1. FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2017
| || ||(Rs. in Lakhs) |
| ||2016-17 ||2015-16 |
|1.1. Forging Sales ||46042.66 ||48905.80 |
|1.2. Profit before exceptional items/ extraordinary items and Tax ||5514.16 ||6928.91 |
|1.3. Exceptional/Extraordinary Items ||0.25 ||0.55 |
|1.4. Profit Before Tax ||5514.16 ||6929.46 |
|1.5. Tax || || |
|For current year ||1176.86 ||1725.00 |
|Relating to previous years ||80.91 ||52.18 |
|Deferred Tax ||293.21 ||143.45 |
|Mat Credit Entitlement ||(378.81) || |
| ||1172.19 ||1920.63 |
|Profit After Tax ||4342.22 ||5008.83 |
|The Directors commend the employees for their commitment and contribution. || || |
|2. DIVIDENDAND FINANCIAL RESULTS: || ||(Rs. in Lakhs) |
| ||2016-17 ||2015-16 |
|2.1. Profit After Tax ||4342.22 ||5008.83 |
|2.2. Balance in P & L Account ||244.20 ||177.07 |
|2.3. Profit available for appropriation ||4586.42 ||5185.91 |
|2.4. Transfer to General Reserve ||3500.00 ||4100.00 |
|2.5. Interim Dividend paid ||701.43 ||841.72 |
|2.6. Proposed Dividend ||140.28 ||- |
|2.7. Balance carried forward ||244.71 ||244.20 |
The Directors had declared Two Interim Dividend of 50% - Rs. 5/- per share of facevalue of Rs. 10/- each on 11 August 2016 and 10% - Rs. 1/- per share on 19 May 2017. Withthis the total Dividend for the year ended 31st March 2017 will aggregate to60% - Rs. 6/- per share. The Directors do not recommend any final dividend for the year2016-17
3. HIGHLIGHTS OF THE COMPANY'S OPERATIONAL PERFORMANCE
3.1. The Company continues to be one of the largest exporter of forgings from India andhas received 25 consecutive Annual Awards from The Engineering Exports Promotion Councilsince 1989.
3.2. The Company has also crossed the Rs. 150 Crore mark for the second time indomestic sales.
3.3. The Company continues to be a net foreign exchange earner. The net foreignexchange earnings during the current year were Rs. 235.56 Crores.
3.4. The Company has retained its ISO 9001 and TS 16949 Certification for its QualityManagement.
3.5. The capital expenditure during the year was Rs. 80.57 Crores. Forging andMachining capacity has been substantially increased in line with customer demand. TheCompany also produces Green Energy in its Solar and in Wind farms.
3.6. Directors retained the dividend payment to 60%.
4. Indian Accounting Standard (IND AS) IFRS Converged Standards
Pursant to the notification of the Companies (Indian Accounding Standard) Rules 2015by the Ministry of Corporate Affairs (MCA) on 16 February 2015 the Company has adoptedIndian Accounting Standard (IND AS) with effect from 01 April 2016.
5. EXPENSES MADE MORE THAN 10% OF THE TURNOVER
|Raw material ||Rs. 191.13 Crores (43%) |
|Personnel ||Rs. 52.86 Crores (12%) |
6. MANAGEMENT DISCUSSION ANDANALYSIS : GLOBAL SCENE
1. Preliminary data suggest that global economic activity is picking up with a longawaited cyclical recovery in investment manufacturing and trade. World growth is expectedto rise from 3.1% in 2016 to 3.5% in 2017 and 3.6% in 2018 slightly above the October2016 World Economic Outlook (WEO) forecast.
2. Economic activity gained some momentum in the second half of 2016 especially inadvanced economies.
3. Growth picked up in the United States as firms grew more confident about futuredemand and inventories started contributing positively to growth (after five quarters ofdrag). Growth in the United States is sluggish at around 1.4 percent in the fourth quarterof 2017. Unemployment rate continued to improve to reaching a low of 4.5% in March 2017.
4. The Dow Jones Industrial Average (DJIA) has increased by approximately -17% becauseUS stock markets are seen as a haven for investment in a sea of gloom.
