avatar Wabco Holdings Inc. Manufacturing
  • Location: Michigan 
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    5th Annual Report 2009


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    Board of Directors Share Transfer Agent Factories VENU SRINIVASAN Sundaram-Clayton Limited Plot No. 3 (SP), III Main Road, Chairman New No. 22 (Old No. 31), Ambattur Industrial Estate, Railway Colony, 3rd Street, Ambattur, Chennai - 600 058 LEON LIU Mehta Nagar, Chennai - 600 029 Tel. : 044 - 2623 8000 Tel. : 044 - 2374 1889 Fax : 044 - 2623 8009 NIKHIL MADHUKAR VARTY 044 - 2374 2939 D E UDWADIA Large Sector, Fax : 044 - 2374 1889 Adityapur Industrial Area, NARAYAN K SESHADRI E-mail : kr.raman@scl.co.in Gamharia, Seraikella-Kharsawan Dist. sclshares@gmail.com Jharkhand - 832 108 TREVOR LUCAS investorscomplaintssta@scl.co.in Tel. : 0657 - 2387996 C N PRASAD madhavan.rajagopalan@wabco-tvs.co.in Fax : 0657 - 2387997 KURT LEHMANN Bankers Plot No. AA8, Central Avenue, STATE BANK OF INDIA Auto Ancillary SEZ, Whole-time Director Corporate Accounts Group Branch Mahindra World City, Greams Dugar Nathan Sub-Post, Chengalpet, P KANIAPPAN Greams Road Kancheepuram District - 603 002 Chennai - 600 006 Tel. : 044 - 4749 0006 Chief Financial Officer Fax : 044 - 4749 0008 T S RAJAGOPALAN Auditors SUNDARAM & SRINIVASAN Software Design Centres General Manager (Finance) Chartered Accountants “Ispahani Centre”, 7th Floor, and Secretary New No.4 (Old No.23) 123/124 Nungambakkam High Road, Sir C P Ramaswamy Road Chennai - 600 034 R MADHAVAN Alwarpet, Chennai - 600 018. Tel. : 044 - 2828 5000 Fax : 044 - 2833 2212 Audit Committee Registered Office NARAYAN K SESHADRI “Jayalakshmi Estates” Module No. 1107, D Block Chairman 29 (Old No.8) Haddows Road 11th Floor, Tidel Park D E UDWADIA Chennai - 600 006 No. 04 Rajiv Gandhi Salai, Tel : 044 - 2827 2233 C N PRASAD Taramani, Chennai - 600 113 Fax : 044 - 2825 7121 Tel. : 044 - 2254 5700 Web Site : www.wabco-tvs.com Fax : 044 - 2254 0909 Investors’ Grievance Committee NARAYAN K SESHADRI Chairman CONTENTS Page No. C N PRASAD P KANIAPPAN Notice to the shareholders 2 Directors’ report to the shareholders 11 Listing of shares with Madras Stock Exchange Ltd., Chennai. Management discussion and analysis report 15 National Stock Exchange of India Ltd., Mumbai. Bombay Stock Exchange Ltd, Mumbai. Report on corporate governance 18 Auditors’ report on corporate governance 26 Auditor’s report to the shareholders 27 Balance sheet 30 Profit and loss account 31 Schedules 32 Cash flow statement 51 General business profile 53 1


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    Notice to the Shareholders 6. To consider and if thought fit, to pass with or without NOTICE is hereby given that the fifth annual general meeting of the modification, the following resolution as an ordinary Company will be held at “Sathguru Gnanananda Hall”, Narada Gana resolution: Sabha Trust, No.314 (Old No.254) T.T.K. Road, Chennai 600 018 on “RESOLVED THAT Mr Trevor Lucas, who was appointed as an Thursday, the 24th September 2009 at 10.15 a.m. to transact the following additional director and holds office upto the date of this annual business: general meeting as per the provisions of the Companies Act, 1956, be and is hereby appointed as a director of the Company, subject ORDINARY BUSINESS: to retirement by rotation.” 1. To consider and if thought fit, to pass with or without 7. To consider and if thought fit, to pass with or without modification, the following resolution as an ordinary modification, the following resolution as an ordinary resolution: resolution: st “RESOLVED THAT the audited balance sheet as at 31 March “RESOLVED THAT Mr Kurt Lehmann, who was appointed as an 2009 and the profit and loss account of the Company for the year additional director and holds office upto the date of this annual ended on that date, together with the directors’ report and the general meeting as per the provisions of the Companies Act, 1956, auditors’ report thereon as presented to the meeting be and the be and is hereby appointed as a director of the Company, subject same are hereby approved and adopted.” to retirement by rotation.” 2. To consider and if thought fit, to pass with or without 8. To consider and if thought fit, to pass with or without modification, the following resolution as an ordinary modification, the following resolution as an ordinary resolution: resolution: “RESOLVED THAT Mr Venu Srinivasan, director who retires by “RESOLVED THAT subject to the provisions of sections 269 read with rotation and being eligible for re-appointment, be and is hereby 198, 309 and Schedule XIII of the Companies Act, 1956 (the Act) re-appointed as a director of the Company.” and such other applicable provisions, if any of the Act, Mr P Kaniappan, director of the Company, be and is hereby appointed as a whole-time 3. To consider and if thought fit, to pass with or without th director, for a period of 5 years commencing from 17 June 2009, modification, the following resolution as an ordinary on such terms and conditions as to his appointment and remuneration, resolution: th as per the agreement dated 17 June 2009 entered between him “RESOLVED THAT Mr C N Prasad, director who retires by rotation and the Company, a copy of which is placed before the meeting and being eligible for re-appointment, be and is hereby re-appointed and initialled by the Chairman for the purpose of identification as a director of the Company.” thereof, with the powers of the board of directors of the Company 4. To consider and if thought fit, to pass with or without to determine quantum of individual items of his remuneration, payable modification, the following resolution as an ordinary at such intervals, within the overall limits, for each financial year so resolution: as not to exceed 5% of the net profits of the Company, calculated in accordance with the provisions of sections 349 and 350 of the “RESOLVED THAT the retiring auditors Messrs. Sundaram & Companies Act, 1956.” Srinivasan, Chartered Accountants, be and are hereby re-appointed “RESOLVED FURTHER THAT the remuneration within the aforesaid as auditors of the Company to hold office from the conclusion of limits, as mentioned below, proposed to be paid to Mr P Kaniappan this annual general meeting till the conclusion of the next annual as whole-time director under the Act, for a period of five years from general meeting of the Company on such remuneration as may th 17 June 2009, be and is hereby approved, subject to the condition be fixed in this behalf by the board of directors of the Company.” that the board of directors, from time to time, may determine the SPECIAL BUSINESS: quantum of individual items of his remuneration for each financial year not exceeding the maximum limits specified in each category 5. To consider and if thought fit, to pass with or without as follows: modification, the following resolution as an ordinary resolution: (1) Salary and commission on profits or performance linked incentive or bonus: “RESOLVED THAT Mr P Kaniappan, who was appointed as an Subject to a ceiling of Rs.45 lakhs per annum additional director and holds office upto the date of this annual general meeting as per the provisions of the Companies Act, 1956, (2) Perquisites and allowances: be and is hereby appointed as a director of the Company, subject Perquisites like unfurnished accommodation / house rent to retirement by rotation.” allowance, conveyance allowance, leave travel assistance for 2


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    self and family, club fees, earned leave, medical / personal directors, in the light of and in conformity with any amendments to accident insurance premia and other benefits or amenities, the relevant provisions of the Companies Act, 1956 / Income-tax Act in aggregate restricted to a sum not exceeding Rs.25 lakhs 1961 and/or the rules and regulations made thereunder and / or such per annum; and guidelines, as may be announced by the Central Government, from Provision of telephone at residence including payment of time to time”. local calls and long distance calls shall not be included in “RESOLVED FURTHER THAT in the event of any loss, absence the computation of perquisites for the purpose of calculation or inadequacy of profits in any financial year, during the term of of the said ceiling. office of Mr P Kaniappan, the remuneration payable to him by way Personal long distance calls on telephone for private purposes of salary, allowances, commission, perquisites and other benefits, shall be recovered by the Company. shall not without the approval of the Central Government (if required) exceed the limits prescribed under Schedule XIII and other applicable Provision of a car for use on Company’s business. provisions of the Companies Act, 1956 including any amendment, (3) Contribution to statutory funds: modification, variation or re-enactment thereof”. Company’s contribution to provident fund not exceeding 12% “RESOLVED FURTHER THAT Mr P Kaniappan, whole-time director of the salary or such other percentage of the salary as may of the Company, shall have the powers and duties as set out in be fixed by the Central Government from time to time; and the aforesaid agreement.” Gratuity as per the rules of the Company. 9. To consider and if thought fit, to pass with or without Company’s contribution to provident and gratuity funds, shall modification, the following resolution as a special resolution. not be included for computation of limits of perquisites and “RESOLVED THAT pursuant to provisions of Section 31 and other allowances as aforesaid. applicable provisions, if any, of the Companies Act, 1956, (including (4) Pension benefits: any statutory modification or re-enactment there of, for the time The Whole-time director is entitled to pension, if any, payable being in force) and subject to such other approvals, consents, after retirement, as per the rules of the Company permissions as may be required in this regard, the existing Articles “RESOLVED FURTHER THAT the scope and quantum of remuneration of Association of the Company be and are hereby altered to the specified hereinabove, may be altered or varied by the board of extent and in the manner specified below.” Article 2 (a) (xxxi)- TVS group be deleted Article 2 (a) (xxxii)- WABCO group be deleted A new Article 56 A- Directors may refuse to register transfers be and is hereby inserted after the existing Article 56 as follows:- Subject to the provisions of the Act, the Board may, at its discretion decline to register or acknowledge any transfer of Shares whether fully paid or not (notwithstanding that the proposed transferee be already a Member), but in such case it shall within one month from the date on which the instrument of transfer was lodged with the Company, send to transferee and the transferor notice of the refusal to register such transfer, giving reasons for such refusal. Article 108- Certain matters to be approved by Special Resolutions be deleted Article 110 (b)- Number of directors be deleted Article 136- Managing Director and Executive Director be deleted and inserted as follows:- Article 136(1)- Managing Director and Whole time Director (s) Subject to the applicable provisions of Act and these Articles, the Board shall have the power to appoint from time to time any of its members as Managing Director and/or Whole-time Director(s) of the Company, upon such terms and conditions as the Board may think fit and subject to the provisions of Article 137, the Board may by resolution vest in such Managing Director and/or Whole-time Director(s) such of the powers hereby vested in the Board generally as it thinks 3


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    fit, and such powers may be made exercisable for such period or periods, and upon such conditions and subject to such restrictions as it may determine. The remuneration of a Managing Director and/or Whole-time Director(s) may be by way of monthly payment, fee for each meeting or participation in profits, or by any or all these modes or any other mode not expressly prohibited by the Act. Article 137- Non Retiring Directors be deleted Article 138- Restriction on Management The words “and/or Whole-time Director(s)”be and are hereby inserted after the “Managing Director” in the first line of this Article. Article 139- Certain Persons not to be appointed as Managing be deleted and inserted as follows:- Director or Executive Director Article 139(1)- Certain Persons not to be appointed as Managing Director and/or Whole-time Director(s). The Company shall not appoint or employ or continue the appointment or employment of, a person as its Managing Director and/or Whole- time Director(s), if he (a) is an undischarged insolvent, or has at any time been adjudged an insolvent; (b) suspends, or has at any time suspended payment to his creditors, or makes, or has at any time made, a composition with them; or (c) is, or has at any time been convicted by a Court of an offence involving moral turpitude. Article 140- Special position of Managing Director/Executive Director be deleted and inserted as follows:- Article 140(1)- Special position of Managing Director The Managing Director of the Company shall not, while holding that office, be subject to retirement by rotation in accordance with Article 127. If he ceases to hold the office of Director, he shall ipso facto and immediately cease to be Managing Director. If he ceases to hold the office of Managing Director, he shall ipso facto and immediately cease to be a Director Article 141- Technical Director be deleted Article 147- Chairman of the Board be amended as follows:- Article 147- Chairman of the Board The Board may from time to time elect one of their members to be the Chairman of the Board and determine the period for which he is to hold the office. If at any meeting of the Board, the Chairman is not present at a time appointed for holding the same, the Vice Chairman, if any, shall be the Chairman of the meeting and failing him, the Directors present shall choose one of their Members to be the Chairman of such meeting. Article 180- When accounts to be deemed finally settled be amended as follows:- Article 180- When accounts to be deemed finally settled Every balance sheet and profit and loss account of the Company when audited and adopted by the Company at an Annual General Meeting shall be conclusive except- (a) as regards any mistake or error discovered therein. Whenever any such mistake or error is discovered, the balance sheet and 4


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    profit and loss account shall be corrected by the Board at a meeting of the Board and shall henceforth be conclusive and (b) any matters in respect of which modifications are made from time to time as are considered proper by the Board and are approved by a General Meeting. Article 181- (a)- Service of documents or notices be amended as follows:- Article 181- Service of documents or notices 181(a) A document or notice may be served or given by the Company on any Member either personally or by sending it by post to the Member to his registered address or (if the Member has no registered address in India) to the address, if any, in India supplied by him to the Company for serving documents or notices on him or it “FURTHER RESOLVED THAT the board of directors be and is hereby authorised to do all such acts, deeds, matters and things as may be necessary for giving full effect to the above resolution.” By order of the board Chennai R MADHAVAN 27th August 2009 General Manager (Finance) and Secretary Registered office: “Jayalakshmi Estates” 29, (Old No.8), Haddows Road Chennai 600 006 Notes: 1. A member entitled to attend and vote at the meeting is Members who have not encashed their dividend warrants in respect entitled to appoint one or more proxies to attend and vote of the above periods are requested to make their claim by instead of himself and the proxy or proxies so appointed surrendering the unencashed warrants immediately to the Company. need not be a member or members, as the case may be, of the Company. The instrument appointing the proxy and 5. Members holding shares in physical form, in their own interest, the power of attorney or other authority, if any, under which are requested to dematerialise the shares to avail the benefits of it is signed or a notarially certified copy of that power or electronic holding / trading. authority shall be deposited at the registered office of the 6. Members are requested to notify the Company immediately of any Company not later than 48 hours before the time fixed for change in their address. Members holding shares in depository holding the meeting. are requested to advise change of address to their depository 2. The explanatory statement pursuant to Section 173(2) of the participants. Companies Act, 1956 in respect of the special business nos. 5 to 9 as set out in the notice is annexed hereto. 7. As a measure of economy, copies of the annual report will not be distributed at the annual general meeting. Members are, therefore, 3. The Register of Members and the share transfer register will remain requested to bring their copies of the annual report to the meeting. nd closed for a period of 3 days from 22 September 2009 to th 24 September 2009 (both days inclusive) for the purpose of annual 8. Members are requested to affix their signature at the space provided general meeting of the Company. on the attendance sheet annexed to the proxy form and hand over the slip at the entrance of the meeting hall. 4. In terms of Section 205A read with Section 205C of the Companies Act, 1956, the dividends declared by the Company, which remain 9. In terms of clause 49 (IV)(G) of the listing agreement with the unclaimed for a period of seven years will be transferred to the stock exchanges, a brief resume of directors, who are proposed Investors Education and Protection Fund (IEPF), established by the to be re-appointed /appointed in this meeting, nature of their Central Government on the due dates. The particulars of due dates expertise in specific functional areas, their other directorships and for transfer of such unclaimed dividends to IEPF are furnished in committee memberships and their shareholdings in the Company the report on Corporate Governance forming part of the annual and their relationships with other directors in the Company are report. given below: 5


