Home  »  Company  »  Talbros Auto.  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Talbros Automotive Components Ltd.

Mar 31, 2015

To The Members,

The Directors have pleasure in presenting 29th Annual Report on the business and operations of the Company alongwith the audited Balance Sheet and Statement of Profit & Loss for the year ended on 31st March, 2015.

FINANCIAL RESULTS: (Rs.in Lacs)

Particulars Year Ended Year Ended 31st March, 2015 31st March, 2014

Gross Sales 13,829.10 12,945.12

Less: Excise Duty 1,209.16 1,212.36

Net Sales 12,619.94 11,732.76

Other Income 260.38 296.65

Total Income 12,880.32 12,029.41

Profit before Interest, 1,264.18 1,236.11

Depreciation & Tax

Less: Interest 245.33 360.71

Depreciation 358.90 286.50

Profit Before Tax 659.95 588.90

Less: Previous Year adjustments 2.86 1.43

Provision for Wealth Tax 0.47 0.36

Provision for current 244.60 192.00 year income-tax

Provision for Deferred Tax (42.86) 5.82

Net Profit after tax 454.88 389.29

Add : Balance carried from 1,808.49 1,547.29

Profit & Loss A/c

Net profit after tax and 2,263.37 1,936.58 adjustments

Dividends

Less: Interim Dividend NIL NIL

Final Dividend (Proposed) 152.30 76.15

Dividend Distribution Tax on 31.87 12.94

Proposed Dividend

Transferred to General Reserve 45.00 39.00

Balance carried to Balance Sheet 2,034.20 1,808.49

EPS (Basic) 17.92 18.03

EPS (Diluted) 17.92 18.03

REVIEW OF OPERATIONS:

Your company has shown sales turnover of Rs. 12,619.94 Lacs in this financial year ended on 31st March, 2015, a growth of around 7.56 % as against Rs. 11,732.76 Lacs for the previous financial year. The net profit after tax for this year is Rs. 454.88 Lacs, a growth of around 16.85% as compared to Rs. 389.29 Lacs for the previous financial year.

Reserves & Surplus as on 31st March, 2015 will stand at Rs. 3,001.81 Lacs as against the paid-up capital of Rs. 253.83 Lacs.

DIVIDEND:

Your Directors recommend a final dividend of Rs. 6 per share (60%).The dividend payout, if approved in the forthcoming Annual General Meeting, will result in outflow ofRs. 184.16 Lacs inclusive of Rs. 31.87 Lacs on Dividend Tax.

Dividend including dividend tax as a percentage of profit after tax before exceptional items is 40.49% as compared to 22.89 % in the previous year.

TRANSFER TO GENERAL RESERVE:

Your directors recommended a transfer of Rs. 45,00,000/- (Rupees Forty Five Lakhs) to the general reserves of the Company.

TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND:

In terms of Section 125 of the Companies Act, 2013, no unclaimed dividend in relation to any financial year is due for remittance to the Investor Education and Protection Fund established by the Central Government.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has a proper Internal Control System commensurate with the size, scale and complexity of its operations. To maintain the objectivity and independence, the Internal Audit team reports to the Chairman of the Audit Committee of the Board and to the Managing Director.

The Internal Audit team monitors and evaluates the efficacy and adequacy of internal control system in the company, accounting procedures and policies. Based on the internal audit report, the Company undertake corrective action in their respective areas and thereby strengthen the control.

MARKETING AND EXPORT:

A modest pick in the Global economy boosted the export of the company from 1,813.97 Lacs to 2,870.32 Lacs in the year 2014-15. Aggressive marketing efforts and relentless focus on quality have been impressive and export performance enablers with nonetheless adding more customers in the clientele list of the Company.

JOINT VENTURE:

In order to expand the business activities, your Company has joined hands with Sypris (a USA based Company) for

Cold Extrusion forging capability. The Joint Venture agreement will be finalized in the current fiscal.

RATING:

Your Company has been assigned a rating of BBB Stable for Fund based bank limits of Rs. 15 Crores and rating of A2 for Non Fund based bank limits availed from Indusind Bank Limited. The rating is assigned by ICRA Limited.

SUBSIDIARIES:

The Company is not having any subsidiary company. DIRECTORS:

The Board of Directors consists of executive and non- executive directors including independent directors who have wide and varied experience in different disciplines of Corporate functioning.

Mr. KartikTalwar, Non Executive Non Independent Director is liable to retire by rotation and being eligible offers himself for re-appointment. Your Directors recommend for his re- appointment.

Further, the Nomination & Remuneration Committee of the Board of Directors has considered and recommended for the re-appointment and remuneration payable to Mr.Tarun Talwar, Managing Director, Mr. Sanjay Sharma, Executive Director and Mr. Vijay Kumar Sharma, Executive Director of the Company. Your Directors recommend to pass necessary resolution as set out in the item no. 5-7 of the notice of the annual general meeting.

DECLARATION BY INDEPENDENT DIRECTORS:

The Independent directors have submitted their disclosure to the Board that they fulfill all the requirements as to qualify for their appointment as an Independent Director under the provisions of the Companies Act, 2013 as well as clause 49 of the Listing Agreement.

NUMBER OF MEETINGS OF THE BOARD:

The Board met 6 (six) times during the financial year under review, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed under the Companies Act, 2013.

BOARD EVALUATION:

Pursuant to the provisions of Companies Act, 2013 and clause 49 of Listing Agreement, Independent Directors at their meeting without the participation of the Non- Independent Directors and Management, considered / evaluated the Boards' performance including the chairman.

The Board subsequently evaluated its own performance, the working of its committees (Audit, Nomination and

Remuneration and Stakeholders Relationship Committee) and Independent Directors (without participation of the relevant Director).

The criteria for performance evaluation have been detailed in the Corporate Governance Report attached to this report.

AUDIT COMMITTEE:

The Company has constituted an Audit Committee w.e.f. 07th August, 2014 with 3 (Three) Directors and Independent Director as chairman of the Committee. During the year two meetings were held. The responsibility and duties of Audit Committee have been detailed in the Corporate Governance Report.

NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration has been constituted w.e.f. 07th August, 2014 with 3 (three) Non Executive Directors. During the year 1 (One) meeting has been held. The key areas of Committee has been detailed in Corporate Governance Report. '

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company has not given any loan or guarantees covered under the provisions of section 186 of Companies Act, 2013. The details of investments made by the Company is given in the notes to the financial statements.

RELATED PARTY TRANSACTIONS:

The Company has entered into transactions with a related party for availing job work services. The said party is covered under the definition of related party as per Listing Agreement. The transactions entered into with the related party during the financial year were on arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the company with promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuant to section 177(9) of the Companies Act, 2013, read with rule 7 of the Companies (Meeting of Board and its powers) Rules, 2014 and clause 49 of the Listing Agreement, the Board of Directors have approved the policy on Vigil Mechanism/Whistle Blower and the same was hosted on the website of the Company.

The policy inter alia provided direct access to the Vice Chairman and CFO of the Company. The Vice Chairman and CFO can approach and discuss the matter with Chairman or Audit Committee as they deem fit.

Your Company affirms that no complaints have been received during the year under review.