5. The outlook has also improved for Europe and Japan based on a cyclical recovery inglobal manufacturing and trade that started in the second half of 2016.
6. Europe The Euro has weathered the pressures on account of the flounderingeconomies of Portugal Ireland Greece and Spain (PIGS countries). The recovery wasbroadly in line with the January forecast in the euro area as strengthening domesticdemand offset a weaker external impulse. Among countries growth was weaker than expectedin Italy but the recovery was stronger in Spain. The Euro (EUR) has appreciated versus theUS Dollar (USD) by about 11%
7. Germany along with a few countries bordering the North Sea continue to be pillars ofthe European economy. Their relative prosperity forms the back bone of the efforts to keepthe EU and ECU integrated. The moribund labour markets in France is a considerable risk tothe very EU itself. The Italian economy is also in stasis with very high public debtleaving very little room for maneuvering.
8. The rigid labour markets of Europe absence of political union unwillingness of theGerman public to bear a higher burden significant welfare commitments large share ofgovernment spending in the economy etc. are some of the significant structural issues.Countries like Spain Ireland etc. have embarked on a journey of significant and painfulstructural reforms which are starting to bear fruit.
9. The significant challenge for European leadership is the management of structuralreforms and containment of public spending without causing social turbulence.
10. The 2017 and 2018 growth forecasts have been marked up for China reflectingstronger-than-expected policy support as well as for Russia where activity appears tohave bottomed out and higher oil prices bolster the recovery.
11. China The Chinese economy is showing signs of considerable slow-down onaccount of slow down in real estate and NPAs in the banking sector. However because it isa controlled economy there are reasonable chances of the leadership managing a slow downwithout a crash landing.
Further fall in growth in China is expected to drag the global economy.
12. Japan Initially benefitted from Abenomics the radical monetary expansionfiscal stimulus and structural reforms promulgated by Mr.Shinzo Abe the Prime Ministerof Japan. However the effects of the fiscal stimulus have worn off with just 0.6% growthin recent months.
13. Commodities The Dow Jones Commodity Index (DJCI) has increased by 0.81% inthe last one year due to considerable revival of business sentiments in commodities. Thisis indicative of growth in various economies in both developed and developing countries.
14. Overall Global output is estimated to have grown by 2.6% in 2016 with 2.2% growthfor advanced economies and 4% growth for emerging market and developing economies pervarious economic think tanks. Global growth is projected to remain modest in 2017 at2.7% before picking up to -2.9% in 2018.
15. The issue of high levels of sovereign debt which most countries have run up overthe last two decades continues to be of serious concern. The next few years appear to bea consolidation phase for the global economy with growth stuck in a range of 3-4%. Gettingout of high levels of sovereign debt without derailing economies into recession will be asignificant conundrum.
16. The Indian economy is expected to grow by approximately 7.1% in F17 as compared toabout 7.5% in F16.
17. During F17 the automotive industry posted growth rates of approximately 11% in thecar segment and 4% in the CV segment.
18. Steel prices have dropped by about 4% compared to the highs of the previous year.
19. The INR ended the year higher by approximately 1.5% ending the year at a level ofRs. 65.86 per USD.
Please refer graph below. Further strengthening of the INR is anticipated. However ifFDI inflows are strong the pressure on the INR will be much higher
M M FORGINGS forging ahead
20. The following were important developments witnessed during the year :
Domestic sales crossed Rs. 150 crore mark for the consecutive second year
Production of 35190 Tons
?Adding to the volume of existing parts were the new parts which were developedin the last 2 years.
The company has posted a growth of 19% in domestic sales by the development ofnew parts.
Export sales fell by 13% on the back of sluggish conditions in global markets.
Changes in steel prices which are in line with international markets are beingpassed on to customers as is the industry practice.
We are focusing on capacity utilisation to take advantage of the productioncapacities created in the last 3 years.
21. As highlighted in the Directors' Report Return on Net Worth is 13.99% and Returnon Capital Employed is 17.14%. Current Ratio is 2.36. The total outside liabilities to networth stands at 0.82. Debt Equity Ratio is 0.47.