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    I. Mr Venu Srinivasan: S. Committee th No. Name of the Company Position held membership/ Born on 11 December 1952, Mr Venu Srinivasan is a Bachelor chairmanship of Engineering from Madras University and holds M.S degree in 7. Southern Roadways Limited Director Management from Purdue University, U.S.A. 8. Sundram Fasteners Limited Director 9. Cummins India Limited Director (i)Chairman– Mr Venu Srinivasan has been the Chairman of CII (Southern Compensation and Region) and has been associated with CII for nearly 17 years in Management Development Committee. various capacities. He is now the President of CII. (ii)Member– Operations He was the past President of Automotive Research Association Committee of India, Pune, Society of Indian Automobile Manufacturers and 10. Sundram Non-Conventional Energy Director Systems Limited Association of Indian Automobile Manufacturers. At present, he is 11. TVS Investments Limited Director an Honorary Consul General of Republic of Korea, Chennai. 12. TATA Coffee Limited Director Mr Venu Srinivasan has been honoured with various awards, 13. Oriental Hotels Limited Director including the HSBC Indo-British Achievement Award, presented in 14. TVS Lanka Private Limited Director recognition of his active contribution to Indo-British commercial 15. TVS Motor (Singapore) Pte Limited Director 16. TVS Energy Private Limited Director relations. He was also the recipient of “Star of Asia” award of 17. TVS Motor Harita Employees Welfare Director Business Week International. Foundation Private Limited He was also conferred the honorary doctorate degree in science by the University of Warwick, UK for his excellence in manufacturing II. Mr C N Prasad: st and contribution in the field of technology and research and Born on 1 July 1947, Mr C N Prasad is a graduate in mechanical development. He is the first Indian industrialist to be honoured by engineering and postgraduate in manufacturing technology from the Warwick University. He has been recently conferred with the Cranfield University, UK. He is also an MBA in Technology highest honour, Doctor of Science (Honoris Causa) for his outstanding Management from La Trobe University, Australia. contribution to the field of Quality Movement and Manufacturing His experience includes 16 years in Hindustan Aeronautics Limited Excellence in India by IIT Kharagpur. in various areas of manufacturing, production engineering and Mr Venu Srinivasan has been the managing director of Sundaram- project management, 3 years in Kinetic Honda, Indore as Works Clayton Limited since May 1979 and also the managing director Manager and 15 years in Rane Engine Valves Limited (REVL) as of TVS Motor Company Limited from 1986. Since July 2002, he Director and CEO. has been the Chairman and Managing Director of TVS Motor During his tenure as CEO of REVL a strong quality orientation Company Limited. and customer centricity were brought into the Company that resulted He does not hold any share in the Company and he is not related in several accolades and achievements. REVL was one of the to any other directors of the Company. earliest companies in India to secure ISO 9000 certification in 1993, Details of his other directorships and membership of committees won the best vendor awards from Maruti and Deutz, Germany. The are given below: export business and turn over grew several folds. S. Committee He joined Sundaram-Clayton Limited (SCL) in February 2003 as No. Name of the Company Position held membership/ President and was elevated as President – Automotive Products chairmanship division effective June 2006 with overall responsibilities for SCL. 1. TVS Motor Company Limited Chairman and Member – Investors’ Managing Director Grievance Committee During his tenure, the Brakes Division won several awards and 2. Sundaram-Clayton Limited Managing director Member – Investors’ recognitions from customers and external agencies including the Grievance Committee following: 3. Harita-NTI Limited Chairman (i)Chairman – Audit Committee ACMA Gold trophy for “Manufacturing Excellence” in 2003; (ii) Member – Remuneration Frost & Sullivan, India Manufacturing Excellence Award – Committee Overall Gold in 2005; 4. Lucas-TVS Limited Director Frost & Sullivan, India Manufacturing Excellence Award – 5. T V Sundram Iyengar & Sons Limited Director Member – Audit Committee Super Platinum in 2007; and 6. Sundaram Textiles Limited Director JIPM – TPM Category 1 Award 6


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    He has been awarded by ITM Business School for ITM Awards He was co-opted as an additional director of the Company and for Corporate Excellence in 2006 and has also been awarded ‘Best was appointed as a whole-time director for a period of five years th CEO’ by QCFI for the year 2007. from 17 June 2009. Effective June 2009, he has been elevated as President & CEO- He is a member of the investors’ grievance committee and Automotive Products Division with overall responsibilities for SCL. administrative committee of directors of the Company. He is the member of the audit committee and investors’ grievance He does not hold any share in the Company and he is not related Committee of directors of the Company. to any other directors of the Company. He does not hold any share in the Company and he is not related to any other directors of the Company. He is not a director of any other Company. Details of his other directorships and membership/chairmanship of IV. Mr Trevor Lucas: rd committees are given below: Born on 3 June 1948, Mr Trevor Lucas is a Bachelor of Business S. Committee Studies (Honours), University of Dublin and a Fellow member of No. Name of the Company Position held membership/ the Institute of Chartered Accountants in Ireland. chairmanship 1 Harita Seating Systems Limited Director Member-Audit He has served KPMG, Dublin from 1975 to 1982 as General Committee Practice Manager. He was with CPC Europe, holding various Member-Shareholders/ positions as Manager Finance & Taxes, Manager Financial Services Investors’ Grievance Committee and Systems and Manager Financial Accounting. Member– RemunerationCommittee He has also served as head of Finance for Council for Education, 2 Harita Fehrer Limited Director Recruitment and Training for the Hotel, Catering and Tourism 3 Sundaram Auto Components Limited Director Member-Audit Industry, Dublin. Committee He was with Best Foods Europe/Africa/Middle East, Brussels (later III. Mr P Kaniappan: part of the Unilever Group) during 1989-2002 as Director Finance th Born on 12 March 1960, Mr P Kaniappan is a graduate in and Taxes. mechanical engineering from Regional Engineering College, He joined American Standard, Brussels, (WABCO Division) in 2003 Karnataka, India and postgraduate in manufacturing systems as Vice President–Taxes. Following the spin off of WABCO Division engineering from University of Warwick, UK. He also holds from American Standard he is presently the Vice President–Taxes Executive MBA degree from Great Lakes Institute of Management of WABCO Holdings Inc. Chennai. th He was co-opted as an additional director of the Company on 30 His experience includes 10 years in TVS Motor Company July 2009. Ltd, Hosur responsible for production management in different areas such as machining, fabrication, painting, engine and He is a member of the administrative committee of directors of vehicle assembly. He was in the purchase department of the Company. brakes division in Sundaram-Clayton Limited (SCL) in various He does not hold any share in the Company and he is not related capacities during 1993 to 1999 and was in the rank of to any other directors of the Company. General Manager before elevated as business head of Foundry division of SCL. He held this position from 1999 Details of his other directorships are given below: to 2001 and became Operations head of brakes division of S. Name of the Company Position held SCL from 2001 to May 2009 (since demerged to the Company No. th effective 28 March 2008). 1 Perrot North America Inc. Director 2 WABCO Air Compressor Holdings Inc. Director He is now elevated as a whole-time director of the Company from th 3 WABCO Automotive Control Systems Inc. Director 17 June 2009. 4 WABCO Automotive Holdings Inc. Director He has established a world class manufacturing system in the 5 WABCO Automotive Products Limited Director Company incorporating some of the best practices such as Total 6 WABCO Korea Inc. Director Quality Management (TQM), Lean and Total Productive Maintenance 7 WABCO Group Inc. Director (TPM) with year over year productivity improvement. 8 WABCO Group International Inc. Director He developed and implemented a vendor development model 9 WABCO, Inc. Director resulting in low cost and high quality supplier base. 10 Westinghouse Air Brake International Corporation Director 7


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    V. Mr Kurt Lehmann: He was also executive vice president and general manager at th Born on 16 June 1962, Mr Kurt Lehmann is a graduate in Continental Foundation braking systems division based in Michigan mechanical engineering from Michigan Technology University USA. USA. He began his career at General Motors in engineering. He was co-opted as an additional director of the Company effective th He is vice president – product development in WABCO since July 30 July 2009. 2008. Prior to his joining WABCO, he has gained nearly 25 years He is not a member of any committee of directors of the Company. of experience in automotive engineering and was vice president- systems engineering at Continental Automotive, Frankfurt, Germany He does not hold any share in the Company and he is not related responsible worldwide for development processes, system to any other directors of the Company. engineering and product development. He is not a director of any other Company. 8


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    Explanatory statement pursuant to Section 173(2) of the Companies Act, 1956. The following explanatory statement sets out all the material facts The directors recommend the resolution as set out in item no.7 of the relating to the special business mentioned in the accompanying notice notice to be approved as an ordinary resolution by the shareholders. th dated 27 August 2009 and shall be taken as forming part of the None of the directors except Mr Kurt Lehmann is deemed to be interested notice. or concerned in the resolution. Item no. 5 Item no. 8 Mr P Kaniappan was appointed as an additional director of the Company th Mr C N Prasad resigned as a whole-time director of the Company effective 17 June 2009 and holds office upto the date of this annual th general meeting of the Company, in terms of section 260 of the Companies effective 17 June 2009 which was accepted by the board of directors. Act, 1956. However, he continues to be a director of the Company. In view of his resignation as a whole-time director of the Company, the Notice has been received from a member of the Company under section 257 of the Companies Act, 1956, along with a deposit of Rs.500/- agreement entered into between the Company and Mr C N Prasad on the terms and conditions as per the resolution passed by the shareholders signifying his intention to propose the candidature of Mr P Kaniappan th for the office of director and to move the resolution as set out in item at the general meeting held on 29 September 2008 to hold the office as a whole-time director of the Company for a period of five years from no.5 of this notice. th th 28 March 2008 to 27 March 2013, stood terminated by mutual consent The directors recommend the resolution as set out in item no.5 of the th effective 17 June 2009. notice to be approved as an ordinary resolution by the shareholders. th Hence, the board of directors on 17 June 2009 appointed None of the directors except Mr P Kaniappan is deemed to be interested Mr P Kaniappan, president of the Company as an additional director or concerned in the resolution. of the Company and also appointed him as a whole-time director of th the Company for a period of five years effective 17 June 2009 and Item no. 6 fixed his term of appointment and remuneration within the limits prescribed Mr Trevor Lucas was appointed as an additional director of the Company under section 198 and 309 read with Schedule XIII of the Companies th effective 30 July 2009 and holds office upto the date of this annual Act, 1956, subject to the approval of the shareholders in the ensuing general meeting of the Company, in terms of section 260 of the Companies annual general meeting of the Company. Act, 1956. Necessary agreement was also entered into between him and th Notice has been received from a member of the Company under section the Company on 17 June 2009 and the abstract of the terms 257 of the Companies Act, 1956, along with a deposit of Rs.500/- of the agreement together with a memorandum clearly specifying the signifying his intention to propose the candidature of Mr Trevor Lucas nature of the concern or interest of other directors in such agreement th for the office of director and to move the resolution as set out in item was also circulated to the shareholders of the Company on 6 July 2009. no.6 of this notice. The directors, therefore, recommend the resolution as set out in item The directors recommend the resolution as set out in item no.6 of the no.8 of the notice to be approved as an ordinary resolution by the notice to be approved as an ordinary resolution by the shareholders. shareholders. None of the directors except Mr Trevor Lucas is deemed to be interested None of the directors except Mr P Kaniappan is deemed to be interested or concerned in the resolution. or concerned in the resolution. Item no. 7 Item no. 9 Mr Kurt Lehmann was appointed as an additional director of the Company Pursuant to the Scheme of Arrangement sanctioned by the Hon’ble High th effective 30 July 2009 and holds office upto the date of this annual Court of Madras, “inter se” transfer of shares between promoters of the rd general meeting of the Company, in terms of section 260 of the Companies Company was effected on 3 June 2009. Act, 1956. With the acquisition of 35.83% shares by Clayton Dewandre Holdings Notice has been received from a member of the Company under section Ltd, Rotterdam (CDH) from the Indian promoters, the total holdings of 257 of the Companies Act, 1956, along with a deposit of Rs.500/- CDH has become 75% of the paid up capital of the Company. signifying his intention to propose the candidature of Mr Kurt Lehmann In line with the listing requirement, the Indian promoters have divested th for the office of director and to move the resolution as set out in item the balance 5% shares held by them on 10 July 2009 to the public no.7 of this notice. and consequently they do not hold any share in the Company. 9


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    In view of this, certain Articles in the Articles of Association of the Inspection of documents: Company have to be revised by deleting references to the promoters The documents referred in the notice and the explanatory statement will and their rights. be available for inspection at the registered office of the Company on Accordingly, the Articles that are proposed to be deleted, modified/varied any working day of the Company between 10.00 a.m. and 12.00 noon. as set out in item no 9 of the Notice is placed for approval of the By order of the board shareholders by way of a special resolution. Chennai R MADHAVAN The directors recommend the special resolution at item No.9 of the 27th August 2009 General Manager (Finance) accompanying notice for approval by the shareholders of the and Secretary Company. Registered office: “Jayalakshmi Estates” None of the directors is deemed to be interested or concerned in the 29, (Old No.8), Haddows Road resolution. Chennai 600 006 10


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    Directors’ report to the shareholders The directors herewith present the fifth annual report and the audited thus become a subsidiary of CDH in termsrd of applicable provisions accounts for the year ended 31st March 2009. of the Companies Act, 1956 effective 3 June 2009. 2. FINANCIAL HIGHLIGHTS The directors wish to record their deep appreciation of association with TVS group. Rs. in lakhs Details Year ended Year ended 3. DIVIDEND th The board of directors at their meeting held on 8 December 2008 31.03.2009 31.03.2008 has declared an interim dividend of Rs. 2.50 per share for the st Sales and other income 44,577.78 54,655.07 year ended 31 March 2009 (representing 50% on the paid up share capital of Rs. 948.38 lakhs). This was paid to the shareholders Gross profit before interest and th on 19 December 2008. depreciation 7,334.11 11,777.04 The board of directors after considering the performance of the Interest –Net 685.42 328.68 Company for the year under review has decided not to recommend Depreciation 1,393.21 1,011.71 any further dividend for the year 2008-09. Profit before tax 5,255.48 10,436.65 4. PERFORMANCE Provision for taxation (including During the year 2008-09, the sales of medium and heavy commercial deferred tax and fringe benefit tax) 1,703.27 3,452.59 vehicles registered a negative growth of 32% over the previous year 2007-08 and the sale of light commercial vehicles registered Profit after tax 3,552.21 6,984.06 a negative growth of 10 % during the same period. Overall, the Surplus /(loss) brought forward from commercial vehicle industry ended with a negative growth of 22% previous year 2,515.10 (0.74) over the previous year. During the year, the Company achieved a total turnover of Profit and loss account balance Rs. 446 crores as against turnover of Rs.547 crores registering transferred from demerged company, a drop of 19%. The drop in the turnover is due to slow down of namely Sundaram-Clayton Limited the commercial vehicle industry as explained in the above paragraph. (SCL) as on 1st January 2007 – 3,214.58 Profit after tax for three months ended 5. CAPITAL EXPENDITURE from 1st January 2007 to 31st A capital expenditure of Rs. 10 crores only is planned during March 2007 transferred from SCL – 220.55 2009-10 after considering the industry slow down in this year. The expenditure will be spent on a case to case basis. Total 6,067.31 10,418.45 Appropriations: 6. DIRECTORS Mr H Lakshmanan and Vice Admiral Mr P thJ Jacob (Retd.) resigned Interim dividend paid 474.20 943.63 as directors of the Company effective 30 July 2009. Interim dividend payable – 1,138.06 The board records its deep appreciation of the services of Dividend tax paid 80.59 160.37 Mr H Lakshmanan and Vice Admiral Mr P J Jacob (Retd.) during their tenure as directors of the Company. Dividend tax payable – 193.41 th Effective 17 June 2009, Mr C N Prasad, resigned as a whole- Transfer to general reserve 356.00 5,467.88 time director of the Company. Accordingly, the agreement entered Surplus/(Loss) in Profit & loss account 5,156.52 2,515.10 into between the Company and Mr C N Prasad on the terms and conditions, as per the resolution th passed by the shareholders at 6,067.31 10,418.45 the general meeting held on 29 September 2008, of his appointment to hold the office as a whole-time th director of the Company for 2. CHANGE IN STATUS OF THE COMPANY a period of five years from 28 March 2008 stands terminated In terms of the Scheme of Arrangement between the Company by mutual consent. and Sundaram-Clayton Limited (SCL) and their respective The board records its deep appreciation of his services as a whole- shareholders and creditors sanctioned th by the Hon’ble High Court time director to the Company. By agreeing to continue to serve on of Madras vide its order dated 20 February 2008, the transfer the board as a director, the board looks forward to the continuous of shares between the promoters of the Company, have since been association and expert advice of Mr C N Prasad in the years to come. completed as envisaged in the said Scheme. Mr P Kaniappan, wasth appointed as an additional director of the Accordingly, M/s Clayton Dewandre Holdings Limited (CDH) acquired Company effective 17 June 2009 by the board. The board also 67,95,684 equity shares of Rs.5/- each from the Indian promoters appointed him as a whole-time th director of the Company for a period namely TVS group constituting 35.83% of the paid up capital of of five years effective 17 June 2009 on such terms and conditions the Company. With this acquisition, CDH’s holding increased to to be approved by the shareholders of the Company in ensuing 75% of the paid up capital of the Company. The Company has annual general meeting of the Company. 11


