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Sundram Fasteners Ltd.

BSE: 500403 Sector: Engineering
NSE: SUNDRMFAST ISIN Code: INE387A01021
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OPEN 490.00
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VOLUME 26754
52-Week high 538.50
52-Week low 262.80
P/E 28.98
Mkt Cap.(Rs cr) 10,008
Buy Price 476.35
Buy Qty 9.00
Sell Price 0.00
Sell Qty 0.00
OPEN 490.00
CLOSE 473.80
VOLUME 26754
52-Week high 538.50
52-Week low 262.80
P/E 28.98
Mkt Cap.(Rs cr) 10,008
Buy Price 476.35
Buy Qty 9.00
Sell Price 0.00
Sell Qty 0.00

Sundram Fasteners Ltd. (SUNDRMFAST) - Director Report

Company director report

The Directors are pleased to present the Fifty Fourth Annual Report together with theaudited financial statements for the year ended 31st March 2017.

FINANCIAL HIGHLIGHTS (STANDALONE) Rs. lakhs
2016-17 2015-16
Revenue from Operations 315863.55 280903.26
Other Income 1320.14 3458.30
Total Revenue 317183.69 284361.56
Total Expenditure 261140.09 242470.69
Gross Profit before interest depreciation and taxes 56043.60 41890.87
Less: Interest 3030.85 2002.47
Exchange Losses/(Gains) 1338.65 4044.86
Depreciation 8976.99 9174.19
Profit before Exceptional items and taxes 42697.11 26669.35
Exceptional items (236.94) (4559.96)
Profit Before Tax 42460.17 22109.39
Less: Provision for tax 10912.23 709.89
Profit after Tax 31547.94 21399.50
Add: Balance brought forward 19828.12 20813.09
Balance available for appropriation 51376.06 42212.59
Appropriations
Interim Dividends 3572.19 6408.92
Tax on Interim Dividends 721.83 975.55
Transfer to General Reserve 25000.00 15000.00
Balance carried forward 22082.04 19828.12
51376.06 42212.59

TRANSFER TO RESERVES

The Company has transferred Rs.25000 lakhs to general reserves.

DIVIDEND

The Board had earlier during the year declared first interim dividend of Rs.1.70/- perequity share (170%) of face of Rs.1 each absorbing a sum of Rs.35.72 crores for thefinancial year 2016-2017 and the same was paid on 18th November 2016. TheBoard is pleased to recommend a final dividend of Rs.2.80 per equity share (280%) of facevalue of Rs.1 each absorbing a sum of Rs.58.84 crores which together with the interimdividend aggregates to a total dividend of Rs.4.50 per equity share for 2016-2017.

CONSOLIDATED FINANCIAL STATEMENTS

The audited Consolidated Financial Statements of the Company also form part of theAnnual Report.

Pursuant to the provisions of Section 136 of the Companies Act 2013 the Company hasplaced separate audited accounts of its subsidiaries on its website www.sundram.com. TheCompany will make available the audited annual accounts and associated information of itssubsidiaries upon request by any of its shareholders.

DIRECTORS

Ms Arundathi Krishna Deputy Managing Director (DIN: 00270935) of the Company is liableto retire by rotation at the ensuing Annual General Meeting (AGM) and being eligibleoffers herself for re-appointment. Necessary resolution for her re-appointment is beingplaced for approval of the members at the AGM. The board therefore recommends herre-appointment as a Director of the Company. A brief resume of her and other relevantinformation have been furnished in the notice convening the AGM.

Sri Venu Srinivasan Non-Executive Non-Independent Director has resigned from theBoard effective 8th August 2016.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (7) OFSECTION 149

All the independent directors have submitted a declaration pursuant to Section 149(7)of the Companies Act 2013 stating that they meet the criteria of independence asstipulated in Section 149(6).

EXTRACT OF ANNUAL RETURN

An extract of annual return in Form MGT-9 is annexed as Annexure-I and forms part ofthis report.

BOARD MEETINGS

The Company in consultation with the Directors prepares and circulates a tentativeannual calendar for the meetings of the Board and its Committees in order to facilitateand assist the Directors to plan their schedules for the meetings.

