Mar 31, 2018
The Directors have pleasure in presenting their 42nd Annual Report of the Company together with the Audited Financial Statements for the year ended 31st March, 2018.
The Company has adopted Indian accounting standard (''Ind As'') and accordingly financial results along with the comparatives have been prepared in accordance with the measurement principles stated therein as prescribed by the Ministry of Corporate Affairs on February 16, 2015, under Section 133 of the Companies Act, 2013 ("the Act") read with relevant rules issued there under and the other accounting principles generally accepted in India.
1. FINANCIAL RESULTS
The Company''s financial performance for the year under review along with previous year''s figures is given hereunder:
Financial Highlights: (Rs. In Lakhs)
Particulars |
Standalone |
Consolidated |
||
Year ended |
Year ended |
Year ended |
Year ended |
|
31.03.2018 |
31.03.2017 |
31.03.2018 |
31.03.2017 |
|
Gross Income |
23,862.52 |
21,805.85 |
27,699.22 |
23,418.82 |
Less: Excise Duty |
541.65 |
2,190.64 |
639.55 |
2,374.47 |
Net Income |
23,320.87 |
19,615.21 |
27,059.67 |
21,044.35 |
Total expenditure |
20,976.69 |
18,532.10 |
24,527.47 |
20,331.33 |
Profit/(Loss) before interest, depreciation and tax |
2,344.18 |
1,083.11 |
2,532.20 |
713.02 |
Finance cost |
714.47 |
629.23 |
814.17 |
668.27 |
Depreciation |
308.72 |
387.72 |
555.51 |
538.64 |
Profit/(Loss) before Exceptional items and tax |
1,320.99 |
66.16 |
1,162.52 |
(493.89) |
Exceptional items* |
- |
328.23 |
- |
328.23 |
Profit/(Loss) after Exceptional items & before tax |
1,320.99 |
(262.07) |
1,162.52 |
(822.12) |
Provision for taxation (Net of deferred tax) |
452.26 |
(341.14) |
446.74 |
(323.54) |
Profit/(loss) after tax |
868.73 |
79.07 |
715.78 |
(498.58) |
Share of Profit/(Loss) of associates |
- |
- |
(5.06) |
34.07 |
Net comprehensive income for the year |
(8.42) |
(31.75) |
(3.66) |
(19.92) |
Total comprehensive income for the year |
860.31 |
47.32 |
707.06 |
(484.43) |
Balance in Statement of profit and loss |
4,541.58 |
4,530.37 |
3,921.28 |
4,441.82 |
Amount available for appropriation |
5,401.89 |
4,577.69 |
4,628.34 |
3,957.39 |
Appropriations: |
||||
Equity dividend paid |
(30.00) |
(30.00) |
(30.00) |
(30.00) |
Tax on Equity Dividend |
(6.13) |
(6.11) |
(6.13) |
(6.11) |
Balance carried to Balance Sheet |
5,365.76 |
4,541.58 |
4,592.22 |
3,921.28 |
*The above exceptional item of Rs. 328 lakhs includes additional depreciation charged for the year ended 31st March 2017, due to change in the useful life of buildings at Whitefield factory - net of salvage value of building and gain on sale of Foundry Business.
The Company has registered a net income of Rs. 23,320.87 lakhs as compared to Rs. 19,615.21 lakhs of previous year. The Company has registered a growth of 19% over the previous year.
2. DIVIDEND:
Your Directors recommend payment of a dividend of 20% on equity shares of the Company for the year ended 31st March, 2018, subject to the approval of the members at the ensuing Annual General Meeting.
3. THE EXTRACT OF ANNUAL RETURN:
The extract of Annual Return for the financial year 2017-18 pursuant to the provisions of Section 92(3) and Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in ''Annexure-1'' forming part of this report.
4. BOARD MEETINGS HELD DURING THE YEAR:
During the year, 5 meetings of the Board of Directors were held and one meeting of Independent Directors was also held. The details of the meeting are furnished in the Corporate Governance Report.
5. COMPLIANCE ON CRITERIA OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS:
All Independent Directors of the Company have given declarations to the Company under Section 149(7) of the act that, they meet the criteria of independence as provided in Sub-Section 149 of the Act and also under the SEBI(Listing obligation and Disclosure Requirements) Regulations,2015(Listing Regulations).
6. REMUNERATION POLICY OF THE COMPANY:
The Remuneration Policy of the Company for appointment and remuneration of the Directors, Key Managerial Personnel and Senior Management of the Company along with other related matters have been provided in the Corporate Governance Report. As and when need arises to appoint Director, the Nomination and Remuneration Committee (NRC) of the Company will determine the criteria based on the specific requirements.
A Statement of Disclosure of Remuneration pursuant to Section 197 of the Act. Read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, is forming part of this report.
7. ANNUAL EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS:
Nomination and Remuneration Committee of the Company has formulated a criteria for evaluation of the Board Members. Accordingly performance evaluation of the Board and its members has been carried out.
8. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY:
There has been no significant and material order passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations. All orders received by the Company during the year are of routine in nature which have no significant/material impact.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:
Loans & Investments:
During the year under review, your Company has not granted any loan or made any investments within the meaning of Section 186 of the Act.
Corporate Guarantee:
During the year under review, the Company granted the following Corporate Guarantees to its subsidiary Companies.
(Rs. in lakhs)
Particulars |
Bank |
Amount (Rs.) |
Coretec Engineering India |
HDFC Bank |
750 |
Private Limited (Subsidiary) |
Sumitomo Mitsui Banking Corporation |
600 |
Grotek Enterprises Private |
HDFC Bank, |
500 |
Limited (Subsidiary) |
The above loans, guarantees and investments are within the limits prescribed under Section 186 of the Companies Act, 2013.
10. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:
In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, the Statement of Profit & Loss and other documents of the Subsidiary Companies are not being attached to the Balance Sheet of the Company.
The Company will make available the Annual Accounts of the Subsidiary Companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The Annual Accounts of the Subsidiary Companies will also be kept open for inspection by any investor at the Registered Office of the Company and that of the respective Subsidiary Companies. The consolidated financial statements presented by the Company include financial results of its Subsidiary Companies.
The details of financial performance of Subsidiaries and Associate Companies are furnished as under:
(Rs. in lakhs)
Particulars |
Coretec Engineering India Pvt. Ltd. (Subsidiary) |
Yuflow Engineering Pvt. Ltd. (Subsidiary) |
Grotek Enterprises Pvt. Ltd. (Subsidiary) |
Sai India Ltd (Associate) (Unaudited) |
Kolben Hydraulics Ltd. (Associate) |
Bourton Consulting (India) Pvt. Ltd. (Associate) |
Total Income FY 2017-18 |
2,329.47 |
9.18 |
5,228.00 |
2,016.80 |
329.97 |
69.96 |
FY 2016-17 |
1,219.94 |
836.24 |
2,084.42 |
2,296.65 |
347.61 |
63.27 |
Total expenditure FY 2017-18 |
2,145.57 |
28.40 |
5,096.75 |
1,826.58 |
349.09 |
61.40 |
FY 2016-17 |
1,129.64 |
1,067.35 |
2,280.66 |
2,029.10 |
328.13 |
56.70 |
Profit/(Loss) before interest, depreciation and tax FY 2017-18 |
183.90 |
(19.22) |
131.25 |
190.22 |
(19.12) |
8.56 |
FY 2016-17 |
90.30 |
(231.11) |
(196.24) |
267.55 |
19.48 |
6.57 |
Finance cost FY 2017-18 |
59.10 |
1.81 |
110.42 |
83.27 |
1.94 |
|
FY 2016-17 |
13.02 |
26.02 |
19.96 |
92.98 |
2.02 |
- |
Depreciation FY 2017-18 |
42.15 |
204.65 |
99.09 |
6.07 |
1.44 |
|
FY 2016-17 |
29.10 |
24.60 |
97.22 |
104.55 |
6.21 |
2.69 |
Profit before tax FY 2017-18 |
82.65 |
(21.03) |
(183.82) |
7.86 |
(27.13) |
7.12 |
FY 2016-17 |
48.18 |
(281.73) |
(313.42) |
70.02 |
11.25 |
3.88 |
Provision for taxation (Net of deferred tax) FY 2017-18 |
21.66 |
0.43 |
(28.09) |
(1.69) |
(5.17) |
2.05 |
FY 2016-17 |
16.17 |
- |
1.43 |
(1.88) |
2.14 |
1.41 |
Other comprehensive income for the period FY 2017-18 |
3.26 |
1.04 |
||||
FY 2016-17 |
1.80 |
- |
10.06 |
- |
- |
- |
Profit/(Loss) after tax(Including comprehensive income) FY 2017-18 |
64.25 |
(21.46) |
(154.69) |
9.55 |
(21.96) |
5.07 |
FY 2016-17 |
33.81 |
(281.73) |
(304.80) |
71.90 |
9.11 |
2.47 |
Earnings per share (in Rs.) FY 2017-18 |
9.84 |
(1.07) |
(3.11) |
1.06 |
(2.19) |
4.02 |
FY 2016-17 |
5.17 |
(14.09) |
(24.19) |
7.99 |
0.91 |
1.96 |
Statement containing salient features of financial statements of subsidiaries and associate companies in form AOC-1 enclosed herewith as "Annexure 2" to this Report.
11. CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract /arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
The details of related party transactions as required under Ind AS-24 are set out in Note-52 to the standalone financial statements of the Company.
Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 is enclosed herewith as Annexure-3 to this report.
The Policy on Related Party Transactions as approved by the Board may be accessed on the Company''s website, web link of which is as under:
http://www.yukenindia.com/wp-content/uploads/2016/02/
Related-Party-Transactions-Policy.pdf
12. AMOUNT, IF ANY, PROPOSED TO BE TRANSFERRED TO RESERVES:
During the year under review, the Company has not transferred any money towards General Reserve.
13. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND;
A. TRANSFER OF UNPAID DIVIDEND:
As required under Section 124 of the Act, the unclaimed dividend amount aggregating to Rs. 1.23 lakhs lying with the Company for a period of seven years pertaining to the financial year ended on March, 31 2010 was transferred during the financial year 2017-18 to the Investor Education and Protection Fund established by the Central Government.
B. TRANSFER OF SHARES:
As per the provisions of Section 124 of the Companies Act, 2013, 17,108 equity shares, in respect of which dividend has not been claimed by the members for seven consecutive years or more, have been transferred by the Company to Investor Education and Protection Fund Authority (IEPF) during the financial year 2017-18. Details of shares transferred have been uploaded on the website of IEPF as well as Company.
14. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION BETWEEN END OF FINANCIAL YEAR AND DATE OF REPORT:
There has been no material change and commitment, affecting the financial performance of the Company occurred between the end of the financial year of the Company to which the Financial Statements relate and the date of this Report.
15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
Pursuant to provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014.
1. Conservation of Energy:
A. Steps taken or impact on conservation of energy:
- Replaced MHL lamps and CFL Lights by energy efficient LED lights.
- Power factor was maintained at 0.99 by identifying and replacing faulty capacitors, increasing the frequency of periodic/preventive maintenance of capacitor banks.
- Installation of Servo Stabilizer in Shop floor and certain office lighting reduced maintenance cost and saving in energy.
2. Foreign Exchange Earnings and Outgo:
A. Foreign Exchange Earnings:
(Rs. in lakhs)
Si No |
Particular |
As on 31.03.2018 |
As on 31.03.2017 |
1 |
Export Sales |
246.38 |
670.06 |
2 |
Other Income |
9.20 |
4.31 |
B. Expenditure in Foreign Currency:
(Rs. in lakhs)
Si No |
Particular |
As on 31.03.2018 |
As on 31.03.2017 |
1 |
Brand fee |
90.47 |
80.32 |
2 |
Royalty |
4.53 |
5.66 |
3 |
Others |
31.66 |
19.95 |
C. Remittance in Foreign Currency on Account of:
(Rs. in lakhs)
Si No |
Particular |
As on 31.03.2018 |
As on 31.03.2017 |
1 |
Dividend |
12 |
12 |
3. Research and Development (R&D):
The Company continues to invest in R&D activities towards development of new products and applications, improvement in operating efficiencies and reduction in manufacturing costs.
The Company has developed certain pumps, valves etc., which are energy efficient and as per the customer requirement. The core idea of the Company''s investments in R&D is to initiate product upgradations and to develop new products that would give an edge over competitors.
(a) Specific areas in which R&D is carried out by the Company:
i. Upgradation and modification of chip compacting machine which was originally designed by Yuken Kogyo Co. Ltd., Japan.
ii. Several concepts of energy saving hydraulic power units have been designed to suit customer requirements.
iii. Development of high pressure application valves and pumps for process and steel industries.
(b) Benefits derived as a result of above R&D efforts:
Special products developed to meet specific requirements of customers which enable your Company to develop niche markets for growth.
(c) Future plan of action:
- Development of additional range of products.
- Focus on process improvements to enable the Company to penetrate the export market.
- Strong focus on employee involvement to eliminate waste in operations through focused initiatives.
(d) Expenditure on R&D
There is a continuous increase in R&D expenditure as the scope of activities carried out keeps on increasing.
4. Technology Absorption, Adaptation and Innovation:
(a) Efforts in brief, made towards technology absorption, adaptation and innovation:
- Special models of energy saving pumps and valves have been designed to meet specific needs of customers and these have enabled us to extend our customer base to include a wider range of industries.
- Indigenization is a continuous ongoing effort.
(b) Benefits derived as a result of the above efforts:
- Reduction of material cost.
- Quality improvement and improvement in product performance characteristics.
- Ability to innovate and produce new products.
(c) Information regarding technology imported during the last five years reckoned from the beginning of the financial year: Nil
16. DETAILS OF CHANGE IN NATURE OF BUSINESS, IF ANY:
There was no change in the nature of business of the Company, during the year 2017-18.
17. DEPOSITS:
The Company has neither accepted nor renewed any deposits during the year.
18. BOARD OF DIRECTORS:
The Board of Directors comprises of a combination of Executive/ Non-Executive Directors and Independent Directors who are professionals in their respective fields and bring in a wide range of skills and experience.
The composition of Board is as under;
SI. No. |
Name of the Director |
Designation |
1 |
Capt. N S Mohanram |
Independent Director |
2 |
Mr. R Srinivasan |
Independent Director |
3 |
Dr. Premchander |
Independent Director |
4 |
Mr. C P Rangachar |
Managing Director |
5 |
Mr. Hideharu Nagahisa |
Non-Executive Director |
6 |
Mr. Koichi Oba |
Non-Executive Director |
7 |
Mrs. Vidya Rangachar |
Non-Executive Director |
Mr. Osamu Tanaka and Mr. Shiro Hattori, Directors resigned from the post of Directorship of the Company with effect from 05th September, 2017. Board placed on the record of appreciation for valuable advice given by them during the tenure of directorship.
Mr. Hideharu Nagahisa and Mr. Koichi Oba appointed as additional Director of the Company with effect from 23rd August, 2017 and re designated as Director at the AGM held on 05th September 2017.
Mr. Hideharu Nagahisa, Non-Executive Director, retires by rotation and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.
19. KEY MANAGERIAL PERSONNEL:
Pursuant provisions of Section 203 of the Companies Act, 2013, following persons are Key Managerial Person as on 31.03.2018:
SI. No. |
Name of the KMP |
Designation |
1 |
Mr. C P Rangachar |
Managing Director |
2 |
Mr. H M Narasinga Rao |
Chief Financial Officer |
3 |
Mr. K Gopalkrishna |
Executive Director |
4 |
Mr. A Venkatakrishnan |
VP Operations |
5 |
Mr. Vinayak Hegde |
Company Secretary |
During the year under review, Mr. Subramanya Ullal, Chief Executive Officer resigned with effect from 15th February, 2018 and Ms. Sridevi Ch, Company Secretary resigned with effect from 12th February, 2018. Board placed on the record of appreciation for valuable advice given by them during the tenure of Key Managerial Person in the Company.