STATUTORY AUDITORS:

Comments of the Auditors in their report and the notes forming part of the Accounts, are self explanatory and need no comments. The Auditors can be appointed for two more years in term of section 139(2) of the Companies Act, 2013.

Your directors request that the appointment of M/s Rakesh Raj & Associates, the Company's Auditors are required to be re-appointed for two more years and being eligible offers themselves for re-appointment. The Company has received a certificate from the auditors to the effect that their re- appointment if made, would be in accordance with the provisions of section 141 of the Companies Act, 2013

You are requested to appoint them as Statutory Auditors form the conclusion of this Annual General Meeting upto the conclusion of 31st Annual General Meeting.

SECRETARIAL AUDIT REPORT AND THE APPOINTMENT OF THE SECRETARIAL AUDITOR:

The Company has appointed M/s Sonal Agarwal & Associates, Company Secretaries to hold the office of Secretarial Auditors and to conduct the Secretarial Audit and the Secretarial Audit Report for the financial year ended on 31st March, 2015 is being attached with the Director's Report as Annexure - B which is self explanatory and needs no comments.

COST AUDITOR'S AND THEIR REPORT:

Comments of the Cost Auditors in their report are self explanatory and the Company has filed the Cost Audit Report for the financial year 2013-14 to the Central Government on dated 13th January, 2015.

M/s Jai Prakash & Co., the Company's Cost Auditors was appointed for the financial year 2014-15 and the Company has already obtained approval of Central Government. The Company has received a certificate from the cost auditors to the effect that thdir re-appointment is in accordance with the provisions of section 141 of the Companies Act, 2013.

INSURANCE AND RISK MANAGEMENT:

The assets of the Company are adequately insured against the loss of fire, burglary and other risks which are considered necessary by the management.

DEPOSITS:

During the year under review, the Company has repaid all deposits accepted and further has not accepted any deposit from the members of the general public as on 31 st March, 2015.

DIRECTORS' RESPONSIBILITY STATEMENT:

In accordance with the provisions of section 134(5), the Board confirm and submit the Directors, Responsibility Statement:-

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

(ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that were 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;

(iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) the Directors had prepared the annual accounts on a going concern basis;

(v) the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and .

(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE:

Your Company is committed to good Corporate Governance Practices and following to the guidelines prescribed by the SEBI and Stock Exchanges from time to time. The Company has implemented all of its major stipulations as applicable to the Company. The Statutory Auditor's Certificate date 27th June, 2015 in accordance with clause 49 of the Listing Agreement and report on Corporate Governance is annexed to and forming part of the Director's Report.

Mr. Tarun Talwar, Managing Director and Mr. Kanwar Pal Pawar, Chief Financial Officer, have given a certificate to the Board as contemplated in sub-clause V of clause 49 of the listing agreement.

CORPORATE SOCIAL RESPONSIBILITY:

The Company is committed to discharging its social responsibility as a good corporate citizen. As part of its social responsibility, the Company has contributed to various NGOs for promoting good education, building schools for under privileged childrens, contribution for softwares and hardwares required for providing good knowledge and education to the childrens.

Further, the Company has also contributed to a NGO namely HMP foundation for promoting health in rural areas where people lack the right guidance for regular health check-ups and proper treatment. HMP foundation has conducted various community health centres and organized various Eye and General Check-up camps in interior rular areas of Bharuch and Narmada district villages. The NGO has also conducted various counseling projects to identify the aptitudes in childrens.

The Company has also contributed to Parashar Foundation, a NGO which is engaged in organ donation activities and laid emphasis on creating organ receiving and giving awareness network in Delhi and nearby areas.

Also, the Company has taken an initiative to maintain the flora around its Registered Office.

The Board provide a brief outline of the Company's CSR Policy including the statement of intent reflecting the ethos of the Company, broad areas of CSR interest and an overview of activities proposed to be undertaken.The CSR policy has been hosted on the website of the Company.

The Composition of the CSR committee is:

1. Mr. Tarun Talwar, Managing Director

2. Mr. Sanjay Sharma, Executive Director

3. Mr. Sunil Kumar, Independent Director

The average net profit of the company for last three (3) financial years is Rs. 6.68 Crores (approx.). The threshold limit (2%) isRs. 13.37 Lacs.

The total amount spent by the Company in year 2014-15 is Rs. 12 Lakhs. However, the Company is planning to promote flora around the registered office area and will utilize the unspent amount ofRs. 1.37 Lakhs in next financial year.

MANAGEMENT DISCUSSION AND ANALYSIS:

A Management discussion and Analysis as required under the Clause 49 of the Listing Agreement is annexed and forming part of the Directors' Report.

CONSERVATION OF ENERGY, REASEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

The particulars prescribed under section 134(3)(m) of Companies Act, 2013 read with rule 8 of Companies (Accounts) Rules, 2014, are enclosed as Annexure - A to the Board's Report.

PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 197(12) of the

Companies Act, 2013 read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, none of the employee of the company has received the remuneration in excess to the limits set out in the rules.

Further, pursuant to the provisions of Section 197(12) of Companies Act, 2013 and rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the disclosures and details as required to be annexed to the Board's Report are provided in annexure forming part of the Annual Report.

Having regard to the provisions of Section 136(1) read with its relevant proviso of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee.

CORPORATE GOVERNANCE CERTIFICATE:

The Compliance Certificate from the auditors regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing Agreement has been annexed to this report.

RISK MANAGEMENT POLICY:

Pursuant to the provisions of section 134(3)(n) of the Companies Act, 2013 and clause 49 of the Listing Agreement, the Company has constituted a business risk management committee. The details of the committee and its terms of reference are set out in the Corporate Governance report.

EXTRACTS OF THE ANNUAL RETURN:

The Extracts of the Annual Return for the year 2014-15 being attached with the Directors Report as Annexure - C

ACKNOWLEDGEMENT:

Your Company outperformed the industry in a challenging year and continue to maintain its leadership position. It' has also been surpassing all international quality and cost benchmarks and continues to build shareholders value. Your Directors look to the future with confidence.

Your Directors wish to place on record their appreciation for the overwhelming co-operating and assistance received from the investors, customers, business associates, bankers, vendors, as well as regulatory and governmental authorities. Your Directors also thank the employees at all levels, who, through their dedication, co-operation, support and smart work, have enabled the Company to achieve rapid growth.

For and on behalf of the Board

Sd/-

Place: Faridabad Kartik Talwar

Date : 27.06.2015 Chairman


Mar 31, 2014

Dear Members,

We have the pleasure of presenting you the 57th Annual Report of your company alongwith audited accounts for the Financial Year ended 31st March, 2014.

You all are aware that during this year we had been in the midst of a very challenging economic environment. All sectors of the manufacturing economy faced a slow down during this year. The automotive industry in particular is going through one of the most challenging phases ever. Your management tried its best to buck the trend but the slow down effect being wide spread across almost all sub-segments of automobile industry; we could not remain totally unaffected.

