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Subros Ltd.

BSE: 517168 Sector: Auto
BSE LIVE 15:40 | 21 Aug 225.95 0.85






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OPEN 226.50
VOLUME 10350
52-Week high 271.95
52-Week low 99.25
P/E 25.44
Mkt Cap.(Rs cr) 1,356
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 226.50
CLOSE 225.10
VOLUME 10350
52-Week high 271.95
52-Week low 99.25
P/E 25.44
Mkt Cap.(Rs cr) 1,356
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Subros Ltd. (SUBROS) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 31st Annual Report of the Company togetherwith the audited financial statements for the year ended March 31 2016.


Standalone Consolidated
Current year Previous year Current year Previous year
PARTICULARS 2015-16 2014-15 2015-16 2014-15
( Rs in Lacs) ( Rs in Lacs) ( Rs in Lacs) ( Rs in Lacs)
Gross Profit before financial charges and depreciation 15453 13781 15461 13768
Less: Financial Charges 4172 3872 4172 3873
Less: Depreciation 8636 7869 8650 7886
Net profit before Taxation 2645 2040 2639 2009
Less: Taxation 244 8 244 8
Profit after Taxation 2401 2032 2395 2001
Add: Profit brought forward 19086 17764 19032 17741
Profit Available for appropriation 21487 19796 21427 19742
Less: Proposed Dividend 480 420 480 420
Less:- Tax on Dividend 99 85 99 85
Less:- Transfer to General Reserves 250 205 250 205
Balance carried over to Balance Sheet 20658 19086 20598 19032


Your Company recorded a gross turnover of Rs. 1480 crores during the year as againstRs. 1333 crores in the previous year clocking an increase of around 11%.

Your Company is continuing with investments in building the capacity technologyupgradation new product development and localization to sustain its market leadership inline with Company's growth plans. The Indian automobile industry has registered a growthof 6% in 2015-16 while our volume of air conditioning systems has grown by 16%. The robustgrowth has happened due to addition of new customers and localization. The Company hasmade significant efforts to sustain its margins through various value analysis/valueengineering activities cost management and other optimization initiatives.

The performance of the Company is also discussed in Management Discussion and Analysisas stipulated under Regulation 34 of the Listing Regulations with the Stock Exchangeswhich forms part of the Directors' Report.


Your Company looks forward to strong growth in the automobile sector due to stableGlobal economic factors 'Make in India' initiative and fuel prices. Your Company is alsoworking to expand sales by catering to the demand from existing and new automobilesmanufacturers in India. The facility for production of radiators has been commissioned inMarch 2016 at the Manesar works. In the current year the Company is planning forcapacity expansion at its existing facilities at Noida Manesar Pune Sanand and Chennaito cater to the increased demand from existing and new automobiles manufacturers.

The Company's Tool Engineering Centre has enabled to focus on in-house development ofall Molds/Dies required for new product development. This will help the Company to shortenthe lead-time of product development at reduced costs.

The Company expects growth in coming years due to increased share of business from itsexisting customers and expansion of business in new business domains like bus airconditioning truck refrigeration and radiators. Your Company will continue to concentrateon cost management initiatives to be more competitive and also to spread out to newrelated domains.


Your Company has earned a net profit (after tax) of Rs. 2401 Lacs as against Rs. 2032Lacs in the previous year. The Directors are pleased to recommend a dividend of Rs. 0.80per share i.e. 40% on the paid-up equity share capital of the Company for the financialyear ended March 31 2016 as against Rs. 0.70 per share i.e. 35% declared in the previousyear. The dividend if approved by the Members at the ensuing Annual General Meetingshall absorb a sum of Rs. 480 Lacs (approx) exclusive of dividend tax.


Your Company proposes to transfer Rs. 250 Lacs to the General Reserves.


There were no material changes and commitments which affect the financial position ofthe Company subsequent to the date of financial statement.


i) During the year under review the following changes took place in the Board of yourCompany:

a) Mr. Katsuhisa Shimokawa resigned as Nominee Director (Representative of DensoCorporation Japan) with effect from January 25 2016

b) Mr. Yoshitaka Kajita resigned as an Alternate Director (Alternate to Mr. KatsuhisaShimokawa) with effect from January 25 2016

c) Mr. Yoshikazu Makino was appointed as Nominee Director (Representative of DensoCorporation Japan) with effect from January 25 2016

d) Mr. Yoshitaka Kajita was appointed as an Alternate Director (Alternate to Mr.Yoshikazu Makino ) with effect from January 25 2016

e) Mr. Devireddy Madhusudhana Reddy resigned as Executive Director with effect fromMarch 31 2016.