Mr. Vinayak Hegde was appointed as Company Secretary with effect from 12th February, 2018 and Mr. A Venkatakrishnan appointed as VP - Operations with effect from 15th February, 2018.
20. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:
The Company''s management is responsible for establishing and maintaining an adequate system of internal controls over financial reporting. The Company has in place adequate systems of internal controls commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization and ensuring compliance of corporate policies. The observations arising out of audit are periodically reviewed and compliance ensured.
The Internal Audit Reports, observations and status of the implementation is submitted to the Audit Committee of the Board of Directors. The status of implementation of the recommendations is reviewed by the Committee on a regular basis and concerns, if any, are reported to the Board.
21. RISK MANAGEMENT POLICY:
In compliance with the provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Risk Management Committee has been constituted by the Board. The Company has in place, a Policy on Risk Management for the purpose of identification, assessment, handling, monitoring and dealing with various risks across the organization.
Risks are identified by the respective departmental heads. Each SBU & Corporate will carry out the Risk Assessment for each identified risk, as applicable to them and will document the results for each risk in the Risk Register. Action will be taken based on the possible impact of the identified risk.
The Company has adopted the following measures concerning the development and implementation of a Risk Management Policy during the year:
a. Measures taken by IT department of the Company to mitigate risk relating to security of data and systems of the Company;
b. Security measures in the manufacturing units of the Company to prevent accidents; and
c. Installation of CC TV cameras and siren at factory for safety of the employees.
d. Measures taken by the Company to mitigate foreign exchange transaction risks.
22. DETAILS OF POLICY DEVELOPED, IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
The Company has constituted a Corporate Social Responsibility Committee and developed a CSR Policy, in compliance with the provisions of Section 135 of the Companies Act, 2013, with the following objectives:
- To ensure an increased commitment at all levels in the Organization to operate its business in an economically, socially and environmentally sustainable manner, while recognizing the interests of the stakeholders.
- To directly or indirectly take up programs that benefit the communities over a period of time, in enhancing the quality of life and economic wellbeing of the society.
In accordance with the Company''s CSR Policy, following are the areas on which the Company would like to focus for the purpose of CSR:
1. Education and
2. Environmental sustainability
In compliance with the CSR Policy, your Company has undertaken the following activities:
1. Rain water harvesting in all the plants of the Company.
2. The Company has appointed a Teacher to teach English and Computers in the Government Elementary School in Hedaginabele village of Kolar District.
3. The Company has given donation to Sarojini Educational and Voluntary Action Trust, which has been active in the field of rural development.
However, the CSR provisions are not applicable to the Company for the year 2017-18, it was not required to allocate / spend any funds towards CSR activities under the provisions of Section 135 of the Companies Act, 2013.
23. DIRECTORS'' RESPONSIBILITY STATEMENT :
To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3) and 134 (5) of the Act, that:
(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit and loss of the Company for that period;
(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the annual accounts on a going concern basis;
(e) The Directors had laid down internal financial controls to be followed by the Company as applicable to listed companies and such internal financial controls are adequate and were operating effectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.
24. COMPOSITION OF AUDIT COMMITTEE:
In compliance with the provisions of Section 177 of the Companies Act, 2013 read with Rules 6 and 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company''s Board has constituted an Audit Committee with the following Directors:
Si No |
Name of the Member |
Designation |
1 |
Capt. N S Mohanram |
Chairman |
2 |
Mr. R Srinivasan |
Member |
3 |
Mr. C P Rangachar |
Member |
4 |
Dr. Premchander |
Member |
The above composition of the Audit Committee consists of three Independent Directors, who form the majority.
25. WHISTLE BLOWER POLICY:
The Company has established a Vigil Mechanism to deal with the genuine concerns of the employees and Directors pertaining to the Company''s interests and also provided direct access to the Chairman of the Audit Committee and the Vigilance Officer of the Company on reporting issues concerning the interests of the Company. The Company also has provided adequate safeguards against victimization of employees and Directors who are the whistle blowers.
The Company has published the Whistle Blower Policy in its website, a web link of which is as under:
http://www.yukenindia.com/wp-content/uploads/2016/02/
Whistle-Blower-Policy.pdf
26. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE(PREVENTION,PROHIBITION AND REDRESSAL) ACT 2013:
The Company has zero tolerance towards sexual harassment at the work place and has adopted a policy on prevention, prohibition and redressal of sexual harassment at work place in line with the provisions of the Sexual Harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013 and rules thereunder. As required under law, an internal Compliance Committee has been constituted for reporting and conducting inquiry into the complaints made by the victim on the harassments at the work place. During the year 2017-18, no complaint of sexual harassment has been received.
27. DETAILS OF REVISION OF FINANCIAL STATEMENTS:
There was no revision of the financial statements of the Company, during the year 2017-18.
28. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:
As part of the Familiarization Programme, Independent Directors of the Company have been made aware of the following information:
a. Rules and regulations pertaining to their appointment as Independent Directors,
b. Duties and responsibilities of the Independent Directors towards the Company and its stakeholders,
c. Code of conduct to be followed by them and
d. Company''s policies and procedures.
29. DETAILS OF REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:
a. Ratio of remuneration of each Director/KMP to the median employee''s remuneration and the percentage increase in the median remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 2017-18.
Name of the Director / KMP |
Remuneration for financial year 2017-18 (in Rs.) |
Remuneration for financial year 2016-17 (in Rs.) |
% increase in remuneration in the financial year 2017-18 |
Ratio of remuneration of each Director/KMP to that of Median remuneration of employees |
Mr. C P Rangachar, Managing Director |
67,58,728 |
52,92,489 |
27.70 |
8.03:1 |
Mr. Osamu Tanaka, Chairman & Non-Executive Director up 05th September, 2017 |
10,000 |
Nil |
||
Capt. N S Mohanram, Non-Executive Independent Director |
3,14,666 |
90,000 |
249.63 |
0.37:1 |
Mr. R Srinivasan, Non-Executive Independent Director |
3,24,666 |
70,000 |
363.81 |
0.38:1 |
Dr. Premchander, Non-Executive Independent Director |
3,24,667 |
70,000 |
363.81 |
0.38:1 |
Name of the Director / KMP |
Remuneration for financial year 2017-18 (in Rs.) |
Remuneration for financial year 2016-17 (in Rs.) |
% increase in remuneration in the financial year 2017-18 |
Ratio of remuneration of each Director/KMP to that of Median remuneration of employees |
Mr. Shiro Hattori, Nominee Director up to 05th September, 2017 |
10,000 |
|||
Mrs. Vidya Rangachar, Non-Executive Director |
2,84,667 |
50,000 |
469.33 |
0.33:1 |
Mr. Hideharu Nagahisa Chairman & Non-Executive Director w.e.f 23rd August, 2017 |
2,44,667 |
0.29:1 |
||
Mr. Koichi Oba Non Executive Director w.e.f 23rd August, 2017 |
2,44,667 |
0.29:1 |
||
Mr. H M Narasinga Rao, CFO |
50,81,332 |
48,68,252 |
4.38 |
6.04:1 |
Mr. Subramanya Ullal, CEO up to 15th February, 2018 |
44,41,775 |
44,99,053 |
(1.27) |
5.28:1 |
Ms. Sridevi Ch, Company Secretary up to 12th February, 2018 |
5,24,755 |
6,01,237 |
(12.72) |
0.62:1 |
Mr. Vinayak Hegde Company Secretary w.e.f 12th February 2018 |
92,469 |
0.11:1 |
||
Mr. K Gopal Krishna, Executive Director |
58,60,582 |
55,33,708 |
5.91 |
6.96:1 |
Mr. A Venkatakrishnan VP Operation w.e.f 15th February, 2018 |
3,09,368 |
- |
- |
0.37:1 |
Notes:
1. The Net Profit after tax has increased by Rs. 789.66 lakhs (excluding comprehensive income) as compared to the previous year and the remuneration of the Managing Director has increased by 27.70 %.
2. Remuneration paid /payable to Managing Director and Non-Executive Directors for the financial year 2017-18 is inclusive of Salary, Commission and Sitting Fees.
3. Remuneration paid/payable to Managing Director and Non-Executive Director was increased due to payment of Commission for the FY 2017-18. Previous year commission is NIL.
b. The number of permanent employees on the rolls of the Company as on 31st March, 2018 was 313.
c. Percentage increase in median remuneration of employees for the financial year is 20.01%.
d. Relationship between average increase in remuneration and Company performance:
The Profit after Tax for the financial year 2017-18 stood at Rs. 868.73 lakhs (excluding comprehensive income) and the average increase in median employee remuneration was 20.01%. Remunerations of the employees are as per the industry standards.
e. Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:
Overall remuneration of Key Managerial Personnel for the year 2017-18 has increased by 10.94% whereas the total revenue from the operations has increased by 19% when compared to the previous year. Remuneration of the KMP are as per the industry standards.
f. Details of share price and market capitalization:
(i) The details of variation in the market capitalization and price earnings ratio as at the closing date of the current and previous financial years are as follows:
Si. No. |
Particulars |
2017-18 |
2016-17 |
i. |
Variations in the market |
1199.40 |
314.82 |
capitalization of the Company on 31st March,2018 |
crores |
crores |
|
ii. |
Price Earnings Ratio of the Company |
138.05:1 |
1072:1 |
(ii) Percentage increase over/decrease in the market quotations of the shares of the Company as compared to the rate at which the company came out with the last public offer in the year:
The Company had come out with initial public offer in 1991. An amount of Rs. 10 invested in the said IPO would be worth Rs. 3998 as on 31st March, 2018 indicating a Compounded Annual Growth Rate of 24.83%. This is excluding the dividend accrued thereon.
g. Average percentage increase already made in the salaries of employees other than the key managerial personnel in the last financial year and its comparison with the percentage increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:
- Average percentage increase of salaries of employees other than the key managerial personnel in the financial year: 16.43%.
- Percentage increase in the key managerial remuneration: 10.94%.
h. The key parameters for any variable component of remuneration availed by the directors.
Directors are paid commission calculated on the basis of net profits of the Company under the provisions of Section 197 of the Companies Act, 2013 and as approved by the shareholders and based on the Nomination and Remuneration Policy of the Company. The Directors are eligible for the commission on the net profit of the Company for the year 2017-18. The commission amount will be paid after the approval of financial statements for the year ended 31st March 2018, by the Board of Directors.
i. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: NIL
It is hereby affirmed that the remuneration paid to the Directors is as per the Nomination and Remuneration Policy of the Company.
Information as per rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: Nil
i. Employed throughout the financial year and were in receipt of remuneration for the year, in the aggregate of not less than Rs. 102 lakhs - Nil
ii. Employed for a part of the financial year and were in receipt of remuneration for any part of the year, at a rate which, in the aggregate, was not less than Rs. 8.50 lakhs per month - Nil
iii. Employed throughout the financial year or part thereof, was in receipt of remuneration in the year in excess of that drawn by the managing director and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company - Nil
30. SHARE CAPITAL:
The Board provides following disclosures pertaining to Companies
(Share Capital and Debentures) Rules, 2014:
Si. No. |
Particulars |
Disclosure |
1. |
Issue of Equity shares with differential rights |
Nil |
2. |
Issue of Sweat Equity shares |
Nil |
3. |
Issue of employee stock option |
Nil |
4. |
Provision of money by company for purchase of its own shares by trustees for the benefit of employees |
Nil |
The Authorized share Capital of the Company is Rs. 6,00,00,000 consisting of 60,00,000 Equity Shares of Rs. 10/- each and paid up equity share capital of the Company is Rs. 3,00,00,000 consisting of 30,00,000 equity shares of Rs. 10/- each as on March 31, 2018. During the year under review, the Company has not issued any shares, debenture or convertible instruments.
31. COST AUDITORS:
Pursuant to the provisions of Section 148 of the Companies Act, 2013, read with Companies (Cost Records and Audit) Rules, 2014 as amend from time to time. the Board of Directors, on the recommendation of the Audit Committee have appointed M/s. Adarsh Sharma & Co, Cost Accountants, Bengaluru, as Cost Auditors for conducting Cost Audit for the financial year 2018-19. Your Directors proposed to ratify the remuneration payable to them for the financial year 2018-19 at the ensuing Annual General Meeting.
32. STATUTORY AUDITORS:
M/s. Walker Chandiok and Co., LLP, Chartered Accountants, have been appointed as statutory auditors of the Company at the 41st Annual General Meeting held on 05th September, 2017, for a period of 5 years and to hold the office up to the conclusion 46th Annual General Meeting of the Company to be held in the year 2022. The Board proposed to fix the remuneration in consultation with the said auditors.
33. SECRETARIAL AUDITORS:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made there under, the Company has appointed M/s. Joseph & Chacko LLP, Practicing Company Secretaries to undertake the Secretarial Audit of the Company for F.Y 2017-18. The Report of the Secretarial Audit is annexed herewith as ''Annexure 4''.
The Board of Directors have re-appointed M/s. Joseph & Chacko LLP, Company Secretary in Practice to conduct the Secretarial Audit for FY 2018-19 also.
34. CORPORATE GOVERNANCE:
Your Company is committed to maintaining high standards of Corporate Governance. A report on Corporate Governance along with a Certificate from the Statutory Auditors on compliance of Corporate Governance is attached to this Report as ''Annexure -5.
35. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis (MDA) forms part of the Annual Report setting out an analysis of business including the industry scenario, performance, financial analysis and risk mitigation. (Refer page No 20.)
36. CONSOLIDATED FINANCIAL STATEMENTS:
In accordance with the Accounting Standard Ind AS-110 on "Consolidated Financial Statements" read with Accounting Standard Ind AS-28 on "Accounting for Investments in Associates", the audited Consolidated Financial Statements are provided in the Annual Report.
37. FORWARD-LOOKING STATEMENTS:
This report contains forward-looking statements that involve risks and uncertainties. When used in this report, the words "anticipate", "believe", "estimate" "expect" "intend" "will" and other similar expressions as they relate to your Company and / or its business are intended to identify such forward-looking statements. Your Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward looking statements. This report should be read in conjunction with the financial statements included herein and notes thereto.
38. ACKNOWLEDGEMENTS:
Your Directors place on record their sincere thanks to the bankers, business associates, consultants and various Government Authorities for their continued support extended to your Company''s activities during the year. Your Directors also acknowledge their gratitude to the Shareholders of the Company, for their continuous support and confidence reposed on the Company.
For and on behalf of the Board of Directors
Place: Bengaluru C P Rangachar Capt. N S Mohanram R. Srinivasan
Date: 30 May, 2018 Managing Director Director Director
(DIN: 00310893) (DIN: 02466671) (DIN: 00043658)
Mar 31, 2017
To the Members,
The Directors have pleasure in presenting their 41st Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2017.
