Mar 31, 2018
The Board of Directors have pleasure in presenting the 12th annual report of the company and the audited financial statements for the year ended March 31, 2018 covering 12 months of operation. The Management Discussion and Analysis (MD&A) Report have been included at the appropriate places in this report.
First year of implementation of Indian Accounting Standards (Ind AS)
This is the first year of implementation of the Indian Accounting Standards (Ind AS). The standalone and consolidated financial statements for the year ended March 31, 2018 have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The financial statements for the year ended March 31, 2017 have been restated in accordance with Ind AS for comparative information.
Financial Highlights
(Rs. in million)
2017-2018 |
2016-2017 |
|
Profit before exceptional items, depreciation and tax |
110.67 |
186.09 |
Less: Depreciation |
73.03 |
70.39 |
Less: Exceptional items |
4.50 |
16.38 |
Profit before taxation |
33.14 |
99.32 |
Less: Provision for taxation |
5.80 |
24.70 |
(Add) / Less: Provision for deferred tax |
8.04 |
(4.18) |
Profit after tax |
19.30 |
78.80 |
Add : Opening surplus |
1084.59 |
1027.14 |
Less: Dividend & Dividend distribution tax paid during the year |
(7.84) |
(22.29) |
Add : Transfer from Other Comprehensive Income |
(2.36) |
0.94 |
Profit available for appropriation |
1093.69 |
1084.59 |
Review of Business Operations and Future Outlook
During the year under review, your company recorded a sales of INR 1885.14 million as against INR 2138.97 million in the previous year. The company had made a net profit of INR 19.30 million as against the net profit of INR 78.80 million in the previous year.
The reduced profit was primarily on account of reduced sales. The drop in sales was on account of GST introduction which significantly impacted sales in first quarter and increased the cost of materials consumed also impacted on our profits.
Change in the nature of Business
There was no change in the nature of business of the company during the financial year ended March 31, 2018.
Transfer to Reserves
During the year under review, an amount of INR 1093.69 million (including the previous year closing balance of INR 1,084.59 million) has been retained under surplus in the Statement of Profit and Loss.
Dividend
During the year under review, the Directors have not recommended any Dividend for the year ended March 31, 2018. Considering the new Reclaimed rubber project at Mambattu, the company is conserving the reserves for investing in the project.
Transfer of Unclaimed Dividend to Investor Education and Protection Fund
The company had transferred an amount of INR 0.58 million to Investor Education and Protection Fund during the financial year 2017-18, as per the terms of section 124 and 125 of the Companies Act, 2013. As stipulated under the Act, unclaimed or unpaid dividend relating to the financial year 2010-11 will be remitted on or before October 21, 2018 to the Investor Education and Protection Fund, established by the Central Government. The shares in respect of such unclaimed or unpaid dividend will also be transferred to the Investor Education and Protection Fund Authority Ministry of Corporate Affairs Demat Account, on or before October 21, 2018, in accordance with the provisions of Section 124(6) of the Companies Act, 2013 read with Regulation 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.
Share Capital
The paid-up capital of the company as at March 31, 2018 stood at INR 50.05 million. During the year under review, your company had not made any fresh issue of shares.
Extract of Annual Return
The extract of annual return pursuant to the provisions of section 92 of the Companies Act, 2013 read with rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure I of this report.
Board and Committee meetings conducted during the period under review
During the year under review, 4 meetings of the Board of Directors, 4 meetings of the Audit Committee, 1 meeting of the Nomination and Remuneration Committee, 4 meetings of the Corporate Social Responsibility Committee, 22 meetings of the Stakeholdersâ Relationship Committee, 3 meetings of the Finance and Administrative Committee and 1 meeting of the Independent Directors were held. Further details of the same have been enumerated in the Corporate Governance Report annexed herewith.
Statement on Compliance of applicable Secretarial Standards
The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.
Directorsâ Responsibility Statement
Pursuant to the requirement of section 134(3)(c) of the Companies Act, 2013 with respect to Directors Responsibility Statement, the Board hereby confirms that:
a) In the preparation of the annual accounts, the applicable accounting standards had been followed and there were no material departures;
b) The Directors had selected such accounting policies, applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for 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 and that 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 that such systems were adequate and operating effectively.
Details in respect of frauds reported by Auditors under Section 143(12) of the Companies Act, 2013 other than those which are reportable to the Central Government
There had been no frauds reported by the auditors pursuant to section 143(12) of the Companies Act, 2013.
Declaration of Independent Directors
The company has received declarations from all the Independent Directors of the company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Companyâs policy relating to Directors appointment, payment of remuneration and other matters provided under Section 178(3) of the Companies Act, 2013
The Board, on the recommendation of the nomination and remuneration committee, had framed a policy for fixing and revising remuneration of Directors, Key Managerial Personnel and Senior Management Personnel of the company. The criteria for determining qualifications, positive attributes and independence of directors has been stated in Annexure II to this report. The nomination and remuneration policy of the company in annexed herewith as Annexure III and can also be accessed on the companyâs website www.elgirubber.com.
Comments on Audit Report
There are no qualifications, reservations or adverse remarks or disclaimers made by M.S.Jagannathan & Visvanathan, Statutory Auditors and by CN Paramasivam, Secretarial Auditor, in their reports.
Particulars of loans, guarantees or investments made under Section 186 of the Companies Act, 2013
Details of loans given, investments made, guarantees given and securities provided pursuant to the provisions of section 186 of the Companies Act, 2013 have been given in the notes to the financial statements.
Particulars of contracts or arrangements made with related parties
All transactions entered into with related parties as defined under the Companies Act, 2013 and regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year 2017-18 were in the ordinary course of business and on armâs length pricing basis. Since there are no transactions which are not on armâs length basis and material in nature, Form AOC-2 is not being annexed.
The policy on related party transactions, as approved by the Board of Directors of the company, is available on the companyâs website www.elgirubber.com.
Material changes and commitment if any affecting the financial position of the company occurred between the end of the financial year to which this financial statements relate and the date of the report
No material changes and commitments affecting the financial position of the company occurred between the end of the financial year to which this financial statements relate and the date of this report.
Conservation of energy, technology absorption, foreign exchange earnings and outgo
The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure IV of this report.
Statement on Risk Management
The Board identifies and reviews the various elements of risk which the company has to face and laid out the procedures and measures for mitigating those risks. The elements of risk threatening the companyâs existence are very minimal.
The company does not face any risks other than those that are prevalent in the industry and has taken all possible steps to overcome such risks. The main concerns are volatility in raw material prices and fluctuations in foreign exchange rates. Effective planning in raw material purchasing and the ability to pass on raw material price increases have minimised the risk relating to the volatility in raw material prices. Foreign exchange fluctuation risk is minimised through proper planning and natural hedging. As a part of the overall risk management strategy, all assets are appropriately insured.
As a matter of abundant caution, the company proposes to commence hedging of some of its key inputs like natural rubber with a view to containing risk further and necessary processes and approvals are being initiated.
Details about the policy developed and implemented by the company on Corporate Social Responsibility initiatives
The Board has formed a Corporate Social Responsibility (CSR) Committee comprising Sudarsan Varadaraj, MD Selvaraj and Suresh Jagannathan. The CSR policy deals with allocation of funds, activities, identification of programmes, approval, implementation, monitoring and reporting mechanisms for CSR activities.
As part of its initiatives under CSR, the company has undertaken projects in the areas of education including support to the education of differently abled children. The said projects are by and large in accordance with Schedule VII of the Companies Act, 2013 and the CSR Policy of the company.
The CSR spend is predominantly directed through registered trust(s). The trust(s) expends the sums contributed by the company towards educational and related activities and also for having a corpus for undertaking construction of new school building within the next 5-10 years. The trust(s) has a proven track record of over five years in involvement in educational activities as it runs a full-fledged school and has earned a good reputation over a period. The trust has medium term plans to construct a new school building with all modern amenities and is working to make it in par to international standards in the years to come. Hence, the company would continue to significantly contribute to the trust.