During the year high interest rates coupled with consistent inflationary pressure adversely impacted growth. Weakening of Indian rupee significantly against all major currencies pushed up costs of imported inputs. Though, we convinced some of our overseas suppliers for price reduction support but we also had to shell out price reductions to our major overseas customers. High volatility in exchange rates and prices of crude oil, uncertainty in fuel policy and shaky customer confidence further dented company''s business and operational profitability. We would like to inform you that despite the adverse circumstances outlined above, your company has been able to clock a net turnover of Rs. 29,438.74 lacs being almost at par with the previous year turnover of Rs. 29,524.43 lacs. You are aware that rubber component manufacturing activity of the company was transferred just before the beginning of Financial Year 2013-14 to a separate joint venture company. Keeping the turnover from the hived off rubber components business aside, your company could achieve a turnover marginally higher than that of the previous year.

The management initiated various cost savings and cost optimization measures wherever possible. In order to improve liquidity and unlock non-productive assets, your company disposed off one of its non core real estate which was not being utilized and was not required for future use. All these activities resulted into a Net Profit before Tax of Rs. 1,743.57 lacs including an extra ordinary profit of Rs. 880.68 lacs through sale of fixed assets. The Net Profit before Tax during the previous year amounted to Rs. 1,002.17 lacs.

Financial Highlights:

(Rs. in lacs) Particulars: Year Ended Year Ended March 31, 2014 March 31, 2013

Revenue from Operations (Gross) 29,438.74 29,524.43

Profit before Interest and Depreciation 4,458.28 3,993.55

Less: Interest 1,829.87 2,047.94

Depreciation 884.84 943.44

Profit before Tax 1,743.57 1,002.17

Less: Provision for Taxation 300.00 202.00

Provision for Deferred Tax (49.73) (97.18)

MAT Credit Entitlement (165.00) (152.00) Add: (Excess)/Short provision of

tax for earlier years (written back) provided 81.45 5.55

Profit after Tax 1,576.84 1,043.80

Add: Balance Brought forward from last year 3,673.40 2,851.78

Profit available for appropriations 5,250.24 3,895.58 Appropriations:

Proposed Dividend 148.15 148.15

Tax on Dividend 25.18 24.03

Transfer to General Reserve 50.00 50.00

Balance carried forward 5,026.91 3,673.40

Total 5,250.24 3,895.58

FINANCIAL REVIEW

At the beginning of the Financial year 2013-14, Industry experts were hoping that the general economic scenario and thereby auto industry will start improving during the year. Contrary to such expectations, there has been further reduction in production volumes of Auto Companies. This year was stated to be the worst year in a decade for auto industry. The production of passenger vehicles and commercial vehicles witnessed decline over the previous year. Heavy commercial vehicles being the top losers witnessed a drop of 21% in production over last year. Light commercial vehicles reported 17.6% negative growth over last year. Apart from the economic slow down, commercial vehicle demand has been negatively affected by slow down in industry output, the gradual rise in diesel prices, slow down in new infrastructural projects and a ban on mining in certain states. Comparative production of vehicles in different segments over last three years has been as follows.

(Production in Nos.) VEHICLE TYPE 2011-12 2012-13 2013-14 (Nos.) Growth (Nos.) Growth

H.C.V.''s 3,84,801 2,80,677 -27% 2,21,626 -21%

L.C.V.''s 5,44,335 5,51,972 1% 4,77,238 -14%

Commercial 9,29,136 8,32,649 -10% 6,98,864 -16%

Vehicle

Cars 25,37,170 24,23,086 -4% 23,11,972 -5%

Utility 3,70,945 5,68,538 53% 5,63,986 -1%

Vehicles

Multi Purpose 2,37,954 2,39,434 1% 1,96,693 -18%

Vehicles (Van Type)

Passenger 31,46,069 32,31,058 3% 30,72,651 -5%

Cars

Two 1,54,27,532 1,57,44,156 2% 1,68,79,891 7%

Wheelers

Tractors 6,41,845 5,78,690 -10% 6,96,801 20%

Source: Society of Indian Automobile Manufacturers.

From the above you will observe that except the Two wheeler industry and Tractor Industry reported production growth of 7% and 20% respectively all other segments reported negative growth. Two wheeler growth was led by Honda Motor & Scooter India Pvt. Ltd., which is catered to by our JV Company. Bajaj Auto Ltd., the major two wheeler customer at your company reported a negative growth of 14.8%.

The volumes for Auto Component Industry being directly linked to production volume of vehicles, Auto Components Industry reported year on year decline in Net Sales and EBIDTA margins for the first time in last five years. Profits declined by a greater magnitude than declined in Net Sales.

Tractor Industry witnessed a growth in production volume of 20% over the previous year. Accordingly, your company''s gasket division was also benefited by this growth but the Tractor Business being only about 9% of total revenue, the overall benefit was not very significant.

Forging Division sales in the domestic market dipped because of drop in production volumes of vehicles. To salvage the position, Forging Division diverted its efforts and energy towards export business and were able to grow its exports by 34.8 % from Rs. 3,173.30 lacs in last year to Rs. 4,279.85 lacs during 2013-14. During the year, high fuel price in the International Market coupled with weakening of rupee against US Dollars had severe adverse effect on the energy cost at our Forging Division.

NEW INITIATIVES

Your Company took steps towards two major technology initiatives at Gasket Division. First being setting up of a dedicated line for manufacturing Heat Shields adopting latest technology acquired through Sanwa Packaging Co. Ltd. Japan, a leading worldwide manufacturer of Heat Shields.

Heat Shield Cover is a futuristic product with multiple functional advantages and its demand is expected to increase with new generation compact engines.

Second initiative involves setting up of Post-Coating facilities based on latest global technology acquired through Sanwa Packaging Co. Ltd., Japan. This facility will enhance company''s cost competiti- veness and pave way for entry into new products/segments.

At the Forging Division, your company expanded and upgraded its precision machining capabilities and ventured into new product range of its overseas customers in Europe. Increased volume of machining will push up value addition and resultant profit margins on related products.

Activities relating to these initiatives are at different stages and their benefits will start to accrue from later part of current financial year 2014-15.

FUTURE OUTLOOK

Currently, the biggest concern for the industry is the challenging macro economic environment in the country. The recently elected new central government has indicated that development of infrastructure; generation of employment, control over inflation and industrial growth would be the thrust areas. Such policies are expected to boost general sentiments and result in higher disposable incomes. This may, in turn, boost demand for new vehicles which was deferred by different sections of the society due to political and economic uncertainty may get restored. Thus after two years of tepid sales, Auto Industry is looking forward to a revival during 2014-15 with a moderate growth. However, medium and heavy commercial vehicle segment may take a bit longer to acquire a full revival as the key drivers, such as mining activity and infrastructure development are yet to pick up.

The growth pick-up expected in the current year may be gradual and its impact across various segments is expected to be visible only in the third quarter of current fiscal.

Your management has continued its strong focus on internal efficiencies towards improvement and investing in manpower through skill up-gradation so as to be nimble enough to fight the down turn and be prepared to take the benefit of upswing.

DIVIDEND

Your Directors are pleased to recommend 12% dividend for the year 2013-14 at par with the dividend declared last year subject to the approval of members at the ensuing Annual General Meeting. The total outgo on account of dividend (including Dividend Distribution Tax) for the financial year 2013- 14 will be 172.18 lacs.