1. FINANCIAL RESULTS
The Company is carrying on the business of manufacturing of hydraulic valves, pumps, systems and cast iron castings. During the year, the Company has registered a total income of Rs. 19,675 lakhs compared to Rs. 19,869 lakhs of previous year. The foundry business of the Company has been transferred to Grotek Enterprises Pvt. Ltd., by way of slump sale during the year with effect from 01st October, 2016. Hence the financial performance pertaining to foundry business for the first half of the year 2016-17 was considered in arriving at the financial results. The Company''s financial performance for the year under review along with previous year''s figures is given hereunder:
Financial summary or highlights: (Rs jn j_akhs)
Particulars |
2016-17 |
2015-16 |
Total Income |
19,675 |
19,869 |
Total expenditure |
18,712 |
18,874 |
Profit before interest, depreciation and tax |
963 |
995 |
Finance cost |
574 |
503 |
Depreciation |
388 |
461 |
Profit before Exceptional items and tax |
01 |
31 |
Exceptional items* |
328 |
- |
Profit after Exceptional items & before tax |
(327) |
31 |
Provision for taxation (Net of deferred tax) |
356 |
28 |
Profit after tax |
29 |
03 |
Balance in Statement of profit and loss |
4,590 |
4,623 |
Amount available for appropriation |
4,619 |
4,626 |
Appropriations: |
||
General reserve |
- |
- |
Proposed dividend |
- |
30 |
Tax on proposed dividend |
- |
06 |
Balance carried to Balance Sheet |
4,619 |
4,590 |
Total |
4,619 |
4,626 |
*The above exceptional item of Rs. 328 lakhs includes additional depreciation charged for the year ended March 31, 2017 due to change in the useful life of buildings at Whitefield factory -net of salvage value of Buildings and gain on sale of Foundry Business.
2. THE EXTRACT OF ANNUAL RETURN (FORM MGT-9)
The extract of Annual Return for the financial year 2016-17 pursuant to the provisions of Section 92(3) and Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure-1 and is attached to this report.
3. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR
Five Board Meetings were held during the financial year, 2016-17 viz., on 28th May 2016, 13th August 2016, 21st September 2016, 19th October 2016 and 04th February 2017.
4. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby submits its Responsibility Statement:
(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit and loss of the Company for that period;
(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the annual accounts on a going concern basis;
(e) The Directors had laid down internal financial controls to be followed by the Company as applicable to listed companies and such internal financial controls are adequate and were operating effectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.
5. COMPANY''S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The Nomination and Remuneration Policy of the Company pertaining to appointment of Directors, payment of managerial remuneration, Directors'' qualifications, positive attributes, independence of Directors and other relevant matters as provided under section 178(3) of the Companies Act, 2013 may be accessed on the Company''s website, web link of which is as under:
http://www.yukenindia.com/wp-content/uploads/2016/05/
Nomination-Remuneration-Policy.pdf
6. EVALUATION OF DIRECTORS
Nomination and Remuneration Committee of the Company has formulated a criteria for evaluation of the Board Members. Accordingly performance evaluation of the Board and its members was carried out.
7. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLOSURES MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR RESPECTIVE REPORTS
There were no qualifications, reservations or adverse remarks made by the Auditors or by the Practicing Company Secretary in their respective reports.
8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Loans:
During the year, the Company has provided a corporate loan of Rs. 77,000,000/- (Rupees Seven Crore Seventy Lakh Only) to Grotek Enterpises Pvt. Ltd., a wholly owned subsidiary of the Company.
Corporate Guarantee:
| Particulars |
Bank |
Amount (Rs.) | |
Corporate Guarantee to |
State |
120 lakhs |
Coretec Engineering India |
Bank of |
|
Private Limited (Subsidiary) |
India |
|
Corporate Guarantee to |
HDFC |
220 lakhs |
Yuflow Engineering Private |
Bank Ltd. |
|
Limited (Subsidiary) |
Investments:
An investment of Rs. 50,100,000/- (Five Core and One Lakh Only) was made in Grotek Enterprises Pvt. Ltd., by subscribing to 5,010,000 equity shares of Rs. 10/- each during the year.
The above loans, guarantees and investments are within the limits prescribed under section 186 of the Companies Act,
2013.
9. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, the Statement of Profit & Loss and other documents of the Subsidiary Companies are not being attached to the Balance Sheet of the Company.
The Company will make available the Annual Accounts of the Subsidiary Companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The Annual Accounts of the Subsidiary Companies will also be kept open for inspection by any investor at the Registered Office of the Company and that of the respective Subsidiary Companies. The consolidated financial statements presented by the Company include financial results of its Subsidiary Companies.
The details of financial performance of Subsidiaries and Associate Companies are furnished as under:
(Rs. in lakhs)
Particulars |
Coretec Engineering India Pvt. Ltd. (Subsidiary) |
Yuflow Engineering Pvt. Ltd. (Subsidiary) |
Grotek Enterprises Pvt. Ltd. (Subsidiary) (from 01.10.2016) |
Sai India Ltd (Associate) (Unaudited) |
Kolben Hydraulics Ltd. (Associate) |
Bourton Consulting (India) Pvt. Ltd. (Associate) |
Total Income FY 2016-17 |
1081.62 |
792.21 |
1904.65 |
2081.10 |
309.36 |
63.27 |
FY 2015-16 |
778.17 |
1011.65 |
- |
1849.66 |
227.78 |
70.89 |
Total expenditure FY 2016-17 |
988.71 |
1023.32 |
2086.34 |
1807.23 |
289.89 |
56.69 |
FY 2015-16 |
697.17 |
1109.61 |
(0.075) |
1689.57 |
219.65 |
60.37 |
Profit before interest, depreciation and tax FY 2016-17 |
92.91 |
(231.11) |
(181.69) |
273.87 |
19.47 |
6.57 |
FY 2015-16 |
81.00 |
(97.95) |
(0.075) |
160.09 |
8.13 |
10.42 |
Finance cost FY 2016-17 |
13.02 |
26.02 |
19.96 |
93.63 |
2.02 |
|
FY 2015-16 |
11.13 |
28.93 |
- |
90.66 |
1.24 |
0.09 |
Depreciation FY 2016-17 |
29.10 |
24.60 |
97.22 |
106.60 |
6.21 |
2.69 |
FY 2015-16 |
22.41 |
27.36 |
- |
110.45 |
6.48 |
3.25 |
Profit before Exceptional items, Prior year items and tax FY 2016-17 |
50.79 |
(281.73) |
(298.87) |
73.63 |
11.24 |
3.89 |
FY 2015-16 |
47.46 |
(154.25) |
(0.075) |
(41.02) |
0.41 |
7.16 |
Exceptional items FY 2016-17 |
||||||
FY 2015-16 |
- |
(53.00) |
- |
- |
- |
- |
Profit after Exceptional items but before prior year items and tax FY 2016-17 |
50.79 |
(281.73) |
(298.87) |
73.63 |
11.24 |
3.89 |
FY 2015-16 |
47.46 |
(207.25) |
(0.075) |
(41.02) |
0.41 |
7.16 |
Prior year items FY 2016-17 |
||||||
FY 2015-16 |
- |
- |
- |
- |
- |
- |
A statement containing salient features of financial statements of subsidiaries and associate companies in Form AOC-1 is enclosed herewith as Annexure-2 to this report.
Profit after Exceptional items and prior year items but before tax FY 2016-17 FY 2015-16 |
50.79 47.46 |
(281.73) (207.25) |
(298.87) (0.075) |
73.63 (41.02) |
11.24 0.41 |
3.89 7.16 |
Provision for taxation (Net of deferred tax) FY 2016-17 |
16.97 |
5.93 |
2.14 |
1.42 |
||
FY 2015-16 |
18.70 |
- |
- |
2.49 |
0.10 |
2.23 |
Profit/ (Loss) after tax FY 2016-17 |
33.81 |
(281.73) |
(304.80) |
73.63 |
9.10 |
2.47 |
FY 2015-16 |
28.76 |
(207.25) |
(0.075) |
(38.53) |
0.51 |
4.93 |
Earnings per share (in Rs.) FY 2016-17 |
5.46 |
(14.09) |
(24.19) |
8.18 |
0.91 |
1.71 |
FY 2015-16 |
4.64 |
(19.85) |
(0.75) |
(4.28) |
0.05 |
3.30 |
10. CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
The details of related party transactions as required under Accounting Standard-18 are set out in Note-32 to the standalone financial statements of the Company.
The Form AOC-2 pursuant to section 134(3)(h) of the Companies Act, 2013 read with rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as Annexure-3 to this report.
The Policy on Related Party Transactions as approved by the Board may be accessed on the Company''s website, web link of which is as under:
http://www.yukenindia.com/wp-content/uploads/2016/02/
Related-Party-Transactions-Policy.pdf
11. DETAILS OF AMOUNTS TRANSFERRED TO RESERVES
Your Company has not transferred any amount to General Reserves.
12. DIVIDEND
The Board of Directors is pleased to recommend a dividend of 10% on equity shares of the Company for the year ended
31st March, 2017, subject to the approval of the members at the ensuing Annual General Meeting
13. TRANSFER OF UNCLAIMED DIVIDEND b EQUITY SHARES IN RESPECT OF WHICH DIVIDENDS FOR 7 CONSECUTIVE YEARS REMAIN UNPAID TO INVESTOR EDUCATION AND PROTECTION FUND AUTHORITY
Since the Company has not declared / distributed any dividend for the financial year 2008-09, there is no unclaimed and unpaid dividend pertaining to that financial year and hence it was not required to remit any amount to the Investors Education and Protection Fund in accordance with section 125 of the Companies Act, 2013, during the year 2016-17. The Company is required to transfer unpaid dividend pertaining to the year 2009-10 to IEPF.
Also, in pursuance of the provisions of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the Rulesâ) notified by the Ministry of Corporate Affairs effective September 7,
2016 and subsequent amendments effective February 28, 2017, we are required to transfer all the equity shares in respect of which dividends for 7 (seven) consecutive years have remained unpaid / unclaimed to Demat account of IEPF Authority.
14. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN 31ST MARCH,
2017 AND 29TH MAY, 2017
There were no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year (31st March, 2017) and the date of the Report (29th May, 2017).
15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO UNDER SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 READ WITH RULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES, 2014
1. Conservation of Energy:
The Company has taken various steps for conservation of energy in the process of implementing several projects. Energy conservation is a consistent focus area for the Company both from cost control as well as social responsibility perspective. The power factor is regularly monitored and maintained between 0.99 and 1.00. LED lights are being used in the Company''s premises so that the power consumption comes down.
2. Foreign Exchange Earnings and Outgo:
Foreign Exchange Earnings: (Rs. in lakhs)
Export Sales |
670.06 |
Other Income |
4.31 |
Expenditure in Foreign Currency: (Rs. in lakhs) |
|
Brand fee |
80.32 |
Royalty |
5.66 |
Interest |
0.00 |
Others |
19.95 |
Remittance in Foreign Currency on Account of: (Rs. in lakhs) |
|
Dividend |
12 |
3. Research and Development (R&D)
The Company continues to invest in R&D activities towards development of new products and applications, improvement in operating efficiencies and reduction in manufacturing costs.
The Company has developed certain pumps, valves etc., which are energy efficient and as per the customer requirement. The core idea of the Company''s investments in R&D is to initiate product up gradations and to develop new products that would give an edge over competitors.
(a) Specific areas in which R&D is carried out by the
Company
i. Up gradation and modification of chip compacting machine which was originally designed by Yuken Kogyo Co. Ltd., Japan.
ii. Several concepts of energy saving hydraulic power units have been designed to suit customer requirements.
iii. Development of high pressure application valves and pumps for process and steel industries.
(b) Benefits derived as a result of above R&D efforts
Special products developed to meet specific requirements of customers which enable your Company to develop niche markets for growth.
(c) Future plan of action
- Development of additional range of products
- Focus on process improvements to enable the Company to penetrate the export market
- Strong focus on employee involvement to eliminate waste in operations through focused initiatives.
(d) Expenditure on R&D
There is a continuous increase in R&D expenditure as the scope of activities carried out keeps on increasing.
4. Technology Absorption, Adaptation and Innovation
(a) Efforts in brief, made towards technology absorption, adaptation and innovation:
- Special models of energy saving pumps and valves have been designed to meet specific needs of customers and these have enabled us to extend our customer base to include a wider range of industries.
- Indigenization is a continuous ongoing effort.
(b) Benefits derived as a result of the above efforts:
- Reduction of material cost
- Quality improvement and improvement in product performance characteristics
- Ability to innovate and produce new products
(c) Information regarding technology imported during the last five years reckoned from the beginning of the financial year: Nil
16. DETAILS OF CHANGE IN NATURE OF BUSINESS,
IF ANY
There was no change in the nature of business of the Company, during the year 2016-17.
17. DIRECTORS
There is no change in the composition of Board of Directors, during the year.
The Independent Directors have submitted their declarations to the Board stating that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013.
18. KEY MANAGERIAL PERSONNEL
Mr. C P Rangachar, Managing Director, Mr. H M Narasinga Rao, Chief Financial Officer, Mr. Subramanya Uiiai, Chief Executive Officer and Ms. Sridevi Ch, Company Secretary are the Key Managerial Personnel in accordance with the provisions of section 203 of the Companies Act, 2013, during the period under report.
19. DEPOSITS
The Company has neither accepted nor renewed any deposits during the year.
20. MATERIAL ORDERS PASSED BY REGULATORY AUTHORITIES
There are no significant and material orders passed by the regulators or courts or tribunals during the year, impacting the going concern status and Company''s operations in future.
21. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company''s management is responsible for establishing and maintaining an adequate system of internal controls over financial reporting. The Company has in place adequate systems of internal controls commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization and ensuring compliance of corporate policies. The observations arising out of audit are periodically reviewed and compliance ensured. The Internal Audit Reports, observations and status of the implementation is submitted to the Audit Committee of the Board of Directors. The status of implementation of the recommendations is reviewed by the Committee on a regular basis and concerns, if any, are reported to the Board.
22. RISK MANAGEMENT POLICY
In compliance with the provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Risk Management Committee has been constituted by the Board. The Company has in place, a Policy on Risk Management for the purpose of identification, assessment, handling, monitoring and dealing with various risks across the organization.
Risks are identified by the respective departmental heads. Each SBU & Corporate will carry out the Risk Assessment for each identified risk, as applicable to them and will document the results for each risk in the Risk Register. Action will be taken based on the possible impact of the identified risk.
The Company has adopted the following measures concerning the development and implementation of a Risk Management Policy during the year:
a. Measures taken by IT department of the Company to mitigate risk relating to security of data and systems of the Company;
b. Security measures in the manufacturing units of the Company to prevent accidents; and
c. Installation of CC TV cameras and siren at factory for safety of the employees.
d. Measures taken by the Company to mitigate foreign exchange transaction risks.
23. DETAILS OF POLICY DEVELOPED, IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company has constituted a Corporate Social Responsibility Committee and developed a CSR Policy, in compliance with the provisions of section 135 of the Companies Act, 2013, with the following objectives:
- To ensure an increased commitment at all levels in the Organization to operate its business in an economically, socially and environmentally sustainable manner, while recognizing the interests of the stakeholders.
- To directly or indirectly take up programs that benefit the communities over a period of time, in enhancing the quality of life and economic well being of the people around.
In accordance with the Company''s CSR Policy, following are the areas on which the Company would like to focus for the purpose of CSR:
1. Education and
2. Environmental sustainability
In compliance with the CSR Policy, your Company has undertaken the following activities:
1. Rain water harvesting in all the plants of the Company, and
2. The Company has appointed a Teacher to teach English and Computers in the Government Elementary School in Hedagenabele village of Kolar District.
However, since the CSR provisions are not applicable to the Company for the year 2016-17, it was not required to allocate / spend any funds towards CSR activities under the provisions of section 135 of the Companies Act, 2013.
24. COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM
In compliance with the provisions of Section 177 of the Companies Act, 2013 read with Rules 6 and 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company''s Board has constituted an Audit Committee with the following Directors:
1. Capt. N S Mohanram - Chairman
2. Mr. R Srinivasan - Member
3. Mr. C P Rangachar - Member
4. Dr. Premchander - Member
The above composition of the Audit Committee consists of three Independent Directors, who form the majority.
