To The Members,
The Directors are delighted to present the 30th Annual Report on the
business and operations together with Audited Balance Sheet and Profit
& Loss Account of your Company for the year ended March 31, 2011.
FINANCIAL RESULTS
Your Company''s performance during the year as compared with the
previous year is summarized below:
Rupees in Lacs
Particulars 2010-11 2009-10
Sales (Excluding Excise Duty) 34,080.47 22,702.74
Gross Profit (GP) 3,002.16 1,283.51
(-) Finance Expenses 51.95 136.10
(-) Depreciation 274.40 270.68
Profit Before Taxation (PBT) 2,675.81 876.73
(-) Provision for Taxation & Deferred Tax 885.97 199.25
Profit After Tax (PAT) 1,789.84 677.48
( ) Balance in the P&L A/c b/f 185.07 69.32
Profit for Appropriation 1,974.91 746.80
Appropriation :
Proposed Equity Dividend :
(For 2009 - 10,Include Interim
Dividend of Rs.116.32 Lacs) 817.90 465.26
Tax on Dividend 132.68 28.72
Transfer to General Reserve 179.43 67.75
Balance retained in P & L Account 844.91 185.07
1974.91 746.80
DIVIDEND
Keeping in view of the remarkable Financial Performance during the year
under review, as also the philosophy of your Company to reward its
shareholders, the Board of Directors are pleased to recommend a
Dividend of 60% (Rs.6/- per Equity Share) for the Financial Year
2010-2011 as against 40% (including 10% Interim Dividend) for the
corresponding last year. The total amount of Dividend proposed to be
distributed and tax thereon aggregates to Rs. 950.58 Lacs (including
Dividend Tax) as against Rs.493.98 Lacs. The Dividend payout ratio
comes to 53%.
A sum of Rs. 179.43 Lacs has been transferred to the General Reserve of
the Company. This reaffirms the inherent financial strength of your
Company.
BUSINESS PERFORMANCE
India’s economic scenario has passed through a systematic transition
from being a closed to an open economy since the beginning of economic
reforms in 1991. These reforms have had a far-reaching impact and have
unleashed its enormous growth potential. Today, the Indian economy has
grown to become a trillion dollar economy with a largely
self-sufficient agricultural sector, a diversified industrial base and
a stable financial and services sector.1
After the gloom of global economic crisis, Indian economy has well
recovered at a steady pace during the last Financial Year (FY) 2010-11
2 and has so far vastly exceeded expectations. Apparently, the Gross
Domestic Product (GDP) is estimated to have grown at 8.60% during the
FY 2010-11 (in real terms) and further is likely to touch the figure of
9.00% during the next FY 2011-12.3
Consequently, due to strong linkages with the economy, introduction of
the liberalization policy, various tax reliefs by the Government of
India and rapid growth in industrialization process in recent years,
the Indian Automobile Industry has made a remarkable growth. It has
recorded a noteworthy Production Growth of 27%, as compared to the last
year. India is expected to become the world''s 7th largest automobile
market by 2016 and third largest by 2030. Further, the total sales are
expected to reach US$ 120 -160 Billion by 2016 and the investment
requirement is estimated to be US$ 35-40 Billion.4
1. Book on Doing Business in India by Ernst & Young, India (E&Y)
2. Economic Survey 2010-2011
3. Dun & Bradstreet Sectoral Outlook Report 2011-12
4. Book on Doing Business in India by Ernst & Young, India (E&Y)
Surge in the automobile Industry since the nineties has also led to
robust growth of the auto component sector in the country. In tandem
with the Industry trends, the Indian auto component Sector has shown
great advances in recent years in terms of growth, spread, absorption
of new technologies and flexibility. Indian auto component industry has
seen major growth with the arrival of world vehicle manufacturers from
Japan, Korea, U.S.A and Europe. Today, India is emerging as one of the
key auto components center in Asia and is expected to play a
significant role in the global automotive supply chain in the near
future. As per ACMA Vision 2020 for India the Indian Auto Component
Industry is expected to grow beyond US $ 110 billion by 2020 from the
current level of around US $ 26 Billion in 2010-11.