TRANSFER OF UNPAID DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company shall transfer the unclaimed dividends for the year 2006-07 to Investor Education and Protection Fund on or before October 24, 2014 as being unpaid for a period of seven years in compliance with the provisions of Section 205C of the Companies Act, 1956.

The shareholders who have not encashed their dividend warrants for the financial year 2006-07 or any subsequent year are requested to lodge their claims for revalidation of dividend warrants. The Company is specifically intimating those members who have so far not claimed the unpaid dividend for these years.

FIXED DEPOSIT

The Fixed Deposit Scheme of the Company continued during the year. Deposits accepted from the public amounted to Rs. 1192.05lacs on March 31, 2014. Your Company has duly complied with the "Residuary Non-Banking Companies (Reserve Bank) Directions, 1987" issued by the Reserve Bank of India. As on March 31, 2014, 52 fixed deposits aggregating to Rs. 16.34 lacs matured for payment, but were neither claimed nor renewed by the depositors.

However with the commencement of Companies Act, 2013 (''the 2013 Act), deposits are now governed by the new law and approval of the shareholders is required by way of a Special Resolution for inviting/accepting/renewing deposits. Accordingly company is taking the consent of shareholders in the ensuing Annual General Meeting.

BOARD OF DIRECTORS

In accordance with the provisions of the Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Anuj Talwar, Executive Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

The Companies Act, 2013 provides for appointment of independent directors. Sub-section(10) of Section 149 of the Companies Act, 2013 (effective April 1, 2014 )provides that independent directors shall hold office for a term of up to five consecutive years on the Board of a company; and shall be eligible for re-appointment on passing a special resolution by the shareholders of the Company.

Mr. V.Mohan, Mr. Rajive Sawhney, Mr. A.K.Mehra, Mr. Amit Burman and Mr. R.R. Vederah in terms of Section 149 and other applicable provisions of the Companies Act, 2013, being eligible are proposed to be appointed as Independent Directors for five consecutive years. Separate notices have been received proposing them as candidates for the office of Director of the Company. The details of Directors being appointed / reappointed are given elsewhere in the Annual Report.

The Board recommends their appointment

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to sub Section (2AA) of Section 217 of the Companies Act, 1956, your Directorsstate and confirm;

a. that in the preparation of annual accounts, all the applicable accounting standards have been followed and there has not been any material departure from them.

b. that such accounting policies were selected and applied consistently and such judgments and estimates were made that were 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 the year under review;

c. that proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 (to the extent applicable) and the Companies Act, 2013 (to the extent notified) for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

d. that the annual accounts for the financial year under reference have been prepared on a ''going concern'' basis.

CORPORATE GOVERNANCE

The Corporate Governance structure in the Company assigns responsibilities and entrusts authority among different participants in the organization i.e. Board of Directors, Senior Management team and middle management employees.

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, a separate section titled "Corporate Governance" has been included in this Annual Report. Certificate from the Statutory Auditors of the Company, M/s. S.N. Dhawan & Co., Chartered Accountants, confirming compliances with the provisions of Corporate Governance as stipulated in clause 49, is annexed to the said Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed chapter on "Management Discussion and Analysis" (MDA) pursuant to Clause 49 of the Listing Agreement is annexed to the Annual Report and forms integral part of this Report. CORPORATE SOCIAL RESPONSIBILITY As per Companies Act, 2013 all companies having net worth of Rs. 500 Crore or more, or turnover of Rs. 1000 Crore or more or a net profit of Rs. 5 Crore or more during any financial year are required to constitute a Corporate Social Responsibility (CSR) Committee of the Board of Directors comprising three or more directors, atleast one of whom will be an independent director. Aligning with guidelines, a Committee comprising of Mr. Umesh Talwar, Mr. Amit Burman and Mr. Navin Juneja, has been constituted and is responsible for formulating and monitoring the CSR Policy of the Company.

AUDITORS AND THEIR REPORT

M/s. S.N. Dhawan& Co., Chartered Accountants, Statutory Auditors of the Company, M/s. R. Sundraraman& Co. Chartered Accountants, Auditors for the Chennai Plant and CMRS & Associates, Chartered Accountants, Auditors for the Pune Plant, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

The Auditor''s observations and the relevant notes on the accounts are self-explanatory and therefore, do not call for further comments.

COST AUDITORS

In accordance with the procedure laid down by Ministry of Corporate Affairs vide its General Circular No. 15/2011 dated April 11, 2011, the Company has appointed M/s. Vijender Sharma & Co, Cost Accountants as the cost auditors under section 148 of the Companies Act, 2013 for the audit of cost accounts of the Company for the year ending March 31, 2015.

JOINT VENTURE COMPANIES

In terms of Accounting Standard (AS-27), "Financial Reporting of Interest in Joint Ventures" the consolidated financial statements comprise of the operating results of your Company and proportionate results of three Joint Venture Companies namely Nippon Leakless Talbros Pvt. Ltd., Magnetti Marelli Talbros Chassis Systems Pvt. Ltd., and TalbrosMarugo Rubber Pvt. Ltd., in the proportion of 40%, 50% and 50%-1share respectively.

Consolidated revenue from operations (Gross Sales) during the year has been Rs. 39,658.30 lacs as against Rs. 37,503.87 lacs in the previous year thereby showing 5.7% increase.

The consolidated net profit after provision of tax has been Rs. 1,931.28 lacs as against Rs. 1,387.82 lacs in the previous year showing an increase of 39.15%.

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

Information pursuant to sub-section 1(e) of Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure-I to this Report.

PERSONNEL & PARTICULARS OF EMPLOYEES

The Board of Directors wishes to expresses their appreciation to all the employees for their contribution to the operations of the Company during the year. It is the collective spirit of partnership across all sections of employees and their sense of ownership and commitment that has helped the Company to grow.

A statement u/s 217(2A) containing list of employees drawing remuneration exceeding Rs. 60.00 lacs per annum or Rs. 5.00 lacs per month is attached with this report as Annexure II.

ACKNOWLEDGEMENT

Your Directors gratefully acknowledge the support given by our customers, shareholders, employees, financial institutions and banks and all other stakeholders, and we look forward to their continued support.

For and on behalf of the Board

VARUN TALWAR UMESH TALWAR Joint Managing Vice Chairman & Director Managing Director

Place : New Delhi Date : 26th May, 2014


Mar 31, 2013

Dear Members,

The Board of Directors have pleasure in presenting the 56th Annual Report alongwith the audited accounts of the Company for the year ended March 31, 2013.

Your Company''s gross revenue from operations during the year has been 13.8% lower at Rs. 32,056.29 lacs as against Rs. 37,204.56 lacs in the previous year partially due to slowdown of economy and partially due to sale of Stamping & Rubber businesses to two separate Joint Venture Companies. Operations of the Company resulted into a net profit of Rs. 1,043.80 lacs as againstRs. 1,062.57 lacs in the previous year after provision of corporate tax.

