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Igarashi Motors Ltd.

BSE: 517380 | NSE: IGARASHI |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE188B01013 | SECTOR: Electric Equipment

BSE Live

Jul 09, 16:00
281.90 6.75 (2.45%)
Volume
AVERAGE VOLUME
5-Day
23,215
10-Day
19,967
30-Day
23,926
12,159
  • Prev. Close

    275.15

  • Open Price

    280.00

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

NSE Live

Jul 09, 15:58
282.00 6.75 (2.45%)
Volume
AVERAGE VOLUME
5-Day
181,246
10-Day
134,121
30-Day
308,776
119,314
  • Prev. Close

    275.25

  • Open Price

    276.60

  • Bid Price (Qty.)

    282.00 (549)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

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Director’s Report

Your Directors present the Fourteenth Annual Report of your Company, together with the Audited Accounts for the year ended 31st March 2006. FINANCIAL RESULTS Your Companys performance during the year as compared with that of the previous year is summarized below: (Rs. in Lakhs) 2005-06 2004-05 Export Sales 16,846.95 9,590.07 Domestic Sales 679.24 884.88 Total Sales 17,526.19 10,474.95 Add : Other Income 715.11 591.03 Total Income 18,241.30 11,065.98 Less: Materials & Manufacturing Expenses 13,585.31 8,021.15 Less: Value Addition Cost 3,888.37 2,237.38 Profit Before Depreciation & Amortization Expenses 767.62 807.45 Less : Depreciation & Amortization Expenses 604.01 425.78 Profit Before Tax 163.61 381.67 OPERATIONS During the year under review, the cost of steel and copper wires increased substantially. These are basic raw materials used by your Company. Your Company has taken various measures to address these competitive challenges by way of in sourcing, improving productivity, re-organizing operations and talking to customers. Your Company has so far been offering fixed price contracts to its customers as desired by them. Steep rise in the price of Steel and Copper during last year was not anticipated while booking these orders. This has resulted in significant increase in cost of production and consequent lower operating margins. Your Company has taken various measures to address these issues. These include insourcing of components and where possible, renegotiating the contracts with the customers. The Profitability was also adversely affected due to increase in supply chain cost to meet the increased off take of our customers. These costs are now under control. The weakening of Euro also affected our Profitability. We have taken steps to hedge against currency fluctuation to minimize such effects. The steps as mentioned above along with focus on further improving productivity, streamlining operations and other cost out measures will result in improved operating margins. Your Board is confident of sustaining the growth momentum as your Company has already embarked on additional business programs required by our customers. INCREASE IN SHARE CAPITAL During the year under review, your Company raised equity through preferential allotments on private placement basis based on members approval at the Extra-Ordinary General Meetings held on 7th April, 2005 and 20th January, 2006 the details of which are given below: a) Allotted 8,49,382 equity shares of Rs. 10/- each at an issue price of Rs. 180/- (Incl. Premium) per share and 8,54,900 optionally convertible warrants at Rs. 180/-per warrant (Rs. 18/- paid on allotment & balance of Rs. 162/- per warrant is payable on conversion) to M/s. Aeneas Evolution Portfolio Limited. b) Allotted 11,25,000 equity shares of Rs. 10/- each at a price of Rs. 214/- per share (incl. Premium) in the aggregate to Foreign Institutional Investors viz., M/s. T. Rowe Price International Inc., (i.e 4,25,000 shares) and M/s. Lloyd George Investment Management (Bermuda) Limited (i.e 7,00,000 shares). Consequent to above, the number of paid-up equity shares increased from 1,19,00,000 shares to 1,38,74,382 shares as of March 31, 2006. The Company has not utilized the funds raised by way of Preferential Allotments for purposes other than those stated in the Notice convening Extra-ordinary General Meetings. DIVIDEND Based on the confidence in the performance of your Company in the coming years, your Directors are pleased to recommend a dividend of Rs 1.50 per share on 1,38,74,382 equity shares of the Company in respect of the financial year 2005-2006. TRANSFER TO RESERVES The Company proposes to transfer Rs 406.07 Lakhs to the Reserves and the Reserves after the transfer at the end of the year 31st March, 2006 is Rs 5,823.56 Lakhs as against the Total Reserves of Rs. 2,209.59 Lakhs as at 31st March, 2005. QUALITY AND ENVIRONMENT Your Directors are pleased to inform you that during the year your Company