avatar Wabco Holdings Inc. Manufacturing
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    7th Annual Report 2011


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    Board of Directors Share Transfer Agent Factories M LAKSHMINARAYAN* Sundaram-Clayton Limited Plot No. 3 (SP), III Main Road, Chairman New No. 22 (Old No. 31), Ambattur Industrial Estate, Railway Colony 3rd Street, Chennai 600 058 D E UDWADIA Mehta Nagar, Chennai 600 029 Tel. : 044 4224 2000 Tel. : 044-2374 1889 Fax : 044 4224 2009 NARAYAN K SESHADRI 044-2374 2939 C N PRASAD# Large Sector, Fax : 044-2374 1889 Adityapur Industrial Area, NIKHIL MADHUKAR VARTY E-mail : kr.raman@scl.co.in Gamharia, Seraikella-Kharsawan Dist. sclshares@gmail.com Jharkhand 832 108 LEON LIU investorscomplaintssta@scl.co.in Tel. : 0657 661 6800 TREVOR LUCAS madhavan.rajagopalan@wabco-tvs.co.in Fax : 0657 238 7997 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, 3rd Floor, Sigappi Achi Building Natham Sub-Post, Chengalpet, P KANIAPPAN 18/3, Rukmanilakshmipathy Road Kancheepuram District 603 002 Egmore, Chennai 600 008 Tel. : 044 4744 2000 Chief Financial Officer Fax : 044 4749 0006 T S RAJAGOPALAN Auditors Software Design Centres S.R. BATLIBOI & ASSOCIATES General Manager - Finance and Chartered Accountants “Ispahani Centre”, 7th & 5th Floor, Secretary 2nd Floor, TPL House, 123/124 Nungambakkam High Road, R MADHAVAN No. 3, Cenotaph Road, Chennai 600 034 Chennai 600 018 Tel. : 044 2828 5000 Fax : 044 2833 2212 Audit Committee Solicitors & Advocates NARAYAN K SESHADRI UDWADIA & UDESHI Chairman Solicitors & Advocates D E UDWADIA Elphinstone House 1st Floor, 17 Murzban Road C N PRASAD# Mumbai 400 001 TREVOR LUCAS@ CONTENTS Page No. Investors’ Grievance Committee Registered Office NARAYAN K SESHADRI Plot No. 3 (SP), III Main Road, Notice to the Shareholders 3 Chairman Ambattur Industrial Estate, Chennai 600 058 Directors’ report to the shareholders 7 P KANIAPPAN Tel. : 044 4224 2000 C N PRASAD# Fax : 044 4224 2009 Management discussion and analysis report 11 TREVOR LUCAS@ Web Site : www.wabco-tvs.com Report on corporate governance 14 Listing of Shares with Auditors’ certificate on corporate governance 24 Madras Stock Exchange Limited Chennai Auditors’ report to the shareholders 25 National Stock Exchange of India Limited Balance sheet 28 Mumbai Profit & loss account 29 Bombay Stock Exchange Limited Mumbai Schedules 30 Cash flow statement 49 * from 25th October 2010 # General Business Profile 51 upto 12th May 2011 @ from 12th May 2011 1


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    FINANCIAL HIGHLIGHTS Rupees in lakhs Year ended March 31st 2007-08 2008-09 2009-10 2010-11 Profit and Loss Account Sales 54655 42594 59126 86780 Other income 1266 2003 1828 3143 Total income 55921 44597 60954 89923 Gross profit before interest, depn & tax 11822 7354 13574 20596 Depreciation 1012 1393 1444 1442 Profit before interest & tax 10810 5960 12130 19154 Interest 373 705 296 17 Profit before taxation 10437 5255 11834 19137 Profit after taxation 6984 3552 7819 12743 Balance Sheet Net Fixed assets 17407 19528 18677 19031 Investments 866 900 221 1220 Net current assets 843 5758 9178 19294 Total 19116 26186 28076 39545 Share capital 948 948 948 948 Reserves & surplus 15820 18818 26084 37725 Net worth 16768 19766 27032 38673 Loan funds 2024 6020 719 57 Deferred taxation (net) 324 400 325 815 Total 19116 26186 28076 39545 EPS (Rs) 36.82 18.73 41.22 67.18 DPS (Rs) 10.98 2.50 2.50 5.00 Book value per share (Rs) @ 88.40 104.21 142.51 203.89 Return on capital employed (ROCE) % @ 112.4 26.3 44.7 56.7 Return on net worth (RONW) % @ 83.3 19.4 33.4 38.8 Fixed assets turnover (no of times) @ 6.2 2.3 3.1 4.6 Working capital turnover (no of times) 129.1 12.9 7.9 6.1 Gross profit as % of sales (EBITDA) 21.6 17.3 23.0 23.7 Gross profit as % of total income 21.1 16.5 22.3 22.9 Net profit as % of total income 12.5 8.0 12.8 14.2 ROCE is profit before interest and taxation divided by average networth plus loan funds. RONW is profit after tax divided by average networth Fixed assets turnover is sales divided by average net fixed assets as at the end of the year. Working capital turnover is sales divided by average net current assets as at the end of the year. @ Return on capital employed, Return on net worth and Fixed assets turnover ratios for 2007-08 is based on pre demerger figures and hence not comparable with the ratios for 2008-09, 2009-10 and 2010-11. 2


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    Notice to the Shareholders 6. To consider and if thought fit, to pass with or NOTICE is hereby given that the Seventh Annual without modification, the following resolution as General Meeting of the Company will be held at an ordinary resolution: "The Music Academy", No. 168 (Old No. 368), TTK Road, RESOLVED THAT Messrs. S.R. Batliboi & Associates, Chennai 600 014 on Wednesday, the 27th July 2011 Chartered Accountants, 2nd floor, TPL House, No.3 at 10.00 a.m. to transact the following business: Cenotaph Road, Chennai 600 018, holding Firm 1. To consider and if thought fit, to pass with or Registration No.101049W allotted by the Institute of without modification, the following resolution as Chartered Accountants of India, be and are hereby an ordinary resolution: appointed as statutory auditors of the Company to RESOLVED THAT the audited balance sheet as at hold office from the conclusion of this Annual General 31st March 2011 and the profit and loss account of Meeting until the conclusion of the next Annual General the Company for the year ended on that date, together Meeting of the Company. with the directors' report and the auditors' report RESOLVED FURTHER THAT the board of directors thereon as presented to the meeting be and the same of the Company be and is hereby authorized to fix are hereby approved and adopted. their remuneration and reimburse their travelling and out of pocket expenses. 2. To consider and if thought fit to pass with or without modification the following resolution as 7. To consider and if thought fit, to pass with or an ordinary resolution: without modification, the following resolution as RESOLVED THAT, pursuant to the recommendation a special resolution: of the board of directors of the Company, a dividend RESOLVED THAT pursuant to section 21 and other of Rs. 5.00 per share on 1,89,67,584 equity shares applicable provisions of the Companies Act 1956 and of Rs. 5/- each fully paid up absorbing a sum of subject to the approval of the Central Government, Rs. 948.38 lakhs be and is hereby declared for the the name of the company be changed to "WABCO year ended 31st March 2011 and the same be paid INDIA LIMITED”; to the shareholders whose name appear in the register of members of the Company as at the close of FURTHER RESOLVED THAT 21st July 2011. a. the said change of name shall be complete and take effect from the date of the fresh Certificate 3. To consider and if thought fit, to pass with or of Incorporation issued by the Registrar of without modification, the following resolution as Companies, Chennai pursuant to and in an ordinary resolution: accordance with Section 23 of the said Act; RESOLVED THAT Mr Narayan K Seshadri, director who retires by rotation and being eligible for b. the new name "WABCO INDIA LIMITED" be re-appointment, be and is hereby re-appointed as a substituted in the Memorandum and Articles of director of the Company. Association for the existing name wherever necessary upon the change of name taking effect 4. To consider and if thought fit, to pass with or as aforesaid; without modification, the following resolution as c. the board of directors be and is hereby authorized an ordinary resolution: to do all such acts, deeds, matters and things RESOLVED THAT Mr P Kaniappan, Whole-time director as may be deemed necessary or expedient to who retires by rotation and being eligible for re- give effect to this resolution. appointment, be and is hereby re-appointed as a director of the Company. By order of the board 5. To consider and if thought fit, to pass with or Chennai R MADHAVAN without modification, the following resolution as 12th May 2011 General Manager - an ordinary resolution: Finance and Secretary RESOLVED THAT Mr M Lakshminarayan, who was appointed in the casual vacancy caused by the Registered office: resignation of Mr Venu Srinivasan and holds office Plot No. 3 (SP), III Main Road upto the date of this Annual General Meeting be and Ambattur Industrial Estate is hereby appointed as a director. Chennai 600 058. 3


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    Notes: proxy form and hand over the slip at the entrance of the meeting hall. 1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend 9. In terms of clause 49 (IV)(G) of the listing agreement and vote instead of himself and the proxy or proxies with the stock exchanges, a brief resume of directors, so appointed need not be a member or members, who are proposed to be re-appointed in this meeting, as the case may be, of the Company. The instrument nature of their expertise in specific functional areas, their appointing the proxy and the power of attorney or other directorships and committee memberships and other authority, if any, under which it is signed or their shareholdings in the Company and their relationships a notarially certified copy of that power or authority with other directors in the Company are given below: shall be deposited at the registered office of the Company not later than 48 hours before the time Brief resume and other information in respect of fixed for holding the meeting. directors seeking re-appointment at the annual general meeting 2. An explanatory statement pursuant to section 173(2) of the Companies Act, 1956 in respect of item nos. Mr Narayan K Seshadri 5 and 7 as set out in the notice is annexed hereto. Born on 13th April 1957, Mr Narayan K Seshadri is a graduate of Science from the University of Bangalore and 3. The Register of Members and the share transfer register a Chartered Accountant with over twenty five years of will remain closed for a period of 6 days from professional experience. 22nd July 2011 to 27th July 2011 (both days inclusive) for the purpose of dividend to be approved by the He was the founder Chairman and CEO of Halcyon Group, shareholders at the ensuing Annual General Meeting an Investment Advisory and Management Services of the Company. organization. Halcyon Group runs a USD 300 million Special Situations Fund investing in distressed companies 4. In terms of Section 205A read with Section 205C of and latent businesses with considerable potential for growth. the Companies Act, 1956, the dividends declared by the Prior to establishing Halcyon, Mr Narayan K Seshadri was Company, which remain unclaimed for a period of seven the Managing partner at KPMG's Business Advisory Service years will be transferred to the Investor Education and Practice which he helped turnaround and rebuild. Protection Fund (IEPF), established by the Central Besides the industry sectors that he currently works with, Government on the due dates. The particulars of due Mr Narayan Seshadri has advised the Power, Banking and dates for transfer of such unclaimed dividends to IEPF Financial Services, Agribusiness, Pharmaceutical, are furnished in the report on Corporate Governance Healthcare, IT and ITES Sectors at different levels - from forming part of the annual report. policy formulation to corporate strategy, restructuring and Members who have not encashed their dividend warrants organization transformation. in respect of the above periods are requested to make He is the Chairman of the Audit committee of directors their claim by surrendering the unencashed warrants and Investors' Grievance committee of directors of the immediately to the Company. Company. He does not hold any share in the Company 5. Members holding shares in physical form, in their own and he is not related to any other directors of the Company. interest, are requested to dematerialize the shares to Details of his other directorships and membership/ avail the benefits of electronic holding / trading. chairmanship of committees are given below: 6. Members are requested to register their e-mail address S. Committee with the Company/Share transfer Agents immediately No. Name of the company Position held membership/ and participate in the "Green initiative" launched by the chairmanship Ministry of Corporate Affairs. 1 Halcyon Resources and 7. Members holding shares in depository are requested to Management Private Limited Director register their e-mail address with their depository participants and participate in the "Green initiative" 2 Development Credit Bank Director Chairman- launched by the Ministry of Corporate Affairs. Limited Audit Committee 8. Members are requested to affix their signature at the 3 DHFL Venture Capital space provided on the attendance sheet annexed to the India Private Limited Director 4


