Mar 31, 2018
The Directors hereby present the 32nd Annual Report together with the audited accounts of the company for the year ended 31st March 2018.
FINANCIAL HIGHLIGHTS
The performance of the company for the year ended 31st March 2018 is as follows:
(Rs. in lakhs)
Particulars |
For the year ended |
|
31.03.2018 |
31.03.2017 |
|
Revenue from operations (Gross) |
59,455.45 |
64,391.95 |
Net Revenue (Excluding Excise Duty) |
57,761.53 |
56,714.96 |
Total Expenditure |
47,935.00 |
48,882.29 |
Operating Income |
9,826.53 |
7,832.67 |
Other Income |
456.40 |
627.34 |
Profit before Interest, Depreciation, Tax and Exceptional items |
10,282.93 |
8,460.01 |
Interest |
2,220.90 |
2,433.12 |
Depreciation |
1,838.15 |
2,255.00 |
Profit before Tax & Exceptional items |
6,223.88 |
3,771.89 |
Exceptional items |
15,191.85 |
- |
Profit/(Loss) before Tax |
(8,967.97) |
3,771.89 |
Tax Expense/(credit) |
(3,035.70) |
1,202.46 |
Profit/(Loss) after Tax |
(5,932.27) |
2,569.43 |
Balance of profit brought forward from last year |
27,408.25 |
25,827.49 |
Amount available for appropriations Appropriations |
21,475.98 |
28,396.92 |
Transfer to general reserve |
- |
- |
Dividend paid during the year |
(1,105.68) |
(773.97) |
Tax on dividend |
(225.09) |
(144.25) |
Other comprehensive Income/(Loss) |
(85.02) |
(70.45) |
Balance profit carried to Balance Sheet |
20,060.19 |
27,408.25 |
The company has adopted âInd ASâ with effect from April 1, 2017. Financial statements for the year ended March 31 2017 have been re-stated to conform to Ind AS.
DIVIDEND
The Profit after Tax is negative due to the exceptional item of Rs.15,191.85 lakhs which is the write-off of advances and receivables due from Amtec Precision Products Inc., USA (Amtec) the wholly owned subsidiary of the company. The Board of Directors was of the view that the shareholders should not be denied the benefit of an improved performance and hence have considered and recommended a dividend of Rs.10 per equity share on the 2,21,13,625 equity shares of face value of Rs.10 each out of the accumulated profits of the company, for the approval of the shareholders at the ensuing Annual General Meeting. The total dividend amount inclusive of distribution tax and surcharge thereon would be Rs.2,649.11 lakhs. The dividend, if approved by the shareholders, will be paid within the due date to all the eligible shareholders whose names appear in the register of members of the company as on the record date fixed for this purpose. The dividend declared is as per the dividend policy of the company. The dividend policy is disclosed in the website of the company www.ucalfuel.com, weblink:http://www.ucalfuel.com/policy-dividend.pdf.
SHARE CAPITAL
The paid-up equity share capital of the company as on 31st March 2018 was Rs.22,11,36,250. The company has not issued any share nor granted stock options or sweat equity during the financial year 2017-18.
FINANCIAL PERFORMANCE
The revenue from operations of the company (net of excise duty) stood at Rs.57,761.53 lakhs in the financial year 2017-18 as against Rs.56,714.96 lakhs in the financial year 2016-17 resulting in an increased turnover of 2%. The increase in revenue can be attributed majorly to the increased offtake of Air Suction Valve (ASV). The earnings before Interest, Tax and Depreciation (EBITDA) stood at Rs.10,282.93 lakhs in the financial year 2017-18 as against Rs.8,460.01 lakhs in the financial year 2016-17. The increase in revenue combined with an improvement in operational efficiency has led to this improved EBITDA.
The exports stood at Rs.1,263 lakhs in the financial year 2017-18 as compared to Rs.1,018 lakhs in the financial year 2016-17. Though the company is EURO VI compliant, the exports did not increase as anticipated due to a change in market requirements. However, the company is reaching out to many manufacturers in Europe and hopes to improve its exports in the current financial year. The spares sales of the company in the financial year 2017-18 stood at Rs.5,470 lakhs as against Rs.6,328 lakhs in the previous financial year. While there has been a marginal improvement in the offtake of spares by dealers, the offtake by the OEMs had reduced thereby affecting the total spares revenue. The company is constantly striving to increase the spares revenue by extending the dealer network.
The Profit/(Loss) After Tax (PAT) for the financial year 2017-18 stood at (Rs.5,932.27 lakhs) as against Rs.2,569.43 lakhs of the previous financial year. The Companyâs earning per share is âNilâ for the financial year 2017-18 due to the exceptional items of Rs.15,191.85 lakhs which is the write-off of advances and receivables due from Amtec. However, the consolidated financial statements of the company show a profit of Rs.10,122 lakhs with an earning per share of Rs.45.77 as the write-off of advances and receivables from Amtec gets offset in the consolidated financial statements.
To augment its capacity to meet the specific needs of certain customers, the company spent Rs.3,182 lakhs in capital investments in the financial year 2017-18 as compared to Rs.1,837 lakhs spent in the financial year 2016 17. The company continues to lay emphasis on R&D and has spent Rs.1,167 lakhs in the financial year 2017-18 as against an amount of Rs.911 lakhs spent in the previous financial year.
DIRECTORS
Mr. Ram Ramamurthyâs (DIN: 06955444) term as Whole-time Director ends on 3rd September 2018. It is proposed to reappoint him as Whole-time Director for a further period of two years from 4th September 2018 to 3rd September 2020 on a remuneration as set out in the Notice convening the ensuing Annual General Meeting. The Board recommends the reappointment of Mr. Ram Ramamurthy as Whole-time Director as per the terms and conditions laid down in the Notice to the ensuing Annual General Meeting. Appropriate resolutions for the reappointment and remuneration have been set out in detail in the Notice convening the ensuing Annual General Meeting.
Mr. S. Balasubramanian (DIN: 02849971) was appointed Additional Director (non-executive and Independent category) in the Board meeting held on 21st May 2018, subject to the appointment being approved by the shareholders at the ensuing Annual General Meeting. Appropriate resolutions for the appointment has been set out in detail in the Notice convening the ensuing Annual General Meeting. The Board recommends his appointment as Independent Director.
Ms. Rekha Raghunathan (DIN: 00057774) retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for reappointment. Necessary resolution for her re-appointment has been set out in detail in the Notice convening the ensuing Annual General Meeting. The Board recommends her reappointment as Director of the company.
The information on Board meetings, committees of the Board, independent directors, Board diversity, remuneration policy, familiarization program for independent directors and Board evaluation are mentioned in the Corporate Governance Report.
Brief resume/details of Directors who are to be appointed/reappointed as mentioned herein has been furnished along with the explanatory statement in the Notice convening the ensuing Annual General Meeting.
DIRECTORSâ RESPONSIBILITY STATEMENT
In terms of section 134(3)(c) read with section 134(5) of the Companies Act, 2013 the directors to the best of their knowledge and belief and according to information and explanation obtained by them confirm that,
(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to any material departures;
(b) Such accounting policies have been selected and applied consistently and such judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 31st March 2018 and of the profit and loss of the company for the year ended 31st March 2018.
c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) The annual accounts have been prepared on aâgoing concernâ basis.
(e) Proper internal financial controls to be followed by the company have been laid down and such internal financial controls are adequate and are operating effectively.
(f) Proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems are adequate and are operating efficiently.
AUDIT COMMITTEE
The audit committee conforms to the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Mr. S. Natarajan, Dr. V. Sumantran, Dr. M.S. Ananth and Mr. Jayakar Krishnamurthy continue as members of the Audit Committee. Mr. S. Natarajan continues as the Chairman of the Audit committee. The committee met seven times during the year. Detailed disclosure on the terms of reference and meetings are mentioned in the corporate governance report.
STATUTORY AUDITORS
M/s R. Subramanian and Company LLP, Chartered Accountants, Chennai (Registration Number: 004137S/S200041) were appointed statutory auditors of the company for a period of 5 consecutive years commencing from the conclusion of the 31st Annual General Meeting held on 28th September 2017 till the conclusion of the 36th Annual General meeting subject to ratification of their appointment by the shareholders at the Annual General Meeting every year. However, as per the amendment in Section 40 of the Companies Amendment Act 2017, the ratification of the appointment of statutory auditor at the Annual General Meeting every year is not required. Hence the company has not put forth the resolution for the ratification of the appointment of Statutory Auditor in the notice to the ensuing Annual General Meeting.
The emphasis of matter specified in the Independent auditorâs report on the Standalone Financial Statements has been explained in Note No. 37(c) and 32 of the notes to accounts.
SECRETARIAL AUDITOR
Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the company had appointed M/s. P. Sriram & Associates, a firm of practising company secretaries as secretarial auditor of the company to undertake secretarial audit of the company for the financial year 2017-18. The report of the secretarial auditor is given in Annexure-I and forms part of this report. It does not contain any qualification, reservation, adverse remark or disclaimer.
INTERNAL AUDITORS
M/s. P. Chandrasekar, Chartered Accountants, are the internal auditors of the company. Their scope of work is as approved by the audit committee. It includes among other things a review of the operational efficiency, effectiveness of systems and controls in existence, review of the processes to safeguard the assets of the company and assessing the strength of
the internal control in all areas. The internal auditorâs report is discussed with the concerned stakeholders and corrective remedial action are taken on a regular basis in consultation with the audit committee. The internal auditors were present at all audit committee meetings.
