric motors, power transformers, drives and elevator system products for the Financial Year ending 31st March, 2014, subject to the approval of the Central Government. Their appointment is in accordance with the limits specified in Section 224 (1B) of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES:

The information required under Section 217 (2A) of the Companies Act, 1956, read with Company''s (Particulars of Employees) Rules, 1975, and forming part of this Report, are annexed to this Report. However, as per the provisions of Section 219 (1)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all Shareholders of the Company, excluding the Statement of Particulars of Employees. Any shareholder interested in the Particulars of Employees, may write to the Company Secretary at the Registered Office of the Company for a copy of the Statement.

Additional information as required by Department of Companies Affairs is presented on Page 20 of this Annual Report.

ACKNOWLEDGEMENTS

The Directors accept and convey their sincere appreciation to all employees of the Company for their continued dedication and commitment of the Company. The Directors also acknowledge and are grateful to the Bankers, Government Authorities, Shareholders, Vendors and other Stake-Holders for their continued support, confidence and co-operation in these difficult times, in the performance of the Company.

For and on behalf of the Board of Directors

Bansi S. Mehta

Chairman

Date : 17th May, 2013


Mar 31, 2012

The Directors are pleased to present their 65th Annual Report on the business and operations of the Company together with Audited Accounts for the financial year ended 31st March, 2012.

FINANCIAL PERFORMANCE :

Year Ended Year Ended 31st March 31st March 2012 2011 (Rs in (Rs in Lakhs) Lakhs)

Income from Sales & Service 78111.99 76901.82

Less: Excise Duty 6334.10 6595.05

71777.89 70306.77

Other Income 1959.67 861.01

73737.56 71167.78

Profit before Finance Costs, Depreciation, Exceptional Items and Tax 6291.84 7642.37

Less: Interest & Finance Charges 1337.48 896.84

Less: Depreciation 960.77 893.35

Profit before Exceptional Item and Tax 3993.59 5852.18

Add : Exceptional Item 2608.92 3380.67

Profit before Tax 6602.51 9232.85

Less: Provision for Taxes 1235.28 1880.29

Profit after Tax 5367.23 7352.56

Short (-)/Excess Provision of tax for earlier years - 0.03

Profit after Taxation 5367.23 7352.53

Add: Profit brought forward from previous year 3648.29 2937.86

Profit available for appropriation 9015.52 10290.39

APPROPRIATION

Proposed Equity

Dividend 1412.89 1412.89

Tax on Proposed Equity

Dividend 229.21 229.21

General Reserve 550.00 5000.00

Profit Carried Forward 6823.42 3648.29

Previous year's figures have been regrouped for comparison purposes with current year's presentation wherever necessary.

DIVIDEND :

The Directors recommend a Dividend of Rs. 25/- per Equity Share for the year ended 31st March, 2012 on 56,51,560 Equity Shares of Rs. 10/- each. The Dividend payout, including Dividend Tax of Rs. 229.21 lakhs, will be Rs. 1642.10 lakhs compared to Rs. 1642.10 lakhs in the previous year.

OPERATIONS :

Industrial growth slowed significantly in 2011-2012 on account of weakened domestic demand companied by interest rate sensitivity, deceleration in external demand and a subdued investment climate. New order placement declined, and surplus capacities in several sectors resulted in low utilisations and brought margins under pressure.

Against this backdrop the Company achieved Income from Sales and Service of Rs. 781 crore as against Rs. 769 crore in the previous year, a nominal increase of Rs. 12 crore. Revenues of the Industrial Systems businesses registered significant growth, and helped offset the degrowth in the Power Systems segment which was exacerbated by a planned shutdown of one of the Transformer plants in the first quarter of the year under review.

Profit before Exceptional Items and Tax dropped by 32% to Rs. 39.94 crore from Rs. 58.52 crore principally due to poor price realisations in the Transformer business, cost overruns in Project operations, and increases in other costs.

Exceptional Items represent proceeds (free of both Capital Gains Tax and MAT) arising from the sale of shares of Siemens Limited in April 2011.

OTHER INITIATIVES :

During the year, one of the Transformer plants was modernised to international standards. This has helped the Company to cater more extensively to international business, and has enhanced production capacity of higher ratings in the 220 KV class.

Training from an international High Voltage Institute in the specialised design software for Transformers up to 500 KV was completed, and will contribute significantly to design optimization and cost effectiveness.

The Motors business grew significantly over the previous year. The ongoing initiative to strengthen and synchronise the supply chain from end to end resulted in measurable improvements in market responsiveness and operational effectiveness, and will provide a strong platform for growth, investment continues in manufacturing facilities and product range extension.