The trust also expends the funds towards educational scholarships, medical relief, to help the upliftment of rural people by way of building infrastructure like, schools, street lights, roads etc., to support special childrenâs school and also for the building corpus. The annual report on CSR activities is annexed herewith as Annexure V.
Annual evaluation of the Board on its own performance and of the individual directors
On the advice of the Board of Directors, the nomination and remuneration committee formulated the criteria for evaluating the performance of the Board of Directors & its Committees, Independent Directors, Non-Independent directors and the Chairman & Managing Director. Based on that, performance evaluation has been undertaken. The Independent Directors of the company have also convened a separate meeting for this purpose. The results and evaluation have been communicated to all concerned.
Directors and Key Managerial Personnel
As per the provisions of section 152 of the Companies Act, 2013, Jairam Varadaraj, the Director of the company, retires by rotation at this annual general meeting. Being eligible, he offers himself for re-appointment.
Selvakumar D has resigned as the Company Secretary & Compliance Officer of the Company with effect from the closure of business hours of January 25, 2018.
Subsidiaries, Joint Ventures and Associate Companies
The company has 7 wholly-owned subsidiaries, 3 step-down subsidiaries and one wholly-owned LLP. The statement pursuant to section 129(3) of the Companies Act, 2013 containing the salient features of the financial statements of subsidiary companies forms part of this annual report.
The Board has approved a policy for determining material subsidiaries which is available on the companyâs website www.elgirubber.com.
The annual accounts of the subsidiary companies are available on the website of the company www.elgirubber.com and kept for inspection by the shareholders at the registered office during normal business hours of the company. The company shall provide the copy of the annual accounts of subsidiary companies to the shareholders upon their request.
Deposits
The company has not accepted or renewed any fixed deposit and hence there are no unclaimed deposits as on March 31, 2018.
Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companyâs operation in future
There were no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and companyâs operations in future.
Adequacy of internal financial controls with reference to the financial statements
The company has implemented and evaluated the internal financial controls which provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes and policies, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records. The company has appointed internal auditors with a dedicated internal audit team. The internal audit reports were reviewed periodically by the Board. Further, the Board annually reviews the effectiveness of the companyâs internal control system.
The Directors and management confirm that the internal financial controls are adequate with respect to the operations of the company. A report of auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of internal financial controls is annexed with the Auditors report.
Statutory Auditors
M.S.Jagannathan & Visvanathan, Chartered Accountants, Coimbatore were appointed as statutory auditors for a period of 5 consecutive years at the 11th annual general meeting of the company held on August 26, 2017 subject to ratification by the shareholders at every annual general meeting. Their continuance of appointment and payment of remuneration for the financial year 2018-19 is to be ratified in the ensuing annual general meeting. The company has received a certificate from the statutory auditors to the effect that if the appointment is ratified, it would be in accordance with the provisions of section 141 of the Companies Act, 2013.
Secretarial Auditors
Pursuant to the provisions of section 204 of the Companies Act, 2013 read with corresponding rules framed thereunder, CN Paramasivam, Company Secretary in Practice, was appointed as the secretarial auditor of the company to carry out the secretarial audit for the year ended March 31, 2018. A secretarial audit report given by the secretarial auditors in Form No. MR-3 is enclosed with this report as Annexure VI.
Cost Auditors
The Board of Directors, at their meeting held on May 24, 2018, have appointed M/s. P. Mohan Kumar & Co. (Firm Registration No.100490), Cost Accountants, as the Cost Auditors of the company for the financial year 2018-19. Pursuant to Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Accounts) Rules, 2014, the remuneration payable to the Cost Auditors of the company is subject to the ratification by the shareholders at the annual general meeting. The Board recommends their remuneration.
Particulars of employees
There are no employees who are in receipt of remuneration in excess of the prescribed limits for the whole financial year 2017-18 or a part thereof during the year. Particulars pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial personal) Rules, 2014, is enclosed as Annexure VII.
Human Resources and Industrial Relations
The company continues to enjoy a cordial relationship with all its employees. The employee count as on March 31, 2018 is 526.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The company has in place a policy for prevention of sexual harassment of women at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An internal complaints committee has been set up to redress complaints received. All employees (permanent, contractual, temporary and trainees) are covered under this policy. There were no complaints received from any employee during the financial year 2017-18.
Corporate Governance
A report on corporate governance, as per regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed as Annexure VIII and forms part of this report. The company has complied with the conditions relating to corporate governance as stipulated in clause C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Audit Committee
Audit committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. The particulars relating to the composition, meetings and functions of the committee has been disclosed in the Report on Corporate Governance under the head, âAudit committeeâ. The Board has accepted the Audit committee recommendations during the year whenever required and hence no disclosure is required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of Audit committee by board.
Whistle Blower Policy
The company has a whistle blower policy to deal with unethical or improper practice or violation of companyâs code of business conduct or any complaints regarding accounting, auditing, internal controls or disclosure practices of the company. The policy gives a platform to the whistle blower to report the complaints on the above mentioned practices to the Chairman of the Audit Committee. Although the complainant is not expected to prove the truth of an allegation, the complainant aims to demonstrate that there are sufficient grounds for concern and is not done as a malicious act against an individual. The Audit Committee of the Board reviews the complaints received, redressed, objected, withdrawn and dismissed for, every quarter in their meeting. The whistle blower policy is available on the companyâs website www.elgirubber.com.
Cautionary Statement
Statements in this report, especially those relating to MD&A giving details of companyâs objectives, projections, estimates and expectations may be construed as âforward looking statementsâ within the realm of applicable laws and regulations. Actual results are liable to differ materially from those either expressed or implied.
Acknowledgement
The Directors thank the companyâs customers, vendors, investors, business associates and bankers for their support to the company. The Directors also wish to place on record their appreciation of the contributions made by all the employees towards the growth of the company.
For and on behalf of the Board
Coimbatore Sudarshan Varadaraj
Chairman & Managing Director
May 24, 2018 DIN: 001313533
Mar 31, 2016
Directorsâ Report
The board of directors have pleasure in presenting the 10th annual report of the Company and the audited accounts for the year ended March 31, 2016 covering 12 months of operation. The Management Discussion and Analysis (MD&A) Report have been included at the appropriate places in this report.
Financial Highlights
(Rs, in millions)
2015-2016 |
2014-2015 |
|
Profit before exceptional items, depreciation and tax |
224.64 |
146.53 |
Less: Depreciation |
90.56 |
67.82 |
Less/(Add): Exceptional items |
377.89 |
0.29 |
Profit before taxation |
(243.81) |
79.00 |
Less: Provision for taxation |
32.18 |
24.60 |
(Add) / Less: Provision for deferred tax |
(11.09) |
(2.15) |
Profit after tax |
(264.90) |
56.55 |
Add: Opening surplus |
1,082.45 |
1,050.36 |
Add: Transfer of surplus from Treads direct Limited upon amalgamation |
342.27 |
- |
(Less): Transfer of deficit from Parani Steels Private Limited upon amalgamation |
(115.36) |
- |
Profit available for appropriation |
1,044.46 |
1,106.91 |
Appropriation |
||
Transitional adjustment on account of depreciation |
- |
8.29 |
General reserve |
- |
5.66 |
Proposed dividend |
18.52 |
10.51 |
Dividend distribution tax |
3.77 |
- |
Balance surplus carried to balance sheet |
1,022.17 |
1,082.45 |
Provision for fall in value of investments
After review, the Company made a provision to the tune of Rs, 375.84 million towards fall in value of investments made in the wholly owned subsidiaries at Brasil, USA and Australia, which resulted in a net loss for the current year. This amount is grouped under exceptional items in the statement of profit and loss.
Review of Business Operations and Future Outlook
During the year under review, the Company recorded sales of Rs, 2,012.04 million as against Rs, 1,333.97 million in the previous year. The Company incurred a net loss of Rs, 264.90 million as against the net profit of Rs, 56.55 million in the previous year after making the above said provision.
The Company could not benefit from the raw material price reduction during the year under review due to market pressure and selling prices of the major products were reduced twice during the year. The Company is taking steps to consolidate its operations with a view to reduce operating costs and to bring in higher efficiencies to improve the bottom line.
