The Directors have pleasure in presenting their Sixty First Annual
Report and Audited Accounts for the year ended December 31,2010.
Financial Results
(Rs in Thousands)
For the year ended For the year ended
December 31,2010 December 31,2009
Profit Before Taxation 1,002,303 5,273,994
Less: Provision for Tax
-Current Tax 415,000 1,805,255
-Deferred Tax (45,000) (39,000)
-Fringe Benefit Tax - (38,652)
Profit After Tax 632,303 3,546,391
Balance Brought Forward from
last year 607,178 556,632
Amount available for
Appropriation 1,239,481 4,103,023
Appropriations
General Reserve 200,000 3,000,000
Proposed Dividend 423,817 423,817
Corporate Dividend Tax 70,391 72,028
Corporate Dividend Tax (2009) (1,637)
Balance Carried Forward 546,910 607,178
1,239,481 4,103,023
Dividend
Your Directors recommend payment of a dividend at the rate of Rs 21-
(Rupees Two only) per share for the year ended December 31, 2010 on
211,908,375 equity shares of Rs 21- each.
Performance Review
Orders received during the year at Rs 63,496 million were 27% lower as
compared to Rs 86,847 million in the previous year. Order backlog at
the end of 2010 was at the same level of Rs 84,362 million compared to
Rs 84,787 million at the end of the previous year.
Sales and other income for the year were marginally higher by 1 % at Rs
63,726 million compared to Rs 63,098 million in the previous year.
Revenues of all the segments were higher than the previous year except
Power Products and Process Automation which saw a negative growth of 9%
and 8% respectively.
Profit before tax for the year was lower at Rs 1,002 million as
compared to Rs 5,274 million in the previous year, mainly on account of
exit costs of rural electrification business, strategic orders with
lower margin, higher input costs witnessed by the industry and adverse
impact from fair valuation of forward foreign exchange and embedded
derivative contracts.
Profit after tax at Rs 632 million for the year has reduced by 82%
compared to Rs 3,546 million in the previous year. Earning per equity
share of face value of Rs 21- correspondingly decreased to Rs 2.98
compared to Rs 16.74 in the previous year.
For detailed analysis of the performance, please refer to the
Managements Discussion and Analysis Section of the Annual Report.
Acquisition
The Company acquired the business of Metsys Engineering and Consultancy
Private Limited (Metsys), based in Bangalore, a private limited company
engaged in providing engineering services/consultancy and optimized
solutions to OEMs/End customers mainly in Metal industry, for a total
consideration of Rs 84.6 million.
Open Offer
The promoter company ABB Asea Brown Boveri Limited, Zurich along with
ABB Norden Holding AB, Sweden was holding 52.11% of the total share
capital of the Company. ABB Asea Brown Boveri Limited, Zurich, has
increased its stake in the Company from 46.19% to 69.08% by way of an
Open Offer during 2010. Subsequent to the Open Offer the total
shareholding of ABB Asea Brown Boveri Limited, Zurich, in the company
along with ABB Norden Holding AB, Sweden is 75%.
Transferto Investor Education and Protection Fund
In terms of Section 205C of the Companies Act, 1956, the unclaimed
dividend amount aggregating to Rs 1,018,692/- lying with the Company
for a period of seven years pertaining to year ended on December 31,
2002, was transferred during the year 2010, to the Investor Education
and Protection Fund established by the Central Government.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The particulars as prescribed under sub-section (1)(e) of Section 217
of the Companies Act, 1956, read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988, are given
in Annexure - A, forming part of this Report.
Environment, Health and Safety
The Company has in place a system for controlling and monitoring
pollutants at all its factories complying with environmental standards
and legislation. All the manufacturing units of the Company have
received certificates for ISO 14001 (EMS). Environment, health and
safety are given high priority. All the units of the Company have been
awarded OHSAS18001 certification for the health and safety system.
Several environmental management projects are underway across the
locations. Some of these include energy conservation, waste management,
rain water harvesting and greening initiatives.
Particulars of Employees
The statement under sub-section (2A) of Section 217 of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended and forming part of this report is given in Annexure -
B. The said Annexure - B shall, however, be provided to the Members on
request made in writing to the Company Secretary.
DirectorsResponsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
confirm that:
i. in the preparation of the annual accounts, the applicable accounting
standards have been followed by the Company;
ii. appropriate accounting policies have been selected and applied
consistently and such judgements 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 as at December 31, 2010 and of the profit of
the Company for the year ended on that date;
iii. 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; and
iv. the annual accounts have been prepared on a going concern basis.
Corporate Governance
As required under Clause 49 of the Listing Agreement of Stock
Exchanges, a report on Corporate Governance and a Certificate from M/s
D. R. Shressha & Associates, Practicing Company Secretaries, confirming
compliance with the requirements of Corporate Governance are given in
Annexure - C and Annexure - D respectively, which form part of this
Report.
Board of Directors
Mr. Bernhard Jucker was appointed as an Alternate Director for Mr.
Peter Leupp during the period from April 30, 2010 to July 29, 2010 when
Mr. Leupp was a Director.
Mr. Biplab Majumder, Vice Chairman & Managing Director of the Company
resigned and his resignation was accepted by the Board from the close
of office hours on December 31,2010.
Your Directors place on record their appreciation of the valuable
services rendered by the above Directors during their tenure as
Alternate Director and Managing Director of the Company respectively.
Mr. Majumder was appointed as an Additional Director effective January
1, 2011. He holds office upto the date of this Annual General Meeting.
He does not wish to seek reappointment.
Mr. Bazmi R. Husain was appointed as an Additional Director. He was
also appointed as the Managing Director of the Company with effect from
January 1,2011, subject to approval of the share holders in general
meeting.
Mr. Arun Kanti Dasgupta, Director of the Company is due to retire by
rotation at this Annual General Meeting and is eligible for
re-appointment.
Mr. Gary Steel was appointed as a Director of the Company with effect
from February 20,2009, in the casual vacancy caused by the resignation
of Mr. Ravi Uppal. Since Mr. Ravi Uppal would have retired by rotation
at this Annual General Meeting had he not resigned, Mr. Gary Steel
would also cease to hold the office of Director at this Annual General
Meeting, pursuant to Section 262 of the Companies Act, 1956 and is
eligible for reappointment as a Director.
As stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges, brief profile of the Directors proposed to be re-appointed /
appointed, nature of their expertise in specific functional areas,
names of companies in which they hold directorships and memberships /
chairmanships of Board Committees, shareholding are provided in the
Report on Corporate Governance forming part ofthe Annual Report.
Auditors
The Companys Auditors, M/s S.R. BATLIBOI & CO., Chartered Accountants,
(Registration Number 301003E), hold office upto the conclusion ofthe
ensuing Annual General Meeting. The Company has received the requisite
certificate from them pursuant to Section 224(1 B) of the Companies
Act, 1956, confirming their eligibility for re-appointment as Auditors
ofthe Company.
For and on behalf of the Board
Place: Bengaluru Gary Steel
Date : February 23,2011 Chairman
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