Financial Highlights:

(Rs.in lacs) Particulars: Year Ended Year Ended March 31, 2013 March 31, 2012

Revenue from Operations (Gross) 32,056.29 37,204.56

Profit before Interest and Depreciation 3,993.55 4,152.25

Less : Interest 2,047.94 1,990.98

Depreciation 943.44 1,079.42

Profit before Tax 1,002.17 1,081.85

Less: Provision for Taxation 202.00 167.50

Provision for Deferred Tax (97.98) 23.14

MAT Credit Entitlement (152.00) (167.50)

Add: (Excess)/Short provision of tax for earlier 5.55 (3.86) years (written back)/provided

Profit after Tax 1,043.80 1,062.57

Add: Balance Brought forward from last year 2,851.78 2,011.39

Profit available for appropriations 3,895.58 3,073.96

Appropriations:

Proposed Dividend 148.15 148.15

Tax on Dividend 24.03 24.03

Transfer to General Reserve 50.00 50.00

Balance carried forward 3,673.34 2,851.78

Total 3,895.58 3,073.96

FINANCIAL REVIEW

Indian economy is estimated to have grown at 5% in 2012-13 which is slowest pace in a decade. The economic slow down took its toll on the Indian Auto Industry, once seen as the world''s most promising by global auto makers and almost all auto companies in India ended the Financial Year on a bleak note. Slowing growth has dampened sentiments of buyers who were reluctant to engage in a new purchases at a time when interest rates and fuel prices remained high. Hefty discounts and freebies on new vehicles in the fourth quarter of 2012-13 failed to attract buyers.

All segments barring multi utility vehicles and scooters registered negative growth and the worst hit sector was heavy and medium commercial vehicles where production dropped by 27.6% as compared to the previous year. This has been the steepest drop since global economic melt down in 2008-09. Your Company was also affected by this as a significant portion of your Company''s business comes from Gaskets for commercial vehicles.

Another major segment catered to by the Gasket Divn. of your Company is two-wheeler segment, particularly motorcycles. Two wheelers segment grew only at negligible 1.9%, that even due to growth in scooters production only. Whereas, motorcycles which hold larger portion experienced marginal dip as compared to the previous year. In the past, two wheeler segment had been recording highest growth in auto industry year on year.

DIVIDEND

Your Directors are pleased to recommend 12% dividend for the year 2012-13 at par with the dividend declared last year subject to the approval of members at the ensuing Annual General Meeting. The total outgo on account of dividend (including Dividend Distribution Tax) for the financial year 2012-13 will be Rs. 172.18 lacs.

TRANSFER OF UNPAID DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company shall transfer the unclaimed dividends for the year 2005-06 to Investor Education and Protection Fund on or before August 02, 2013 as being unpaid for a period of seven years in compliance with the provisions of Section 205C of the Companies Act, 1956.

The shareholders who have not encashed their dividend warrants for the financial year 2005-06 or any subsequent year are requested to lodge their claims for revalidation of dividend warrants. The Company is specifically intimating those members who have so far not claimed the unpaid dividend for these years.

FIXED DEPOSIT

The Fixed Deposit Scheme of the Company continued during the year. Deposits accepted from the public amounted to Rs. 1,588.85 lacs on March 31, 2013. Your Company has duly complied with the "Residuary Non-Banking Companies (Reserve Bank) Directions, 1987" issued by the Reserve Bank of India.

As on March 31, 2013, 48 fixed deposits aggregating to Rs. 19.84 lacs matured for payment, but were neither claimed nor renewed by the depositors.

NEW INITIATIVES

Your Company at its Forging Plant started using gas based power supply during the year in order to economize on energy cost. Gearing up for the recovery of economy, your Company expanded its factory building at Pune Plant and introduced multilevel manufacturing concept to get optimum utilization of space.

In order to strengthen its leadership position in gasket business, the Company continued its efforts to adopt new technologies/ processes and introduced new products in the market.

NEW BUSINESS:

During the Financial Year 2011-12, your Company formed a Joint Venture with Fiat Group and as per the terms of the Joint Venture Agreement, the business of manufacturing Sheet Arms alongwith related production equipments and tools was transferred to the Joint Venture Company, Magneti Marelli Talbros Chassis Systems Pvt. Ltd. where your Company holds 50% equity with effect from April 01, 2012. The other Joint Venture partner being Sistemi Sospensioni S.p.A of Italy, a Fiat Group Company holds balance 50% equity.

During 2012-13, your Company started one more Joint Venture with Marugo Rubber Industries Ltd., Japan in order to acquire technical know how and move up the supply chain system. As per the Joint Venture Agreement the existing rubber components manufacturing business alongwith its existing production equipments was transferred under slump sale to the Joint Venture Company during Jan. 2013.

BOARD OF DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. V. Mohan and Mr. Navin Juneja, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. The Board recommends their reappointment.

During the year under review Mr. Brian Williams resigned from the Directorship of the Company w.e.f. February 02, 2013. The Board places on record its heart felt appreciation for the contribution made by Mr. Brian Williams during his tenure on the Board of the Company.

Mr. R.R. Vederah was appointed as an Additional Director w.e.f February 13, 2013. He holds office upto the date of the ensuing Annual General Meeting of the Company. The Company has received a notice in writing from a member u/s 257 proposing his candidature for the office of Director, liable to retire by rotation.

Details of Mr. V. Mohan, Mr. Navin Juneja and Mr. R.R. Vederah are given elsewhere in the report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to sub Section (2AA) of Section 217 of the Companies Act, 1956, your Directors state and confirm;

a. that in the preparation of annual accounts, all the applicable accounting standards have been followed and there has not been any material departure from them.

b. that such accounting policies were selected and applied consistently and such judgments and estimates were made that were 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 the year under review;

c. that proper and sufficient care was 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 frauds and other irregularities;

d. that the annual accounts for the financial year under reference have been prepared on a ''going concern'' basis.

CORPORATE GOVERNANCE

The Corporate Governance structure in the Company assigns responsibilities and entrusts authority among different participants in the organization i.e. Board of Directors, Senior Management team and middle management employees.

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, a separate section titled "Corporate Governance" has been included in this Annual Report. Certificate from the Statutory Auditors of the Company, M/s. S.N. Dhawan & Co., Chartered Accountants, confirming compliances with the provisions of Corporate Governance as stipulated in clause 49, is annexed to the said Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed chapter on "Management Discussion and Analysis" (MDA) pursuant to Clause 49 of the Listing Agreement is annexed to the Annual Report and forms integral part of this Report.

AUDITORS AND THEIR REPORT

M/s. S.N. Dhawan & Co., Chartered Accountants, Statutory Auditors of the Company, M/s. R. Sundraraman & Co. Chartered Accountants, Auditors for the Chennai Plant and CMRS & Associates, Chartered Accountants, Auditors for the Pune Plant hold office till the conclusion of the forthcoming Annual General Meeting and being eligible for reappointment, have confirmed that their reappointment if made, shall be within the limits of Section 224(1B) of the Companies Act, 1956. The Board recommends the reappointment of M/s. S.N. Dhawan & Co. as Statutory Auditors of the Company and M/s. R. Sundraraman & Co. as Auditors for the Chennai Plant and CMRS & Associates, as Auditors for the Pune Plant of the Company.