The availability of tyres from China at very low prices has put tremendous pressure on the tyre and retreading industry with new tire manufacturers and leading retreaters like companyâs customers facing the brunt of the situation.
The current year continues to be sluggish in terms of sales value and volume.
Change in the nature of Business
There was no change in the nature of business of the Company during the financial year ended 31st March, 2016.
Transfer to Reserves
During the year under review no amount is transferred to General Reserve (Rs, 5.66 million for the year 2014-15) and an amount of Rs, 1,022.17 million (including the previous year closing balance of Rs, 1,082.45 million) has been retained in surplus in the statement of profit and loss
Dividend
For the financial year 2015-16, the board of directors has recommended a dividend of Rs, 0.37 per equity share of Rs, 1.00 each, on the paid up share capital of Rs, 50,050,000. Subject to the approval of shareholders, an amount of Rs, 22.29 million will be paid as dividend including dividend distribution tax (previous year Rs, 10.51 million).
Transfer of Unclaimed Dividend to Investor Education and Protection Fund
The Company has transferred an amount of Rs, 0.33 million to Investor Education and Protection Fund during the financial year 2015-16. In terms of Section 205(A) of the Companies Act, 1956, any unclaimed or unpaid dividend relating to the financial year 2008-09 is due for remittance on 30.09.2016 to the Investor Education and Protection Fund established by the Central Government.
Share Capital
The paid-up capital of the Company as at 31.03.2016 stood at Rs, 50.05 million. During the year under review the Company has not made any fresh issue of shares.
Extract of Annual Return
The extract of annual return pursuant to the provisions of section 92 of the Companies Act, 2013 read with rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure I of this report.
Board and Committee meetings conducted during the period under review
During the year under review, 6 meetings of the board of directors, 5 meetings of the audit committee, 3 meetings of the nomination and remuneration committee, 2 meeting of the corporate social responsibility committee, 17 meetings of the stakeholders relationship committee,
1 meeting of finance and administrative committee and 1 meeting of the independent directors were held. Further details of the same have been enumerated in the Corporate Governance Report annexed herewith.
Directorsâ Responsibility Statement
Pursuant to the requirement of section 134(3)(c) of the Companies Act, 2013 with respect to Directors Responsibility Statement, the board hereby confirms that:
a. in the preparation of the annual accounts, the applicable accounting standards had been followed and there were no 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 at the end of the financial year and of the 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 and that 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 that such systems were adequate and operating effectively.
Details in respect of frauds reported by Auditors under Section 143(12) of the Companies Act, 2013 other than those which are reportable to the Central Government
There have been no frauds reported by the auditors pursuant to section 143(12) of the Companies Act, 2013.
Declaration of Independent Directors
The Company has received declarations from all the independent directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Companyâs policy relating to Directors appointment, payment of remuneration and other matters provided under Section 178(3) of the Companies Act, 2013
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for fixing and revising remuneration of directors, key managerial personnel, senior management personnel and employees of the company. The criteria for determining qualifications, positive attributes, and independence of directors and senior management personnel has been stated in Annexure II to this report. The Nomination and Remuneration policy of the Company is annexed herewith as Annexure III and can also be accessed on the companyâs website at www.elgirubber.com
Comments on Audit Report
There are no qualifications, reservations or adverse remarks or disclaimers made by Reddy, Goud and Janardhan, Statutory Auditors and by CN Paramasivam, Secretarial Auditor, in their report.
Particulars of loans, guarantees or investments made under Section 186 of the Companies Act, 2013
Details of loans given, investments made, guarantees given and securities provided pursuant to the provisions of section 186 of the Companies Act, 2013 have been given in the notes to the financial statements.
Particulars of contracts or arrangements made with related parties
All transactions entered into with related parties as defined under the Companies Act, 2013 and regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the financial year 2015-16 were in the ordinary course of business and on an armâs length pricing basis. Since there are no transactions which are not armâs length basis and material in nature Form AOC-2 is not being annexed.
The policy on related party transactions as approved by the board of directors of the Company has been uploaded on the Companyâs website www.elgirubber.com
Material changes and commitment if any affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of the report
No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report.
Conservation of energy, technology absorption, foreign exchange earnings and outgo
The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure IV of this report.
Statement on Risk Management
The board identifies and reviews the various elements of risk which the Company has to face and laid out the procedures and measures for mitigating those risks. The elements of risk threatening the Companyâs existence are very minimal.
The Company does not face any risks other than those that are prevalent in the industry. The Company has taken all possible steps to overcome such risks. The main concerns are the volatility in raw material prices and fluctuations in foreign exchange rates. Effective planning in raw material purchasing and the ability to pass on raw material price increases have minimized the risk relating to the volatility in raw material prices. Foreign exchange fluctuation risk is minimized through proper planning and natural hedging. As a part of the overall risk management strategy, all assets are appropriately insured.
Details about the policy developed and implemented by the Company on Corporate Social responsibility initiatives
The board has formed a corporate social responsibility committee comprising of Sudarsan Varadaraj, MD Selvaraj and Suresh Jagannathan. The CSR policy deals with allocation of funds, activities, identification of programmes, approval, implementation, monitoring and reporting mechanisms for CSR activities.
As part of its initiatives under CSR, the Company has undertaken projects in the areas of education, social development, medical relief, sports, women empowerment, animal welfare, cultural protection etc. These projects are by and large in accordance with Schedule VII of the Companies Act, 2013.
The CSR spend is predominantly directed through a registered trust. The trust expends the sums contributed by the Company towards educational and related activities only and also for having a corpus for undertaking construction of new school building within the next 5-10 years. The trust has a proven track record of over three years in involvement in educational activities as it runs a full-fledged school and has earned a good reputation over time. The trust has medium term plans to construct a new school building with all modern amenities and aims to be a school of international standards in the years to come. Hence, the Company should continue to significantly contribute to the trust.
The trust also expends the funds towards educational scholarships, medical relief, to help the upliftment of rural people by way of building infrastructure like schools, street lights, roads etc. to support special childrenâs school and also for the building corpus. The annual report on CSR activities is annexed herewith as Annexure V.
Annual evaluation of the Board on its own performance and of the individual directors
On the advice of the board of directors, the nomination and remuneration committee of the board of directors formulated the criteria for the evaluation of the performance of the board of directors & its committees, independent directors, non-independent directors and the Chairman & Managing Director. Based on that, performance evaluation has been undertaken. The independent directors of the Company have also convened a separate meeting for this purpose. All the results and evaluation has been communicated.
Directors and Key Managerial Personnel
As per the provisions of section 152 of the Companies Act, 2013, Jairam Varadaraj, the director of the company, retires by rotation at this ensuing annual general meeting. Being eligible, he offers himself for re-appointment.
C Shankar, GM-Finance and Company Secretary had resigned from the services of the Company from 1st October 2015 & D Selvakumar was appointed as GM-Finance and Company Secretary with effect from 14th November 2015 at the board meeting held on that date.
Subsidiaries, Joint Ventures and Associate Companies
The Company has 7 subsidiaries, 4 step-down subsidiaries and one LLP. The statement pursuant to section 129(3) of the Companies Act, 2013 containing the salient features of the financial statements of subsidiary companies forms part of this annual report.
The board has approved a policy for determining material subsidiaries which has been uploaded on the companyâs website www.elgirubber.com
The annual accounts of the subsidiary companies are posted on the website of the Company www.elgirubber.com and kept for inspection by the shareholders at the registered office of the company. The Company shall provide the copy of the annual accounts of subsidiary companies to the shareholders upon their request.
As a part of restructuring and consolidation process, during the year under review,
i. Treads direct LLC USA, a wholly owned subsidiary of the Company was merged with Elgi Rubber Company LLC, USA another wholly owned subsidiary of the Company.
ii. A new holding company, Elgi Rubber Company Holdings B.V., was incorporated in The Netherlands as a wholly owned subsidiary of the Company. The existing wholly owned subsidiaries of the Company viz., Elgi Rubber Company B.V. and Rubber Resources B.V., have become the subsidiaries of Elgi Rubber Company Holdings B.V. The Netherlands.
iii. Elgi Rubber Company Holdings B.V., has acquired 100% shares of Rubber Compounding Holland B.V., The Netherlands, a Company dealing with rubber compounds.