The Company has established a Vigil Mechanism to deal with the genuine concerns of the employees and Directors pertaining to the Company''s interests and also provided direct access to the Chairman of the Audit Committee and the Vigilance Officer of the Company on reporting issues concerning the interests of the Company. The Company also has provided adequate safeguards against victimization of employees and Directors who are the whistle blowers.
The Company has published the Whistle Blower Policy in its website, a web link of which is as under:
http://www.yukenindia.com/wp-content/uploads/2016/02/
Whistle-Blower-Policy.pdf
25. DETAILS OF REVISION OF FINANCIAL STATEMENTS
There was no revision of the financial statements of the Company, during the year 2016-17.
26. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
As part of the Familiarization Programme, Independent Directors of the Company have been made aware of the following information:
a. Rules and regulations pertaining to their appointment as Independent Directors,
b. Duties and responsibilities of the Independent Directors towards the Company and its stakeholders,
c. Code of conduct to be followed by them and
d. Company''s policies and procedures.
27. DETAILS OF REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
a. Ratio of remuneration of each Director/KMP to the median employee''s remuneration and the Percentage increase in the median remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 2016-17.
Name of the Director / KMP |
Remuneration for financial year 2016-17 (in Rs.) |
Remuneration for financial year 2015-16 (in Rs.) |
% increase in remuneration in the financial year 2016-17 |
Ratio of remuneration of each Director/KMP to that of Median remuneration of employees |
Mr. C P Rangachar, Managing Director |
5,292,489 |
5,543,841 |
-4.53% |
7.54:1 |
Mr. O Tanaka, Chairman & Non-Executive Director |
10,000 |
10,000 |
Nil |
0.01:1 |
Capt. N S Mohanram, Non-Executive Independent Director |
90,000 |
100,000 |
Nil |
0.13:1 |
Name of the Director / KMP |
Remuneration for financial year 2016-17 (in Rs.) |
Remuneration for financial year 2015-16 (in Rs.) |
% increase in remuneration in the financial year 2016-17 |
Ratio of remuneration of each Director/KMP to that of Median remuneration of employees |
Mr. R Srinivasan, Non-Executive Independent Director |
70,000 |
70,000 |
Nil |
0.10:1 |
Dr. Premchander, Non-Executive Independent Director |
70,000 |
60,000 |
Nil |
0.10:1 |
Mr. S Hattori, Nominee Director |
10,000 |
10,000 |
Nil |
0.01:1 |
Mrs. Vidya Rangachar, Non-Executive Director |
50,000 |
50,000 |
Nil |
0.07:1 |
Mr. H M Narasinga Rao, CFO |
4,868,252 |
4,618,845 |
5.40% |
6.94:1 |
Mr. Subramanya Ullal, CEO |
4,499,053 |
4,260,268 |
5.60% |
6.41:1 |
Ms. Sridevi Ch, Company Secretary |
601,237 |
530,657 |
13.30% |
0.86:1 |
Notes:
The Net Profit after tax has increased by Rs. 26 iakhs compared to the previous year and the remuneration of the Managing Director has decreased by 4.53%.
b. The median remuneration of employees of the Company during the year and percentage increase (decrease) in the median remuneration of employees compared to the previous financial year:
Particulars |
2016-17 (Rs.) |
2015-16 (Rs.) |
Increase in % |
Median Remuneration of all employees |
701,572/- |
607,405/- |
15.50% |
c. The number of permanent employees on the rolls of the Company as on 31st March, 2017 was 304.
d. Relationship between average increase in remuneration and company performance:
The Profit After Tax for the financial year 2016-17 stood at Rs. 29 lakhs and the average increase in median employee remuneration was 15.50%. Remunerations of the employees are as per the industry standards.
e. Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company
Overall remuneration of Key Managerial Personnel for the year 2016-17 has increased by 2.06% whereas the total revenue from the operations has decreased by 1.22% when compared to the previous year. The decline in revenue is due to transfer of Foundry Business to Grotek Enterprises Pvt. Ltd. during the year and hence the revenue generated for the first half of the year only has been considered. Remunerations of the KMP are as per the industry benchmarks.
f. Details of share price and market capitalization:
(i) The details of variation in the market capitalization and price earnings ratio as at the closing date of the current and previous financial years are as follows:
S.No. |
Particulars |
2016-17 |
2015-16 | |
i. |
Variations in the market capitalization of the Company |
Rs. 314.82 crores |
Rs. 92.10 crores |
ii. |
Price Earnings Ratio of the Company |
1072:1 |
2791:1 |
(ii) Percentage increase over/decrease in the market quotations of the shares of the Company as compared to the rate at which the company came out with the last public offer in the year:
The Company had come out with initial public offer in 1991. An amount of Rs. 10 invested in the said IPO would be worth Rs. 1049.40 as on 31st March, 2017 indicating a Compounded Annual Growth Rate of 19.60%. This is excluding the dividend accrued thereon.
g. Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentage increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration
-Average percentage increase of salaries of employees other than the managerial personnel in the financial year: 10.31%
-Percentage increase/decrease in the managerial remuneration: 2.06%
h. The key parameters for any variable component of remuneration availed by the directors
Directors are paid commission calculated on the basis of net profits of the Company under the provisions of section 197 of the Companies Act, 2013 and as approved by the shareholders and based on the Nomination and Remuneration Policy of the Company. The Directors were not paid any commission during the financial year 2016-17.
i. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year
Not Applicable.
It is hereby affirmed that the remuneration paid to the Directors is as per the Nomination and Remuneration Policy of the Company.
Information as per rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
Name |
Designation |
Remuneration Received |
Contractual / otherwise |
Qualification & Experience |
Date of commencement of employment |
Age |
Last employment |
% of equity shares held in company |
Whether relative of any director or manager of Company |
Nil |
(i) Employed throughout the financial year and were in receipt of remuneration for the year, in the aggregate of not less than Rs. 6,000,000/- - Nil
(ii) Employed for a part of the financial year and were in receipt of remuneration for any part of the year, at a rate which, in the aggregate, was not less than Rs. 500,000/per month - Nil
(iii) Employed throughout the financial year or part thereof, was in receipt of remuneration in the year in excess of that drawn by the Managing Director and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company - Nil
28. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
During the year under review, the Company has registered a turnover of Rs. 19,675 lakhs compared to Rs. 19,869 lakhs in the previous year. Operations of the Company for the year under review have resulted in a net profit of Rs. 29 lakhs.
As per the Meteorological Department, monsoon will be average during the year 2017-18. Hence we expect that the economy may grow from 7.2% to 7.5%. The order position is encouraging during the year and we expect that the demand for our products will continue to be good during the year.
29. SHARES
a. BUY-BACK OF SHARES
The Company has not bought back any of its securities during the year.
b. SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year.
c. BONUS SHARES
No Bonus Shares were issued during the year.
d. EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to its employees, during the year.
30. COST AUDITORS
Pursuant to the provisions of section 134 of the Companies Act, 2013, the Board had appointed M/s. Adarsh Sharma & Co, Cost Accountants, Bangalore, as Cost Auditors for conducting Cost Audit for the financial year 2017-18.
31. STATUTORY AUDITORS
Tenure of M/s. Deloitte Haskins & Sells, Chartered Accountants, Bangalore who were acting as the Statutory Auditors is going to expire at the conclusion of the ensuing Annual General Meeting. M/s. Walker Chandiok & Co. LLP, Chartered Accountants, are proposed to be appointed as the Statutory Auditors for a period of 5 consecutive years, subject to approval of the members of the Company.
32. SECRETARIAL AUDITORS
The Board has appointed M/s. Joseph & Chacko LLP, Practicing Company Secretaries, Bangalore for conducting Secretarial Audit for the financial year 2017-18 in compliance with the provisions of section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
A report on Secretarial Audit for the financial year 2016-17 in Form MR-3 is attached herewith as Annexure-4.
33. CORPORATE GOVERNANCE
Your Company is committed to maintaining high standards of Corporate Governance. A report on Corporate Governance along with a Certificate from the Statutory Auditors on compliance of Corporate Governance is attached to this Report as Annexure -5.
34. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis (MDA) forms part of the Annual Report setting out an analysis of business including the industry scenario, performance, financial analysis and risk mitigation.
35. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS-21 on "Consolidated Financial Statements" read with Accounting Standard AS-23 on "Accounting for Investments in Associates", the audited Consolidated Financial Statements are provided in the Annual Report.
36. FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words "anticipate", "believe", "estimate", "expect", "intend", "will" and other similar expressions as they relate to your Company and / or its business are intended to identify such forward-looking statements. Your Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward looking statements. This report should be read in conjunction with the financial statements included herein and notes thereto.
37. ACKNOWLEDGEMENTS
Your Directors place on record their sincere thanks to the bankers, business associates, consultants and various Government Authorities for their continued support extended to your Company''s activities during the year. Your Directors also acknowledge their gratitude to the Shareholders of the Company, for their continuous support and confidence reposed on the Company.
For and on behalf of the Board of Directors
Place: Bangalore CP Rangachar Capt. N S Mohanram R Srinivasn
Date: 29th May, 2017 Managing Director Director Director
Mar 31, 2016
To the Members,
The Directors have pleasure in presenting their 40th Annual Report of the Company together with the Audited Statements of Accounts for the year ended 31st March, 2016.
1. FINANCIAL RESULTS
The Company is carrying on the business of manufacturing of hydraulic valves, pumps, systems and cast iron castings. During the year, the Company has registered a total income of Rs. 19,869 lakhs compared to Rs. 18,610 lakhs of previous year. The Companyâs financial performance for the year under review along with previous yearâs figures is given hereunder:
Financial highlights:
(Rs. In Lakhs)
Particulars |
2015-16 |
2014-15 |
Total Income |
19,869 |
18,610 |
Total expenditure |
18,874 |
17,677 |
Profit before interest, depreciation and tax |
995 |
933 |
Finance cost |
503 |
418 |
Depreciation |
461 |
458 |
Profit before Exceptional items and tax |
31 |
57 |
Exceptional items |
- |
- |
Profit after Exceptional items & before tax |
31 |
57 |
Provision for taxation (Net of deferred tax) |
28 |
(16) |
Profit after tax |
03 |
73 |
Balance in Statement of profit and loss |
4,623 |
4,623 |
Amount available for appropriation |
4,626 |
4,696 |
Appropriations: |
||
Depreciation on transition to Schedule II of the Companies Act, 2013 |
15 |
|
General reserve |
- |
4 |
Proposed dividend |
30 |
45 |
Tax on proposed dividend |
6 |
9 |
Balance carried to Balance Sheet |
4,590 |
4,623 |
Total |
4,626 |
4,696 |
2. THE EXTRACT OF ANNUAL RETURN (FORM MGT-9)
The extract of Annual Return for the financial year 2015
16 pursuant to the provisions of Section 92(3) and Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure-1 and is attached to this report.
3. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR
Five Board Meetings had been held during the financial year, 2015-16 viz., on 09th May 2015, 24th July 2015, 15th September 2015, 04th November 2015 and 05th February 2016.
4. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby submits its Responsibility Statement:
(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit and loss of the Company for that period;
(c) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the annual accounts on a going concern basis;
(e) The Directors had laid down internal financial controls to be followed by the Company as applicable to listed companies and such internal financial controls are adequate and were operating effectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.
5. COMPANYâS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The Nomination and Remuneration Policy of the Company pertaining to appointment of Directors, payment of managerial remuneration, Directorsâ qualifications, positive attributes, independence of Directors and other relevant matters as provided under section 178(3) of the Companies Act, 2013 may be accessed on the Companyâs website, web link of which is as under:
http://www.yukenindia.com/wp-content/uploads/2016/05/ Nomination-Remuneration-Policy.p df
6. EVALUATION OF DIRECTORS
Nomination and Remuneration Committee of the Company has formulated a criteria for evaluation of the Board Members. Accordingly performance evaluation of the Board and its members has been carried out.
7. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLOSURES MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR RESPECTIVE REPORTS
There were no qualifications, reservations or adverse remarks made by the Auditors or by the Practicing Company Secretary in their respective reports.
8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Particulars of Loans, guarantees or investments made under section 186 are furnished as under:
No loans have been given during the year.
An investment of Rs. 100 lakhs has been made in Yuflow Engineering Pvt. Ltd., by subscribing to 10 lakh shares of Rs. 10/- each.
9. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, the Statement of Profit & Loss and other documents of the Subsidiary Companies are not being attached to the Balance Sheet of the Company.
The Company will make available the Annual Accounts of the Subsidiary Companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The Annual Accounts of the Subsidiary Companies will also be kept open for inspection by any investor at the Registered Office of the Company and that of the respective Subsidiary Companies. The consolidated financial statements presented by the Company include financial results of its Subsidiary Companies.
Particulars |
Bank |
Amount (Rs.) |
Corporate Guarantee to Yuflow Engineering Private Limited (Subsidiary) |
HDFC Bank Ltd. |
220 lakhs |
Corporate Guarantee to Coretec Engineering India Private Limited (Subsidiary) |
State Bank of India |
120 lakhs |
The above guarantees are within the limits prescribed under section 186 of the Companies Act, 2013.
The details of financial performance of Subsidiaries and Associate Companies are furnished as under:
(Rs. in lakhs)
Particulars |
Coretec Engineering India Pvt. Ltd. (Subsidiary) |
Yuflow Engineering Pvt. Ltd. (Subsidiary) |
* Sai India Ltd (Associate) |
Kolben Hydraulics Ltd. (Associate) |
Bourton Consulting (India) Pvt. Ltd. (Associate) |
Total Income FY 2015-16 |
778.17 |
1011.66 |
1859.86 |
227.78 |
70.89 |
FY 2014-15 |
718.23 |
1121.24 |
1583.15 |
221.77 |
64.76 |
Total expenditure FY 2015-16 |
697.17 |
1109.61 |
1699.53 |
219.65 |
60.37 |
FY 2014-15 |
631.10 |
1098.44 |
1438.85 |
210.64 |
54.13 |
Profit before interest, depreciation and tax FY 2015-16 |
81.00 |
(97.95) |
160.33 |
8.13 |
10.52 |
FY 2014-15 |
87.13 |
22.80 |
144.31 |
11.12 |
10.63 |
Finance cost FY 2015-16 |
11.13 |
28.93 |
90.66 |
1.24 |
0.09 |
FY 2014-15 |
11.69 |
28.57 |
96.80 |
1.28 |
0.60 |
Depreciation FY 2015-16 |
22.41 |
27.36 |
110.45 |
6.48 |
3.25 |
FY 2014-15 |
27.92 |
37.34 |
126.24 |
8.17 |
6.19 |
Profit before Exceptional items, Prior year items and tax FY 2015-16 |
47.46 |
(154.24) |
(40.78) |
0.41 |
7.16 |
FY 2014-15 |
47.52 |
(43.11) |
(78.73) |
1.68 |
3.84 |
Exceptional items FY 2015-16 |
(53.00) |
||||
FY 2014-15 |
- |
- |
- |
- |
- |
Profit after Exceptional items but before prior year items and tax FY 2015-16 |
47.46 |
(207.24) |
(40.78) |
0.41 |
7.16 |
FY 2014-15 |
47.52 |
(43.11) |
(78.73) |
1.68 |
3.84 |
Prior year items FY 2015-16 |
|||||
FY 2014-15 |
- |
- |
- |
3.00 |
- |
Profit after Exceptional items and prior year items but before tax FY 2015-16 |
47.46 |
(207.24) |
(40.78) |
0.41 |
7.16 |
FY 2014-15 |
47.52 |
(43.11) |
(78.73) |
(1.33) |
3.84 |
Provision for taxation (Net of deferred tax) FY 2015-16 |
18.70 |
2.49 |
0.10 |
2.23 |
|
FY 2014-15 |
6.97 |
- |
(2.86) |
(7.56) |
1.33 |
Profit/ (Loss) after tax FY 2015-16 |
28.76 |
(207.24) |
(38.29) |
0.51 |
4.93 |
FY 2014-15 |
40.55 |
(43.11) |
(75.87) |
6.23 |
2.51 |
Earnings per share (in Rs.) FY 2015-16 |
4.64 |
(19.85) |
(4.25) |
0.05 |
3.91 |
FY 2014-15 |
6.54 |
(4.31) |
(8.43) |
0.64 |
1.99 |
Statement containing salient features of financial statements of subsidiaries and associate companies in Form AOC-1 is enclosed herewith as Annexure-2 to this report.