22. The details of segment-wise sales distribution are provided below:
Human Resources and Industrial Relations
23. Your company continues to focus on the development of its human resources toimprove its performance. The company currently has approximately 1357 employees. It istheir invaluable contribution that has primarily resulted in your company's position ofstrength in the industry.
24. Focus on a safe working atmosphere constantly evolving systems for recognition andreward consistent communication and imparting skills and training all thesefocused on meeting customer needs characterise the HR development of the Company.
25. Every year each plant of the Company celebrates Founder's Day' in a familyatmosphere with all employees and their household members.
26. Your Company provided necessary training on GST to the concerned and the ITdepartment in coordination with the implementation partner ensures smooth transformationto the GST platform.
Health Safety and Environment
27. The Company follows a policy of zero tolerance towards accidents. Whereverpossible visible controls and fail-safe systems are provided to ensure prevention ofaccidents. Regular communication periodic reviews of practices and training play a vitalrole in maintaining safety standards.
28. The Company ensures compliance with all pollution control regulations. Adequatepollution control equipments have been installed to treat effluents and to control airpollution.
29. The Company is a leading manufacturer of automotive components. Automotive industryis subjected to cyclical variations in performance and is very sensitive to policychanges. The market is very competitive. Prices of raw materials change based on supplyand demand.
Margins remain under constant pressure. Any steep reduction in off-take exposes theCompany to high fixed costs.
30. A considerable portion of the customers of the Company are situated outside ofIndia. Hence demand for the Company's product is subject to the health of the globaleconomy.
31. The Company has spread its risks by increasing the geographic spread of itscustomer base.
The Company proposes to improve capacity utilization in its existing facilities.Working capital management will receive high priority.
M M FORGINGS forging ahead
32. Our goals in the coming months:
Focus on improving sales in keeping with market conditions.
Increase the production capacity to 65000 Tons.
Focus on cost reduction continuously - particularly on reducing energyconsumption and improving productivity.
Enhance IT systems with the continued development of the ERP system in place.
Continue the evolution into green sources of energy in the coming months.
Reduce the impact on the environment.
1. IMF World Economic Output
2. The Economist
7. TRANSFER TO RESERVE
Transfer to General Reserve - Rs. 35 Crores.
8. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
9.1 Shri. K. Venkatramanan Director retires by rotation and being eligible offershimself for reappointment.
Shri. K. Venkatramanan has a Bachelor of Engineering Degree. He has 25 years ofexperience in the Company. He joined the Board as an Additional Director in this Company.He has been responsible for the tremendous growth in the sales of the Company. Hisaccomplishments include a 10 fold increase in the export sales.
10. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL RESIGNED DURING THE YEAR - Nil
11. BOARDAND COMMITTEE MEETING DATES
Details are provided in Annexure III of this Report
12. DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTED BY THE BOARDALONG WITH REASONS None
13. RISK MANAGEMENT
Your Company has implemented a mechanism for risk management and has formulated a RiskManagement Policy. The Policy provides for idendification of risks and mitigationmeasures. The Audit Committee is informed on the risk assessment and minimizationsmechanism adopted by the Company.
14. RELATED PARTY TRANSACTION
The Company has formulated a policy on related party transactions and the same isuploaded on the Company's website.
All Related Party transactions that were entered into by the Company during thefinancial year 2016-17 were in compliance of Section 188 of the 2013 Act and the Rulesframed thereunder. There are no "Material" contracts or arrangement ortransactions 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 priorapproval in accordance with the requirements of the SEBI LODR. The transactions enteredinto pursuant to such approval are placed periodically before the Audit Committee for itsreview.
There are no materially significant Related Party transactions made by the Company withPromoters Directors and Key Managerial Personnel which may have a potential conflictwith the interest of the Company at large.
15. CORPORATE SOCIAL RESPONSIBILITY
A Board Level Committee of CSR has been constituted and the Board has adopted a CSRPolicy as recommended by the Committee. The thrust areas of CSR Policy are EradicatingHunger and Poverty Education Combating Diseases and Social Business Projects. Yourcompany has fulfilled its obligation towards CSR by spending a sum of Rs. 117.12 lakhsduring the year Annual Report on CSR has been provided in Annexure III of this Report.