Merger of Indian subsidiaries
During the year under review, the wholly owned Indian subsidiaries M/s Treads direct Limited and Parani Steels Private Limited had been subsidiaries had been merged with the Company, as approved by the members in their meeting held on 26th September 2015 and as per the orders of Honourable High court of Madras dated 22nd January 2016. The merger was effective from 1st April 2015. Hence, the current year figures (2015-16) are not comparable with the previous year figures (2014-15).
Deposits
The Company has not accepted or renewed any fixed deposit and hence there are no unclaimed deposits as on 31st March 2016.
Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companyâs operation in future
There were no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and Companyâs operations in future.
Adequacy of internal financial controls with reference to the financial statements
The Company has implemented and evaluated the Internal Financial Controls which provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes and policies, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records. The Company has appointed Internal Auditor with a dedicated internal audit team. The Internal Audit Reports were reviewed periodically by the Board. Further, the Board annually reviews the effectiveness of the Companyâs internal control system.
The directors and management confirm that the Internal Financial Controls (IFC) are adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors report.
Statutory Auditors
Reddy, Goud and Janardhan, Chartered Accountants, Bangalore were appointed as statutory auditors for a period of 3 years at the annual general meeting of the Company held on 27th September 2014 subject to ratification by the shareholders at every annual general meeting. Their continuance of appointment and payment of remuneration for the financial year 2016-17 is to be ratified in the ensuing annual general meeting. The Company has received a certificate from the above auditors to the effect that if the appointment is ratified, it would be in accordance with the provisions of section 141 of the Companies Act, 2013.
Secretarial Auditors
Pursuant to the provisions of section 204 of the Companies Act, 2013 read with corresponding rules framed there under, CN Paramasivam, Company Secretary in Practice, was appointed as the secretarial auditor of the Company to carry out the secretarial audit for the year ended 31st March, 2016. A secretarial audit report given by the secretarial auditors in Form No. MR-3 is enclosed with this report as Annexure VI.
Cost Auditors
The Board of Directors at their meeting held on May 30, 2016 have appointed M/s. P. Mohan Kumar & Co. (Firm Regn No.100490), Cost Accountants, as the Cost Auditors of the Company for the financial year 2016-17. Pursuant to Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Accounts) Rules, 2014, the remuneration payable to the Cost Auditors of the Company is subject to the ratification by the shareholders at the annual general meeting. The Board recommends their remuneration.
Particulars of employees
There are no employees who are in receipt of remuneration in excess of Rs, 6,000,000/- for the whole financial year 2015-16 or a part thereof during the year. Particulars pursuant to Rule of Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, is enclosed as Annexure VII.
Human Resources and Industrial Relations
The Company continues to enjoy a cordial relationship with all its employees. The employee count as on March 31, 2016 is 593.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has in place a policy on sexual harassment of women at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An internal complaint committee has been set up to redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received from any employee during the financial year 2015-2016.
Corporate Governance
A report on corporate governance, as per regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed as Annexure VIII and forms part of this report. The Company has complied with the conditions relating to corporate governance as stipulated in clause C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Audit Committee
Audit Committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. Kindly refer to the Section on Corporate Governance, under the head, âAudit Committeeâ for matters relating to the composition, meetings and functions of the Committee. The Board has accepted the Audit Committee recommendations during the year whenever required and hence no disclosure is required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of Audit Committee by Board.
Whistle Blower Policy
The Company has a whistle blower policy to deal with unethical or improper practice or violation of Companyâs code of business conduct or any complaints regarding accounting, auditing, internal controls or disclosure practices of the company. The policy gives a platform to the whistle blower to report the complaints on the above mentioned practices to the chairman of the audit committee. Although the complainant is not expected to prove the truth of an allegation, the complainant aims to demonstrate that there are sufficient grounds for concern and is not done as a malicious act against an individual. The audit committee of the board reviews the complaints received, redressed, objected, withdrawn and dismissed for, every quarter in their meeting. The whistle blower policy is available in the website of the Company at the following address www.elgirubber.com
Cautionary Statement
Statements in this report, especially those relating to MD&A giving details of companyâs objectives, projections, estimates and expectations may be construed as âforward looking statementsâ within the realm of applicable laws and regulations. Actual results are liable to differ materially from those either expressed or implied.
Acknowledgment
The directors thank the companyâs customers, vendors, investors, business associates and bankers for their support to the company. The directors also wish to place on record their appreciation of the contributions made by all the employees towards the growth of the company.
For the board of directors
Sudarsan Varadaraj
Coimbatore Chairman & Managing Director
30.05.2016 (DIN: 00133533)
Mar 31, 2015
The Board of Directors have pleasure in presenting the 9th annual
report of the Company and the audited accounts for the year ended March
31, 2015 covering 12 months of operation. The Management Discussion and
Analysis (MD&A) Report have been included at the appropriate places in
this report.
Financial Highlights
(Rs. in million)
2014-2015 2013-2014
Profit before depreciation and tax 146.53 259.99
Less: Depreciation 67.82 50.92
Add: Exceptional items 0.29 _
Profit before taxation 79.00 209.07
Less: Provision for taxation 24.60 51.63
(Add) / Less: Provision for deferred tax (2.15) 6.20
Profit after tax 56.55 151.24
Add: Opening surplus 1,050.36 932.76
Profit available for appropriation 1,106.91 1,084.00
Appropriation
Transitional adjustment on account of depreciation 8.29 _
General reserve 5.66 15.12
Proposed dividend 10.51 18.52
Dividend distribution Tax _ _
Balance surplus carried to balance sheet 1,082.45 1,050.36
Review of Business Operations and Future Outlook
During the year under review, the Company recorded sales of INR
1,333.97 million as against INR 1,442.86 million in the last year The
company earned a net profit of INR 56.55 million as against INR 151.24
million in the previous year. The Indian Subsidiary, Treads direct
Limited achieved sales of INR 1,516.59 million and Profit after tax of
INR 72.76 million.
The current year continues to be sluggish in terms of sales with the
overall industry going through difficult times. The Company is taking
steps to consolidate its operations with a view to reduce operating
costs and to bring in higher efficiencies to improve the bottom line.
Transfer to Reserves
An amount of INR 5.66 million has been transferred to General Reserve
and an amount of INR 1,082.45 million (including the previous year
closing balance of INR 1,050.36 million) has been retained in Surplus
in the Statement of Profit and Loss.
Dividend
The directors recommend a dividend of INR 0.21 per equity share of INR
1.00 each. This comes to INR 10.51 million. The dividend will be paid
to the registered members, who are in the register of members as on the
book closure date and upon approval by the members of the Company at
the ensuing annual general meeting. In respect of the dematerialised
shares, dividend will be paid to the beneficial owners based on the
list provided by the depositories.
Transfer of Unclaimed Dividend to Investor Education and Protection
Fund
In terms of Section 205(a) and 205(b) of the Companies Act, 1956, any
unclaimed or unpaid dividend relating to the financial year 2007- 2008
is due for remittance on 30/09/2015 to the Investor Education and
Protection Fund established by the Central Government.
Share Capital
The paid-up capital of the Company as at 31.03.2015 stood at INR 50.05
million. During the year under review the Company has not made any
fresh issue of shares.
Extract of Annual Return
The extracts of Annual Return pursuant to the provisions of Section 92
read with Rule 12 of the Companies (Management and administration)
Rules, 2014 is furnished in Annexure I of this Report.
Board and Committee meetings conducted during the period under review
During the year under review, 5 Meetings of the Board of Directors, 4
Meetings of the Audit Committee, 2 Meetings of the Nomination and
Remuneration Committee, 1 Meeting of the Corporate Social
Responsibility Committee and 22 Meetings of the Stakeholders
Relationship Committee were held. Further details of the same have been
enumerated in the Corporate Governance Report annexed herewith.
