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Directors Report of WABCO India Ltd.

Mar 31, 2013

The directors have pleasure in presenting the ninth annual report and the audited accounts for the financial year ended 31st March 2013.

2. FINANCIAL HIGHLIGHTS

Rs. in lakhs

Details Year ended Year ended 31.03.2013 31.03.2012

Sales (net) 91,735.78 1,00,497.08

Other Operating income 4,856.60 4,067.16

Other income 1,263.50 1,205.90

Total revenue from operations and other income 97,855.88 1,05,770.14

Gross profit before interest and depreciation 20,668.37 23,198.63

Finance costs 1.76 11.88

Depreciation 2,171.78 1,563.72

Profit before tax 18,494.83 21,623.03

Provision for taxation (including deferred tax and tax relating to earlier years) 5,416.00 6,283.07

Profit after tax 13,078.83 15,339.96

Surplus brought forward from previous year 33,241.02 22,003.29

Total 46,319.85 37,343.25

Appropriations:

Proposed dividend 948.38 948.38

Dividend tax payable 161.18 153.85

Transfer to general reserve 5,000.00 3,000.00

Surplus in profit & loss account 40,210.29 33,241.02

46,319.85 37,343.25

3. DIVIDEND

The board of directors have recommended a dividend of Rs.5 per share for the year ended 31st March 2013 absorbing a sum of Rs.948.38 lakhs for approval of the shareholders at the ensuing annual general meeting.

4. PERFORMANCE

During the year 2012-13, sales of medium and heavy commercial vehicles (MHCV), dropped by 24% over the previous year. The Company achieved a total revenue from operations and other income of Rs.978 crores as against turnover of Rs.1,057 crores in the previous year, a reduction of 7.5%.

However, after market sales segment registered a growth of 16.5% over the previous year and exports segment registered a growth of 34.2% over the previous year.

5. CAPITAL EXPENDITURE

Capital expenditure of Rs.63 crores is planned for the year 2013-14 considering the industry growth in this year.

6. DIRECTORS

Mr Leon Liu, Mr Narayan K Seshadri, and Mr Michael Edward Thompson, retire at the ensuing Annual General Meeting of the Company. Being eligible, they offer themselves for re-appointment. In compliance with clause 49 of the Listing Agreement, a brief resume of the above three directors and other required information is given in the notice convening the annual general meeting of the Company. Necessary resolutions for their reappointment will be placed for approval of the shareholders at the ensuing annual general meeting. Your directors recommend their reappointment as directors of the Company.

Mr Nikhil Madhukar Varty resigned as a director with effect from 24th July 2012. The Board of Directors at its meeting on 24th July 2012 placed on record its appreciation of the valuable services rendered by him during his tenure as a director. Mr Michael Edward Thompson was appointed as a director in the casual vacancy caused by the resignation of Mr Nikhil Madhukar Varty at the board meeting on 24th July 2012.

7. AUDITORS

Messrs S.R.Batliboi & Associates LLP, Chartered Accountants have informed that that the name of their firm Viz S.R.Batliboi & Associates, Chartered Accountants has been changed to S.R.Batliboi & Associates LLP on the conversion of the firm to limited liability partnership effective 1st April 2013. They retire at the ensuing Annual General Meeting and are eligible for re-appointment and the re-appointment will be made in the new firm name.

8. COST AUDITOR

Mr A N Raman was appointed as Cost auditor of the Company for 2012-13 by the board of directors at their meeting held on 23rd May 2012. The board at their meeting held on 15th May 2013 have re-appointed Mr A N Raman as Cost auditor for 2013-14.

9. STATUTORY STATEMENTS

Conservation of energy, technology absorption and foreign exchange earnings and outgo

Information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in Annexure I to this report, as per the requirements of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

Particulars of employees

Particulars of employees pursuant to Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, are set out in Annexure II and form part of this report. However, pursuant to Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to all the Members excluding the aforesaid information. The said particulars will be made available to a Member upon request and also made available for inspection at the Registered Office of the Company. Any Member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956 it is hereby confirmed: _

(i) that in the preparation of annual accounts for the financial year ended 31st March 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the directors have 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 the year under review;

(iii) that 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; and

(iv) that the directors have prepared the accounts for the financial year ended 31st March 2013 on a going concern basis.

