The Directors hereby present the 33rd Annual Report together with theaudited accounts of the company for the year ended 31st March 2019.
The performance of the company for the year ended 31st March 2019 is asfollows:
| || |
(Rs. in lakhs)
|Particulars ||For the year ended |
| ||31.03.2019 ||31.03.2018 |
|Revenue from operations(Gross) ||59612.98 ||59361.11 |
|Net Revenue (Excluding Excise Duty) ||59612.98 ||57667.19 |
|Total Expenditure ||49934.85 ||47840.66 |
|Operating Income ||9678.13 ||9826.53 |
|Other Income ||391.11 ||456.40 |
|Profit before Interest Depreciation Tax and Exceptional items ||10069.24 ||10282.93 |
|Interest ||2295.15 ||2220.90 |
|Depreciation ||1768.39 ||1838.15 |
|Profit before Tax & Exceptional items ||6005.70 ||6223.88 |
|Exceptional items ||- ||15191.85 |
|Profit/(Loss) before Tax ||6005.70 ||(8967.97) |
|Tax Expense/(credit) ||2127.44 ||(3035.70) |
|Profit/(Loss) after Tax ||3878.26 ||(5932.27) |
|Balance of profit brought forward from last year ||20060.19 ||27408.25 |
|Amount available for appropriation ||23938.45 ||21475.98 |
|Appropriations || || |
|Transfer to general reserve ||- ||- |
|Dividend paid during the year ||(2211.36) ||(1105.68) |
|Tax on dividend ||(437.75) ||(225.09) |
|Other comprehensive Income/(Loss) ||26.93 ||(85.02) |
|Balance profit carried to Balance Sheet ||21316.27 ||20060.19 |
The Board has out of the profits available for appropriation recommended a dividend of`9 per equity share for the financial year 2018-19 on the 22113625 equity shares offace value of Rs.10 each for the approval of the shareholders at the ensuing AnnualGeneral Meeting. The total dividend amount inclusive of distribution tax surcharge andcess thereon would be `2399.32 lakhs. The dividend if approved by the shareholders willbe paid within the due date to all the eligible shareholders whose names appear in theregister of members of the company as on the record date fixed for this purpose. Thedividend declared is as per the dividend policy of the company. The dividend policy isdisclosed in the website of the company www.ucalfuel.comweblink:http://www.ucalfuel.com/policy-dividend.pdf.
TRANSFER TO GENERAL RESERVE
There has been no transfer to the general reserve of the company for the financial year2018-19.
The paid-up equity share capital of the company as on 31st March 2019 was`221136250. The company has not issued any share nor granted stock options or sweatequity during the financial year 2018-19.
The net revenue from the operations of the company stood at Rs.59612.98 lakhs in thefinancial year 2018-19 as against Rs.57667.19 lakhs in the financial year 2017-18resulting in an increased revenue of 3.4%. This can be attributed to the increased offtakeby the existing customers. The earnings before Interest Tax and Depreciation (EBITDA)stood at Rs.10069.24 lakhs in the financial year 2018-19 as against Rs.10282.93 lakhs inthe financial year 2017-18 due to marginal increase in various costs.
The exports stood at Rs.550 lakhs in the financial year 2018-19 as compared to Rs.1263lakhs in the financial year 2017-18. The exports were mainly to Europe for thediesel segment but with Europe moving away from diesel segment due to environmentalnorms the export customers had reduced their offtake which resulted in a drop in export.The spares sales of the company in the financial year 2018-19 stood at Rs.5976 lakhs asagainst Rs.5470 lakhs in the previous financial year. The offtake by the dealers and theOEMs increased in 2018-19 resulting in this 9.2% increase.
The Profit/(Loss) After Tax (PAT) for the financial year 2018-19 stood at Rs.3878.26lakhs as against the loss of Rs.5932.27 lakhs of the previous financial year. The loss ofthe previous financial year was due to the write-off of advances and receivables from UcalHoldings Inc (formerly Amtec Precision Products Inc). The Company's earning per share isRs.17.54 for the financial year 2018-19. The consolidated financial statements of thecompany show a profit of Rs.4581.21 lakhs with an earning per share of `20.72.
To augment its capacity to meet the requirements of its customers and to develop newproducts to cater to the BSVI emission norms the company has spent Rs.3854.95 lakhs incapital investment in the financial year 2018-19 as compared to Rs.3182.08 lakhs spent inthe financial year 2017-18. The company continues to lay emphasis on R&D and has spentRs.1374.98 lakhs in the financial year 2018-19 as against an amount of Rs.1166.81 lakhsspent in the previous financial year.
