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Wheels India Ltd.

BSE: 590073 | NSE: WHEELS |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE715A01015 | SECTOR: Auto Ancillaries

BSE Live

Sep 21, 11:14
761.20 -10.60 (-1.37%)
Volume
AVERAGE VOLUME
5-Day
2,950
10-Day
2,198
30-Day
2,969
262
  • Prev. Close

    771.80

  • Open Price

    779.40

  • Bid Price (Qty.)

    759.90 (1)

  • Offer Price (Qty.)

    762.25 (14)

NSE Live

Sep 21, 11:14
760.00 -12.15 (-1.57%)
Volume
AVERAGE VOLUME
5-Day
17,307
10-Day
14,337
30-Day
21,185
5,213
  • Prev. Close

    772.15

  • Open Price

    786.60

  • Bid Price (Qty.)

    760.00 (97)

  • Offer Price (Qty.)

    762.40 (1)

Annual Report

For Year :
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Director’s Report

The Directors present their Forty Ninth Annual Report and the Audited Accounts for the year ended 31st March, 2008. Financial Results Sales for the year under review were Rs. 1130 crores compared to Rs. 1003 crores in the last year. The financial results of your Company for the year under review are as below: 2007-2008 2006-2007 (Rs. in Lakhs) Gross profit before interest and depreciation 10,170 8,593 Interest 3,069 2,052 Depreciation 3,127 2,672 Profit before tax for the year 3,974 3,869 Profit after tax for the year 2,586 2,603 Dividend Two interim dividends totaling to 70% amounting to Rs.6,90,86,108/- were paid for the year ended 31st March, 2008. The Directors are not recommending any further dividend for the year ended 31st March, 2008. Management Discussion and Analysis In the last year, the Indian economy grew at 9%, slightly lower than the 9.4% growth in GDP in the preceding year. The latter part of the year, saw some slowdown in the momentum of growth, especially in the manufacturing sector which grew at 8.8% as against 12.1% in the previous year. A higher growth of 4.5% in the agriculture sector made up for the lower growth in industry and services. The latter part of the year and the beginning of this year saw severe global inflationary trends in commodities, resulting in high inflation. The government has tried to restrict money supply to counter inflation. The combination of inflation and tighter money supply is likely to restrict growth in the coming year. The medium and heavy commercial vehicle segment saw a decline of 2% in 2007-08 as against a growth of 35% in the previous year. Within this, the goods haulage segment saw a steep drop of 16%, which was partially offset by growth in buses and tippers. In light of the environment of economic uncertainty in the current year, we expect no growth in the commercial vehicle market. Similarly, in the light commercial vehicle segment, the last year saw growth slowing down to 10% from 33% in the previous year. We expect only a marginal growth in the coming year. In the passenger car and utility vehicle segment, growth slowed down to 12% from 22% in the previous year. This growth is likely to further come down to 8% in the current year. The uncertainty caused by inflation and high fuel prices will curtail growth to some extent. The growth in the segment will come primarily from new models and export based programs of car manufacturers. The agricultural tractor market declined in volume by 5%, after a positive growth of 20% in the previous year. In spite of reasonable growth in the agricultural sector, the tractor market declined partly due to excess capacity that had built in the previous year and partly due to tighter availability of money. While the coming year is expected to have a good monsoon, issues of availability of finance is likely to result in only a marginal growth in the tractor market. The mining and construction equipment industry grew in excess of 30% for the third consecutive year. In the coming year, availability of finance is likely to affect the lower end segments of the industry. At the same time, the commodity markets and export programs of equipment manufacturers will ensure growth at the higher end to maintain the growth in the current year. Your company is a major supplier to the international market in this industry. In the international market, while all customers are looking at double digit growth, Asia-Pacific, where we have a significant share, is likely to grow at 20% in the coming year. In the last fiscal, the companys performance mirrored the various industry segments. In addition to the segments covered, we did double our sales in air suspension systems as public transport corporations across the country looked at buses with factory fitted air suspension. We expect this trend to continue in the current year. In the last fiscal, we had successfully filed for anti-dumping duty against Chinese truck wheel imports. This along with cost escalations in China, will stand the company in good stead, as our capacities come on stream later on in the year. In the current year, the availability and prices of steel are major concerns. The prices have increased by over 30% in the current fiscal. At the same time, availability of steel in the country is tight and our ability to manage the situation will be a critical factor in our growth in the coming year. Our international business grew by 23% in the year under review and forms 18% of our business. This performance has been during a period in which the Indian Rupee has appreciated by almost 10%. We expect our export business growth trend to continue in the current year. In the last year, your company commenced production at a new plant at Sriperumbudur for manufacture of large earthmover wheels for mining trucks. The plant was commissioned in a record period of 9 months and we expect the plant to break even in the latter part of the coming year. In the coming year, we will commission our plant at Pantnagar in Uttarkhand. Your company has started a new company, Sundaram Hydraulics Ltd, along with Sundaram Finance Ltd (your company will hold a 49% stake) for manufacture of hydraulic cylinders for the construction equipment industry. We believe that there is a tremendous opportunity to develop, manufacture and market this product to a number of our existing customers. It has been through the team work and efforts of your Companys employees that we have been able to manage our operations in these difficult times. Inflation compounded by slow growth is a major challenge that your company has to face in the coming year. In line with this, we are actively looking at cost rationalization exercises at all our plants to improve our competitiveness. Your company has an adequate system of internal control commensurate with the size and nature of the Companys business. The internal auditors conduct periodical audits to ensure adequacy of internal control systems, adherence to management policies besides ensuring compliance with laws and regulations of the country. We are in the process of implementing the ERP package SAP to improve the internal controls and responsiveness of your organization. Directors Under Article 94(3) of the Company, Mr J M A Akers and Mr T K Seshadri, retire from office by rotation, and being eligible, offer themselves for re-appointment. Corporate Governance 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, your Directors confirm that i. in the preparation of the annual accounts, the applicable accounting standards have been followed; ii. such accounting policies have been selected and applied consistently and judgements 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, 2008 and of the profit of the Company for the year ended on that date; iii. 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 and iv. the annual accounts have been prepared on a going concern basis. Auditors M/s Sundaram & Srinivasan, Chartered Accountants, Chennai retire at the conclusion of the Forty Ninth Annual General Meeting and are eligible for re-appointment. The Directors recommend their re-appointment. 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. General 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 support. Your Company continues to enjoy the full co-operation of all its employees. The Directors wish to place on record their appreciation of the good work done by them. On behalf of the Board of Directors Chennai S Ram 27th June, 2008 Chairman & Managing Director

Director’s Report