Directors' Responsibility Statement
Pursuant to the requirement of Section 134(3)(c) of the Companies Act,
2013 with respect to Directors Responsibility Statement, the Board
hereby confirms that:-
a. in the preparation of the annual accounts, the applicable
accounting standards had been followed and there were no 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 at the end of the financial year and of the profit 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 and that 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 that such systems were
adequate and operating effectively.
Details in respect of frauds reported by Auditors under Section 143(12)
of the Companies Act, 2013 other than those which are reportable to the
Central Government
There have been no frauds reported by the Auditors pursuant to Section
143(12) of the Companies Act, 2013.
Declaration of Independent Directors
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as prescribed both under the Companies Act, 2013 and
Clause 49 of the Listing Agreement entered with the Stock Exchange.
Company's policy relating to Directors appointment, payment of
remuneration and other matters provided under Section 178(3) of the
Companies Act, 2013
The Board has, on the recommendation of the Nomination and Remuneration
Committee, framed a policy for fixing and revising remuneration of
Directors, Key Managerial Personnel, Senior Management Personnel and
employees of the Company. The Nomination and Remuneration policy of the
Company in annexed herewith as Annexure II and can also be accessed on
the Company's website www.elgirubber.com.
Comments on Audit Report
There are no qualifications, reservations or adverse remarks or
disclaimers made by Reddy, Goud and Janardhan, Statutory Auditors and
by CN Paramasivam, Secretarial Auditor, in their report.
Particulars of loans, guarantees or investments made under Section 186
of the Companies Act, 2013
Details of loans given, investments made, guarantees given and
securities provided pursuant to the provisions of Section 186 of the
Companies Act, 2013 have been given in the Notes to the Financial
Statements.
Particulars of contracts or arrangements made with related parties
All transactions entered into with related parties as defined under the
Companies Act, 2013 and Clause 49 of the Listing Agreement during the
financial year 2014-2015 were in the ordinary course of business and on
an arm's length pricing basis. Transactions of material nature in Form
AOC-2 is attached to this Report as Annexure III.
The Policy on Related Party Transactions as approved by the Board of
Directors of the Company has been uploaded on the Company's website
www.elgirubber.com.
Material changes and commitment if any affecting the financial position
of the company occurred between the end of the financial year to which
this financial statements relate and the date of the report
The Board of directors at their meeting held on 21st April, 2015 has
approved the Scheme of Amalgamation of the wholly owned subsidiaries
Treadsdirect Limited and Parani Steels Private Limited with the Company
with effect from 01st April, 2015 subject to the approval of the
Hon'ble High Court of Judicature at Madras and such other authorities
as may be necessary in this regard. Other than this there are no
material changes and commitments affecting the financial position of
the Company occurred between the end of the financial year to which
this financial statements relate and the date of this report.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The information pertaining to conservation of energy, technology
absorption, foreign exchange earnings and outgo as required under
Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the
Companies (Accounts) Rules, 2014 is furnished in Annexure IV of this
report.
Statement on Risk Management
The Board identifies and reviews the various elements of risk which the
Company has to face and laid out the procedures and measures for
mitigating those risks. The elements of risk threatening the Company's
existence are very minimal.
The company does not face any risks other than those that are prevalent
in the industry. The company has taken all possible steps to , overcome
such risks. The main concerns are the volatility in raw material prices
and fluctuations in foreign exchange rates. Effective planning in raw
material purchasing and the ability to pass on raw material price
increases have minimised the risk relating to the volatility in raw
material prices. Foreign exchange fluctuation risk is minimised through
proper planning and natural hedging. As a part of the overall risk
management strategy, all assets are appropriately insured.
Details about the policy developed and implemented by the Company on
Corporate Social responsibility initiatives
The Board has formed a Corporate Social Responsibility Committee
comprising of Sudarsan Varadaraj, MD Selvaraj and Suresh Jagannathan.
The Committee at its meeting held on 4th August, 2014, recommended a
CSR policy for adoption by the Company. The CSR policy deals with
allocation of funds, activities, identification of programmes,
approval, implementation, monitoring and reporting mechanisms for CSR
activities.
As part of its initiatives under CSR, the Company has undertaken
projects in the areas of Education, Social development, Medical relief,
Sports, Women empowerment, animal welfare, Cultural protection etc.
These projects are by and large in accordance with Schedule VII of the
Companies Act, 2013.
The CSR spend is predominantly directed through a registered trust. The
trust expends the sums contributed by the Company towards educational
and related activities only and also for having a corpus for
undertaking construction of new school building within the next 5- 10
years. The trust has a proven track record of over three years in
involvement in educational activities as it runs a full-fledged school
comprising of 1,300 students and has earned a good reputation over
time. The trust has medium term plans to construct a new school
building with all modern amenities and aims to be a school of
international standards in the years to come. Hence, the Company should
continue to significantly contribute to the trust.
The trust also expends the funds towards Educational Scholarships,
Medical Relief, to help the upliftment of rural people by way of
building infrastructure like Schools, Street Lights, Roads etc. to
support Special Children's School and also for the Building Corpus. The
Annual Report on CSR activities is annexed herewith as Annexure V.
Annual evaluation of the Board on its own performance and of the
individual directors
On the advice of the Board of Directors, the Nomination and
Remuneration Committee of the Board of Directors, the Company
formulated the criteria for the evaluation of the performance of the
Board of Directors & its Committees, Independent Directors,
Non-independent Directors and the Chairman & Managing Director. Based
on that performance evaluation has been undertaken. The Independent
Directors of the Company have also convened a separate meeting for this
purpose. All the results and evaluation has been communicated.
Directors and Key Managerial Personnel
Suresh Jagannathan, MD Selvaraj, P Vijay Raghunath and Vidyasankar
Bhuvaneshwari were appointed as Independent Directors of the Company at
the Annual General Meeting held on 27th September 2014 for a term of
five consecutive years.
As per the provisions of Section 152 of the Companies Act 2013, the
Managing Director of the Company, Sudarsan Varadaraj, retires by
rotation at this Annual General Meeting. Being eligible, he offers
himself for re-appointment.
At the Board Meeting held on 19th May, 2014, Sudarsan Varadaraj,
Chairman and Managing Director, SR Venkatachalam, Chief Financial '$
Officer (Vice-President - Finance) and C Shankar, GM - Finance and
Company Secretary, were designated as "Key Managerial Personnel" of the
Company pursuant to Sections 2(51), 203 of the Companies Act, 2013 read
with Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014.
Sudarsan Varadaraj, Chairman and Managing Director of the Company,
apart from drawing remuneration from this Company is also paid
remuneration by way of commission by the wholly owned subsidiary,
Treadsdirect Limited. This disclosure is made pursuant to the
provisions of Section 197(14) of the Companies Act, 2013.
Subsidiaries, Joint Ventures and Associate Companies
The Board has approved a policy for determining material subsidiaries
which has been uploaded on the Company's website www.elgirubber.com.
The annual accounts of the Subsidiary Companies are posted on the
website of the Company www.elgirubber.com and kept for inspection by
the shareholders at the Registered Office of the Company. The Company
shall provide the copy of the annual accounts of Subsidiary Companies
to the shareholders upon their request.
The statement pursuant to Section 129(3) of the Companies Act, 2013,
containing the salient features of the Financial Statement of
subsidiary Companies, forms part of this Annual Report.
Deposits
The Company has not accepted any fixed deposit and hence there are no
unclaimed deposits as on 31st March 2015.
Details of significant and material orders passed by the regulators or
courts or tribunals impacting the going concern status and company's
operation in future
There were no significant or material orders passed by the regulators
or courts or tribunals impacting the going concern status and I
company's operations in future. I
Internal Control Systems and their adequacy
The Company has adequate internal control systems to monitor business
processes, financial reporting and compliance with applicable
regulations. The systems are periodically reviewed for identification
of control deficiencies and formulation of time bound action plans to
improve efficiency at all the levels. The Audit Committee of the Board
constantly reviews internal control systems and their adequacy,
significant risk areas, observations made by the internal auditors on
control mechanism and the operations of the Company and recommendations
made for corrective action through the internal audit reports. The
Committee reviews the statutory auditors' report, key issues,
significant processes and accounting policies.