COST AUDITOR
The cost audit was conducted for 2017-18 by Mr. V. Kalyanaraman who was appointed as Cost Auditor for the financial year 2017-18. Mr. V. Kalyanaraman was reappointed as cost auditor for the financial year 2018-19 at a remuneration of Rs.5,00,000/- per annum subject to the remuneration being ratified by the shareholders at the ensuing Annual General Meeting. Mr. V. Kalyanaraman has sent his consent for appointment as Cost Auditor for 2018-19.
SUBSIDIARY COMPANIES
The company has two wholly-owned subsidiaries.
Ucal Polymer Industries Limited (UPIL)-UPIL has recorded an increased revenue from operations of Rs.4,972 lakhs in the financial year 2017-18 as against Rs.4,085 lakhs in the financial year 2016-17. The increased revenue can be attributed to the increased offtake by the company which continues to be the major customer of UPIL. The net profit after tax stood at Rs.602 lakhs in the financial year 2017-18 mainly due to this increased offtake and an improvement in operations. A dividend of 50% has been declared by UPIL, for the financial year 2017-18. Transfer of business from other vendors of the company to UPIL is a continuing process and has provided the company an advantage in terms of prices, quality and timeliness of supplies.
Amtec - The revenue from operations of Amtec was Rs.24,288 lakhs in the financial year 2017-18 up from Rs.22,434 lakhs in the financial year 2016-17 thereby recording an increase of 8% in terms of Indian Rupees due to exchange conversion rates though in terms of US dollar, the revenue from operations was $37.40 million during financial year 2017-18 as compared to $34.20 million in the financial year 2016-17 recording an increase of 9%. Amtec has earned a net profit after tax of Rs.306 lakhs during the financial year 2017-18 as against a profit of Rs.282 lakhs in the financial year 2016-17.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements for the year ended 31st March 2018 of the company and its subsidiaries together with the auditorâs report thereon is enclosed. The statement pursuant to sub section(3) of Section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 in the prescribed form AOC-1 relating to the subsidiary companies is given in Annexure-II.
The consolidated results of the company and its subsidiaries show that a net profit after tax of Rs.10,122 lakhs has been achieved during the financial year 2017-18 as against Rs.3,586 lakhs in the financial year 2016-17 as the write-off of Rs.15,191.85 lakhs due from Amtec in the standalone financial statements gets off-set in the consolidated financial statements. The consolidated financial statements of 2017-18 have been prepared taking into account the audited financial statements of Amtec and UPIL, USA Inc., for the financial year 2017-18 and all adjustments have been given effect to in the consolidated statements. The increased profit also reflects the better performance of all the companies in terms of revenue and operations.
In terms of section 136 of the Companies Act, 2013 the company has not attached the financial statements of the subsidiary companies. However, the financial information of the subsidiary companies are disclosed in the annual report. The annual accounts, reports and other documents of the subsidiary companies will be available for inspection during business hours, by any shareholder of the company at the registered office of the company and also at the registered office of the concerned subsidiary and has also been posted on the website of the company www.ucalfuel.com. The annual accounts, reports and other documents of the subsidiary companies will be dispatched to the shareholders upon receipt of a request from them.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The companyâs CSR activities continue in the field of education, sports, health, sanitation and preservation of culture and heritage through the two implementation agencies. The projects are in accordance with Schedule VII of the Companies Act, 2013. The aim is âTo be a responsible corporate citizen by contributing to the wellbeing of the society at large keeping in mind the national vision of ensuring a healthy, educated and a poverty-free India and to protect the culture and heritage of this great ancient landâ. The constitution of the CSR committee and the other details are mentioned in the corporate governance report. The annual report of the CSR activities carried out during the financial year 2017-18 is given in Annexure-III.
PUBLIC DEPOSITS
During the financial year 2017-18, the company has not accepted any deposits from the public within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules 2014 and there is no outstanding amount on account of principal or interest on deposits from public as on date.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
The company has an efficient internal control system commensurate with its size and nature of business to safeguard the assets of the company and to ensure effective utilisation of resources. These controls ensure that transactions are completed on time and in an accurate manner and by following proper procedures and systems. The internal auditors cover a wide area of operations and this is being continuously reviewed by the audit committee. Internal audit is conducted on a quarterly basis by a team of internal auditors and the reports together with the action taken reports are reviewed by the audit committee periodically. A system of management controls is also in place to ensure higher levels of efficiency and to keep the organisation competitive. All the critical functions of the company i.e., Sourcing and Procurement, Manufacturing, Costing, Finance, Dispatch and Sales are handled through Oracle system which is well-integrated. Checks and controls have been built into the system to handle the transactions. Existing internal controls provide adequate assurance to the management for all the transactions covering operations, inventory, fixed assets, financial records and compliance to statuary requirements. The systems and controls are reviewed periodically to ensure their effectiveness. The Board has adopted various policies like Material Subsidiary Policy, Whistle Blower Policy, Related Party transactions Policy to safeguard the assets of the company, to ensure timely information and to prevent and detect frauds and errors.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE, EARNINGS AND OUTGO
Information required under Section 134(3)(m)of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014, on energy conservation, technology absorption, foreign exchange earnings and outgo is given in Annexure-IV.
EXTRACT OF ANNUAL RETURN
An extract of Annual Return in form MGT-9 is given in Annexure-V and forms part of this report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Particulars of loans and advances given, guarantees given, securities provided and investments made are provided in the Note Nos. 3, 4, 10 and 44 of the notes to accounts of the Standalone Financial Statements.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments in the operations of the company affecting the financial position of the company have occurred between the end of the financial year of the company to which the financial statements relate and the date of the Boardâs report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The company did not enter into any material transaction with any related party which may have potential conflict with the interest of company at large during the financial year 2017-18 as per Section 188 of Companies Act, 2013. All transactions entered into with related parties were at an armâs length basis and in the ordinary course of business. Form AOC-2 as required under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014, is given in Annexure-VI and forms part of this report. The companyâs related party transactions have been made to meet the requirements of operations and at an armâs length basis and have been entered in the ordinary course of business.
CHANGE IN NATURE OF BUSINESS
There was no change in the nature of business of the company during the year under review.
REGULATORY/COURT ORDERS
During the year 2017-18 no significant and material orders were passed by the courts, regulators or tribunals affecting the going concern status of the company and its future operations.
PARTICULARS OF EMPLOYEES
Mr. Jayakar Krishnamurthy, Chairman and Managing Director, Mr. Ram Ramamurthy, Whole-time Director and Chief Financial Officer, Ms. Rekha Raghunathan, Director and Company Secretary hold the office of key managerial personnel of the company. The Information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 in respect of directors, key managerial personnel and employees are given in Annexure-VII.
INDUSTRIAL RELATIONS
During the year cordial and healthy relations were maintained with all sections/levels of employees.
WHISTLE BLOWER POLICY
The company has a whistle blower policy to deal with instances of fraud and mismanagement. The details are explained in the Corporate Governance Report and are also posted on the companyâs website www.ucalfuel.com.
SEXUAL HARASSMENT POLICY
The company has in place a policy for prevention of sexual harassment. An internal committee has been set up at each plant to redress sexual harassment complaints. All employees are covered under this policy. No complaint was received during the financial year 2017-18.
RISK MANAGEMENT POLICY
Key business risks are identified and reviewed on a regular basis. A strategy development committee has been formed to strategise on ways to mitigate the various risks. The necessary actions and precautions are taken on time to deal with various risks associated with the company and the Board discusses the same from time to time. The details are given in Corporate Governance Report.
PREVENTION OF INSIDER TRADING
The company has framed a code of conduct for prevention of insider trading based on SEBI (prohibition of insider trading) Regulations, 2015. This code is applicable to all the board members/employees/officers of the company. This ensures prevention of dealing with shares by people who have access to unpublished price sensitive information.
CORPORATE GOVERNANCE
The company adheres to all the requirements of the code of corporate governance as stipulated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on corporate governance along with certification of the Chairman and Managing Director and the Whole-time Director and Chief Financial Officer is attached in Annexure-VIII. Certificate from the Statutory Auditor regarding compliance of the conditions of corporate governance as stipulated by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given in Annexure-IX. The Management Discussion and Analysis Report is attached in Annexure-X.
STATEMENT ON COMPLIANCE TO APPLICABLE SECRETARIAL STANDARD
The company has complied with all the applicable secretarial standards as issued by the Institute of Company Secretaries of India during the year 2017-18.
ACKNOWLEDGEMENT
The Board thanks all its employees, customers, bankers, vendors, suppliers and governmental agencies for their continued support. The Board is grateful to the shareholders for their continued trust and confidence in the company.
For and on behalf of the Board
Place: Chennai JAYAKAR KRISHNAMURTHY
Date: 29th August 2018 CHAIRMAN AND MANAGING DIRECTOR
Mar 31, 2014
Dear Members,
The Directors hereby present the Twenty Eighth Annual Report together
with the audited accounts of the company for the year ended 31st March
2014.
FINANCIAL HIGHLIGHTS
The performance of the company for the year ended 31st March 2014 is as
follows:
(Rs. in lakhs)
For the year ended
Particulars 31.03.2014 31.03.2013
Gross Revenue 52,682 57,084
Net Revenue (excluding Excise Duty) 46,563 50,435
Total Expenditure 40,333 43,756
Operating Income 6,230 6,679
Other Income 100 123
Profit before Interest, Tax & Depreciation 6,330 6,802
Interest 2,983 3,197
Deferred Revenue Expenses 417 417
Depreciation 1,923 1,925
Profit before Tax & Exceptional item 1,007 1,263
Tax Expense 185 305
Profit after Tax/Net Profit 822 958
Balance of profit brought forward
from last year 8,815 8,316
Amount Available for Appropriations 9,637 9,274
Appropriations:
Transfer to General Reserve 200 200
Dividend 221 221
Tax on Dividend 33 38
Balance Carried to Balance Sheet 9,183 8,815
DIVIDEND
The Board recommends a dividend of 10% i.e. Rs. 1 per equity share,
aggregating to Rs. 221 lakhs (exclusive of tax on dividend) for the
financial year 2013-2014.