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    S. Committee He was appointed as whole time director of WTIL on 17th June 2009 No. Name of the company Position held membership/ and will hold that office for a period of five years from that date. chairmanship He has established a world class manufacturing system in WTIL 4 PI Industries Limited Director Member- incorporating some of the best practices such as Total Quality Audit Committee Management (TQM), Lean and Total productive Maintenance (TPM) with year over year productivity improvement. 5 HGB Holdings Private He developed and implemented a vendor development model resulting Limited Director in low cost and high quality supplier base. 6 Magma Fincorp Limited Director Chairman- He is not a director of any other company. He is a member of Audit Committee Investors’ Grievance Committee and Administrative Committee of 7 Kalpatru Power Transmission Director Member- directors of WTIL. Limited Audit Committee He does not hold any share in the company and he is not related 8 Tranzmyoot Capital to any other directors of the company. Management Private Limited Director Mr M Lakshminarayan 9 SBI Capital Markets Limited Director Mr M Lakshminarayan holds Masters Degree in Technology from 10 Radiant Life Care Private the Indian Institute of Technology, Mumbai. He has over 37 years Limited Director experience in distinguished companies such as Tata Motors and 11 Halcyon Enterprises Private Bosch Ltd (formerly MICO). Limited Director He has also headed a product group in Germany for over two years 12 IRIS Business Private during his tenure in Bosch. He has served as Chairman of Southern Limited Director Region at Confederation of Indian Industry and has been an Executive Council Member of the Indian machine Tool Manufacturer's 13 TVS Investments Limited Director Association. He is the Chairman of the Advisory Board of Central Manufacturing Technology Institute, Bangalore. At present he is the Mr P Kaniappan Managing Director of Harman International India Pvt Ltd, a 100% subsidiary of the Audio giant Harman. Mr P Kaniappan is a graduate in mechanical engineering from Regional Engineering College, Karnataka, India and postgraduate He holds 50 shares in the company and he is not related to any in manufacturing systems engineering from University of Warwick, other directors of the company. Details of his other directorships UK. He also holds Executive MBA degree from Great Lakes Institute and membership/chairmanship of committees are given below: of Management Chennai. S. Committee His experience includes 10 years in TVS Motor Company Ltd, Hosur No. Name of the company Position held membership/ responsible for production management in different areas such as chairmanship machining, fabrication, painting, engine and vehicle assembly. 1 Carborundum Universal He was in the purchase department of brakes division in Limited Director Sundaram-Clayton Limited (SCL) in various capacities during 1993 to 1999 and was in the rank of General Manager before elevated 2 Rane (Madras) Limited Director as business head of Foundry division of SCL. He held this position 3 Kirloskar Oil Engines Limited Director from 1999 to 2001 and became Operations head of brakes division 4 Harman International (India) Managing of SCL from 2001 to May 2009 (since demerged to Pvt Limited Director WABCO-TVS (INDIA) Limited (WTIL) from 28th March 2008. 5


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    Explanatory statement pursuant to Section 173(2) of the Companies Act, 1956 Item No. 5 Mr M Lakshminarayan was appointed as a Director at the in connection with the promotion, sales, marketing and th Board meeting held on 25 October 2010 in the casual distribution of the Company's products including for the purpose vacancy caused by the resignation of Mr Venu Srinivasan of branding the Company's products, subject to the terms th on 19 May 2010. Mr Venu Srinivasan would have held and conditions stated therein, for a period of 3 years from nd office as a director upto the date of this Annual General the agreement date i.e. up to 2 June 2012. Meeting had he not resigned. Mr Lakshminarayan accordingly holds office upto the date of this Annual The Company and SCL have however mutually agreed in General Meeting pursuant to provisions of section 262 of writing to (i) the corporate name being changed by the Companies Act, 1956. omitting therefrom SCL's trade mark 'TVS' and (ii) the Company continuing to use the trademark 'TVS' on products Notice has been received from a member of the Company sold, prior to the change of name being effective to under section 257 of the Companies Act, 1956, along with distributors/ secondary channels upto December 2011. The a deposit of Rs 500/- signifying his intention to propose change of the Company's cor porate name to the candidature of Mr M Lakshminarayan for the office of WABCO INDIA LIMITED requires the approval of the director and to move the resolution as set out in item no. shareholders and Central Government under the applicable 5 of the notice. provisions of the Companies Act, 1956. The change of name will become effective only upon issue of a fresh The directors recommend the resolution at item no. 5 of certificate of incorporation. the Notice to be approved as an ordinary resolution by the shareholders. This resolution is hence being placed at the annual general meeting for the approval of the shareholders. The Directors Mr M Lakshminarayan is interested or concerned in the recommend the resolution at item no. 7 of the Notice for resolution, since it relates to his appointment. approval of the shareholders. Item No: 7 Memorandum and Articles of Association is available for inspection at the registered office from 10 a.m. to 2 p.m. In terms of the scheme of demerger approved by the on all working days, up to the date of the meeting. Hon'ble Madras High Court and consequent to the acquisition of 35.83% of shares of our Company by Clayton By order of the board Dewandre Holdings Limited from Indian promoters, viz., rd Chennai R MADHAVAN TVS group of Companies on 3 June 2009, a Name and 12th May 2011 General Manager - Trade Mark Licence Agreement was entered into with Finance and Secretary Sundaram-Clayton Limited (SCL). Registered office: Pursuant to this Agreement, SCL has granted WABCO-TVS Plot No. 3 (SP), III Main Road (INDIA) Ltd a non exclusive licence to use the Trademark Ambattur Industrial Estate "TVS" in its corporate name and as a Trademark and logo Chennai 600 058 6


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    Directors’ report to the shareholders The directors have pleasure in presenting the seventh annual report above paragraph and also increased sales from aftermarket and and the audited accounts for the year ended 31st March 2011. exports. 2. FINANCIAL HIGHLIGHTS The Company has outperformed MHCV market growth in OE Rs. in lakhs through, Details Year ended Year ended a. Increased content per sale; and 31.03.2011 31.03.2010 b. Improved market share Sales and other income 89,922.91 60,953.49 5. CAPITAL EXPENDITURE Gross profit before interest and depreciation 20,596.53 13,573.76 A capital expenditure of Rs. 60 crores is planned for the year 2011-12 after considering the industry growth in this year. Interest 16.92 296.08 Depreciation 1,442.45 1,444.49 6. DIRECTORS Profit before tax 19,137.16 11,833.19 During the year, Mr Narayan K Seshadri, director, Mr P Kaniappan, whole-time director and Mr M Lakshminarayan, director, retire at Provision for taxation (including the ensuing annual general meeting of the Company in terms of deferred tax and tax relating to the articles of association of the Company, and being eligible, offer earlier years) 6,393.98 4,014.23 themselves for re-appointment. Profit after tax 12,743.18 7,818.96 A brief resume of the aforesaid directors and other information Surplus /(loss) brought forward from have been detailed in the notice convening the annual general previous year 11,636.66 5,156.52 meeting of the Company. Appropriate resolutions for their Total 24,379.84 12,975.48 reappointment are being placed for approval of the shareholders Appropriations: at the ensuing annual general meeting. Your directors recommend their reappointment as directors of the Company. Proposed dividend 948.38 474.20 Notice has been received from a member of the Company signifying Dividend tax payable 153.85 78.76 his intention to propose the appointment of Mr M Lakshminarayan Transfer to general reserve 1,274.32 785.86 as director of the Company in terms of section 257 of the Surplus/(Loss) in profit & loss account 22,003.29 11,636.66 Companies Act, 1956 along with the requisite deposit of Rs. 500/-. 24,379.84 12,975.48 On 12th May 2011, Mr C N Prasad, director resigned from the 3. DIVIDEND directorship of the company. The Board of Directors recorded the same at the board meeting held on 12th May 2011 and are not The board of directors have recommended a dividend of Rs. 5.00 proposing to induct a new director to replace him. per share for the year ended 31st March 2011 absorbing a sum of Rs. 948.38 lakhs for approval of the shareholders in the ensuing The Board of Directors at this meeting have placed on record annual general meeting. the valuable services rendered by him during his tenure as a director and also when he was a whole time director from 4. PERFORMANCE 28th March 2008 to 17th June 2009. During the year 2010-11, the sales of medium and heavy commercial Consequent to the resignation of Mr C N Prasad, director, the vehicles (MHCV) registered a positive growth of 33% over the audit committee and Investors' Grievance Committee are previous year 2009-10 and the sale of light commercial vehicles reconstituted. In his place Mr Trevor Lucas a Non-Independent (LCV) registered a positive growth of 28% during the same period. director is inducted as a member in both the committees effective Overall, the commercial vehicle (CV) industry ended with a positive 12th May 2011. growth of 30% over the previous year. During the year, the Company achieved a total turnover of 7. AUDITORS Rs. 899 crores as against turnover of Rs. 609 crores registered Messrs S.R.Batliboi & Associates, Chartered Accountants, Chennai a growth of 47%. The growth in the turnover is due to improved retire at the ensuing annual general meeting and are eligible for economy resulted in growth in CV industry as explained in the re-appointment. 7


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    8. STATUTORY STATEMENTS The whole-time director (CEO) and the chief financial officer (CFO) Conservation of energy, technology absorption and foreign of the Company have certified to the board on financial statements exchange earnings and outgo and other matters in accordance with clause 49(V) of the Listing Agreement pertaining to CEO/CFO certification for the financial The information regarding conservation of energy, technology year ended 31st March 2011. absorption and foreign exchange earnings and outgo is given in A management discussion and analysis report, as required by the Annexure I to this report, as per the requirements of Listing Agreement, is also attached which forms part of this report. Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of 10. CHANGE OF NAME OF THE COMPANY Directors) Rules, 1988. In terms of the scheme of demerger approved by the Hon'ble Particulars of employees Madras High Court and consequent to the acquisition of 35.83% Particulars of employees pursuant to Section 217(2A) of the of shares of our Company by Clayton Dewandre Holdings Limited Companies Act, 1956, read with the Companies (Particulars of from Indian promoters, viz., TVS group of Companies on 3rd June Employees) Rules, 1975, as amended, is set out in Annexure II 2009, a Name and Trademark Licence Agreement was entered and forms part of this report. However, in pursuance of into with Sundaram-Clayton Limited (SCL). Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Pursuant to this Agreement, SCL has granted WABCO-TVS (INDIA) Accounts is being sent to all the Members of the Company Ltd a non exclusive licence to use the Trademark "TVS" in its corporate excluding the aforesaid information and the said particulars will name and as a Trademark and logo in connection with the promotion, be made available on request and also made available for inspection sales, marketing and distribution of the Company's products including at the Registered Office of the Company. Any Member interested for the purpose of branding the Company's products, subject to the in obtaining such particulars may write to the Company Secretary terms and conditions stated therein, for a period of 3 years from the at the Registered Office of the Company. agreement date i.e. up to 2nd June 2012. Directors’ Responsibility Statement The Company and SCL have however mutually agreed in writing Pursuant to the requirement of Section 217(2AA) of the Companies to (i) the corporate name being changed by omitting therefrom Act, 1956 with respect to directors' responsibility statement, it is SCL's trade mark 'TVS' and (ii) the Company continuing to use hereby confirmed: the trade mark 'TVS' on products sold, prior to the change of name (i) that in the preparation of annual accounts for the financial being effective to distributors/ secondary channels upto December year ended 31st March 2011, the applicable accounting 2011. The change of the Company's corporate name to WABCO standards have been followed along with proper explanation INDIA LIMITED requires the approval of its shareholders and relating to material departures; Central Government under the applicable provisions of the Companies Act, 1956. (ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates The change of name will become effective only upon issue of a that were reasonable and prudent so as to give a true and fresh certificate of incorporation. A resolution to this effect is fair view of the state of affairs of the Company at the end included in the Notice of Annual General Meeting. of the financial year and of the profit of the Company for 11. ACKNOWLEDGEMENT the year under review; The directors gratefully acknowledge the support and co-operation (iii) that the directors had taken proper and sufficient care for received from WABCO Europe BVBA, Belgium. the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 The directors thank the vehicle manufacturers, distributors, vendors for safeguarding the assets of the Company and for preventing and bankers for their continued support and assistance. and detecting fraud and other irregularities; and The directors wish to place on record their appreciation of the (iv) that the directors had prepared the accounts for the financial excellent work done by employees of the Company at all levels year ended 31st March 2011 on a "going concern basis". during the year. The directors specially thank the shareholders for the confidence reposed by them in the Company. 9. CORPORATE GOVERNANCE The company has complied with the provisions of the Listing Agreement concerning corporate governance and a report to this For and on behalf of the board effect is attached to this report as required by clause 49 of the Listing Agreement with the stock exchanges. A certificate issued by the auditors of the Company regarding compliance of conditions Chennai M LAKSHMINARAYAN of corporate governance, is also annexed to the said report. 12th May 2011 Chairman 8


