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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

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Annual Report

For Year :
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Director’s Report

The Directors present their Fifty Eighth Annual report and the Audited Accounts of your Company for the year ended March 31, 2017.

Directors’ Report to the Shareholders


Sales for the year were Rs. 2,141 crores compared to Rs. 1,981 crores in the last year showing an increase of 8.08 % when compared with the previous year.

Financial Results

The financial results of your Company for the year under review are as below:

(Rs in Crores)



Gross profit before finance cost and depreciation



Finance Cost






Profit before tax for the year



Profit after tax for the year



Transfer to General Reserve



Dividend and transfer to General Reserve

The Board approved and paid an interim Dividend of Rs 5/- per equity share (50%) in February 2017.

Your Directors are pleased to recommend a final dividend of Rs. 8.00 per equity share (80%) for the year ended 31st March, 2017. This final dividend, subject to approval at the 58th Annual General Meeting, will be paid to all the shareholders whose names appear in the Register of members as on the book closure date. The total dividend payout for the financial year is Rs. 15.64 crores on which the dividend distribution tax amounts to Rs. 3.31 crores.

The Company intends to transfer Rs.25.00 crores to the General Reserve. A sum of Rs.38.65 crores is proposed to be retained in the Statement of Profit and Loss.

Management Discussion and Analysis

It is estimated that the global economy grew by 3.1% in 2016, and it is expected to grow at close to 3.5% in 2017, with growth in both emerging and developed economies. The year saw the strengthening of fuel and metal commodity prices over the year. The period was eventful with Brexit, the election of Donald Trump as President of the United States, demonetization in India and the anti-trade rhetoric of international leadership. The good monsoon in the last year, after two lean years saw Indian GDP grew at 7.1%. The current account deficit was contained under 1% and there were strong FDI inflows into the country. Notwithstanding, the global uncertainties, major economies expect higher growth in the year ahead.

After a year of strong growth in the previous year, the market for medium and heavy commercial vehicles was stagnant, with the “pre-buy” ahead of the BS IV deadline in the fourth quarter, offsetting a dip in the market in the preceding two quarters. The tipper segment grew along with the rapid infrastructure activities in the country, and the passenger vehicle market showed a positive trend. The goods carriage segment of the medium and heavy commercial vehicle market was sluggish. In the light commercial vehicle market, the business cycle typically lags that of the medium and heavy commercial vehicle market, though there was reasonable growth.

The passenger car market grew by 11%, driven by new model introduction and effective market segmentation by major vehicle manufacturers. The penetration of alloy wheels in the passenger car segment has reached 27%, limiting the growth of steel wheels.

The rural and agricultural economy were affected by demonetization. However, a good monsoon and a 5.4% rise in the wholesale price index of food articles saw the agricultural tractor market grow by 14%.

The global construction and mining industry struggled through most of the year, with manufacturers shutting down capacities across plants. The lower activity levels across the globe slowed the construction equipment industry in the year under review. In India, however, the construction equipment market showed good growth driven by active road building in the country. While the global mining equipment saw an increase in commodity prices, it was only towards the end of the year that it started to reflect in increased requirements notably in Asia.

The demand for buses with air suspension systems saw a strong growth in the year under review, with large purchases by state transport corporations and export of buses by OEMs. The buying of buses with air suspension by corporations is a cyclical market with peaks and troughs. The year also saw the full year operation of the Company''s lift axle suspension business.

We continued to see growth in the wind energy segment with India adding 5,400MW of windmills in the year under review. Your Company is a major supplier of fabricated and machined parts for this sector and grew along with the industry. The thermal power equipment industry, however, continues to struggle, as there is a shift towards renewable energy in the country.

The Government of India imposed safeguard duties and a minimum import price for steel coming into the country to protect the Indian steel industry, in the year under review. This resulted in an increase in the steel price in India. In the second half following, commodity price increases, the international steel prices have also increased. There were also challenges in managing the foreign currency exposure in the period just after Brexit and at the end of the year when the Rupee appreciated against the Dollar.