TRANSFER TO GENERAL RESERVE
A sum of Rs. 200 lakhs has been transferred to the general reserve of the
company for the financial year 2013-2014.
PERFORMANCE
The turnover of the company decreased by 8% from Rs. 50,435 lakhs in the
financial year 2012-2013 to Rs. 46,563 lakhs in the financial year
2013-2014. This was mainly because of the continued recessionary trend
in the auto sector and consequent low off take by the customers. This
decrease in turnover was in spite of the efforts put in by the
management to identify new markets and new business. The Earnings
before Interest, Tax and Depreciation (EBITDA) also decreased from Rs.
6,802 lakhs in the financial year 2012-2013 to Rs. 6,330 lakhs in the
financial year 2013-2014. The decrease can be mainly attributed to the
reduction in the volume of business and the high fixed expenditure
cost.
In spite of considerable efforts the exports reduced to Rs. 2,069 lakhs
during the financial year 2013-2014 from Rs. 2,589 lakhs in the financial
year 2012-2013. This decrease is again a reflection of the global
trends in the auto sector. The spares sales of the company during the
financial year 2013-2014 was Rs. 3,164 lakhs as against that of Rs. 3,048
lakhs in the financial year 2012-2013 showing a marginal increase.
The Profit After Tax (PAT) for 2013-2014 was less than that of the
financial year 2012-2013 by 14%. The Company''s earning per share was Rs.
3.72 during the financial year 2013-2014.
The economy continued its downward trend in 2013-2014 and the
automobile segment did not show any signs of improvement. The company''s
manufacturing plants worked at less than optimum capacity as the
customer off take was low. However the company''s efforts to cut costs
through various new initiatives, close monitoring and control of
projects and steps to increase productivity continued unabated during
the financial year 2013-2014. Rearranging the production facilities did
yield some savings in the form of increased efficiency of operations
but that was not substantial enough to make up for the low off take and
the constant demand by the customer for price discounts. The supply
chain management continued to be a challenge in terms of price and
quality.
The reduced turnover resulted in a limited capital expenditure in
2013-2014 keeping in mind the low demand in the automobile segment. The
company continued its emphasis on updating its facilities and spent Rs.
534 lakhs in capital investments in the financial year 2013-2014 as
compared to Rs. 734 lakhs spent in the financial year 2012-2013. The
company strengthened its R&D by spending Rs. 907 lakhs on R&D in the
financial year 2013-2014 as against an amount of Rs. 1,013 lakhs spent in
the previous financial year.
DIRECTORS
Mr.R.Sundararaman stepped down as Joint Managing Director on
01.04.2014. The Board places on record its appreciation for the
services rendered by him during his tenure. Mr.R.W.Khanna''s nomination
as director was withdrawn by Exim bank and he ceased to be Nominee
Director with effect from 23.01.2014. In his place Exim Bank nominated
Mr K.Ajit Kumar and he was appointed Nominee Director with effect from
23.01.2014. Subsequently Exim Bank withdrew his nomination too and he
ceased to be Nominee Director with effect from 19.06.2014. The Board
places on record its appreciation for the services rendered by
Mr.R.W.Khanna and Mr.K.Ajit Kumar during their tenure as Directors. Mr.
S.Muthukrishnan did not seek re-appointment at the previous Annual
General Meeting.
The Board in its meeting held on 30th August 2014 appointed Mr.Ram
Ramamurthy as Additional Director with immediate effect. His
appointment will be confirmed at the ensuing Annual General Meeting of
the company. Subject to the approval of the shareholders and Central
Government, the Board also appointed Mr.Ram Ramamurthy as Whole time
Director for a period of two years with effect from 4th September 2014.
Apppropriate resolutions for his appointment and remuneration have been
set out in the Notice convening the Annual General Meeting.
Mr.S. Natarajan retires by rotation and being eligible offers himself
for reappointment. However in terms of Section 149 of the Companies Act
2013, Mr.S.Natarajan, Dr.V.Sumantran and Dr.M.S.Ananth are seeking
appointment as Independent Directors for a consecutive term of five
years from the conclusion of this Annual General Meeting.
Brief resume/details of Directors who are to be appointed/reappointed
as mentioned herein has been furnished along with the explanatory
statement in the Notice convening the Annual General Meeting.
Padma Vibhushan Dr. V. Krishnamurthy continues to guide the management
in all areas and the Board is grateful to him for his continued
guidance and support.
AUDITORS
The statutory auditors of the company M/s. G Balu Associates, Chartered
Accountants, Chennai, will retire at the conclusion of the ensuing
Annual General Meeting and being eligible offer themselves for
reappointment. The necessary resolutions in this regard will be passed
at the ensuing Annual General Meeting. The company has received a
certificate from the auditors to the effect that their reappointment if
made will be in accordance with the provisions of the Companies Act,
2013. The auditors have also confirmed that they hold a Peer Review
Certificate issued by the Peer Review Board of the Institute of
Chartered Accountants of India. Mr. V. Kalyanaraman was appointed cost
auditor of the company for the financial years 2013-2014 and 2014-2015.
The cost audit report for the financial year 2013-2014 will be filed
within the due date. The company has however come out of the purview of
cost audit for the year 2014-2015.
AUDIT COMMITTEE
Dr.V.Sumantran was appointed member of the audit committee on
11.08.2014. Mr. S.Natarajan, Dr. M.S. Ananth and Mr. Jayakar
Krishnamurthy continue to be the other members of the Audit Committee.
Mr. S.Natarajan continues as Chairman of the Audit committee. The
committee met five times during the year.
SUBSIDIARY COMPANIES
The company has two wholly owned subsidiaries.
Ucal Polymer Industries Limited (UPIL) - UPIL continues to perform well
and support the company by expanding its scope of supply of plastic and
rubber components to the company. The turnover for the financial year
2013-2014 was Rs. 2,598 lakhs compared to that of Rs. 2,357 lakhs in the
financial year 2012-2013. The net profit after tax was higher at Rs. 248
lakhs in the financial year 2013-2014 thereby recording an increase of
9% as against Rs. 228 lakhs in the financial year 2012-2013. This has
been achieved mainly due to the introduction of new products and
improved efficiency of operations. A dividend of 20% has been declared
by UPIL. UPIL''s objective of expanding its customer profile beyond UCAL
Fuel Systems Limited (UFSL) is proceeding at a rather slow pace but its
attempts to diversify its product portfolio has succeeded to a large
extent in the financial year 2013-14.
Amtec Precision Products Inc, USA (Amtec) - The turnover of Amtec was Rs.
17,561 lakhs during the financial year 2013-2014 up from Rs. 14,832 lakhs
in the financial year 2012-2013 thereby recording an increase of 18% in
rupee terms. In US dollar terms, the turnover was $ 37.51 million
during financial year 2013-2014 compared to $ 29.01 million in the
financial year 2012-2013 showing an increase of 9%. Amtec has earned a
cash profit of Rs. 400 lakhs during the financial year 2013-2014. The
company''s growth has been reasonable considering the fact that the
global auto industry had not really picked up in 2013-2014. Amtec''s
efforts to gain entry into original equipment manufacturers and Tier 1
suppliers by obtaining minority certification did not materialize to
the extent expected in the financial year 2013-2014. This is in spite
of the fact that Amtec enjoys a high credibility amongst its customers.
Capacity utilization continues to be low and in addition Amtec has not
been able to take advantage of low cost sourcing from India. The
employee costs continues to be high and an increase in the customer
portfolio seems to be the only solution to increase profitability.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements for the year ended 31st March
2014 of the company and its subsidiaries together with the auditor''s
report thereon is enclosed. The statement pursuant to Section 212 of
the Companies Act, 1956 relating to the subsidiary companies forms a
part of the accounts. A summary of the key financials of the company''s
subsidiaries is also included in the Annual Report.
The consolidated results of the company and its subsidiaries show that
a net profit after tax of Rs. 685 lakhs has been achieved during the
financial year 2013-2014 as against that of Rs. 598 lakhs in the
financial year 2012-2013. Efforts are on to improve the overall
performance of the company and its subsidiaries in all respects.
The Ministry of Corporate Affairs vide its General Circular No. 2/2011
dated February 8, 2011 has granted a general exemption subject to
certain conditions to holding companies from complying with the
provisions of Section 212(1) of the Companies Act, 1956 which requires
the attaching of the balance sheet, profit and loss statement and other
documents of its subsidiary companies to its Annual Report. The Board
in its meeting held on 30th August 2014 passed the necessary resolution
for complying with all the conditions regarding the circulation of the
annual report of the company without attaching all the documents of the
subsidiary companies referred to in Section 212(1) of the Companies
Act, 1956. Accordingly, the said documents are not being included in
this Annual Report. The annual accounts, reports and other documents of
the subsidiary companies will be available for inspection during
business hours, by any shareholder of the company at the registered
office of the company and also at the registered office of the
concerned subsidiary. The annual accounts, reports and other documents
of the subsidiary companies will be despatched to the shareholders upon
receipt of a request from them.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 217(2AA) of the Companies Act,
1956 , the Directors confirm that,
(a) In the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(b) Such accounting policies have been selected and applied
consistently and such judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year 31st March
2014 and of the profit of the company for the year ended 31st March
2014;
(c) 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;
(d) The annual accounts have been prepared on a "going concern" basis.