The Auditor''s observations and the relevant notes on the accounts are self-explanatory and therefore, do not call for further comments.

COST AUDITORS

In accordance with the procedure laid down by Ministry of Corporate Affairs vide its General Circular No. 15/2011 dated April 11, 2011 the Company has appointed M/s. Vijender Sharma & Co, Cost Accountants as the cost auditors under section 233B of the Companies Act, 1956 for the audit of cost accounts of the Company for the year ending March 31, 2014. The extended due date of filing the Compliance Report was February 28, 2013. The Company had filed the report with the Ministry of Corporate Affairs on January 31, 2013.

JOINT VENTURE COMPANIES

In terms of Accounting Standard (AS-27), "Financial Reporting of Interest in Joint Ventures" the consolidated financial statements comprise of the operating results of your Company and proportionate results of three Joint Venture Companies namely Nippon Leakless Talbros Pvt. Ltd., Magnetti Marelli Talbros Chassis Systems Pvt. Ltd., and Talbros Marugo Rubber Pvt. Ltd., in the proportion of 40%, 50% and 50%-1share respectively.

Consolidated revenue from operations (Gross Sales) during the year has been Rs. 37,503.87 lacs as against Rs. 40,659.42 lacs in the previous year showing 7.8% decline.

The consolidated net profit after provision of tax has been Rs. 1,387.82 lacs as against Rs. 1,437.89 lacs in the previous year showing a drop of 3.5%.

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

Information pursuant to sub-section 1(e) of Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure-I to this Report.

PERSONNEL & PARTICULARS OF EMPLOYEES

The Board of Directors wishes to expresss their appreciation to all the employees for their outstanding contribution to the operations of the Company during the year. It is the collective spirit of partnership across all sections of employees and their sense of ownership and commitment that has helped the Company to grow.

A statement u/s 217(2A) containing list of employees drawing remuneration exceeding Rs. 60.00 lacs per annum or Rs. 5.00 lacs per month is attached with this report as Annexure II.

ACKNOWLEDGEMENT

Your Directors gratefully acknowledge the support given by our customers, shareholders, employees, financial institutions and banks and all other stakeholders, and we look forward to their continued support.

For and on behalf of the Board

VARUN TALWAR UMESH TALWAR

Joint Managing Vice Chairman &

Director Managing Director

Place: New Delhi

Date : May 28, 2013


Mar 31, 2012

The Board of Directors have pleasure in presenting the 55th Annual Report alongwith the audited accounts of the Company for the year ended March 31, 2012.

Your company achieved impressive top line growth during the Financial Year 2011-12 with a total revenue of Rs. 37,204.56 lacs being 15% higher than the previous year. The operating profits before interest and depreciation amounted to Rs. 4,152.25 lacs showing a growth of 12.9% over the previous year.

Profits after providing for taxation amounted to Rs. 1,062.57 lacs in comparison to Rs. 951.11 lacs in the previous year. The Financial Results are summarized below:-

Financial Highlights: (Rs. in lacs) Year Ended Year Ended Particulars March 31, 2012 March 31, 2011

Revenue from Operations (Gross) 37,204.56 32,341.20

Profit before Interest and Depreciation 4,152.25 3,679.05

Less : Interest 1,990.98 1,663.16

Depreciation 1,079.42 1,038.86

Profit before Tax 1,081.85 977.03

Less: Provision for Taxation 167.50 141.50

Provision for Deferred Tax 23.14 25.91

MAT Credit Entitlement (167.50) (141.50)

(Excess) / Short provision for tax for earlier years written back / provided (3.86) 0.01

Profit after Tax 1,062.57 951.11

Add: Balance Brought forward from last year 2,011.39 1,282.46

Profit available for appropriations 3,073.96 2,233.57

Appropriations:

Proposed Dividend 148.15 148.15

Tax on Dividend 24.03 24.03

Transfer to General Reserve 50.00 50.00

Balance carried forward 2,851.78 2,011.39

Total 3,073.96 2,223.57

FINANCIAL REVIEW

During the year 2011-12 high rate of inflation, consistently moving up interest rates as well as fuel prices reflected adversely on the automobile demand. A slowing economy took some sheen off car sales which registered a growth of only 2% over the previous year. At the same time, the Sports Utility Vehicle (SUV) segment attracted most automobile makers and is expected to cash in on growing consumer demand.

Commercial vehicle sale which grew at 8% during 2011-12 to 8,09,000 units is expected to touch 16,00,000 units by 2016-17 at a compounded annual growth rate of 15%. This would be largely driven by rapid pace of urbanization. Small and light commercial vehicles will hold major chunk of this growth.

Two wheelers historically being the fastest growing segment witnessed only a moderate growth of 7% during 2011-12 over the previous year.

Tractor Sales after expanding at a compounded annual growth rate of 25% for 3 years, are losing steam. Research reports indicate that tractor industry may see decline in sales during 2012-13.

The Indian Engineering Industry appears poised for better access to Japanese and European markets. Your company also achieved significant growth in export particularly of forged parts. Export sales (FOB Value) during the year amounted to Rs. 6,092.26 lacs showing a growth of 52.7% over the previous year mark of Rs. 3,989.96 lacs. Export incentives were significantly reduced due to change in government policy effective from Oct. 2011 resulting in lower profit margins on exports.

With the influx of Multi National companies in India, the competition is increasing and so is the requirement for technological up gradation. Your company is keeping pace with latest technologies and continuing to maintain its leadership position in domestic market.

DIVIDEND

Your Directors are pleased to recommend 12% dividend for the year 2011-12 at par with the dividend declared last year. This would amount to Rs. 1.20 per share, aggregating to Rs. 172.18 lacs (including tax on dividend) on the paid up share capital of the company.

TRANSFER OF UNPAID DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company shall transfer the unclaimed dividends for the year 2004-05 to Investor Education and Protection Fund on or before September 03, 2012 as being unpaid for a period of seven years in compliance with the provisions of Section 205C of the Companies Act, 1956.

The shareholders who have not encashed dividend warrant for the financial year 2004-05 or any subsequent year are requested to lodge their claims for revalidation of dividend warrants. The Company is specifically intimating those members who have so far not claimed the unpaid dividend for these years.

FIXED DEPOSIT

The Fixed Deposit Scheme of the Company continued during the year. Deposits accepted from the public amounted to Rs. 1,652.17 lacs on March 31, 2012. Your Company has duly complied with the "Residuary Non-Banking Companies (Reserve Bank) Directions, 1987" issued by the Reserve Bank of India.

Out of these Deposits 38 fixed deposits aggregating to Rs. 14.57 lacs matured for payment, but were neither claimed nor renewed by the depositors.

NEW INITIATIVES

Your company strives to be the forefront player and maintain its leadership position in the Indian Gasket Industry aimed at developing new products to meet the emerging needs of its customers. It continued to build on its in-house capabilities and work with business partners to ensure cost competitiveness and adoption of new techniques. During the year Non-asbestos materials for gaskets were successfully developed at the Sohna Plant replacing old Asbestos material.

At the Forging Division, your company contributed equity capital in the Caparo Power Pvt. Ltd., so as to be able to obtain gas based power supply at comparatively economical cost per unit. This will add to forging business's profitability.