Your Company saw sales increase by over 9% in the year under review, partly the effect of higher steel prices. There was also a strong growth in the air suspension business, and good growth in the windmill parts business and tractor wheel business, that helped your Company to show sales growth.

The concerns of low capacity utilization in passenger car steel wheels continued and quarterly variations in volume affected effective utilization in the truck and tractor wheel lines. Your Company persists with its rigorous cost control review mechanism, strengthened its safety practices across plants, and started a robust quality improvement program across plants. In recognition of its performance, your Company received customer awards from Caterpillar, Ford, Hyundai, Maruti Suzuki, TAFE and Volvo Eicher.

In the coming year, with the expectations of a good monsoon, the economy having demonetized and with the government planning to spend on the rural economy and infrastructure, we expect a higher GDP growth. However, the medium and heavy commercial vehicle segment is likely to marginally decline, post the implementation of BS IV, as the effect of the “pre-buy”. The passenger car market is likely to remain decent and the utility vehicle market and tractor markets are likely to improve as the government''s focus on rural economy increases. We expect the air suspension business to grow marginally largely due to growth in the lift axle suspension business of your Company. We expect to grow the wheel business to the Indian Defense equipment. The forged aluminum wheel business of your Company should grow as capacities are being put in place in the coming year. We also expect the growth in the windmill parts business to continue. Overall, the coming year is one in which we expect to have similar growth in sales, as in the year under review.

The challenges in the coming year will remain those of cost control at a time of industrial inflation. The other challenge will be of managing foreign exchange risk at a time of relative volatility in the currency markets. Your Company will also need to ensure that it launches new products on time, as a lot of the business growth comes from new products. There are many changes that are likely to come in the coming year including GST, amongst other government initiatives that your Company will have to adapt. In these times of change, much as there are likely to be changes in the way we do business, there are equally opportunities for us to learn and grow.

Consolidated Financial Statements

In accordance with the provisions of Section 129(3), of the Companies Act, 2013 (“2013 Act”), the consolidated financial statements drawn up in accordance with the applicable Accounting Standards, forms part of the annual report.

In accordance with the provisions of Section 136 of the 2013 Act, the audited financial statements, including the consolidated financial statements and related information of the Company and audited financial statements will be available on our website These documents will also be available for inspection during business hours at the registered office of the Company.

Axles India Limited, an Associate Company has achieved a turnover of Rs 417.36 crores and profit before tax of Rs 21.53 crores for the financial year 2016-17 (unaudited) as against the turnover of Rs 494.75 crores and profit before tax of Rs 19.23 crores for the financial year 2015-16. The share of profit is Rs 1.34 crores for the financial year 2016-17 (unaudited) and Rs 1.19 crores for the financial year 2015-16.

A statement containing the salient features of the financial statements of the Associate Company is provided in Form AOC1. Refer Annexure I of this report.

Fixed Deposits

As at 31st March, 2017, fixed deposits accepted by the Company from public and shareholders aggregated to Rs.120.69 crores, which are within the limits prescribed under the 2013 Act and the rules framed there under.

The provisions of the 2013 Act also mandate that any Company inviting/ accepting/ renewing deposits is required to obtain Credit Rating from a recognized credit rating agency. Your Company has obtained a credit rating for its fixed deposits from ICRA.

The details relating to deposits covered under Chapter V of the 2013 Act are given in Annexure II forming part of this Report.

Board Evaluation

Pursuant to the provisions of Section 134 (3) (p), Section149(8) and Schedule IV of the 2013 Act, SEBI (Listing Obligations & Disclosure Requirements Regulations) 2015 (“SEBI LODR”), Annual Performance Evaluation of the Board, the Directors as well as Committees of the Board has been carried out.

The Performance Evaluation of the Independent Directors was done by the entire Board and that of the Chairman and Non Independent Directors by the Independent Directors. The criteria and manner in which the evaluation has been carried out are provided in Annexure II forming part of this Report.

Particulars of Loans, Guarantees or Investments

The Company has not given any loans or guarantees covered under the provisions of Section 186 of the 2013 Act. The details of the investments made by Company are given in the notes to the financial statements.