Note: * Consolidated financials include un-audited financials of Sai India Ltd., one of the Associates.
10. CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an armâs length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
The details of related party transactions as required under Accounting Standard-18 are set out in Note-30 to the standalone financial statements of the Company.
The Form AOC-2 pursuant to section 134(3)(h) of the Companies Act, 2013 read with rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as Annexure-3 to this report.
The Policy on Related Party Transactions as approved by the Board may be accessed on the Companyâs website, web link of which is as under:
http://www.yukenindia.com/wp-content/uploads/2016/02/ Related-Party-Transactions-Policy.pdf
11. DETAILS OF AMOUNTS TRANSFERRED TO RESERVES
Your Company has not transferred any amount to General Reserves.
12. DIVIDEND
The Board of Directors is pleased to recommend a dividend of 10% on equity shares of the Company for the year ended 31st March, 2016, subject to the approval of the members at the ensuing Annual General Meeting.
13. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Since the Company has not declared / distributed any dividend for the financial year 2009-10, there is no unclaimed and unpaid dividend pertaining to that financial year and hence it is not required to remit any amount to the Investors Education and Protection Fund in accordance with section 125 of the Companies Act, 2013, during the year 2016-17.
14. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN 31st MARCH, 2016 AND 28th MAY, 2016
There were no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year (31st March, 2016) and the date of the Report (28th May, 2016).
15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO UNDER SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 READ WITH RULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES, 2014
1. Conservation of Energy:
The Company has taken various steps for conservation of energy in the process of implementing several projects. Energy conservation is a consistent focus area for the Company both from cost control as well as social responsibility perspective. The power factor is regularly monitored and maintained between 0.99 and 1.00. LED lights are being used in the Companyâs premises so that the power consumption comes down. Solar power is being used at foundry division of the Company at Malur.
2. Foreign Exchange Earnings and Outgo:
Foreign Exchange Earnings: (Rs. in lakhs)
Export Sales |
574.02 |
Other Income |
22.46 |
Expenditure in Foreign Currency: (Rs. in lakhs)
Brand fee |
75.03 |
Royalty |
5.55 |
Interest |
0.80 |
Others |
42.75 |
Remittance in Foreign Currency on Account of:
(Rs. in lakhs)
Dividend |
18 |
3. Research and Development (R&D)
The Company continues to invest in R&D activities towards development of new products and applications, improvement in operating efficiencies and reduction in manufacturing costs.
2015-16 was an eventful year for Yuken India Limitedâs R&D efforts. Apart from contributions to analyzing customer complaints and field failures on various products, the release of a new and revamped product catalog was a significant milestone. The core idea of the Companyâs investments in R&D is to initiate product upgradations and to develop new products that would give an edge over competitors.
(a) Specific areas in which R&D is carried out by the Company
i. Design and release of a high speed metal chip compacting machine branded as âKirikoâ which is based on Yuken Kogyo Co. Ltd.âs original design. It is a leap over the Japanese design and answers the need of the Indian customers.
ii. Several concepts of energy saving hydraulic power units have been designed and are in various stages of testing. These will cater to the machine tool industry, one of the most important industry segments of the Company.
iii. Development of larger valves for process and steel industries, rugged vane pumps for special applications and development of high efficiency gear pumps.
(b) Benefits derived as a result of above R&D efforts
Special products developed to meet specific requirements of customers which enable your Company to develop niche markets for growth.
(c) Future plan of action
⢠Development of additional range of products
⢠Focus on process improvements to enable the Company to penetrate the export market
⢠Strong focus on employee involvement to eliminate waste in operations through focused initiatives.
(d) Expenditure on R&D
There is a continuous increase in R&D expenditure as the scope of activities carried out keeps on increasing.
4. Technology Absorption, Adaptation and Innovation
(a) Efforts in brief, made towards technology absorption, adaptation and innovation:
⢠Special models of energy saving pumps and valves have been designed to meet specific needs of customers and these have enabled us to extend our customer base to include a wider range of industries.
⢠Indigenization is a continuous ongoing effort.
(b) Benefits derived as a result of the above efforts:
⢠Reduction of material cost
⢠Quality improvement and improvement in product performance characteristics
⢠Ability to innovate and produce new products
(c) Information regarding technology imported during the last five years reckoned from the beginning of the financial year:
i. Technology imported: For manufacture of Chip compacting machine
ii. Year of import: 2011
iii. Has technology been fully absorbed? Yes
iv. If not fully absorbed, areas where this has not taken place, reasons thereof and future plans of action: NA
16. DETAILS OF CHANGE IN NATURE OF BUSINESS, IF ANY
There was no change in the nature of business of the Company, during the year 2015-16.
17. JOINT DEVELOPMENT OF COMPANYâS PROPERTY LOCATED AT WHITEFIELD, BANGALORE
During the year, the Company has entered into a Joint Development Agreement with Brigade Enterprises Ltd., Bangalore for developing its property located at Whitefield, Bangalore in order to maximize the returns. The Company is under process of shifting the entire plant from Whitefield to Malur, Kolar District.
18. DIRECTORS
There is no change in the composition of Board of Directors, during the year.
The Independent Directors have submitted their declarations to the Board stating that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013.
19. KEY MANAGERIAL PERSONNEL
Mr. C P Rangachar, Managing Director, Mr. H M Narasinga Rao, Chief Financial Officer, Mr. Subramanya Ullal, Chief Executive Officer and Ms. Sridevi Ch, Company Secretary are the Key Managerial Personnel in accordance with the provisions of section 203 of the Companies Act, 2013, during the period under report.
20. DEPOSITS
The Company has neither accepted nor renewed any deposits during the year.
21. MATERIAL ORDERS PASSED BY REGULATORY AUTHORITIES
There are no significant and material orders passed by the regulators or courts or tribunals during the year, impacting the going concern status and Companyâs operations in future.
22. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Companyâs management is responsible for establishing and maintaining an adequate system of internal controls over financial reporting. The Company has in place adequate systems of internal controls commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use or losses, executing transactions with proper authorization and ensuring compliance of corporate policies. The observations arising out of audit are periodically reviewed and compliance ensured. The Internal Audit Reports, observations and status of the implementation is submitted to the Audit Committee of the Board of Directors. The status of implementation of the recommendations is reviewed by the Committee on a regular basis and concerns, if any, are reported to the Board.
23. RISK MANAGEMENT POLICY
In compliance with the provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Risk Management Committee has been constituted by the Board. The Company has in place, a Policy on Risk Management for the purpose of identification, assessment, handling, monitoring and dealing with various risks across the organization.
Risks are identified by the respective departmental heads. Each SBU & Corporate will carry out the Risk Assessment for each identified risk, as applicable to them and will document the results for each risk in the Risk Register. Action will be taken based on the possible impact of the identified risk.
The Company has adopted the following measures concerning the development and implementation of a Risk Management Policy during the year:
a. Measures taken by IT department of the Company to mitigate risk relating to security of data and systems of the Company;
b. Security measures in the manufacturing units of the Company to prevent accidents; and
c. Installation of CC TV cameras and siren at factory for safety of the employees.
d. Measures taken by the Company to mitigate foreign exchange transaction risks.
24. DETAILS OF POLICY DEVELOPED, IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company has constituted a Corporate Social Responsibility Committee and developed a CSR Policy, in compliance with the provisions of section 135 of the Companies Act, 2013, with the following objectives:
> To ensure an increased commitment at all levels in the Organization to operate its business in an economically, socially and environmentally sustainable manner, while recognizing the interests of the stakeholders.
> To directly or indirectly take up programs that benefit the communities over a period of time, in enhancing the quality of life and economic well being of the people around.
In accordance with the Companyâs CSR Policy, following are the areas on which the Company would like to focus for the purpose of CSR:
1. Education and
2. Environmental sustainability
In compliance with the CSR Policy, your Company has undertaken the following activities:
1. Rain water harvesting in all the plants of the Company,
2. Presented a camera to traffic police in Whitefield,
3. The Company has appointed a Teacher to teach English and Computers in the Government Elementary School in Hedagenabele village of Kolar District,
4. Supplied uniforms, shoe and bags to school children at Hedagenabele, Kolar District and
5. Donation towards pendal, furniture and food for meditation programme organized by the villages of Hedagenabele.
However, since the CSR provisions are not applicable to the Company for the year 2015-16, it was not required to allocate / spend any funds towards CSR activities under the provisions of section 135 of the Companies Act, 2013.
25. COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM
In compliance with the provisions of Section 177 of the Companies Act, 2013 read with Rules 6 and 7 of the Companies (Meetings of Board and its Powers) Rules, 2013, and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Companyâs Board has constituted an Audit Committee with the following Directors:
1. Capt. N S Mohanram - Chairman
2. Mr. R Srinivasan - Member
3. Mr. CP Rangachar - Member
4. Dr. Premchander - Member
The above composition of the Audit Committee consists of three Independent Directors, who form the majority.
The Company has established a Vigil Mechanism to deal with the genuine concerns of the employees and Directors pertaining to the Companyâs interests and also provided direct access to the Chairman of the Audit Committee and the Vigilance Officer of the Company on reporting issues concerning the interests of the Company. The Company also has provided adequate safeguards against victimization of employees and Directors who are the whistle blowers.
The Company has published the Whistle Blower Policy in its website, a web link of which is as under:
http://www.yukenindia.com/wp-content/uploads/2016/02/ Whistle-Blower-Policy.pdf
26. DETAILS OF REVISION OF FINANCIAL STATEMENTS
There was no revision of the financial statements of the Company, during the year 2015-16.
27. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
As part of the Familiarisation Programme, Independent Directors of the Company have been made aware of the following information:
a. Rules and regulations pertaining to their appointment as Independent Directors,
b. Duties and responsibilities of the Independent Directors towards the Company and its stakeholders,
c. Code of conduct to be followed by them and
d. Companyâs policies and procedures.
28. DETAILS OF REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
a. Ratio of remuneration of each Director/KMP to the median employeeâs remuneration and the Percentage increase in the median remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 2015-16.
Name of the Director / KMP |
Remuneration for financial year 2015-16 (in Rs.) |
Remuneration for financial year 2014-15 (in Rs.) |
% increase in remuneration in the financial year 2015-16 |
Ratio of remuneration of each Director/ KMP to that of Median remuneration of employees |
Mr. C P Rangachar, Managing Director |
5,543,841 |
5,284,401 |
4.91% |
9.13:1 |
Mr. O Tanaka, Chairman & Non-Executive Director |
10,000 |
10,000 |
Nil |
0.02:1 |
Capt. N S Mohanram, Non-Executive Independent Director |
100,000 |
90,000 |
Nil |
0.16:1 |
Mr. R Srinivasan, Non-Executive Independent Director |
70,000 |
90,000 |
Nil |
0.12:1 |
Dr. Premchander, Non-Executive Independent Director |
60,000 |
30,000 |
Nil |
0.09:1 |
Mr. S Hattori, Nominee Director |
10,000 |
10,000 |
Nil |
0.02:1 |
Mrs. Vidya Rangachar, Non-Executive Director |
50,000 |
- |
* |
0.08:1 |
Mr. H M Narasinga Rao, CFO |
4,618,845 |
4,193,165 |
10.72% |
7.60:1 |
Mr. Subramanya Ullal, CEO |
4,260,268 |
3,318,267 |
28.39% |
7.01:1 |
Ms. Sridevi Ch, Company Secretary |
530,657 |
349,285 |
** |
0.87:1 |
Notes:
The Net Profit after tax has declined in the financial year 2015-16 and the remuneration of the Managing Director has been increased by 4.91%.
* Percentage increase in remuneration not reported as she was holding Directorship for part of the financial year 2014-15 and remuneration is proportionately adjusted.
**Percentage increase in remuneration not reported as she was employed for part of the financial year 2014-15 and remuneration is proportionately adjusted.
b. The median remuneration of employees of the Company during the year and percentage increase/(decrease) in the median remuneration of employees compared to the previous financial year:
Particulars |
2015-16 (Rs.) |
2014-15 (Rs.) |
Increase in % |
Median Remuneration of all employees per annum |
607,405/- |
527,856/- |
13.49% |
c. The number of permanent employees on the rolls of the Company as on 31st March, 2016 was 390.
d. Relationship between average increase in remuneration and company performance:
The Profit Before Tax for the financial year 2015-16 was Rs. 31 lakhs and the average increase in median employee remuneration was 13.49%. Remunerations of the employees are as per the industry standards.
e. Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company
Overall remuneration of Key Managerial Personnel for the year 2015-16 has been increased by 15.92% whereas the total revenue from the operations has increased by 7.36% when compared to the previous year. Remunerations of the KMP are as per the industry benchmarks.
f. Details of share price and market capitalization:
(i) The details of variation in the market capitalization and price earnings ratio as at the closing date of the current and previous financial years are as follows:
S.No. |
Particulars |
2015-16 |
2014-15 |
i. |
Variations in the market capitalization of the Company |
Rs. 92.10 crores |
Rs. 68.22 crores |
ii. |
Price Earnings Ratio of the Company |
2791:1 |
100.18:1 |
(ii) Percentage increase over/decrease in the market quotations of the shares of the Company as compared to the rate at which the company came out with the last public offer in the year:
The Company had come out with initial public offer in 1991. An amount of Rs. 10 invested in the said IPO would be worth Rs. 307.00 as on 31st March, 2016 indicating a Compounded Annual Growth Rate of 14.08%. This is excluding the dividend accrued thereon.
Name |
Designation |
Remuneration Received |
Contractual / otherwise |
Qualification & Experience |
Date of commencement of employment |
Age |
Last employment |
% of equity shares held in company |
Whether relative of any director or manager of Company |
- Nil - |
(iii) Employed throughout the financial year or part thereof, was in receipt of remuneration in the year in excess of that drawn by the managing director and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company - Nil
(i) Employed throughout the financial year and were in receipt of remuneration for the year, in the aggregate of not less than Rs. 6,000,000/- - Nil
(ii) Employed for a part of the financial year and were in receipt of remuneration for any part of the year, at a rate which, in the aggregate, was not less than Rs. 500,000/- per month - Nil
g. Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentage increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration
⢠Average percentage increase of salaries of employees other than the managerial personnel in the financial year: 8.36%
⢠Percentage increase/decrease in the managerial remuneration: 4.91%
h. The key parameters for any variable component of remuneration availed by the directors
Directors are paid commission calculated on the basis of net profits of the Company under the provisions of section 197 of the Companies Act, 2013 and as approved by the shareholders and based on the Nomination and Remuneration Policy of the Company. The Directors were not paid any commission during the financial year 2015-16.
i. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year
Not Applicable.