ii) Pursuant to the provisions of Section 152 of the Companies Act 2013 Dr. JyotsnaSuri Non Executive Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers herself for reappointment. The brief resume ofDr. Jyotsna Suri as required under the Listing Regulations is provided in the Notice ofthe 31 st Annual General Meeting of the Company.The requisite resolutions pertaining tothe appointment/re-appointment appears at the respective items of the Notice along withthe Statement and recommended to the Members for approval.

iii) Pursuant to the provisions of Section 203 of the Companies Act 2013 Mr. ManojKumar Sethi was appointed as Chief Financial Officer with effect from May 14 2015.

iv) Declaration from Independent Director: The Company has received necessarydeclaration from all the Independent Directors of the Company as laid down under Section149(7) of the Companies Act 2013 confirming that they meet with the criteria ofIndependence as laid down under Section 149(6) of the Companies Act 2013 and the ListingRegulations.

v) Board Evaluation: In compliance with the provisions of the Companies Act2013 the Board during the year adopted a formal mechanism for evaluation of itsperformances as well as that of its committees and individual Directors including theChairman of the Board. Nomination & Remuneration Committee has approved the draftevaluation formats for the Board Executive & Non Executive Directors and Chairman ofthe Company considering qualification expertise attributes and various parameters basedon which evaluation of the Board has to be carried out by the Company.

vi) Board Meeting: The Board of Directors met five times during the financialyear 2015-16 the details of which are given in the Corporate Governance Report that formspart of this Annual Report. The intervening gap between any two meetings was within theperiod prescribed under the Companies Act 2013.

vii) Policy on Directors' appointment and remuneration: The policy of the Companyon Directors' appointment and remuneration including criteria for determiningqualifications positive attributes and other matters are available on the website of theCompany.


The Composition of Audit Committee of the Company is described in Corporate GovernanceReport as stipulated under Listing Agreement with the Stock Exchanges which forms part ofthe Directors' Report.


As required under Section 134 (5) of the Companies Act 2013 your Directors herebyconfirm that:

(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

(b) 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 at the end of the financial year and ofthe profit and loss of the Company for that period;

(c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) The Directors have prepared the annual accounts on a going concern basis;

(e) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


During the financial year under review THAI SUBROS LIMITED Subsidiary Company inThailand did not carry out any business operations and the company incurred a loss of THB5.28 Lacs as against THB 14.86 lacs in the previous year.

During the financial year under review the financial performance of Denso SubrosThermal Engineering Centre India Limited a Joint Venture achieved gross revenues of Rs.1469.34 Lacs as against Rs.1463.03 Lacs during the previous financial year a marginalincrease over the last year. The Company earned a profit of Rs. 11.23 Lacs (unaudited)during the year as against loss of Rs. 0.98 Lacs in last year. Your Company is holding 26%share in this Joint Venture.


In accordance with the Accounting Standard AS-21 on Consolidated Financial Statementsread with Accounting Standard AS-27 on Financial Reporting for Interest in Joint Venturesyour Directors have pleasure in attaching the Audited Consolidated Financial Statementswhich form a part of the Annual Report.


The information in terms of Section 134(3)(m) of the Companies Act 2013 read withrelevant rules is annexed herewith as Annexure-1 and forms integral part of this report.


Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12 of the Companies(Management and Administration) Rules 2014 the extract of annual return in Form MGT-9is annexed as Annexure-2 to this report and forms integral part of this Report.


Statutory Auditors: M/s. V.K. Dhingra & Co. Chartered Accountants wereappointed as Statutory Auditors at the 30th Annual General Meeting of the Company to holdoffice from the conclusion of the Annual General Meeting held in the year 2015 till theconclusion of the Annual General Meeting to be held in the year 2017 subject toratification by Members at every subsequent Annual General Meetings. The Members arerequested to ratify the appointment of M/s V.K. Dhingra & Co Chartered Accountants(Firm Registration No.000250N) as Statutory Auditors of the Company for the financial year2016-17. The observations of the Auditors and the relevant notes on accounts areself-explanatory and therefore do not call for any further comments. The Auditors' Reportdoes not contain any qualification or adverse remark.

Cost Auditors: The Company has appointed M/s. Chandra Wadhwa & Company CostAccountants as Cost Auditors of the Company to conduct the audit of cost recordsmaintained by the Company for the financial year 2016-17. The ratification of remunerationpayable to Cost Auditors for the financial year 2016-17 is being sought from the Membersof the Company at the ensuing Annual General Meeting.

Secretarial Auditors: The Company has appointed M/s. RSM & Co. CompanySecretaries as Secretarial Auditors to conduct the audit of secretarial and relatedrecords of the Company for the financial year ended March 31 2016. The Secretarial AuditReport for the financial year ended March 31 2016 is annexed herewith as Annexure-3 andthe same is self-explanatory. The said Secretarial Audit Report does not contain anyqualification or adverse remark.


During the year under review your Company has neither invited nor accepted anydeposits from the Public.