NEW BUSINESS

Your company signed a Joint Venture Agreement during the year with Sistemi Sospensioni S.p.A Italy, a Fiat Group Company and contributed equity on 50:50 basis for setting up a new venture under the name Magneti Marelli Talbros Chassis Systems Pvt. Ltd., to manufacture Control Arms, Knuckles, Cross Members, Hubs, Spindles etc. for supply as Tier I supplier to OEMs. Existing production equipments being used for manufacturing of Sheet Arms at the Company's Sheet Metal Division have been transferred to the Joint Venture Company.

The Joint Venture Company started its operations from April 01, 2012 at Faridabad.

BOARD OF DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. A.K. Mehra and Mr. Rajive Sawhney, directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The details of Mr. A.K. Mehra and Mr. Rajive Sawhney are given elsewhere in the Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to sub section (2AA) of Section 217 of the Companies Act, 1956, your Directors state and confirm

a. that in the preparation of annual accounts, all the applicable accounting standards have been followed and there has not been any material departure from them.

b. that such accounting policies were selected and applied consistently and such judgments and estimates were made that were 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 the year under review;

c. that proper and sufficient care was 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 frauds and other irregularities;

d. that the annual accounts for the financial year under reference have been prepared on a 'going concern' basis.

CORPORATE GOVERNANCE

Your company is committed to benchmarking itself with other corporates providing good Corporate Governance and disclosure practices.

The essence of Corporate Governance lies in adoption of good management practices, compliance with different statutes and adherence to ethical standards so as to take the business forward and maximize stake holders' values. The Corporate Governance structure in the Company assigns responsibilities and entrusts authority among different participants in the organization i.e. Board of Directors, Senior Management team and middle management employees.

Pursuant to Clause 49 of the Listing Agreement with Stock Exchanges, a separate section titled "Corporate Governance" has been included in this Annual Report alongwith a Certificate from the Auditors of the Company and a Certificate from the Vice Chairman & Managing Director and Chief Finance Officer.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed chapter on "Management Discussion and Analysis" (MDA) pursuant to Clause 49 of the Listing Agreement is annexed to the Annual Report and forms integral part of this Report.

AUDITORS

M/s. S.N. Dhawan & Co., Chartered Accountants and Statutory Auditors of the company, M/s. R. Sundraraman & Co. Chartered Accountants & Auditors for the Chennai Plant and M/s. Chandrakant G. Doshi & Co., Chartered Accountants & Auditors for the Pune Plant hold office till the conclusion of the forthcoming Annual General Meeting and being eligible for re-appointment, have confirmed that their re-appointment if made, shall be within the limits of Section 224(1B) of the Companies Act, 1956. The Board recommends the re-appointment of M/s. S.N. Dhawan & Co. as Statutory Auditors of the company and M/s. R. Sundraraman & Co. as auditors for the Chennai Plant and M/s. Chandrakant G. Doshi & Co., as auditors for the Pune Plant of the Company.

The Auditor's observations and the relevant notes on the accounts are self-explanatory and therefore, do not call for further comments.

JOINT VENTURE COMPANY

As per the Accounting Standard (AS 27), "Financial Reporting of interests in Joint Ventures" the Consolidated Financial Statements comprise of the operating results of your company and 40% share in the operating results of the Joint Venture company, Nippon Leakless Talbros Pvt. Ltd. Consolidated Revenue from Operations (Gross sales) grew at 16.08% to Rs. 40,659.42 lacs as compared to Rs. 35,027.02 lacs in the previous year.

The consolidated net profit after tax for the year has been Rs. 1,437.89 lacs being 14.04% higher than the previous year figure of Rs. 1,260.87 lacs.

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

Information pursuant to sub-section 1(e) of Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure-I to this Report.

PERSONNEL & PARTICULARS OF EMPLOYEES

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the Company during the year. It is the collective spirit of partnership across all sections of employees and their sense of ownership and commitment that has helped the Company to grow.

A statement u/s 217(2A) containing list of employees drawing remuneration exceeding Rs. 60.00 lacs per annum or Rs. 5.00 lacs per month is attached with this report as Annexure II.

ACKNOWLEDGEMENT

It is our strong belief that caring for our business constituents has ensured our success in the past and will do so in future. Contribution of all the employees at different levels has been commendable in the operations of the company. The Board of Directors wishes to express their appreciation to the collective spirit of partnership across all sections of employees who helped the company to grow.

Your directors acknowledge with sincere gratitude co-operations and assistance extended by the shareholders, Central and State Government Agencies, Financial Institutions, Banks, Customers, Dealers, Vendors and all other business associates.

For and on behalf of the Board

VARUN TALWAR UMESH TALWAR

Joint Managing Vice Chairman & Director Managing Director

Place : Gurgaon

Date : May 29, 2012


Mar 31, 2010

The Directors have pleasure in presenting the 53rd Annual Report on the business and operations of the Company and the Financial Statements for the year ended 31st March 2010.

(Rs. in lakh) Financial Results: Year Ended Year Ended 31st March, 2010 31st March, 2009

Revenue from Operations (Gross) 24701.69 21449.11

Profit before Interest and Depreciation 2915.49 2107.55

Less : Interest 1455.44 1116.89

Depreciation 918.19 881.79

Profit before Tax 541.86 108.87

Less : Provision for Taxation 65.00 2.15

Provision for Deferred Tax 21.79 196.28

Provision for Fringe Benefit Tax - 58.00

MAT Credit Entitlement (65.00) (2.15)

Add Excess provision of tax for earlier years (86.36) 17.10 written back Profit after Tax 606.42 (162.51) Add : Balance Brought forward from last year 870.00 1104.73 Profit available for appropriations 1476.42 942.22 Appropriations: Proposed Dividend 123.46 61.73

Tax on Dividend 20.50 10.49

Transfer to General Reserve 50.00 - Balance carried forward 1282.46 870.00

Total 1476.42 942.22

FINANCIAL REVIEW

You would recall that during 2008-09 the global economy experienced worlds worst economic downturn since the Great Depression and India was not immune to these tumultuous times. The suddenness and severity of the turmoil caught everybody by surprise and almost every sector was effected from the adverse impact of this crisis.

The Indian economy based on its inherent resilience coupled with significant domestic demand comprising of about 70% of our GDP, bounced back in the beginning of 2009-10. Stimulus packages announced by the Government and softening of interest rates rekindled demand for automobile companies.

In the face of such challenges, your company with the advantage of holding the highest share in the Indian Gasket Industry, resorted to various austerity and innovative measures so as to insulate its profitability and achieve steady growth. Expenses were pruned, wherever possible, and capital investments were deferred, baring strategic investments.

You would notice that as a result of the concerted efforts put in by the management, there has been a growth of over 15% in the gross turnover of the company to reach at Rs. 247.02 crores as against Rs. 214.49 crores in the previous year.

It may be pertinent to note that the core business of your company, i.e., manufacturing and supply of gaskets registered a handsome turnover growth of about 30% over the previous year.

We are committed to continuously upgrade our technology and add new parts to our product range. During the year under review, your company introduced new domestic customers at its Forging plant and successfully developed new components at its Sheet metal Division for Maruti- Suzukis new models and achieved a single source status.