FIXED DEPOSITS
The company has not accepted any fixed deposits from the public during
the financial year 2013-2014 and there is no outstanding fixed deposit
as on date.
PERSONNEL
Particulars of employees as required under sub-section (2A) of Section
217 of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 form a part of this report. In terms of section
219(1)(b)(iv) of the Companies Act 1956, the Annual Report and accounts
are being sent to the shareholders of the company excluding the
statement of particulars of employees under section 217(2A) of the
Companies Act 1956. The statement will be available for inspection by
the shareholders at the registered office of the company during
business hours. Any shareholder interested in obtaining such statement
may write to the Company Secretary at the registered office of the
company.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information required under Section 217(1) (e) of the Companies Act 1956
read with the Companies (Disclosure of Particulars in the report of the
Board of Directors) rules 1988, on energy conservation, technology
absorption, foreign exchange earnings and outgo, is given in Annexure-A
and forms an integral part of this report.
CORPORATE GOVERNANCE
The Company adheres to all the requirements of the code of corporate
governance as stipulated in clause 49 of the listing agreement with the
stock exchanges as well as to the standards set by the Securities and
Exchange Board of India. A report on corporate governance along with
certification of the chairman and managing director and the chief
financial officer is attached in Annexure-B. A certificate from the
auditors of the company regarding compliance of the conditions of
corporate governance as stipulated by clause 49 of the listing
agreement is attached in Annexure-C. The Management Discussion and
Analysis Report is attached in Annexure-D.
ACKNOWLEDGEMENT
The Board acknowledges with gratitude the support of its employees,
customers and bankers, the cooperation of its vendors and suppliers and
the assistance of governmental agencies. The Board is particularly
grateful to the shareholders for continuing to repose their confidence
in the company.
For and on behalf of the Board
Place : Chennai JAYAKAR KRISHNAMURTHY
Date:30.08.2014 Chairman and Managing Director
Mar 31, 2013
The Directors hereby present the Twenty Seventh Annual Report together
with the audited accounts of the company for the year ended 31st March
2013.
FINANCIAL HIGHLIGHTS
The performance of the company for the year ended 31st March 2013 is as
follows:
(Rs.in lakhs)
For the year ended
Particulars 31.03.2013 31.03.2012
Gross Revenue 57,084 57,905
Net Revenue (excluding Excise Duty) 50,435 52,502
Total Expenditure 43,756 44,139
Operating Income 6,679 8,363
Other Income 123 210
Profit before Interest, Tax & Depreciation 6,802 8,573
Interest 3,197 3,018
Deferred Revenue Expenses 417 417
Depreciation 1,925 2,144
Profit before Tax & Exceptional item 1,263 2,994
Tax Expense 305 726
Profit after Tax/Net Profit 958 2,268
Balance of profit brought
forward from last year 8,316 7,476
Amount Available for Appropriations 9,274 9,744
Appropriations:
Transfer to General Reserve 200 400
Dividend 221 885
Tax on Dividend 38 143
Balance Carried to Balance Sheet 8,815 8,316
DIVIDEND
The Board recommends a dividend of 10% i.e. Rs. 1 per equity share,
aggregating to Rs. 221 lakhs (exclusive of tax on dividend) for the
financial year 2012-2013.
TRANSFER TO GENERAL RESERVE
A sum of Rs. 200 lakhs has been transferred to the general reserve of the
company for the financial year 2012-2013.
PERFORMANCE
The turnover of the company decreased by 4% from Rs. 52,502 lakhs in the
financial year 2011-2012 to Rs. 50,435 lakhs in the financial year
2012-2013. This was mainly due to the depressed demand in the auto
sector and consequent low offtake by the customers. The Earnings before
Interest, Tax and Depreciation (EBITDA) also decreased from Rs. 8,573
lakhs in the financial year 2011-2012 to Rs. 6,802 lakhs in the financial
year 2012-2013. The decrease can be attributed to increase in the cost
of inputs and the unceasing pressure from customers to reduce prices in
spite of spiraling material, power, labour and interest costs. The
unprecedented power cuts in Tamil Nadu had resulted in extensive use of
diesel power to maintain production and this added to the manufacturing
cost substantially thereby leading to decreased EBITDA. To overcome the
huge power cost, the company has installed a dedicated feeder line and
purchases power through the exchange.
In spite of considerable efforts the exports reduced to Rs. 2,589 lakhs
during financial year 2012-2013 from Rs. 3,734 lakhs in the financial
year 2011-2012. This decrease was due to the recessionary conditions in
the international markets.
The spares sales of the company during the financial year 2012-2013 was
Rs. 3,048 lakhs as against that ofRs. 2,652 lakhs in the financial year
2011-2012.
The Profit After Tax (PAT) for 2012-2013 was substantially less than
that of the financial year 2011-2012 by 58%. The Company''s earning per
share was Rs. 4.33 during the financial year 2012-2013.
Given that the situation in 2013-2014 is not likely to be any better as
the economy has shown no signs of revival till now, the company has
launched a massive program to cut costs, increase productivity and
intensify marketing efforts. Efforts are also on to secure better
prices from the customers for the existing products due to rising
costs. With the commissioning of the Bawal plant there has been a
rearrangement of production facilities between plants to minimize
costs. The operations at Gurgaon stand shifted to Bawal. The operations
of the Export Oriented Unit at Ambattur which was essentially catering
to the requirements of Am tec has dried up and it is proposed to shift
the machineries there to another export oriented unit at Maraimalai
nagar. The rearrangement of facilities will help in streamlining
production and lead to increased efficiency of operations. Efforts are
on to streamline the supply chain and reduce/strengthen the
subcontractors and vendors.
The reduced turnover resulted in a very cautious approach with regard
to capital expenditure in 2012-2013. The company spent only Rs. 734 lakhs
in capital investments in the financial year 2012-2013 as compared to Rs.
4,601 spent in the financial year 2011-2012. The company continued its
emphasis on R&D and spentRs. 1,013 lakhs on R&D in the financial year
2012-2013.
DIRECTORS
In accordance with the Articles of Association of the company
Mr.S.Muthukrishnan retires by rotation at the forthcoming Annual
General Meeting. Mr. S. Muthukrishnan had informed the board of his
intention not to seek reappointment at the ensuing Annual General
Meeting due to health reasons. Consequently no resolution is placed for
his reappointment in the current Annual General Meeting.
Mr.S.Muthukrishnan is the founder director of UCAL Fuel Systems
Limited. It was under his leadership that UCAL Fuel Systems Limited
developed into a world class supplier of auto components. The
foundations laid by him have sustained the company in the most
difficult times. The Board is grateful to Mr.S. Muthukrishnan for his
leadership and guidance through the years.
Dr.V.Sumantran also retires by rotation at the ensuing Annual General
Meeting and being eligible offers himself for reappointment. Brief
resume/details of Dr.V.Sumantran who is to be reappointed as mentioned
herein has been furnished in the Notice convening the Annual General
Meeting.
The Board is grateful to Padma Vibhushan Dr. V. Krishnamurthy who
spends a considerable portion of his time with the company, guiding it
in all areas.
AUDITORS
The statutory auditors of the company M/s. G Balu Associates, Chartered
Accountants, Chennai, will retire at the conclusion of the ensuing
Annual General Meeting and being eligible offer themselves for
reappointment. The necessary resolutions in this regard will be passed
at the ensuing Annual General Meeting. The company has received a
certificate from the auditors to the effect that their reappointment if
made will be in accordance with the provisions of Section 224( IB) of
the Companies Act, 1956. The auditors have also confirmed that they
hold a Peer Review Certificate issued by the Peer Review Board of the
Institute of Chartered Accountants of India. Mr. V. Kalyanaraman was
appointed as cost auditor for financial year 2012-2013. The company
will be filing the cost audit report for the year ended 31st March 2013
before the due date of 30th September 2013. Based on the
recommendations of audit committee the Board has reappointed Mr. V.
Kalyanaraman as cost auditor of the company for the financial years
2013-2014 and 2014-2015.
AUDIT COMMITTEE
Mr. S.Natarajan, Dr. M.S. Ananth and Mr. Jayakar Krishnamurthy continue
to be the members of the Audit Committee. Mr. S.Natarajan continues as
Chairman of the Audit committee. The committee met 4 times during the
year.
SUBSIDIARY COMPANIES
The company has two wholly owned subsidiaries.
Ucal Polymer Industries Limited (UPIL) Â UPIL continues to be a steady
supplier to the company of plastic and rubber components. The turnover
for the financial year 2012-2013 was Rs. 2,357 lakhs compared to that of
Rs. 2,347 lakhs in the financial year 2011-2012. The net profit after tax
was higher at Rs. 228 lakhs in the financial year 2012-2013 thereby
recording an increase of 44% as against Rs. 159 lakhs in the financial
year 2011-2012. This has been achieved mainly due to the
rationalization of operations and vendors. A dividend of 10% has been
declared by UPIL. The dividend remains modest as the company is
planning to invest in revamping its facilities in the current year. One
main concern is to expand the customer profile beyond UCAL Fuel Systems
Limited and efforts are on in this direction. The company is also
attempting to diversify its product portfolio to emerge as one of the
leading suppliers of sophisticated and precision products of rubber and
plastic.
Amtec Precision Products Inc, USA (Amtec) Â The turnover of Amtec was Rs.
14,832 lakhs during the financial year 2012-13 down from Rs. 15,716 lakhs
in the financial year 2011-2012 thereby recording a decrease of 6%.