There were four Board Meetings during the year ended 31st March 2017 whichwere on 20th May 2016 9th August 2016 2nd November2016 and 2nd February 2017.

COMMITTEES OF THE BOARD

The Board of Directors has the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Corporate Social Responsibility Committee

4. Stakeholders' Relationship Committee

5. Finance Committee

6. Strategy Committee

The details of the Committees along with their composition number of meetings andattendance at the meetings are provided in the Corporate Governance section of thisReport.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that:

a) in the preparation of annual accounts the applicable accounting standards had beenfollowed and there were no material departures.

b) they had selected appropriate accounting policies and applied them consistently andmadejudgments and estimates that have been made are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearand of the profit of the Company for the year ended 31st March 2017.

c) they had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.

d) they had prepared the annual accounts on a going concern basis.

e) they had laid down the internal financial controls to be followed by the company andsuch internal financial controls are adequate and are operating effectively.

f) they had devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems were adequate and operating effectively.

NOMINATION AND REMUNERATION POLICY

(I) Criteria for Determining Qualifications Positive Attributes & Independence ofDirector

1. Qualifications of Independent Director:

An independent director shall be a person of eminence standing and knowledge withsignificant achievements in business professions and/or public service or professionalpractice and desirable to have industry experience in which the company operates. AnIndependent director shall possess appropriate skills experience and knowledge in one ormore fields of finance law management sales marketing administration researchcorporate governance operations or other disciplines related to the company's business.

2. Positive attributes of Independent Directors:

Nomination and Remuneration Committee shall take into account the following positiveattributes while recommending the appointment of independent director.

a) To demonstrate integrity credibility trustworthiness ability to handle conflictconstructively and the willingness to address issues proactively.

b) Continuously update their knowledge and skills with the latest developments in theautomobile industry market conditions and applicable legal provisions.

c) Ability and willingness to devote sufficient time and attention to the Company'sbusiness and discharge their responsibilities.

d) Ability to bring an independentjudgment to the Board's deliberations especially onissues of strategy performance risk management key appointments and standards ofconduct.

e) Ability to develop a good working relationship with other Board members andcontribute to the Board's working relationship with the senior management of the Company.

f) To act within their authority assist in protecting the legitimate interests of theCompany its shareholders and employees

g) Assist the company in implementing the best corporate governance practices.

3. Independence of Independent Directors:

An Independent director should meet the requirements of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 concerningindependence of directors as may be specified from time to time.

(II) Remuneration Policy for Directors Key Managerial Personnel and other employees

A. NON-EXECUTIVE DIRECTORS

Sitting Fees

Non-executive Directors will be entitled to sitting fees for attending meetings of theBoard and its Committees as may be decided by the Board from time to time within thelimits prescribed under the Act. The sitting fees presently paid to the Non -ExecutiveDirector is Rs.50000/- per meeting of the Board and Rs.20000/- per meeting of anyCommittee of the Board or separate meeting of independent directors thereof.

Reimbursement of expenses

Non-executive Directors will be entitled to reimbursement of expenses incurred inconnection with attending the Board meetings Board Committee meetings meeting ofindependent directors general meetings and in relation to the business of the Companytowards hotel accommodation travelling and other out-of-pocket expenses.

B. MANAGING DIRECTOR KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

The following will be the guiding factors with respect to remuneration to ManagingDirector(s) Key Managerial Personnel and other employees.

a) The objective of the policy is directed towards having a compensation philosophy andstructure that will reward and retain talent.

b) The Remuneration to Managing Director shall take into account the Company's overallperformance Managing Directors' contribution for the same and trends in the industry ingeneral in a manner which will ensure and support a high performance culture.

c) As the company does not have any stock options such instruments do not form part ofhis remuneration package.

d) The remuneration and commission to be paid to the Managing Director shall be inaccordance with the percentage/limits/conditions laid down in the Companies Act 2013.

e) Remuneration to Key Managerial Personnel and Senior Management personnel will have abalance between fixed and incentive pay reflecting both short and long term performanceobjectives appropriate to the working of the Company and its goals and objectives. Suchremuneration will generally comprise of fixed pay performance pay perquisites provisionof car and other work related benefits Directors & Officers' Liability InsurancePolicy (D&O Policy)

f) The Remuneration to the key managerial personnel and other employees will be such asto ensure that the relationship of remuneration to performance is clear and meetsappropriate performance benchmarks.