No significant material orders were passed by the Regulators or Courts or Tribunalsimpacting the going concern status and Company's operations in future.


The adequacy of Internal Financial Controls is discussed in Management Discussion andAnalysis as stipulated under the Listing Regulations with the Stock Exchanges whichforms part of the Directors' Report.


The Company has not made any transaction relating to inter-corporate loans andinvestment during the year.


The Company has formulated a Corporate Social Responsibility (CSR) Policy to undertakeCSR initiatives as specified in Schedule VII of the Companies Act 2013. The Company hasconstituted a robust and transparent governance structure to oversee the implementation ofCSR Policy in compliance with the requirements of Section 135 of the Companies Act2013.The Annual Report on CSR activities is annexed herewith as Annexure - 4 and formsintegral part of this Report.


Four meetings of the Risk Management Committee were held during the year and theCommittee has formulated the risk management framework identified the elements of variousrisks and devised a risk mitigation plan.


Pursuant to Section 177(9) of the Companies Act 2013 the Company has established aVigil Mechanism for directors employees suppliers contractors and other stakeholders ofthe Company. The same is also intended to cover the Whistle Blower Policy under the aspectof Listing Regulations. The purpose and objective of this Policy is to cover seriousconcerns that would have a larger impact on image and values of the Company due toincorrect financial reporting or serious improper conduct. The Whistle Blower Policy hasbeen placed on the website of the Company


The Company has in place a Sexual Harassment Policy in line with the requirements ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. The Internal Complaints Committee has been set up to redress complaints receivedregarding sexual harassment. The Company received one complaint under the Policy and thesame was disposed of.


The Board of Directors has formulated a Related Party Transaction Policy fordetermining material related party transactions. The Related Party Transaction Policy isavailable on the website of the Company. A statement of all particulars of Contracts orArrangements with related parties referred to in Section 188(1) of the Companies Act2013 duly approved by the Board of Directors is annexed herewith as Annexure-5 and formsintegral parts of the Report.


The Equity Shares of your Company continue to be listed on BSE Limited (BSE) NationalStock Exchange of India Limited (NSE) and Delhi Stock Exchange Limited (DSE). The listingfees for the year 2015-16 have been paid to the said stock exchanges except to DSE asSecurities and Exchange Board of India has withdrawn the recognition granted to DSE onNovember 19 2014.


The Company has carried out evaluation of Board Executive Directors IndependentDirectors and Chairperson. It is opinioned that the Company's Board compositionstructure processes and working procedure are well laid. The Board members have adequateexpertise drawn from diverse industries like Banking Administration and Technical &bring specific competencies relevant to the Company's business. Information flow fromManagement to the Board and Committees are timely and of acceptable quality. The Boarddeliberations and participation of members were found to be quite satisfactory and theBoard's overall functioning is effective.


Disclosure in respect to remuneration and other details as per the provisions ofSection 197(12) of the Companies Act 2013 read with Rule 5(1) of Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are provided in the Annexure- 6 tothis Report.

Disclosure in respect to remuneration and other details as per the provisions ofSection 197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are provided in theAnnexure to this Report Having regard to the provisions of the first proviso to Section136(1) of the Companies Act 2013 the Annual Report excluding the said statement ofemployee under Section 197(12) of Companies Act 2013 is being sent to the Members of theCompany. The said information is available for inspection at the registered office of theCompany during working hours and any Member interested in obtaining said statement maywrite to the Dy. Company Secretary at the registered office of the Company.


The Company is committed to maintain the highest standards of corporate governance. TheCompany has complied with the corporate governance requirements as stipulated under theListing Regulations. A report on Corporate Governance along with a Certificate from theAuditors of the Company regarding compliance on the conditions of corporate governancepursuant to Listing Regulations is annexed herewith and forms integral part of thisreport.


Your Board of Directors wishes to convey their appreciation to all the employees fortheir enormous efforts as well as their collective contribution to the Company'sperformance.

Your Directors acknowledge with gratitude the co-operation and support extended byCompany's bankers Canara Bank Kotak Mahindra Bank & other Banks and the Managementof our collaborators Denso Corporation and Suzuki Motor Corporation Japan for theircontinued support.

Your Directors also take this opportunity to convey heartfelt gratitude to theCompany's valued customers particularly Maruti Suzuki India Limited Tata Motors LimitedMahindra & Mahindra Limited Renault Nissan Automotive India Pvt. Ltd and Force MotorsLimited for the trust and confidence reposed by them in the Management for theirunstinted co-operation and support provided to the Company.

Last but not the least the Board wishes to thank all Members vendors and businessassociates for their continuous support and confidence reposed in the Company.

For and on behalf of Board of Directors
Place: New Delhi Chairman
Dated: 26 th May 2016 DIN: 00176488