It is hereby affirmed that the remuneration paid to the Directors is as per the Nomination and Remuneration Policy of the Company.
Information as per rule 5(2) and (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules, 2014:
29. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
During the year under review, the Company has registered a turnover of Rs. 19,767 lakhs compared to Rs. 18,412 lakhs in the previous year. Operations of the Company for the year under review have resulted in a net profit of Rs. 3.34 lakhs.
As predicted by the Meteorological Department, we expect a good monsoon during the current year. We anticipate that the GDP may grow above 7.50% during 2016-17 and the demand for our products will increase.
30. SHARES
a. BUY-BACK OF SHARES
The Company has not bought back any of its securities during the year.
b. SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year.
c. BONUS SHARES
No Bonus Shares were issued during the year.
d. EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to its employees, during the year.
31. COST AUDITORS
Pursuant to the provisions of section 134 of the Companies Act, 2013, the Board had appointed M/s. Adarsh Sharma & Co, Cost Accountants, Bangalore, as Cost Auditors for conducting Cost Audit for the financial year 2015-16.
32. STATUTORY AUDITORS
M/s. Deloitte Haskins & Sells, Chartered Accountants, Bangalore had been appointed as the Statutory Auditors for a period of 3 years in the 38th Annual General Meeting of the Company held on 09th September, 2014, whose appointment
33. SECRETARIAL AUDITORS
The Company has appointed M/s. BG & Associates, Practising Company Secretaries, Bangalore for conducting Secretarial Audit for the financial year 2015-16 in compliance with the provisions of section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
A report on Secretarial Audit in Form MR-3 is attached herewith as Annexure-4.
34. CORPORATE GOVERNANCE
Your Company is committed to maintaining high standards of Corporate Governance. A report on Corporate Governance along with a Certificate from the Statutory Auditors on compliance of Corporate Governance is attached to this Report as Annexure -5.
35. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis (MDA) forms part of this report as Annexure-6 setting out an analysis of business including the industry scenario, performance, financial analysis and risk mitigation.
36. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS-21 on âConsolidated Financial Statementsâ read with Accounting Standard AS-23 on âAccounting for Investments in Associatesâ, the audited Consolidated Financial Statements are provided in the Annual Report.
37. FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words âanticipateâ, âbelieveâ, âestimateâ, âexpectâ, âintendâ, âwillâ and other similar expressions as they relate to your Company and / or its business are intended to identify such forward-looking statements. Your Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward looking statements. This report should be read in conjunction with the financial statements included herein and notes thereto.
38. ACKNOWLEDGEMENTS
Your Directors place on record their sincere thanks to the bankers, business associates, consultants and various Government Authorities for their continued support extended to your Companyâs activities during the year. Your Directors also acknowledge their gratitude to the Shareholders of the Company, for their continuous support and confidence reposed on the Company.
For and on behalf of the Board of Directors
Place: Bangalore C P Rangachar Capt. N S Mohanram Dr. Premchander
Date: 28th May, 2016 Managing Director Director Director
Mar 31, 2014
Dear Members,
The Directors are pleased to present the 38th annual report and the
audited accounts for the financial year ended 31st March 2014.
FINANCIAL RESULTS
The Financial performance of the Company, for the year ended 31st March
2014 is summarized below.
(Rs in Lakhs)
Particulars 2013-14 2012-13
Total income 16,512 15,523
Total expenditure 15,591 14,305
Profit before interest, depreciation and tax 921 1,218
Finance cost 376 474
Depreciation 431 413
Profit before Exceptional items and tax 114 331
Exceptional Item 201 -
Profit after Exceptional item & before tax 315 331
Provision for taxation(Net of deferred tax) 61 130
Profit after tax 254 201
Balance in Statement of profit and loss 4,434 4,297
Amount available for appropriation 4,688 4,498
Appropriations:
General reserve 13 11
Proposed dividend 45 45
Tax on proposed dividend 7 7
Balance carried to Balance Sheet 4,623 4,435
Total 4,688 4,498
REVIEW OF PERFORMANCE
During the year under review, the Company achieved a turnover of Rs.
16,449/- lakhs compared to Rs. 15,404/- lakhs in 2013. The operations
of the Company for the year under review have resulted in a net profit
of Rs.254/- lakhs.
DIVIDEND
Your Directors are pleased to recommend a dividend of 15% on the equity
shares of the company for the year ended 31st March 2014, subject to
the approval of the members at the ensuing annual general meeting.
INDUSTRIAL RELATIONS
Employee relations continue to be cordial. Your Directors would like to
place on record their appreciation of the valuable contribution to the
operations of the Company during the year.
CORPORATE GOVERNANCE
Your Company is committed to maintaining high standards of Corporate
Governance. A Report on Corporate Gover- nance along with a certificate
from the statutory auditors on compliance of Corporate Governance norms
is part of this Annual Report.
COMPLIANCE CERTIFICATE
A Report on Compliances along with the certificate from the Practicing
Company Secretaries on compliances is part of this Annual Report.
Information required under section 217(2A) of the Companies Act 1956
read with Companies (Particulars of Employment) Rules, 1975
In terms of the provisions of section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are set out
in the annexure to the Directors'' Report.
Information required under section 217(2A) of the Companies Act 1956
read with Companies (Particulars of Employ- ment) Rules 1975
I
Sl Name Desig- GrossLast Qualif- Age Date of Exper- Last
No nation Remune- ication commme- ience employ-
ration ncement (inclu- ment held/
(Rs.) of empl- ding designa-
oyment previous tion/orga-
years nization
if any
- Nil -
1. Employment throughout the year under review and were in receipt of
remuneration for that year in the aggregate of not less than Rs
60,00,000 or more - Nil
2. Annual remuneration as above includes salary, allowances and
perquisites.
3. The above appointment is contractual.
II. Employees of the Company who were employed for part of the
financial year and in receipt of remuneration at a rate, which in
aggregate was not less than Rs 500,000/- pm - Nil
DIRECTORS
During the year, the Ministry of Corporate Affairs (MCA) has notified
majority of the provisions inter alia provisions relating to selection,
manner of appointment,roles,functions, duties, re-appointment of
independent directors (IDs) and the relevant rules under the Companies
Act, 2013 (the Act 2013) and made them effective 1st April, 2014.
In terms of the provisions of Section 149(10) read with Section 149(5)
of the Act, 2013, IDs are eligible to hold office for a term upto five
consecutive years on the board and eligible for re-appointment for the
second term on passing special resolutions by the Company. During the
period, they will not be liable to ''retire by rotation'' as per the
provisions of Sections 150(2), 152(2) read with schedule 1V to the Act
2013.
It is, therefore proposed to appoint them as IDs for a consecutive
period of five years at the AGM. Necessary declara- tions have been
obtained from them, as envisaged under the Act 2013. In terms of the
provisions of sub-section(6) read with explanation to Section 152 of
the Act 2013, two-third of the total number of directors (excluding
IDs) are liable to retire by rotation and out of which, one third is
liable to retire by rotation at every annual general meeting. Mr.Osamu
Tanaka, director of the Company, is.therefore, liable to retire by
rotation, at the ensuring AGM, and being eligible, offers himself for
re-appointment.
Mr. Y Mukaide has been serving on the board since 2005. During his
tenure of office,he has made distinct and immense contribution to the
deliberations of the meetings of the board in general and for the
growth of the company in particular. Yuken Kogyo Company Limited (YKC)
withdrawn his directorship owing to his retirement. The Board does
hereby record its deep sense of appreciation for the valuable services
rendered by him during his tenure.
As per the direction of YKC Mr.Shiro Hattori has to be appointed as a
director in his place.
Mr. V Balaji Bhat,Independent director of the Company resigned from the
Board effective from 8th February,2014. The Board does hereby record
its deep sense of appreciation for the valuable services rendered by
him during his tenure.
The brief resume of the directors proposed to be appointed and
re-appointed and other relevant information have been furnished in the
Notice convening the AGM. Appropriate resolutions for their
appointment/re-appointment are being placed for approval of the members
at the AGM.
The Board, therefore, recommends their appointment/re-appointment as
directors of the Company.
Pursuant to section 217 (2AA) of the Companies Act, 1956 your Directors
confirm that:
1. In the preparation of the accounts for the year ended 31st March
2014 the applicable accounting standards have been followed and there
are no material departures from the same;
2. The accounting policies which have been selected are applied
consistently, judgments and estimates that are reasonable and prudently
is made so as to give a true and fair view of the state of affairs of
the Company at the financial year ended 31st March 2014 and of the
profit of the Company for that year;
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act 1956 for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
4. The accounts for the year ended 31st March 2014 have been prepared
on a going concern basis.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis (MDA), which forms part of this
Directors'' Report, sets out an analysis of business including the
industry scenario, performance, financial analysis and risk mitigation.
FIXED DEPOSITS
The Company has not accepted any public deposits and as such, no amount
on account of principal or interest on public deposits was outstanding
as on the date of the balance sheet.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS-21 on "Consolidated
Financial statements" read with Accounting Standard AS-23 on
"Accounting for Investments in Associates", the audited Consolidated
Financial Statements are pro- vided in the Annual Report.
SUBSIDIARY COMPANIES
In Accordance with the general Circular issued by the Ministry of
Corporate Affairs, Government of India, the Balance sheet, the
statement of Profit and Loss and other documents of the Subsidiary
Companies are not being attached with the Balance Sheet of the Company.
The Company will make available the Annual Accounts of the Subsidiary
Companies and the related detailed informa- tion to any member of the
Company who may be interested in obtaining the same. The Annual
Accounts of the Subsidiary Companies will also be kept open for
inspection by any investor at the Registered Office of the Company and
that of the respective Subsidiary Companies. The consolidated Financial
Statements presented by the Company include financial results of its
Subsidiary Companies.
During the year under review, Your Company has the following subsidiary
Companies viz (i) Coretec Engineering India Pvt Ltd, Bangalore (ii)
Yuflow Engineering Pvt. Ltd, Chennai.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company recognizes the community as an important stakeholder in
the business and believes in sustainability as a core parameter of its
business strategy.
The Company provides opportunities to Engineering and Management
Institute students to undergo in-plant training/ projects as part of
their academic curriculum, thus enabling them to appreciate application
of theoretical knowledge and get an exposure to the industrial
practices.
The Company''s employees participate in blood donation camps every year
and donate blood.
Employees are trained in ''First -Aid'' regularly. The Company has rain
water harvesting system in place in all the factory plants.
The Company''s products and services have very little or marginal impact
on the environment and it adheres to all related legal and statutory
requirements.
HEALTH, SAFETY & ENVIRONMENT (HSE)
Health, Safety and environment are high priority issues in your
Company.
Your Company conducts annual medical check up for its employees and
assists the employees who need medical attention or counseling. The
employees and their dependents are covered under Health Insurance
Scheme.
Awareness workshops on safety in industries are being conducted for the
employees in collaboration with the Direc- torate of Factories and
Boilers, Government of Karnataka.
With no reportable injuries during the year, we are committed to
enhance occupational health and safety. Apart from personnel safety,
process safety is the top priority of the Management. Well documented
standards, emphasis on line management responsibility, an improved and
standardized process for safety observations are helping the
manufacturing sites achieve higher employee participation in the safety
management.
All manufacturing locations remained fully compliant with Environmental
Regulations. High emphasis was placed on the productive use of raw
materials, natural resources, energy and on reducing wastes. We believe
that a sustainable Organization can be built only with the highest
standards of performance on economic, social and environmental param-
eters.
DISCLOSURE OF PARTICULARS UNDERSECTION 217(1) (E) OF THE COMPANIES ACT,
1956
Energy conservation is a consistent focus area for the Company both
from a cost control and a social responsibility perspective. Energy
conservation is a consistent endeavor of your Company. The power factor
is regularly monitored and maintained between 0.99 and 1.00. Solar
lights have been installed at Malur Plant.
INFORMATION UNDER SECTION 217 (1) (e) OF THE COMPANIES ACT 1956 READ
WITH COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES, 1988:
1. Conservation of Energy:
The Company has taken several steps and also in the process of
implementing several projects to conserve energy by various measures.
2. Research and Development (R&D)
The Company continues to invest in R&D activities towards development
of new products and applications, improvement in operating efficiencies
and reduction in manufacturing costs.
(a) Specific areas in which R&D carried out by the Company
Development of larger size valves for process and steel industries,
rugged vane pumps for special applications and development of high
efficiency gear pumps are some of the areas where R&D was carried out
by the Company.
(b) Benefits derived as a result of above R&D efforts
Special products developed to meet specific requirements of customers
which enable your Company to develop niche markets for growth.
(c) Future plan of action:
* Development of additional range of products.
* Focus on process improvements to enable the Company to penetrate the
export market.
* Strong focus on employee involvement to eliminate waste in Operations
through focused initiatives.
(d) Expenditure on R & D
There is a continuous increase in R & D expenditure as the scope of
activities carried out keeps on increasing. The exact amount spent has
not been apportioned this year.
4. Technology Absorption, Adaptation and Innovation:
(a) Efforts in brief, made towards technology absorption, adaptation
and innovation:
* Special models of pumps and valves have been designed to meet
specific needs of customers and these have enabled us to extend our
customer base to include a wider range of industries.
* Indigenization is a continuous ongoing effort.
(b) Benefits derived as a result of the above efforts:
* Reduction of material cost.
* Quality improvement and improvement in product performance
characteristics.
* Ability to innovate and produce new products.
(c) Information regarding technology imported during the last five
years reckoned from the beginning of the financial year.
i Technology imported - For manufacture of Chip compacting machine
ii Year of Import: 2011
iii Has technology been fully absorbed? Yes
iv If not fully absorbed, areas where this has not taken place, reasons
there off and future plans of action: N/A
COST AUDITORS
The Company has appointed M/S. K.S.Kamalakara & Co. Cost Accountants as
cost auditors for conducting Cost Audit for the financial year 2013-14.
The Cost Audit Reports in XBRL mode for the financial year ended 31st
March 2013, was filed on 27th December 2013. The Cost Audit Reports
for the financial year ended 31st March 2014 will be filed before the
due date.
STATUTORY AUDITORS
M/s. Deloitte Haskins & Sells, Chartered Accountants, who are the
statutory auditors of the Company, hold office, in accor- dance with
the provisions of the Act till the conclusion of the ensuing annual
general meeting and are eligible for re-appointment.
SECRETARIAL AUDITORS
The Company has appointed M/s.BG & Associates, Company Secretaries for
the Secretarial Audit for the financial year 2014-15.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that involve risks and
uncertainties. When used in this Report, the words "anticipate'',
"believe", "estimate", "expect", "intend", "will" and other similar
expressions as they relate to your Company and / or its business are
intended to identify such forward-looking statements. Your Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise. Actual results, performances or
achievements could differ materially from those expressed or implied in
such forward-looking statements. This report should be read in
conjunction with the financial statements included herein and notes
thereto.
ACKNOWLEDGEMENTS
Your Directors thank the customers, auditors, vendors, banks,
government, collaborators, investors and all other business associates
for their continued support. Your Directors also wish to place on
record their appreciation of the contribution made by all the employees
of the Company for their performance in the year under review.
For and on behalf of the Board
Place: Bangalore C P Rangachar CAPT. N S Mohanram R Srinivasan
Date: 29th May 2014 Managing Director Director
Director
Mar 31, 2012
The Board of Directors are pleased to present the 36th Annual Report
and the Audited Accounts for the Financial Year ended 31st March 2012.
FINANCIAL RESULTS
The Financial performance of the Company, for the year ended 31st March
2012 is summarized below.
