TO THE SHAREHOLDERS
Your Directors are pleased to present 28th Annual Report and the Audited Accounts ofthe Company for the year ended March 31 2014.
| ||201314 ||201213 |
|Gross Sales ||22810.03 ||19284.49 |
|Less: Excise Duty & Sales Tax ||2247.31 ||1939.58 |
|Net Sales ||20562.72 ||17344.91 |
|Total Expenditure ||17577.59 ||14593.36 |
|Other Income ||20.72 ||30.34 |
|Operating Profit (PBDIT) ||3005.85 ||2781.89 |
|Interest ||467.81 ||474.34 |
|Cash Profit ||2538.04 ||2307.56 |
|Depreciation ||1045.06 ||1034.64 |
|Profit before Exceptional Item ||1492.98 ||1272.92 |
|Exceptional Item ||66.18 ||- |
|Profit after Exceptional Item ||1559.17 ||1272.92 |
|Provision for Taxation || || |
|i) Current Year ||450.00 ||380.00 |
|ii) Deferred Taxation ||34.57 ||26.00 |
|Net Profit / (Loss) after Tax ||1074.60 ||866.93 |
Note: Figures have been re-grouped wherever necessary to confirm to currentperiod classification
In view of requirement of funds for the operations of the company and to meet withCapital expenditure with internal accruals and also to improve liquidity your Directorsrecommend a dividend of Rs.2.50 per equity share i.e 25% for the Year Ended 31st March2014 as against Rs.2.50 per equity share ie.25% in the previous year.
The Company achieved the gross turnover of Rs.22810.03 lakhs during 2013-14 as againstRs.19284.49 lakhs in the previous year 2012-13 there by recorded an increase of 18.28%.
The company R&D expenditure is 113.09 lakhs i.e. 0.55% of sales during the year tocatch up with up- gradation of technology and to meet OEMs ever demanding qualityand new developments requirement to improve life cycle of their product meeting Euro IIInorms.
The operation of the Company on the whole has been satisfactory.
Your company has posted Net turnover of Rs.20562.72 lacs as compared to Rs.17346.91lacs for the previous year an increase of 18.55%.
Earnings Before Depreciation Interest and Tax (PBDIT) at Rs.3005.85 lakhs as againstprevious year of Rs.2781.91 Lakhs. The Profit Before Tax was at Rs.1559.17 lakhs ascompared to Rs.1272.93 lakhs in 2012-13 an increase of 22.49%.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
Auto Component Industry growth marging during the 2013-14. Micro ecoomic envirounmentcontinued to remaind weak. Depresed economic sentiments caupled with high price levels andpoor income growth continued to affect the Industry.
The Company has very good opportunities because of valued customers both in DomesticOEMs and Replacement Market & Exports. The Company exports increased by 23%during 2013-14 due to demand expansion better products mix.
The Company has got very strong distribution network at their aftermarket sales becauseof imports from free trade zones the competition is very stiff and price sensitive.
The company continues its drive for sustainable growth in this growing Domesticautomotive industry. In view of strong support of OEMs and because of establishinggood distribution net work company is poised for good growth.
All the cost effective steps have been taken with technical support from Japan and tomeet the challenges of price competition and also quality delivery and logistics.
The 2w segment prospect in longterm even though Indian economy has been experiencing aslow groth.
CONCERN & RISKS:
The company has taken all the steps to mitigate the following risks:
Raw material prices : Ours is a continuous high volume manufacturing industry. Ourprofitability will depend on change in the price in raw materials and input costs. Foreigncurrency Risks: Exchange rate fl uctuations may some times effect. Adequate steps weretaken.
Competition and Price Pressure: The Company is facing stiff competition in the segmentsof OEMs and aftermarket as well as price pressure from the OEMs which playing major rollon the profitability of the company.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has well defined internal control systems and procedures to ensure that onthe assets of the Comapny on safegard and protected against any loss and optimumutilization of various resources Investment decisions involving Capital Expenditure ortaken up only after due appraisal and review. Internal audit function covers and carriedout periodically and reviewed by the Audit Committee to ensure that all policies andprocedures are adhered to and all statutory obligations complied with.
The Company earned total net revenue of Rs.20562.72 lakhs compared with Rs.17344.91lakhs in the previous year and the operational expenses Rs.19824.70 lakhs compared withRs.16532.94 lakhs incurred last year mainly on account of steep increase in raw materialcost power cost and drop in sales.