Statutory Auditors
Reddy, Goud and Janardhan, Chartered Accountants, Bangalore were
appointed as Statutory Auditors for a period of 3 years at the previous
Annual General Meeting held on 27th September 2014. Their continuance
of appointment and payment of remuneration are to be ratified in the
ensuing Annual General Meeting. The Company has received a certificate
from the above Auditors to the effect that if the appointment is
ratified, it would be in accordance with the provisions of Section 141
of the Companies Act, 2013.
Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act, 2013
read with corresponding Rules framed thereunder, CN Paramasivam,
Company Secretary in Practice, was appointed as the Secretarial Auditor
of the Company to carry out the secretarial audit for the year ended
31st March, 2015. A Secretarial Audit Report given by the Secretarial
Auditors in Form No. MR-3 is enclosed with this Report as Annexure VI.
Particulars of employees
There are no employees who are in receipt of remuneration in excess of
INR. 6,000,000/- for the whole Financial year 2014-15 or a part thereof
during the year. Particulars pursuant to Rule 5(1) of Companies
(Appointment and Remuneration of Managerial personnel) Rules 2014, is
enclosed as Annexure VII
Human Resources and Industrial Relations
The Company continues to enjoy a cordial relationship with all its
employees. The employee count as on March 31, 2015 is 318.
Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company has in place a policy on Sexual Harassment of Women at
Workplace in line with the requirements of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
An Internal Complaint Committee has been set up to redress complaints
received. All employees (permanent, contractual, temporary, trainees)
are covered under this policy. There were no complaints received from
any employee during the financial year 2014-2015.
Corporate Governance
A report on Corporate Governance is annexed and forms part of this
report. The Company has complied with the conditions relating to
Corporate Governance as stipulated in Clause 49 of the Listing
Agreement.
Whistle Blower Policy
The Company has a Whistle Blower Policy to deal with unethical or
improper practice or violation of Company's Code of Business Conduct or
any complaints regarding accounting, auditing, internal controls or
disclosure practices of the Company. The Policy gives a platform to the
Whistle Blower to report the complaints on the above mentioned
practices to the Chairman of the Audit Committee. Although the
complainant is not expected to prove the truth of an allegation, the
complainant aims to demonstrate that there are sufficient grounds for
concern and is not done as a malicious act against an individual. The
Audit Committee of the Board reviews the Complaints received,
redressed, objected, withdrawn and dismissed for, every quarter in
their meeting. The Whistle Blower Policy is available in the website of
the Company at the following address www.elgirubber.com.
Cautionary Statement
Statements in this report, especially those relating to MD & A giving
details of company's objectives, projections, estimates and
expectations may be construed as "forward looking statements" within
the realm of applicable laws and regulations. Actual results are liable
to differ materially from those either expressed or implied.
Acknowledgement
The Directors thank the Company's customers, vendors, investors,
business associates and bankers for their support to the Company. The
Directors also wish to place on record their appreciation of the
contributions made by all the employees towards the growth of the
Company.
For the board of directors
Sudarsan Varadaraj
Coimbatore Chairman & Managing Director
30.07.2015 (DIN: 00133533)
Mar 31, 2014
Dear members,
The Board of Directors take pleasure in presenting the 8th annual
report and the audited accounts for the year ended March 31, 2014. The
Management Discussion and Analysis (MD & A) Report have been included
at the appropriate places in this report.
Abstract of the Financial Results of the Company
(Rs. in million)
2013-2014 2012-2013
Profit before depreciation and tax 259.99 268.96
Less : Depreciation 50.92 36.30
Profit before taxation 209.07 232.66
Less: Provision for taxation 51.63 52.13
(Add) / Less: Provision for deferred tax 6.20 3.22
Profit after tax 151.24 177.31
Add: Opening surplus 932.76 812.94
Add: Dividend distribution tax of earlier
year return back 3.85
Profit available for appropriation 1,084.00 994.10
Appropriation
General reserve 15.12 17.73
Proposed dividend 18.52 40.04
Dividend distribution tax - 3.57
Balance surplus carried to balance sheet 1,050.36 932.76
Dividend
The directors recommend a dividend of INR 0.37 per equity share of INR
1.00 each. This comes to INR 18.52 million. The dividend will be paid,
upon approval by the members of the Company at the ensuing annual
general meeting to the registered members, who are in the register of
members as on the book closure date and in respect of the
dematerialised shares, dividend will be paid to the beneficial owners
based on the list provided by the depositories.
Review of Operations and Future Outlook
During the year under review, the Company recorded sales of INR 1442.86
million as against INR 1407.32 million in the previous year. The
company earned a net profit of INR 151.24 million as against INR 177.31
million in the previous year.
The Indian Subsidiaries, Treadsdirect Limited and Titan Tyrecare
Products Limited achieved sales of INR 1670.88 million and INR 45.66
million respectively during the year under review. The revenue from
windmill operations increased to INR 35.41 million from INR 33.63
million in the previous year recording an increase of 5%.
There was only marginal improvement in overall sales due to global
economic slowdown. The decrease in input costs was inadequate to offset
the increases in employee, depreciation and overhead costs. Hence the
margins were lower.
In February 2014, the Company commenced manufacture of buffing rasp
blades, with the installation and commissioning of a state of the art
furnace and relocated two presses at Kovilpalayam in September 2013 at
total cost of INR 72.75 million.
The Company acquired the entire business of its wholly owned subsidiary
Titan Tyrecare Products Limited with effect from 01.09.2013 consisting
of manufacture of retreading machineries and a 100% EOU division
engaged in manufacture of brazed carbide products for a consideration
of INR 169.63 million.
During the year under review, two hydraulic presses were installed at
Annur and new moulds were procured at a total cost of INR 20.62
million.
The Karur facility manufacturing tyre repair units was shifted to Annur
in order to consolidate operations.
The wholly owned subsidiary Treadsdirect LLC, USA acquired the assets
of Western states manufacturing company Inc which was engaged in
manufacture and distribution of tyre repair and related products.
The Company has successfully retreaded aircraft tyres for the Indian
Airforce on commercial basis in November 2013.
The Company expects to have considerable growth in sales and
profitability in future on account of substantial capital investments
made during the year.
Risk and Concerns
The company does not face any risks other than those that are prevalent
in the industry. The company has taken all possible steps to overcome
such risks. The main concerns are the volatility in raw material prices
and fluctuations in foreign exchange rates. Effective planning in raw
material purchasing and the ability to pass on raw material price
increases have minimised the risk relating to the volatility in raw
material prices. Foreign exchange fluctuation risk is minimised through
proper planning and natural hedging.
As a part of the overall risk management strategy, all assets are
appropriately insured.
Internal Control Systems
Quarterly Internal Audit is carried out by an independent firm of
Chartered Accountants and the observations are reported to the
management. Immediate steps are taken to rectify any discrepancies.
All significant audit observations are discussed in the audit committee
meetings.
Human Resources and Industrial Relations
The Company continues to enjoy a cordial relationship with all its
employees. The employee count as on March 31, 2014 is 306.
Subsidiaries
The consolidated financial statements presented in this annual report
include financial results of all the subsidiary companies. The details
of the Subsidiary Companies are furnished in the statement pursuant to
section 212 of the Companies Act, 1956.
Directors
The Board of Directors, at their meeting held on 31st July, 2014, have
appointed Ms Vidyasankar Bhuvaneswari as an Additional Director of the
Company and she holds office upto the ensuing Annual General Meeting.
Further, the Board has recommended the appointment of Ms Vidyasankar
Bhuvaneswari as the Independent Director and accordingly necessary
Resolution has been included in the Agenda of the Notice convening the
Annual General Meeting.
Further, the Board of Directors, at their meeting held on 31st July,
2014, has recommended the appointment of Mr Suresh Jagannathan, Mr P
Vijay Raghunath and Mr M D Selvaraj, as the Independent Directors of
the Company for a period of 5 consecutive years. Accordingly, necessary
Resolution(s) proposing their appointment(s) has been included in the
Agenda of the Notice convening the Annual General Meeting.
Dr Jairam Varadaraj, Director of the Company, retires by rotation and
being eligible offers himself for re-appointment.