10. CORPORATE GOVERNANCE

The Company has complied with the provisions of the Listing Agreement concerning corporate governance and a report to this effect is attached, as required by clause 49 of the Listing Agreement with the stock exchanges. The certificate issued by the auditors of the Company regarding compliance with the corporate governance requirements is also annexed to this report.

The whole-time director (CEO) and the chief financial officer (CFO) of the Company have certified to the board on financial statements and other matters in accordance with clause 49(V) of the Listing Agreement pertaining to CEO/CFO certification for the financial year ended 31st March 2013.

The management discussion and analysis report, as required by the Listing Agreement, is also attached and forms part of this report.

Para (xxi) of the Annexure to the Auditors'' Report dated May 15, 2013 is self-explanatory. The investigation referred therein is entrusted to an external agency and the Company is wholly co-operating therewith. Also, the Company has further strengthened its internal controls to prevent such an occurrence.

11. ACKNOWLEDGEMENT

The directors gratefully acknowledge the continued support and co-operation received from WABCO Europe BVBA, Belgium. The directors thank the vehicle manufacturers, distributors, vendors and bankers for their continued support and assistance.

The directors wish to place on record their appreciation of the excellent work done by employees of the Company at all levels during the year. The directors specially thank the shareholders for the confidence reposed by them in the Company.

For and on behalf of the board

Chennai M LAKSHMINARAYAN

15th May 2013 Chairman


Mar 31, 2012

NOTICE is hereby given that the Eighth Annual General Meeting of the Company will be held at "The Music Academy", New No 168 (Old No 306), T.T.K Road, Chennai 600 014 on Wednesday, the 25th day of July 2012 at 10.00 a.m. to transact the following business:

1. To consider and, if thought fit, to pass with or without modification, the following resolution as an ordinary resolution:

RESOLVED THAT the audited balance sheet as at 31st March, 2012 and the profit and loss account of the Company for the year ended on that date, together with the directors' report and the auditors' report thereon as presented to the meeting be and the same are hereby approved and adopted.

2. To consider and, if thought fit to pass with or without modification, the following resolution as an ordinary resolution:

RESOLVED THAT pursuant to the recommendation of the board of directors of the Company, a dividend of Rs. 5/- per share on 1,89,67,584 equity shares of Rs. 5/- each fully paid up absorbing a sum of Rs. 948.38 lakhs be and is hereby declared for the year ended 31st March, 2012 and the same be paid to the shareholders whose name appear in the register of members of the Company as at the close of 19th July, 2012.

3. To consider and, if thought fit, to pass with or without modification, the following resolution as an ordinary resolution:

RESOLVED THAT Mr Trevor Lucas, director who retires by rotation and being eligible for re-appointment, be and is hereby re-appointed as a director of the Company.

4. To consider and, if thought fit, to pass with or without modification, the following resolution as an ordinary resolution:

RESOLVED THAT Mr D E Udwadia, director who retires by rotation and being eligible for re-appointment, be and is hereby re-appointed as a director of the Company.

5. To consider and, if thought fit, to pass with or without modification, the following resolution as an ordinary resolution:

RESOLVED THAT Mr Vincent Pickering, who was appointed as a director of the Company with effect from 23rd May, 2012 to fill in the casual vacancy caused by the resignation of Mr Kurt Lehmann and holds office upto the date of this Annual General Meeting and in respect of whom the Company has received a notice in writing under Section 257 of the Companies Act, 1956 along with a deposit of Rs. 500/- from a shareholder intimating his intention to propose Mr Vincent Pickering for directorship, be and he is hereby appointed as a director of the Company.

6. To consider and if thought fit, to pass with or without modification, the following resolution as an ordinary resolution:

RESOLVED THAT Messrs. S.R. Batliboi & Associates Chartered Accountants, Tidel Park, 6th & 7th Floor - A Block (Module 601,701-702), No. 4, Rajiv Gandhi Salai, Taramani, Chennai - 600113, holding Firm Registration No.101049W allotted by the Institute of Chartered Accountants of India, be and are hereby appointed as the statutory auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company.

RESOLVED FURTHER THAT the board of directors of the Company be and is hereby authorized to fix their remuneration and reimburse their travelling and out of pocket expenses.