POLICY ON BOARD DIVERSITY

Pursuant to requirements under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Nomination and Remuneration Committee (NRC) has framed a Policy onBoard diversity appropriate to the business requirements of the Company which inter-aliaspecifies optimum combination of Executive Directors

Non -Executive Directors and Independent Directors the recommendatory requirement foreach of the directors to possess functional diversity and role of NRC to ensure that thePolicy on Board diversity is considered while recommending the appointment of newdirectors on the Board of the Company.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013

Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilised by the recipient are provided in the standalone financial statement (Please referto Note No.38 to the standalone financial statement).

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES (REFERRED TO INSUBSECTION (1) OF SECTION 188 OF THE COMPANIES ACT 2013)

All transactions with related parties were on arm's length basis and in the ordinarycourse of business. There was no material related party contract during the year. FormAOC-2 as required under Section 134 (3)(h) is enclosed as Annexure-II to this report.

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Information with respect to conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134 of the Act read with Companies(Accounts) Rules 2014 enclosed as Annexure-III.

RISK MANAGEMENT

The Company faces diverse risks in terms of slowdown in economy input pricesreputation interest rates foreign exchange information systems etc. The auto componentindustry has been operating in a challenging environment due to uncertainties and demandfluctuations in the economy in general and in particular automotive industry. The Companymanages its risks in the following manner:-

a) exercising prudence while incurring capital expenditure or outlays on new projects

b) entering into long term contracts with customers to underwrite the capacitiescreated

c) determination of product prices after engineering studies

d) adoption of a diversified business model in terms of products market segmentsgeography and customers to ensure that Company is able to withstand any instability in theentire business eco-system

e) judicious approach to proportionate sourcing of inputs from indigenous and overseasmarkets in order to take advantage of commodity prices and exchange rate movements

f) analysing credit risks through market feedbacks

g) management of interest rate risks through a combination of loan products tenor offinancing and currency denomination

h) monitoring reviewing and hedging foreign exchange risks in accordance with the riskmanagement policy

All the above mentioned risks are managed through continuous review of businessparameters on a regular basis by the management. Insurable risks are analysed andinsurance policies are taken to protect the company's interests. The Board of Directorsare also informed periodically of the risks and concerns. Corrective actions andmitigation measures are taken as and when needed.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND IMPLEMENTATION

The Company has undertaken activities as per the CSR Policy (available on the Company'swebsite http:// www.sundram.com/investors.php and the Annual report on CSR activities isenclosed vide Annexure-IV forming part of this report.

BOARD EVALUATION

The Nomination and Remuneration Committee (NRC) has laid down the criteria forperformance evaluation of independent directors and other directors Board of Directorsand Committees of the Board of Directors. The criteria for performance evaluation coverthe areas relevant to their functioning as independent directors or other directorsmember of Board or Committees of the Board.

Evaluation of all Board members is done by the Board NRC and Independent Directors onan annual basis with specific focus on the performance and effective functioning of theBoard and individual directors. During the year the Board adopted a formal mechanism forevaluating its performance and as well as that of its Committees and individual directorsincluding the Chairman of the Board. The exercise was carried out through an evaluationprocess covering various aspects of the Boards' functioning such as composition of theBoard and committees frequency of meetings administration of meeting flow ofinformation to the board experience and competencies performance of specific duties andobligations disclosure of information to stakeholders etc. Separate exercise was carriedout to evaluate the performance of individual directors including the Chairman who wereevaluated on parameters such as attendance contribution at the meetings andindependentjudgement. The directors were satisfied with the evaluation results whichreflected the overall engagement of the Board and its Committees with the Company.

PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES AND JOINTVENTURE

Report on the performance and financial position of each of the subsidiaries of theCompany is given along with Financial Statement in Form AOC-1 (Please refer page no. 134).

CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business of the Company during the financial year.

NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE COMPANY'S SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

TVS Infotech Limited (TVSi) a subsidiary of Sundram Fasteners Limited (SFL) hasacquired 90% of the equity share capital of Blisslogix Technology Solutions PrivateLimited (BTS) on April 11 2016. In view of the above the name of the Company-BTS hasbeen changed to TVS Next Private Limited. With this acquisition TVS Next Private Limitedhas become a subsidiary of TVSi and a step down subsidiary of SFL.

The Company by way of subscription to rights offer has subscribed to 3050885 equityshares of TVS Infotech Limited (TVSi) a subsidiary on April 11 2016. With thisacquisition Sundram Fasteners Limited has 54.61% equity stake in TVSi and it has thusbecome a direct subsidiary of the Company.

In view of the cessation of Company's Joint Venture with Bleistahl Produktions GmbH& Co. KG Germany (Bleistahl) through its subsidiary company Sundram PrecisionComponents Limited (SPCL) the Company has acquired 1680000 equity shares (24%) ofRs.10/- each from Bleistahl in the share capital of SPCL on 27th March 2017.With this acquisition our Company has 100% equity stake in SPCL (prior to acquisitionthe Company was holding 76%) and SPCL has thus become a wholly owned subsidiary of theCompany.

Except for the details given above no other company has become or ceased from beingCompany's subsidiary joint venture or associate company during the financial year.

PUBLIC DEPOSITS

During the year the Company has not accepted any deposits within the meaning ofSection 73 of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules2014. No amount on account of principal or interest on deposits from public wasoutstanding as on Balance Sheet date.

REGULATORY/COURT ORDERS

No significant and material orders were passed by the regulators or courts or tribunalsimpacting the going concern status of the Company and its future operations.

INTERNAL FINANCIAL CONTROLS OF THE COMPANY

The Company maintains all its financial records in Systems Applications and Products(SAP) System and all financial transaction flow and approvals are routed through SAP. TheCompany's Internal Audit team reviews the effective functioning of internal financialcontrols ensuring adequacy with respect to financial statements and verify whether thefinancial transaction flow in the organisation is being done based on the approvedpolicies of the Company. During every quarter internal auditor presents the internalaudit report and management comments on the internal audit observations to the AuditCommittee. Further the Board of Directors of the Company have adopted various policieslike Related Party Transactions Policy Whistle Blower Policy Material Subsidiary Policyfor ensuring the orderly and efficient conduct of its business for safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and timely preparation of reliable financial information.

APPOINTMENT AND REMUNERATION OF KEY MANAGERIAL PERSONNEL

The statement of particulars of Appointment and Remuneration of Key ManagerialPersonnel as per Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is enclosed vide Annexure V forming part of this report.

STATEMENT ON EMPLOYEES REMUNERATION

Pursuant to Section 136 (1) of the Companies Act 2013 the report of the Board ofDirectors is being sent to all the shareholders of the Company excluding the statementprescribed under Rule 5 of the Companies (Appointment and Remuneration) Rules 2014. Thestatement is available for inspection by the shareholders at the Registered Office of theCompany during business hours.

SECRETARIAL AUDITORS

The Board of Directors has appointed M/s. S Krishnamurthy & Co. CompanySecretaries Chennai as the Secretarial Auditor of the Company for the financial year2017-2018. Necessary consent has been received from them to act as Secretarial Auditors.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors had appointed M/s. S Krishnamurthy & Co. Company Secretaries Chennai asthe Secretarial Auditor of the Company for the financial year 2016-2017. Secretarial AuditReport issued by Sri K Sriram Practising Company Secretary (CP No.2215) Partner M/s. SKrishnamurthy & Co. Company Secretaries Chennai in Form MR-3 is enclosed in AnnexureVI forming part of this report and does not contain any qualification.

STATUTORY AUDITORS

Pursuant to Section 139 of the Companies Act 2013 M/s Sundaram & SrinivasanChartered Accountants Chennai were appointed as Statutory Auditors of the Company at the51st Annual General Meeting held on 22nd September 2014 for aconsecutive period of three years upto the conclusion of the 54th AnnualGeneral Meeting.