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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 viii) Removal of not used coolant motor and unused function in the machine. 1. Measures taken ix) Modification of coolant system to suit our application of i) Changes of light connection of MCB's from 4 to 1 there by component machining. unnecessary light can be switched off. x) Introduce of High efficiency cutting tools in the machine to ii) Reduction of Compressor Power consumption by introducing reduce power consumption. drain valve modification. xi) Combining the machining operation and optimizing tool selection iii) Switching on the of Air Curtains through PLC during usage there by reduction of energy consumption. of doors. xii) Introducing efficient coolant in all grinding machines thereby iv) Provided Thermal Insulation for Chiller Water Pipe line & resulting of power consumption. minimized the wastage of Cooling in the pipe line. xiii) Replacement of all air guns by coolant guns in all machines. v) Reduction of Compressor Power consumption by providing hot xiv) Introduce ceiling fans in production area instead of pedestal air duct reduce inlet the temperature from 44 to 36 deg fan. Celsius. xv) Modifying the light fittings in production area from both sides vi) Provided LED Lights in Office areas in the First Floor for to centre line of the gang way resulted in half of the lighting 200 nos. for first phase. power consumption. vii) Removal of conveyor from machinery where minimum chips This will result in a saving of about Rs 30.86 Lakhs per annum. generated from machine. viii) Removal of not used coolant motor and unused function in B. TECHNOLOGY ABSORPTION the machine. Research & Development (R & D) ix) Modification of coolant system to suit our application of component machining. 1. Specific areas in which R & D is carried out by the company. Existing activities: x) Introduce of High efficiency cutting tools in the machine to reduce power consumption. (a) Automatic Slack Adjuster with patented adjustment mechanism certified by TUV, Germany and is production ready. xi) Combining the machining operation and optimizing tool selection there by reduction of energy consumption. (b) Air cylinder and mounting bracket assembly has been developed for Light Commercial vehicle applications for operating hydraulic The above measures have resulted in an annual saving of about brakes. Rs. 29.27 Lakhs per annum. (c) Type 24/24 Spring Brake Actuator (SBA) (Value engineered 2. Measures Proposed design) - The existing product has been redesigned. i) Avoiding the Fluctuations in the Compressed Air at the end (d) Spring Brake Actuator Type 16/16 is a new design replacing user by providing the Servo Valve. the current Type 16/24 SBA for medium tonnage vehicle ii) Provision of Natural Light to Office areas at first floor. applications. iii) Reduction of lighting power consumption by changing the light (e) Development of Integral Pedal Unit for Indian customers. mounting position from Operational Standard to gang way (f) New range of Graduated Hand Control Valves for Indian center. customers satisfying European regulations. iv) Replacement of street lights to CFL / LED lights wherever suitable. 2. Benefits derived as a result of R & D: v) Recover the Waste Heat from Compressor and transferring (a) Market expansion and improved competitive position through the same to the Surface Protection Unit there by reducing significantly improved products for new markets. the usage of electrical heaters. (b) Combating competition through new Graduated Hand Control vi) Removal of conveyor from machinery where minimum chips Valves and Lift Axle Control System for Indian customers. generated from machine. (c) New opportunity in North America by introducing new range vii) Replacement of High bay lights to CFL/LED lamp wherever of valves with improved performance, temperature and corrosion suitable to maintain the luminous level. resistance. 9


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    (d) Improved safety of vehicles through technology development (b) Benefits derived as a result of the above efforts: of Automatic Slack Adjuster. 1. Significant growth in R&D engineers with standardized training 3. Future plan of action: methods to enhance competency. (i) Development and launch of Lift axle control system for Indian 2. Developed innovative products to improve competitive position market. in the market, expand market through new technologies and (ii) Design and development of Hydraulic Brake Booster and Park systems and leverage global markets. Brake Module for North American OEMs. 3. Development of products with best in class performance and (iii) Series production of valve devices for North American OEMs. reliability. (iv) Value engineered Foot Brake Valve with integrated switch for 4. Enhancement of comfort levels in heavy vehicles, improvement Indian customers. of fuel economy through new technology, which enhances competitive position in markets and increases content per vehicle. 4. Expenditure on R & D: Rs. in Lakhs The new simulation technologies have reduced the product Capital expenditure 169.45 development time and cost significantly. Recurring expenditure (including salaries) 885.24 (c) Details relating to imported technology: (Technology imported 1,054.69 during the last 5 years reckoned from the beginning of the Total expenditure as percentage of sales turnover 1.17% financial year). Nil Technology absorption, adaptation and innovation: (a) Efforts in brief: C. FOREIGN EXCHANGE EARNINGS AND OUTGO 1. Knowledge acquisition in design and development area by EXPORT ACTIVITIES: standardizing continuously through the creation of new design st Exports during the year ended 31 March 2011 amounted to guidelines, calculation methods and standards. Rs. 11,778.97 lakhs. 2. Development of new accelerated test standards for rubber components. Total foreign exchange used and earned: 3. Increased use of engineering plastics in products to reduce a) Foreign exchange used Rs. 8,722.81 lakhs cost and weight and innovatively combine functions. b) Foreign exchange earned Rs. 14,154.45 lakhs 4. Development of new surface protections like zinc aluminum flake coatings for fasteners to enhance the corrosion life of For and on behalf of the board products. 5. Introduction of new analysis technologies through model based Chennai M LAKSHMINARAYAN engineering to simulate the product performance and behavior. 12th May 2011 Chairman 10


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    MANAGEMENT DISCUSSION AND ANALYSIS REPORT The financial year 2010-11 represents the first full year of operations I. Industry Structure and Development: of the Company after the raising of ownership position to 75 % by India's real Gross Domestic Product (GDP) increased by 8.9% in WABCO Holdings Inc., USA a global technology leader and tier one the first half of 2010-11, reflecting strong domestic demand, supplier to the commercial vehicle industry through its indirectly owned especially private consumption and investment, and improving subsidiary Messrs. Clayton Dewandre Holdings Ltd, U.K. external demand. Pumped by a strong agriculture growth and allied The Company recorded all time high sales of Rs. 899 crores during activities (estimated 5.4% in FY11), the economy is expected to 2010-11 as against Rs. 609 crores in 2009-10, registering a growth of 47%. grow at 8.6% during the current financial year as against 8% a Profit before tax also recorded all time high at Rs.191 crores as against year ago. However, inflation is increasing and is expected to be Rs.118 crores in the previous year, representing an increase of 62%. around at 9.3% for the year under review. Growth Rate of Real GDP (%) 2007-08 2008-09 2009-10 2009-10 2010-11 2010-11F Sector Q1 Q2 Q3 Q4 Q1 Q2 Q3F Q4F Agriculture 5.8 -0.1 1.9 0.9 -1.8 0.7 0.4 2.5 4.4 6.5 5.8 5.4 Industry 9.2 4.0 4.6 8.5 12.3 15.1 8.3 11.7 9.0 5.2 7.3 8.2 Services 10.4 9.5 8.0 10.2 7.3 8.5 9.7 9.4 9.7 9.6 9.5 9.4 Real GDP 9.3 6.8 6.3 8.7 6.5 6.6 8.0 8.9 8.9 8.2 8.5 8.6 Source : Central Statistical Organization The commercial vehicle industry registered a significant revival in Investment in Roads & Highways 2010-11 with a growth of 33% in Medium and Heavy Commercial Owing to the above growth drivers and enablers, the production of Vehicles (MHCV) sales volume. This was a result of heightened Medium and Heavy Commercial Vehicles (MHCV) in 2010-11 compared industrial activity, government focus on infrastructure development, to 2009-10 has recorded a growth of 38% as per data given below: rapid urbanization, robust freight demand and improved transporter profitability. Category 2010-11 2009-10 growth The development of road infrastructure is a key factor that influences Medium and Heavy Commercial Vehicles Production 344542 250171 38% the growth of the Indian commercial vehicle industry. With the government paving the way for increased private investment in the (Source: SIAM) road sector, the total investment is set to more than double to Indian companies are gaining recognition as manufacturers of high Rs. 6,370 billion over 2010-11 to 2014-15 from Rs. 2,595 billion quality automotive components in the international market. Presence during the preceding five year period. Since better quality of roads of global players like VOLVO, MAN, Navistar and Daimler will drive will improve transporters' turnaround time and fuel efficiency and technology in our Market. improve their cash flow and profitability, demand for commercial II. Business outlook and overview vehicles will rise. In 2011-12, GDP growth will be propelled by a strong performance by the Industrial sector and growth in the Agricultural & allied Rs. Billion sectors. The services sector too is expected to do well. 7000 6370 The industrial sector is projected to grow by 7.9% mainly due to growth in manufacturing sector. Agriculture sector is expected to 5250 1730 grow at 2.1% and Services sector is expected to grow at 9.9%. This improved outlook of the economy is expected to have positive 3500 1940 2595 impact in the automotive sector, which will see a growth in 597 2011-12. The increased infrastructure development projects in the 1750 domestic market and increase in agricultural output will result in 1266 2700 732 improved freight availability, and hence the MHCV industry is likely 0 to register a positive growth of 10 ~ 12% in the year 2011-12. 2005-06 to 2009-10 2010-11 to 2014-15 III. Opportunities & Threats Rural Roads State Roads National Highways The Company caters to requirements of commercial vehicle segment Source : CRISIL Research of the automotive industry. As the national highway network will 11