7. To consider and if thought fit, to pass with or without modification, the following resolution as an ordinary resolution:

RESOLVED THAT subject to Section 310 and other applicable provisions of the Companies Act, 1956, read with Schedule XIII thereto and in partial modification of the ordinary resolution at item No. 7 passed by the shareholders, in the Sixth Annual General Meeting of the Company held on 26th August, 2010, approval of the shareholders of the Company be and is hereby accorded to the undermentioned increase in the remuneration payable to Mr P Kaniappan, Whole-time Director from 1st July 2012 until the expiry of his present term of office on 16th June 2014.

(i) Salary and commission on net profits or performance linked incentive or bonus; subject to a ceiling of Rs.90 lakhs per annum and

RESOLVED FURTHER THAT the Supplemental Agreement dated 23rd May 2012 between the Company and Mr P Kaniappan placed on the table incorporating the above increase in his remuneration, be and is hereby approved.

Notes:

1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote instead of himself and the proxy or proxies so appointed need not be a member or members, as the case may be, of the Company. The instrument appointing the proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the registered office of the Company not later than 48 hours before the time fixed for holding the meeting.

2. An explanatory statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of item no. 5 and 7 as set out in the notice is annexed hereto.

3. The Register of Members and the share transfer register will remain closed for a period of 6 days from 20th July, 2012 to 25th July, 2012 (both days inclusive) for the purpose of dividend to be approved by the shareholders at the ensuing Annual General Meeting of the Company.

4. In terms of Section 205A read with Section 205C of the Companies Act, 1956, the dividends declared by the Company, which remain unclaimed for a period of seven years will be transferred to the Investor Education and Protection Fund (IEPF), established by the Central Government on the due dates. The particulars of due dates for transfer of such unclaimed dividends to IEPF are furnished in the report on Corporate Governance forming part of the annual report.

Members who have not encashed their dividend warrants in respect of the above periods are requested to make their claim by surrendering the unencashed warrants immediately to the Company.

5. Members holding shares in physical form, in their own interest, are requested to dematerialize the shares to avail the benefits of electronic holding / trading.

6. Members are requested to register their e-mail address with the Company/Share transfer Agents immediately and participate in the "Green initiative" launched by the Ministry of Corporate Affairs.

7. Members holding shares in depository are requested to register their e-mail address with their depository participants and participate in the "Green initiative" launched by the Ministry of Corporate Affairs.

8. Members are requested to notify to the Company/ Share Transfer Agent immediately any change in their address. Members holding shares in depository are requested to advise change of address to their depository participants.

9. As a measure of economy, copies of the annual report will not be distributed at the Annual General Meeting.

Members are, therefore requested to bring their copies of the annual report to the meeting.

10. Members are requested to affix their signature at the space provided on the attendance sheet annexed to the proxy form and hand over the slip at the entrance of the meeting hall.

11. In terms of clause 49 (IV)(G) of the listing agreement with the stock exchanges, a brief resume of directors, who are proposed to be re-appointed in this meeting, nature of their expertise in specific functional areas, their other directorships and committee memberships and their shareholdings in the Company and their relationships with other directors in the Company are given below:

Brief resume and other information in respect of directors seeking re-appointment at the Annual General Meeting.

Mr Trevor Lucas:

Born on 3rd June 1948, Mr Trevor Lucas is a Bachelor of Business Studies (Honours), University of Dublin and a fellow member of the Institute of Chartered Accountants in Ireland.

He has served KPMG, Dublin from 1975 to 1982 as General Practice Manager. He was with CPC Europe, holding various positions as Manager Finance and Taxes, Manager Financial Services and Systems and Manager Financial Accounting.

He has also served as head of Finance for Council for Education, Recruitment and Training for the Hotel, Catering and Tourism Industry, Dublin.

He was with Best Foods Europe/Africa/Middle East, Brussels (later part of the Unilever Group) during 1989-2002 as Director Finance and Taxes.

He joined American Standard, Brussels, (WABCO Division) in 2003 as Vice President-Taxes. Following the spin off of WABCO Division from American Standard, he is presently the Vice President-Taxes of WABCO Holdings Inc.

He is a member of Audit committee, Investors' Grievance committee and Administrative committee of directors of the Company.

He does not hold any share in the Company and he is not related to any other directors of the Company.

Mr D E Udwadia:

Mr D E Udwadia is a post graduate from University of Bombay. He is an Advocate and Solicitor of the Bombay High Court. He is also a Solicitor of the Supreme Court of England.