Amtec has earned a cash profit of Rs. 175 lakhs during the financial year
2012-2013. The company has not shown the desired growth due to the
stagnating US economy. The molded product division was shifted nearer
to the precision product division during the year. This has led to
increased supervision and reduced costs. During the year Amtec obtained
a minority certification in US which opens new possibilities of
securing orders. The minority certification will immensely help Amtec
to gain entry into original equipment manufacturers and Tier 1
suppliers as there is a mandate for these companies to award a certain
percentage of their business to minority suppliers. Also with the US
economy picking up there is every possibility that Amtec will post
better results in 2013-2014. Rising employee costs is also a concern at
Amtec which will get evened out only if the customer portfolio
increases.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements for the year ended 31st March
2013 of the company and its subsidiaries together with the auditor''s
report thereon is enclosed. The statement pursuant to Section 212 of
the Companies Act, 1956 relating to the subsidiary companies forms a
part of the accounts. A summary of the key financials of the company''s
subsidiaries is also included in the Annual Report.
The consolidated results of the company and its subsidiaries show that
a net profit after tax ofRs. 598 lakhs has been achieved during the
financial year 2012-2013 as against that ofRs. 2,392 lakhs in the
financial year 2011-2012. The economic recession was felt both in the
domestic operations and in Amtec. The expected increase in customer
offtake did not materialize and there was a time lag in cutting down
costs corresponding to the customer off take which has led to reduced
profits. This situation of low demand is being used by the company and
Amtec to streamline their operations and costs and diversify their
product mix.
The Ministry of Corporate Affairs vide its General Circular No. 2/2011
dated February 8,2011 has granted a general exemption subject to
certain conditions to holding companies from complying with the
provisions of Section 212( 1) of the Act which requires the attaching
of the balance sheet, profit and loss statement and other documents of
its subsidiary companies to its Annual Report. The Board in its meeting
held on 2nd September 2013 passed the necessary resolution for
complying with all the conditions regarding the circulation of the
Annual Report of the company without attaching all the documents of the
subsidiary companies referred to in Section 212(1) of the Act.
Accordingly, the said documents are not being included in this Annual
Report. The annual accounts, reports and other documents of the
subsidiary companies will be available for inspection during business
hours, by any shareholder of the company at the registered office of
the company and also at the registered office of the concerned
subsidiary. The annual accounts, reports and other documents of the
subsidiary companies will be despatched to the shareholders upon
receipt of a request from them.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, the Directors confirm that,
(a) In the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
(b) Such accounting policies have been selected and applied
consistently and such judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year 31st March
2013 and of the profit of the company for the year ended 31st March
2013;
(c) 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;
(d) The annual accounts have been prepared on a "going concern" basis.
FIXED DEPOSITS
The company has not accepted any fixed deposits from the public during
the financial year 2012-2013 and there is no outstanding fixed deposit
as on date.
PERSONNEL
Particulars of employees as required under sub-section (2A) of Section
217 of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 form a part of this report. In terms of section
219(l)(b)(iv) of the Companies Act 1956, the Annual Report and accounts
are being sent to the shareholders of the company excluding the
statement of particulars of employees under section 217(2A) of the
Companies Act 1956. The statement will be available for inspection by
the shareholders at the registered office of the company during
business hours. Any shareholder interested in obtaining such statement
may write to the Company Secretary at the registered office of the
company.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information required under Section 217( 1) (e) of the Companies Act
1956 read with the Companies (Disclosure of Particulars in the report
of the Board of Directors) rules 1988, on energy conservation,
technology absorption, foreign exchange earnings and outgo, is given in
Annexure-A and forms an integral part of this report.
CORPORATE GOVERNANCE
The Company adheres to all the requirements of the code of corporate
governance as stipulated in clause 49 of the listing agreement with the
stock exchanges as well as to the standards set by the Securities and
Exchange Board of India. A report on corporate governance along with
certification of the chairman and managing director and the chief
financial officer is attached in Annexure-B. A certificate from the
auditors of the company regarding compliance of the conditions of
corporate governance as stipulated by clause 49 of the listing
agreement is attached in Annexure-C. The Management Discussion and
Analysis Report is attached in Annexure-D.
ACKNOWLEDGEMENT
The Board acknowledges with gratitude the support, cooperation and
assistance of all its stakeholders: - the customers, the bankers, the
suppliers and vendors, the governmental agencies, the employees and
more importantly the shareholders.
For and on behalf of the Board
Place : Chennai JAYAKAR KRISHNAMURTHY
Date : 02.09.2013 Chairman and Managing Director
Mar 31, 2012
The Directors have pleasure in presenting the Twenty Sixth Annual
Report together with the audited accounts of the company for the year
ended 31st March 2012.
FINANCIAL HIGHLIGHTS
The performance of the company for the year ended 31st March 2012 is as
follows:
(Rs. in lakhs)
For the year ended
Particulars 31.03.2012 31.03.2011 % Change
Gross Revenue 57,905 52,600 10
Net Revenue (excluding Excise Duty) 52,502 48,154 9
Total Expenditure 44,139 40,069 10
Operating Income 8,363 8,085 3
Other Income 210 85 147
Profit before Interest, Tax
& Depreciation 8,573 8,170 5
Interest 3,018 2,725 11
Deferred Revenue Expenses 417 417 -
Depreciation 2,144 2,357 (9)
Profit before Tax & Exceptional item 2,994 2,671 12
Tax Expense 726 450 -
Profit after Tax/Net Profit 2,268 2,221 2
Balance of profit brought forward
from last year 7,476 6,698 12
Amount Available for Appropriations 9,744 8,919 -
Appropriations:
Transfer to General Reserve 400 415 (4)
Dividend 885 885 -
Tax on Dividend 143 143 -
Balance Carried to Balance Sheet 8,316 7,476 -
DIVIDEND
The Board is pleased to recommend a dividend of 40% i.e. Rs.4 per
equity share, aggregating to Rs. 885 lakhs (exclusive of tax on
dividend) for the financial year ended 2011-2012.
TRANSFER TO GENERAL RESERVE
A sum of Rs.400 lakhs has been transferred to the general reserve of
the company for the financial year 2011-2012.
PERFORMANCE
The turnover of the company during the financial year 2011-2012
increased to Rs.52,502 lakhs from Rs.48,154 lakhs in the previous
financial year thereby recording an increase of 9%. The Earnings before
Interest, Tax and Depreciation (EBITDA) increased by 5% to touch a
level of Rs.8,573 lakhs from that of Rs.8,170 lakhs of the previous
financial year. The increase in EBITDA has been much lower than
expected due to various reasons like increased input cost especially
that of steel and aluminum, inability to pass the increased cost to the
customer, increased labour cost due to attrition, increased power cost
and increased finance cost due to enhancement of interest rates and
availment of further borrowings to meet the capital expenditure. The
company's earning per share was Rs. 10.26 during the financial year
2011-2012. The exports reduced to Rs.3,734 lakhs during financial year
2011-2012 from Rs.5,189 lakhs in the previous financial year. This
decrease was due to the reduced offtake by the customer. After market
sales of the company during the financial year 2011-2012 was Rs. 1,091
lakhs as against that of Rs. 1,103 lakhs in the previous year. The
company has despite certain adverse factors been able to maintain the
Profit after Tax (PAT) at the same level as that of the previous
financial year mainly because of its efforts at improving operational
efficiency. In 2012-2013 further improvements are being attempted to
increasee EBITDA through reduced levels of inventory, rationalization
of vendors and continuous value engineering of the products. All
leading automobile manufacturers have either set up a base in India or
expanded their existing operations in India in the recent years in
spite of a general slowdown and the company hopes to take advantage of
this development in the future years.
PROJECTS
The company has invested Rs 4,601 lakhs in capital expenditure during
the financial year 2011-2012 as compared to that of Rs 4,216 lakhs
during the financial year 2010-2011. The manufacturing facility at
Bawal is almost complete and most of the operations at the Gurgaon
facility have been shifted to Bawal, Haryana. It is proposed to make
Bawal, the company's headquarters in North India. The company has
introduced fully automated manufacturing lines at Bawal for the very
first time and machinery and equipment are in the process of being
procured for which substantial capital expenditure is to be incurred in
the current financial year 2012-2013. The first phase of construction
is also complete at the facility in Mahindra City, Chengalpattu and
operations have commenced on a small scale. The company is in the
process of securing export orders .
DIRECTORS
Mr. P.P.R. Rao completed his term of three years as Executive Director
on 25.9.2011 and ceased to be a director from that day onwards. The
Board wishes to place on record its appreciation and gratitude for the
excellent services rendered by Mr. P.P.R. Rao during his tenure.
In accordance with the Articles of Association of the company,
Mr.S.Natarajan and Dr.M.S.Ananth, retire by rotation at the ensuing
Annual General Meeting and being eligible offer themselves for
reappointment. Brief Resume/details of the directors who are to be
reappointed as mentioned herein have been furnished along with the
explanatory statement in the Notice convening the Annual General
Meeting.
Padma Vibhushan Dr. V. Krishnamurthy continues to guide the Board in
all major policy decisions and the Board is grateful to him for his
support.
AUDITORS
M/s. G Balu Associates, Chartered Accountants, Chennai, Auditors of the
company will retire at the conclusion of the ensuing Annual General
Meeting and being eligible offer themselves for reappointment. The
company has received a certificate from the auditors to the effect that
their reappointment if made will be in accordance with the provisions
of Section 224( 1B) of the Companies Act 1956. The auditors have also
confirmed that they hold a Peer Review Certificate issued by the Peer
Review Board of the Institute of Chartered Accountants of India. Mr. V.
Kalyanaraman has been appointed as cost auditor of the company for the
financial year 2012-2013.