  • Page 13

    Mr Trevor Lucas th ceased as an alternate director to Mr Leon Liu Directors’ Responsibility Statement effective 15 June 2009. Pursuant to the requirement of Section 217(2AA) of the Companies Mr Trevor Lucas and Mr Kurt Lehmann were th appointed as additional Act, 1956 with respect to directors’ responsibility statement, it is directors of the Company effective 30 July 2009. hereby confirmed: Mr P Kaniappan, Mr Trevor Lucas and Mr Kurt Lehmann, directors (i) that in the preparation st of annual accounts for the financial of the Company will be eligible to hold office upto the date of year ended 31 March 2009, the applicable accounting the ensuing annual general meeting of the Company and are standards have been followed along with proper explanation eligible for re-appointment as directors of the Company in the relating to material departures; ensuing annual general meeting. (ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates In terms of the articles of association of the Company, Mr Venu that were reasonable and prudent so as to give a true and Srinivasan and Mr C N Prasad, directors, will be retiring at this fair view of the state of affairs of the Company at the end annual general meeting and are eligible for re-appointment in terms of the financial year and of the profit of the Company for of the articles of association of the Company. the year under review; A brief resume of the aforesaid directors and other information (iii) that the directors had taken proper and sufficient care for the have been detailed in the notice convening the annual general maintenance of adequate accounting records in accordance meeting of the Company. with the provisions of the Companies Act, 1956 for safeguarding Notices have been received from members of the Company signifying the assets of the Company and for preventing and detecting their intention to propose the appointment of Mr P Kaniappan, fraud and other irregularities; and Mr Trevor Lucas and Mr Kurt Lehmann as directors of the Company (iv) that the directorsst had prepared the accounts for the financial in terms of section 257 of the Companies Act, 1956 along with year ended 31 March 2009 on a “going concern basis”. the requisite deposit of Rs.500/- each. 9. CORPORATE GOVERNANCE Appropriate resolutions for their re-appointment and appointment are being placed for approval of the shareholders at the ensuing The Company has complied with the provisions of Listing Agreement annual general meeting. The directors recommend their concerning corporate governance and a report to this effect is re-appointment/appointment as directors of the Company. attached to this report as required by Clause 49 of the Listing Agreement with the stock exchanges. A certificate issued by the 7. AUDITORS auditors of the Company regarding compliance of conditions of corporate governance, is also annexed to the said report. M/s Sundaram & Srinivasan, Chartered Accountants, retire at the ensuing annual general meeting and are eligible for The whole-time director (CEO) and the chief financial officer (CFO) re-appointment. of the Company have certified to the board on financial statements and other matters in accordance with clause 49 (V) of the Listing 8. STATUTORY STATEMENTS Agreement pertaining to CEO/CFO certification for the financial year ended 31st March 2009. Conservation of energy, technology absorption and foreign exchange earnings and outgo A management discussion and analysis report, as required by Listing Agreement, is also attached which forms part of this report. As per the requirements of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the 10. ACKNOWLEDGEMENT Report of Board of Directors) Rules, 1988, the information regarding conservation of energy, technology absorption and foreign exchange The directors gratefully acknowledge the support and co-operation earnings and outgo are given in the Annexure I to this report. received from M/s T V Sundram Iyengar and Sons Limited, Madurai and WABCO Europe BVBA. Particulars of employees The directors thank the vehicle manufacturers, distributors, vendors The particulars required pursuant to Section 217(2A) of the and bankers for their continued support and assistance. Companies Act, 1956 read with Companies (Particulars of The directors wish to place on record their appreciation of the Employees) Rules, 1975 as amended, are given in Annexure II excellent work done by all the employees of the Company during to this Report. the year. The directors specially thank the shareholders for their However, in terms of the provisions of Section 219(1)(b)(iv) of the faith in the Company. Companies Act, 1956, the Directors’ Report (excluding Annexure II) is being sent to all the shareholders of the Company. Any shareholder interested in obtaining a copy of the said annexure For and on behalf of the board may write to the Company Secretary at the registered office of Chennai VENU SRINIVASAN the Company. 27th August 2009 Chairman 12


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    Annexure I to the Directors’ report Information as required under Section 217(1) (e) of the Companies Act,1956 A. CONSERVATION OF ENERGY B. TECHNOLOGY ABSORPTION 1. Measures taken: Research & Development (R & D) i) Optimizing pressure setting in HP and LP compressor air 1. Specific areas in which R & D is carried out by the Company pressure; Existing activities: ii) Installing shut off valve for test rigs; (a) Double diaphragm spring brake actuator for disc brake iii) Providing high efficiency motors for machines; and applications (20/24) designed for export market; iv) Reduction in lighting power through tube light modification in assembly. (b) Environmental friendly and reliable Air Processing and Distribution Assembly (APDA) promoted to customers; The above measures have resulted in an annual saving of about Rs.24.50 lakhs. (c) New Life Compressor II with improved performance promoted to customers; Measures Proposed 3 i) Introduction of dedicated small capacity portable compressor (d) 160 cm Compressor for Cummins Avalon engine developed for holiday working; for Exports; ii) Energizing environmental light with Solar Power; (e) Master cylinder and clutch servo developed for CNHTC, China; iii) Demand controller for compressor air system; (f) Lift axle system developed for air commercial vehicles; iv) Reduction in lighting power by introducing Dome light in sales (g) Electronically Controlled Air Suspension System (ECAS) warehouse; promoted for commercial vehicles; v) Provision of predictive demand controller for controlling Maximum Demand; (h) Designed and developed long stroke actuators for Indian market; vi) Recover screw compressor heat for using in Surface Protection (i) Products upgraded for 10 bar system pressure; Unit (SPU) water heating; (j) Application of micro-alloyed steels for cost reduction; vii) Improve canteen steam boiler efficiency by steam line modification; (k) Developed mathematical modeling of compressor for performance improvements; viii) Introduce thyrister control for canteen and surface protection unit equipment electric heater to control even voltage supply; (l) Developed environment friendly coating process for improved ix) Reduce machining cell power consumption by 5% through corrosion resistance; energy mapping of 20 identified cells; and (m) Field quality of products improved by resolving failure modes x) Eliminate electric lamps in three identified office areas by through design improvements; and utilizing direct daylight. (n) Products and parts were redesigned to reduce cost. This will result in a saving of about Rs.20 lakhs per annum 13


  • Page 15

    2. Benefits derived as a result of R & D: 4. Expenditure on R & D: Rs. in Lakhs (a) Environment friendly products; Capital expenditure 132.16 (b) Fuel saving; Recurring expenditure (including salaries) 561.95 (c) Longer product life; 694.11 (d) The innovative ideas generated during the year have enabled Total expenditure as percentage of sales turnover 1.56% the Company in filing application for six patents under the Patents Act, 1970; Technology absorption, adaptation and innovation: (e) Reduced warranty cost due to resolving of field failure modes (a) Efforts in brief: through design improvements; 1. Continued efforts in evolving design rules from technology (f) New customers added; and development projects to reduce development lead time; (g) Significant cost saving through improved design. 2. Utilizing the services of eminent consultants to improve efficiency in product development; 3. Future plan of action: 3. Development of brake system engineering standards to achieve (a) Development and launch of following products: global standards of braking performance in vehicles; i. Environment friendly and reliable Air Processing and 4. Development of new seal and materials to operate at higher Distribution Assembly (APDA); range of temperatures; and ii. Double Diaphragm Spring Brake Actuators – 20/24 (shorter 5. Development of new theoretical analysis methods to reduce version) for export market; lead time and improve performance. iii. NLC II Compressors; (b) Benefits derived as a result of the above efforts: iv. Clutch Master Cylinder; 1. Developed innovative products to improve competitive position v. Door Cylinder; in the market; vi. Brake chambers for Indian markets; 2. Reduced lead time for product development; vii. Compressor for Avalon engine to exports; 3. Better quality product at a lower cost; and viii. Brake valves for North American Original Equipment 4. Introduced new products that would improve braking efficiency (NAOE) market; and system reliability; ix. Improved D2 governor valve for export market; (c) Details relating to imported technology: (Technology x. Value engineered actuators for Indian market; imported during the last 5 years reckoned from the beginning xi. Long stroke actuators for Indian market; and of the financial year). xii. Clutch servo for European market. Nil (b) Re-engineering of products to enhance performance, life, (d) Foreign Exchange Earnings and Outgo reliability and ease of use by customer; Export Activities: (c) R & D efforts will also be directed to develop products for st Exports during the year ended 31 March 2009 amounted to export markets; Rs. 3,533.22 lakhs. (d) R & D efforts will be directed for product validation of Total foreign exchange used and earned: manufacturing transfer products from WABCO; a) Foreign exchange used Rs. 5,016.85 lakhs (e) Implementation of environmental friendly surface treatment process with trivalent Chromium/ Chromium free processes; b) Foreign exchange earned Rs. 5,610.64 lakhs (f) Redesign of products and parts for reducing cost; For and on behalf of the board (g) Chemical attack resistant rubber for valves; and Chennai VENU SRINIVASAN (h) Development of flow simulation and anlaysis. 27th August 2009 Chairman 14


  • Page 16

    Management Discussion and Analysis Report On 3rd of June 2009, WABCO Holdings Inc., USA a global technology leader Total length Completed Under Balance to and tier-one supplier to the commercial vehicle industry, raised its ownership (in Km) (In %) implementation be awarded position through indirectly owned subsidiary M/s Clayton Dewandre Holdings Ltd, Rotterdam to 75 percent in its award-winning joint venture, WABCO- Port Connectivity TVS (India) Limited (WTIL) further strengthening not only WABCO’s & others 380 54.2% 44.3% 1.5% presence in India but also its capabilities to connect with and grow in all of Others 945 81.2% 18.1% 0.7% the world’s emerging markets. Total NHDP 33097 32.3% 18.4% 49.3% During the year under review, WTIL, the leader in the automotive air and air assisted brake actuation systems for the commercial vehicle industry in (Source: NHAI) India, recorded a moderate performance due to global financial crisis and Indian companies are gaining recognition as manufacturers of high quality industry slowdown. automotive components in the international market. Exports are expected The Company recorded sales of Rs. 446 crores during 2008-09 as against to grow, driven by the cost management factors of international manufacturers Rs. 547 crores in 2007-08, registering a drop of 19%. Profit before tax to source from cost-effective countries which is expected to benefit the reduced to Rs.52 crores from Rs.104 crores in the previous year, Company’s businesses. representing a decrease of 50%. II. Business outlook and overview I. Industry Structure and Development: Whilst there would be a strain of global economic slowdown, the GDP is Intensification of global financial crisis and significant slowdown witnessed estimated to grow at a slower rate of 6%. Subdued demand condition and in world economy, the cyclical downside risk of India’s growth prospects decline in commodity prices expected to bring down the inflation significantly have increased significantly during last two quarters of 2008-09. The Indian in the current year. Due to increased cost of capital, Industrial sector is economy recorded a moderate performance during 2008-09. GDP registered expected to slowdown and grow at 2 - 3%. a 6.7% growth, facilitated by 2.6% in industrial production, 1.6% in agriculture and 9.7% growth in the services sector. Inflation gone-up as high as 11% in This subdued outlook of the economy will impact the automotive sector, the first half of the year under review and started reducing from November which will see a slowdown in growth rates in 2009-10 when compared to the 2008 after Government announced the stimulus package and is at 8.3% high growth rates registered in the past few years. Further, due to the excess for the full year 2008-09. capacity created by the delayed implementation / non-implementation of the overloading ban, the Medium and heavy commercial vehicle (MHCV) The following table highlights the MHCV production figures in vehicle units. industry is likely to register a negative growth of 10% in the year 2009-10. Category 2008-09 2007-08 growth III. Opportunities & Threats Medium and Heavy Commercial Vehicles (MHCV) 191,286 291,114 -34% The Company caters to requirements of commercial vehicle segment of the automotive industry. (Source: SIAM) With improved road infrastructure, the demand for faster vehicles that carry Due to high interest rate and banks’ reluctance to lend resulted in reduction higher payloads is increasing. To ensure road safety, Government of India of MHCV production / sales in 2008-09. had introduced regulation for mandatory fitment of anti-lock braking systems The development of road infrastructure is a key factor that influences the (ABS) for commercial vehicles carrying hazardous goods from October 2006, growth of the Indian commercial vehicle industry. The various projects tractor-trailers and buses with national permit and hilly terrains from October initiated by National Highway Authority of India (NHAI) were not progressing 2007. as per plan due to global financial crisis and slowdown in Indian economy Product development and component manufacturing are being undertaken and following is the status of various projects as on 31st March 2009: to cater to the global requirement of WABCO. This is expected to bring in Total length Completed Under Balance to additional exports sales opportunities for the Company. (in Km) (in %) implementation be awarded So far, the Company has commissioned 125 authorized service centers at Golden strategic locations across the country, to provide quicker and better service Quadrilateral 5846 97.9% 2.1% NIL on air brake aggregates. Further, to improve availability of quality service in rural areas, the Company also commissioned 125 certified workshops. These North-South, initiatives would result in improved service practices, availability of genuine East-West parts and generate additional revenue for the Company. Corridor 7300 47.1% 42.0% 10.9% The Company has done extensive application engineering for the above NHDP Phase III 12109 6.5% 15.5% 78.0% category of vehicles and has offered total solution to the domestic OEMs. NHDP Phase V 6500 1.6% 14.2% 84.2% This regulation will further improve Company’s sales opportunity. The 15


  • Page 17

    Company has made its test track, the only test track of its kind available in B. Quality the country today, available for government agencies for certification testing. The quality system at the factory aims at achieving total customer satisfaction The Company’s competitors are active and continue to supply to key through its focus on improving product quality to World standards. This is customers. achieved through total employee involvement and continuous improvement culture. Rigorous usage of poka-yokes, utilization of statistical tools for IV. Risks and concerns process optimization and control also contribute towards improving the product quality. The cyclical nature of the Indian commercial vehicle industry (Company’s major customer segment) might affect the demand. To control inflation, the The standardization of the quality procedures is aligned with QS 9000/ TS Government has initiated actions towards liberalisation of imports and a cut 16949 requirements. WTIL is certified for TS 16949. in excise and customs duties. TQM is a way of life at WTIL. 100% participation in employee involvement Since, major growth is expected from Exports, new product launch at the has been successful for the past 10 consecutive years. right time will be the focus area. Suitable measures have been factored in Employees have completed more than 223 projects by applying statistical the company’s operating plan. tools through QC Circles in 2008-09. The average number of suggestions The import of components from China might be a concern to the Indian implemented per employee is 46 in 2008-09. auto component industry. The OEM customers across the world would continue their pressure on price reduction from their suppliers. The Company C. Cost management plans to mitigate this risk through cost reduction initiatives such as value The Company continues its rigorous focus on its costs through an effective engineering and global sourcing. cost deployment system. Value engineering and global sourcing projects As the banks are ready to lend only from now, the availability of credit is are being pursued for cost reduction and also to insulate from cost escalation. easing up slowly. Added to that fuel price increase and low freight movement would result in drop in MHCV sales. D. Information Technology The Company uses ERP system that integrates all business processes V. Internal control system and their adequacy across the Company as well as dealers and suppliers. During the year, the The Company has a proper and adequate system of internal controls to Company has focused on further leveraging the ERP system. ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, VII. Human Resource Development recorded and reported correctly. The internal controls are supplemented by The Company focuses on attracting the best talent and enjoys a good brand an extensive programme of internal audits, review by management, image across leading educational institutions and job seekers. The Company guidelines and procedures. The status of the observations made during the blends successfully mid career recruitment with internally grown talent. A internal audit is reviewed by the audit committee of the Board of Directors reward and recognition system is in place to provide fast track growth for and concerns if any are reported to the Board. high potential employees. Career development workshops are undertaken to identify such high potential. VI. Operations review Executives are sponsored to overseas and inland universities for developing A. Manufacturing their capabilities to handle new technologies and management practices. During the year 2007-08 the company made operational its new Customised management development programs have been developed with manufacturing facility in a Special Economic Zone (SEZ) at ‘Mahindra World reputed educational institutions to hone the leadership skills of the senior City’ near Chennai. During the year 2008-09, the company had the full benefit executives. of the plant and is expected to bring additional revenue growth during the People are encouraged to take up higher responsibilities and stretch coming years. assignments from the very early stages of their career. Periodic job rotations To meet the challenges of emerging competition and to serve the customers help the employees to get a broad perspective to assume leadership roles better, the Company had already set-up a manufacturing facility in in future. Jamshedpur nearer to a major customer plant. The Company continues to maintain its impeccable record on industrial The Company’s manufacturing facilities follow the best practices such as relations. Total Quality Management (TQM), Total Productive Maintenance (TPM) and As of 31st March 2009, the Company had 996 employees on its rolls. Lean Manufacturing and has best-in-class practices for safety, work environment, water and energy conservation. These initiatives are deployed company wide to achieve significant improvement in productivity and VIII. Environment & Safety reduction in manufacturing cost. Safety management is integrated with the overall environment, health and Continuous improvement actions are implemented to improve manufacturing safety (EHS) management system. WTIL have been certified for ISO 14001 quality and productivity in all the manufacturing locations. systems. 16