(Rs in Lakhs)
Particulars 2011-12 2010-11
Total Income 17,198 15,072
Total Expenditure 14,958 13,088
Profit before Interest,
Depreciation & Tax 2,240 1,984
Finance cost 413 266
Depreciation 288 252
Profit Before Tax 1,539 1,466
Provision for Taxation(Net
of deferred tax) 502 486
Profit After Tax 1,037 980
Balance in profit and Loss Account 3,451 2,658
Amount available for appropriation 4,488 3,638
Appropriations:
General Reserve 104 100
Proposed Dividend 75 75
Tax on Proposed Dividend 12 12
Balance Carried to Balance Sheet 4,297 3,451
Total 4,488 3,638
REVIEW OF PERFORMANCE
During the year under review, the Company achieved a turnover of
Rs17,198 Lakhs compared to Rs 15,072 Lakhs in 2011. The operations of
the Company for the year under review have resulted in a net profit of
Rs1,037 Lakhs.
DIVIDEND
Your Directors are pleased to recommend a dividend of 25% on the equity
shares of the Company for the year ended 31st March 2012, subject to
the approval of the members at the ensuing Annual General Meeting.
INDUSTRIAL RELATIONS
Employee relations continue to be cordial. Your Directors would like to
place on record their appreciation of the valuable contribution by the
workmen representatives in arriving at an amicable wage settlement.
CORPORATE GOVERNANCE
Your Company is committed to maintaining high standards of Corporate
Governance. A Report on Corporate Governance along with a certificate
from the statutory auditors on compliance of Corporate Governance norms
is part of this Annual Report.
Information required under section 217(2A) of the Companies Act 1956
Read with Companies (Particulars of Employment) Rules 1975
In terms of the provisions of section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are set out
in the annexure to the Directors' Report. Having regard to the
provisions of Section 219(1) (b)(iv) of the said act, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particular may write to the Compliance Officer at the
registered office of the Company.
Information required under section 217(2A) of the Companies Act 1956
Read with Companies (Particulars of Employment) Rules 1975
SI Name Designation Gross Qualification Age
No Remuneration
(Rs.)
1 CP Managing Rs.85.78 BE.MIE 69
Rangachar Director lakhs
Name Date of Experience Last
commence (including employment
ment of previous held/
employment years if any) designation
C P Rangachar 1978.05.01 47 Director-
PGI(P)
Ltd,
Chennai
1. Employment throughout the year under review and were in receipt of
remuneration for that year in the aggregate of not less than Rs
60,00,000 or more.
2. Annual remuneration as above includes salary, allowances and
perquisites.
3. The above appointment is contractual.
II. Employees of the Company who were employed for part of the
financial year and in receipt of remuneration at a rate, which in
aggregate was not less than Rs 500,000/- pm -
NIL
DIRECTORS
Under section 256(1) of the Companies Act, 1956, and article 116 of the
Articles of the Company, Mr. R Srinivasan and Mr. V Balaji Bhat,
Director is liable to retire by rotation at this Annual General
Meeting. They are eligible and offer themselves for re-appointment.
Brief Resume of Directors proposed to be re-appointed, nature of their
expertise in specific functional areas, names of Companies in which
they hold directorships and membership, their share holding in the
Company are provided in the notice of AGM.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to section 217 (2AA) of the Companies Act, 1956 your Directors
confirm that:
1. In the preparation of the accounts for the year ended 31st March
2012, the applicable accounting standards have been followed.
2. Such accounting policies have been selected and applied
consistently and judgments and estimates that are reasonable and
prudent made so as to give a true and fair view of the state of affairs
of the Company at the financial year ended 31st March 2012 and of the
profit of the Company for that year.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
4. The accounts for the year ended 31st March 2012 have been prepared
on a going concern basis.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis (MDA), which forms part of this
Directors Report, sets out an analysis of business including the
industry scenario,1 performance, financial analysis and risk
mitigation.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS-21 on Consolidated
Financial statements read with Accounting Standard AS-23 on Accounting
for Investments in Associates, the Audited Consolidated Financial
Statements are provided in the Annual Report.
SUBSIDIARY COMPANIES
In Accordance with the general Circular issued by the Ministry of
Corporate Affairs, Government of India, the Balance sheet, Profit and
Loss Account and other documents of the Subsidiary Companies are not
being attached with the Balance Sheet of the Company.
The Company will make available the Annual Accounts of the subsidiary
Companies and the related detailed information to any member of the
Company who may be interested in obtaining the same. The Annual
Accounts of the subsidiary Companies will also be kept open for
inspection by any investor at the Registered Office of the Company and
that of the respective subsidiary Companies. The consolidated Financial
Statements presented by the Company include financial results of its
subsidiary Companies.
During the year under review, your Company has the following subsidiary
Companies viz (i) Courted Engineering India Pvt Ltd, Bangalore (ii)
Yalow Engineering Pvt. Ltd, Chennai and (iii) Prism Hydraulics Pvt
Ltd, Belgaum.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company recognizes the community as an important stakeholder in
our business and believes in 'sustainability' as a core parameter of
its business strategy.
The Company provides opportunities to Engineering and Management
Institute students to undergo in-plant training/ projects as part of
their academic curriculum, thus enabling to appreciate application of
theoretical knowledge and get an exposure to the industrial practices.
The Company's employees participate in blood donation camps every
year and donate blood.
Employees are trained in 'First -Aid' regularly. The Company has rain
water harvesting systems in place covering the entire Factory premises.
During the year, your Company donated Computers to a Government School
at Malur, Kolar District, Karnataka.
The Company's products and services have very little or marginal impact
on the environment and it adheres to all related legal and statutory
requirements.
Health, Safety & Environment. (HSE)
Health, Safety and Environment are high priority issues in your
Company.
Your Company conducts annual medical checkup for its employees and
assists the employees who need medical attention or counseling. The
employees and their dependents are covered under Health Insurance
Scheme.
Awareness workshops on Safety in Industries are being conducted to the
employees in collaboration with the Directorate of Factories and
Boilers, Government of Karnataka.
With no reportable injuries during the year, we are committed to
enhance occupational health and safety. Apart from personnel safety,
process safety is in the top priority of the Management. Well
documented standards, emphasis on line management responsibility, an
improved and standardized process for safety observations are helping
the manufacturing sites achieve higher employee participation in the
safety management.
All manufacturing locations remained fully compliant with Environmental
Regulations. High emphasis was placed on the productive use of raw
materials, natural resources, energy and on reducing wastes. We believe
that a sustainable Organization can be built only with the highest
standards of performance on economic, social and environmental
parameters.
Disclosure of particulars under section 217(1)(e) of the Companies Act,
1956
Energy conservation is a consistent focus area for the Company both
from a cost control and a social responsibility perspective. Energy
conservation is a consistent endeavor of your Company. The power factor
is regularly monitored and maintained between 0.99 and 1.00. Solar
lights have been installed in Malur Plant.
INFORMATION UNDER SECTION 217 (1) (e) OF THE COMPANIES ACT 1956 READ
WITH COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES 1988:
1. Conservation of Energy:
The Operations of Your Company are not energy intensive. However,
necessary care is being taken to conserve energy by various measures.
2. Foreign Exchange Earnings and outgo
Foreign Exchange Earnings:-
Export sales Rs.340.75 lakhs
Others Rs. 15.70 lakhs
Expenditure in Foreign Currency on account of (on payment basis)
Interest Rs.2.18 lakhs
Others Rs.44.61 lakhs
Brand Fee Rs.70.45 lakhs
Remittance in Foreign currency on account of:
Dividends Rs.30.00 lakhs
3. Research and Development (R&D)
The Company continues to invest in R&D activities towards development
of new products and applications, improvement in operating
efficiencies, and reduction in manufacturing costs.
(a) Specific areas in which R&D carried out by the Company.
Development of larger size valves for process & steel industries,
rugged vane pumps for special applications and development of high
efficiency gear pumps are some of the areas where R&D was carried out
by the Company.
(b) Benefits derived as a result of above R&D efforts.
Special Products developed to meet specific requirements of customers,
which enable your Company to develop niche markets for growth.
(c) Future Plan of action
- Development of additional range of products.
- Focus on process improvements to enable the Company to penetrate
the Export market.
- Strong focus on employee involvement to eliminate waste in
Operations through focused initiatives.
(d) Expenditure on R&D.
There is a continuous increase on R&D expenditure as the scope of
activities carried out goes on increasing. The exact amount spent has
not been apportioned this year.
4. Technology Absorption, Adaptation and Innovation:
(a) Efforts in brief, made towards technology absorption, adaptation
and innovation.
- Special models of pumps and valves have been designed to meet
specific needs of customers and these have enabled us to extend our
customer base to include a wider range of industries.
- Indigenization is continuous, ongoing effort.
(b) Benefits derived as a result of the above efforts.
- Reduction of material cost.
- Quality improvement and improvement in product performance
characteristics.
- Ability to innovate and produce new products.
(c) Information regarding technology imported during the last five
years reckoned from the beginning of the financial year.
i Technology imported - For manufacture of Chip compacting machine
ii Year of Import: 2011
iii Has technology been fully absorbed? Yes
iv If not fully absorbed, areas where this has not taken place, reasons
there off and future plans of action: N/A
AUDITORS
M/s Deloitte Haskins & Sells, Chartered Accountants, retiring at the
ensuing Annual General Meeting, pursuant to the provisions of Section
224 and other applicable provisions, if any, of the Companies Act,
1956, be and are hereby re-appointed as Auditors of the Company, to
hold office from the conclusion of this meeting until the conclusion of
next Annual General Meeting of the Company on such remuneration as
shall be fixed by the Board of Directors."
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that involve risks and
uncertainties. When used in this Report, the words "anticipate",
"believe", "estimate", "expect", "intend", "will" and other similar
expressions as they relate to your Company and / or its business are
intended to identify such forward-looking statements. Your Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise. Actual results, performances or
achievements could differ materially from those expressed or implied in
such forward-looking statements. This report should be read in
conjunction with the financial statements included herein and notes
thereto.
ACKNOWLEDGEMENTS
Your Directors thank the Customers, Vendors, Financial Institutions,
Banks, Collaborators, and Investors for their continued support. Your
Directors also wish to place on record their appreciation of the
contribution made by all the employees of the Company for their
performance in the year under review.
For and on behalf of the Board
Place : Bangalore V. Balaji Bhat R. Srinivasan C P Rangachar
Date: 21st May,2012 Director Director Managing
Director
Mar 31, 2011
Dear Members,
The Board of Directors are pleased to present the 35th Annual Report
and the Audited Accounts for the Financial Year ended 31st March 2011.
FINANCIAL RESULTS
The Financial performance of the Company, for the year ended 31st March
2011 is summarized below.
(Rs in Lakhs)
Particulars 2010-11 2009-10
Total Income 15,084 11,632
Total Expenditure 13,115 10,064
Profit before Interest, Depreciation &
Tax 1,969 1,568
Interest 251 279
Depreciation 252 252
Profit Before Tax 1,466 1,036
Provision for Taxation (Net of
deferred tax) 486 343
Profit After Tax 980 693
Balance in profit and Loss Account 2,658 2,122
Amount available for appropriation 3,638 2,815
Appropriations:
General Reserve 100 70
Proposed Dividend 75 75
Tax on Proposed Dividend 12 12
Balance Carried to Balance Sheet 3,451 2,658
Total 3,638 2,815
REVIEW OF PERFORMANCE
During the year under review, the Company achieved a turn over of Rs
15,084 Lakhs compared to Rs 11,632 Lakhs in 2010. The operations of the
Company for the year under review have resulted in a net profit of
Rs.980 Lakhs.
DIVIDEND
Your Directors are pleased to recommend a dividend of 25% on the equity
shares of the Company for the year ended 31st March 2011, subject to
the approval of the members at the ensuing Annual General Meeting.
INDUSTRIAL RELATIONS
Employee relations continue to be cordial. Your Directors would like to
express their appreciation to all the employees for their contribution
to the operations of the Company during the year.
CORPORATE GOVERNANCE
Your Company is committed to maintaining high standards of Corporate
Governance. A Report on Corporate Governance along with a certificate
from the statutory auditors on compliance of Corporate Governance
norms, is part of this Annual Report.
Information required under section 217(2A) of the Companies Act 1956
Read with Companies
(Particulars of Employment) Rules 1975
In terms of the provisions of section 217(2A) of the Companies Act,
1956, read with the Companies (Particu- lars of Employees) Rules, 1975
as amended, the names and other particulars of the employees are set
out in the annexure to the Directors' Report. Having regard to the
provisions of Section 219(1)(b)(iv) of the said act, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particular may write to the Compliance Officer at the
registered office of the Company.
I. Information required under section 217 (2A) of the Companies Act,
1956 read with Companies (particulars of employment) Rules 1975
Sl. Name Desig Gross Qualification Age
No. -nation Remuneration
(Rs.)
1. C.P. Rangachar MD Rs. 8,053,653 BEMIE 68
Sl. Name Date of Experience Last
No. commencement (including employment
of employ previous held/designation/
-ment years if organiztion
any)
1. C.P. Rangachar 1978.05.01 46 Director-PGI(P) Ltd,
Chennai
1. Employment throughout the year under review and were in receipt of
remuneration for that year in the aggregate of not less than Rs
60,00,000 or more.
2. Annual remuneration as above includes salary, allowances and
perquisites.
3. The above appointment is contractual.
II. Employees of the Company who were employed for part of the
financial year and in receipt of remunera- tion at a rate, which in
aggregate was not less than Rs 500,000/- pm - NIL
DIRECTORS
Under section 256(1) of the Companies Act, 1956, and article 116 of the
Articles of the Company, Dr. Premchander, Director is liable to retire
by rotation at this Annual General Meeting. He is eligible and offers
himself for re-appointment. Brief Resume of Directors proposed to be
re-appointed, nature of their expertise in specific functional areas,
names of Companies in which they hold directorships and membership,
their share holding in the Company are provided in the notice of AGM.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to section 217 (2AA) of the Companies Act, 1956 your Directors
confirm that:
1. In the preparation of the accounts for the year ended 31st March
2011, the applicable accounting stan- dards have been followed.
2. Such accounting policies have been selected and applied
consistently and judgments and estimates that are reasonable and
prudent made so as to give a true and fair view of the state of affairs
of the Company at the financial year ended 31st March 2011 and of the
profit of the Company for that year.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accor- dance with the provisions of the
Companies Act 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
4. The accounts for the year ended 31st March 2011 have been prepared
on a going concern basis.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis (MDA), which forms part of this
Directors' Report, sets out an analysis of business including the
industry scenario, performance, financial analysis and risk mitigation.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS-21 on Consolidated
Financial statements read with Accounting Standard AS-23 on Accounting
for Investments in Associates, the Audited Consolidated Finan- cial
Statements are provided in the Annual Report.
SUBSIDIARY COMPANIES
In Accordance with the general Circular issued by the Ministry of
Corporate Affairs, Government of India, the Balance sheet, Profit and
Loss Account and other documents of the Subsidiary Companies are not
being attached with the Balance sheet of the Company.
The Company will make available the Annual Accounts of the subsidiary
Companies and the related detailed information to any member of the
Company who may be interested in obtaining the same. The Annual
Accounts of the subsidiary Companies will also be kept open for
inspection by any investor at the Registered Office of the Company and
that of the respective subsidiary Companies. The consolidated Financial
Statements presented by the Company include financial results of its
subsidiary Companies.
During the year under review, Your Company has the following subsidiary
Companies viz (i) Coretec Engineering India Pvt Ltd, Bangalore (ii)
Yuflow Engineering Pvt. Ltd, Chennai and (iii) Prism Hydraulics Pvt
Ltd, Belgaum.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company recognizes the community as an important stakeholder in
our business and believes in 'sustainability' as a core parameter of
its business strategy.