In terms of third proviso under Section 139(2) of the Companies Act 2013 the tenureof the incumbent Auditors ceases upon the conclusion of ensuing Annual General Meeting.

The Board of Directors place on record their sincere appreciation of the valuableservices rendered by M/s Sundaram & Srinivasan Chartered Accountants Chennai sinceinception of the Company as statutory auditors of the Company.

The Board of Directors have recommended the appointment of B S R & Co. LLPChartered Accountants Chennai as the statutory auditors of the Company for a term offive consecutive years till the conclusion of the Annual General Meeting of the Companyfor the financial year 2021-2022. The Company has received consent from B S R & Co.LLP Chartered Accountants Chennai to serve as statutory auditors of the Company if theyare so appointed.

They have also furnished necessary certificate required under the Companies Act 2013conveying their eligibility for appointment.

A brief profile of the auditor is given below:-

B S R & Co. ('the firm') was constituted on 27th March 1990 having firmregistration no. as 101248W. It was converted into limited liability partnership i.e. B SR & Co. LLP on 14th October 2013 thereby having a new firm registrationno. 101248W/W-100022. The registered office of the firm is at 5th Floor LodhaExcelus Apollo Mills Compound N. M. Joshi Marg Mahalaxmi Mumbai Maharashtra-400 011 .

B S R & Co. LLP is a member entity of B S R & Affiliates a network registeredwith the Institute of Chartered Accountants of India. The other entities which are part ofthe B S R & Affiliates include B S R & Associates LLP B S R & Company B S Rand Co B S R and Associates B S R and Company B S R R & Co B S S R & Co and BB S R & Co.

B S R & Co. LLP is registered in Mumbai Gurgaon Bangalore Kolkata HyderabadPune Chennai Chandigarh Ahmedabad Vadodara Noida Jaipur and Kochi.

COST AUDITOR

In terms of Section 148 of the Companies Act 2013 (the Act) read with Companies (Costrecords and audits) Rules 2014 as amended the Board of Directors had appointed Sri PRaju Iyer Practising Cost Accountant (Membership No.6987) as Cost Auditor for thefinancial year 2017-2018. The audit committee recommended his appointment and remunerationsubject to the compliance of all the requirements as stipulated under the Act andcirculars issued thereunder.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has adopted the SFL's Policy on Sexual Harassment of Women at the Workplacein line with the requirements of the Sexual Harassment of Women at the Workplace(Prevention Prohibition & Redressal) Act 2013. Internal Complaints Committee (ICC)of the Company has been constituted to redress complaints regarding sexual harassment. Onecomplaint was received and resolved during the year 2016.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company has a Vigil Mechanism through a Whistle Blower Policy. The policy enablesstakeholders including individual employees and their representative bodies to freelycommunicate their concerns about illegal or unethical practices if any reporting ofconcerns by directors and employees about unethical behaviour actual or suspected fraudor violation of the company's code of conduct or ethics policy or any other genuineconcerns or grievances. It also provides for adequate safeguards against victimisation ofemployees and directors who avail of the vigil mechanism and also provide for directaccess to the Chairman of the audit committee. No communication from any employee of thecompany under the whistle blower policy was received during the year.

INDUSTRIAL RELATIONS

Industrial relations continued to remain congenial during the year. The Directors thankthe employees for their contribution to the progress of the Company during the year underreview.

ACKNOWLEDGMENT

The Directors wish to thank the Chinese Authorities Officers of Haiyan County JiaxinCity Zhejiang province Chinese tax and other administrative authorities for the supportextended to Sundram Fasteners (Zhejiang) Limited. The Directors wish to thank One NorthEast the Regional Development Authority for Cramlington United Kingdom for the continuedsupport extended to the step down Subsidiary. The Directors wish to thank the Company'sbankers State Electricity Boards in Tamil Nadu Pondicherry Andhra Pradesh andUttarakhand customers and vendors employees for all the assistance rendered by them fromtime to time.

On behalf of the Board
Chennai SURESH KRISHNA
24th May 2017 Chairman and Managing Director

Annexure-III

The conservation of energy technology absorption foreign exchange earnings and outgopursuant to the provisions of section 134(3) (m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014:

CONSERVATION OF ENERGY

1. Conservation of Electrical Power:

• The company has taken specific initiatives towards conservation of both thermaland electrical energy usage of alternate/renewable energy.

