The Directors present their Fifty Third Annual report and the Audited
Accounts of your Company for the year ended March 31, 2012.
Sales for the year under review were Rs. 2,051 crores compared to Rs.
1,676 crores in the last year. The financial results of your Company
for the year under review are as below:
(Rs. in Lakhs)
Gross profit before finance
cost and depreciation 17,493 13,228
Finance Costs 7,030 5,362
Depreciation 5,047 4,608
Profit before tax for the year 5,416 3,258
Profit after tax for the year 3,435 2,464
Transfer to General Reserve 2,300 1,600
The Board approved and paid an interim dividend of Rs. 4/- per equity
share of Rs. 10/- each, in March 2012.
Your Directors are pleased to recommend a final dividend of Rs. 6/- per
equity share of the face value of Rs.10/- each, for the year ended 31st
March, 2012. The final dividend, recommended, if approved at the Fifty
Third Annual General Meeting, will be paid to all the shareholders
whose names appear in the Register of members as on the Book closure
The total dividend for the financial year including the proposed final
dividend amounts to Rs. 10/- per equity share and will absorb Rs. 11.47
Crores including Dividend Distribution Tax of Rs. 1.60 Crores
Management Discussion and Analysis
The last financial year saw tumultuous events on the world stage from
the Arab Spring to the Japanese earthquake-tsunami to the Euro crisis.
The Indian economy saw the GDP growth come down to 6.8% as the nation''s
fiscal and trade deficit widened and inflation remained at high levels.
Coming on the back of a year of strong growth, the headwinds of the
slowing economy affected all domestic market segments serviced by your
The passenger car market was additionally burdened by two factors.
There was a major industrial dispute affecting production at the
largest car manufacturer for over a month. The year also saw a widening
gap between petrol and diesel prices leading to consumers increasingly
preferring diesel vehicles. The supply chain capacities in diesel
engines was not able to ramp up adequately to meet this demand. As a
result, the passenger car market had only a marginal growth during the
The traditional commercial vehicle market saw growth in the heavy and
light segments with no growth in the medium commercial vehicles. This
resulted in the commercial vehicle segment growing at only single digit
rates. Outside of the traditional CV market there continued to be
strong growth in the small commercial vehicle market. Even the
agricultural tractor market saw moderated growth as the slowdown in the
economy started affecting all market segments. The construction and
mining equipment wheel segment of your Company is truly international
in nature and a resurgence in global demand augurs well for your
Company in the coming years.
Your Company faced increased competition in all domestic industry
segments, as demand slowed down. While Company grew at around industry
rates in all segments, it benefited from its relatively stronger
position in the growing small commercial vehicle segment. The air
suspension system division of your Company, that had seen a decline in
the previous year, saw strong growth off the low base, with demand from
both state transport undertakings and private operators. In the energy
equipment structural parts division, your Company was able to scale up
above break-even levels. It was really the growth in the earth moving
and construction equipment wheel global business together with new
segments of businesses that were taken up that helped your Company to
grow at a faster rate above the domestic vehicle industry levels.
While the year under review saw a slower rate of growth, it had its
share of inflationary forces to deal with, with higher material costs
at the start of the year and high energy costs at the year-end. Added
to this, a double digit depreciation of the Indian Rupee vis-a-vis the
US Dollar added to the cost pressures. In this environment, your
Company dedicated its efforts for the year on operational cost control
across its plants. This has built strength and teamwork within the
organization that can be harnessed in the years to come. During the
year, your Company signed a technical agreement with Topy Industries, a
leading Japanese wheel manufacturer, that will strengthen the passenger
car wheel business.
The coming year is likely to see the Indian economy grow at around 7%,
and the domestic industry segments are likely to grow at single digit
levels. There is particularly some concern on the growth prospects of
the tractor and truck markets in the country. Your Company is a
supplier in some of the high volume newer models in the passenger car
segment and is likely to benefit from this in the coming year. We
continue to see reasonable growth in the construction and mining
equipment business worldwide, as also the non-wheel business. The major
concerns in the year ahead is inflation in the cost of most inputs.