  • Page 18

    The Company is committed to energy conservation. During the year the XI. Cautionary statement following implemented projects have gained momentum: Statements in the management discussion and analysis report describing Timer controls for various air handling systems the Company’s objectives, projections, estimates and expectations may be “forward looking statements” within the meaning of applicable securities Optimizing air pressure setting laws and regulations. Actual results could differ materially from those Power factor improvement expressed or implied. Important factors that could make a difference to the Introduction of variable frequency drives (VFD) for motors Company’s operations include, among others, economic conditions affecting Use of energy efficient lighting systems demand / supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors. IX. Community development and social responsibility As a corporate citizen, the Company believes in its social responsibility and has involved itself in several community development activities. With the Company’s active support ‘Self-help groups’ have been active in villages and various programmes have been undertaken towards economic development of people living below the poverty line. The Company also conducts literacy programs, medical camps, health check up programs and nutrition program for primary school children and adults periodically. X. Financial statement Year ended Year ended 31st March 2009 31st March 2008 Particulars Rs in lakhs % Rs in lakhs % Sales 42,594.58 95.6 53,433.91 97.8 Other income 1,983.20 4.4 1,221.16 2.2 Total income 44,577.78 100.0 54,655.07 100.0 Raw materials consumed 24,617.78 55.2 30,622.22 56.0 Staff cost 5,025.30 11.3 4,513.41 8.3 Stores & tools consumed 1,624.65 3.6 1,662.24 3.0 Power & fuel 736.58 1.7 666.59 1.2 Repairs & maintenance 508.60 1.1 408.56 0.7 Other expenses 4,730.76 10.6 5,005.01 9.2 Interest-net 685.42 1.6 328.68 0.6 Depreciation 1,393.21 3.1 1,011.71 1.9 Total expenditure 39,322.30 88.2 44,218.42 80.9 Profit before tax 5,255.48 11.8 10,436.65 19.1 Provision for taxation Current tax 1,575.00 3.5 3,215.00 5.9 Fringe benefits tax 51.94 0.1 53.64 0.1 Deferred tax 76.33 0.2 183.95 0.3 Profit after tax 3,552.21 8.0 6.984.06 12.8 17


  • Page 19

    Report on Corporate Governance 1. Company’s philosophy on code of governance Mr Kurt Lehmann was appointed as an additional director of the The Company believes in transparency, professionalism and Company effective 30th July 2009. Mr Trevor Lucas and Mr Kurt accountability, which are the basic principles of Corporate Governance. Lehmann, are non-independent directors in terms of clause 49 of The Company would constantly endeavour to improve on these aspects. the Listing Agreement. 2. Board of directors Out of the eight non-executive directors, three directors viz., M/s Venu Srinivasan, D E Udwadia and Narayan K Seshadri are 2.1 Composition and category of directors: independent directors. As of 31st March 2009, the total strength of the board of directors Chairman is a non-executive director and not related to any promoter (the board) is eight directors. All the directors except the whole- of the Company as defined under clause 49 of the Listing time director are non-executive directors. Agreements. The number of independent directors is one third of Mr P Kaniappan was appointed as an additional director of the its total strength. Thus, the Company meets with the requirements Company effective 17th June 2009. Mr C N Prasad resigned as a of composition of the board as per the Listing Agreement. whole-time director of the Company effective 17th June 2009. However, he continues to be the director in the board. Both Mr P Kaniappan 2.2 Board Meetings: and Mr C N Prasad are non-independent directors of the Company. The Company, in consultation with the directors, prepares and circulates a tentative annual calendar for the meetings of the Subsequent to the resignation of Mr C N Prasad as a whole-time committees / board in order to assist the directors for planning their director, Mr P Kaniappan, director of the Company, was appointed schedules to participate in the meetings. as a whole time director of the Company for a period of five years effective 17th June 2009 on a remuneration consisting salary and During the year 2008-09, the board met 6 times on 7th May 2008, other perquisites in terms of the agreement entered into between 23rd July 2008, 20th August 2008, 20th October 2008, 8th December him and the Company on 17th June 2009, subject to the approval 2008 and 23rd January 2009 and the gap between two meetings of the shareholders of the Company in the ensuing annual general did not exceed four months. meeting to be held on 24th September 2009. 2.3 Attendance and other directorships: Mr Trevor Lucas ceased to be the alternate director to Mr Leon Liu, the The details of attendance of the directors at the board meetings original director, effective 15th June 2009 and was subsequently during the year and at the last annual general meeting held on 29th appointed as an additional director in the board effective 30th July 2009. September 2008 and also the number of other directorships and Mr H Lakshmanan and Vice Admiral Mr P J Jacob (Retd.), directors committee memberships / chairmanships as on 31st March 2009 of the Company, resigned from the board effective 30th July 2009. are as follows: Attendance particulars Number of directorships and Name of the director Category committee memberships / chairmanships M/s Board Last AGM Other Committee Committee meeting directorships* memberships ** chairmanships Venu Srinivasan C-I 6 No 17 5 3 H Lakshmanan NE-I 6 Yes 21 9 5 (resigned effective 30.07.2009) Trevor Lucas NE-NI 1 No 10 – – (Alternate director to Mr Leon Liu) (ceased to be an alternate director and appointed as an additional director in the board effective 30.07.2009) C N Prasad NE-NI 6 Yes 3 3 – (ceased to be a WTD effective 17.06.2009) D E Udwadia NE-I 5 Yes 21 10 1 Nikhil Madhukar Varty NE-NI - Yes 2 - - Leon Liu NE-NI - No 11 - - Vice Admiral PJ Jacob (Retd.) NE-I 6 Yes 2 2 2 (resigned effective 30.07.2009) Narayan K Seshadri NE-I 5 Yes 9 3 1 * includes private companies and bodies corporate C : Chairman WTD : Whole-time Director-Non Independent ** includes committees where the director is also a chairman NE-I : Non executive – Independent director NE-NI : Non executive - Non-independent director 18


  • Page 20

    None of the directors is a member in more than 10 board level c. Reviewing the related party transactions. committees or chairman of more than 5 such committees as required d. Reviewing the reports of internal auditors and ensuring that adequate under clause 49 of the listing agreement. follow-up action is taken by the management on observations and 2.4 Access to information and Updation to directors: recommendations made by the internal auditors. The board reviews all information provided periodically for e. Recommending to the board the appointment / re-appointment / discussion and consideration at its meetings in terms of clause replacement of the statutory auditors and the fees payable for audit 49 of the Listing Agreement. Functional heads are present and for other services rendered by the statutory auditors. whenever necessary and apprise all the directors about the developments. They also make presentations to the board and f. Reviewing with the management, the performance of statutory and audit committee of directors. internal auditors. Apart from this, the observations of audit carried out by the internal g. Reviewing with the management, external and internal auditors, the auditors and the compliance report on payment of statutory adequacy of internal control systems. liabilities submitted by the statutory auditors of the Company are placed and discussed with functional heads. The board also h. Reviewing the adequacy of internal audit functions and systems, reviews the declarations made by the whole-time director and structure, reporting process, audit coverage and frequency of internal secretary of the Company regarding compliance of all applicable audit. laws on quarterly basis. i. Discussion with external auditors regarding audit plan as well as 2.5 Code of Business Conduct and Ethics for board and senior post-audit discussion to ascertain any area of concern. management personnel: j. Ascertainment of reasons for substantial defaults in the payment to The Company has in place the Code of Business Conduct and creditors and in case of payment of declared dividends to the Ethics for Board and Senior Management personnel (the shareholders. Code) approved by the board. The Code has been communicated to directors and the members of the senior management. The Code k. Review of management discussion analysis of financial conditions has also been displayed on the Company’s and results of operations and other matters specified under website www.wabco-tvs.com. clause 49 of the Listing Agreement. All the board members and senior management personnel st have l. Review of financial statements, in particular the investments made affirmed compliance with the Code for the year ended 31 March by the unlisted subsidiary. 2009. The annual report contains a declaration to this effect signed by the whole-time director and general manager (finance) and m. In addition, review of such other functions as envisaged under secretary of the Company as compliance officer for the Code. Section 292A of the Companies Act, 1956 and Clause 49 of the Listing Agreement with Stock Exchanges. 2.6 Appointment of directors: In terms of clause 49(IV)(G) of the Listing Agreement with the Stock 3.2 Composition, name of members and the chairman of the Audit Committee: Exchanges, a brief resume of directors,proposed to be appointed/ The Audit Committee was reconstituted consequent to the changes re-appointed, nature of their expertise in specific functional areas, in the board. As of date, the Audit Committee consists of the following their other directorships and committee memberships, their shareholdings and their relationships with other directors are provided directors: in the notice convening the ensuing annual general meeting of the Name of the directors (M/s) Status Company. Vice Admiral 3. Audit Committee P J Jacob (Retd.)(*) Non-executive, Independent director The primary objective of the Audit Committee is to monitor and provide H Lakshmanan (*) Non-executive, Independent director effective supervision of the management’s financial reporting process Narayan K Seshadri Non-executive, Independent director with a view to ensure accurate, timely and proper disclosures and D E Udwadia Non-executive, Independent director transparency, integrity and quality of financial reporting. C N Prasad Non-executive, Non-Independent director 3.1 Brief description of terms of reference: The Audit Committee of the Company is entrusted with the (*) Ceased to be the members of the Committee consequent to their responsibility to supervise the Company’s internal control and resignation from the board. financial reporting process and inter-alia performs the following functions: Mr Narayan K Seshadri, independent director, is the Chairman of the re-constituted Audit Committee. Mr R Madhavan, general manager a. Overseeing the Company’s financial reporting process and (finance) and secretary of the Company acts as the Secretary of the disclosure of financial information. the Audit Committee. Chairman of the Audit Committee was present th b. Reviewing with the management quarterly and annual financial at the annual general meeting held on 29 September 2008. statements before submission to the board for approval with The composition of the committee is in accordance with the particular reference to the matters specified in the Listing requirements of Clause 49 of the Listing Agreement and Section Agreement. 292A of the Companies Act, 1956. 19


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    3.3 The particulars of meetings and attendance by the members of the 4.5 Disclosure by senior management personnel: committee during the year under review are given in the table below: The senior management personnel have made disclosure to the Date of the meeting Members present (M/s) board relating to all material, financial and other transactions stating rd 23 July 2008 Vice Admiral P J Jacob, H Lakshmanan that they did not have personal interest that could result in a conflict and Narayan K Seshadri with the interest of the Company at large. th 20 August 2008 Vice Admiral P J Jacob, H Lakshmanan 4.6 CEO and CFO Certification: and Narayan K Seshadri The whole-time director (CEO) and Chief Financial Officer of the th 20 October 2008 Vice Admiral P J Jacob, H Lakshmanan, Company have certified to the board on financial and other matters Narayan K Seshadri and D E Udwadia. in accordance with Clause 49(V) of the Listing Agreement pertaining rd st 23 January 2009 Vice Admiral P J Jacob, H Lakshmanan, to CEO/CFO certification for the financial year ended 31 March 2009. Narayan K Seshadri and D E Udwadia. 4.7 Compliance with mandatory / non-mandatory requirements: th 12 March 2009 Vice Admiral P J Jacob, H Lakshmanan, The Company has complied with all applicable mandatory Narayan K Seshadri and D E Udwadia. requirements in terms of clause 49 of the Listing Agreement. The non-mandatory requirements have been adopted to the extent and 4. Disclosures in the manner as stated under the appropriate headings detailed 4.1 Materially significant related party transactions: elsewhere in this report. During the year, the Company has not entered into any transaction 4.8 Management discussion and analysis report: of material nature with the directors, their relatives or management The management discussion and analysis report has been attached which is in conflict with the interests of the Company. to the directors’ report. The transactions with the related parties, namely its promoters, its 5. Remuneration Committee subsidiary and associate companies etc., are of routine nature have been reported elsewhere in the annual report as per Accounting The board has not constituted a remuneration committee, as the Standard 18 (AS 18) issued by The Institute of Chartered Accountants need for forming such committee has not arisen. The remuneration of India. to the whole-time director was decided by the board of directors subject to the approval of the shareholders. The Audit Committee is briefed, inter alia, on the following aspects: 5.1 Remuneration to directors: (i) the related party transactions undertaken by the Company in th the ordinary course of business (summary); Effective 17 June 2009, Mr C N Prasad, resigned as a whole-time (ii) material individual transactions, if any, which were not in the director of the Company. Accordingly, the agreement entered into normal course of business; and between the Company and Mr C N Prasad on the terms and (iii) material individual transactions, if any, with related parties or conditions, as per the resolution passed by the shareholders at the th others, which were not at arm’s length basis. general meeting held on 29 September 2008, of his appointment to hold the office as a whole-time director of the Company for a th 4.2 Disclosure of accounting treatment: period of five years from 28 March 2008 stands terminated by The Company follows the Accounting Standards issued by The mutual consent. Institute of Chartered Accountants of India and Company (Accounting Mr P Kaniappan, director of the Company, was appointed as a whole- Standards) Rules, 2006. time director of the Company for a period of five years effective 4.3 Risk Management: th 17 June 2009 on a remuneration consisting salary and other The Company has laid down procedures to inform Board members perquisites in terms of the agreement entered into between him and th about the risk assessment and minimization procedures. These the Company on 17 June 2009, and the same is subject to the procedures are periodically reviewed to ensure that executive approval of the shareholders of the Company in the ensuing annual th management controls risk through means of a properly defined general meeting of the Company to be held on 24 September 2009. framework. The non-executive directors do not draw any remuneration from the 4.4 Instances of non-compliances, if any: Company other than sitting fees for attending each meeting of the There were no instances of non-compliances by the Company, board and committees thereof. The Company pays sitting fees of penalties and strictures imposed on the Company by the Stock Rs. 7,500/- to all the non-executive directors for attending each Exchanges or SEBI or any other statutory authorities on any matter meeting of the board and/or committee thereof which is within the related to the capital markets during the last three years. limits prescribed under the Companies Act, 1956. 20


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    5.2 Particulars of sitting fees paid to non-executive directors during the director of the Company. Mr Venu Srinivasan was the Chairman of financial year 2008-2009: the Committee. The Committee met three times during the year. Name of the non-executive directors Sitting fee Subsequent to the resignation of Mr Venu Srinivasan as chairman M/s. (Rs.) and member of the committee and Mr H Lakshmanan as member th Venu Srinivasan 90,000 of the committee, the committee was reconstituted effective 30 July H Lakshmanan(*) 1,50,000 2009 with Mr Narayan K Seshadri, director, Mr C N Prasad, director D E Udwadia 60,000 and Mr P Kaniappan, whole-time director. Mr Narayan K Seshadri is the chairman of the re-constituted investors’ grievance Vice Admiral P J Jacob (Retd.) (*) 82,500 committee. Leon Liu - Trevor Lucas 7,500 6.2 As required by Securities and Exchange Board of India (SEBI), Mr Nikhil Madhukar Varty - R Madhavan, general manager (finance) and secretary of the Narayan K Seshadri 75,000 Company has been appointed as the compliance officer. For any (*) since resigned. clarification/complaint, the shareholders may contact Mr R Madhavan, general manager (finance) and Secretary of the Company. 5.3 Details of shareholdings of non-executive directors in the Company st as on 31 March 2009: 6.3 The committee oversees and reviews all matters connected with share transfers, issue of duplicate share certificates and other Name of the non-executive directors No. of shares held issues pertaining to shares. The committee also looks into the (M/s) (face value of Rs.5/- each) redressal of investors’ grievances pertaining to transfer of shares, Venu Srinivasan Nil non-receipt of balance sheet, non-receipt of declared dividends, H Lakshmanan (*) 1,066 etc. The Company, as a matter of policy, disposes investor C N Prasad Nil complaints within a span of seven days. Vice Admiral P J Jacob (Retd) (*) Nil D E Udwadia Nil 6.4 Complaints received and redressed during the year 2008-09: Leon Liu Nil S.No. Nature of complaint No. of complaints Nikhil Madhukar Varty Nil 1 Non receipt of share certificates – Narayan K Seshadri Nil 2 Non receipt of dividend warrants 3 Trevor Lucas Nil 3 Non receipt of annual reports 1 (*) since resigned. 4 Other complaints – There are no other particular pecuniary relationships or transactions Total 4 of the non-executive directors’ vis-à-vis of the Company. None of st the directors is related to each other. 6.5. All the complaints were resolved and, as on 31 March 2009, no complaint was pending. 5.4 Particulars of remuneration paid to the whole-time director during the financial year 2008-09: (Rs in lakhs) All requests for dematerialization of shares were carried out within Name of the Salary Contribution to Perquisites the stipulated time period and no share certificate was pending for st director PF and other & Allowances Total dematerialization as on 31 March 2009. (M/s) funds 6.6 Secretarial Audit C N Prasad(*) 47.88 4.39 35.62 87.89 th A qualified practising company secretary carried out secretarial (*) resigned as WTD effective 17 June 2009. audit on a quarterly basis to reconcile the total admitted capital 5.5 Presently, the Company does not have a scheme for grant of stock with National Securities Depository Limited (NSDL) and Central options either to the directors or employees of the Company. Depository Services (India) Limited (CDSL) and the total issued and listed capital and placed the report for perusal of the Board. 6. Investors’ grievance committee: The secretarial audit report confirms that the total issued and listed st 6.1 As on 31 March 2009, the investors’ grievance committee consisted capital is in agreement with the total number of shares in physical of three members, viz., Mr Venu Srinivasan, chairman, form and the total number of shares in dematerialized form held Mr H Lakshmanan, director and Mr C N Prasad, whole-time with NSDL and CDSL. 21