• Wind energy usage has gone up by 96% from 434 lakhs units in FY 2015-16 to 850lakhs units in FY 2016-17. This has resulted in the company to realize a savings of about4.3% in FY 2016-17. In addition wind being a renewable power source has resulted in areduction of emission of Green House Gases to an equivalent of 77000 MT CO2.

• Procurement of alternative power through Group Captive Power (GCP) sources hasresulted in a savings of about 3.7% for the FY 2016-17. Consumption has gone up from 407lakhs units in FY2015-16 to 587 lakhs units in FY 2016-17 which represents a 42%increase. The share of GCP increased from 23% in FY2015-16 to 30% in FY 2016-17 out of thetotal power consumed.

• All manufacturing units continue to maintain power factor towards unity.

• Your company also focused on energy savings through various energy savingprojects as follows:

1 Installation of Energy efficient LED lamps/Induction lamps in place of metal halidelamps tube lights.

2 Furnaces reinsulated with low heat loss refractories.

3 Introduction of bus coupler arrangement in transformers resulting to reduction ofloss of power.

4 Power factor improved by introducing additional capacitor banks

5 Idling of motors in forging secondary machines fume exhaust equipment and pumpsavoided by interlock mechanism.

6 Heat pump technology introduced in place of electrical heaters in furnacepre-cleaning/post-cleaning areas.

7 Optimisation of air compressor loads by reducing losses and commonising pipelines.

8 Improvement in boiler efficiency by calibrating air fuel ratio based on stackanalysis

9 Increasing sealed quench furnaces throughput by reducing cycle time

10 Introduction of energy efficient cooling towers

2. Wealth from Waste:

Your company also focused on creating "Wealth from Waste". Food and Canteenwastes which were let to naturally decompose are now utilized for production of bio gas.Two of the manufacturing locations have set up bio gas plants where the food and canteenwaste is anaerobically digested and the bio gas thus produced is used in kitchen. This biogas fuel is an alternate to fossil fuel like Liquefied Petroleum Gas (LPG). The companywas able to reduce the LPG consumption by 6.5 MT per year. This bio gas initiative will behorizontally deployed in other units.

TECHNOLOGY ABSORPTION

(i) The efforts made towards technology absorption 1. FEA and modeling software AMC are utilized for upgradations and deriving benefits therefrom.
2. Development of light weight fasteners.
3. Ultrasonic cleaning machine introduced to supply contamination 4 free parts.
Heat treated bars procured for production of studs of length greater 5 than 150mm.
Change of process for higher size nuts-Hot forging route adopted 6 from Cold forging route.
Development of new pre-alloyed medium hardenable alloy iron 7 powder with nickel and lead.
Development of high compressibility hybrid alloy iron powder variant for manufacture of sintered parts along with development of high 8 density sintered rotors.
Development of low speed synchro hubs sintered aluminium gerotors rotors for variable displacement oil pumps.
(ii) The benefits like product improvement cost reduction product development or import substitution; Manufacturing lead time cost reduction through elimination/change in process as mentioned above in point nos. 45678. Import substitution-Ultrasonic machine procured in India
(iii) Imported Technology
a) Details of technology imported The Company had entered into a technical collaboration agreement during the year 2008 with Hitachi Japan for the manufacture of tappets. The Company has fully absorbed the technology and has been
b) The year of import
c) Whether the technology been fully absorbed
d) If not fully absorbed areas where absorption has not taken place and the reasons thereof; and
(iv) Expenditure on Research and Development Capital Expenditure : Rs.248.46 lakhs
Revenue Expenditure : Rs.1296.37 lakhs
Total Research & Development Expenditure Rs.1 544 83 lakhs (Net of revenue)

FOREIGN EXCHANGE EARNINGS AND OUTGO

The total foreian exchange earned and used are as under:

Foreign exchange earned Rs.in lakhs) 105201.36
Foreign exchange used Rs.in lakhs) 31992.38

The Company continues to be a Net Foreign Exchange earner for the twentieth year insuccession.