Auditors
Pursuant to the Section 139 of Companies Act, 2013 read with the
Company (Audit and Auditors) Rules, 2014, the present auditors, M/s.
Reddy, Goud and Janardhan, Chartered Accountants, Bangalore, is
recommended for appointment as Statutory Auditors of the Company to
hold the office for 3 years from the conclusion of the ensuing Annual
General Meeting till the conclusion of 11th Annual General Meeting of
the Company. Further, such appointment is liable to ratification by the
members of the company at every annual general meeting during their
tenure of office.
Directors'' Responsibility Statement
In accordance with the provisions of Section 217(2AA) of the Companies
Act, 1956, the Directors confirm that they have
1. In the preparation of the annual accounts, followed the applicable
accounting standards and there are no material departures.
2. Selected such accounting policies and applied them consistently and
made judgements and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company and of
the profit of the Company for the financial year.
3. 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.
4. Prepared the annual accounts on a going concern basis.
Other Information
Particulars as required by Section 217(1) (e) of the Companies Act,
1956, relating to Conservation of Energy, Technology absorption and
Foreign Exchange earnings and outgo are provided as an annexure to this
report. There are no employees who are in receipt of remuneration
exceeding the specified limit as notified by the Government.
The Company has not accepted any fixed deposits and hence there were no
unclaimed fixed deposit as on 31.03.2014.
Corporate Governance
A separate report on the compliance with Clause 49 of the Listing
Agreement with the Stock Exchanges and the Auditor''s Certificate on the
compliance form part of this report.
Cautionary Statement
Statements in this report, especially those relating to MD & A giving
details of company''s objectives, projections, estimates and
expectations may be construed as "forward looking statements" within
the realm of applicable laws and regulations. Actual results are liable
to differ materially from those either expressed or implied.
Acknowledgement
The Directors thank the Company''s customers, vendors, investors,
business associates and bankers for their support to the Company. The
Directors also wish to place on record their appreciation of the
contributions made by all the employees towards the growth of the
Company
For the Board of Directors
Coimbatore Sudarsan Varadaraj
31.07.2014 Chairman & Managing Director
Mar 31, 2013
The Board of Directors take pleasure in presenting the 7th annual
report and the audited accounts for the year ended March 31,2013. The
Management Discussion and Analysis (MD & A) Report have been included
at the appropriate places in this report.
Abstract of the Financial Results of the Company
(Rs. in Million)
2012-2013 2011-2012
Profit before depreciation and tax 265.47 178.59
Less : Depreciation 36.30 39.37
Profit before taxation 229.17 139.22
Less: Provision for taxation 52.13 42.52
(Add) / Less: Provision for deferred tax 3.22 1.88
Profit after tax 173.82 94.82
(Add) / Less: Adjustment relating
to earlier years (Income tax) (3.49) 0.95
177.31 93.87
Add: Opening surplus 812.94 757.54
Add: Dividend distribution tax of
earlier year written back 3.85
Profit available for appropriation 994.10 851.41
Appropriation
General reserve 17.73 9.39
Proposed dividend 40.04 25.02
Dividend distribution tax (After
adjustment of dividend distribution
tax paid by subsidiaries) 3.57 4.06
Balance surplus carried to balance sheet 932.76 812.94
Dividend
The directors recommend a dividend of INR 0.80 per equity share of INR
1.00 each. This along with the dividend distribution tax comes to INR
43.61 Million. The dividend will be paid to the registered members, who
are in the register of members as on the book closure date and upon
approval by the members of the Company at the ensuing annual general
meeting. In respect of the dematerialised shares, dividend will be paid
to the beneficial owners based on the list provided by the
depositories.
Review of operations and future outlook
During the year under review, the Company recorded sales of INR
1,407.32 Million as against INR 1,115.45 Million in the previous year.
The Company earned a net profit of INR 177.32 Million as against INR
93.87 Million in the previous year.
The Indian subsidiaries, Treadsdirect Limited and Titan Tyrecare
Products Limited achieved sales of INR 1,756.48 Million and INR 77.33
Million respectively during the year under review.
Acute power shortage and increase in cost of fuel during the financial
year had a negative impact on the operations of the Company. Despite
this, the Company achieved higher profitability on account of cost
control and prudent financial management.
With increasing rubber prices, the margins are expected to be under
pressure during the next financial year. The Company is taking measures
to expand its market share overseas. These measures are expected to
result in the growth of the Company''s business globally.
Risk and concerns
The Company does not face any risks other than those that are prevalent
in the industry. The Company has taken all possible steps to overcome
such risks. The main concerns are the volatility in raw material
prices, availability of power and fluctuations in foreign exchange
rates. Effective planning in raw material purchasing and the ability to
pass on raw material price increases will minimise the risk relating to
the volatility in raw material prices. Foreign exchange fluctuation
risk will be minimised through proper planning and natural hedging.
As a part of the overall risk management strategy, all assets are
appropriately insured.
Internal control systems
An independent firm of Chartered Accountants carries out quarterly
internal audit and the observations are reported to the management.
Immediate steps are taken to rectify any discrepancies. All significant
audit observations are discussed in the audit committee meetings.
Human resources and industrial relations
The Company continues to enjoy a cordial relationship with all its
employees. The employee count as on March 31, 2013 is 301.
Subsidiaries
In accordance with the circular issued by Ministry of Corporate
Affairs, the Board of Directors of the Company at their meeting held on
May 17, 2013 have approved waiving the requirement to attach the
various documents related to the subsidiary companies. Upon request,
the annual accounts of the subsidiary companies will be made available
for inspection by any member of the Company at the registered office of
the Company and that of the subsidiary companies. The consolidated
financial statements presented in this annual report include financial
results of the subsidiary companies. The details of the subsidiary
companies are furnished in the statement pursuant to section 212 of the
Companies Act, 1956.
Directors
As per the provisions of Companies Act, 1956, and the articles of
association of the Company, the directors of the Company MD Selvaraj
and Suresh Jagannathan retire by rotation. Being eligible, they offer
themselves for reappointment.
Auditors
Reddy, Goud and Janardhan, Chartered Accountants, Statutory Auditors of
the Company, retire in the ensuing annual general meeting and are
eligible for reappointment.
Cost accounting records
In terms of the general order issued by the central government and
pursuant to the provisions of section 233B of the Companies Act, 1956,
the Company has appointed M/s. K.R.S & Associates, Cost Auditors,
Coimbatore to audit the cost accounts of the Company for the year ended
March 31, 2013. The cost audit report in respect of financial year
2012-2013 will be filed on or before the due date.
Pursuant to Sec. 209 (1)(d) of the Companies Act, 1956 and Rule 5 of
The Companies (Cost Accounting Records) Rules, 2011, the cost
compliance report for the financial year ended March 31, 2012 has been
submitted to the central government.
Directors'' Responsibility statement
In accordance with the provisions of section 217(2AA) of the Companies
Act, 1956, the Directors confirm that they have
1. In the preparation of the annual accounts, followed the applicable
accounting standards and there are no material departures.
2. Selected relevant accounting policies, applied them consistently
and made judgements and estimates that are reasonable and prudent to
give a true and fair view of the state of affairs of the Company and of
the profit of the Cbmpany for the financial year.
3. Taken proper care in the maintenance of 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.
4. Prepared the annual accounts on a going concern basis.
Other information
Particulars as required by section 217(1) (e) of the Companies Act,
1956, relating to conservation of energy, technology absorption and
foreign exchange earnings and outgo are provided as an annexure to this
report. There are no employees who are in receipt of remuneration
exceeding the specified limit as notified by the government.
The Company has not accepted any fixed deposits and there were no
unclaimed fixed deposit as on 31.03.2013.
Corporate governance
A separate report on the compliance with clause 49 of the listing
agreement with the stock exchanges and the auditor''s certificate on the
compliance form a part of this report.
Cautionary statement
Statements in this report, especially those relating to MD & A giving
details of company''s objectives, projections, estimates and
expectations may be construed as "forward looking statements" within
the realm of applicable laws and regulations. Actual results are liable
to differ materially from those either expressed or implied.