Under Article 94(3) of the Company, Mr CMB Akers (DIN 06979883) retires by rotation and being eligible, offers himself for re-election. Brief resume of the Director proposed to be appointed along with additional information pursuant to SEBI LODR is given in the Corporate Governance Report.

All the Independent Directors have given declaration that they meet the criteria of independence as laid down under Section 149(6) of the 2013 Act.

Key Managerial Personnel

The Board of Directors appointed/designated Mr. R Raghunathan as Chief Financial Officer and Mr. S Balasundharam as Company Secretary and Compliance Officer with effect from 11th April, 2017 pursuant to the superannuation of Mr. S Srivathsan, CFO and Company Secretary and Compliance Officer on April 10, 2017.

Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Company''s policy on appointment and remuneration including criteria for determining qualifications, positive attributes and independence are provided in the Corporate Governance Report forming part of this Report. The policy is given as Annexure III forming part of this Report.

Corporate Social Responsibility

As an initiatives under Corporate Social Responsibility (CSR), in accordance with Schedule VII of the 2013 Act, your Company constituted the CSR Committee under the Board. This Committee is to frame, monitor and execute the CSR activities. The Board has approved the CSR policy and guidelines for implementation. The Committee effectively supervises the programmes.

Your Company has fulfilled its obligation towards CSR by spending a sum of Rs 91.28 lakhs during the year. The constitution of the CSR Committee and the report as required under the 2013 Act, are provided in Annexure IV, forming part of this Report.

Risk Management, Internal Financial Control Systems and Audit

Your Company has implemented a mechanism for risk management and has formulated a Risk Management Policy. The Policy provides for identification of risks and mitigation measures. The Audit committee is informed on the risk assessment and minimization mechanism adopted by the Company.

Implementation of IT based Governance, Risk and Compliance (GRC) software across the multiple locations of the Company has further bolstered the business processes and has assisted the internal audit in achieving a controlled environment.

Your Company maintains adequate and effective Internal Controls commensurate with its size. These reasonably assure that the transactions are duly authorized and recorded to facilitate compiling of financial statements in line with the established practices and that the assets are secured against any misuse or loss. The internal control system is supplemented through an extensive internal audit program besides periodic review by the Management and Audit Committees. The Company has in place adequate internal financial controls.

Vigil Mechanism / Whistle Blower Policy

In accordance with the requirements of the 2013 Act, your Company has established a Vigil Mechanism/ Whistle Blower Policy for Directors and Employees to report genuine concerns. The said Policy meets the requirement of the Vigil Mechanism framework under the 2013 Act, and the members can view the details of the policy on

Director’s Responsibility Statement

The Directors acknowledges their responsibility of ensuring compliance with the provisions of Section 134(3)(c) of the 2013 Act. To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the 2013 Act:

a. that in the preparation of the annual financial statements the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies as mentioned in the financial statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the 2013 Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Related Party Transactions

The Company has formulated a policy on related party transactions and the same is uploaded on the Company''s website

All Related Party transactions that were entered into by the Company during the financial year 2016-17, were in compliance of Section 188 of the 2013 Act and the Rules framed there under. There are no “Material” contracts or arrangement or transactions at arm''s length basis and hence disclosure in form AOC-2 is not required.

All Related Party transactions were placed before the Audit Committee for their prior approval in accordance with the requirements of the SEBI LODR. The transactions entered into pursuant to such approval are placed periodically before the Audit Committee for its review.

There are no materially significant Related Party transactions made by the Company with Promoters, Directors, and Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

Meetings of the Board

The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other businesses. The Board / Committee Meetings are pre-scheduled and a tentative annual calendar of the Board and Committee Meetings are circulated to the Directors in advance to facilitate them to plan their schedule and to ensure meaningful participation in the meetings.

Resolution passed by Circulation: In case of special and urgent business need, the approval of the Board/ Committee is taken by passing resolutions through circulation, as permitted by law, which are confirmed in the subsequent meeting. The details of the meetings of the Board as well as the Committees are disclosed in the Corporate Governance Report, forming part of this Report.

Significant and Material Orders Passed by the Regulators or Courts

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. There are no material changes and commitments, if any, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

Employees and details of Remuneration:

None of the employees of the Company was in receipt of remuneration in excess of the limits prescribed under the 2013 Act and the rules framed there under.