Mr. Ram Ramamurthy (DIN:06955444) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for reappointment. Necessary resolution for hisreappointment has been set out in detail in the Notice convening the ensuing AnnualGeneral Meeting. The Board recommends his reappointment as Director of the company.
Mr. S. Balasubramanian (DIN: 02849971) was appointed Additional Director (non-executiveand Independent category) in the Board meeting held on 21st May 2018 and hisappointment was approved by the shareholders at the Annual General Meeting held on 29thSeptember 2018.
Dr. M.S. Ananth (DIN:00482391) resigned from the Board on 4.11.2018. The Company hasbenefited greatly from his association and the Board places on record its sincereappreciation for the services rendered by him during his tenure as director.
Mr. S. Natarajan (DIN:00155988) and Dr. V. Sumantran (DIN:02153989) are seekingreappointment as Independent Directors for a second term of five years from the conclusionof this Annual General Meeting upto the conclusion of the 38th Annual GeneralMeeting. Necessary resolutions for their reappointment has been set out in detail in theNotice convening the ensuing Annual General Meeting. The Board recommends theirreappointment as Independent Directors of the company.
The information on Board meetings committees of the Board independent directorsBoard diversity remuneration policy familiarization program for independent directorsand Board evaluation are mentioned in the Corporate Governance Report.
Brief resume/details of Directors who are to be reappointed as mentioned herein hasbeen furnished along with the explanatory statement in the Notice convening the ensuingAnnual General Meeting.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of section 134(3)(c) read with section 134(5) of the Companies Act 2013 thedirectors to the best of their knowledge and belief and according to information andexplanation obtained by them confirm that
(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to any material departures;
(b) Such accounting policies have been selected and applied consistently and suchjudgments and estimates have been made that 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 year31st March 2019 and of the profit and loss of the company for the year ended 31stMarch 2019
(c) Proper and sufficient care has been taken 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 annual accounts have been prepared on a "going concern" basis.
(e) Proper internal financial controls to be followed by the company have been laiddown and such internal financial controls are adequate and are operating effectively.
(f) Proper systems to ensure compliance with the provisions of all applicable laws havebeen devised and such systems are adequate and are operating efficiently.
The audit committee conforms to the requirements of Section 177 of the Companies Act2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. With the resignation of Dr. M.S. Ananth from the board the AuditCommittee was reconstituted to include Mr. S. Balasubramanian. The members of the AuditCommittee as on date of this report are Mr. S. Natarajan Dr. V. Sumantran Mr. S.Balasubramanian and Mr. Jayakar Krishnamurthy. Mr. S. Natarajan continues as theChairman of the Audit committee. The committee met five times during the year. Detaileddisclosure on the terms of reference and meetings are mentioned in the corporategovernance report.
M/s R. Subramanian and Company LLP Chartered Accountants Chennai (RegistrationNumber: 004137S/S200041) were appointed statutory auditors of the company for a period offive consecutive years commencing from the conclusion of the 31st AnnualGeneral Meeting held on 28th September 2017 till the conclusion of the 36thAnnual General meeting subject to the ratification of their appointment by theshareholders at the Annual General Meeting every year. However as per the amendment inSection 40 of the Companies Amendment Act 2017 the ratification of the appointment ofstatutory auditor at the Annual General Meeting every year is not required. Hence thecompany has not put forth the resolution for the ratification of the appointment ofStatutory Auditor in the notice to the Annual General Meeting from last financial yearonwards. The emphasis of matter specified in the Independent auditor's report on theStandalone Financial Statements has been explained in Note No. 34 39(c) of the notes toaccounts.
Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hadappointed M/s. P. Sriram & Associates a firm of practising company secretaries assecretarial auditor of the company to undertake secretarial audit of the company for thefinancial year 2018-19. The report of the secretarial auditor is given inAnnexure-I and forms part of this report. It does not contain any qualificationreservation adverse remark or disclaimer. The Board of Directors have reappointed M/s. P.Sriram & Associates as secretarial auditor for the financial year 2019-20. Necessaryconsent has been received from them to act as secretarial auditor.