Mr D E Udwadia was a partner of Crawford Bayley & Co., Mumbai, one of the India's leading law firms for nearly 22 years. He is a founder partner of Udwadia & Udeshi, Advocates and Solicitors, Mumbai. Consequent upon the reconstitution of the firm, its name was changed to Udwadia Udeshi & Argus Partners effective 1st April 2012. His firm and he are legal advisors to several Indian and multinational companies and foreign banks having a presence in India.

He has during his nearly 47 years of active law practice acquired valuable knowledge, experience and expertise in the areas of corporate law, mergers, acquisitions and take overs, corporate restructuring, foreign collaboration, joint ventures, project and infrastructure finance, intellectual property, international loans and finance related transactions and financial instruments, mutual funds, real estate and conveyancing.

He is a member of the Audit committee of directors of the Company. He does not hold any shares in the Company and he is not related to any other director of the Company. Details of his other directorships and memberships/ chairmanships of committees are given below:

Mr Vincent Pickering:

Born on 27th September 1968, Mr Vincent Pickering has law degree from the University of London, and is qualified as a U K Solicitor.

He began his career at the European Commission's Directorate General for Competition. He also gained diverse legal experience working with leading international law firms while based in Brussels and London.

He served as General Counsel and Head of Regulatory Affairs at Bulldog Communications, a U K based telecom service provider. He also served for 8 years at Microsoft Corporation in Redmond, Washington, USA, as Associate General Counsel for the company's Worldwide Licensing and Pricing Division. While there, he was responsible for legal support for Microsoft's global commercial sales, as well as Microsoft financing and the company's emerging market initiatives.

He does not hold any share in the Company and he is not related to any other directors of the Company.

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956.

Item No. 5

Mr Vincent Pickering was appointed as a director at the board meeting held on 23rd May, 2012 in the casual vacancy caused by the resignation of Mr Kurt Lehmann on 25th January, 2012. Mr Kurt Lehmann would have held office as a director upto the date of this Annual General Meeting had he not resigned. Pursuant to Section 262 of the Companies Act, 1956, Mr Vincent Pickering holds office upto the date of this Annual General Meeting.

Notice has been received from a shareholder of the Company under Section 257 of the Companies Act, 1956, along with a deposit of Rs. 500/- signifying his intention to propose the candidature of Mr Vincent Pickering for the office of director.

The directors recommend for approval the resolution at item no. 5 of the Notice.

Mr Vincent Pickering is interested or concerned in the resolution, since it relates to his appointment.

Item No: 7

Mr P Kaniappan was appointed as a Whole-time director for a period of five years with effect from 17th June 2009 by the board of directors of the company on 17th June 2009. His appointment as whole-time director and payment of remuneration to him were approved by the shareholders passed at the Fifth Annual General Meeting of the Company held on 24th September 2009.

In line with the general increase in remuneration payable to senior executives of the Company, the increase in his duties, functions and responsibilities and in recognition of the valuable services provided by him, the board of directors, in their meeting held on 23rd May 2012, increased the remuneration payable by way of salary and commission on net profits or performance linked incentive or bonus by increasing the present ceiling of Rs. 65 lakhs per annum to Rs. 90 lakhs per annum effective 1st July 2012 up to the expiry of his tenure as whole-time director on 16th June 2014.

The increase in remuneration of Mr P Kaniappan is well within the limits prescribed under Schedule XIII of the Companies Act, 1956.

All other terms and conditions of his appointment, as approved by the shareholders at the Sixth Annual General Meeting of the Company held on 26th August 2010, remain unchanged.

The above increase in the ceiling is subject to the approval of the shareholders in a General Meeting. Hence the resolution at item no. 7 is proposed.

A Supplemental Agreement dated 23rd May 2012 has been entered into by the Company with Mr P Kaniappan incorporating the above increase in his remuneration.

A copy of the Supplemental Agreement dated 23rd May 2012 referred to in the resolution at item no. 7 of the Notice will be open for inspection by shareholders between 11.00 a.m. and 2.00 p.m. on any working day of the Company at the Company's Registered Office.

The directors recommend the resolution for approval by the shareholders.

Mr P Kaniappan is interested or concerned in the resolution since it relates to his remuneration.

By order of the board

Chennai R MADHAVAN

23rd May 2012 General Manager -

Finance and Secretary Registered office: Plot No. 3 (SP), III Main Road Ambattur Industrial Estate Chennai 600 058.

 
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