The Company provides opportunities to Engineering and Management
Institute students to undergo in- plant training/projects as part of
their academic curriculum, thus enabling to appreciate application of
theoretical knowledge and get an exposure to the industrial practices.
The Company's employees participate in blood donation camps every year
and donate blood.
Employees are trained in 'First -Aid' regularly. The Company has rain
water harvesting systems in place covering the entire Factory premises.
During the year Your Company sponsored Toilet complex to a Government
High School at Bagalur.
The Company's products and services have very little or marginal impact
on the environment and it adheres to all related legal and statutory
requirements.
Health, Safety & Environment. (HSE)
Health, Safety and environment are high priority issues in your
Company.
Your Company conducts annual medical check up for its employees and
assists the employees who need medical attention or counseling. The
employees and their dependents are covered under Health Insurance
Scheme.
Awareness workshops on Safety in Industries are being conducted to the
employees in collaboration with the Directorate of Factories and
Boilers, Government of Karnataka.
With no reportable injuries during the year, we are committed to
enhance occupational health and safety. Apart from personnel safety,
process safety is in the top priority of the Management. Well
documented standards, emphasis on line management responsibility, an
improved and standardized process for safety observations are helping
the manufacturing sites achieve higher employee participation in the
safety management.
All manufacturing locations remained fully compliant with Environmental
Regulations. High emphasis was placed on the productive use of raw
materials, natural resources, energy and on reducing wastes. We believe
that a sustainable Organization can be built only with the highest
standards of performance on economic, social and environmental
parameters.
Disclosure of particulars under section 217(1)(e) of the Companies Act,
1956
Energy conservation is a consistent focus area for the Company both
from a cost control and a social respon- sibility perspective. Energy
conservation is a consistent endeavor of your Company. The power factor
is regularly monitored and maintained between 0.99 and 1.00.
INFORMATION UNDER SECTION 217 (1 )(e) OF THE COMPANIES ACT 1956 READ
WITH COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES 1988:
1. Conservation of Energy:
The Operations of Your Company are not energy intensive. However,
necessary care is being taken to conserve energy by various measures.
2. Foreign Exchange Earnings and outgo
3. Research and Development (R&D)
The Company continues to invest in R&D activities towards development
of new products and applica- tions, improvement in operating
efficiencies, and reduction in manufacturing costs.
(a) Specific areas in which R&D carried out by the Company.
Development of larger size valves for process & steel industries,
rugged vane pumps for special applica- tions and development of high
efficiency gear pumps are some of the areas where R&D was carried out
by the Company.
(b) Benefits derived as a result of above R&D efforts.
Special Products developed to meet specific requirements of customers,
which enable your Company to develop niche markets for growth.
(c) Future Plan of action:
- Development of additional range of products.
- Focus on process improvements to enable the Company to penetrate the
Export market.
- Strong focus on employee involvement to eliminate waste in Operations
through focused initiatives.
(d) Expenditure on R & D.
There is a continuous increase on R & D expenditure as the scope of
activities carried out goes on increasing. The exact amount spent has
not been apportioned this year.
4. Technology Absorption, Adaptation and Innovation:
(a) Efforts in brief, made towards technology absorption, adaptation
and innovation.
- Special models of pumps and valves have been designed to meet
specific needs of customers and these have enabled us to extend our
customer base to include a wider range of industries.
- Indigenization is continuous, on going effort.
(b) Benefits derived as a result of the above efforts.
- Reduction of material cost.
- Quality improvement and improvement in product performance
characteristics.
- Ability to innovate and produce new products.
(c) Information regarding technology imported during the last five
years reckoned from the beginning of the financial year.
i Technology imported - NIL
ii Year of Import: N/A
iii Has technology been fully absorbed? N/A
iv If not fully absorbed, areas where this has not taken place, reasons
there off and future plans of action: N/A
AUDITORS
M/s Deloitte Haskins & Sells, Chartered Accountants, retiring at the
ensuing Annual General Meeting, pursuant to the provisions of Section
224 and other applicable provisions, if any, of the Companies Act,
1956, be and are hereby re-appointed as Auditors of the Company, to
hold office from the conclusion of this meeting until the conclusion of
next Annual General Meeting of the Company on such remuneration as
shall be fixed by the Board of Directors."
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that involve risks and
uncertainties. When used in this Report, the words "anticipate',"
believe", "estimate", "expect", "intend", "will" and other similar
expressions as they relate to your Company and / or its business are
intended to identify such forward-looking statements. Your Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise. Actual results, performances or
achievements could differ materially from those expressed or implied in
such forward-looking statements. This report should be read in
conjunction with the financial statements included herein and notes
thereto.
ACKNOWLEDGEMENTS
Your Directors thank the customers, vendors, financial institutions,
banks, Collaborators, and investors for their continued support. Your
Directors also wish to place on record their appreciation of the
contribution made by all the employees of the Company for their
performance in the year under review.
For and on behalf of the Board
V.BalajiBhat R. Srinivasan C. P. Rangachar
Director Director Managing Director
Place: Bangalore
Date: 14th May 2011.
Mar 31, 2010
The Board of Directors is pleased to present the performance of your
Company for the year ended 31st March 2010.
FINANCIAL HIGHUGHTS
( Rs in Lakhs )
Particulars 2009-10 2008-09
Total Income 11,632 9,916
Total Expenditure 10,064 9,142
Profit before Interest, Depreciation & Tax 1,568 775
Interest 279 380
Depreciation 252 243
Profit Before Tax 1,036 151
Provision for Taxation(Net of deferred tax) 343 86
Profit After Tax 693 65
Appropriations:
Proposed Dividend 75 -
Tax on Proposed Dividend 12 -
Transfer to General Reserve 70 -
REVIEW OF PERFORMANCE
During the year under review, the Company performed reasonably well,
given the very difficult conditions prevailing in the domestic and
world markets for the greater part of the year. The Company achieved a
turn over of Rs 11,632 Lakhs compared to Rs 9,916 Lakhs in 2009. The
operations of the Company for the year under review have resulted in a
net profit of Rs.693 Lakhs.
DIVIDEND
Your Directors are pleased to recommend a dividend of 25 % on the
equity shares of the Company for the year ended 31st March 2010,
subject to the approval of the members at the ensuing Annual General
Meeting.
INDUSTRIAL RELATIONS
Employee relations continue to be cordial. Mutual trust, built over
decades of fair-mindedness and justice, is the bedrock on whici the
Company continues to build. This augurs well to take on various
challenges in these difficult times.
CORPORATE GOVERNANCE
Your Company is committed to maintaining high standards of Corporate
Governance. A Report on Cor- porate Governance along with a certificate
from the statutory auditors on compliance of Corporate Gover- nance
norms, is part of this Annual Report.
Information required under section 217(2A) of the Companies Act 1956
Read with Companies
(Particulars of Employment) Rules 1975
Gross
SI. Name Desig Remuneration Qualifi Age
No nation (Rs) cation
1 C P Rangachai IVD Rs.5,553,444 BEMIE 67
2 S Yamanoi Whole Time Rs.1,763,550 Gradu 60
Direcitor ate Engi
neer
Name Last
Date of com- Experience employment
mencement of (including previous held
employment years if any designation/
organization
C P Rangachai 1978.05.01 45 Director-
PGI(P) Ltd,
Chennai
S Yamanoi 2009.04.01 36 Manager-
International
Dept, Yuken
Kogyo, Japan
1. Employment throughout the year under review and were in receipt of
remuneration for that year in the aggregate of not less than Rs
2,400,000 or more.
2. Annual remuneration as above includes salary, allowances and
perquisites.
3. The above appointment is contractual.
II . Employees of the Company who were employed for part of the
financial year and in receipt of remu- neration at a rate, which in
aggregate was not less than Rs 200,000/- pm - NIL
DIRECTORS
Under section 256(1) of the Companies Act, 1956, and article 116 of the
Articles of the Company, Capt N S Mohan Ram, Director is liable to
retire by rotation at this Annual General Meeting. He is eligible and
offers himself for re-appointment. Brief Resume of Directors proposed
to be re-appointed, nature of their expertise in specific functional
areas, names of Companies in which they hold directorships and
membership, their share holding in the Company are provided in the
notice of AGM.
The Board of Directors have re-appointed Mr Shigeyoshi Yamanoi for a
period of 3 years as a Whole-time Director with effect from 1st April
2010 on contractual basis, renewable at the end of third year subject
to the approval of the shareholders at the Annual General Meeting. Mr S
Yamanois brief resume is also provided in the notice of AGM.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to section 217 (2AA) of the Companies Act, 1956 your Directors
confirm that:
1. In the preparation of the accounts for the year ended 31st March
2010, the applicable accounting standards have been followed.
2. Such accounting policies have been selected and applied
consistently and judgments and estimates that are reasonable and
prudent made so as to give a true and fair view of the state of affairs
of the Company at the financial year ended 31st March 2010 and of the
profit of the Company for that year.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
4. The accounts for the year ended 31s March 2010 have been prepared
on a going concern basis.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis (MDA), which forms part of this
Directors Report, sets out an analysis of business including the
industry scenario, performance, financial analysis and risk mitigation.
SUBSIDIARY COMPANIES
An application has been made under section 212(8) of the Companies Act
1956 to the Ministry of Corporate Affairs seeking exemption from
publishing the Annual Accounts of the subsidiary Companies and the
related detailed information for the year ended March 31, 2010. Your
Directors have pleasure in attaching the Consoli- dated Financial
Statements pursuant to clause 32 to the Listing Agreement entered into
with Stock Exchanges. The Company will make available the Annual
Accounts of the subsidiary Companies and the related detailed
information to any member of the Company who may be interested in
obtaining the same. The Annual Accounts of the subsidiary Companies
will also be kept open for inspection by any investor at the Registered
Office of the Company and that of the respective subsidiary Companies.
The consolidated Financial Statements presented by the Company include
financial results of its subsidiary Companies.
During the year under review, Your Company has the following subsidiary
Companies viz (i) Coretec Engineering India Pvt Ltd, Bangalore (ii)
Yuflow Engineering Pvt. Ltd, Chennai and (Hi) Prism Hydraulics Pvt Ltd,
Belgaum.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company recognizes the community as an important stakeholder in
our business and believes in sustainability as a core parameter of
its business strategy.
The Company provides opportunities to Engineering and Management
Institute students to undergo in- plant training/projects as part of
their academic curriculum, thus enabling to appreciate application of
theoreti- cal knowledge and get an exposure to the industrial
practices.
The Companys employees participate in blood donation camps every year
and donate Wood.
Employees are trained in First -Aid regularly. The Company has rain
water harvesting systems in place covering the entire Factory premises.
The Companys products and services have very little or marginal impact
on the environment and it ad- heres to all related legal and statutory
requirements.
Health, Safety & Environment. (HSE)
Health, Safety and environment are high priority issues in your
Company.
Your Company conducts annual medical check up for its employees and
assists the employees who need medical attention or counseling. The
employees and their dependents are covered under Health Insurance
Scheme.
Awareness workshops on Safety ip Industries are being conducted to the
employees in collaboration with the Directorate of Factories and
Boilers, Government of Karnataka.
With no reportable injuries during the year, we are committed to
enhance occupational health and safety. Apart from personnel safety,
process safety is in the top priority of the Management. Well
documented stan- dards, emphasis on line management responsibility, an
improved and standardized process for safety obser- vations are helping
the manufacturing sites achieve higher employee participation in the
safety management.
All manufacturing locations remained fully compliant with Environmental
Regulations. High emphasis was placed on the productive use of raw
materials, natural resources, energy and on reducing wastes. We believe
that a sustainable Organization can be built only with the highest
standards of performance on eco- nomic, social and environmental
parameters.
Disclosure of particulars under section 217(1)(e) of the Companies Act,
1956
Energy conservation is a consistent focus area for the Company both
from a cost control and a social responsibility perspective. Energy
conservation is a consistent endeavor of your Company. The power factor
is regularly monitored and maintained between 0.99 and 1.00.
INFORMATION UNDER SECTION 217 (1)(e) OF THE COMPANIES ACT 1956 READ
WITH COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES 1988:
1. Conservation of Energy:
The Operations of Your Company are not energy intensive. However,
necessary care is being taken to conserve energy by various measures.
2. Foreign Exchange Earnings and outgo
Foreign Exchange Earnings:-
Export sales Rs.20,936,227
Others Rs.23,778
Expenditure in Foreign Currency on account of(on payment basis)
Interest Rs.7,511,068
Others Rs.6,005,878
Brand Fee Rs.3,558,170
Remittance in Foreign currency on account of:
Dividends Nil
3. Research and Development (R&D)
The Company continues to invest in R&D activities towards development
of new products and applica tions, improvement in operating
efficiencies, and reduction in manufacturing costs.
(a) Specific areas in which R&D carried out by the Company.
Development of larger size valves for process & steel industries,
rugged vane pumps for special appli cations and development of high
efficiency gear pumps are some of the areas where R&D was carried out
by the Company.
(b) Benefits derived as a result of above R&D efforts.
Special Products developed to meet specific requirements of customers,
which enable your Company to develop niche markets for growth.
(c) Future Plan of action:
Development of additional range of products.
à Focus on process improvements to enable the Company to penetrate the
Export market.
Strong focus on employee involvement to eliminate waste in Operations
through focused initiatives.
(d) Expenditure on R & D.
There is a continuous increase on R & D expenditure as the scope of
activities carried out goes on increasing. The exact amount spent has
not been apportioned this year.
4. Technology Absorption, Adaptation and Innovation:
(a) Efforts in brief, made towards technology absorption, adaptation
and innovation.
* Special models of pumps and valves have been designed to meet
specific needs of customers and these have enabled us to extend our
customer base to include a wider range of industries.
* Indigenization is continuous, on going effort.
(b) Benefits derived as a result of the above efforts. Reduction of
material cost.
* Quality improvement and improvement in product performance
characteristics.
* Ability to innovate and produce new products.
(c) Information regarding technology imported during the last five
years reckoned from the beginning of the financial year.
i Technology imported NIL
ii Year of Import N/A
iii Has technology been fully absorbed? N/A
iv If not fully absorbed, areas where this has not taken place, reasons
therefor and future plans of action: N/A
AUDITORS
M/s Deloitte Haskins & Sells, Chartered Accountants, retiring at the
ensuing Annual General Meeting, pursuant to the provisions of Section
224 and other applicable provisions, if any, of the Companies Act,
1956, be and are hereby re-appointed as Auditors of the Company, to
hold office from the conclusion of this meeting until the conclusion of
next Annual General Meeting of the Company on such remuneration as
shall be fixed by the Board of Directors."
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that involve risks and
uncertainties. When used in this Report, the words "anticipate,"
believe", "estimate", "expect", "intend", "will" and other similar
expressions as they relate to your Company and / or its business are
intended to identify such forward-looking statements. Your Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise. Actual results, performances or
achievements could differ materially from those expressed or implied in
such forward-looking statements. This report should be read in
conjunction with the financial statements included herein and notes
thereto.
ACKNOWLEDGEMENTS
Your Directors thank the customers, vendors, financial institutions,
banks, Collaborators, and investors for their continued support. Your
Directors also wish to place on record their appreciation of the
contribution made by all the employees of the Company for their
performance in the year under review.
For and on behalf of the Board
R. Srinivasan V. Balaji Bhat C. P. Rangachar
Director Director Managing Director
H M Narasinga Rao
Chief Financial Officer
Place : Bangalore
Date: 22nd May2010
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