M/s. P. Chandrasekar Chartered Accountants continue as internal auditors of thecompany. Their scope of work is periodically reviewed and updated by the audit committee.It includes among other things a review of the operational efficiency effectiveness ofsystems and controls in existence review of the processes to safeguard the assets of thecompany and assessing the strength of the internal control in all areas. The internalauditor's report is discussed with the concerned stakeholders and corrective remedialaction is taken on a regular basis in consultation with the audit committee. Theinternal auditors were present at the audit committee meetings as and when required.
In terms of Section 148 of the Companies Act 2013 (the Act) read with Companies (CostRecords and Audit) Rules 2014 as amended the Board of Directors have appointed Mr. L.Thriyambak Cost Accountant as Cost Auditor for the financial year 2019-2020 on aremuneration of Rs.180000 per annum subject to the remuneration being ratified by theshareholders at the ensuing Annual General Meeting. The audit committee had recommendedhis appointment and remuneration subject to the compliance of all the requirements asstipulated under the Act and circulars issued thereunder. As specified by the CentralGovernment under Section 148(1) of the Companies Act 2013 the cost records are requiredto be maintained by the Company and accordingly such accounts and records are made andmaintained. Mr. L. Thriyambak has sent his consent for appointment as Cost Auditor for2019-20.
The company has two wholly-owned subsidiaries.-.
Ucal Polymer Industries Limited (UPIL)-UPIL has recorded an increased revenue fromoperations of Rs.5916.61 lakhs in the financial year 2018-19 as against Rs.4975.69 lakhsin the financial year 2017-18. The increased revenue can be attributed to the increasedofftake by the company which continues to be the major customer of UPIL. The net profitafter tax stood at `728.29 lakhs in the financial year 2018-19. A dividend of 50% has beendeclared by UPIL for the financial year 2018-19. Transfer of business from other vendorsof the company to UPIL continues and has provided the company an advantage in terms ofprices quality and timeliness of supplies. UPIL is also gearing up its facilities to meetthe new business requirements of UCAL Fuel Systems Limited as per BSVI emission norms.
Ucal Holdings Inc. (UHI) (formerly Amtec Precision Products Inc)- The name of thecompany has been changed from Amtec Precision Products Inc to Ucal Holdings Inc. witheffect from 14th November 2018. The revenue from operations of Ucal HoldingsInc was `27783.57 lakhs in the financial year 2018-19 up from `23899.04 lakhs in thefinancial year 2017-18 thereby recording an increase of 16.2% in terms of Indian Rupeesdue to exchange conversion rates though in terms of US dollar the revenue fromoperations was $41.07 million during financial year 2018-19 as compared to $36.84 millionin the financial year 2017-18 recording an increase of 11.5%. Ucal Holdings Inc hasearned a net profit after tax of Rs.484 lakhs during the financial year 2018-19 as againsta profit of Rs.306 lakhs in the financial year 2017-18. Both increased customer offtakeand improvement in operations have contributed to this increased net profit.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements for the year ended 31st March 2019 ofthe company and its subsidiaries together with the auditor's report thereon are enclosed.The statement pursuant to sub section(3) of Section 129 of the Companies Act 2013 readwith Rule 5 of Companies (Accounts) Rules 2014 in the prescribed form AOC-1 relating tothe subsidiary companies is given in Annexure-II.
The consolidated results of the company and its subsidiaries show that a net profitafter tax of Rs.4581 lakhs has been achieved during the financial year 2018-19 as againstRs.10122 lakhs in the financial year 2017-18. The consolidated financial statements of2018-19 have been prepared taking into account the audited financial statements of all thesubsidiary companies for the financial year 2018-19 and all adjustments have been giveneffect to in the consolidated statements.
In terms of section 136 of the Companies Act 2013 the company has not attached thefinancial statements of the subsidiary companies. However the financial information ofthe subsidiary companies is disclosed in the annual report. The annual accounts reportsand other documents of the subsidiary companies will be available for inspection duringbusiness hours by any shareholder of the company at the registered office of the companyand also at the registered office of the concerned subsidiary and has also been posted onthe website of the company www.ucalfuel.com. The annual accounts reports and otherdocuments of the subsidiary companies will be dispatched to the shareholders upon receiptof a request from them.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The company's CSR activities are in the field of education sports health sanitationand preservation of culture and heritage. As per Section 135 of the Companies Act 2013the CSR Policy was formulated by the CSR Committee and thereafter approved by the Board.The CSR policy is displayed on the website of the company www.ucalfuel.com weblink:http://www.ucalfuel.com/policy-csrp.pdf. With the resignation of Dr. M.S. Ananth from theBoard Mr. S. Balasubramanian has been inducted into the CSR committee. Mr. S.Balasubramanian is the chairman of the committee and Mr. Ram Ramamurthy and Mr. JayakarKrishnamurthy are the other members of the committee. The company has contributed towardsCSR upto the financial year 2017-18. For the financial year 2018-19 there was nocontribution towards CSR as the Company's average net Profit for the last three financialyears calculated pursuant to section 135 of Companies Act 2013 on a Standalone basis isnegative. The report on corporate social responsibility activities forms part of theBoard's Report and is given in Annexure-III.