continued to work on live APQP (Advanced Product Quality Planning) processes for different Programs in the automotive industry. This ensures an effective advance failure mode analysis to ensure that Quality gets built into the Design as well as Process. AWARDS/RECOGNITION Your Company has been awarded TS-16949 Certification, the new process based Quality System which will translate the Quality Model from Design of Product and Process to all elements of the Organization. During the year, your Company has been awarded ISO 14001 Certification for compliance of Environmental Management System requirements. DIRECTORS Mr. T Igarashi and Mr. Keiichi Igarashi, Directors retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. The brief resume/details relating to Directors who are to be re-appointed as stipulated under Clause 49(IV)(G) of the Listing Agreement executed with the Stock Exchanges are furnished in the Report on Corporate Governance. DIRECTORS RESPONSIBILITY STATEMENT In compliance of Section 217(2AA) of the Companies Act, 1956 your directors, on the basis of information made available to them, confirm the following: a) In the preparation of the annual accounts, for the year 2005-06 the applicable Accounting Standards have been followed and there are no material departures; b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at 31st March 2006 and of the profit of the Company for the year ended on that date; c) Proper care has been taken for maintenance of adequate accounting records for safeguarding the assets of the Company and detecting fraud and other irregularities; d) The accounts are prepared on a going concern basis. FIXED DEPOSITS During the year under review, your Company has not invited or accepted any deposits from the public under Section 58A of the Companies Act, 1956 and Rules made thereunder. IGARASHI TECHNOLOGIES PRIVATE LIMITED-SUBSIDIARY COMPANY The Company is engaged in the business of designing Product and Process Technology of motor sub ssemblies, motors and motor systems. The first indigenously designed Motor for an Engine application is likely to capture a significant Global market share. Many new motors for Domestic applications have been designed and they are being launched progressively. The Company in its first full year of operation recorded Net Sales of Rs. 116.89 Lakhs and Net Profit of Rs. 26.43 Lakhs. The Company has worked on various product and process development manily for Igarashi Group and will soon commence Engineering and Technolgy work for clients other than Igarashi Group. As required by Accounting Standards, the financial statements of your Company reflecting the Consolidation of Accounts of the Company along with Igarashi Technologies Private Limited (Subsidiary Company) are annexed to this report. CORPORATE GOVERNANCE A Report on Corporate Governance along with a certificate from the Auditors of the Company regarding compliance of the requirements of Corporate Governance pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges are annexed hereto. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report of the Company for year under review as required under Clause 49 of the Listing Agreement with the Stock Exchanges, is given as a separate Statement in the Annual Report. AUDITORS M/s. Sharp & Tannan, Auditors of the Company retire at the ensuing Annual General meeting and being eligible, offer themselves for re-appointment. Members are requested to appoint Auditors for the current year and authorize the Board to fix their remuneration. As required under the provisions of Section 224 of the Companies Act, 1956, the Company has obtained a written Certificate from the above Auditors proposed to be re-appointed to the effect that their re-appointment, if made, would be inconformity with the limits specified in the said section. ESOP-Proposed Scheme World over employees stock options schemes have been used as a successful tool to reward those employees who are performing well, encourage performance improvement, retain talent, align employee interest with those of the organisations and to motivate talented human resources for the Company. It is therefore proposed to introduce Employees Stock Options Scheme for the employees of the Company, including eligible Directors, to be decided by the Board of Directors of the Company/Compensation Committee constituted by the Board of Directors. The proposed scheme will strictly adhere to the norms, guidelines and regulations prescribed from time to time by the Securities Exchange Board of India and other regulatory requirements. OTHER MATTERS During the year under review, your Company has divested 50% of its investment in Igarashi Brush Cards Private Limited and earned