  • Page 13

    be strengthened, the mode of transportation for bulk commodities like in the fourth quarter of 2010-11 on account of the floods in steel products, cement and food grains will gradually shift from rail Australia, a major producer. to road. The share of road in the transport of all commodities is hence • Rubber prices breached historical highs and rose by 65 per likely to rise from 53% in 2009-10 to 58% in 2014-15. With improved cent in 2010-11 as floods in Thailand led to a demand-supply road infrastructure, the demand for faster vehicles that carry higher gap. Average rubber prices are expected to be 12-15 per cent payloads is increasing. To ensure road safety, Government of India higher in 2011- 12, as compared to 2010-11 levels. has introduced regulation for mandatory fitment of anti-lock braking • Domestic aluminium prices increased by 17 per cent in systems (ABS) for commercial vehicles carrying hazardous goods from 2010-11 on account of stronger demand. The uptrend is expected October 2006, tractor-trailers and buses with national permit and hilly to continue in 2011-12 as well. terrains from October 2007. Commercial Vehicles manufacturers are likely to pass on these additional Local market growth opportunities through increase in content per costs to customers. However, the sensitivity of transporters' profitability vehicle in the form of introducing new systems / technologies like to the increase in vehicle cost would determine the extent of the cost Automated Manual Transmission (AMT), Electronically Controlled Air actually passed on to the end customer. Suspension (ECAS) Clutch actuation systems etc. will result in increased Since, major growth is expected from Exports as well as from new business opportunities. systems, new product launch at the right time will be the focus area. In the aftermarket side, so far, the Company has commissioned 162 Suitable measures have been factored in the company's operating authorized service centers at strategic locations across the country, plan. The OEM customers across the world would continue their to provide quicker and better service on air brake aggregates. Further, pressure on price reduction from their suppliers. The Company plans to improve availability of quality service in rural areas, the Company to mitigate this risk through cost reduction initiatives such as value also commissioned 145 certified workshops. These initiatives would engineering and global sourcing. result in improved service practices, availability of genuine parts and V. Internal control system and their adequacy generate additional revenue for the Company. The Company has a proper and adequate system of internal controls Being the part of WABCO, growth opportunities are available through to ensure that all assets are safeguarded and protected against loss productionising transfer projects (inter-company export sales) and from unauthorized use or disposition thereof. All transactions are technology transfer. The unit located at Mahindra World City, a Special authorized, recorded and reported correctly. The internal controls are Economic Zone caters to the needs of WABCO plants globally. checked by internal auditors. The observations made by them, With the revival of global economy expected in the near future, management action and time frame are reviewed by the audit committee business opportunities for this unit will increase multifold. In line with of the Board of Directors. Concerns if any are reported to the Board. this, the company has embarked on phase 2 expansion of this unit very recently and construction is progressing. VI. Operations review The Company's competitors are active and continue to supply to key A. Manufacturing customers. As part of expansion and to set up a plant near the major IV. Risks and concerns customers, the company has purchased land near Lucknow in the State of Uttar Pradesh and will take steps to set up the The cyclical nature of the Indian commercial vehicle industry (Company's manufacturing facility there in the year 2012-13. major customer segment) might affect the demand. In 2011-12, operating expenses are likely to rise with the expected increase in prices of The Company's manufacturing facilities follow the best practices key raw materials. The basic raw material index for the automobile such as Total Quality Management (TQM), Total Productive value chain has touched a 6-year peak in the fourth quarter of 2010- Maintenance (TPM) and Lean Manufacturing and has best-in- class practices for safety, work environment, water and energy 11. Prices of key raw materials - steel, rubber and aluminium - have risen sharply owing to supply constraints, driven by natural calamities/ conservation. These initiatives are deployed company wide to achieve significant improvement in productivity and reduction in strong demand. The increase in prices of key raw materials will keep manufacturing cost. the basic raw material price index higher by 7-8 per cent across the automobile value chain in 2011-12 over a 22 per cent rise in 2010- Continuous improvement actions are implemented to improve 11. The trend in prices of key raw materials is as follows:- manufacturing quality and productivity in all the manufacturing locations. • Steel prices have increased by 13 per cent in 2010-11 and by a further 6-7 per cent in 2011-12, on the back of a corresponding During the year under review, the Company obtained "Super rise in coking coal prices and recovery in demand. Prices of Platinum" award, for its manufacturing excellence from Frost & coking coal, a key input for manufacturing steel, rose sharply Sullivan. 12


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    B. Quality The Company is committed to energy conservation. During the year The quality system at the factory aims at achieving total customer the following implemented projects have gained momentum: satisfaction through its focus on improving product quality to • Reduction of Compressor Power consumption by introducing World standards. This is achieved through total employee drain valve modification; involvement and continuous improvement culture. Rigorous usage • Providing LED (Light Emitting Diode) Lights in Office areas in of poka-yokes, utilization of statistical tools for process optimization the first floor, 200 nos. for first phase; and control also contribute towards improving the product quality. • Introduction of High efficiency cutting tools in the machine to The standardization of the quality procedures is aligned reduce power consumption; with QS 9000/ TS 16949 requirements. WTIL is certified for • Provided thermal insulation for Chiller Water Pipe line & minimized TS 16949. the wastage of cooling in the pipe line; TQM is a way of life at WTIL. 100% participation in employee • Use of energy efficient lighting systems. involvement has been successful for the past 11 consecutive years. IX. Community development and social responsibility Employees have completed more than 226 projects by applying As a corporate citizen, the Company believes in its social responsibility statistical tools through QC Circles in 2010-11. The average and community development activities. Activities to be undertaken number of suggestions implemented per employee is 61 in 2010- in this regard will be identified and action will be taken thereof. 11 which is close to international benchmark. X. Financial statement C. Cost management Particulars Year ended Year ended The Company continues its rigorous focus on its costs through 31st March 2011 31st March 2010 an effective cost deployment system. Value engineering and Rs. in lakhs % Rs. in lakhs % global sourcing projects are being pursued for cost reduction Sales 86,779.73 96.5 59,125.80 97.0 and also to insulate from cost escalation. Commodity sourcing Other income 3,143.18 3.5 1,827.69 3.0 from prime producers and price negotiation with customers helps Total income 89,922.91 100.0 60,953.49 100.0 in managing the cost effectively and efficiently. Raw materials D. Information Technology consumed 49,495.88 55.0 33,024.05 54.2 The Company uses ERP system that integrates all business Staff cost 7,119.49 7.9 5,443.02 8.9 processes across the Company as well as customers and Stores & tools suppliers. During the year, the Company has focused on further consumed 3,555.41 4.0 2,157.83 3.5 leveraging the ERP system. Power & fuel 1,430.63 1.6 988.97 1.6 VII. Human Resource Development Repairs & The Company focuses on attracting the best talent and enjoys a good maintenance 808.69 0.9 685.55 1.1 brand image across leading educational institutions and job seekers. Other expenses 6,916.28 7.7 5,080.31 8.4 The Company blends successfully mid career recruitment with internally Interest 16.92 0.0 296.08 0.5 grown talent through talent management process. A reward and Depreciation 1,442.45 1.6 1,444.49 2.4 recognition system is in place to provide fast track growth for high Total expenditure 70,785.75 78.7 49,120.30 80.6 potential employees. Career development workshops are undertaken Profit before tax 19,137.16 21.3 11,833.19 19.4 to identify such high potential. Provision for Executives are sponsored to overseas and inland universities for taxation 6,393.98 7.1 4,014.23 6.6 developing their capabilities to handle new technologies and Profit after tax 12,743.18 14.2 7,818.96 12.8 management practices. Customised management development XI. Cautionary statement programs have been developed with reputed educational institutions to hone the leadership skills of the senior executives. Statements in the management discussion and analysis report describing the Company's objectives, projections, estimates and The Company continues to maintain its impeccable record on industrial expectations may be "forward looking statements" within the meaning relations. st of applicable securities laws and regulations. Actual results could As of 31 March 2011, the Company had 1108 employees on its differ materially from those expressed or implied. Important factors rolls. that could make a difference to the Company's operations include, VIII. Environment & Safety among others, economic conditions affecting demand / supply and Safety management is integrated with the overall environment, health price conditions in the domestic and overseas markets in which the and safety (EHS) management system. The Company has been Company operates, changes in the Government regulations, tax laws certified for ISO 14001 systems. and other statutes and incidental factors. 13


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    REPORT ON CORPORATE GOVERNANCE 1. Company's philosophy on code of governance Chairman is a Director and not related to any promoter of The Company believes in transparency, professionalism and the Company as defined under clause 49 of the Listing accountability, which are the basic principles of Corporate Agreement. Governance. The Company would constantly endeavour to improve The number of Independent Directors is one third of its total on these aspects. strength. Thus, the Company meets with the requirements of composition of the board as per the Listing Agreement. 2. Board of directors 2.2 Board Meetings: 2.1 Composition and category of directors: The Company, in consultation with the Directors, prepares As of 31st March 2011, the total strength of the Board of and circulates a tentative annual calendar for the meetings Directors (the board) was nine directors. All the directors of the committees / board in order to assist the Directors except the whole-time director are non-executive directors. for planning their schedules to participate in the meetings. Out of the eight Non-Executive Directors, three Directors viz., During the year 2010-11, the Board met 4 times on Messrs M Lakshminarayan, D E Udwadia and Narayan K 4th May 2010, 28th July 2010, 25th October 2010 and Seshadri are independent Directors. 19th January 2011 and the gap between two meetings did During 2010-11, Mr Venu Srinivasan resigned as Director not exceed four months. and Chairman on 19th May 2010. Mr M Lakshminarayan 2.3 Attendance and other directorships: was appointed as a Director and was elected as Chairman The details of attendance of the Directors at the board at the Board Meeting held on 25th October 2010. meetings, during the year, and at the last Annual General Mr C N Prasad has resigned as Director on 12th May 2011. Meeting held on 26th August 2010 and also the number of The total strength of the Board of Directors as on other directorships and committee memberships/ 12th May 2011 is eight directors. chairmanships as on 31st March 2011 are as follows: Attendance Number of directorships and particulars committee member / chairmanships Name of the director M/s. Category Board Last Other Committee Committee meeting AGM directorships* memberships** chairmanships M Lakshminarayan C-I 2 NA 5 — — P Kaniappan WTD-NI 4 Yes — — — C N Prasad @ NE-NI 3 Yes 8 6 — Narayan K Seshadri NE-I 3 Yes 13 4 2 D E Udwadia NE-I 3 Yes 18 9 1 Nikhil Madhukar Varty NE-NI 1 No 3 — — Leon Liu NE-NI 4 No 11 — — Trevor Lucas NE-NI 2 Yes 5 — — Kurt Lehmann NE-NI 1 Yes — — — @ resigned on 12th May 2011 * includes private companies. ** includes committees where the director is also chairman. C- I : Chairman Independent WTD : Whole-time Director - Non Independent NE-I : Non executive - Independent director NE-NI : Non executive - Non-independent director None of the Directors is a member in more than 10 board level committees or chairman of more than 5 such committees, as required under clause 49 of the listing agreement. 14


  • Page 16

    2.4 Access to information and Updation to directors: 3.1 Brief description of terms of reference: The board reviews all information provided periodically for The Audit Committee of the Company is entrusted with the discussion and consideration at its meetings in terms of responsibility to supervise the Company's internal control and clause 49 of the Listing Agreement. financial reporting process and inter-alia performs the following functions: Functional heads are present whenever necessary and apprise all the directors about the developments. They also make a. Overseeing the Company's financial reporting process presentations to the board and audit committee of directors. and the disclosure of financial information. Apart from this, the observations of audit carried out by the b. Reviewing with the management quarterly and annual internal auditors and the compliance report on payment of financial statements before submission to the board for statutory liabilities submitted by a firm of Chartered approval with particular reference to the matters specified Accountants are placed and discussed with functional heads. in the Listing Agreement. The board also reviews the declarations made by the c. Reviewing the related party transactions. Whole-time Director and General Manager - Finance and d. Reviewing the reports of internal auditors and ensuring Secretary of the Company regarding compliance of all that adequate follow-up action is taken by the applicable laws on quarterly basis. management on observations and recommendations 2.5 Code of Business Conduct and Ethics for board and senior made by the internal auditors. management personnel: e. Recommending to the board the appointment / The Company has in place the Code of Business Conduct re-appointment / replacement of the statutory auditors and Ethics for Board and Senior Management personnel and the fees payable for audit and for other services (the Code) approved by the board. The Code has been rendered by the statutory auditors. communicated to Directors and the members of the senior f. Reviewing with the management, the performance of management. The Code has also been displayed on the statutory and internal auditors. Company's website www.wabco-tvs.com. g. Reviewing with the management, external and internal All the board members and senior management personnel auditors, the adequacy of internal control systems. have affirmed compliance with the Code for the year ended h. Reviewing the adequacy of internal audit functions and 31st March 2011. The annual report contains a declaration systems, structure, reporting process, audit coverage to this effect signed by the Whole-time Director and General and frequency of internal audit. Manager - Finance and Secretary of the Company as i. Discussion with external auditors regarding audit plan compliance officer for the Code. as well as post-audit discussion to ascertain any area 2.6 Appointment of directors: of concern. In terms of clause 49(IV)(G) of the Listing Agreement with j. Ascertainment of reasons for substantial defaults in the the Stock Exchanges, a brief resume of directors, proposed payment to creditors and in case of payment of declared to be re-appointed, nature of their expertise in specific dividends to the shareholders. functional areas, their other directorships and committee k. Review of management discussion analysis of financial memberships, their shareholdings and their relationships with conditions and results of operations and other matters other directors are provided in the notice convening the specified under clause 49 of the Listing Agreement. ensuing Annual General Meeting of the Company. l. Review of financial statements, in particular the 3. Audit Committee investments made by the unlisted subsidiary. The primary objective of the Audit Committee is to monitor and m. In addition, review of such other functions as envisaged provide effective supervision of the management's financial reporting under Section 292A of the Companies Act, 1956 and process with a view to ensure accurate, timely and proper disclosures Clause 49 of the Listing Agreement with Stock and transparency, integrity and quality of financial reporting. Exchanges. 15