During the financial year 2018-19 the company has not accepted any deposits from thepublic within the meaning of Section 73 of the Companies Act 2013 read with Companies(Acceptance of Deposits) Rules 2014 and there is no outstanding amount on account ofprincipal or interest on deposits from public as on date.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
The company has an efficient internal control system commensurate with its size andnature of business to safeguard the assets of the company and to ensure effectiveutilisation of resources. These controls ensure that transactions are completed on timeand in an accurate manner and by following proper procedures and systems. The internalauditors cover a wide area of operations and this is being continuously reviewed by theaudit committee. Internal audit is conducted on a quarterly basis by a team of internalauditors and the reports together with the action taken reports are reviewed by the auditcommittee periodically. A system of management controls is also in place to ensure higherlevels of efficiency and to keep the organisation competitive. All the critical functionsof the company i.e. Sourcing and Procurement Manufacturing Costing Finance Dispatchand Sales are handled through Oracle system which is well-integrated. Checks and controlshave been built into the system to handle the transactions. Existing internal controlsprovide adequate assurance to the management for all the transactions covering operationsinventory fixed assets financial records and compliance to statuary requirements. Thesystems and controls are reviewed periodically to ensure their effectiveness. The Boardhas adopted various policies like Material Subsidiary Policy Whistle Blower PolicyRelated Party Transactions Policy to safeguard the assets of the company to ensure timelyinformation and to prevent and detect frauds and errors.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information required under Section 134(3)(m)of the Companies Act 2013 read with Rule 8of the Companies (Accounts) Rules 2014 on energy conservation technology absorptionforeign exchange earnings and outgo is given in Annexure-IV.
EXTRACT OF ANNUAL RETURN
An extract of Annual Return in form MGT9 is given in Annexure-V and forms part ofthis report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
Particulars of loans and advances given guarantees given securities provided andinvestments made are provided in the Note Nos.41144 and 3 of the notes to accounts ofthe Standalone Financial Statements.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments in the operations of the company affecting thefinancial position of the company have occurred between the end of the financial year ofthe company to which the financial statements relate and the date of the Board's report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The company did not enter into any material transaction with any related party whichmay have potential conflict with the interest of company at large during the financialyear 2018-19 as per Section 188 of Companies Act 2013. All transactions entered into withrelated parties were at an arm's length basis and in the ordinary course of business. FormAOC-2 as required under Section 134(3)(h) of the Companies Act 2013 read with Rule 8(2)of the Companies (Accounts) Rules 2014 is given in Annexure-VI and forms part of thisreport. The company's related party transactions have been entered in to for meeting therequirements of operations and at an arm's length basis and in the ordinary course ofbusiness.
CHANGE IN NATURE OF BUSINESS
There was no change in the nature of business of the company during the year underreview.
During the year 2018-19 no significant and material orders were passed by the courtsregulators or tribunals affecting the going concern status of the company and its futureoperations.
NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE COMPANY'S SUBSIDIARIES JOINTVENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
No company has become or ceased to be the company's subsidiary joint venture orassociate company during the financial year 2018-2019.
PARTICULARS OF EMPLOYEES
Mr. Jayakar Krishnamurthy Chairman and Managing Director Mr. Ram RamamurthyWhole-time Director and Chief Financial Officer Ms. Rekha Raghunathan Director andCompany Secretary hold the office of key managerial personnel of the company. TheInformation required pursuant to Section 197 of the Companies Act 2013 read with Rule 5of the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 inrespect of directors key managerial personnel and employees are given in Annexure-VII.
During the year cordial and healthy relations were maintained with all sections/levelsof employees.