Your Company has a reasonably large foreign exchange exposure to the
extent of approximately 23% of sales by way of exports and imports. To
add to this, in the year under review, there was a steep depreciation
of the Indian Rupee vis-a-vis the US Dollar particularly in the second
half of the year. This element of foreign exchange risk is likely to
continue in the current year.
Mr Aroon Raman, who was appointed as a Director in the vacancy caused
by the resignation of Mr T T Rangaswamy holds upto the conclusion of
the 53rd Annual General Meeting and being eligible, offers himself for
appointment by the members.
The Company has received notice under Section 257 of the Companies Act,
1956 from a member of the Company proposing Mr Aroon Raman to be
appointed a Director.
Under Article 94(3) of the Company, Mr S Viji and Mr T S Vijayaraghavan
retire by rotation and being eligible offer themselves for re-election.
In pursuance to Clause 49 of the Listing Agreement with the Stock
Exchange, Corporate Governance Report is given elsewhere and forms part
of this Report.
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956 and Corporate
Governance Voluntary Guidelines, 2009 issued by the Ministry of
Corporate Affairs, your Directors confirm that:-
1. in the preparation of the annual accounts, the applicable
accounting standards have been followed;
2. such accounting policies have been selected and applied
consistently and judgments and estimates made that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
your Company as at 31st March, 2012 and of the profit of the Company
for the year ended on that date;
3. proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
4. the annual accounts have been prepared on a going concern basis and
5. proper systems are in place to ensure compliance with all laws
applicable to the Company
M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai retire at
the conclusion of the Fifty Third Annual General Meeting and are
eligible for re-appointment. The Directors recommend their
Internal Control and Audit
The Company has a well established internal control system which helps
in ensuring that the assets of the Company are properly protected. The
effectiveness of the internal control system is constantly monitored by
the internal audit department along with the external audit firms
appointed to carry out the internal audit of the various units of the
Company. The Audit Committee periodically reviews the reports on the
internal audit findings and takes appropriate decisions to implement
corrective action wherever required.
During the year under review, your Company''s Padi plant won the All
India Organisation of Employers (AIOE) Industrial Relations Award for
the year 2010-11.
Your Company received awards from TAFE, Toyota, Caterpillar and Maruti
Suzuki for its performance, quality and supply of products.
Your Company gives high priority to the Safety and the objective is to
achieve a zero incident. To ensure Safety and create a safe work
environment, Safety Audit is being conducted regularly and reviewed by
the Company. Further, safety performance is being reviewed by the
top-level management every month. Your Company also gives safety
training to create awareness on safety to all the employees
Corporate Social Responsibility
Your Company believes that Corporate Social Responsibility is an
integral part of the business. As a part of its CSR activity:-
- your Company established educational facilities in Thiruvannamalai
District to cater to the needs of the children. Your Company along with
reputed Non Governmental Organization, has set up SuperKidz Centers in
13 villages in Vembakkam, Thiruvannamalai District, wherein most of the
children in Vembakkam, Thiruvannamalai District have benefited.
- Special Health check up camp was conducted in association with ESI
Hospital Chennai and Sriperumbudur during the year under review .
Particulars of Employees
None of the employees of the Company was in receipt of remuneration in
excess of the limits prescribed under Section 217(2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975.
Particulars prescribed by the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 are enclosed in the
annexure and form part of this report.
The Directors wish to thank United Bank of India, State Bank of India,
Standard Chartered Bank and HDFC Bank Limited for their continued
Your Company continues to have the full cooperation of all its
employees. The Directors would like to place on record the appreciation
of the efforts of the employees in controlling costs and improving the
profitability of the Company.
On behalf of the Board of Directors
Chennai S Ram
30th May 2012 Chairman