Income of Rs. 650 Lakhs. INCOME TAX DEMAND The Assistant Commissioner of Income Tax, Company Circle II (3), Chennai has issued a notice demanding Rs. 77.44 Lakhs for the assessment year 2003-04 in connection with computation/method of calculation of Income Assessable under the Income Tax Act, 1961. The said demand is subject of appeal before the prescribed authorities. DELPHI Your Companys Customer Delphi,USA along with its U.S Subsidiaries had filed voluntary petition on October 08, 2005 for re-organization relief under Chapter 11 of title 11 of the United States Code, 11 U.S.C before Bankruptcy Court at New York, USA. Since, your Company is a key supplier, all dues outstanding on petition date have been paid and after petition date the supplies to Delphi, USA and payments continue smoothly. HUMAN RESOURCES Your Company continues to focus on improving employee skills and productivity through appropriate Human Resources Development initiatives. The Board of Directors wishes to place on record their sincere appreciation to all the employees of the Company for their dedication, commitment and loyalty to the Company. None of the employees received remuneration during the year in excess of limits set out inder Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION The information required to be furnished pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is appended hereto and forms part of this Report. FOREIGN EXCHANGE EARNINGS AND OUTGO The details of expenditure and earnings in foreign currency are given in the prescribed format as an annexure to this Report. LISTING The shares of your Company continued to be listed at National Stock Exchange, Bombay Stock Exchange and Madras Stock Exchange. Listing fee has already been paid for the financial year 2006-07. Further, Annual Custody Fee has also been paid to NSDL and CDSL. ACKNOWLEDGEMENT The Board places on record its sincere appreciation for the continued support from the relevant Government Authorities, Promoter Companies, Shareholders, Suppliers, Customers, Employees and other business associates, for the strong support. For and on behalf of the Board of Directors Place : Chennai K.K Nohria Date : 14th June, 2006 Chairman ANNEXURE TO THE DIRECTORS REPORT A. CONSERVATION OF ENERGY a. Energy Conservation Measures Taken: * Implemented Waste Heat Recovery Process by Vapor Absorption Machine to run Air Conditioners which replaces 701 Tones utilizing waste fuel (exhaust) gases from Captive Generators; * Additional variable frequent drives with Microprocessor Controlled Screw Compressors to reduce Power Consumption; * Air Conditioners upgraded to Energy Efficient scroll compressor units has become mostly operational; * Additional investments and proposals, if any, implemented for reduction of Consumption of energy: * On going investments on implementing energy conservation on areas in (A) above. B. TECHNOLOGY ABSORPTION FORM B Technology, absorption, adaptation and innovation a. Efforts, in brief, made towards technology absorption, adaptation and innovation : Developed new products at India Established Technology center for motors in India by working with collaborators for new applications of DC Motors. Working with Suppliers of Equipment and Machinery for improved productivity machinery for Process Technology up-gradation Understanding of new Hi-Technology and more efficient manufacturing processes for component making resulting in quality improvement and cost reduction. b. Benefits derived as a result of the above efforts: Opening up of new global market opportunities Lower cost of materials, parts and manufacture Better quality of parts c. Expenditure on New Product Development 2005-06 (Rs.Lakhs) Total Program Expenditure 303.20 Less : Amortized Expenditure 4.18 Net Expenditure 299.02 d. Information regarding imported technology during the last 5 Years: a. Technology imported : Permanent Magnet DC Micro motors Technology b. Year of Import : 1993-94 c. Status : Absorbed d. If not fully absorbed : Not Applicable C. FOREIGN EXCHANGE EARNINGS AND OUTGO a. Activities relating to Exports; initiatives taken to increase exports; development of new export markets for products & export plans: As the Company is 100% export oriented, refer para on Company Business Growth/Strategy of the Management Discussion Analysis Report of the Main report. b. Total Foreign exchange used and earned: 2005-06 2004-05 (Rs.Lakhs) (Rs.Lakhs) Total Foreign Exchange earned 16,845.75 8,144.99 Total Foreign Exchange used 11,646.53 6,268.19 (Excludes payments for capital goods: Rs.1,742.50 lakhs (Previous Year: Rs.874.48 lakhs)). For and on behalf of the Board of Directors Place : Chennai K.K Nohria Date : 14th June, 2006 Chairman

Director’s Report