The Drives business continued to expand its application segments, and the new facility for production of a specific range of AC drives in cooperation with KEB of Germany is near completion.

FINANCE :

In April 2011, the Company generated an exceptional tax free income of Rs. 26.09 crore from the sale of 2,97,000 equity shares of Siemens Limited in the open market at an average price of Rs. 886 per share so as to augment its existing cash reserves for strategic business expansions.

As a guiding policy, the Company focuses upon the efficient management of short-term and long-term funds through rigorous monitoring of deployment towards working capital, a comprehensive evaluation and execution process for capital expenditure, and prudent deployment of surplus funds. Although the Company incurred interest and finance costs of Rs. 13.37 crore, it also earned income of Rs. 14.05 crore from deployment of surplus funds and treasury operations.

The Company's free reserves as on 31st March, 2012 increased by Rs. 3725 lakhs to Rs. 31295 lakhs.

As on 31st March, 2012, the Company had Fixed Deposits aggregating to Rs. 2403.47 lakhs. Out of the Fixed Deposits which matured for payment prior to 31st March, 2012,71 deposits aggregating to Rs. 15.77 lakhs were neither renewed nor claimed till 31st March, 2012. Of these 5 deposits aggregating to Rs. 0.95 lakhs have since been renewed or refunded on receipt of requests from the deposit holders. The balance of 66 deposits aggregating to Rs. 14.82 lakhs have been neither claimed nor renewed till date of this Report, in spite of the Company's intimation to the deposit holders. There has been no default or delay in meeting any maturity payment obligations.

During the year Rs. 1.49 lakhs was transferred to the Investor Education and Protection Fund.

HUMAN RESOURCES AND EMPLOYEE RELATIONS :

There is an ongoing emphasis on building a progressive Human Resources culture within the organisation. Structured initiatives to nurture talent and create a working environment that fosters motivation, team-work and result- orieritation continue to be addressed.

The long term wage agreement with the Union expired on 31st December, 2011, and negotiations will commence in due course. Employee Relations across the Company continued to be cordial, and issues were settled amicably. Productivity levels continued to be subject to continuous monitoring.

Employee strength as on 31st March, 2012 was 1381 as compared to 1317 in the previous year.

CORPORATE GOVERNANCE :

A separate report on Corporate Governance along with Auditor's Certificate on its compliance, is set out in Annexure "A".

DIRECTORS' RESPONSIBILITY STATEMENT :

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that:

(i) In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures.

(ii) The Directors 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 31st March, 2012, and the profit for that period.

(iii) Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956, for safeguarding of assets of the Company and for preventing and detecting frauds and other irregularities.

(iv) The Directors have prepared Annual Accounts on going concern basis.

DIRECTORS :

Mr. Sanjiv N. Shah, Mr. Jairaj C. Thacker and Mr. Mukul Harkisondass retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

During the year Mr. Deepak S. Parekh resigned as Alternate Director to Mr. Anand J. Danani. The Board of Directors place on record their appreciation for the invaluable advice and guidance given by Mr. D. S. Parekh during his long association with the Company.

Information on the Directors eligible for reappointment as required under Clause 49 of the Listing Agreement with Stock Exchanges is disclosed in the profiles of the Directors under Item Nos. 3, 4 and 5 forming part of the Notice dated 16th May, 2012 circulated along with the Annual Report 2011-12.

AUDITORS :

The Company's auditors, M/s. Dalai & Shah, bearing Firm Registration No. 102021W, hold office till the date of the ensuing Annual General Meeting and, being eligible, are recommended for reappointment. This item of business is covered under Item No. 6 of the accompanying notice.

COST AUDITORS :

M/s. R M. Nanabhoy & Co. an independent firm of Cost Accountants having an arm's length relationship with the Company and who are free from any disqualification as specified under Section 233 B(5) read with Section 224 and sub- section 3 and sub-section 4 of Section 226 of the Companies Act, 1956, have been appointed by the Board as Cost Auditors of the Company, for electric motors, for the Financial Year ending 31st March, 2013, subject to the approval of the Central Government. Their appointment is in accordance with the limits specified in Section 224 (iB) of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES :

The information required under Section 217 (2A) of the Companies Act, 1956, read with Company's (Particulars of Employees) Rules, 1975, and forming part of this Report, are annexed to this Report. However, as per the provisions of Section 219 (1) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to all Shareholders of the Company, excluding the Statement of Particulars of Employees. Any shareholder interested in the Particulars of Employees, may write to the Company Secretary at the Registered Office of the Company for a copy of the statement.

Additional information as required by Department of Companies Affairs is presented on Page 13 & 14 of this Annual Report.