WHISTLE BLOWER POLICY
The company has a whistle blower policy to deal with instances of fraud andmismanagement. The details are explained in the Corporate Governance Report and are alsoposted on the company's website www.ucalfuel.com.
SEXUAL HARASSMENT POLICY
The company has in place a policy for prevention of sexual harassment. An internalcommittee has been set up at each plant to redress sexual harassment complaints. Allemployees are covered under this policy. No complaint was received during the financialyear 2018-19.
RISK MANAGEMENT POLICY
Key business risks are identified and reviewed on a regular basis. A strategydevelopment committee has been formed to strategise on ways to mitigate the various risks.The necessary actions and precautions are taken on time to deal with various risksassociated with the company and the Board discusses the same from time to time. Thedetails are given in Corporate Governance Report.
PREVENTION OF INSIDER TRADING
The company has framed a code of conduct for prevention of insider trading based onSEBI (prohibition of insider trading) Regulations 2015. This code is applicable to allthe board members/employees/officers of the company. This ensures prevention of dealingwith shares by people who have access to unpublished price sensitive information.
The company adheres to all the requirements of the code of corporate governance asstipulated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. A report on corporate governance along with certification of the Chairman andManaging Director and the Whole-time Director and Chief Financial Officer is attached inAnnexure-VIII. Certificate from the Statutory Auditor regarding compliance of theconditions of corporate governance as stipulated by SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is given in Annexure-IX. The ManagementDiscussion and Analysis Report is attached in Annexure-X.
STATEMENT ON COMPLIANCE TO APPLICABLE SECRETARIAL STANDARD
The company has complied with all the applicable secretarial standards as issued by theInstitute of Company Secretaries of India during the year 2018-19.
The Board thanks all its employees customers bankers vendors suppliers andgovernmental agencies for their continued support. The Board is grateful to theshareholders for their continued trust and confidence in the company.
| ||For and on behalf of the Board |
|Place: Chennai ||JAYAKAR KRISHNAMURTHY |
|Date: 31st August 2019 ||CHAIRMAN AND MANAGING DIRECTOR |
ANNEXURE - II TO BOARD'S REPORT
STATEMENT CONTAINING THE SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES /ASSOCIATE COMPANIES / JOINT VENTURES-FORM AOC-1
Statement pursuant to first proviso to subsection(3) of section 129 of the CompaniesAct 2013 read with Rule 5 of Companies (Accounts) Rules 2014 in the prescribed FormAOC-1 relating to subsidiary companies.
| || ||(Rs. in lakhs) |
| ||UPIL ||UHI (formerly Amtec Precision Products Inc) |
|Reporting Period ||31st March 2019 ||31st March 2019 |
|Reporting Currency ||INR ||INR |
|Exchange Rate || || |
|Share Capital ||163.52 ||20877.28 |
|Reserves & Surplus ||4159.88 ||(28091.87) |
|Total Assets* ||5837.26 ||14614.02 |
|Total Liabilities** ||1513.86 ||21828.61 |
|Investments ||- ||- |
|Turnover ||5916.61 ||27783.57 |
|Profit before taxation ||1102.40 ||707.67 |
|Provision for taxation ||374.11 ||223.31 |
|Profit after taxation ||728.29 ||484.36 |
|% of Proposed Dividend ||50% ||- |
|% of Shareholding ||100% ||100% |
|Country ||India ||USA |
*(Non Current Assets + Current Assets)
**(Non Current Liabilities + Current Liabilities)
1. There are no subsidiaries which are yet to commence operations.
2. No subsidiaries have been liquidated or sold during the year.
3. Indian Rupee equivalent of the figures given in foreign currencies in the accountsof the subsidiary companies are based on the exchange rates as on 31st March2019 for the Balance Sheet and average rate for Income/Expenditure.
| ||REKHA RAGHUNATHAN ||RAM RAMAMURTHY ||JAYAKAR KRISHNAMURTHY |
|Place : Chennai ||DIRECTOR AND COMPANY SECRETARY ||WHOLE-TIME DIRECTOR AND CHIEF FINANCIAL OFFICER ||CHAIRMAN AND MANAGING DIRECTOR |
|Date : 31st August 2019 || || || |
ANNEXURE IV TO BOARD'S REPORT
CONSERVATION OF ENERGY/ TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO(Information pursuant to section 134(3)(m) of the Companies Act2013 read with Rules 8 ofthe Companies (Accounts) Rule 2014.)
