Greaves Cotton
BSE: 501455 | NSE: GREAVESCOT | ISIN: INE224A01018 | Engines
- Directors Report
- Chairman's Speech
- Auditors Report
- Notes To Accounts
- Accounting Policy
- Finished Products
- Raw Materials
| Directors Report | Year End : Jun '08 |
The Directors present the eighty-ninth Annual Accounts for the
financial year ended June 30, 2008.
Financial highlights (Rs. in crores)
Year ended Year ended
June June
30,2008 30, 2007
Gross Revenue
(incl. Excise Duty) 1322,27 1225,36
Profit before Interest,
Depreciation, Tax and
Exceptional Items 168.04 175.39
Less: Interest and
Commitment charges 20.10 15.66
Less: Depreciation/
Obsolescence/Amortisation 20.72 16.01
Profit Before Tax and
Exceptional Items 127.22 143.72
Add: Exceptional Items 10.79 -
Profit Before Tax 138.01 143.72
Less: Provision for Tax including 19.10 16.00
Fringe Benefit Tax
Less: Deferred Tax 8.75 5.40
Profit After Tax 110.16 122.32
Profit brought forward 82.15 38.95
Profit available for appropriation 192,31 161.27
Appropriations:
Interim Dividends 29.30 29.30
Final Dividend - 4.88
Dividend Distribution Tax 4.98 4.94
Transfer to General Reserve 40.00 40.00
Balance carried to Balance Sheet 118.03 82.15
192.31 161.27
Dividend
Your Directors have declared three Interim Dividends, each of Rs. 2/-
per share on November 2, 2007, January 18, 2008 and April 18, 2008
respectively, which have already been paid to the Members. Thus, the
total dividend amounts to Rs. 6/- per share (i.e. 60%) and the total
cash outgo (inclusive of Dividend Distribution Tax) works out to Rs.
34.3 crores. Your Directors have decided not to recommend any Final
Dividend, keeping in mind the lower profits, the need to conserve its
resources for future expansion plan and also the prevailing economic
environment.
Business review
During the year under review, the total revenue went up modestly by 8%
at Rs. 1322 crores. The Earning Before Interest, Depreciation, Tax and
Amortisation (EBIDTA) dropped marginally to Rs. 168 crores as against
Rs. 175 crores in the previous year. The operating margins were lower
mainly due to higher input costs. The Infrastructure Equipment business
performed extremely well registering a growth of 51% over the previous
year. The Light Engines business for the first time after nearly 4 to 5
years of robust growth, registered a decline due to negative growth in
the 3- wheeler automotive sector. The business highlights are discussed
in detail in the Management Discussion & Analysis annexed to this
Report.
Outlook
- During the year under review, the Company continued to expand its
different business segments, by setting up the following new
facilities:
a. at Aurangabad, Maharashtra, for manufacture of twin cylinder
engines/power train.
b. at Chinchwad, Pune, Maharashtra, for manufacture of G series
multi cylinder diesel engines.
c. at Gummidipoondi, Tamilnadu, for manufacture of road compaction
equipments.
Continuing its emphasis on self reliance in R&D, your Company also set
up a state-of-the-art Technology Centre at Chinchwad, Pune, for the
design, development and testing of large multi cylinder diesel engines.
The Company also expanded its portfolio by introduction of new products
across all Business Groups. It is taking various initiatives to enhance
market share in different business segments. Although, the Company is
faced with the challenges of rising input costs and a slow down in the
auto sector, the Directors are hopeful of overall improved performance
in the current financial year due to various initiatives taken by it
such as creation of new manufacturing facilities, introduction of
several new products, entry into growth markets like four wheelers and
complete generating sets and a thrust in exports.
Re-issue of forfeited shares
10,137 Equity Shares of Rs, 10/- each allotted by the Company last year
to its certain key Executives, have now become fully paid-up and have
been listed on the Bombay Stock Exchange Limited and National Stock
Exchange of India Limited.
Promoter Group
The Company is a part of B M Thapar Group. The Promoter Group holding
is currently 50.67% of the Companys Equity Capital. The Members may
note that B M Thapar Group, inter alia, comprises of the following
Companies (1) English Indian Clays Limited (2) Premium Energy
Transmission Limited (3) Pembril Industrial & Engineering Company
Private Limited (4) DBH International Private Limited (5) Karun Carpets
Private Limited (6) Greaves Leasing Finance Limited (7) Bharat Projects
Private Limited (8) Dee Greaves Limited (9) KCT Chemicals & Electricals
Limited (10) Standard Refinery & Distillery Limited (11) Bharat Starch
Products Limited (12) Greaves Farymann Diesel GmbH (13) Greaves Cotton
Netherlands B.V. (14) DBH Global Holdings Limited (15) Greaves Auto
Limited.
Subsidiaries
The Company has the following Subsidiaries:
1. Greaves Farymann Diesel GmbH, Lampertheim, Germany
For the financial year ended June 30, 2008, the Company had recorded a
turnover of Euro 6.45 million with a loss of Euro 0.86 million. The
Company suffered a set back in its business mainly due to adverse
Euro/Dollar rate and weak US market demand.