16. POLICY ON DIRECTORS'APPOINTMENTAND REMUNERATION
In terms of provision of Section 178 of the Companies Act 2013 read with Rulesprescribed a policy for the Directors KMP and other employees has been adopted by theBoard of Directors of the Company analysing the criteria for determining qualificationspositive attributes and independence of a Director. The said policy is given in Annexure 3under Nomination & Remuneration Committee.
17. PARTICULARS OF EMPLOYEES
The information required under the Rules prescribed has been given as annexureappended hereto and forms part of this Report.
18. PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES:
18.1 The ratio of remuneration of each Director to the median remuneration of theemployees:
|Name ||Ratio |
|Shri. N. Srinivasan ||3.80 : 1 |
|Shri. V. Vaidyanathan ||2.03 : 1 |
|Shri. A. Gopalakrishnan ||1.52 : 1 |
|Smt. Kavitha Vijay ||1.52 : 1 |
|Shri. Vidyashankar Krishnan Vice Chairman and Managing Director ||155 : 1 |
|Shri. K. Venkatramanan Joint Managing Director ||149 : 1 |
|For this purpose sitting fees paid to the Directors have not been || |
|considered as remuneration || |
18.2 Percentage increase in remuneration of each Director KMP in the financial year:
|Name ||% Increase |
|Shri. N. Srinivasan ||0.81 % |
|Shri. V. Vaidyanathan ||-5.75 % |
|Shri. A. Gopalakrishnan ||-2.57 % |
|Smt. Kavitha Vijay ||2.13 % |
|Shri. Vidyashankar Krishnan Vice Chairman and Managing Director ||-18.75 % |
|Shri. K. Venkatramanan Joint Managing Director ||-19.23 % |
|Smt.J.Sumathi ||5.40 % |
|Shri.R.Venkatakrishnan ||6.50 % |
18.3 Percentage increase in median remuneration of employees is 8.3% in the financialyear 2016-17.
18.4 The number of permanent employees on the rolls of Company: 1357
18.5 Explanation of relationship between average increase in remuneration and companyperformance PAT
(last year) - Rs. 5008.83 Lakhs PAT (this year) - Rs. 4342.22 LakhsDecrease 13.31% against which the average decrease in remuneration is 4%.
18.6 Comparison of remuneration of each KMP against performance of company
|Name ||Designation ||CTC in CTC ||% Increase ||PAT Rs. in Lakhs ||% in PAT |
|Vidyashankar Krishnan ||CEO ||30503724 ||-18.75% || || |
|J.Sumathi ||Company Secretary ||999650 ||5.40 % ||4342.22 ||-13.31% |
|R.Venkatakrishnan ||CFO ||1417386 ||6.50 % || || |
18.7 Variation in market cap/net worth of company:
|Date ||Issued Capital (Shares) ||Closing market Price per share in Rs. ||EPS ||PE Ratio ||Market Capitalisation Rs. in Crores |
|31.03.2016 ||12070400 ||443 ||41.50 ||10.67 ||534.72 |
|31.03.2017 ||12070400 ||542 ||35.97 ||15.07 ||654.21 |
|Increase/(Decrease) ||NIL ||99 ||(5.53) ||4.40 ||19.49 |
|% of Increase / (Decrease) ||NIL ||18.26 ||(13.32) ||29.20 ||18.26 |
18.8 Justification of increase in managerial remuneration with that of increase inremuneration of other employees.
Average decrease in Remuneration for employees other than Directors and KMP is 0.80%Average decrease in Remuneration for KMP and Senior Management is 18.99 % 18.9 Keyparameters for any variable remuneration of Directors:
Directors are paid Commission. However the overall managerial remuneration payable issubject to the provisions of the Companies Act 2013
18.10 Ratio of remuneration of highest paid Director to other employees who getsremuneration more than highest paid Director. NOT APPLICABLE
18.11 Is remuneration as per remuneration policy of the Company: YES
19. SIGNIFICANTAND MATERIAL ORDERS PASSED BY THE REGULATIONS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUSAND COMPANY'S OPERATIONS IN FUTURE
20. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAS OCCURED SINCE 31.03.2017 TILL THE DATE OF THIS REPORT:
21. DIRECTORS RESPONSIBILITY STATEMENT:
The Directors have fulfilled their responsibility for the preparation of theaccompanying financial statements by taking all reasonable steps to ensure that -
21.1 In the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures;
21.2 The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at 31 March 2017 and of the profit orloss of the company for that period ended on that date;