  • Page 17

    3.2 Composition, name of members and the chairman of the The transactions with the related parties, namely its promoters, Audit Committee: its subsidiary and associate companies etc., are of routine As of date, the Audit Committee consists of the following nature have been reported elsewhere in the annual report as per Accounting Standard 18 (AS 18) issued by The directors: Institute of Chartered Accountants of India. Name of the directors - The Audit Committee is briefed, inter alia, on the following Status (Messrs) aspects: Narayan K Seshadri Non-executive, (i) the related party transactions undertaken by the Company Independent director in the ordinary course of business (summary); D E Udwadia Non-executive, (ii) material individual transactions, if any, which were not Independent director in the normal course of business; and C N Prasad # Non-executive, (iii) material individual transactions, if any, with related parties Non-Independent director or others, which were not at arm's length basis. Trevor Lucas ## Non-executive, 4.2 Disclosure of accounting treatment: Non-Independent director The Company follows the Accounting Standards issued by the Institute of Chartered Accountants of India and Companies # resigned as Director on 12th May 2011 and ceased to (Accounting Standards) Rules, 2006. be a member of audit committee on that date. 4.3 Risk Management: ## appointed as a member of audit committee on The Company has laid down procedures to inform Board 12th May 2011. members about the risk assessment and minimization Mr Narayan K Seshadri, Independent Director, is the procedures. These procedures are periodically reviewed to Chairman of the Audit Committee. Mr R Madhavan, General ensure that executive management controls risk through means of a properly defined framework. Manager - Finance and Secretary of the Company acts as the Secretary of the Audit Committee. 4.4 Instances of non-compliances, if any: There were no instances of non-compliances by the Company, Chairman of the Audit Committee was present at the annual penalties and strictures imposed on the Company by the general meeting held on 26th August 2010. The composition Stock Exchanges or SEBI or any other statutory authorities of the committee is in accordance with the requirements of on any matter related to the capital markets during the last Clause 49 of the Listing Agreement and Section 292A of three years. the Companies Act, 1956. 4.5 Disclosure by senior management personnel: 3.3 The particulars of meetings and attendance by the members The senior management personnel have made disclosure to of the committee during the year under review are given in the board relating to all material, financial and other the table below: transactions stating that they did not have personal interest that could result in a conflict with the interest of the Company Date of the Members present at large. meeting Messrs 4.6 CEO and CFO Certification: 4th May 2010 Narayan K Seshadri and D E Udwadia The Whole-time Director (CEO) and Chief Financial Officer 26th July 2010 Narayan K Seshadri, D E Udwadia of the Company have certified to the board on financial and and C N Prasad other matters in accordance with Clause 49(V) of the Listing Agreement pertaining to CEO/CFO certification for the financial 25th October 2010 Narayan K Seshadri and D E Udwadia year ended 31st March 2011. 19th January 2011 Narayan K Seshadri, D E Udwadia 4.7 Compliance with mandatory / non-mandatory requirements: and C N Prasad The Company has complied with all applicable mandatory requirements in terms of clause 49 of the Listing Agreement. 4. Disclosures The non-mandatory requirements have been adopted to the 4.1 Materially significant related party transactions: extent and in the manner as stated under the appropriate During the year, the Company has not entered into any headings detailed elsewhere in this report. transaction of material nature with the directors, their relatives 4.8 Management discussion and Analysis Report: or management which is in conflict with the interests of the The management Discussion and Analysis Report has been Company. attached to the Directors' Report. 16


  • Page 18

    5. Remuneration Committee 5.3 Details of shareholdings of non-executive directors in the The board has not constituted a remuneration committee, as the need Company as on 31st March 2011: for forming such committee has not arisen. The remuneration to the Mr M Lakshminarayan holds 50 shares and all other directors Whole-time Director was decided by the Board of Directors subject do not hold any share in the Company. There are no other to the approval of the shareholders. particular pecuniary relationships or transactions of the non-executive directors' vis-à-vis of the Company. None of 5.1 Remuneration to directors: the directors is related to each other. Mr P Kaniappan, director of the Company, was appointed as 5.4 Particulars of remuneration paid to the whole-time director a Whole-time Director of the Company for a period of five years during the financial year 2010-11: effective 17th June 2009 on a remuneration consisting salary (Rs. in lakhs) and other perquisites in terms of the agreement entered into between him and the Company on 17 th June 2009. Name of the Contribution Perquisites director Salary to PF and & Total A supplemental agreement was entered with Mr P Kaniappan (M/s.) other funds Allowances on 28th July 2010 to give effect to the increase in remuneration P Kaniappan 52.20 5.30 23.94 81.44 effective 1st April 2010 and approved by the shareholders at their meeting held on 26th August 2010. 5.5 Presently, the Company does not have a scheme for grant of The remuneration payable to the Whole-time Director is fixed any stock option either to the executive directors or employees. by the board within the limits approved by the shareholders in 6. Investors' grievance committee: terms of the relevant provisions of the Companies Act, 1956. 6.1 As on 31st March 2011, the investors' grievance committee During 2010-11, the Non-Executive Independent Directors consisted of three members, viz., Mr Narayan K Seshadri, have not drawn any remuneration from the Company other Director, Mr C N Prasad, Director and Mr P Kaniappan, than sitting fees for attending each meeting of the board and Whole-time Director of the Company. The Committee met committees thereof. four times during the year. On 12th May 2011, Mr C N Prasad During 2010-11, the Company has obtained approval of the ceased to be a member of Investors' Grievance Committee shareholders by passing Special resolution by Postal Ballot in view of his resignation as a director. Mr Trevor Lucas, a for payment of Commission to Non Executive Independent non-independent director was appointed as a member of Directors from 1st April 2011 subject to the limits fixed by Investors' Grievance Committee on 12th May 2011. the board of directors and that aggregate of such Commission 6.2 As required by Securities and Exchange Board of India will be within 1% of net profit of the Company in terms of (SEBI), Mr R Madhavan, General Manager - Finance and section 309 of the Companies Act, 1956. Secretary of the Company has been appointed as the 5.2 Particulars of sitting fees paid to non-executive directors compliance officer. For any clarification/complaint, during the financial year 2010-11 the shareholders may contact Mr R Madhavan, General Manager - Finance and Secretary of the Company. Name of the non-executive directors Sitting fee 6.3 The committee oversees and reviews all matters connected Messrs (Rs.) with share transfers, issue of duplicate share certificates and Venu Srinivasan # 15,000 other issues pertaining to shares. The committee also looks M Lakshminarayan ## 30,000 into the redressal of investors' grievances pertaining to transfer D E Udwadia 1,05,000 of shares, non-receipt of balance sheet, non-receipt of declared dividends, etc. The Company, as a matter of policy, disposes Narayan K Seshadri 1,65,000 investor complaints within a span of seven days. C N Prasad ### 1,20,000 6.4 Complaints received and redressed during the year 2010-11: Total 4,35,000 No. of # resigned on 19th May 2010 S.No. Nature of complaint complaints ## appointed on 25th October 2010 ### 1 Non receipt of share certificates 3 resigned on 12th May 2011 2 Non receipt of dividend warrants 6 Other non-executive directors, Messrs Leon Liu, 3 Non receipt of annual reports 4 Nikhil Madhukar Varty, Trevor Lucas and Kurt Lehmann have Total 13 waived the sitting fees payable to them. 17


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    6.5. All the complaints were resolved and, as on 31st March 2011, 7.3 None of the subjects placed before the shareholders in the no complaint was pending. All requests for dematerialization last / ensuing Annual General Meeting required/requires of shares were carried out within the stipulated time period. approval by a postal ballot. 6.6 Secretarial Audit 8. Means of communication A qualified practising company secretary carried out secretarial 8.1 Quarterly results: audit on a quarterly basis to reconcile the total admitted The unaudited quarterly financial results of the Company capital with National Securities Depository Limited (NSDL) were published in the English and vernacular newspapers. and Central Depository Services (India) Limited (CDSL) and These are not sent individually to the shareholders. the total issued and listed capital and placed the report for perusal of the Board. The secretarial audit report confirms 8.2 Newspapers wherein results normally published: that the total issued and listed capital is in agreement with The results are normally being published in the English the total number of shares in physical form and the total newspapers, namely "The Hindu" or "Times of India" and number of shares in dematerialized form held with NSDL "The Economic Times" or "Business Line" and the Tamil and CDSL. version in a Tamil daily viz., "Dinamani". 7. General body meeting: 8.3 Website: 7.1 Location and time where the Annual General Meetings were The Company has in place a web site addressed as held during the last three years. www.wabco-tvs.com. The unaudited results and the quarterly distribution schedules as filed with the Stock Exchanges are Year Location Date Time published in Company website. The Company makes use 2007-08 The Music Academy, 29.09.2008 10.15 A.M. of its website for publishing official news releases and No. 168, (Old No. 368), presentations, if any, made to institutional investors / analysts. TTK Road Chennai 600 014 9. General shareholder information 9.1 Annual general meeting: 2008-09 Sathgurugnananda Hall, 24.09.2009 10.15 A.M. Narada Gana Sabha Trust, Date and time : 27th July 2011 at 10.00 a.m. No. 314, (Old No. 254), Venue : "The Music Academy", TTK Road, No. 168 (Old No. 306) TTK Road, Chennai 600 018 Chennai 600 014 2009-10 Sathgurugnananda Hall, 26.08.2010 10.00 A.M. 9.2 Financial year : 1st April to 31st March Narada Gana Sabha Trust, Financial calendar No. 314, (Old No. 254), 2011-12 (Tentative) : TTK Road, Chennai 600 018 Financial reporting for the quarter ending : Financial calendar 7.2 Special resolutions passed in the previous three Annual General Meetings: 30th June 2011 : between 15th to 31st July 2011 (a) At the Annual General Meeting of the Shareholders of 30th September 2011 : between 15th to 31st October 2011 the Company held on 24th September 2009, consent/ 31st December 2011 : between 15th to 31st January 2012 approval of the shareholders was obtained for alteration 31st March 2012 : between 1st to 15th May 2012 to certain clauses of Articles of Association of the Company under Section 31 and other applicable Annual general Meeting provisions of the Companies Act, 1956. (next year) : July / August 2012 (b) Approval of shareholders by way of Special Resolution 9.3 Date of book closure : 22nd July 2011 to 27th July 2011 was obtained pursuant to section 309 of the Companies (both days inclusive) Act 1956 for payment of commission to Non-executive Independent Directors effective 1st April 2011 by way 9.4 Particulars of dividend payment of Postal Ballot process. The result was announced on The board of directors had recommended a dividend of 21st December 2010. Rs. 2.50 per share for the year 2009-10, absorbing a sum 18