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    7. General body meeting: (iii) Approval for adopting the new set of articles of association 7.1 Location and time where the annual general meetings were held during of the Company in terms of Section 31 and other applicable the last three years. provisions of the Companies Act, 1956. Year Location Date Time (iv) Approval for amendments to the main objects of the 2005-2006 Registered Office:, memorandum of association and the new set of Articles of No.29 Haddows Road Association of the Company under Section 31 and other Chennai 600 006 27.09.2006 9.15 A.M applicable provisions of the Companies Act, 1956 2006-2007 Registered Office:, No.29 Haddows Road 7.3 None of the subjects placed before the shareholders in the last / Chennai 600 006 28.09.2007 9.15 A.M ensuing annual general meeting required/requires approval by a 2007-2008 The Music Academy, New No.168, postal ballot. T T K Road (Mowbrays Road), Chennai 600 014 29.09.2008 10.15 A.M 8. Means of communication: 7.2 Special resolutions passed in the previous three annual general 8.1 Quarterly results: meetings: The unaudited quarterly financial results of the Company are published (a) At the extraordinary general meeting of the shareholders of the in the English and vernacular newspapers. These are not sent th Company held on 19 April 2007, approval of the shareholders individually to the shareholders. was obtained for the change of name of the Company under 8.2 Newspapers wherein results normally published: Section 21 and other applicable provisions, if any, of the The results are normally being published in the English newspapers, Companies Act, 1956 from the then Auto (India) Engineering namely “The Hindu” and “The Economic Times” and the Tamil version Limited to WABCO-TVS (INDIA) Limited. in a Tamil daily viz., “Dinamani”. (b) In pursuance of the order of the Hon’ble High Court of Madras, nd the meeting of the shareholders was convened on 22 October 8.3 Website: 2007 for approving the Scheme of Arrangement made between The Company has in place a website addressed as www.wabco-tvs.com. the Company (Resulting Company) and Sundaram-Clayton Limited The unaudited results and the quarterly distribution schedules as filed (Demerged Company) and their respective shareholders and with the Stock Exchanges are published in Company website. The creditors under Sections 391 - 394 of the Companies Act, 1956. Company makes use of its website for publishing official news release and presentations, if any, made to institutional investors / analysts. The said Scheme of Arrangement was approved by the shareholders unanimously and the result of the poll is given as 9. General shareholder information follows: 9.1 Annual general meeting: Total Number Votes cast Votes cast % of votes % of votes Date and Time : Thursday, the 24th September, 2009 of Valid Votes In favour against cast in cast cast favour against at 10.15 a.m 1,00,000 1,00,000 – 100% – Venue : ‘Sathguru Gnanananda Hall’, th Narada Gana Sabha Trust, The Hon’ble High Court of Madras vide its order dated 20 February No. 314, TTK Road, Chennai - 600 018 2008 sanctioned the said Scheme of Arrangement. The said order st st was filed with the Registrar of Companies, Tamil Nadu, Chennai 9.2 Financial year : 1 April to 31 March th th on 28 March 2008 and the Scheme became effective on 28 Financial calendar 2009-10 (Tentative): March 2008. Financial reporting for (c) At the Extraordinary General meeting of the shareholders of th the quarter ending : Financial calendar the Company held on 17 March 2008, consent / approval th 30 June 2009 : 30th July 2009 of the shareholders was obtained for the following: 30th September 2009 : between 15th to 31st of October 2009 (i) Authorization to make investments in securities or to provide 31st December 2009 : between 15th to 31st of January 2010 loan or give guarantee upto a limit of Rs.200 crores more 31st March 2010 : between 15th to 30th of April 2010 than the limits in terms of Section 372A of the Companies Annual general meeting : August / September 2010 Act, 1956. (next year) (ii) Approval for keeping and maintaining books, returns and documents at a place other than the Registered office 9.3 Date of book closure : 22nd September, 2009 to of the Company in terms of Section 163 of the Companies 24th September, 2009 Act, 1956. (both days inclusive) 22


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    9.4 Particulars of dividend payment: The shareholders have also been advised about this appointment of STA to handle share registry work pertaining to both physical An interim dividend of Rs.2.50 per share for the year ended st th and electronic segments of the Company. 31 March 2009 was paid to the shareholders on 19 December 2008. The board has not recommended any further dividend for the b. All matters connected with the share transfer both physical and st year ended 31 March 2009. electronic, dividends and other matters are handled by the STA located at the address mentioned elsewhere in this report. 9.5 Listing on Stock Exchanges: c. Shares lodged for transfer are normally processed within 10 days Name of the stock exchange Stock code from the date of lodgement, if the documents are clear in all Madras Stock Exchange Ltd. (MSE) – respects. All requests for dematerialization of securities are processed and the confirmation is given to the depositories Bombay Stock Exchange Ltd. (BSE) 533023 within 7 days. Grievances received from investors and other National Stock Exchange miscellaneous correspondence on change of address, mandates of India Ltd. (NSE) WABCO-TVS etc are processed by the STA within 7 days. ISIN allotted by depositories INE 342 J 01019 d. Pursuant to clause 47(c) of the Listing Agreement with Stock (Company ID Number) Exchanges, certificates, on half-yearly basis, have been issued (Note : Annual listing fees for the year 2009-2010 have been duly by a Company Secretary-in-practice for due compliance of share paid to the above stock exchanges) transfer formalities by the Company. e. Pursuant to SEBI (Depositories and Participants) Regulations, 9.6 Market Price Data: 1996, certificates have also been received from a Company Bombay Stock Exchange National Stock Exchange Secretary-in-practice for timely dematerialization of the shares of Limited (BSE) (in Rs.) of India Ltd. (NSE) (in Rs.) the Company and for conducting a secretarial audit on a quarterly Month basis for reconciliation of the share capital of the Company. Month’s Month’s Month’s Month’s high price low price high price low price f. The Company, as required under clause 47(f) of the Listing April 2008 - - - - Agreement, has designated the following e-mail IDs, namely May 2008 - - - - investorscomplaintssta@scl.co.in (share transfer agent) / madhavan.rajagopalan@wabco-tvs.co.in (compliance officer) for June 2008 - - - - the purpose of registering complaints, if any, by the investors July 2008 - - - - and expeditious redressal of their grievances. August 2008 - - - - g. The shareholders are, therefore, requested to correspond with September 2008 - - - - the STA at the address mentioned elsewhere in this report for any change of names and queries pertaining to the shareholding October 2008 374.00 111.00 370.00 102.00 and dividends etc. November 2008 200.00 131.00 239.90 126.80 st 9.8 Shareholding pattern as on 31 March 2009: December 2008 178.45 130.90 183.10 130.05 Particulars No. of shares held % to total January 2009 190.00 107.45 184.10 104.25 (A) Shareholding of Promoter and February 2009 127.45 101.60 122.75 101.00 Promoter Group (1) Indian – Bodies Corporate 77,44,064 40.83 March 2009 147.90 100.00 142.50 101.45 (2) Foreign – Bodies Corporate 74,30,000 39.17 (*) The present share capital of the Company consists of 1,89,67,584 equity shares Total Shareholding of Promoter and Promoter of Rs.5/- each, issued pursuant to the Scheme of Arrangement between the Group (A) 1,51,74,064 80.00* Company and Sundaram-Clayton Limited and their respective shareholders and creditors sanctioned by the Hon’ble High Court of Madras vide its order dated (B) Public Shareholding 20th February 2008. (1) Institutions (**) the shares of the Company were listed in the stock exchanges effective (a) Mutual Funds 11,25,374 5.93 1st October 2008. Hence the share prices commencing from the month of October (b) Banks, Financial Institutions, 26,967 0.14 2008 is shown in the above table. Insurance companies (Central, State Government Institutions, 9.7 Share transfer agents (STA) and share transfer system: Non-Govt. Institutions) a. With a view to rendering prompt and efficient service to the (c) Foreign Institutional 1,22,115 0.65 investors, M/s Sundaram-Clayton Limited (SCL), which has been Investors registered with SEBI as the Share Transfer Agent (STA) in Sub Total Institutions 12,74,456 6.72 Category II, has been appointed as the STA of the Company. 23


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    Particulars No. of shares held % to total Software Design Centres: 2. Non-Institutions “Ispahani Centre”, 7th Floor, 123/124 Nungambakkam High Road, a) Bodies Corporate 2,92,494 1.54 Chennai 600 034 b) Individuals <1 lakh 18,91,864 9.97 Tel : 044 - 2828 5000 c) Individuals >1 lakh 3,04,054 1.60 Fax : 044 - 2833 2212 d) NRI - Repatriable 17,406 0.09 e) NRI - Non-Repatriable 13,246 0.08 Module No – 1107, D Block, 11th Floor Tidel Park, Sub Total Non-Institutions 25,19,064 13.28 No.04 Rajiv Gandhi Salai, Total (B) 37,93,520 20.00* Taramani Grand Total (A) + (B) 1,89,67,584 100.00 Chennai - 600 113 * Promoter’s holding has since been reduced to 75% while the public holding has been increased to 25%. Tel : 044 - 2254 5700 Fax : 044 - 2254 0909 9.9 Distribution of shareholding as on 31st March 2009 9.13 Address for investors’ Correspondence Shareholding No. of % No. of % (i) For transfer / dematerialisation Sundaram-Clayton Limited (Range) shares members of shares, payment of dividend Share transfer department Upto 5000 18,80,668 9.92 17,236 99.72 on shares and any other query New No.22, Old No.31 5001-10000 1,04,903 0.56 14 0.08 relating to the shares of the Railway Colony, 3rd Street 10001-20000 1,71,347 0.90 11 0.06 company Mehta Nagar, Chennai 600 029 20001-50000 2,41,529 1.27 7 0.04 Tel. : 044 - 2374 1889, 044 - 2374 2939 50001-100000 4,36,760 2.30 6 0.04 Fax : 044 - 2374 1889 100001 & above 1,61,32,377 85.05 10 0.06 (ii) for any query on Total 1,89,67,584 100.00 17,284 100.00 non-receipt of annual report; Email: 9.10 Dematerialization of shares and liquidity kr.raman@scl.co.in sclshares@gmail.com Out of 37,93,520 shares held by persons other than promoters, (iii) for Investors Grievance & investorscomplaintssta@scl.co.in st 33,82,173 shares have been dematerialised as on 31 March 2009 general correspondence madhavan.rajagopalan@wabco-tvs.co.in accounting for 89.16%. 10. Non-mandatory disclosures: 9.11 The Company has not issued any Global Depository Receipt / The non-mandatory requirements have been adopted to the extent and in the manner as stated under the appropriate headings American Depository Receipt / Warrant or any convertible instrument, detailed below: which is likely to have impact on the Company’s equity. 10.1 The Board: 9.12 Plant locations : Factories: The non-executive directors of the Company are liable to retire Plot. No.3 (SP), III Main Road, by rotation and if eligible, offer themselves for re-appointment. No Ambattur Industrial Estate, Ambattur, specific tenure has been fixed for the independent directors. Chennai - 600 058 10.2 Remuneration committee: Tel : 044 - 2623 8000 The board has not set up a remuneration committee, as the need Fax: 044 - 2623 8009 for the same has not arisen. Large Sector, Adityapur Industrial Area, 10.3 Shareholder rights: Gamharia, Seraikella-Kharsawan District, The half-yearly results of the Company are published in English Jharkhand - 832 108 and vernacular newspapers and are also displayed on the Company’s Tel : 0657 238 7996 website, namely www.wabco-tvs.com. The results are not sent to Fax : 0657 238 7997 the shareholders individually. Plot No. AA8, Central Avenue, 10.4 Audit Qualifications: Auto Ancillary SEZ, Mahindra World City, The statutory financial statements of the Company are unqualified. Nathan Sub-Post, Chengalpet, 10.5 Training of board members / Mechanism for evaluating non-executive Kancheepuram District - 603 002 directors: Tel : 044 - 4749 0006 The present board consists of well-experienced and responsible Fax : 044 - 4749 0008 members of society. All the directors are well aware of business 24


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    model as well as the risk profile of the business parameters of Registration of Nominations: the Company and their responsibilities as directors. Hence, in the Nomination in respect of shares – Section 109A of the Companies opinion of the board, they do not require any further training. There is also no specific mechanism for evaluating the performance of Act, 1956 provides facility for making nominations by shareholders the non-executive directors of the Company. in respect of their holding of shares. Such nomination greatly facilitates transmission of shares from the deceased shareholder 10.6 Whistle blower policy: to his / her nominee without having to go through the process of The Company has not adopted whistle blower policy. However, obtaining succession certificate / probate of the Will etc. the Company has not denied access to any personnel to approach It would, therefore, be in the best interests of the shareholders the management on any issue. holding shares in physical form registered as a sole holder to make 11. Request to shareholders: such nominations. Investors, who have not availed nomination facility, are requested to avail the same by submitting the nomination Shareholders are requested to follow the general safeguards / in form 2B. This form will be made available on request. Investors procedures as detailed hereunder in order to serve them efficiently holding shares in demat form are advised to contact their DPs for and avoid risks while dealing in securities of the Company. making nominations. Demat of Shares: Updation of address: Shareholders are requested to convert their physical holding to demat/ Shareholders are requested to update their address registered with the electronic form through any of the depository participants (DPs) to Company, directly through the STA located at the address mentioned avoid any possibility of loss, mutilation etc. of physical share certificates above, to receive all communications promptly. and also to ensure safe and speedy transaction in securities. Shareholders, holding shares in electronic form, are requested to deal Registration of Electronic Clearing Service (ECS) Mandate: only with their depository participant (DP) in respect of change of ECS helps in quick remittance of dividend without possible loss/delay address and furnishing bank account number, etc. in postal transit. Shareholders, who have not earlier availed this facility, SMS Alerts are requested to register their ECS details with the STA or their respective DPs. Investors are requested to note that National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited Transfer of shares in physical mode: (CDSL) have announced the launch of SMS alert facility for demat Shareholders should fill in complete and correct particulars in the account holders whereby investors will receive alerts for debits transfer deed, for expeditious transfer of shares. Wherever applicable, / credits (transfers) to their demat accounts a day after the registration number of power of attorney should also be quoted in transaction. These alerts will be sent to those account holders the transfer deed at the appropriate place. who have provided their mobile numbers to their Depository Shareholders, whose signatures have undergone any change over participants (DPs). No charge will be levied by NSDL / CDSL a period of time, are requested to lodge their new specimen signature on DPs providing this facility to investors. This facility will be duly attested by a bank manager to the STA. available to investors who request for the same and provide their Shareholders are requested to note that SEBI has recently issued mobile numbers to the DPs. Further information is available on th a circular vide MRD/DoP/Cir -05/1009 dated: 20 May 2009 wherein the website of NSDL and CDSL namely www.nsdl.co.in and it has made it mandatory for transferees to furnish a copy of www.cdslindia.com, respectively. Permanent Account Number (PAN) for registration of transfer of shares to be held in physical mode Timely encashment of dividends: In case of loss / misplacement of share certificates, Shareholders should Shareholders are requested to encash their dividends promptly to immediately lodge a FIR / Complaint with the police and inform the avoid hassles of revalidation/ losing your right of claim owing to Company / STA with original or certified copy of FIR / acknowledged transfer of unclaimed dividends beyond seven years to Investors copy of complaint for marking stop transfer of shares. Education and Protection Fund. Consolidation of Multiple Folios: As required by SEBI, shareholders are requested to furnish details Shareholders, who have multiple folios in identical names, are of their bank account number and name and address of the bank requested to apply for consolidation of such folios and send the for incorporating the same in the warrants. This would avoid wrong relevant share certificates to the Company. credits being obtained by unauthorized persons. 25