A CONSERVATION OF ENERGY
a The steps taken or impact on conservation of energy
During the year 2018-19 improvements have been made for Energy Conservation in shopfloor lighting office area lighting air-conditioning compressor and Vacuum pump. Theinstallation of LED lights was implemented by replacing the metal halide lamp therebysaving up to 0.65 lakh units of power in financial year 2018-19. Transparent sheets onroof tops to avoid usage of lights during day time were introduced thereby saving up to0.10 lakh units of power in financial year 2018-19. Conventional duct typeair-conditioning systems were replaced by more efficient split air-conditioners. Thisresulted in a saving of 1 lakh units of power during financial year 2018-19. Efficiencyimprovement in compressor modification of pipelines led to a savings of upto 4.37 lakhunits of power in the financial year 2018-19. Overall there was a cost-saving ofaround Rs.53 lakhs in the financial year 2018-19 as a result of the above energyconservation measures.
b. Steps taken by the company for using alternate source of energy
Power was not purchased from alternate sources during the financial year 2018-19. Thewindmills operated efficiently and generated 17.24 lakh units during financial year2018-19.
c. The capital investments on energy conservation requirements
There was no major capital investment on energy conservation measures during thefinancial year 2018-19.
B. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION
1. Efforts made in brief towards technology absorption adaptation andinnovation
The company has fully absorbed the technologies in the domain areas of carburettorsair suction valves and pumps and is continuously improving its knowledge in these areasfor adapting this to meet the demands of new customers new applications throughinnovative features in the product. The increased product range and new Customer additionshave been due to the company's initiative and continued focus on R&D. The company isinnovating new technologies and products to comply with BSVI emission norms. Newtechnologies has been developed in the domain areas of pumps air-fuel management systemand products that are required for after treatment devices for the various applications of2-Wheelers passenger cars commercial vehicles. Considering the developments in theelectrical vehicle the company is focused on the development of electrical and electronicproducts and R&D is upgrading its facilities to test and validate such products also.
2. Benefits derived as a result of the above efforts
The company has been able to address the market requirements through innovativeengineering solutions in terms of performance and emission norms
Customer demands are met by offering a range of products
New business opportunities have been created through technical demonstration ofthe company's capability and technical support
The company is able to approach newer customers and markets for variousapplications through a good value proposition
Customer expectations are met through innovative engineering solutions in termsof performance emission targets
Development of products for the existing and new customers for their variousapplications
Improvements in manufacturing process and quality through product design changes
Product cost reduction through validation of parts from new sources valueengineering
Building knowledge repository within the organization
Development validation of parts catering to the fuel compatibility requirementsof the customers The new developments through indigenous efforts include
Constant Depression (CD) carburettor for the premium segment (200cc engine) fora Two-Wheeler manufacturer
Variable Depression (VD) carburettor for the Three-Wheeler segment
Constant Depression (CD) carburettor for the motorcycle segment
Variable Depression (VD) carburettor for the motorcycle and scooter segment
Fuel filter development for passenger car segment
3. In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year) the following information may be furnished - Notapplicable
4. Expenditure on R&D
|Particulars ||Rs. In lakhs |
|a. Capital ||164.35 |
|b. Revenue (recurring) includes amount transferred to Deferred revenue expenses ||1210.63 |
|c. Total ||1374.98 |
|d. Total R&D expenditure as a percentage of total turnover ||2.31% |
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
The earnings of foreign exchange was on account of export of carburettors MPFI partsand pumps during the year. The foreign exchange outgo was mainly on account of purchase ofcomponents capital goods and foreign travel. During the financial year 2018-19 the totalforeign exchange outgo was Rs.1765 lakhs while the foreign exchange earned was Rs.550lakhs resulting in a net foreign exchange outgo of Rs.1215 lakhs
| ||For and on behalf of the Board |
|Place : Chennai ||JAYAKAR KRISHNAMURTHY |
|Date : 31st August 2019 ||CHAIRMAN AND MANAGING DIRECTOR |
ANNEXURE VI TO BOARD'S REPORT
FORM NO. AOC-2
[Pursuant to clause (h) of Sub-section (3) of Section 134 of the Companies Act 2013and Rule 8(2) of the Companies (Accounts) Rules 2014]
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in Sub-section (1) of Section 188 of theCompanies Act 2013 including certain arm's length transactions under third provisothereto.