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    of Rs.474.20 lakhs, and approved by the shareholders in the b. All matters connected with the share transfer, both last Annual General Meeting. This dividend was paid on 1st physical and electronic, dividends and other matters are September 2010. handled by the STA located at the address mentioned elsewhere in this report. 9.5 Listing on Stock Exchanges: Name of the stock exchange Stock code c. Shares lodged for transfer will be processed within 10 days from the date of lodgement, if the documents Madras Stock Exchange Ltd (MSE) – are clear in all respects. All requests for dematerialization Bombay Stock Exchange Ltd (BSE) 533023 of securities are processed and the confirmation will be National Stock Exchange of India Ltd. given to the depositories within 7 days. Grievances (NSE) WABCO-TVS received from investors and other miscellaneous ISIN allotted by depositories INE342J01019 correspondence on change of address, mandates etc (Company ID Number) will be processed by the STA within 7 days. (Note: Annual listing fees for the year 2011-12 have been d. Pursuant to clause 47(c) of the Listing Agreement with duly paid to the above stock exchanges) Stock Exchanges, certificates, on half-yearly basis, will be issued by a Company Secretary-in-practice for due 9.6 Market Price Data: compliance of share transfer formalities by the Company. Bombay Stock Exchange National Stock Exchange e. Pursuant to SEBI (Depositories and Participants) Limited (BSE) (in Rs.) of India Ltd. (NSE) (in Rs.) Regulations, 1996, certificates from a Company Month Month's Month's Month's Month's Secretary-in-practice for timely dematerialization of the high price low price high price low price shares of the Company and for conducting a secretarial April 2010 817.30 686.00 817.70 693.20 audit on a quarterly basis for reconciliation of the share May 2010 852.90 702.05 857.80 705.50 capital of the Company were obtained. June 2010 824.00 704.00 820.00 709.30 f. The Company, as required under clause 47(f) of the Listing Agreement, has designated the following e-mail July 2010 982.90 766.00 983.00 766.60 IDs, namely investorscomplaintssta@scl.co.in (share August 2010 1058.00 918.00 1059.45 921.25 transfer agent) / madhavan.rajagopalan@wabco-tvs.co.in September 2010 1316.00 1002.05 1224.00 1000.00 (compliance officer) for the purpose of registering complaints, if any, by the investors and expeditious October 2010 1165.00 1088.05 1245.00 1070.05 redressal of their grievances. November 2010 1169.00 975.05 1149.00 961.40 g. The shareholders are, therefore, requested to correspond December 2010 1175.85 1011.60 1145.00 1000.20 with the STA at the address mentioned elsewhere in January 2011 1150.00 935.00 1140.00 900.05 this report for any change of names and queries February 2011 977.90 863.00 978.80 856.20 pertaining to the shareholding and dividends etc. March 2011 1085.00 895.00 1080.00 881.10 9.8 Shareholding pattern as on 31st March 2011: Particulars No. of % to 9.7 Share transfer agents (STA) and share transfer system: shares held total a. With a view to rendering prompt and efficient service (a) Shareholding of Promoter and to the investors, Messrs Sundaram-Clayton Limited (SCL), Promoter Group which has been registered with SEBI as the Share Transfer Agent (STA) in Category II, has been appointed (1) Indian - Bodies Corporate – – as the STA of the Company. (2) Foreign- Bodies Corporate 1,42,25,684 75.00 The shareholders have also been advised about this appointment of STA to handle share registry work Total Shareholding of Promoter pertaining to both physical and electronic segments of and promoter Group (A) 1,42,25,684 75.00 the Company. 19


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    Particulars No. of % to 9.12 Plant locations : shares held total Factories : (b) Public Shareholding Plot No. 3 (SP), III Main Road, 1. Institutions Ambattur Industrial Estate, (a) Mutual Funds 20,48,085 10.80 Chennai 600 058 (b) Banks, Financial Institutions, Tel : 044 4224 2000 Insurance Companies Fax : 044 4224 2009 (Central, State Government Institutions, Non-Govt. Large Sector, Adityapur Industrial Area, Institutions) 402 0.00 Gamharia, Seraikella-Kharsawan District, Jharkhand 832 108 (c) Foreign Institutional Investors 3,72,556 1.96 Tel : 0657 661 6800 Sub Total Institutions 24,21,043 12.76 Fax : 0657 238 7997 2. Non - Institutions a) Bodies Corporate 3,12,021 1.65 Plot No. AA8, Central Avenue, Auto Ancillary SEZ, Mahindra World City, b) Individuals <1 lakh 16,82,829 8.88 Nathan Sub-Post, Chengalpet, c) Individuals >1 lakh 2,97,774 1.57 Kancheepuram District 603 002 d) NRI - Repatriable 13,040 0.07 Tel : 044 4744 2000 e) NRI - Non-Repatriable 15,193 0.04 Fax : 044 4749 0006 Sub Total Non-Institutions 23,20,857 12.25 Software Design Centre: Total (B) 47,41,900 25.00 "Ispahani Centre", 7th & 5th Floor Grand Total (A) +(B) 1,89,67,584 100.00 123/124 Nungambakkam High Road 9.9 Distribution of Shareholding as on 31st March 2011: Chennai 600 034 Tel : 044 2828 5000 Shareholding No. of % No. of % Fax : 044 2833 2212 (Range) Shares Members Upto 5,000 17,27,494 9.11 16,392 99.74 9.13 Address for investors Correspondence: 5,001 - 10,000 96,359 0.51 13 0.08 (i) For transfer / dematerialisation Sundaram-Clayton Limited of shares, payment of dividend Share transfer department 10,001 - 20,000 81,909 0.43 5 0.03 on shares and any other query New No. 22, Old No. 31 20,001 - 50,000 4,19,299 2.21 12 0.07 relating to the shares of the Railway Colony, 3rd Street Company. Mehta Nagar, 50,001 - 1,00,000 5,26,529 2.78 7 0.04 Chennai 600 029 1,00,001 & above 1,61,15,994 84.96 7 0.04 (ii) for any query on non-receipt Tel : 044 2374 1889, Total 1,89,67,584 100.00 16,436 100.00 of annual report; and 044 4224 2000, (iii) for investors grievance & 044 2374 2939 9.10 Dematerialization of shares and liquidity: general correspondence Fax : 044 2374 1889, Out of 47,41,900 shares held by persons other than promoters, 044 4224 2009 43,91,684 shares have been dematerialised as on 31st March 2011 accounting for 92.61 %. Email : 9.11 The Company has not issued any Global Depository Receipt kr.raman@scl.co.in / American Depository Receipt / Warrant or any convertible sclshares@gmail.com instrument, which is likely to have impact on the Company's investorscomplaintssta@scl.co.in equity. madhavan.rajagopalan@wabco-tvs.co.in 20


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    10. Non-mandatory disclosure: (DPs) to avoid any possibility of loss, mutilation etc. of physical The non-mandatory requirements have been adopted to the extent share certificates and also to ensure safe and speedy transaction and in the manner as stated under the appropriate headings in securities. detailed below: Registration of Electronic Clearing Service (ECS) Mandate: 10.1 The Board: ECS helps in quick remittance of dividend without possible loss/ Both executive and non-executive directors of the Company delay in postal transit. Shareholders, who have not earlier availed are liable to retire by rotation and if eligible, offer themselves this facility, are requested to register their ECS details with the for re-appointment. No specific tenure has been fixed for the STA or their respective DPs. independent directors. Transfer of shares in physical mode: 10.2 Remuneration committee: Shareholders should fill in complete and correct particulars in the The board has not set up a remuneration committee, as the transfer deed, for expeditious transfer of shares. Wherever applicable, need for the same has not arisen. registration number of power of attorney should also be quoted in the transfer deed at the appropriate place. 10.3 Shareholder rights: Shareholders, whose signatures have undergone any change over The half-yearly results of the Company will be published in a period of time, are requested to lodge their new specimen English and vernacular newspapers and are also displayed signature duly attested by a bank manager to the STA. on the Company's website, namely www.wabco-tvs.com Shareholders are requested to note that as per SEBI circular The results are not sent to the shareholders individually. no. MRD/DoP/Cir - 05/1009 dated 20th May 2009, it is mandatory 10.4 Audit Qualifications: for transferees to furnish a copy of Permanent Account Number (PAN) The statutory financial statements of the Company are for registration of transfer of shares to be held in physical mode unqualified. In case of loss / misplacement of share certificates, Shareholders 10.5 Training of board members / Mechanism for evaluating should immediately lodge a FIR / Complaint with the police and non-executive directors: inform the Company / STA with original or certified copy of FIR / acknowledged copy of complaint for marking stop transfer of The present board consists of well-experienced and shares. responsible members of society. All the directors are well aware of business model as well as the risk profile of the Consolidation of Multiple Folios: business parameters of the Company and their responsibilities Shareholders, who have multiple folios in identical names, are as directors. Hence, in the opinion of the board, they do requested to apply for consolidation of such folios and send the not require any further training. There is also no specific relevant share certificates to the Company. mechanism for evaluating the performance of the Registration of Nominations: non-executive directors of the Company. Nomination in respect of shares - Section 109A of the Companies 10.6 Whistle blower policy: Act, 1956 provides facility for making nominations by shareholders The Company has not adopted whistle blower policy. However, in respect of their holding of shares. Such nomination greatly the Company has not denied access to any personnel to facilitates transmission of shares from the deceased shareholder approach the management on any issue. to his / her nominee without having to go through the process of obtaining succession certificate / probate of the Will etc. 11. Request to shareholders: Shareholders are requested to follow the general safeguards / It would therefore be in the best interests of the shareholders holding shares in physical form registered as a sole holder to make procedures as detailed hereunder in order to serve them efficiently such nominations. Investors, who have not availed nomination and avoid risks while dealing in securities of the Company. facility, are requested to avail the same by submitting the nomination Demat of Shares: in form 2B. This form will be made available on request. Investors Shareholders are requested to convert their physical holding to holding shares in demat form are advised to contact their DP's demat/ electronic form through any of the depository participants for making nominations. 21