In the above backdrop, during the year under review your Company has
registered a remarkable growth of 50% in top line which is much above
the industry growth, by achieving a Sales Turnover (Net of Excise) of
Rs. 34,080.47 Lacs (on Standalone Basis) as against Rs. 22,702.74 Lacs
(on Standalone Basis) in the corresponding previous year, much above
the industry growth.
The Profit Before Tax (PBT) reported for the current year increased to
Rs. 2,675.81 Lacs (on Standalone Basis) from Rs. 876.73 Lacs (on
Standalone Basis) as compared to previous year, resulting 205% rise, as
compared to the previous year.
On Consolidated Basis, your Company registered a growth of 49% during
the year under review by achieving a Sales Turnover (net of excise) of
Rs. 62,669.15 Lacs as against Rs. 42,076.54 Lacs in the corresponding
previous year.
On consolidated basis your Company has recorded a Profit Before Tax
(PBT) of Rs. 5,482.56 Lacs for the year under review as against Rs.
2,907.33 Lacs as compared to the corresponding previous year,
registering a growth of 89%.
SUBSIDIARY COMPANY
100% SUBSIDIARY- LUMAX DK AUTO INDUSTRIES LIMITED (LDK)
During the year under review LDK has reported an impressive growth of
49% by recording net sales of Rs 28,385.78 Lacs as against Rs.19,112.66
Lacs as compared to the previous year. The Profit after Tax has also
grown by 43% to Rs. 2,731.40 Lacs from Rs. 1,903.54 Lacs over the
previous year.
The Gear Shifter Division has received prestigious Gold Award for
Design & Development for the year 2010-11 from the customer Maruti
Suzuki and best localization supplier award from Toyota Kirloskar for
its small car ETIOS.
JOINT VENTURE COMPANY
LUMAX CORNAGLIA AUTO TECHNOLOGIES PRIVATE LIMITED (LCAT)
During the year under review LCAT has reported an impressive growth of
24% by recording net sales of Rs 889.50 Lacs as against Rs.714.89 Lacs
for the previous year. The Profit after Tax has also grown by 23% to
Rs. 60.31 Lacs from Rs. 49.15 Lacs over the previous year.
Presently, LCAT is supplying Air Intake System (AIS) to two leading
automobile manufactures in India viz. TATA & FIAT and during the year
it has also started supplying AIS to two new world renowned Automobile
manufactures viz. VOLKSWAGEN & SKODA, thereby making itself a single
source for all the new programs. LCAT has also received orders from
General Motors India for the development of AIS and CAC Ducts for a new
Commercial Vehicle program, from FIAL for development of Oil Vapor
separator and from Piaaggio, India, RFQ for Air Intake System for Vespa
Scooter.
Further, it has initiated discussion with Tata Motors for development
of complete Exhaust Systems for the Nano Europa & Nano Diesel programs.
A formal LOI is expected very soon.
LCAT has a VISION - 2015, to become a full service provider for
Automotive Exhaust & Air Intake Systems with the application of
innovative and cost effective solutions that will add value to the
customers as well as to the organization.
During the year the Joint venture partners have proposed to make an
investment of Rs. 40 Mn in the 3D Blow Moulding Project for Intake &
CAC Ducts in phased manner by way of equity, out of which Rs. 20 Mn has
already been invested by the Joint Venture Partners in January, 2011.
LCAT has already secured orders for the Intake Ducts from TATA, FIAT,
VW & GM.
DIRECTORS
In accordance with the provisions of Companies Act, 1956 and Articles
of Association of the Company Mr. Sandeep Dinodia and Mr. D.D.Gupta,
Directors are retiring by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for re-appointment.