21.3 The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
21.4 The Directors had prepared the annual accounts on a going concern basis.
21.5 The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
21.6 The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively;
22. ESTABLISHMENT OF VIGIL MECHANISM
The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policyhas been in vogue. The Whistle Blower Policy covering all employees and Directors ishosted on the Company's website.
23. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
The Company had laid down Internal Financial Controls and such internal financialcontrols are adequate with reference to the Financial Statements and were operatingeffectively.
It also ensures the orderly efficient conduct of its business including adherence toCompany's policies the safe guarding of its assets the prevention and detention offrauds and errors the accuracy and completements of the accounting records and the timelypreparation of reliable financial inforamtions during the year such controls were testedand bi-material wekness in the desgin or operations were observed.
24. CORPORATE GOVERNANCE REPORT
The guidelines evolved by SEBI were applicable to the company. The company is committedto ethical management and excellence in performance. Details are Provided in Annexure 3.
25. ANNUAL RETURN
An extract of Annual Return as on 31 March 2017 pursuant to Section 92 (3) of theCompanies Act 2013 and forming part of the report is attached separately.
26. A STATEMENT INDICATING THE MANNER IN WHICH FORMALANNUAL EVALUATION HAS BEEN MADE BYTHE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEE AND INDIVIDUAL DIRECTORS
1. Nomination and Remuneration Committee of the Board had prepared and sent through itsChairman draft parameterized feed back forms for evaluation of the Board IndependentDirectors and Chairman.
2. Independent Directors at a meeting without anyone from the non-independent Directorsand management considered/evaluated the matters relating to the Board's performanceperformance of the Chairman and other non-independent Directors Their meeting was held on15 February 2017.
3. The Board subsequently evaluated performance of the Board the Committees andIndependent Directors (without participation of the relevant Director)
27. FAMILIARISATION PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS
M M Forgings Limited has put in place a system to familiarise the Independent Directorsabout the company its products business and the on-going events relating to the Company.
?Independent Directors of the Company are made aware of their roleresponsibilities and liabilities at the time of their appointment / re-appointment through a formal letter of appointment which also stipulates various terms and conditionsof their engagement.
?They are also made aware of Company's Board and Board Committee frameworkpolicies and procedures.
?As part of Board Discussions presentations on business of the Company are madeto the Directors from time to time.
?Important announcements and press releases for various news related to thecompany are forwarded to the Directors from time-to-time.
?Each member of the Board including the independent Directors have been givencomplete access to any information relating to the Company.
28. STATUTORY AUDITORS:
As per Section 139 (2 ) of the Companies Act 2013 and Rules prescribed thereunder theterm of the present Auditor G. Ramesh Kumar & Co. expires from the date of the ensuingAnnual General Meeting. The Board of Directors place on record their appreciation for theservice rendered by M/s. G. Ramesh Kumar & Co during their tenure as StatutoryAuditors of the Company.
GRNK & CO ( FRN 016847S) is recommended by the Board to be appointed as StatutoryAuditor of the Company for the approval of members in the ensuing Annual General Meetingtill the conclusion of the fifth consecutive Annual General Meeting in the year 2022(subject to the ratification by members at every Annual General Meeting). Certificate fromproposed Auditors has been received to the effect that their appointment if made wouldbe within the limits prescribed under section 139 of the Companies Act 2013.
A short profile of G R. Naresh Kumar the proposed Auditor:
|Name : ||G. R. Naresh Kumar FCA CISA |
|Firm Name : ||GRNK & CO |
|FRN : ||016847S |
|Mem No: ||215577 |
|Address : ||26/5 Akila Lands Ganapathy Colony South |
| ||Thiruvanaikoil Post Trichy 620005. |
To be recognized by the stakeholders of the company as a valuable associate byindependently and objectively providing information analysis and counsel to assistmanagement in fulfilling their responsibility and ensuring operations are managedethically effectively and efficiently.