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    st Shareholders who have not encashed their dividend warrants in respect of dividends declared for the year ended 31 March, 2008 and for any financial year thereafter may contact the Company and surrender their warrants for payment. Shareholders are requested to note that the dividend not claimed for a period of seven years from the date they first became due for payment shall be transferred to “Investors Education and Protection Fund” (IEPF) interms of Section 205C of the Companies Act, 1956. Shareholders are requested to note that as per the Companies Act, 1956, unclaimed dividends once transferred to IEPF will not be refunded. Information in respect of unclaimed dividends due for remittance into IEPF is given below: PARTICULARS OF UNCLAIMED DIVIDEND Financial year Date of Declaration Date of transfer to special account Date of transfer to IEPF 2007-08 (2nd interim) 20.08.2008 25.09.2008 25.09.2015 2008-09 (1st Interim) 08.12.2008 13.01.2009 13.01.2016 Declaration pursuant to clause 49 of the listing agreement regarding adherence to the Code of Business Conduct and Ethics To the shareholders of WABCO-TVS (INDIA) Limited, Chennai On the basis of the written representations received from Members of the Board and Senior Management Personnel in terms of the relevant provisions of clause 49 of the Listing Agreement, we hereby certify that both the members of the board and the senior management personnel of the Company have affirmed compliance with the respective provisions of the Code of Business Conduct and Ethics of the Company as laid down by the board of directors for the year ended 31st March 2009. P KANIAPPAN R MADHAVAN Whole-time director General Manager (Finance) and Secretary Chennai 27th August 2009 Auditors’ certificate on compliance of the provisions of the Code of Corporate Governance in the listing agreement To The shareholders of WABCO-TVS (INDIA) Limited, Chennai We have examined the compliance of conditions of Corporate Governance by WABCO-TVS (INDIA) Limited, Chennai – 600 006 for the year ended 31st March 2009, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges. The compliance of conditions of Corporate Governance is the responsibility of Company’s management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the abovementioned Listing Agreement. We state that no investor grievances are pending for a period exceeding one month against the Company as per the records maintained by the Investors’ Grievances Committee. We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. For SUNDARAM & SRINIVASAN Chartered Accountants M BALASUBRAMANIYAM Chennai Partner 27th August 2009 Membership No.F7945 26


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    Auditors' report to the shareholders of M/s WABCO-TVS (INDIA) Limited, Chennai 600 006 for the year ended 31st March 2009. We have audited the attached balance sheet of M/s.WABCO-TVS (INDIA) (iv) in our opinion, the balance sheet, profit and loss account st Limited, Chennai 600 006 as at 31 March 2009, the profit and loss and the cash flow statement dealt with by this report comply account and the cash flow statement for the year ended on that date with the accounting standards, referred to in sub-section (3C) both annexed thereto. These financial statements are the responsibility of section 211 of the Companies Act, 1956; of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit. (v) on the basis of written representations received from the directors, as on 31st March 2009 and taken on record by 1. We conducted our audit in accordance with auditing standards the board of directors, we report that no director is disqualified generally accepted in India. These standards require that we plan from being appointed as a director of the company in terms and perform the audit to obtain reasonable assurance about whether of clause (g) of sub-section (1) of section 274 of the Companies the financial statements are free of material misstatement. An audit Act, 1956 on the said date; includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also (vi) in our opinion and to the best of our information and according includes assessing the accounting principles used and significant to the explanations given to us, the said accounts read estimates made by management, as well as evaluating the overall together with the notes thereon give the information required presentation of the financial statements. We believe that our audit by the Companies Act, 1956, in the manner so required and provides a reasonable basis for our opinion. give a true and fair view in conformity with the accounting principles generally accepted in India; 2. As required by the Companies (Auditor's Report) Order, 2003 and a. in so far as it relates to the balance sheet, of the state amended by the Companies (Auditor's report) (Amendment) Order, st of affairs of the company as at 31 March 2009; 2004 issued by the Central Government in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in b. in so far as it relates to the profit and loss account, the annexure a statement on the matters specified in paragraphs of the profit of the company for the year ended on that 4 and 5 of the said Order. date; and 3. Further to our comments in the annexure referred to above, we c. in so far as it relates to the cash flow statement, of state that - the cash flows for the year ended on that date. (i) we have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purpose of our audit; For SUNDARAM & SRINIVASAN (ii) in our opinion, proper books of account, as required by law, Chartered Accountants have been kept by the company so far as appears from our examination of those books; (iii) the balance sheet and profit and loss account and cash flow M BALASUBRAMANIYAM statement, dealt with by this report, are in agreement with Chennai Partner the books of account; 27th August 2009 Membership No. F7945 27


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    Auditors’ report to the Shareholders (Contd.) Annexure referred to in our report of even date on the accounts for the year ended 31st March 2009 (i) (a) The company has maintained proper records showing full been made at prices which are reasonable having regard particulars including quantitative details and situation of fixed to prevailing market prices at the relevant time. assets; (vi) The company has not accepted any deposit from the public. (b) All the assets have not been physically verified by the (vii) The company has an internal audit system which, in our opinion, management during the year but there is a regular programme is commensurate with the size and nature of its business. of verification at reasonable intervals, which, in our opinion, is reasonable having regard to the size of the company and (viii) We have broadly reviewed the books of account maintained by the nature of its assets. No material discrepancies were the company pursuant to the rules made by the Central Government noticed on such verification; under Section 209 (1)(d) of the Companies Act, 1956 for maintenance of cost records and are of the opinion that, prima (c) The assets disposed off during the year are not substantial facie, the prescribed accounts and records have been made and and therefore do not affect the going concern status of the maintained. company. (ix) (a) According to the records provided to us, the company is regular in depositing undisputed statutory dues including (ii) (a) The inventory including those with third parties, other than Provident Fund, Employees' State Insurance, Investors in-transit have been physically verified at reasonable intervals Education & Protection Fund, Income tax, Sales tax, Wealth during the year by the management. In our opinion the tax, Customs duty, Excise duty, Service tax, Cess and other frequency of such verification is adequate. statutory dues with the appropriate authorities. (b) In our opinion and according to the information and (b) According to the information and explanations given to us, explanations given to us, the procedures for physical verification no undisputed amounts payable in respect of Income tax, of inventory followed by the management were reasonable Wealth tax, Sales tax, Customs duty, Excise duty, Service st and adequate in relation to the size of the company and tax and cess were in arrears as at 31 March 2009 for a the nature of its business; period of more than six months from the date they became payable. (c) In our opinion, the company has maintained proper records of inventory. The discrepancies between the physical stocks (c) According to the information and explanations given to us, and the book stocks were not material and have been the following are the details of the disputed dues, that were properly dealt with in the books of account. not deposited with the concerned authorities. (iii) During the year, the company has not granted or taken any loan, Name of the Nature of Amount Forum where secured or unsecured to or from companies, firms or other parties statute dues (Rs. in lakhs) dispute is pending covered in the register maintained under section 301 of the Customs Act, 1962 Customs duty 5.17 Commissioner of Companies Act, 1956. Customs (Appeals), Chennai (iv) In our opinion and according to the information and explanations (x) The company has no accumulated losses as at the end of the given to us, there are adequate internal control procedures financial year and has not incurred cash losses during the financial commensurate with the size of the company and the nature of year and in the immediately preceding year. its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, (xi) Based on our verification and according to the information and no major weakness has been noticed in the internal control system. explanations given by the management, the company has not defaulted in repayment of dues to any bank. (v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the (xii) Based on our examination and according to the information and management, we are of the opinion that the contracts or explanations given to us, the company has not granted loans and arrangement that need to be entered in the register maintained advances on the basis of security by way of pledge of shares, in pursuance of Section 301 of the Companies Act, 1956 debentures and other securities. have been properly entered in the said register; (xiii) The company is not a chit / nidhi / mutual benefit fund / society and as such clause (xiii) of the Order is not applicable; (b) In our opinion and according to the information and explanations given to us, the transactions entered in the (xiv) The company is not dealing or trading in shares, securities, register maintained under Section 301 and exceeding during debentures and other investments, other than mutual fund the year by rupees five lakhs in respect of each party have instruments. 28


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    Auditors’ report to the Shareholders (Contd.) Annexure referred to in our report of even date on the accounts for the year ended 31st March 2009 (Contd.) (xv) During the year, there are no guarantees given by the company (xix) During the year, the company has not issued any secured for loans taken by others. debentures. (xvi) During the year, the company has availed rupee term loan and (xx) During the year, the company has not raised any money by public the funds have been utilised for the purpose for which the loan issue. was obtained. (xxi) Based on the audit procedures adopted and information and (xvii) On the basis of our examination, the company has not used funds explanations given to us by the management, no fraud on or by raised on short term basis for long term investment. the company has been noticed or reported during the course of our audit. (xviii) During the year, the company has not allotted any shares on preferential basis to parties and companies covered in the register For SUNDARAM & SRINIVASAN maintained under section 301 of the Companies Act, 1956. Chartered Accountants th Shares were allotted on 7 May 2008 to the shareholders of Sundaram-Clayton Limited (SCL) in terms of the Scheme of Arrangement between the Company and SCL and their respective M BALASUBRAMANIYAM shareholders and creditors sanctioned by the Hon’ble High Court Chennai Partner th of Judicature at Madras vide its order dated 20 February 2008. 27th August 2009 Membership No. F7945 29


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    Balance Sheet as at 31st March 2009 (Rupees in lakhs) Schedule As at As at number 31.03.2009 31.03.2008 I. SOURCE OF FUNDS 1. Shareholders’ funds a) Capital I 948.38 948.38 b) Reserves and surplus II 18,817.52 15,820.10 19,765.90 16,768.48 2. Loans a) Secured loans III 5,520.44 2,023.38 b) Unsecured loans IV 500.00 0.06 6,020.44 2,023.44 3. Deferred taxation (net) V 399.93 323.60 26,186.27 19,115.52 II. APPLICATION OF FUNDS 1. Fixed Assets VI a) Gross block 26,327.37 22,787.46 b) Less : Depreciation including impairment 7,187.80 5,811.88 c) Net block 19,139.57 16,975.58 d) Capital work-in-progress 388.37 431.45 2. Investments VII 900.69 865.78 3. Current assets, loans and advances a) Inventories VIII 4,630.40 3,102.50 b) Sundry debtors IX 7,026.03 7,577.89 c) Cash & bank balances X 127.91 1,163.27 d) Other current assets XI 8.86 17.23 e) Loans & advances XII 1,092.26 1,536.29 (a) 12,885.46 13,397.18 Less: current liabilities and provisions a) Current Liabilities XIII 5,357.60 9,838.93 b) Provisions XIV 1,770.22 2,715.54 (b) 7,127.82 12,554.47 Net current assets (a)-(b) 5,757.64 842.71 26,186.27 19,115.52 VENU SRINIVASAN P KANIAPPAN As per our report annexed Chairman Whole-time Director For SUNDARAM & SRINIVASAN Chartered Accountants Chennai R MADHAVAN T S RAJAGOPALAN M BALASUBRAMANIYAM 27th August 2009 General Manager (Finance) and Secretary Chief Financial Officer Partner Membership No. F7945 30


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    Profit & Loss Account for the year ended 31st March 2009 (Rupees in lakhs) Schedule Year ended Year ended number 31.03.2009 31.03.2008 Sales (Gross) 48,303.53 62,825.63 Less: Excise duty 5,708.95 9,391.72 Sales (Net) 42,594.58 53,433.91 Other Income XV 1,983.20 1,221.16 a 44,577.78 54,655.07 Materials consumed XVI 24,617.78 30,622.22 Salaries and wages, stores consumed and other expenses XVII 12,625.89 12,255.81 b 37,243.67 42,878.03 Profit before Interest, depreciation and tax c (a-b) 7,334.11 11,777.04 Interest (net) 685.42 328.68 Depreciation 1,393.21 1,011.71 d 2,078.63 1,340.39 Profit before tax e (c-d) 5,255.48 10,436.65 Provision - for Income tax 1,575.00 3,215.00 - for Fringe benefit tax 51.94 53.64 - for Deferred tax 76.33 183.95 f 1,703.27 3,452.59 Profit for the year (after tax) g (e-f) 3,552.21 6,984.06 Balance profit / (loss) brought forward 2,515.10 (0.74) Profit / (loss) for the year 3,552.21 6,984.06 Profit and loss account balance transferred from demerged company Sundaram-Clayton Ltd. Chennai (SCL) as on 01.01.2007 – 3,214.58 Profit after tax for three months from 01.01.2007 to 31.03.2007 transferred from SCL – 220.55 Total 6,067.31 10,418.45 Interim dividend paid 474.20 943.63 Interim dividend payable - 1,138.06 Dividend tax paid 80.59 160.37 Dividend tax payable - 193.41 Transfer to general reserve 356.00 5,467.88 Balance carried to Balance Sheet 5,156.52 2,515.10 Total 6,067.31 10,418.45 Notes on accounts XVIII Nominal value of each share in rupees 5.00 5.00 Basic earnings per share in rupees on 1,89,67,584 shares 18.73 36.82 Diluted earnings per share in rupees 18.73 36.82 VENU SRINIVASAN P KANIAPPAN As per our report annexed Chairman Whole-time Director For SUNDARAM & SRINIVASAN Chartered Accountants Chennai R MADHAVAN T S RAJAGOPALAN M BALASUBRAMANIYAM 27th August 2009 General Manager (Finance) and Secretary Chief Financial Officer Partner Membership No. F7945 31


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    Schedules (Rupees in lakhs) As at As at 31.03.2009 31.03.2008 I. SHARE CAPITAL Authorised 2,00,00,000 Equity Shares of Rs.5/- each 1,000.00 1,000.00 Issued, subscribed and paid-up 1,89,67,584 (Last year 1,89,67,584) Equity Shares of Rs.5/- each fully paid 948.38 948.38 Pursuant to the scheme of demerger of Brakes division into the company from Sundaram-Clayton Limited, Chennai,(SCL) the shareholders of SCL are entitled for allotment of 1,89,67,584 Equity Shares of Rs. 5/- each fully paid up for consideration other than in cash. These shares are deemed to be issued, subscribed and fully paid up in terms of the scheme of arrangement (vide item No 1 of notes on accounts under schedule XVIII.) These shares were allotted on 7th May 2008. II . RESERVES AND SURPLUS Capital reorganisation reserve As per last Balance Sheet 5.00 – Add: Reserve created consequent to cancellation of equity shares held by demerged company – 5.00 5.00 5.00 General reserve As per last Balance Sheet 13,300.00 – Less: Transferred from Sundaram-Clayton Ltd on demerger – 7,832.12 – 13,300.00 7,832.12 Add: Transfer from Profit & Loss Account 356.00 13,656.00 5,467.88 13,300.00 Surplus Balance in Profit & Loss Account 5,156.52 2,515.10 18,817.52 15,820.10 III. SECURED LOANS From banks Secured by hypothecation of raw materials, components, work-in-process, finished goods, book debts, stores, spares and tools 3,520.44 2,023.38 Secured by hypothecation of specific plant and machinery 2,000.00 - 5,520.44 2,023.38 IV. UNSECURED LOANS From bank-short term 500.00 0.06 V. DEFERRED TAXATION (NET) Deferred tax liabilities Tax on - (i) Depreciation 594.18 310.68 (ii) Employee related schemes (16.92) 577.26 53.37 364.05 Less : Deferred tax assets On other timing differences 177.33 177.33 40.45 40.45 399.93 323.60 32