ACKNOWLEDGEMENTS :

The Directors accept and convey their sincere appreciation to all employees of the Company for their continued dedication and commitment to achieving the results of the Company. The Directors also acknowledge and are grateful to the Bankers, Government Authorities, Shareholders, Vendors and other Stakeholders for their continued support, confidence and co-operation in the performance of the Company.

For and on behalf of the Board of Directors

Bansi S. Mehta

Chairman

Date : 16th May, 2012


Mar 31, 2011

The Directors are pleased to present herewith the 64th Annual Report of the Company together with Audited Accountsfor the financial year ended 31st March 2011.

FINANCIAL PERFORMANCE

Year Ended Year Ended 31st March 31st March 2011 2010 (? in (? in Lakhs) Lakhs)

Income from Sales & Service 76299.48 70608.64

Less: Excise Duty 6595.05 5094.35

69704.43 65514.29

Other Income 1463.35 1167.72

71167.78 66682.01

Profit before Interest,

Finance Charges,

Depreciation,

Exceptional Items and Tax 7647.70 7537.95

Less: Interest & Finance Charges 896.84 605.28

Less: Depreciation 893.35 836.71

Profit before Exceptional Item and Tax 5857.51 6095.96

Add: Exceptional Item 3380.67 -

Profit before Tax 9238.18 6095.96

Less: Provision for Taxes 1885.62 2007.09

Profit after Tax 7352.56 4088.87

Short (Excess) Provision of tax for earlier years 0.03 (33.48)

Profit after Taxation 7352.53 4122.35

Add: Profit brought forward from previous year 2937.86 2463.06

Profit available for appropriation 10290.39 6585.41

APPROPRIATION :

Proposed Equity

Dividend 1412.89 1412.89

Tax on Proposed Equity

Dividend 229.21 234.66

General Reserve 5000.00 2000.00

Profit Carried Forward 3648.29 2937.86

Previous years figures have been regrouped for comparison purposes with current years presentation wherever necessary.

DIVIDEND

The Directors recommend a Dividend of t 25 per Equity Share for the year ended 31st March, 2011 on 56,51,560 Equity Shares of ? 10/- each. The Dividend payout, including Dividend Tax of ? 229.21 lakhs, will be? 1642.10 lakhs compared to ? 1647.55 lakhs in the previous year.

OPERATIONS

Although the Indian economy in general, and the electrical equipment industry in particular, displayed growth and buoyancy, the overhang of built-up capacities coupled with inflation, surging commodity prices, and higher financing costs kept market conditions fiercely competitive and exerted relentless pressure on margins, Further, upgradation of one of the transformer plants affected production and deliveries during the last two months of the year under review.

Against this backdrop, the Company was able to increase Income from Sales and Service from ? 706 crores to ? 763 crores, a growth of 8% over the previous year. The motors, drives, elevator systems and projects businesses contributed significantly to the turnover growth.

The PBT from operations and before exceptional items decreased marginally, by ? 2 crore to ? 59 crore.

OTHER INITIATIVES

During the year one of the transformer plants was upgraded and modernised to cater to international business and to enhance production capacity of higher ratings up to 220 KV.

Specialised design software for transformers up to 500 KV, installed under a turnkey contract with an international high-voltage research institute, will enhance design capabilities by improving predictability, optimization and cost- effectiveness.

The ongoing distributorship arrangement for AC drives with KEB, Germany, was strengthened by an agreement under which the Company will assemble drives of ratings above 45 KW. This is expected to improve market share by enabling specific application segments to be more effectively addressed. Production from the new facility at the Airoli works is expected to begin during the second half of this year.

A comprehensive end-to-end project to streamline the supply chain for motors was initiated during the year. This is expected to significantly improve both customer responsiveness and the effectiveness of operations, and to establish a robust platform for continued growth.

There is ongoing emphasis on value engineering, product development, cycle time reduction, and process and system scalability.

FINANCE

The Company continues to focus on efficient management of short-term and long-term funds through rigorous monitoring of deployment for working capital, a critical evaluation and negotiation of proposals for capital expenditure, and optimising terms from fund providers. This enabled the Company to restrict net financing cost (net of income from cash surplus) - notwithstanding increased interest rates - to 0.45% (previous year: 0.41%) of sales.

The Company sold 3,90,000 equity shares of Siemens Ltd. during the year through the open market at an average price of ? 874 with the objective of part financing contemplated expansions of the motors and transformers businesses. This generated exceptional income (free of both Capital Gains Tax and MAT) of ? 34.10 crore, and is reflected as such in the Accounts.

The Companys free reserves as on March 31, 2011 increased by ^ 5711 lakhs to ? 27570 lakhs.