Profit Before Depreciation interest and tax (PBDIT) at Rs.3005.85 lakhs. The ProfitBefore Tax was at Rs.1559.17 lakhs as compared to Rs.1272.93 Lakhs in 2012-13 an increaseof 22.49%. Company has been able to pay all the long term loans outstands and as of.
The Company maintains cordial industrial relations environment and the Companycontinues to establish its training facilities.
The Company intending talents through job rotation challenging projects assignmentsand exposer to globaly acclaimed programms are taken up on a regular basis.
Statements in this Management Discussion and Analysis describing the Companysobjective projections estimates and expectations may constitute forward lookingstatements within the meaning of applicable laws and regulations. Actual results mightdiffer marginally or materially from those either expressed or implied.
10 YEARS RECORD:
A chart showing 10 Years performance is appended forming part of this report.
Pursuant to the provisions of the Clause 49 of the Listing Agreement a report onCorporate Governance and a certificate from the Statutory Auditors regarding theCompliance of conditions of Corporate Governance are annexed to and form part of thisAnnual Report.
The Export Turnover of Rs.4871.51 lakhs during the year as against Rs.3955.96 lakhs ofthe previous year because of recession in US & Europe our exports are increased by23.14%.
The Company is focusing exports to developed Countries like Europe U.K FranceGermany Brazil and Russia. The Company has plans to reach 25% to 30% of the Turnoverduring the next 2 years.
POLLUTION CONTROL SAFETY & ENVIRONMENTAL PROTECTION:
We are complying all the norms prescribed by the statutory authorities i. e. A.P. Pollution Control Board.
The Company very much concerned for safety of men and machines through safety awarenesstraining programmes.
BOARD OF DIRECTORS:
Shri S Madhava Rao Director is liable to retire by rotation at this Annual GeneralMeeting and being eligible offers himself for reappointment.
Shri Dr. V Venkat Reddy Director is liable to retire by rotation at this AnnualGeneral Meeting and being eligible offers himself for reappointment.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 217 (2AA) of the Companies (Amendment) Act 2000 your Directors arehereby confirmed that:
In the participation of Annual Accounts the applicable accounting standards havebeen followed and that there have been no material departures.
The Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2014 andof the profit to the Company for the year.
Your Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
That the Directors have prepared the Annual accounts on a going concern basis.
The Companys Internal Auditors have conducted periodic audit to providereasonable assurance that the Companys established policies and procedures have beenfollowed. The Audit Committee of the Board meets once in a quarter with Internal Auditorsto review internal control and financial reporting issues.
The Company in terms of Section 139 (1) and (2) of the Act 2013 is required toappoint statutory auditors for a term of five consecutive years i.e. till the conclusionof sixth annual general meeting and ratify their appointment during the period in everyannual general meeting by an ordinary resolution.
The period for which any firm has held office as auditor prior to the commencement ofthe Act 2013 will be taken into account for calculating the period of five consecutiveyears as per the fourth proviso to Section 139(2) of the Act 2013 read with Rule 6(3) ofthe Companies (Audit and Auditors) Rules 2014.
M/s. Ravi & Kesav. Chartered Accountants Hyderabad who were earlier appointed asstatutory auditors of the Company at the annual general meeting held on 27th September2013 are eligible to be appointed for the remaining period of three years out of thefirst term of five consecutive years in terms of the Act 2013.
The Company has obtained necessary certificate under Section 141 of the Act 2013 fromthe auditor conveying their eligibility for the above appointment. The audit committee andboard reviewed their eligibility criteria as laid down under Section 141 of the Act 2013and recommended their appointment as auditors for the aforesaid period.
PARTICULARS OF EMPLOYEES:
Particulars of employees required to be furnished under section 217 (2A) of theCompanies Act 1956 read with the Companies (Particulars of Employees) Rules 1975 aregiven in the annexed statement with forms an integral part of this report. The Companycontinued to have cordial and harmonious relations with its employees.
DISCLOSURE OF PARTICULARS:
The information required under section 217(1)(e) of the Companies Act 1956 read withCompanies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988is given in the Annexure-1 forming part of this report.
The Company has not accepted any Deposits in terms of Sec.58 (A) of the Companies Act1956 and the rules made there under and hence compliance with the same as not applicable.
Your Directors wish to place on record their appreciation for the cooperation andsupport of Bankers Customers Business Associates Shareholders dealers and supplierswho are enabling the Company to achieve its goals. The Directors also place on recordtheir appreciation made by the employees at all levels.
| ||On behalf of the Board of Directors |
| ||S.D.M. RAO |
|Place : Hyderabad ||CHAIRMAN |
|Date : 19.05.2014 ||& MANAGING DIRECTOR |