Practicing Chartered Accountant with more than a decade experience in Statutory AuditsInternal Audits Management Consulting Business Process Reengineering IT ConsultingSystems Audit ERP Consulting Income Tax practice and Internal financial controls audit.
29. SECRETARIAL AUDIT REPORT
Pursuant to the requirements of the Companies Act 2013 the Company has appointed. V.Shankar Practicing Company Secretaries ( C.P. No.12974 ) as the Secretarial Auditor forFY 2017 whose report of 19 May 2017 is attached separately to this report.
Pursuant to the provisions contained in Rule 14 of the Companies (Audit and Auditors)Rules 2014 Shri. S. Hariharan (C.P. No. 20864) has been appointed as Cost Auditor for thefinancial year 2017-18.
31. EXPLANATION TOAUDITOR'S REMARKS
There are no qualifications reservations or adverse remarks or disclaimers made by theStatutory Auditors and Company Secretary in practice in their reports respectively. TheStatutory Auditors have not reported any incident of fraud to the Audit Committee of theCompany in the year under review.
Employees have been encouraged to adhere to safety in all their activities in and outof the Company premises. Safety training at all levels have been provided by the Company.
The Company does not have any deposits. Fresh deposits are not being accepted by theCompany.
34. ENERGY TECHNOLOGY & FOREIGN EXCHANGE:
Disclosures as per requirements of Section 134 (3 ) ( m) of Companies act 2013 readwith the Companies (Accounts ) Rules 2014 with respect to Energy Conservation TechnologyAbsorption Research & Development and Foreign Exchange Earnings / Outgo are given inAnnexure.
35. DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
All the Independent Directors have given the necessary declarations to the Company asrequired under sub section (6) of Section 149 of the Companies Act 2013.
36. PROHIBITIONAND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE
During the year under review pursuant to the new legislation PreventionProhibition and Redressal of Sexual Harassment of Women at Workplace Act 2013' introducedby the Government of India which came into effect from 09 December 2013 the Company hasframed a Policy on Prevention of Sexual Harassment at Workplace. There were no casesreported during the year under review under the said Policy.
Your Directors would like to express their gratitude for the cooperation and continuedassistance received from Citibank N.A. DBS bank State Bank of India and State Bank ofTravancore.
Your Directors wish to record their appreciation for the exemplary services rendered bythe employees of the company. The results achieved would not have been possible but fortheir outstanding effort.
Above all the Directors thank the shareholders for their continued confidence in themanagement.
| ||For and On behalf of the Board |
|Place : Chennai ||Vidyashankar Krishnan |
|Date : 19 May 2017 ||Chairman of this meeting |
| ||(DIN 00081441) |
Annexure I to the Directors' Report:
Information in accordance with the Companies (Disclosure of particulars in the reportof the Board of Directors) Rules 1988 and forming part of the report of the Directors forthe year ended 31 March 2017.
(A) CONSERVATION OF ENERGY:
1. Energy conservation methods undertaken:
1.1 Conservation of energy is a continuous process. We have spent around Rs. 50 lakhsto improve efficiency and saving on power consumption.
1.2 New buildings are set up with natural lighting and energy efficient LED lights.Energy efficient LED lights are also employed in existing buildings wherever replacementsoccur. We have spent around Rs. 10 lakhs for LED lights last year.
1.3 Consumption of Light Diesel Oil and Furnace Oil is closely monitored to conserveenergy.
1.4 Extracting waste heat from forgings to reduce energy consumption in Heat Treatment.
2. Additional investment and proposals if any are being implemented for the reductionin consumption of energy: Optimising energy consumption. Close monitoring of PowerConsumption of Induction Billet Heaters to reduce power consumption.
3. Solar Power : The Company has generated 279 lakh units from its wind and solar farmsequivalent to approximately 25752 tons of CO2.