As on 31st March, 2011, the Company had Fixed Deposits aggregating to ? 1955.93 lakhs. Out of the Fixed Deposits which matured for payment prior to 31 st March, 2011,32 deposits aggregating to ? 5.56 lakhs were neither renewed nor claimed till 31st March, 2011. Of these 4 deposits aggregating to ? 0.56 lakh have since been renewed or refunded on receipt of requests from the deposit holders. The balance of 28 deposits aggregating to ? 5.00 lakhs have been neither claimed nor renewed till date of this Report, in spite of the Company^ intimation to the deposit holders. There has been no default or delay in meeting any maturity payment obligations,

During the year ? 1.16 lakhs was transferred to the Investor Education and Protection Fund.

HUMAN RESOURCES AND EMPLOYEE RELATIONS

The Company remains committed to developing and fostering a culture of participation, engagement and accountability, and takes pride in the initiative and team-work, and in the spirit of excellence, demonstrated by all its employees; they have displayed exemplary team-work, result- orientation, and motivation; and also a sense of accomplishment from their contribution to the Companys goals.

The work environment was cordial throughout the year and. in an atmosphere of harmonious Industrial Relations, the year under review was peaceful, with no loss of man-days. The long term wage settlement, settled amicably, was signed on 29th June 2010, and is valid until 31st December 2011.

The employee strength as of 31 March, 2011 was 1317, compared to 1298 in the previous year.

CORPORATE GOVERNANCE

A separate report on Corporate Governance along with Auditors Certificate on its compliance, is set out in Annexure "A".

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that:

(i) In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures.

(ii) The Directors 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 31st March 2011, and the profit for that period.

(iii) Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956, for safeguarding of assets of the Company and for preventing and detecting frauds and other irregularities.

(iv) The Directors have prepared Annual Accounts on going concern basis.

DIRECTORS

Mr. Bansi S. Mehta, Mr. Jaisingh R. Danani and Mr. Prakash V. Mehta retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment.

Mrs. D. Vijayalakshmi was appointed as Additional Director by the Board of Directors with effect from 22nd July, 2010. In terms of Section 260 of the Companies Act, 1956 and Article 161 of the Articles of Association of the Company she holds office as Director only till the date of the forthcoming Annual General Meeting but is eligible for reappointment for the office of Director in the Company. Notice has been received from a member under Section 257 of the Companies Act, 1956 signifying their intention to propose the candidature of Mrs. D. Vijayalakshmi for the office of Director liable to retire by rotation. The Board of Directors of the Company are confident that her vast knowledge and experience will be of great value to the Company and hence recommends the Resolution No. 7 of the Notice dated 9th May, 2011 for approval of the members.

Information on the Directors eligible for reappointment as required under Clause 49 of the Listing Agreement with Stock Exchanges is disclosed in the profiles of the Directors under Item Nos. 3, 4, 5 and 7 forming part of the Notice dated 9th May, 2011 circulated along with the Annual Report 2010-11.

AUDITORS

The Companys auditors, M/s. Dalai & Shah, bearing Firm Registration No. 102021W, hold office till the date of the ensuing Annual General Meeting and, being eligible, are recommended for reappointment. This item of business is covered under Item No. 6 of the accompanying notice.

COST AUDITORS

M/s. R M. Nanabhoy & Co. an independent firm of Cost Accountants having an arms length relationship with the Company and who are free from any disqualification as specified under Section 233B(5) read with Section 224 and sub- section 3 and sub section 4 of Section 226 of the Companies Act, 1956, have been appointed by the Board as Cost Auditors of the Company, for the Financial Year ending 31st March, 2012, subject to the approval of the Central Government. Their appointment is in accordance with the limits specified in Section 224 (1B) of the Companies Act, 1956.

PARTICULARS OF EMPLOYEES

The information required under Section 217 (2A) of the Companies Act, 1956, read with Companys (Particulars of Employees) Rules, 1975, and forming part of this Report, are annexed to this Report. However, as per the provisions of Section 219 (1)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all Shareholders of the Company, excluding the Statement of Particulars of Employees. Any shareholder interested in the Particulars of Employees, may write to the Company Secretary at the Registered Office of the Company for a copy of the Statement.

Additional information as required by Department of Companies Affairs is presented on Page 14 & 15 of this Annual Report.

ACKNOWLEDGEMENTS

The Directors accept and convey their sincere appreciation to all employees of the Company for their continued dedication and commitment to achieving the results of the Company. The Directors also acknowledge and are grateful to the Bankers, Government Authorities, Shareholders, Vendors and other Stakeholders for their continued support, confidence and co- operation in the performance of the Company.

For and on behalf of the Board of Directors

Bansi S. Mehta

Chairman

Date : 9th May, 2011

 
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