Acknowledgement
The Directors thank the Company''s customers, vendors, investors,
business associates and bankers for their support to the Company. The
Directors also wish to place on record their appreciation of the
contributions made by all the employees towards the growth of the
Company.
For the Board of Directors
Coimbatore Sudarsan Varadaraj
17.05.2013 Chairman & Managing Director
Mar 31, 2012
The Board of Directors take pleasure in presenting the 6th annual
report and the audited accounts for the year ended March 31, 2012. The
Management Discussion and Analysis (MD&A) Report have been included at
the appropriate places in this report.
Abstract of the Financial Results of the Company
(Rs. in Million)
2011-2012 2010-2011
Profit Before Depreciation and Tax 178.59 344.29
Less : Depreciation 39.37 58.68
Profit Before Taxation 139.22 285.61
Less : Provision for Taxation 42.52 105.15
(Add) / Less: Provision for Deferred Tax 1.88 (9.64)
Profit after Tax 94.82 190.10
Less : Adjustment relating to earlier years
(Income tax) 0.95 1.40
93.87 188.70
Add : Balance surplus incorporated on amalgamation - 637.15
Add : Opening Surplus 757.54 -
Profit available for appropriation 851.41 825.85
Appropriation
General Reserve 9.39 18.87
Proposed Dividend 25.02 42.54
Dividend Distribution Tax 4.06 6.90
Balance surplus carried to balance sheet 812.94 757.54
Dividend
The directors recommend a dividend of INR 0.50 per equity share of INR
1.00 each. This along with the dividend distribution tax comes to INR
29.08 Million. The dividend will be paid to the registered members, who
are in the register of members as on the book closure date and upon
approval by the members of the Company at the ensuing annual general
meeting. In respect of the dematerialised shares, dividend will be paid
to the beneficial owners based on the list provided by the
depositories.
Review of Operations and Future Outlook
During the year, under reviewed the Company recorded sales of INR
1,115.45 Million as against INR1,942.38 Million in the previous year.
The company earned a net profit of INR 93.87 Million as against INR
188.70 Million in the previous year. The current year figures are not
comparable with the previous year on account of the Scheme of
Amalgamation and Arrangement implemented during the last year.
The Indian Subsidiaries, Treadsdirect Limited and Titan Tyrecare
Products Limited achieved sales of INR 1,943.18 Million and 51.78
Millions respectively during the year under review.
Despite healthy improvement in sales quantities and higher capacity
utilisation, high input costs during the second half of the financial
year, has affected the bottom line. Through an aggressive marketing
strategy, the company is expanding into new products and markets, both
domestic and overseas. To meet the projected demand, addition to
manufacturing capacities is being implemented.
In October 2011, the company acquired Pincott International Pty Ltd, an
Australian company manufacturing buffing blade refills used in the tyre
retreading and recycling industry. This wholly owned subsidiary
registered sales of INR 47.77 Million for the 9 months ending March, 31
2012. This acquisition brings to the company new technologies and
globally respected brand.
Risk and Concerns
The company does not face any risks other than those that are prevalent
in the industry. The company has taken all possible steps to overcome
such risks. The main concerns are the volatility in raw material prices
and fluctuations in foreign exchange rates. Effective planning in raw
material purchasing and the ability to pass on raw material price
increases have minimised the risk relating to the volatility in raw
material prices. Foreign exchange fluctuation risk is minimised through
proper planning and natural hedging.
As a part of the overall risk management strategy, all assets are
appropriately insured.
Internal Control Systems
Quarterly Internal Audit is carried out by an independent firm of
Chartered Accountants and the observations are reported to the
management. Immediate steps are taken to rectify any discrepancies. All
significant audit observations are discussed in the audit committee
meetings.
Human Resources and Industrial Relations
The Company continues to enjoy a cordial relationship with all its
employees. The employee count as on March 31, 2012 is 288.
Subsidiaries
In accordance with the circular issued by Ministry of Corporate
Affairs, the Board of Directors of the Company at their meeting held on
May 23, 2012 have approved waiving the requirement to attach the
various documents related to the subsidiary companies. Upon request,
the annual accounts of the subsidiary companies will be made available
for inspection by any member of the Company at the registered office of
the Company and that of the subsidiary companies. The consolidated
financial statements presented in this annual report include financial
results of the subsidiary companies. The details of the Subsidiary
Companies are furnished in the statement pursuant to section 212 of the
Companies Act, 1956.
Directors
During the year CN Srivatsan, director, resigned with effect from
November 01, 2011. As per the provisions of Companies Act and the
Articles of Association of the Company, the directors of the Company
Dr. Jairam Varadaraj and P Vijay Raghunath retire by rotation. Being
eligible, they offer themselves for re-appointment.
Auditors
Reddy, Goud and Janardhan, Chartered Accountants, Statutory Auditors of
the Company, retire in the ensuing Annual General Meeting and are
eligible for re-appointment.
Cost Accounting Records
In conformity with the provisions of the Companies (Cost Accounting
Records) Rules, 2011 (notified vide notification No. 52/26/CAB- 2010
dated 24th January 2012) issued by the Ministry of Corporate affairs,
the company has appointed M/s K.R.S & Associates, Cost Accountants,
Coimbatore as Cost Auditor for the year 2012 - 13.
Directors' Responsibility Statement
In accordance with the provisions of Section 217(2AA) of the Companies
Act, 1956, the Directors confirm that they have
1. In the preparation of the annual accounts, followed the applicable
accounting standards and there are no material departures.
2. Selected such accounting policies and applied them consistently and
made judgements and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company and of
the profit of the Company for the financial year.
3. 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.
4. Prepared the annual accounts on a going concern basis.
Other information
Particulars as required by Section 217(1) (e) of the Companies Act,
1956, relating to Conservation of Energy, Technology absorption and
Foreign Exchange earnings and outgo are provided as an annexure to this
report. There are no employees who are in receipt of remuneration
exceeding the specified limit as notified by the Government.
The Company has not accepted any fixed deposits and hence there were no
unclaimed fixed deposit as on 31.03.2012.
Corporate Governance
A separate report on the compliance with Clause 49 of the Listing
Agreement with the Stock Exchanges and the Auditor's Certificate on
the compliance form part of this report.
Cautionary Statement
Statements in this report, especially those relating to MD & A giving
details of company's objectives, projections, estimates and expectations
may be construed as "forward looking statements" within the
realm of applicable laws and regulations. Actual results are liable to
differ materially from those either expressed or implied.
Acknowledgement
The Directors thank the Company's customers, vendors, investors,
business associates and bankers for their support to the Company. The
Directors also wish to place on record their appreciation of the
contributions made by all the employees towards the growth of the
Company .
Annexure to Directors' Report
A. Conservation of Energy -
a. Energy conservation measures taken
Energy conservation is one of the primary objectives of the company and
measures taken albeit small, is an ongoing process
b. Additional investments and proposals, if any, being implemented for
reduction of consumption of energy There are no significant proposals
c. Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods.
There is a marginal reduction in energy costs.
d. Total energy consumption per unit of production
Not applicable
B. Technology absorption
e. Efforts made in technology absorption
i. Research and Development (R&D)
1. Specific areas in which R & D is carried out by the Company
Improvements in products and processes
2. Benefit derived as a result of above R&D Increase in orders from
new markets.
3. Future plan of action No significant plans.
4. Expenditure on R& D Rs. in Million
a. Capital : Nil
b. Recurring : 5.19
c. Total : 5.19
d. Total R&D expenditure as a percentage of total turnover : 0.47%
ii. Technology absorption, adaptation and innovation
Not applicable
C. Foreign Exchange Earnings & Outgo
f. Activities relating to exports; initiatives taken to increase
exports, development of new export markets for products and services
and export plan
The Company is constantly and consciously planning to penetrate
unexplored markets to improve its international market share.
g. Total Foreign Exchange earned and used
Foreign Exchange Earned : Rs. 254.10 Million
Foreign Exchange Used : Rs. 12.36 Million
For the Board of Directors
Coimbatore Sudarsan Varadaraj
23.05.2012 Chairman & Managing Director