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    Updation of address: Unclaimed shares in physical form: Shareholders are requested to update their address registered with As per the requirement of amended Clause 5 A of Listing agreement, the Company, directly through the STA located at the address the Company sent first reminder letter to the shareholders whose mentioned above, to receive all communications promptly. share certificates were returned undelivered or unclaimed. It is also Shareholders, holding shares in electronic form, are requested to proposed to send second and third reminder letters during the deal only with their depository participant (DP) in respect of change current year 2011-12. Action will be taken thereafter to transfer of address and furnishing bank account number, etc. the shares unclaimed to "Unclaimed Suspense Account" to comply SMS Alerts: with the amended Clause 5 A. Investors are requested to note that National Securities Depository Green initiative in the Corporate Governance: Limited (NSDL) and Central Depository Services (India) Limited The Ministry of Corporate affairs (MCA) has taken a green initiative (CDSL) have announced the launch of SMS alert facility for demat to provide paperless compliance by the Companies. MCA has account holders whereby investors will receive alerts for debits/ issued circular nos. 17 & 18/2011 dated 21st April 2011 and credits (transfers) to their demat accounts a day after the transaction. 29th April 2011 respectively clarifying that service of notice/document These alerts will be sent to those account holders who have to members can be made by electronic mode provided the Company provided their mobile numbers to their Depository participants has obtained e-mail addresses of the members. (DPs). The Company proposes to send notices/documents like the Annual No charge will be levied by NSDL / CDSL on DPs providing this Report in electronic form to the members who have registered facility to investors. This facility will be available to investors who their email addresses with the depositories or the Company. request for the same and provide their mobile numbers to the Members holding shares in dematerialised form are requested to DPs. Further information is available on the website of NSDL register their e mail addresses with their depository participants. and CDSL namely www.nsdl.co.in and www.cdslindia.com, respectively. Members holding shares in physical form are requested to register their email address to the Company's Share Transfer Agents (STA), Timely encashment of dividends: Sundaram-Clayton Limited, New No 22 (Old No 31) Railway Colony Shareholders are requested to encash their dividends promptly to 3rd Street, Mehta Nagar Chennai 600 029 or to the Company to avoid hassles of revalidation/ losing your right of claim owing to the attention of Compliance Officer and Secretary, R Madhavan, transfer of unclaimed dividends beyond seven years to Investor Plot No 3(SP) III Main Road, Ambattur Industrial Estate, Chennai Education and Protection Fund. 600 058. As required by SEBI, shareholders are requested to furnish details E-mail addresses of the STA and compliance officer: of their bank account number and name and address of the bank for incorporating the same in the warrants. This would avoid wrong STA: credits being obtained by unauthorized persons. kr.raman@scl.co.in Shareholders who have not encashed their dividend warrants in sclshares@gmail.com respect of dividends declared for the year ended 31st March, 2008 investorscomplaintssta@scl.co.in and for any financial year thereafter may contact the Company Compliance officer:- and surrender their warrants for payment. madhavan.rajagopalan@wabco-tvs.co,in Shareholders are requested to note that the dividend not claimed In case any member desires to receive the notices/documents in for a period of seven years from the date they first became due physical form, member may request the Company or STA. for payment shall be transferred to "Investors Education and Protection Fund" (IEPF) terms of Section 205C of the Companies Ser vice of notices/documents to the members whose Act, 1956. Shareholders are requested to note that as per the e-mail addresses are not registered with the depositories or Companies Act, 1956, unclaimed dividends once transferred to Company will be effected by modes of service as provided under IEPF will not be refunded. section 53 of the Companies Act, 1956. 22


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    Information in respect of unclaimed dividends due for remittance Pursuant to this Agreement, SCL has granted WABCO-TVS (INDIA) into IEPF is given below: Ltd a non exclusive licence to use the Trademark "TVS" in its corporate name and as a Trademark and logo in connection with the promotion, PARTICULARS OF UNCLAIMED DIVIDEND sales, marketing and distribution of the Company's products including Financial Date of Date of transfer to Date of transfer for the purpose of branding the Company's products, subject to the year Declaration special account to IEPF terms and conditions stated therein, for a period of 3 years from the 2007-08 20.08.2008 25.09.2008 25.09.2015 agreement date i.e. up to 2nd June 2012. (2nd interim) The Company and SCL have however mutually agreed in writing 2008-09 08.12.2008 13.01.2009 13.01.2016 to (i) the corporate name being changed by omitting therefrom (1st Interim) SCL's trade mark 'TVS' and (ii) the Company continuing to use 2009-10 26.08.2010 01.10.2010 01.10.2017 the trade mark 'TVS' on products sold, prior to the change of name being effective to distributors / secondary channels upto December 12. Change of name of the Company: 2011. The change of the Company's corporate name to WABCO In terms of the scheme of demerger approved by the Hon'ble INDIA LIMITED requires the approval of its shareholders and Madras High Court and consequent to the acquisition of 35.83% Central Government under the applicable provisions of the of shares of our Company by Clayton Dewandre Holdings Limited Companies Act, 1956. from Indian promoters, viz., TVS group of Companies The change of name will become effective only upon issue of a on 3rd June 2009, a Name and Trade Mark Licence Agreement fresh certificate of incorporation. A resolution to this effect is was entered into with Sundaram-Clayton Limited (SCL). included in the Notice of Annual General Meeting. 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 On the basis of the written representations received from Members of the Board and Senior Management Personnel in terms of the relevant provision 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 2011. Chennai P Kaniappan R Madhavan th 12 May 2011 Whole-time Director General Manager - Finance and Secretary 23


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    Auditors’ Certificate To The Members of WABCO-TVS (INDIA) Limited We have examined the compliance of conditions of corporate governance by WABCO-TVS (INDIA) Limited ('the Company'), for the year ended on March 31, 2011, 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 the 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 above mentioned Listing Agreements. 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 S.R. BATLIBOI & ASSOCIATES Chartered Accountants Firm Registration No. 101049W Per S BALASUBRAHMANYAM Chennai Partner May 12, 2011 Membership No. 053315 24


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    Auditors’ report to the Shareholders To iii. The balance sheet, profit and loss account and cash flow The Members of WABCO-TVS (INDIA) Limited statement dealt with by this report are in agreement with the books of account; 1. We have audited the attached Balance Sheet of WABCO-TVS (INDIA) Limited ('the Company') as at March 31, 2011 and also iv. In our opinion, the balance sheet, profit and loss account the Profit and Loss account and the cash flow statement for the and cash flow statement dealt with by this report comply year ended on that date annexed thereto. These financial statements with the accounting standards referred to in sub-section (3C) are the responsibility of the Company's management. Our of section 211 of the Companies Act, 1956; responsibility is to express an opinion on these financial statements v. On the basis of the written representations received from based on our audit. the directors, as on March 31, 2011, and taken on record 2. We conducted our audit in accordance with auditing standards by the Board of Directors, we report that none of the directors generally accepted in India. Those Standards require that we plan is disqualified as on March 31, 2011 from being appointed and perform the audit to obtain reasonable assurance about as a director in terms of clause (g) of sub-section (1) of whether the financial statements are free of material misstatement. section 274 of the Companies Act, 1956; An audit includes examining, on a test basis, evidence supporting vi. In our opinion and to the best of our information and the amounts and disclosures in the financial statements. An audit according to the explanations given to us, the said accounts also includes assessing the accounting principles used and give the information required by the Companies Act, 1956, significant estimates made by management, as well as evaluating in the manner so required and give a true and fair view in the overall financial statement presentation. We believe that our conformity with the accounting principles generally accepted audit provides a reasonable basis for our opinion. in India; 3. As required by the Companies (Auditor's Report) Order, 2003 (as a) in the case of the balance sheet, of the state of affairs amended) issued by the Central Government of India in terms of the Company as at March 31, 2011; of sub-section (4A) of Section 227 of the Companies Act, 1956, b) in the case of the profit and loss account, of the profit we enclose in the Annexure a statement on the matters specified for the year ended on that date; and in paragraphs 4 and 5 of the said Order. c) in the case of cash flow statement, of the cash flows 4. Further to our comments in the Annexure referred to above, we for the year ended on that date. report that: i. We have obtained all the information and explanations, which For S.R. Batliboi & Associates to the best of our knowledge and belief were necessary for Chartered Accountants the purposes of our audit; Firm Registration No. 101049W ii. In our opinion, proper books of account as required by law Per S. BALASUBRAHMANYAM have been kept by the Company so far as appears from Place : Chennai Partner our examination of those books; Date : May 12, 2011 Membership No. 053315 25


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    Auditors’ report to the Shareholders (Contd.) Annexure referred to in paragraph 3 of our report of even date Re: WABCO-TVS (INDIA) Limited ('the Company') (i) (a) The Company has maintained proper records showing full particulars, reasonable having regard to the prevailing market prices at the including quantitative details and situation of fixed assets. relevant time. (b) Fixed assets have been physically verified by the management (vi) The Company has not accepted any deposits from the public. during the year and no material discrepancies were identified (vii) In our opinion, the Company has an internal audit system commensurate on such verification. with the size and nature of its business. (c) There was no disposal of a substantial part of fixed assets during (viii) We have broadly reviewed the books of account maintained by the the year. Company pursuant to the rules made by the Central Government for (ii) (a) The management has conducted physical verification of inventory the maintenance of cost records under section 209(1)(d) of the at reasonable intervals during the year. Companies Act, 1956, related to the manufacture of automotive parts (b) The procedures of physical verification of inventory followed by and accessories and are of the opinion that prima facie, the prescribed the management are reasonable and adequate in relation to accounts and records have been made and maintained. the size of the Company and the nature of its business. (ix) (a) The Company is regular in depositing with appropriate authorities (c) The Company is maintaining proper records of inventory and undisputed statutory dues including provident fund, employees' no material discrepancies were noticed on physical verification. state insurance, income-tax, sales-tax, wealth-tax, service tax, (iii) (a) According to the information and explanations given to us, the customs duty, excise duty, cess and other material statutory dues Company has not granted any loans, secured or unsecured to applicable to it. Statutory dues in respect of investor education companies, firms or other parties covered in the register and protection fund are not applicable to the Company. maintained under section 301 of the Companies Act, 1956. Further, since the Central Government has till date not prescribed Accordingly, the provisions of clause 4(iii) (a) to (d) of the Order the amount of cess payable under section 441 A of the Companies are not applicable to the Company and hence not commented Act, 1956, we are not in a position to comment upon the upon. regularity or otherwise of the Company in depositing the same. (b) According to information and explanations given to us, the (b) According to the information and explanations given to us, no Company has not taken any loans, secured or unsecured, from undisputed amounts payable in respect of provident fund, companies, firms or other parties covered in the register employees' state insurance, income-tax, wealth-tax, service tax, maintained under section 301 of the Companies Act, 1956. sales-tax, customs duty, excise duty, cess and other undisputed Accordingly, the provisions of clause 4(iii) (e) to (g) of the Order statutory dues were outstanding, at the year end, for a period are not applicable to the Company and hence not commented of more than six months from the date they became payable. upon. (c) According to the records of the Company, the dues outstanding (iv) In our opinion and according to the information and explanations given of income-tax, sales-tax, wealth-tax, service tax, customs duty, to us, there is an adequate internal control system commensurate excise duty and cess on account of any dispute, are as follows: with the size of the Company and the nature of its business, for the Amout Period to which Forum where purchase of inventory and fixed assets and for the sale of goods and Nature of Nature of (Rs. in the amount dispute is rendering of services. During the course of our audit, we have not Statute dues lakhs) relates pending observed any major weakness or continuing failure to correct any major Income Tax Income Tax 183.30 2006 - 2007 Commissioner of weakness in the internal control system of the Company in respect Act, 1961 Income Tax of these areas. 2007 - 2008 (Appeals), Chennai Central Excise duty- 11.27 2008 - 2009 Commissioner of (v) (a) According to the information and explanations provided by the Excise Cenvat credit Central Excise management, we are of the opinion that the particulars of Act, 1944 reversal 2009 - 2010 (Appeals), Chennai contracts or arrangements referred to in section 301 of the Service Tax Reversal of 8.67 2007 to 2010 Commissioner of Companies Act, 1956 that need to be entered into the register service tax Central Excise maintained under section 301 have been so entered. credit on (Appeals), Chennai (b) In our opinion and according to the information and explanations certain inputs given to us, the transactions made in pursuance of such contracts (x) The Company has no accumulated losses at the end of the or arrangements exceeding value of Rupees five lakhs have financial year and it has not incurred cash losses in the current been entered into during the financial year at prices which are and immediately preceding financial year. 26