CHIEF FINANCIAL OFFICER
Mr. Jayakar Krishnamurthy relinquished his additional portfolio as
Chief Financial Officer of the company with the appointment of Mr.N.
Gnanasambandan, Vice President - Finance, as the Chief Financial
Officer of the company with effect from 8th May 2012.
AUDIT COMMITTEE
Mr. S.Natarajan, Dr. M.S. Ananth and Mr. Jayakar Krishnamurthy continue
to be the members of the Audit Committee. Mr. S.Natarajan continues as
Chairman of the Audit committee.
SUBSIDIARY COMPANIES
The company has two wholly owned subsidiaries.
Ucal Polymer Industries Limited (UPIL) Ã The operations of UPIL
continue to be steady. The turnover for the financial year 2011-2012
was Rs.2,347 lakhs up by 34% compared to that of Rs.1,750 lakhs of the
previous financial year. The net profit after tax was higher at Rs. 159
lakhs recording a growth of 81% as against Rs.88 lakhs of the previous
financial year. A dividend of 10% has been declared by UPIL. UPIL is
actively working to enhance its customer base and go beyond UCAL Fuel
Systems Limited.
Amtec Precision Products Inc, USA (Amtec) Ã The turnover of the company
was Rs. 15,716 lakhs during the financial year 2011-2012 up from
Rs.13,265 lakhs of the previous financial year thereby recording an
increase of 18%. Amtec has earned a cash profit of Rs. 684 lakhs during
the current financial year.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements for the year ended 31st March
2012 of the company and its subsidiaries together with the auditor's
report thereon is enclosed. The statement pursuant to Section 212 of
the Companies Act, 1956 relating to the subsidiary companies forms a
part of the accounts. A summary of the key Financials of the company's
subsidiaries is also included in the Annual Report.
The consolidated results of the company and its subsidiaries show that
a net profit after tax of Rs.2,392 lakhs has been achieved during the
financial year 2011-2012 as against Rs. 1,926 lakhs in the previous
financial year. This can be attributed to an improvement in the
operations of both the subsidiaries.
The Ministry of Corporate Affairs vide its General Circular No. 2/2011
dated February 8, 2011 has granted a general exemption subject to
certain conditions to holding companies from complying with the
provisions of Section 212(1) of the Act which requires the attaching of
the balance sheet, profit & loss account and other documents of its
subsidiary companies to its Annual Report. The Board in its meeting
held on 10th August 2012 passed the necessary resolution for complying
with all the conditions regarding the circulation of the Annual Report
of the company without attaching all the documents of the subsidiary
companies referred to in Section 212(1) of the Act. Accordingly, the
said documents are not being included in this Annual Report. The annual
accounts, reports and other documents of the subsidiary companies will
be available for inspection during business hours, by any shareholder
of the company at the registered office of the company and also at the
registered office of the concerned subsidiary. The annual accounts,
reports and other documents of the subsidiary companies will be
dispatched to the shareholders upon receipt of a request from them.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, the Directors confirm that,
In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
Such accounting policies have been selected and applied consistently
and such judgments and estimates have been made that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the company at the end of the financial year 31st March 2012 and of the
profit of the company for the year ended 31st March 2012;
Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
The annual accounts have been prepared on a "going concern" basis.
FIXED DEPOSITS
The company has not accepted any fixed deposits from the public during
the financial year 2011-2012 and there is no outstanding fixed deposit
as on date.
PERSONNEL
Particulars of employees as required under sub-section (2A) of Section
217 of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 form a part of this report. In terms of section
219(l)(b)(iv) of the Companies Act 1956, the Annual Report and accounts
are being sent to the shareholders of the company excluding the
statement of particulars of employees under section 217(2A) of the
Companies Act 1956. The statement will be available for inspection by
the shareholders at the registered office of the company during
business hours. Any shareholder interested in obtaining such statement
may write to the Company Secretary at the registered office of the
company.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information required under Section 217(1) (e) of the Companies Act 1956
read with the Companies (Disclosure of Particulars in the report of the
Board of Directors) rules 1988, on energy conservation, technology
absorption, foreign exchange earnings and outgo, is given in Annexure-A
and forms an integral part of this report.
CORPORATE GOVERNANCE
The Company adheres to all the requirements of the code of corporate
governance as stipulated in Clause 49 of the listing agreement with the
stock exchanges as well as to the standards set by the Securities and
Exchange Board of India. A Report on corporate governance along with
certification of the Chairman and Managing Director and the Chief
Financial Officer is attached in Annexure-B. A certificate from the
Auditors of the company regarding compliance of the conditions of
corporate governance as stipulated by Clause 49 of the listing
agreement is attached in Annexure-C. The Management Discussion &
Analysis Report is attached in Annexure-D.
ACKNOWLEDGEMENT
The Board acknowledges with sincere gratitude the cooperation and
assistance of all its stakeholders: - the customers, for their
continued patronage, the bankers, for their understanding and timely
financial support, the suppliers and vendors, for their continued
association, the governmental agencies, for their assistance, the
employees, for their commitment and more importantly the shareholders
for continuously reposing their confidence in the company.
For and on behalf of the Board
Place : Chennai JAYAKAR KRISHNAMURTHY
Date : 30.08.2012 Chairman and Managing Director
Mar 31, 2011
Dear Members,
The Directors have pleasure in presenting the Twenty Fifth Annual
Report together with the audited accounts of the company for the year
ended 31st March 2011.
FINANCIAL HIGHLIGHTS
The performance of the company for the year ended 31st March 2011 is as
follows:
(Rs. in lakhs)
For the year ended
Particulars 31.03.2011 31.03.2010 % Change
Gross Revenue 52,600 42,613 23
Net Revenue (excluding Excise Duty) 48,154 39,366 23
Total Expenditure 40,069 33,239 21
Operating Income 8,085 6,127 32
Other Income 85 93 (8)
Profit before Interest, Tax &
Depreciation 8,170 6,220 31
Interest 2,725 2,852 (4)
Deferred Revenue Expenses 417 418 -
Depreciation 2,357 2,376 (1)
Profit before Tax & Exceptional item 2,671 574 365
Tax Expense 450 (189) -
Profit after Tax / Net Profit 2,221 763 191
Prior period Adjustments - (6) -
Balance of profit brought forward
from last year 6,698 6,199 8
Amount Available for Appropriations 8,919 6,956 -
Appropriations:
Transfer to General Reserve 415 - -
Dividend 885 221 300
Tax on Dividend 143 37 289
Balance Carried to Balance Sheet 7,476 6,698 -
DIVIDEND
The Board is pleased to recommend a dividend of 40% i.e. Rs.4 per
equity share, aggregating to Rs.885 lakhs (exclusive of tax on
dividend) for the financial year ended 2010-2011. This dividend
recommended by the Board is the highest dividend payout by the company
in absolute terms till date.
TRANSFER TO GENERAL RESERVE
A sum of Rs.415 lakhs has been transferred to the general reserve of
the company for the financial year 2010-2011.
PERFORMANCE
The turnover of the company during the financial year 2010-2011
increased to Rs.48,154 lakhs from Rs.39,366 lakhs in the previous
financial year thereby recording an increase of 23%. The EBITDA
increased by 31% to touch a level of Rs.8,170 lakhs from that of
Rs.6,220 lakhs of the previous financial year. The increased offtake
from various customers, greater controls established in the areas of
capital expenditure, borrowings and other revenue expenditure coupled
with better capacity utilization and increased productivity have
contributed to the increased EBITDA. Due to better working capital
management, the interest cost of the company came down by 4% inspite of
increase in interest rates of banks. The company's earning per share
was Rs. 10.04 during the financial year 2010-2011 which is higher by
137% compared to that of Rs.4.23 per share of the previous financial
year. The exports also surged to Rs.5,189 lakhs during financial year
2010-2011 from Rs.3,799 lakhs in the previous financial year thereby
recording a growth of 37%. After market sales of the company during the
financial year 2010-2011 increased to Rs. 1,103 lakhs as against a sale
of Rs.876 lakhs in the previous financial year thereby recording a
growth of 26%.
NEW PROJECTS
The company has invested Rs.4,216 lakhs in capital expenditure during
the financial year 2010-2011. A major portion of this capital
expenditure has gone towards setting up of a manufacturing facility at
Bawal, Haryana to meet the growing customer base in North India and
towards establishing another manufacturing facility at Mahindra City,
Chengalpattu, Tamil Nadu to consolidate all export operations in a
special economic zone. The existing plants have also been strengthened
and expanded to meet the growing needs of the customers particularly in
the areas of carburettors, oil pumps and vacuum pumps. Commercial
production commenced at the Bawal facility on 28th February 2011 and at
the Mahindra City facility on 27th June 2011. Further investment will
have to be incurred in 2011-2012 to complete these projects keeping in
step with the market trends.
DIRECTORS
Subject to the approval of the shareholders and the approval of the
Central Government, the Board in its meeting held on 27th August 2011
reappointed Mr.Jayakar Krishnamurthy who is also Chairman and Chief
Financial Officer as Managing Director of the company for a further
period of five years with effect from 1st September 2011. Appropriate
resolution for his reappointment and remuneration has been set out in
the Notice convening the Annual General Meeting.
Mr. RP.R. Rao, Executive Director, is completing his term of three
years on 25th September 2011 and he will cease to be a Director from
that day.
The Board in its meeting held on 27th August 2011 appointed Mr. R.
Sundararaman as Additional Director. As per the provisions of the
Companies Act, 1956 his appointment will be confirmed at the ensuing
Annual General Meeting of the company. Subject to the approval of the
shareholders and Central Government, the Board also appointed Mr. R.