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    Schedules (continued) VI. FIXED ASSETS (Rupees in lakhs) Description Land Lease Buildings Plant & Furniture, Vehicles Others Total as at hold Machinery, Fixtures & Fixed Land Dies & Jigs Equipments Assets 31.03.2009 31.03.2008 @ Cost of assets As at 01 04 2008 1,556.81 356.87 4,766.97 14,518.04 1,199.93 141.50 247.34 22,787.46 16,152.69 Additions - - 743.85 2,586.78 141.15 33.46 55.40 3,560.64 6,762.79 Less: sales/transfer - - - 0.75 13.17 6.81 - 20.73 128.02 Total 1,556.81 356.87 5,510.82 17,104.07 1,327.91 168.15 302.74 26,327.37 22,787.46 Depreciation Upto 31.03.2008 - 12.91 329.02 4,614.74 571.25 65.63 218.33 5,811.88 4,905.40 For the year - 6.08 171.27 1,011.37 132.99 15.10 56.40 1,393.21 1,011.71 Deductions on sales/transfer - - - 0.75 10.92 5.62 - 17.29 105.23 Total - 18.99 500.29 5,625.36 693.32 75.11 274.73 7,187.80 5,811.88 Written down value As at 31.03.2009 1,556.81 337.88 5,010.53 11,478.71 634.59 93.04 28.01 19,139.57 - As at 31.03.2008 1,556.81 343.96 4,437.95 9,903.30 628.68 75.87 29.01 - 16,975.58 @ vide note no XVIII (z) regarding Intangible Assets under Accounting Standards 26 CAPITAL WORK-IN-PROGRESS (at cost) Buildings 250.67 384.14 Electrical equipment 1.79 22.20 Machinery in transit / installation 135.91 25.11 388.37 431.45 33


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    Schedules (continued) (Rupees in lakhs) Face As at As at VII. INVESTMENTS (AT COST) Value 31.03.2009 31.03.2008 1. Non-trade-quoted (fully paid up) - Long term 5,69,377 Tax free bonds (6.75%) in Unit Trust of India, Mumbai (relating to last year) 569.38 – 599.54 2. Non-trade-Unquoted (fully paid up) - Long term ICICI Prudential Life Insurance Group Superannuation Fund 220.24 220.24 220.24 3. Non-trade-quoted (fully paid up) - Short term 53,982.865 units (last year Nil) in UTI Mutual Fund of UTI Asset Management Company Private Limited, Mumbai - UTI Treasury Advantage Fund (institutional plan - growth option) 634.45 634.45 – 4. Non-trade-quoted (fully paid up) - Long term 4,60,000 units in SBI Mutual Fund of State Bank of India, Mumbai - SBI One India Fund - Dividend option 46.00 46.00 46.00 900.69 865.78 SUMMARY Quoted Investments 680.45 645.54 Unquoted Investment 220.24 220.24 900.69 865.78 Short term 634.45 – Long term 266.24 865.78 900.69 865.78 Market value of quoted investments 660.65 618.33 VIII. INVENTORIES Raw materials and components* 3,340.75 2,082.02 Work-in-process* 135.35 119.29 Finished goods* 542.47 364.99 Stores* 216.45 194.22 Goods in transit 395.38 341.98 4,630.40 3,102.50 * As certified by whole-time director, at lower of weighted average cost or net realisable value as prescribed in Accounting Standard 2 issued by The Institute of Chartered Accountants of India. IX. SUNDRY DEBTORS-UNSECURED, CONSIDERED GOOD a) Debts outstanding for a period exceeding six months - Considered good – – - Considered doubtful 242.92 175.41 Total 242.92 175.41 b) Other debts 7,026.03 7,577.89 Less: Provision for bad and doubtful debts 242.92 175.41 7,026.03 7,577.89 X. CASH AND BANK BALANCES a) Cash and cheques on hand 9.19 98.52 b) With scheduled banks - current accounts 118.72 1,064.75 127.91 1,163.27 XI. OTHER CURRENT ASSETS Interest accrued on investments and deposits 8.86 17.23 8.86 17.23 XII. LOANS AND ADVANCES-UNSECURED, CONSIDERED GOOD a) Advances recoverable in cash or in kind or for value to be received 896.25 1,336.76 b) Advance payment of income tax less provisions – 4.69 c) Advance payment of fringe benefit tax less provisions 0.19 – d) Deposits 195.82 194.84 1,092.26 1,536.29 34


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    Schedules (continued) (Rupees in lakhs) As at As at 31.03.2009 31.03.2008 XIII. CURRENT LIABILITIES Sundry creditors 5,357.60 9,838.93 5,357.60 9,838.93 XIV. PROVISIONS a) Interim dividend payable – 1,138.06 b) Dividend tax payable – 193.41 c) Pension 615.72 468.53 d) Leave salary 162.47 142.17 e) Warranty 773.58 770.78 f) Provision for income tax less advance payments 217.60 – g) Provision for fringe benefit tax less advance payments – 1.74 h) Others 0.85 0.85 1,770.22 2,715.54 XV. OTHER INCOME a) Sale of scrap and empties 305.95 296.00 b) Profit on sale of assets 3.86 3.64 c) Profit on sale of investments 46.82 3.37 d) Software service export 1,041.40 767.56 e) Test track service usage 159.43 116.22 f) R & D Service export 373.40 29.96 g) Tool development income (net of expenses) 49.33 – h) Dividend income 2.38 – i) Miscellaneous income 0.63 4.41 1,983.20 1,221.16 XVI. MATERIALS CONSUMED Opening stock Raw materials 2,082.02 1,261.81 Work-in-process 119.29 79.85 Finished goods 364.99 190.81 2,566.30 1,532.47 Add : Purchases 26,070.05 31,656.05 Total (a) 28,636.35 33,188.52 Less : Closing stock Raw materials 3,340.75 2,082.02 Work-in-process 135.35 119.29 Finished goods 542.47 364.99 Total (b) 4,018.57 2,566.30 Net (a)-(b) 24,617.78 30,622.22 35


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    Schedules (continued) (Rupees in lakhs) Year ended Year ended 31.03.2009 31.03.2008 XVII. SALARIES AND WAGES, STORES CONSUMED AND OTHER EXPENSES Salaries, wages and bonus (includes Rs. 83.36 lakhs to whole - time director) (last year Rs 0.59 lakhs) 4,180.81 3,831.65 Stores and tools consumed 1,624.65 1,662.24 Contribution to provident and other funds (includes Rs. 4.39 lakhs to whole - time director) (last year Rs 0.03 lakhs) 362.23 123.65 Power and fuel 736.58 666.59 Workmen and staff welfare expenses (includes Rs. 0.14 lakhs to whole - time director) (last year Rs. Nil) 482.26 558.11 Rent 129.17 103.10 Rates and taxes 105.59 47.84 Repairs and maintenance a) Building 204.07 155.06 b) Machinery 272.33 229.43 c) Other assets 32.20 24.07 Insurance 49.95 50.16 Commission 55.19 29.82 Audit fees 18.49 13.37 Cash discount 31.31 30.92 Travel and conveyance 449.39 532.54 Packing and forwarding 1,356.76 1,725.01 Data processing 69.53 72.56 Sitting fees to directors 4.65 – Research and development 314.32 510.21 Other expenses 2,113.69 1,872.28 Loss on sale of investments 30.15 – Loss on sale of assets 2.57 17.20 12,625.89 12,255.81 XVIII. NOTES ON ACCOUNTS 1. Pursuant to the Scheme of arrangement between the Company (Resulting Company) and Sundaram-Clayton Limited, Chennai (Demerged company) and their respective shareholders and creditors sanctioned by the Hon’ble High Court of Madras, the business of brakes division of the Demerged company got demerged into the Company with effect from 1st January 2007 (the appointed date). Accordingly, the assets and liabilities of the said division of Demerged Company transferred to / vested in the Company. The effect of the order of the Hon’ble Court reflected in the accounts for the year ended 31st March 2008 is given below: (a) Transfer of share capital – 948.38 (b) Transfer of general reserve – 7832.12 (c) Transfer of profit upto 31.12.2006 – 3214.58 (d) Transfer of profit for the first three months ended 31.03.2007) (net of dividend and tax liability) – 220.55 36


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    Schedules (continued) XVIII. NOTES ON ACCOUNTS (continued) (Rupees in lakhs) As at/ As at/ Year ended Year ended 31.03.2009 31.03.2008 Accounting Standards a) AS - 1 Disclosure of Accounting policies The accounts are maintained on accrual basis as a going concern. b) AS - 2 Valuation of Inventories Inventories are valued in accordance with the method of valuation prescribed by The Institute of Chartered Accountants of India at lower of weighted average cost or net realisable value. c) AS - 3 Cash Flow Statement Cash flow statement is prepared under “Indirect Method” and the same is annexed. d) AS - 4 Contingencies and events occurring after balance sheet date Nil Nil e) AS - 5 Net Profit or Loss for the period, Prior Period Items and Changes in Accounting Policies Rates and Taxes 21.19 – f) AS - 6 Depreciation Accounting Depreciation has been provided under the straight line method at the rates prescribed under Schedule XIV of the Companies Act, 1956 with applicable shift allowance. In respect of the assets added/sold during the year, pro-rata depreciation has been provided. Depreciation in respect of computers and vehicles has been provided @30% and 18% respectively which is higher than the rate prescribed in Schedule XIV of the Companies Act, 1956. Depreciation in respect of assets acquired during the year whose actual cost does not exceed Rs. 5,000/- has been provided at 100%. g) AS - 7 Construction contracts This accounting standard is not applicable. h) AS - 8 Research and Development This accounting standard is withdrawn. i) AS - 9 Revenue Recognition The income of the Company is derived from sale of air brake equipment, parts and accessories thereof net of trade discount, tool development income and software services and includes realised exchange fluctuation gain on exports, amounting to Rs. 111.90 lakhs (last year - loss of Rs.45.98 lakhs) Interest income is recognised on a time proportion basis taking into account the amount outstanding and rate applicable. The revenue and expenditure are accounted on a going concern basis. j) AS - 10 Accounting for Fixed Assets All the fixed assets are valued at cost including expenditure incurred in bringing them to usable condition as reduced by Central Value Added Tax (CENVAT) credit less depreciation. k) AS - 11 Accounting for the effects in Foreign exchange rates Foreign Currency transactions Income and expenses in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing on the balance sheet date. Exchange differences arising out of such translation are recognised in the Profit and Loss Account. 37


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    Schedules (continued) XVIII. NOTES ON ACCOUNTS (continued) (Rupees in lakhs) As at/ As at/ Year ended Year ended 31.03.2009 31.03.2008 Net exchange differences credited (last year debited) debited to Profit and Loss Account - purchase of raw materials and components 30.87 123.61 Net exchange differences debited to Profit and Loss Account - capital expenditure – 3.90 Foreign currency exposures The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below: Sl.No Description Value in foreign Value in Indian currency (in Millions) Rupees (in lakhs) 1 Import of goods and services USD 0.03 (0.02) 15.54 (6.57) Euro 0.36 (0.97) 242.62 (613.57) JPY (0.32) (1.30) Total 258.16 (621.44) 2 Capital goods Euro (0.09) (58.70) JPY (1.25) (5.02) Total (63.72) 3 Export of goods & services USD 0.82 (1.17) 417.77 (468.68) Euro 1.09 (0.85) 733.48 (537.38) AUD (0.01) (1.90) GBP (0.01) (6.37) Total 1,151,25 (1,014.33) (figures in brackets relates to last year) l) AS - 12 Accounting for Government grants The Company has not received any grant from the Government. m) AS - 13 Accounting for Investments Investments are valued at cost. Provision for diminution in the carrying cost of long term investments is made if such diminutions are other than temporary in nature in the opinion of the management. (i) Investments made during the year UTI Asset Management Company Private Limited, Mumbai 634.45 – DSP Merrill Lynch Investment Managers Limited, Mumbai 50.00 – Lotus India Asset Management Company Private Limited, Mumbai 50.00 – 734.45 – (ii) Investments realised during the year DSP Merrill Lynch Investment Managers Limited, Mumbai 50.00 – Lotus India Asset Management Company Private Limited, Mumbai 50.00 – 6.75% Tax free bonds in Unit Trust of India, Mumbai 599.54 – 699.54 – (The amounts of Rs 734.45 lakhs (last year Nil) and Rs 699.54 lakhs (last year Nil) are cumulative figures). Cost of investments held as at balance sheet date 900.69 865.78 38


  • Page 40

    Schedules (continued) XVIII. NOTES ON ACCOUNTS (continued) (Rupees in lakhs) As at/ As at/ Year ended Year ended 31.03.2009 31.03.2008 n) AS - 14 Accounting for Amalgamation During the year there was no amalgamation. o) AS - 15 Accounting for retirement benefits Disclosure is made as per the requirements of the standard and the same is furnished below: A Defined contribution plans (a) Contribution to provident fund is in the nature of defined contribution plan and are made to a recognised trust. The Company has discontinued contribution to superannuation fund. B Defined benefit plan (a) The Company extends defined benefit plans in the form of leave salary to employees. In addition, the Company also extends pension to senior managers of the Company. Provision for leave salary and pension is made on actuarial valuation basis. (b) The Company also extends defined benefit plan in the form of gratuity to employees. Contribution to gratuity is made to Life Insurance Corporation of India in accordance with the schemes framed by the Corporation. C Disclosure as required by Accounting Standard 15 Rupees in lakhs Leave salary Pension Gratuity (a) Expenses recognised in the Profit & Loss Account i) Current service cost 13.68 – 60.95 ii) Interest cost 10.54 42.17 48.68 iii) Expected return on plan assets – – (60.60) iv) Net actuarial loss / (gain) recognised in the year 47.32 105.02 (41.83) Total 71.54 147.19 7.20 (b) Change in defined benefit obligation during the year ended 31st March 2009 i) Present value of obligation as at beginning of the year (01.04.2008) 142.17 468.53 608.58 ii) Interest cost 10.54 42.17 48.68 iii) Current service cost 13.68 – 60.95 iv) Benefits paid (51.23) – (85.71) v) Actuarial loss on obligation 47.32 105.02 (41.83) vi) Present value of obligation as at the end of the year (31.03.2009) 162.48 615.72 590.67 39


  • Page 41

    Schedules (continued) XVIII. NOTES ON ACCOUNTS (continued) (Rupees in lakhs) Leave salary Pension Gratuity (c) Change in fair value of plan assets during the year ended 31st March 2009 i) Fair value of plan assets at the beginning of the year (01.04.2008) – – 694.97 ii) Expected return on plan assets – – 60.60 iii) Contributions made during the year – – – iv) Benefits paid – – (85.71) v) Actuarial gain on plan assets – – – vi) Fair value of plan assets as at the end of the year (31.03.2009) – – 669.86 (d) Balance Sheet movements i) Value of benefit obligations / (net assets) at the beginning of the year (01.04.2008) 142.17 468.53 694.97 ii) Actual return on plan assets 60.60 iii) Contributions made during the year – – – iv) Expenses 71.54 147.19 – v) Benefits paid (51.23) – (85.71) vi) Value of benefit – – – vii) Fair value of plan assets as at the end of the year (31.03.2009) 162.48 615.72 669.86 Funded status – – 79.19 The net asset in respect of gratuity plan is not recognised as it is lying in irrevocable trust fund approved by Income tax authorities. (e) Actuarial assumptions i) Discount rate used 9.00% 9.00% 8.00% ii) Expected return on plan assets NA NA 8.00% Estimates of future salary increase considered in actuarial valuation taking into account the inflation, seniority and other relevant factors. p) AS - 16 Borrowing Cost The borrowing cost has been treated in accordance with Accounting Standard on borrowing cost (AS 16) issued by The Institute of Chartered Accountants of India. During the year, there were no borrowings attributable to qualifying assets and hence no borrowing costs were capitalised. q) AS - 17 Segment Reporting The Company operates in only one segment viz., Automotive Components and there are no separate reportable segments. As the income from software services division is less than 10% of total income, it is not recognised as a separate segment. 40


  • Page 42

    Schedules (continued) XVIII. NOTES ON ACCOUNTS (continued) (Rupees in lakhs) As at/ As at/ Year ended Year ended 31.03.2009 31.03.2008 r) AS - 18 Related Party Disclosure Disclosures are made as per the requirements of the standard and clarifications issued by The Institute of Chartered Accountants of India. s) AS - 19 Accounting of leases As the Company has not entered in to any lease agreement during the year, this standard is not applicable. t) AS - 20 Earnings Per Share (EPS) Disclosure is made in the Profit and Loss Account as per the requirements of the standard. u) AS - 21 Consolidated Financial Statements Not applicable as the Company has no subsidiary. v) AS - 22 Accounting for Taxes on Income Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax liability and asset are recognised, subject to the consideration of prudence, on timing differences using the tax rates substantively enacted on the Balance Sheet date. w) AS - 23 Accounting for Investments in Associates in Consolidated Financial Statements Not applicable as the Company has no shareholding/control in any associates. x) AS - 24 Discontinuing Operations Not applicable as the Company has not discontinued any operations during the year. y) AS - 25 Interim Financial Reporting The Company has elected to publish quarterly financial results which were subject to limited review by the statutory auditors. The Company has started publishing the unaudited financial results from quarter ended 31st December 2008 as the shares got listed only on 1st October 2008. z) AS - 26 Intangible Assets During the year, the Company acquired the following assets falling under the definition of intangible assets as per the Accounting Standard and the following disclosure is made in respect of those assets : Licences & Software : - Useful life of the assets 2 years 2 years - Amortisation rate used 50% each year 50% each year as depreciation as depreciation 41