Your Directors recommend the re-appointment of the above said Directors
at the ensuing Annual General Meeting.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act 1956, the
Directors state:
(i) That in the preparation of the Annual Accounts for the Financial
Year ended March 31, 2011, the applicable Accounting Standards have
been followed along with proper explanation relating to material
departures;
(ii) That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year and of the
profit or loss of the company for that period;
(iii) 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
irregularities;
(iv) That the Directors have prepared the Annual Accounts on a going
concern basis.
FIXED DEPOSITS
During the year under review the Company has not accepted any Deposit
under Sections 58A and 58AA of the Companies Act, 1956 read with the
Companies (Acceptance of Deposits) Rules, 1975.
AUDITORS
M/s D. R. Barve & Co, Chartered Accountants, having its Firm
Registration Number FRN 101034W, are proposed for re-appointment as
Statutory Auditors of the Company, from the conclusion of the ensuing
Annual General Meeting till the conclusion of the next Annual General
Meeting. They have given their consent to act as Auditors of the
Company and have further confirmed that their appointment would be in
conformity of the provision of Section 224(1B) of the Companies Act,
1956. The Board recommends their re-appointment for the approval of the
Members in the ensuing Annual General Meeting.
During the year, all the recommendations of the Audit Committee were
accepted by the Board. Hence there is no need for disclosure of the
same in this Report.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements of the Company are prepared in
accordance with the Accounting Standard, Companies Act and all other
laws for the time being in force (if applicable) and the same forms
part of this Annual Report.
Further, in accordance with the Circular issued by Ministry of
Corporate Affairs (MCA), granting the general exemption from the
provisions of Section 212 of the Companies Act, 1956, your Company is
not attaching the Annual Accounts for the year ended 31st March 2011
and other related documents of its subsidiary Company Lumax DK Auto
Industries Ltd (LDK) with this Annual Report. Any shareholder
interested in obtaining a copy of the Annual Accounts of LDK may write
to the Company Secretary at the registered office of the Company and
the company undertakes to supply the same along with all related
detailed information. In addition, the Company shall also keep the same
Annual Accounts for inspection by any Shareholders in the registered
office of the Company and LDK.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Clause 49 of the Listing Agreement,
Management Discussion & Analysis Report is annexed as part of this
report separately as Annexure - A.
OTHER INFORMATION
Disclosure of information regarding Conservation of Energy, Research &
Development, Technology Absorption and Foreign Exchange Earnings and
Outgo etc. under Section 217(1)(e) of the Companies Act, 1956, is
annexed separately as Annexure - B.
Information of Particulars of Employees as required under Section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules, 1975 forms an integral part of this report. As per
the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the
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 a copy of such statement may write to the Company Secretary
at the registered office of the Company and the same is also available
for inspection in accordance with the provision of Section
219(1)(b)(iv) of the Companies Act, 1956.
GROUP
Pursuant to the intimation from the Promoters, the names of the
Promoters and entities comprising ''Group'' are disclosed in the Annual
Report as Annexure C, for the purpose of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997.
CORPORATE GOVERNANCE
The report on Corporate Governance together with the Auditor''s
Certificate regarding the Compliance of conditions of Corporate
Governance as stipulated in Clause 49 of the Listing Agreement is
annexed and forms part of this Annual Report as Annexure D.
ACKNOWLEDGEMENT
The Directors wish to place on record their sincere thanks to all its
highly valued customers, its Technical Collaborators, Joint Venture
Partners, all other business partners, all the Shareholders, Financial
Institutions, Banks, Vendors and various Government agencies for their
continued support and patronage.
The Board would also like to acknowledge the co-operation & commitment
rendered by all the associates & employees of the Company for their
unstinted support shown during these challenging times.
For and on behalf of the Board of Directors
D. K. JAIN
CHAIRMAN
Place : Gurgaon
Dated : 27th May, 2011
|