Sundararaman as Joint Managing Director of the company for a period of
3 years with effect from 8th September 2011. Appropriate resolutions
for his appointment and remuneration have been set out in the Notice
convening the Annual General Meeting.
EXIM Bank nominated Mr. R.W. Khanna as a Director on the Board of the
company in place of Mr. K.Muthukumaran. The Board co-opted him as
Nominee Director on 30th June 2011. The Board wishes to place on record
its appreciation and gratitude for the excellent services rendered by
Mr.K.Muthukumaran during his tenure as Director.
In accordance with the Articles of Association of the company, Mr.
S.Muthukrishnan and Dr. V. Sumantran, retire by rotation at the ensuing
Annual General Meeting and being eligible offer themselves for
reappointment. Brief Resume/ details of the directors who are to be
appointed and reappointed as mentioned herein have been furnished along
with the explanatory statement in the Notice convening the Annual
General Meeting.
The Board expresses its sincere gratitude to Padma Vibhushan Dr. V.
Krishnamurthy for his guidance in all spheres of the business
especially in major policy decisions.
AUDITORS
M/s. G Balu Associates, Chartered Accountants, Chennai, Auditors of the
company will retire at the conclusion of the ensuing Annual General
Meeting and being eligible offer themselves for reappointment. The
company has received a certificate from the auditors to the effect that
their reappointment if made will be in accordance with the provisions
of Section 224(1B) of the Companies Act 1956. The auditors have also
confirmed that they hold a Peer Review Certificate issued by the Peer
Review Board of the Institute of Chartered Accountants of India.
AUDIT COMMITTEE
Mr. S.Natarajan, Dr. M.S. Ananth and Mr. K. Muthukumaran were members
of the Audit Committee till 30th June 2011. The Audit Committee was
reconstituted on 30th June 2011 to include Mr.Jayakar Krishnamurthy,
Chairman and Managing Director & Chief Financial Officer as a member in
place of Mr. K.Muthukumaran whose nomination was withdrawn by Exim
Bank. Mr. S.Natarajan continues to be the Chairman of the Audit
committee.
SUBSIDIARY COMPANIES
The company has two wholly owned subsidiaries.
UCAL Polymer Industries Limited(UPIL) Ã The operations of UPIL continue
to be satisfactory. The turnover for the financial year 2010-2011 was
Rs.1,750 lakhs up by 40% compared to that of Rs. 1,253 lakhs of the
previous financial year.
The net profit after tax was higher at Rs.88 lakhs recording a growth
of 46% as against Rs.60 lakhs of the previous financial year. A
dividend of 10% has been declared by UPIL.
Amtec Precision Products Inc, USA(Amtec) Ã The turnover of the company
was Rs. 13,265 lakhs during the financial year 2010-2011 up from Rs.
11,040 lakhs of the previous financial year thereby recording an
increase of 20%. Amtec has for the first time earned a cash profit of
Rs.226 lakhs during the current financial year.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements for the year ended 31st March
2011 of the company and its subsidiaries together with the auditor's
report thereon is enclosed. The statement pursuant to Section 212 of
the Companies Act, 1956 relating to subsidiary companies forms a part
of the accounts. A summary of the key financials of the company's
subsidiaries is also included in the Annual Report.
The consolidated results of the company and its subsidiaries show that
a net profit after tax of Rs. 1,926 lakhs has been achieved during the
financial year 2010-2011 as against a loss of Rs.2,376 lakhs in the
previous financial year. This can be attributed to an improvement in
the operations of AMTEC and greater controls established in the
operations of UCAL Fuel Systems Limited.
The Ministry of Corporate Affairs vide its General Circular No 2/2011
dated February 8, 2011 has granted a general exemption subject to
certain conditions to holding companies from complying with the
provisions of Section 212(1) of the Art which requires the attaching of
the balance sheet, profit & loss account and other documents of its
subsidiary companies to its Annual Report. The Board in its meeting
held on 27th May 2011 passed the necessary resolution for complying
with all the conditions regarding the circulation of the Annual Report
of the company without attaching all the documents of the subsidiary
companies referred to in Section212(l) of the Act. Accordingly, the
said documents are not being included in this Annual Report. The annual
accounts, reports and other documents of the subsidiary companies will
be available for inspection during business hours, by any shareholder
of the company at the registered office of the company and also at the
registered office of the concerned subsidiary. The annual accounts,
reports and other documents of the subsidiary companies will be
despatched to the shareholders upon receipt of a request from them.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, the Directors confirm that, In the preparation of the annual
accounts, the applicable accounting standards have been followed along
with proper explanation relating to material departures;
Such accounting policies have been selected and applied consistently
and such judgments and estimates have been made 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 31SI March 2011 and of the
profit of the company for the year ended 31st March 2011;
Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
The annual accounts have been prepared on a "going concern" basis.
FIXED DEPOSITS
The company has not accepted any fixed deposits from the public during
the financial year 2010-2011 and there is no outstanding fixed deposit
as on date.
PERSONNEL
Particulars of employees as required under sub-section (2A) of Section
217 of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 form a part of this report. In terms of section
219(l)(b)(iv) of the Companies Art 1956, the Annual Report and accounts
are being sent to the shareholders of the company excluding the
statement of particulars of employees under section 217(2A) of the
Companies Act 1956. Any shareholder interested in obtaining such
statement may write to the Company Secretary at the registered office
of the company.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information required under Section 217( 1) (e) of the Companies Act
1956 read with the Companies (Disclosure of Particulars in the report
of the Board of Directors) rules 1988, on energy conservation,
technology absorption, foreign exchange earnings and outgo, is given in
Annexure-A and forms an integral part of this report.
CORPORATE GOVERNANCE
The Company adheres to all the requirements of the code of corporate
governance as stipulated in Clause 49 of the listing agreement with the
stock exchanges as well as to the standards set by the Securities and
Exchange Board of India. A Report on corporate governance along with
certification of the Chairman and Managing Director & Chief Financial
Officer is attached in Annexure-B. A certificate from the Auditors of
the company regarding compliance of the conditions of corporate
governance as stipulated by Clause 49 of the listing agreement is
attached in Annexure-C. The Management Discussion & Analysis Report is
attached in Annexure-D.
ACKNOWLEDGEMENT
The Board acknowledges with sincere gratitude the cooperation and
assistance of all its stakeholders: - the customers, for their
continued support, the bankers, for their understanding and timely
financial support, the suppliers and vendors, for their continued
association, the governmental agencies, for their assistance, the
employees, for their commitment and more importantly the shareholders
for continuously reposing their confidence in the company.
For and on behalf of the Board
Place : Chennai JAYAKAR KRISHNAMURTHY
Date : 27.08.2011 Chairman and Managing Director &
Chief Financial Officer
Mar 31, 2010
The Directors have pleasure in presenting the TWENTY FOURTH ANNUAL
REPORT together with the Audited Accounts of the Company for the year
ended 31st March 2010.
1. FINANCIAL HIGHLIGHTS
The performance of the Company for the year ended 31st March 2010 is
presented below:
(Rs. in lakhs)
Particulars For the year ended %
Change
31.03.2010 31.03.2009
Gross Revenue 42,613 34,216 25
Net Revenue (excluding Excise Duty) 39,366 30,026 31
Total Expenditure 33,239 25,626 30
Operating Income 6,127 4,400 39
Other Income 93 312 (70)
Profit before Interest, Tax &
Depreciation 6,220 4,712 32
Interest 2,852 2,528 13
Deferred Revenue Expenses 418 156 168
Depreciation 2,376 1,848 29
Profit before Tax & Exceptional item 574 180 219
Tax Expense (189) 142 (233)
Profit after Tax / Net Profit 763 38 1,908
Prior period Adjustments (6) (34) (82)
Balance of profit brought forward
from last year 6,199 5,920 5
Amount Available for Appropriations 6,956 5,924 17
Appropriations:
Transfer to General Reserve - - -
Dividend 221 - -
Tax on Dividend 37 - -
Balance Carried to Balance Sheet 6,698 5,924 11
Earnings per Share 4.23 0.27 1,467
2. DIVIDEND
The Board has recommended a dividend of 10% for the financial year
2009-10.
3. PERFORMANCE OF OPERATIONS
The sales turnover of the Company has increased during the year from
Rs.300.26 Cr to Rs.393.66 Cr thus recording an overall growth of 31.1 %
over the previous year. The turnover has increased as a result of
robust revival of demand starting from the second quarter of the
financial year 2009-10. As a result of increase in turnover coupled
with control on costs, operating income has recorded a jump of 39%.
Further, consequent to restructuring of loans, the interest cost has
decreased from 8.42% of sales in 2008-09 to 7.24% of sales in 2009- 10.
The depreciation is also higher due to additional investments in fixed
assets necessitated by technological advancements. The net profit after
tax for the year 2009-10 was higher at Rs.7.62 Cr as against Rs.0.38 Cr
in 2008-09.
4. DIRECTORS
At the Board meeting held on 30th April 2010, Mr.S. Muthukrishnan
stepped down as the Chairman of the Company and Mr.Jayakar
Krishnamurthy, who was Vice Chairman and Managing Director assumed the
Chairmanship of the Company. He was also appointed as Chief Financial
Officer of the Company w.e.f. 30th April 2010. Mr. S. Muthukrishnan
continues as a Director on the Board. The Board wishes to place on
record its appreciation for the contribution made by Mr.
S.Muthukrishnan during his tenure as Chairman of the Company.
As already reported in the last AGM, Mr.V.Narayanan and
Mr.M.R.Sivaraman ceased to be Directors w.e.f. 29th September 2009.