  • Page 43

    Schedules (continued) XVIII. NOTES ON ACCOUNTS (continued) (Rupees in lakhs) As at/ As at/ Year ended Year ended z) AS - 26 Intangible Assets (contd.) 31.03.2009 31.03.2008 - Gross carrying amounts at the beginning and at the end of the period together with additions and deletions during the year Opening balance 247.34 188.44 Additions during the year 55.40 58.90 Total (A) 302.74 247.34 Amortisation Opening balance 218.33 151.34 During the year 56.40 66.99 Total amortisation (B) 274.73 218.33 Closing balance (A – B) 28.01 29.01 aa) AS - 27 Financial Reporting of Interests in Joint Ventures The Company has no interest in any joint venture. ab ) AS - 28 Impairment of Assets During the year 2008-09, the carrying amount of the assets net of accumulated depreciation as on the balance sheet date is not less than the recoverable amount of those assets. However, during 2007-08, in respect of certain plant and machinery, the carrying amount net of accumulated depreciation is less than the recoverable amount by Rs 9.62 lakhs and the impairment loss has been provided. This is included in the depreciation charge. ac) AS - 29 Provisions, contingent liabilities and contingent assets i) Provisions In respect of warranty obligations, provision is made in accordance with terms of sale vide Schedule XIV to Balance Sheet ii) Contingent liabilities Amount for which the Company is contingently liable is disclosed in note 6. iii) Contingent assets Contingent assets which are likely to give rise to possibility of inflow of economic benefits - Nil iv) Contested liabilities are detailed in note 6. 2. Amount of loan repayable within one year: a) Secured - from banks 3,895.44 2,023.38 b) Unsecured - from bank 500.00 0.06 3. Sundry creditors include: a) Total outstanding dues to Micro and Small enterprises 220.05 294.53 b) Total outstanding dues to creditors other than Micro and Small enterprises 2,510.98 4,295.66 The above dues are furnished based on the information available with the Company in respect of Micro, Small and Medium Enterprises (as defined in the Micro, Small and Medium Enterprises Development Act, 2006). 42


  • Page 44

    Schedules (continued) XVIII. NOTES ON ACCOUNTS (continued) (Rupees in lakhs) As at/ As at/ Year ended Year ended 31.03.2009 31.03.2008 The Company is regular in making payments of dues to such enterprises before due dates agreed upon. Hence the question on payment/provision of interest towards belated payments does not arise. c) Investors Education and Protection Fund Unclaimed dividend 7.39 – 4. Bank balance include: Unclaimed dividend 7.39 – 5. Loans and Advances include: - Amount lying with central excise 5.00 15.66 - Amount due from an officer of the Company 1.81 1.91 - Maximum amount due from an officer of the Company at any time during the year 1.91 1.98 6. Contingent Liability not provided for: Liability not provided for: i) On counter guarantee given to bankers 59.03 32.47 ii)On letters of credit opened with bankers 18.61 23.59 iii) Capital commitments not provided 82.93 1,695.35 iv)On account of future export obligations (under Export Promotion 1,913.23 1,969.01 Capital Goods scheme and Advance Licence) v) Bills discounted 2,966.48 10,079.28 Contested Liabilities: i) Customs duty 5.17 – 7. Tax deducted at source on a) Interest receipts 0.71 0.40 b) Miscellaneous income 11.48 3.72 8. Audit fees consists of a) Audit fees 12.00 10.00 b) Certification fees 2.00 1.00 c) Taxation matters 2.00 1.00 d) Reimbursement of expenses 1.99 1.37 e) Other services 0.50 – 9. Contribution to provident and other funds include : a) Contribution towards gratuity as per scheme framed by Life Insurance Corporation of India 4.20 83.79 b) Contribution towards superannuation as per scheme framed by Life Insurance Corporation of India – 24.02 c) Contribution to pension fund 147.19 (177.00) d) Contribution towards deposit linked insurance as per scheme framed by Life Insurance Corporation of India 3.83 2.57 10. Repairs include Stores consumed 19.74 47.05 43


  • Page 45

    Schedules (continued) XVIII. NOTES ON ACCOUNTS (continued) (Rupees in lakhs) As at/ As at/ Year ended Year ended 31.03.2009 31.03.2008 11. Interest paid comprises of: a) Interest on fixed loans 134.30 – b) Interest on others 570.65 373.31 c) Less: Interest receipts on bonds, deposits, staff advances and Other advance made (gross) 19.53 44.63 Interest (net of income) 685.42 328.68 12. Expenses in cases of 1% of the total revenue Fees paid for management services 685.22 700.00 13. Research and development Following the order of the Hon’ble High Court of Judicature at Madras in the demerger of brakes division into the Company, as required by the Department of Science and Technology, Ministry of Science and Technology, the letter of undertaking was submittted that notwithstanding the demerger of the brakes business from Sundaram-Clayton Limited, Chennai (SCL) into this Company, the procedures, processes, design and development matters relating to brakes business adopted by the demerged Company will be continued and carried on by this Company, without any change. This undertaking was given to enable this Company to continue to enjoy the weighted deduction under Section 35(2AB) of the Income Tax Act 1961, without any break from the appointed date viz.., 1st January 2007, when as per this Scheme of Arrangement the brakes business devolved upon this Company from SCL. For the Year For the Year For the period ended 31.3.2009 ended 31.3.2008 from 01.01.2007 to 31.03.2007 Revenue Expenditure 561.95 838.43 332.17 Capital expenditure a. Land & buildings 23.82 – – b. Other than land & buildings 108.34 144.45 50.59 14. Previous year’s figures have been regrouped wherever necessary to conform to current year's classifcation. 15. Disclosure made in terms of clause 32 and clause 41 of the Listing Agreement with Stock Exchanges Particulars Name of the Company Amount Maximum Amount outstanding amount due outstanding as on at any time as on 31.03.2009 during the year 31.03.2008 (a) Loans and advances (i) Loans and advances in the The Company does not have nature of loansmade to any subsidiary. subsidiary Company (ii) Loans and advances in the The Company does not have any nature of loans made to associate Company. associate Company (iii) Loans and advances in the The Company has not given any nature of loans made to firms/ advance to firms/companies in companies in which directors which director of the Company are of the Company are interested interested. 44


  • Page 46

    Schedules (continued) XVIII. NOTES ON ACCOUNTS (continued) 15. Disclosure made in terms of clause 32 and clause 41 of the Listing Agreement with Stock Exchanges (continued) Particulars Name of the Company Amount Maximum Amount outstanding amount due outstanding as on at any time as on 31 03 2009 during the year 31 03 2008 (b) Investments by the Company (i) In subsidiary companies The Company does not have any subsidiary. (ii) In associate companies The Company does not have any associate Company. (iii) In joint venture The Company does not have any joint venture. ( c) Investments by the holding The Company was not a sub- Company sidiary of any holding Company during 2008-09. On 3rd June 2009, the Company became a subsidiary of Clayton Dewandre Holdings Ltd, Rotterdam, The Netherlands when the latter acquired 35.83% of share capital and is now holding 75% of the share capital. 16. Related party disclosure LIST OF RELATED PARTIES a) Reporting entity WABCO-TVS (INDIA) Limited, Chennai b) Subsidiary companies The reporting entity does not have any subsidiary Company. c) Associate companies 1* Sundaram Industries Limited, Madurai 2* Southern Roadways Limited, Madurai 3* T V Sundram Iyengar & Sons Limited, Madurai 4** Clayton Dewandre Holdings Limited, Rotterdam, The Netherlands. * Ceased to be associate companies with effect from 3rd June 2009 consequent to the disposal of 35.83% of the shares held in the Company to Clayton Dewandre Holdings Ltd, Rotterdam, The Netherlands. ** The Company became a subsidiary of Clayton Dewandre Holdings Ltd, Rotterdam with effect from 3rd June 2009 consequent to the purchase of 35.83% shares. 45


  • Page 47

    Schedules (continued) XVIII. NOTES ON ACCOUNTS (continued) LIST OF RELATED PARTIES (continued) d) Fellow Subsidiary companies 1 WABCO Fahrzeugbremsen, Germany 2 WABCO China Co Ltd, China 3 WABCO France SAS, France 4 Meritor WABCO Vehicle Control Systems, USA 5 Shandong Wieming Automotive Product Co. Ltd, China 6 WABCO (Shanghai) Management Co Limited, China 7 WABCO Automotive, South Africa 8 WABCO Automotive UK Ltd, United Kingdom 9 WABCO Australia Pty Limited, Australia 10 WABCO Compressor Mfg. Co. USA 11 WABCO Hong Kong Limited, Hong Kong 12 WABCO Japan Inc, Japan 13 WABCO Korea Ltd, Korea 14 WABCO Polska Z.O.O, Poland 15 WABCO Development Gmbh, Germany 16 WABCO Logistics GmbH, Germany 17 WABCO Asia Private Ltd, Singapore 18 WABCO Europe BVBA, Belgium 19 WABCO Austria GesmbH, Austria 20 WABCO Belgium BVBA/SPRL, Belgium 21 WABCO do Brasil Industria e comercio DE freios Ltd, Brazil 22 WABCO Brzdy K Vozidlum spol S.R.O, Czeh Republic 23 WABCO Gmbh, Germany 24 WABCO Radbremsen Gmbh, Germany 25 WABCO Automotive Italia SRL, Italy 26 WABCO BV, Netherlands 27 WABCO Europe Holdings BV, Netherlands 28 WABCO Espana SLU, Spain 29 WABCO Automotive AB, Sweden 30 WABCO (Schweiz) GmbH, Switzerland 31 WABCO Automotive B.V. Netherlands 32 WABCO ARAC Kontrols Sistemleri Destek VE Pazarlama Limited Sirketi , Turkey 33 WABCO Holdings INC,USA e) Key management personnel Mr C N Prasad - Whole-time director till 17.06.2009 Mr P.Kaniappan- Whole-time director from 17 06 2009 46


  • Page 48

    Schedules (continued) XVIII NOTES ON ACCOUNTS (continued) 17 Related party transactions (Rupees in lakhs) SI No Nature of transactions Name of the Company Key Key Fellow Fellow management management Associates Associates Subsidiary Subsidiary personnel personnel year ended year ended year ended year ended year ended year ended 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08 1 Purchase of goods Sundaram Industries Limited, Madurai 816.64 1159.76 - - Shandong Wieming Automotive Product Co Ltd, China - - 2.87 - - - WABCO Westinghouse Fahrzeugbremsen Germany - - 1443.05 - - - WABCO do Brasil Industria e Comercio DE Freios Ltd, Brazil - - 1.80 - - - WABCO France, France - - 98.35 - - - WABCO China Ltd, China - - 540.97 - - - WABCO Compressor Manufacturing Co, USA - - 0.69 - - - 816.64 1,159.76 2,087.73 - - - 2 Receiving of services Southern Roadways Limited , Madurai 42.14 24.73 - - T V Sundram Iyengar & Sons,Madurai 0.97 4.67 - - WABCO (Shanghai) Management Co., Limited, China - - 61.38 - - - 43.11 29.40 61.38 - 3 Sale of goods T V Sundram Iyengar Sons Limited, Madurai. 946.10 1,803.00 - - - - Meritor WABCO Vehicle Control Systems, USA - - 191.27 - - - WABCO Logistics GmbH, Germany - - 938.31 - - - WABCO China Co Ltd, China - - 1,080.92 - - - WABCO Automotive, South Africa - - 10.01 - - - WABCO Compressor Mfg. Co,USA - 879.52 - - - WABCO Polska Z.O.O, Poland - 162.47 - - - WABCO Automotive UK Ltd, United Kingdom - - 205.82 - - - 946.10 1,803.00 3,468.32 - - - 47


  • Page 49

    Schedules (continued) XVIII NOTES ON ACCOUNTS (continued) 17 Related party transactions (continued) (Rupees in lakhs) SI No Nature of transactions Name of the Company Key Key Fellow Fellow management management Associates Associates Subsidiary Subsidiary personnel personnel year ended year ended year ended year ended year ended year ended 2008-09 2007-08 2008-09 2007-08 2008-09 2007-08 4 Rendering of Services WABCO Development Gmbh, Germany - - 1,356.29 - - - - - 1,356.29 - - - 5 Receivables as on 31.03.2009 T V Sundram Iyengar & Sons Limited, Madurai. 174.71 185.59 - - - - WABCO Logistics GmbH, Germany - - 202.34 - - - WABCO China Co Ltd, China - - 328.21 - - - WABCO Automotive UK Ltd, Uinted Kingdom - - 120.78 - - - Meritor WABCO Vehicle Control Systems, USA - - 22.38 - - - WABCO Development GmbH, Germany - - 322.88 - - - WABCO Compressor Mfg. Co,USA 120.94 WABCO Polska Z.O.O, Poland 29.11 174.71 185.59 1,146.64 - - - 6 Payables as on 31.03.2009 Sundaram Industries Limited ,Madurai 61.58 96.70 - - Southern Roadways Limited ,Madurai 7.01 3.21 - - T.V.Sundram Iyengar & Sons Limited ,Madurai 1.83 4.16 - - WABCO do Brasil Industria e Comercio DE Freios Ltd, Brazil - - 0.27 - - - WABCO Compressor Manufacturing Co, USA - - 0.69 - - - WABCO Westinghouse Fahrzeugbremsen, Germany - - 191.44 - - - 70.42 104.07 192.40 - - - 7 Remuneration to whole time director - - - - 87.89 0.62 48


  • Page 50

    Schedules (continued) XVIII. NOTES ON ACCOUNTS (continued) 18. Information pursuant to the provisions of part II of Schedule VI of the Companies Act, 1956 (vide Notification dated 30th October, 1973 of the Ministry of Corporate Affairs, Government of India) (Rupees in lakhs) Year ended 31.03.2009 Year ended 31.03.2008 Quantity Value Quantity Value I. RAW MATERIALS CONSUMED 1. a) Basic raw materials Steel sheets,bar materials & tubes Kgs 37.232 24.96 12,04,293 693.40 Castings and forgings Nos 43,99,336 5,299.54 59,48,070 6,255.19 b) Intermediates and components (which individually do not account for 10 % or more of the total value of consumption) – 19,486.82 – 23,887.25 24,811.32 30,835.84 % of total % of total consumption consumption 2 Consumption of raw materials and components a) Imported 9.0 2,225.36 9.0 2,772.89 b) Indigeneous 91.0 22,585.96 91.0 28,062.95 100.0 24,811.32 100.0 30,835.84 II. CONSUMPTION OF MACHINERY SPARES a) Imported 2.00 1.81 – – b) Indigeneous 98.0 105.78 100.0 85.67 100.0 107.59 100.0 85.67 III. IMPORTS (CIF value) a) Raw materials 3,147.55 3,356.40 b) Spares, stores and components 193.88 205.82 c) Capital goods 743.82 1,821.12 IV. EXPENDITURE IN FOREIGN CURRENCY a) Commission on export sales 27.17 6.22 b) Travel 109.10 151.65 c) Training 14.56 13.99 d) Consultancy, retainer - Productivity improvement 10.12 13.46 - Recruitment 61.37 18.27 e) Subscription to associations – 0.49 f) Books and periodicals 0.50 0.07 g) Warranty related – 1.05 h) Others 77.26 77.90 V. PAYMENT TO NON RESIDENT SHAREHOLDERS a) No. of non resident shareholders One One b) No. of shares held by non residents 74,30,000 74,30,000 c) Dividend - relating to 31st March 2008 interim 445.78 943.63* - relating to 31st March 2009 interim 185.74 – * Apportioned and reckoned as interim dividend on the basis of the profit earned in 2007-08 pursuant to the scheme of arrangement between the Company and Sundaram-Clayton Limited, Chennai and respective shareholders and creditors sanctioned by the Hon’ble High Court of Judicature at Madras vide its order dated 20.02.2008. VI. EARNINGS IN FOREIGN EXCHANGE a) Exports (on FOB basis) 3,433.18 1,863.46 b) Freight and insurance recovery 100.44 67.29 c) Software service 1,041.40 767.56 d) R & D Service 373.40 29.96 e) Others 662.22 93.30 49

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