2. Greaves Cotton Netherlands B.V.
This Company has been set up to act as a Holding and an Investment
Company overseas.
3. Greaves Leasing Finance Limited (GLFL)
GLFL is engaged in leasing and finance activities mainly confined to
the Greaves Group. GLFL reported a total revenue of Rs. 2.35 crores
during the financial year ended March 31,2008 with a Profit after Tax
of Rs. 1.06 crores.
4. Dee Greaves Limited (DGL)
DGL is a Wholly Owned Subsidiary of Greaves Leasing Finance Limited,
engaged in trading activities. For the financial year ended March 31,
2008, DGL achieved a total revenue of Rs. 4.31 crores with a Profit
after Tax of Rs. 1.29 crores.
5. Greaves Auto Limited
Greaves Auto Limited has been recently set up to act as a Special
Purpose Vehicle for new business that the Company may undertake in
future. This Company is yet to commence its business operations.
In terms of approval granted by the Central Government under Section
212(8) of the Companies Act, 1956, copies of the Balance Sheet and
Profit & Loss Account, Reports of the Directors and Auditors of the
Subsidiaries, have not been attached to the Annual Accounts of the
Company. These documents, will however, be made available upon request
by any Member of the Company. As directed by the Central Government in
its approval, the financial data of the Subsidiaries have been annexed
and form part of this Annual Report.
Directors
Mr. S. D. Nayyar was appointed as an Additional Director by the Board
on October 18, 2007. Mr. Nayyar, aged 66 years, brings with him
experience in banking and finance of over 40 years, having worked with
different Banks such as Grindlays Bank, ING Bank, etc. Currently, he is
associated with Development Credit Bank Limited as a Director and also
as Chairman of its Executive and Credit Committee.
Mr. Karan Thapar and Mr. Vijay Rai retire by rotation and are eligible
for re-appointment.
The profiles of Mr. Nayyar, Mr. Thapar and Mr. Rai seeking appointment
/ re-appointments form part of the Notice convening the Annual General
Meeting. The Board recommends appointment/re-appointments of these
Directors.
Directors Responsibility Statement
Pursuant to the provisions under Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:
a. In the preparation of the Accounts, the applicable accounting
standards have been followed.
b. The Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at June 30,2008 and profits for the year ended June
30,2008.
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.
Code of Conduct
Pursuant to Clause 49 of the Listing Agreement, a Declaration signed by
the Managing Director & CEO regarding compliance of Code of Conduct for
the financial year 2007-08, is annexed and forms part of this Report.
Fitch Ratings
The Company had approached Fitch Ratings India Private Limited for
assigning a rating to the Company as well as the credit facilities
being enjoyed by the Company.
The Directors are pleased to report that the Company has been assigned
a rating of AA-(ind) with a stable outlook. They have also assigned a
rating of AA-(ind) to the Companys fund based cash credit limits of
Rs. 650 million and a rating of F1+(ind) to its non-fund based limits
of Rs. 2100 million. These ratings reflect the sound financial health
of the Company.
Corporate Governance
The Company has fully complied with the Corporate Governance Code, as
prescribed under Clause 49 of the Stock Exchange Listing Agreement. A
Report on Corporate Governance, along with a Certificate from Auditors
confirming the compliance, is annexed and forms part of this Report.
Auditors and Auditors Report
Messrs Sharp & Tannan, Chartered Accountants, Mumbai, will retire at
the ensuing Annual General Meeting and are eligible for re-appointment.
They have confirmed their eligibility for re- appointment under the
provisions of Section 224(1 B) of the Companies Act, 1956. The
Directors recommend their re- appointment.
Cost Auditors
Pursuant to the provisions of Section 233B of the Companies Act, 1956,
audit of cost accounts in respect of Diesel Engines, IC Engines and
Power Driven Pumps, is being regularly carried out by the Cost
Auditors. The Directors have re-appointed M/s. Dhananjay V. Joshi &
Co., Cost Accountants, as Cost Auditors of the Company for the
financial year 2008-09, in respect of which the approval of Central
Government has been duly received.
Public Deposits
Pursuant to the provisions of Section 205C of the Companies Act, 1956,
all unpaid Public Deposits and interest due thereon, have been
transferred to the Investor Education and Protection Fund, on the
respective due dates. As on June 30, 2008, the unclaimed Deposits
amounts to Rs. 0.13 crore.
Human Resources
The employee relations, by and large, remained cordial at all
Units/Offices of the Company, except that the matter relating to
Charter of Demands has been referred by the Workers Union at Ranipet,
to the Industrial Tribunal.
Information as required, pursuant to Section 217(2A) of the Companies
Act, 1956, read with Companies (Particulars of Employees) Rules, 1975,
as amended, is given in Annexure A forming part of this Report.
Particulars of Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo
A statement pursuant to Section 217(1 )(e) of the Companies Act, 1956,
read with Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988, forms part of this Report, as Annexure
B.
Acknowledgment
Your Directors acknowledge the contribution made by all the
stakeholders and the support given by its Bankers and other Lenders.
For and on behalf of the Board of Directors
Place: Mumbai Karan Thapar
Date : August 8, 2008 Chairman |
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| Source : Religare Technova | |
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