The dedicated efforts put in by your team have not only combated the effects of the downturn but also boosted the profitability of your company. The net profit before tax jumped from Rs. 108.87 lacs in the previous year to Rs. 541.86 lacs in the year under review registering a growth of about 400%.

The future is more challenging but exciting and full of promises. Export markets particularly in Europe and US which continued to be depressed during the first three quarters up to December 2009 are also expected to pick-up momentum. With all these changes we are confident that your companys management is poised to deliver excellent results.

DIVIDEND

Keeping in view the increase in profitability, your Directors are pleased to recommend a 10% dividend for the year 2009- 10 as against 5% declared last year. This would amount to Rs. 1.00 per share, aggregating to Rs. 143.96 lacs (including tax on dividend) on the paid up share capital of the company.

TRANSFER OF UNPAID DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company shall, in accordance with Section 205C of the Companies Act, 1956, transfer the unclaimed dividend for the year 2002-03 standing unpaid for a period of seven years to Investor Education and Protection Fund on or 24th October 2010.

The shareholders who have not encashed the dividend warrant(s) so far the financial year 2002-03 or any subsequent dividend payments are requested to lodge their claims to the Company. Members who have so far not claimed the unpaid dividend for the year 2002 -03 are being intimated.

FIXED DEPOSIT

The Fixed Deposit received by the Company from the public amounted to Rs. 1286.87 lacs on March 31, 2010. Your Company is complying with the "Residuary Non-Banking Companies (Reserve Bank) Directions, 1987" issued by the Reserve Bank of India.

Out of the total Fixed Deposits 13 fixed deposits aggregating to Rs 3.85 lacs matured for payment, which were neither claimed nor renewed by the depositors.

OPERATIONS AND BUSINESS PERFORMANCE

Kindly refer to Management Discussion and Analysis covered under Report on Corporate Governance which forms part of this Report.

NEW INITIATIVES

NEW GASKET MANUFACTURING PLANT:

Your company went ahead with the strategic investment in Uttrakhand state and set up its 4th gasket manufacturing plant in ELDECO-SIDCUL Industrial Park, Sitargunj, Uttrakhand. This being a notified Industrial zone, the Uttrakhand Plant will enjoy exemption from the excise duty, income-tax etc. and will further add to the operating margins.

NEW BUSINESS:

Your company also forged a new Technical Assistance Agreement with Sanwa Packaging Co. Ltd., Japan for manufacturing Heat Shields a product with considerable

potential in the future . This could be a natural diversification of the gasket business.

DEVELOPMENT OF NEW MATERIALS:

Your Company has successfully developed Non-Asbestos Beater Addition Jointings, one of the raw materials required for manufacturer of gaskets, with the technical support from Ahlstrom Altenkirchen Gmbh, Germany. In house manufacturing of this environment friendly material conforming to international standards will not only enhance the competitiveness in the market but may also pave way for a new line of business subject to commercial considerations. It also holds potential for export of raw material.

BOARD OF DIRECTORS

In accordance with the provisions of Sections 255 and 256 of the Companies Act, 1956 and the Articles of Association of the company, Mr. Nikhil Talwar and Mr. V. Mohan, directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to sub section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the company hereby state and confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure from them.

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 and of the profit of the company for the year under review;

c. The Directors have 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;

d. The Directors have prepared the annual accounts for the financial year ended 31 March 2010 on a going concern basis.

CORPORATE GOVERNANCE

The company has always been committed to benchmark itself with the prevailing Indian Standard in all areas for good Corporate Governance.

Your company views corporate governance in its widest sense almost like a trusteeship, a philosophy to be progressed, a value to be imbibed and an ideology to be ingrained into the corporate culture. It involves aligning its activities to shareholders benefit, employees growth and customer satisfaction, thereby delighting all its stakeholders. The primary objective is to create and adhere

to a corporate culture of consciousness, transparency, fairness, accountability, sustainable value creation and ethical practices, thereby creating an outperforming organization.

A report on Corporate Governance, along with a Certificate from Auditors of the Company and a Certificate from Vice Chairman and Managing Director and CFO, have been included in the annual report, detailing the compliances of Corporate Governance norms as enumerated in clause 49 of the Listing Agreement.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed chapter on "Management Discussion and Analysis" (MDA) pursuant to Clause 49 of the Listing Agreement is annexed to the Annual Report and forms integral part of this Report.

AUDITORS

M/s. S.N. Dhawan & Co., Chartered Accountants and Statutory Auditors of the company, M/s. R. Sundraraman & Co. Chartered Accountants & Auditors for the Chennai Plant and M/s. Chandrakant G. Doshi & Co., Chartered Accountants & Auditors for the Pune Plant hold office till the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment, have confirmed that their re- appointment if made, shall be within the limits of Section 224(1 B) of the Companies Act, 1956. The Board recommends the re-appointment of M/s. S.N. Dhawan & Co. as Statutory Auditors of the company and M/s. R. Sundraraman & Co. as auditors for the Chennai Plant and M/s. Chandrakant G. Doshi & Co., as auditors for the Pune Plant of the Company.

The Auditors observations and the relevant notes on the accounts are self-explanatory and therefore, do not call for further comments.

JOINT VENTURE COMPANY (JV Co)

In line with the Accounting Standard 27 (AS 27) relating to Financial Reporting of interests in Joint Ventures, the Consolidated Financial Statements comprise of the operating results of your company and 40% share in the operating results of the Joint Venture company. Consolidated Revenue from Operations (Net sales) grew by 20.6 % to Rs. 246.52 crores as compared to Rs. 204.31 crores in the previous year. The consolidated net profit after tax for the year has been Rs. 876.42 lakh as compared to Rs. 64.37 lacs in the previous year.

The JV Company during the year has set up a new facility at Begampur, near Haridwar, primarily to cater to the demands of Hero Honda in the State of Uttrakhand. The commercial production from the said plant started only in the month of March, 2010. This being a notified industrial zone with considerable tax benefits, the operations from Uttrakhand will further add to the profitability of the JV company.

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

Information pursuant to sub-section 1(e) of Section 217 of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure-I to this Report.

PERSONNEL & PARTICULARS OF EMPLOYEES

The industrial relations with the workers and staff members of the company remained cordial throughout the year. There was unity of objective among all levels of employees- continuously striving for improvement in work practices and productivity. Training and development of employees continue to be an area of prime importance.

A statement u/s 217(2A) containing list of employees drawing remuneration exceeding Rs.24.00 lacs per annum or Rs.2.00 lacs per month is attached with this report as Annexure II.

ACKNOWLEDGEMENT

The Directors would like to express gratitude towards shareholders, customers, suppliers, collaborators, bankers, financial institutions and all other business associates and various departments of Central Government and State Government for the incessant support provided by them to the company and their confidence in its management. Your Directors also wish to place on record their sincere appreciation for the devotion and dedicated efforts put in by the employees at all levels.

For and on behalf of the Board Place : New Delhi NARESH TALWAR Date : 31.05.2010 Chairman

 
Subscribe now to get personal finance updates in your inbox!