1. Details of contracts or arrangements or transactions not at arm's length basis
Not Applicable. The company has not entered into any contract or arrangement ortransactions which are not at arm's length basis.
2 Details of material contracts or arrangement or transactions at arm's length basis.(a) Name(s) of the related party and nature of relationship
Details of transactions with the related parties are provided in Note No 42 (1) &(2) to the Standalone Accounts for the Financial year 2018-19.
(b) Nature of contracts/arrangements/transactions
Details of transactions with the related parties are provided in Note No 42 (3) to theStandalone Accounts for the Financial year 2018-19 It may be seen from the relevant notesthat the total value of transactions with all related parties are less than 10% of thetotal income of the Financial Year 2018-19 and hence none of them are material in nature.Hence the details required in paras (a) to (e) to be furnished in respect of materialrelated party transactions are not applicable and hence not furnished.
(c) Amount paid as advances if any: NIL
| ||For and on behalf of the Board |
|Place : Chennai ||JAYAKAR KRISHNAMURTHY |
|Date : 31st August 2019 ||CHAIRMAN AND MANAGING DIRECTOR |
ANNEXURE - VII TO BOARD'S REPORT
PARTICULARS OF EMPLOYEES
A. The information required under Section197 of the Act read with rule 5 (1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow :
(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year:
|Executive Directors ||Ratio to median remuneration |
|Mr. Jayakar Krishnamurthy ||58.69 |
|Mr. Ram Ramamurthy ||6.71 |
Ms. Rekha Raghunathan does not draw any remuneration as director of the companyNon-executive directors
The non-executive directors do not draw any remuneration from the company exceptsitting fees for attending the meetings of the board and the committees of the Board.
(ii) The percentage increase in remuneration of each director chief financial officercompany secretary or manager if any in the financial year:
|Directors Chief Financial Officer and Company Secretary ||% increase in remuneration in the financial year |
|Mr. Jayakar Krishnamurthy - Chairman and Managing Director ||9% |
|Mr. Ram Ramamurthy - Whole-time Director and Chief Financial Officer ||21% |
|Ms. Rekha Raghunathan - Director and Company Secretary ||Nil |
(iii) The percentage increase in the median remuneration of employees in the financialyear 0%
(iv) The number of permanent employees on the rolls of company 969
(v) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration.
There is no increase in the salaries of employees other than the managerial personnel.The remuneration of the Chairman and Managing Director is increased as per the approval ofthe Central Government and the remuneration of the Whole-Time Director is increased as perthe approval of the shareholders.
(vi) Affirmation that the remuneration is as per the remuneration policy of thecompany.
The company affirms that the remuneration is as per the remuneration policy of thecompany.
B. Statement of Particulars of Employees as per rule 5(2) and (3)
|(i) ||Designation of the employee ||Chairman and Managing Director ||Chief Executive Officer |
|(ii) ||Remuneration received ||` 28363333 ||Rs.9932544 |
|(iii) ||Nature of employment whether contractual or otherwise ||Permanent ||Permanent |
|(iv) ||Qualifications and experience of the employee ||MBA-Finance - Duke University ||B. Sc (Maths) B. Tech (Production Technology) Master of Science (Manufacturing Systems Engineering) |
| || ||33 years experience ||34 years experience |
|(v) ||Date of commencement of employment ||01.09.2001 ||23.08.2013 |
|(vi) ||The age of such employee ||58 years ||57 years |
|(vii) ||The last employment held by such employee before joining the company ||Director Mascon Information Technologies Limited formerly known as Martek Holdings Inc. ||President (Special Projects) Sundaram Clayton Limited |
|(viii) ||The percentage of equity shares held by the employee in the company ||1.60% ||NIL |
|(ix) ||whether any such employee is a relative of any director or manager of the company and if so name of such director or manager ||No ||No |
| ||The employee if employed throughout the financial year was in receipt of remuneration for that year which in the aggregate was not less than one crore rupees ||Yes ||Yes |
| ||The employee if employed for a part of the financial year was in receipt of remuneration for any part of that year at a rate which in the aggregate was not less than five lakh rupees per month ||Not Applicable ||Not Applicable |
| ||The employee if employed throughout the financial year or part thereof was in receipt of remuneration in that year which in the aggregate or as the case may be at a rate which in the aggregate is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children not less than two percent of the equity shares of the company. ||Not Applicable ||Not Applicable |