The statement of Disclosure of Remuneration under Section 197 of the 2013 Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (“Rules”), is provided in Annexure V forming part of this Report.

The information as per Rule 5(2) of the Rules, forms part of this Report. However, as per first proviso to Section 136(1) of the 2013 Act and second proviso of Rule 5(2) of the Rules, the Report and Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees under Rule 5(2) of the Rules. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company. The said statement is also available for inspection by the members at registered office of the Company during office hours till the date of Annual General Meeting.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, there were no cases filed pursuant to the above Act.

Corporate Governance

In pursuance to SEBI LODR, Corporate Governance Report is given in Annexure VI and forms part of this Report.


As per Section 139 of the 2013 Act, read with the Companies (Audit and Auditors) Rules, 2014, the term of M/s. Sundaram & Srinivasan, Chartered Accountants, Chennai as the Statutory Auditors of the Company expires at the conclusion of the ensuing Annual General Meeting of the Company.

The Board of Directors of the Company at their meeting held on 29.05.2017, on the recommendation of the Audit Committee, have made its recommendation for appointment of M/s. Brahmayya & Co, Chartered Accountants (ICAI registration number FRN 000511S), as the Statutory Auditors of the Company subject to the approval of the Members at the 58th Annual General Meeting of the Company for a term of 5 years.

Accordingly, a resolution, proposing appointment of M/s. Brahmayya & Co, Chartered Accountants, as the Statutory Auditors of the Company for a term of five consecutive years i.e. from the conclusion of 58th Annual General Meeting till the conclusion of 63rd Annual General Meeting of the Company pursuant to Section 139 of the 2013 Act, forms part of the Notice of the 58th Annual General Meeting of the Company.

The Company has received their written consent and a certificate that they satisfy the criteria provided under Section 141 of the 2013 Act and that the appointment, if made, shall be in accordance with the applicable provisions of the 2013 Act and the rules framed there under.

The Directors recommend their appointment. As required under the SEBI LODR, the Statutory Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Board place on record its appreciation for the services rendered by M/s. Sundaram & Srinivasan, Chartered Accountants, as the Statutory Auditors of the Company.

Cost Audit

Pursuant to Section 148 of the 2013 Act read with the Companies (Cost Audit and Record) Rules 2014, the cost records and the accounts maintained by the Company are required to be audited. Your Company has appointed M/s. Geeyes and Co, Cost and Management Accountants to audit the cost records and the accounts maintained by the Company for the financial year ended 31.3.2017. The report of the said Cost Auditor will be filed with the Central Government in accordance with the rules framed there under.

The report of the said auditor for the financial year ended March 31, 2016 was filed with the Central Government.

Secretarial Audit

Pursuant to the provisions of Section 204 of the 2013 Act and the rules framed there under, the Company appointed M/s. S Dhanapal & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is given in Annexure VII and forms part of this Report.

Comments on Auditors’ report

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Company Secretary in Practice in their reports respectively. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review.


In regard to safety, Wheels India has been working towards inculcating a culture, installing a system and reviewing its results at its facilities. Starting with the Padi plant, the Company is horizontally deploying safety work systems and review mechanisms across its plants. The last year saw decent progress towards this endeavor to build safety into the manufacturing work culture.

Employees have been encouraged to adhere to safety in all their activities in and out of the Company premises. Safety training is conducted at all levels on a continuous basis and additional emphasis is given in implementation of safety work standards. The Company rewards best safety performers from different groups of employees regularly. This has helped to inculcate a significant change in outlook.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Annexure VIII forms part of this Report


Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo as required under Section 134(3)(m) of the 2013 Act, read with rule 8(3) of the Companies (Accounts) rules, 2014 are enclosed as Annexure IX and forms part of this report. The Directors wish to thank United Bank of India, State Bank of India, Standard Chartered Bank, HDFC Bank, other Banks and financial institutions for their continued support.

Your Company continues to have the full co-operation of all its employees. The Directors would like to place on record their 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

May 29, 2017 Chairman

DIN 00018309

Director’s Report