4. Impact of measures at 1 2 & 3 for reduction of energy consumption andconsequent impact on the cost of production of goods: It is not possible to determine thefigure.
| ||2016-17 ||2015-16 |
|1 ELECTRICITY || || |
|a. Purchased: || || |
|Units ||46879346 ||52058575 |
|Total Amount. (Rs.) ||392909174 ||412567812 |
|Rate / Unit (Rs.) ||8.38 ||7.93 |
|b. Own Generation: || || |
|Units ||97829 ||666476 |
|Units per ltr. ||2.46 ||2.79 |
|Cost / Unit (Rs.) ||22.22 ||17.17 |
|2 FUEL OIL || || |
|Quantity (in ltrs) ||1765063 ||2132290 |
|Total amount (Rs.) ||50675440 ||61696721 |
|Average Rate (Rs./ltr.) ||28.71 ||28.93 |
|3 CONSUMPTION PER UNIT OF PRODUCTION || || |
|a. Electricity Units ||1335 ||1362 |
|b. Fuel Oil Litres ||50 ||55 |
Note:No standards are available for comparison.
(B) TECHNOLOGY ABSORPTION:
RESEARCH AND DEVELOPMENT (R &D)
Specific areas in which R & D are carried out by the company:
1. R & D efforts in a manufacturing industry like ours is an ongoing process.Continuous efforts have been taken in various areas of the manufacturing activity.
2. Benefits derived as a result of the above R & D: It has not been possible todetermine the figure.
3. Future plan of action:
Continuous efforts are being put in by way of Research & Development in all areasof manufacturing to reduce the cost of major inputs such as steel fuel power etc.
4. Expenditure on R & D: Not less than Rs. 100 lakhs though indirectly.
TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION:
1. Efforts in brief made towards technology absorption adaptation and innovation:
1.1. Continuous efforts are made on conservation of raw material by improving designand layout of dies.
1.2. The Company has upgraded its Quality Management Systems to TS 16949
2. Benefits derived as a result of the above efforts: 2.1. Reduction in raw materialconsumption.
2.2. With the accreditation to TS 16949 many new export customers are being developed.
2.3. Technology imported during the last 5 years: Nil
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO
|1 Activities relating ||Exports at Rs. 29314.40 form a significant part of the company's turnover (Rs. 33743.07 lakhs in 2015-16) |
|2 Initiatives taken to increase development of new export markets for products and services and export plan ||a. Vigorous efforts are taken by marketing department to locate new multinational customers in addition to the existing multinationals. b. The Company has been consistently retaining the TS 16949 certification for its Quality Management system. |
|3 Total Foreign Exchange ||Earned: Rs. 2835715074 (Rs.3374307226 IN 2015-16) |
| ||a. Used: Rs. 480155898 (Rs. 590068608 IN 2015-16) |
| ||For and On behalf of the Board |
|Place : Chennai ||Vidyashankar Krishnan |
|Date : 19 May 2017 ||Chairman of this meeting |
| ||(DIN 00081441) |
ANNEXURE II FORMING PART OF THE REPORT OF THE DIRECTORS
(Information as per Section 217(2A) of the Companies Act 1956 read with Companies(Particulars of Employees) Rules1975 and forming part of the Report of the Directors forthe year ended 31.03.2017
|Name ||Designation ||Remuneration ||Qualification ||Experience (years) ||Date of Joining ||Age ||Last Employment ||% of shares held in the Company |
|a) Employed throughout the year and were in receipt of remuneration at a rate of not less than 1.05 crore per annum || |
|1 Shri Vidyashankar Krishnan DIN: 00081441 ||Vice Chairman and Managing Director ||30503724 ||B.E.M.S. ||27 ||25.06.1990 ||51 ||Nil ||11.27% |
|2 Shri. K.Venkatramanan DIN : 00823317 ||Jt. Managing Director ||29411525 ||B.E. ||25 ||24.01.1992 ||47 ||Nil ||10.71% |
|b) Employed for a part of the year and were in receipt of remuneration at a rate of not less than 850000 per month || || |
| || || || || || || || || |
| || ||None || || || || || || |
1. Remuneration as shown above includes salarycommissionemployer's contribution toProvidend Fund and value of perquisites together with other allowances.
| ||For and on behalf of the Board |
|Place : Chennai ||Vidyashankar Krishnan |
|Date : 19.05.2017 ||Chairman of this Meeting |
| ||(DIN 00081441) |