The Directors have pleasure in presenting the Twenty Seventh Annual
Report and Audited Accounts for the year ended 31st March 2012.
1. FINANCIAL HIGHLIGHTS
Year ended Year ended
31st March 2012 31st March 2011
Sales (Net of excise duty) 26005 22885
Profit before depreciation,
exceptional items and taxes 4371 3750
Depreciation 528 415
Profit before tax &
exceptional items 3843 3335
Exceptional items 133 -
Profit before tax 3976 3335
Taxation 846 792
Profit after tax 3130 2543
Profit brought forward from
previous year 785 836
Dividends 1018 767
Dividend distribution tax 165 127
Transfer to general reserve
& share capital 1200 1700
Retained in profit and loss
account 1532 785
Your Company''s sales grew by 14% over the previous year, from Rs 228.85
crores to Rs 260.05 crores. Profit before tax and exceptional items at
Rs 38.43 crores showed an improvement of 15% over the previous year.
4. INTERNATIONAL APPRECIATION
The ''smart regulator'' developed through in- house R&D by your company
has won an award from a well known motorcycle maker from Japan, for
fuel efficiency. A certificate in appreciation of the development has
been given to the joint venture partner of your company, M/s Kokusan
Denki, acknowledging this development by your company in India. The
customer is also keen to promote the use of this regulator in its
products manufactured in other parts of the world.
5. PT AUTOMOTIVE SYSTEMS INDONESIA (PT ASI)
Your Company has obtained approval from the designated authorities at
Indonesia for extension of time by two more years for commencing
commercial production which is expiring in March 2014. Your Company is
continuing to explore various options and an appropriate decision will
The Ministry of Corporate Affairs viae its General Circular
No.2/2011/circular no.5/12/2007-CL-lll dated 8th February 2011 has
granted general exemption from the requirement of attaching the annual
report of subsidiary company subject to fulfilment of conditions
stipulated in the circular. Your company has satisfied the conditions
stipulated in the circular and hence is entitled to the exemption.
The annual accounts of the subsidiary company will be available at the
registered office of the Company and of the subsidiary company
concerned, if any member or investor wishes to inspect them during the
business hours on any working day.
6. ASSOCIATE COMPANY
As indicated in the last year''s report, in the context of the growing
need to reduce dependence on conventional sources of energy and on
environmental grounds, the Central Government is accelerating
initiatives to promote use of renewable sources of energy from the
Twelfth Plan (2012- 17). Introduction of Renewable Purchase Obligation
(RPO) for industrial consumers and state distribution utilities
alongside Renewable Energy Certificates (REC) scheme for the renewable
power generators is a step in this direction. Mandatory compliance of
RPO commencing from FY 2011 -12 is expected to gather momentum in the
coming years. The Ministry of New and Renewable Energy is also in the
process of formulating a National Biomass Mission policy framework to
support biomass-based power generators on issues ranging from long term
fuel security to viable energy tariffs for this sector.
Synergy Shakthi Renewable Energy Limited (SSREL), in which your Company
has made a strategic investment, has gradually improved its capacity
utilization during the second half of the year under review by securing
alternate sources of biomass and fine tuning its operations. SSREL has
also received accreditation from the regulatory authorities for trading
in RECs to which it would be entitled based on energy sold to its
customers. Realization from en-cashing the certificates by sale to the
obligated entities is expected to support the long term viability of
your investee company.
Your Company had paid an interim dividend of Rs 4.00 per share in the
month of February ''12, A further dividend of Rs 5 per share will be
paid in June ''12. The total dividend of Rs 9 per share is being treated
as final dividend for the year. The dividends will absorb a sum of Rs
101 7,97 lacs besides an additional outgo on dividend distribution tax
of Rs 165.15 lacs.
8. BONUS SHARES
During the year, your Company issued and allotted 32,31,632 equity
shares of Rs 10/- each as bonus shares on 22nd September 2011 in the
ratio of 2 equity shares for every 5 equity shares held to the eligible
shareholders as on the record date i.e. 21 st September 2011 by
capitalizing an equivalent amount standing to the credit of the general
reserve account of the Company. As a result, the Company''s share
capital now stands at Rs 11.31 crores. The said issue and allotment of
bonus shares was completed within the stipulated period of two months
of its declaration by the Board of Directors in terms of SEBI (Issue of
Capital and Disclosure Requirements) Regulations, 2009.
9. PUBLIC DEPOSITS
Your Company has not accepted any deposits under Section 58A of the
Companies Act, 1956 read with Companies [Acceptance of Deposits] Rules
10.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
OUTGO AND EARNINGS
Please refer to Annexure-I to the Directors'' Report to the
11. PARTICULARS OF EMPLOYEES
None of the employees is drawing remuneration in excess of the amounts
specified as per Section 21 7 (2A) of the Companies Act, 1956 read with
Companies (Particulars of Employees) Rules 1975 as amended.
As required by Clause 49 of the Listing Agreement, the ''Report on
Corporate Governance'' is enclosed as part of this report.
A certificate from the Auditors of your Company regarding compliance of
the conditions of the Corporate Governance as stipulated by Clause 49
of the Listing Agreement is attached to this report.
The certificate required from CEO/ CFO, is also attached to this
13. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions under Section 217(2AA) of the Companies Act,
1956 on the Directors''
Responsibility Statement, it is hereby confirmed:
a) that in the preparation of accounts for the financial year ended
31st March 2012 the applicable accounting standards have been followed.
b) that the Directors have selected the 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, at the end of the financial year under review and of
the Profit of the Company, for the year under review.
c) that the Directors have taken proper and sufficient care 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
d) that the Directors have prepared the annual accounts for the year
ended 31st March 2012 on a ''going concern'' basis.
Mr. K Nakamura has resigned from the Board of Directors and Mr Y Tomita
has been inducted in the casual vacancy caused by his resignation
effective 1st June 2012. Mr Y Tomita, will be proposed for appointment
as a Director liable to retire by rotation in the ensuing Annual
Mr. N S Murthy and Mr. G Chidambar are retiring by rotation at the
ensuing Annual General meeting and being eligible offer themselves for
M/s Brahmayya & Co., Chartered Accountants, retire at the conclusion of
the Annual General Meeting and are eligible for re-appointment.
Your Directors wish to place on record their appreciation for the good
work of all the employees of the Company.
Your Directors also acknowledge the continued support received from
Lucas Indian Service Ltd, Chennai, Kokusan Denki Co Ltd., Japan and
also wish to thank the Governments at the Centre and in the States of
Tamil Nadu, Haryana and Puducherry, Bank of Baroda, ICICI Bank Ltd,
Axis Bank Ltd, and SIPCOT for the assistance rendered by them from time
For and on behalf of the Board of Directors
Chennai T K BALAJI
30th May 2012 Chairman