EXIM Bank nominated Mr.K.Muthukumaran as a Director on the Board of the
Company w.e.f. 9th September 2009 in place of Mr Mukul Sarkar. The
Board wishes to place on record its appreciation for the excellent
services rendered by the outgoing Directors during their tenure.
In accordance with the Articles of Association of the Company,
Mr.S.Natarajan and Dr.M.S.Ananth, retire by rotation at the ensuing
Annual General Meeting and are eligible for reappointment.
5. AUDITORS
M/s. G Balu Associates, Chartered Accounts, Auditors of the Company
retire at the ensuing Annual General Meeting and are eligible for
reappointment.
6. PREFERENTIAL ALLOTMENT
During the year, with the approval of the shareholders and Securities
and Exchange Board of India (SEBI), the paid up capital of the Company
was increased from Rs. 13,89,60,000 to Rs. 22,11,36,250 by allotment of
82,17,625 Equity shares of Rs.10/- each at a premium of Rs. 26.35 per
share, on a Preferential basis to the Promoters / Persons acting in
concert group.
7. MERGER
Merger of UCAL Machine Tools Limited with UCAL Fuel Systems Limited
Consequent to the Honable High Court of Madras approving the merger of
UCAL Machine Tools Limited (UMTL) with UCAL Fuel Systems Limited (UFSL)
effective from the appointed date i.e., 1.4.2009, vide its order dated
22nd June 2010 (received on 1st July 2010), UMTL stands merged with
UFSL. Accordingly, the financial results of UCAL Fuel Systems Limited
for the financial year 2009-10 are financial results of the merged
entity.
8. SUBSIDIARY COMPANIES
Consequent to the merger of UMTL with UFSL, the Company now has two
wholly owned subsidiaries.
UCAL Polymer Industries Limited has been functioning profitably and has
declared a dividend of 10% for the financial year 2009-10. The Company
is actively working to expand its customer base beyond UFSL.
Financial year 2009-10 has been a breakthrough year for Amtec Precision
Products, Inc., USA. Amtec has avoided cash losses since October 2009
despite recession in the US economy. The infusion of funds into Amtec
by the promoter / persons acting in concert group has greatly
stabilized the operations of Amtec and has enabled it to sustain itself
through the recession and achieve good results.
Statutory Requirements and Subsidiary Performance / Consolidated
Financial Statements The statement pursuant to Section 212 of the
Companies Act, 1956, relating to Subsidiary Companies is attached to
the accounts.
The Company has received exemption from the Central Government under
Section 212(8) of the Companies Act, 1956 with regard to attaching of
the Balance Sheet, Profit and Loss Account and other documents of the
subsidiaries for the year ended 31st March 2010. Accordingly the
accounts of the subsidiaries have not been attached. These documents
will be available for inspection by any member of the Company at the
registered office and also at the registered office of the concerned
subsidiary. The accounts of the subsidiary companies and detailed
information will be made available to the members upon receipt of
request from them. The summary of the key financials of the Companys
subsidiaries is included in this Annual Report.
9. FIXED DEPOSITS
The Company has not accepted public deposits during the year. Old
deposits aggregating à 64,000 remained outstanding as on 31st March
2010 as the matter is subjudice.
10. CORPORATE GOVERNANCE
The Company has complied with the requirements of the Code of Corporate
Governance as stipulated by clause 49 of the listing agreement with the
stock exchanges. A Report on Corporate Governance along with
Certification by the Chairman & Managing Director and Chief Financial
Officer is attached in Annexure-C.
A Certificate from the Auditors of the Company regarding compliance of
the conditions of Corporate Governance as stipulated by clause 49 of
the listing agreement is attached in Annexure-D.
The Management Discussion and Analysis Report is attached in
Annexure-E.
11. PERSONNEL
Information in accordance with sub-section (2A) of Section 217 of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, is furnished in Annexure-B.
12. DIRECTORS RESPONSIBILITY STATEMENT
The Directors confirm that,
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
b) Such accounting policies have been selected and applied consistently
and the judgments and estimates are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the
end of the financial year 31st March 2010 profit of the Company for the
year ended 31st March 2010;
c) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of
Companies Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
d) The annual accounts have been prepared on a going concern basis.
13 . ENERGY, TECHNOLOGY & FOREIGN EXCHANGE
Information on energy conservation, technology absorption, foreign
exchange earnings and outgo are given in Annexure-A.
14. ACKNOWLEDGEMENT
The Board places on record its appreciation of all its stakeholders: -
the Customers for their continued support, the Bankers for their
understanding and timely financial support, the Suppliers and Vendors
for their continued association, the Governmental Agencies for their
assistance, the Employees for their commitment and more importantly the
Shareholders for continuously reposing their confidence on the Company.
Annexure-a to the report of the directors
a. energy conservation measures undertaken and consequent savings
1. Installation of timer control in coolant pump and hydraulic pump
2. Implementation of Impregnation plant vacuum pump cooling water
recycling
3. Auto off Controller provided for 25 HP Compressor thereby reducing
the idle working of loads
4. Increase in the efficiency of the compressor by reduction of heat
from the compressor room
b. energy conservation proposal
1. Introduction of energy efficient LED lamps in street lights and
Compact Florescent Lamp (CFL) in Machine Shop
2. Introduction of Natural lighting pipe
3. Solid State Relay (SSR) to be tried out in the PDC furnaces to
control the temperature optimally
4. Transvector nozzle to be tried out in the air jet and washing
machine
5. Automatic On/Off control to be provided for Mercury vapour lamp in
PDC
6. Providing of the auto cut off controller for hydraulic pump and
cooling tower fan motor
7. Replacing of the mono block water pump with submersible pump
8. Conversion of the pneumatic cylinder to Hydro pneumatic cylinder
9. Optimizing the Heater Capacity in solenoid oven by changing flat
type heater into U-type heater
10. Introduction of lighting energy saver for lighting load
11. Introduction of auto valve for incoming air line of the machine
(Valve is Open when the Machine is Switch ON)
c. research and development
Specific areas in which r&d is carried out by the Company:
- Development of Carburetors and Secondary Air Valves for 2-Wheelers &
3-Wheelers
- Development of Oil Pump for Passenger Cars & Commercial Vehicles
- Development of Vacuum Pump for Diesel engine Passenger Cars
- Development of Water Pump for Petrol & Diesel engine applications
- Electronic Engine Management System for 2-Wheelers
- Electronic Exhaust Gast Recirculation (EGR) controller
- Computer Aided Engineering (CAE) focusing on developing the required
theoretical, design, technologies and simulation capability as related
to our product range and future technologies
- Focused Value Engineering and Value Analysis activities for
standardization and cost reduction
Benefits derived out of R&D
- Capability to address market needs through Indigenous product
development by way of faster turn around of products and its variants,
support to the customer
> Offerings based on the current range of products to existing and new
customers
> Development of new products to existing / new customers
- Development of Indigenous technology and building a technology
repository
- Building knowledge capital within the organization
> We were successful in demonstrating our CAE capability for Oil Pump
to General Motors
- Reduction in cost through Value Engineering / value Analysis
- Import substitution / alternate sourcing of critical parts completed
as per plan
- Design guidelines have been documented for all our products to help
the design activities
Future Plans
Developing new technologies which can be used for developing products
for our existing customers as well as new customers such as:
- Electronic Throttle Valve for Gasoline engines
- 4 Stroke Port Injection system for 2-Wheelers
- Water Pump
- Develop a library of Vacuum Pump with higher capacity to meet future
needs.
- Variable Flow Oil Pump
Expenditure on R&D
Particulars Rs. in Lakhs
Capital 20.69
Revenue 885.31
Total 906.00
% of turnover 2.31%
D. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
We have reached a technologically self reliant stage, as evidenced by
the following:
- We are able to design products to the changing needs of the
customers through our in-house R&D efforts. Example: 32mm throttle bore
size carburetor for Pulsar 220 Motorcycle, so far largest in our range.
- Identification of suitable substitutes for materials and processes to
meet ELV (End of Life Vehicle) requirement and to use Ethanol blended
petrol as required by some of the customers / applications.
- Re-designing our products to meet the requirements of the customers.
Example: Re-designing the Vacuum Pump to meet the reverse rotation
requirement.
- Innovative features have been incorporated in the carburetor -
Throttle Position Sensor, Solenoid operated starter for cold starting.
- We are able to develop products to meet the customer targets in
terms of fuel economy, emission levels. Example: New models and the
variants launched by our customers with our carburetors are meeting the
Emission norms, effective from April 2010.
Benefits derived as a result of the above efforts
- The Company has been able to develop new products meeting the
customer timelines and price targets.
- The Company has been able to expand into new domains like Pumps -
Oil Pump, Vacuum Pump & Water Pump.
- The Company has been able to approach new customers with our
offerings by demonstrating our design capabilities.
- Our R&D center continues to enjoy the recognition of Department of
Scientific & Industrial Research (DSIR).
- Our R&D engineers have presented 6 papers in National and
International conferences.
E. FOREIGN EXCHANGE EARNINGS AND OUTGO
The earnings of foreign exchange were on account of export of
Carburetors, MPFI parts and Secondary Air Valves during the year. The
foreign exchange outgo was mainly on account of components, capital
goods, foreign travel, royalty and technical know-how fee. During the
financial year ended 31st March 2010, the total FE Outgo was Rs.
5,581.37 Lakhs while the FE earned was Rs. 1,973.44 Lakhs resulting in
a net FE outgo of Rs. 3,607.93 Lakhs.
For and on behalf of the Board
Place : Chennai
Date : 31.08.2010 JAYAKAR KRISHNAMURTHY
CHAIRMAN & MANAGING DIRECTOR
AND CHIEF FINANCIAL OFFICER