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    Auditors’ report to the Shareholders (Contd.) Annexure referred to in paragraph 3 of our report of even date Re: WABCO-TVS (INDIA) Limited ('the Company') (xi) Based on our audit procedures and as per the information and report that no funds raised on short-term basis have been used explanations given by the management, we are of the opinion that for long-term investment. the Company has not defaulted in repayment of dues to banks. (xviii) The Company has not made any preferential allotment of shares The Company has no dues to financial institutions or debenture to parties or companies covered in the register maintained under holders. section 301 of the Companies Act, 1956. (xii) According to the information and explanations given to us and based on the documents and records produced before us, the (xix) The Company did not have any outstanding debentures during the Company has not granted loans and advances on the basis of year. security by way of pledge of shares, debentures and other securities. (xx) The Company has not raised any money by public issues and (xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual accordingly, the provisions of clause 4(xx) of Companies (Auditor's benefit fund / society. Therefore, the provisions of clause 4(xiii) Report) Order, 2003 (as amended) are not applicable to the of the Companies (Auditor's Report) Order, 2003 (as amended) Company. are not applicable to the Company. (xxi) Based upon the audit procedures performed for the purpose of (xiv) In our opinion, the Company is not dealing in or trading in shares, reporting the true and fair view of the financial statements and securities, debentures and other investments. Accordingly, the as per the information and explanations given by the management, provisions of clause 4(xiv) of the Companies (Auditor's Report) we report that no fraud on or by the Company has been noticed Order, 2003 (as amended) are not applicable to the Company. or reported during the course of our audit. (xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others For S.R. Batliboi & Associates from bank or financial institutions. Chartered Accountants Firm Registration No. 101049W (xvi) The Company did not have any term loans outstanding during the year. Per S. BALASUBRAHMANYAM (xvii) According to the information and explanations given to us and on Place : Chennai Partner an overall examination of the balance sheet of the Company, we Date : May 12, 2011 Membership No. 053315 27


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    Balance Sheet as at 31st March 2011 (Rupees in lakhs) Schedule As at As at number 31.03.2011 31.03.2010 I. SOURCE OF FUNDS 1. Shareholders’ funds a) Capital I 948.38 948.38 b) Reserves and surplus II 37,724.47 26,083.52 38,672.85 27,031.90 2. Loans a) Secured loans III 56.90 719.23 3. Deferred taxation (net) IV 815.22 324.57 39,544.97 28,075.70 II. APPLICATION OF FUNDS 1. Fixed Assets V a) Gross block 27,887.63 26,478.94 b) Less : Depreciation 9,848.47 8,462.91 c) Net block 18,039.16 18,016.03 d) Capital work-in-progress 991.73 661.31 2. Investments VI 1,220.24 220.24 3. Current assets, loans and advances a) Inventories VII 7,986.29 4,606.75 b) Sundry debtors VIII 17,118.38 11,937.85 c) Cash and bank balances IX 1,285.97 238.28 d) Other current assets X 4.60 4.55 e) Loans and advances XI 4,209.75 1,964.54 (a) 30,604.99 18,751.97 Less: Current liabilities and provisions a) Current liabilities XII 8,605.89 7,434.57 b) Provisions XIII 2,705.26 2,139.28 (b) 11,311.15 9,573.85 Net current assets (a)-(b) 19,293.84 9,178.12 39,544.97 28,075.70 Notes on accounts XVII The schedules referred to above and notes on accounts form an integral part of the Balance Sheet M LAKSHMINARAYAN P KANIAPPAN As per our report of even date Chairman Whole-time Director For S.R. BATLIBOI & ASSOCIATES Chartered Accountants Firm Registration No. 101049W Chennai R MADHAVAN T S RAJAGOPALAN Per S. BALASUBRAHMANYAM 12th May, 2011 General Manager (Finance) and Secretary Chief Financial Officer Partner Membership No. 053315 28


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    Profit & Loss Account for the year ended 31st March 2011 (Rupees in lakhs) Schedule Year ended Year ended number 31.03.2011 31.03.2010 Sales (Gross) 95,297.33 64,123.40 Less: Excise duty 8,517.60 4,997.60 Sales (Net) 86,779.73 59,125.80 Other Income XIV 3,143.18 1,827.69 a 89,922.91 60,953.49 Materials consumed XV 49,495.88 33,024.05 Salaries & wages, stores consumed and other expenses XVI 19,830.50 14,355.68 b 69,326.38 47,379.73 Profit before Interest depreciation and tax c = (a-b) 20,596.53 13,573.76 Interest 16.92 296.08 Depreciation 1,442.45 1,444.49 d 1,459.37 1,740.57 Profit before tax e = (c-d) 19,137.16 11,833.19 Provision - for Income tax 5,900.00 4,050.00 - for Income tax relating to earlier years 3.33 39.59 - for Deferred tax 490.65 (75.36) f 6,393.98 4,014.23 Profit for the year (after tax) g = (e-f) 12,743.18 7,818.96 Balance profit brought forward 11,636.66 5,156.52 Profit for the year (after tax) 12,743.18 7,818.96 Total 24,379.84 12,975.48 Proposed dividend 948.38 474.20 Dividend Tax payable 153.85 78.76 Transfer to general reserve 1,274.32 785.86 Balance carried to Balance Sheet 22,003.29 11,636.66 Total 24,379.84 12,975.48 Notes on accounts XVII Nominal value of each share in rupees 5.00 5.00 Basic and diluted earnings per share in rupees on 1,89,67,584 shares 67.18 41.22 The schedules referred to above and notes on accounts form an integral part of the Profit and Loss Account M LAKSHMINARAYAN P KANIAPPAN As per our report of even date Chairman Whole-time Director For S.R. BATLIBOI & ASSOCIATES Chartered Accountants Firm Registration No. 101049W Chennai R MADHAVAN T S RAJAGOPALAN Per S. BALASUBRAHMANYAM 12th May, 2011 General Manager (Finance) and Secretary Chief Financial Officer Partner Membership No. 053315 29


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    Schedules (Rupees in lakhs) As at As at 31.03.2011 31.03.2010 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 Equity Shares of Rs. 5/- each fully paid up. 948.38 948.38 a) Pursuant to the scheme of demerger of Brakes division in to the company from Sundaram-Clayton Limited, Chennai,(SCL) the shareholders of SCL were entitled for allotment of 1,89,67,584 equity shares of Rs 5/- each fully paid up for consideration other than in cash. b) These shares are deemed to be issued, subscribed and fully paid up in terms of the scheme of arrangement. These shares were allotted on 7th May 2008. c) On 3rd June 2009, Clayton Dewandre Holdings Limited, Rotterdam, The Netherlands(CDH) acquired 67,95,684 equity shares of Rs 5/- each fully paid up in the company. Consequently the aggregate number of equity shares held in the company stood at 1,42,25,684 equity shares. Thus the company became a subsidiary of CDH on and from the above date. II. RESERVES AND SURPLUS Capital reorganisation reserve As per last Balance Sheet 5.00 5.00 General reserve As per last Balance Sheet 14,441.86 13,656.00 Add: Transferred from Profit & Loss Account 1,274.32 15,716.18 785.86 14,441.86 Surplus Balance in Profit & Loss account 22,003.29 11,636.66 37,724.47 26,083.52 III. SECURED LOANS From banks Secured by hypothecation of raw materials, components, work-in-process, finished goods, book debts, stores, spares and tools 56.90 719.23 56.90 719.23 IV. DEFERRED TAXATION (NET) Deferred tax liabilities a) Differences in depreciation and other differences in block of fixed assets as per tax books and financial books 1,753.44 1,295.56 1,753.44 1,295.56 Deferred tax assets a) Provisions relating to employee benefits 455.12 433.09 b) Provision for warranty 185.00 241.33 c) Others 298.10 296.57 Total 938.22 970.99 Net Deferred tax liability 815.22 324.57 30


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    Schedules (continued) V. 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 31.03.2011 31.03.2010 (Intangibles) Cost of assets As at 01.04.2010 1,556.81 356.87 5,534.06 17,066.32 1,417.78 223.90 323.20 26,478.94 26,327.37 Additions 259.40 – 81.39 974.95 139.26 0.74 15.86 1,471.60 713.40 Less: sales – – – 6.26 45.33 11.32 – 62.91 561.83 Total 1,816.21 356.87 5,615.45 18,035.01 1,511.71 213.32 339.06 27,887.63 26,478.94 Depreciation Upto 31.03.2010 – 25.08 680.67 6,574.98 776.68 92.76 312.74 8,462.91 7,187.80 For the year – 6.09 181.95 1,084.54 132.18 20.98 16.71 1,442.45 1,444.49 Deductions on sales – – – 5.94 40.19 10.76 – 56.89 169.38 Total – 31.17 862.62 7,653.58 868.67 102.98 329.45 9,848.47 8,462.91 Written down value As at 31.03.2011 1,816.21 325.70 4,752.83 10,381.43 643.04 110.34 9.61 18,039.16 – As at 31.03.2010 1,556.81 331.79 4,853.39 10,491.34 641.10 131.14 10.46 – 18,016.03 (Rupees in lakhs) As at As at 31.03.2011 31.03.2010 CAPITAL WORK-IN-PROGRESS (at cost) Buildings 331.35 269.18 Furniture, fixtures and equipments 11.24 19.81 Machinery under installation 649.14 372.32 991.73 661.31 VI. INVESTMENTS (AT COST) Face Value 1. Non-trade-Unquoted (fully paid up) - Long term ICICI Prudential Life Insurance Group Superannuation Fund Mumbai 220.24 220.24 220.24 2. Non-trade-quoted (fully paid up) - Short term 62,144.598 units (last year Nil) in UTI Mutual Fund of UTI Asset Management Company Private Limited, Mumbai - UTI Liquid Cash 1,000.00 1,000.00 – Plan (institutional plan - growth option) 1,220.24 220.24 SUMMARY Quoted Investments 1,000.00 – Unquoted Investments 220.24 220.24 1,220.24 220.24 Short term 1,000.00 – Long term 220.24 220.24 1,220.24 220.24 Market value of quoted investments 1,000.56 – refer note 4 of Schedule XVII 31


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    Schedules (continued) (Rupees in lakhs) As at As at 31.03.2011 31.03.2010 VII. INVENTORIES - LOWER OF WEIGHTED AVERAGE COST OR NET REALISABLE VALUE a) Raw materials and components 4,439.53 3,069.74 b) Work-in-process 342.14 198.61 c) Finished goods 2,104.63 926.27 d) Stores 569.93 290.08 e) Goods in transit - raw materials and components 530.06 122.05 7,986.29 4,606.75 VIII.SUNDRY DEBTORS-UNSECURED, CONSIDERED GOOD a) Debts outstanding for a period exceeding six months - Considered good 467.07 163.80 - Considered doubtful 150.49 124.50 Total 617.56 288.30 b) Other debts - considered good 16,651.31 11,774.05 Less: Provision for doubtful debts 150.49 124.50 17,118.38 11,937.85 IX. CASH AND BANK BALANCES a) Cash and cheques on hand 10.07 9.38 b) With scheduled banks - current accounts 1,275.90 228.90 1,285.97 238.28 X. OTHER CURRENT ASSETS Interest accrued on investments and deposits 4.60 4.55 4.60 4.55 XI. LOANS AND ADVANCES-UNSECURED, CONSIDERED GOOD a) Advances recoverable in cash or in kind or for value to be received 3,069.28 1,576.82 b) Advance payment of income tax less provisions 728.84 204.91 c) Deposits 411.63 182.81 4,209.75 1,964.54 XII. CURRENT LIABILITIES Sundry creditors (refer note 9 of Schedule XVII) 8,605.89 7,434.57 8,605.89 7,434.57 XIII. PROVISIONS a) Proposed dividend 948.38 474.20 b) Dividend tax payable 153.85 78.76 c) Pension 794.03 697.39 d) Leave salary 234.26 198.61 e) Warranty 570.19 687.76 f) Provision for fringe benefit tax less advance payments 4.55 2.56 2,705.26 2,139.28 32


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    Schedules (continued) (Rupees in lakhs) Year ended Year ended 31.03.2011 31.03.2010 XIV. OTHER INCOME a) Sale of scrap & empties 650.98 374.31 b) Profit on sale of assets 1.50 4.46 c) Profit on sale of investments 101.08 31.51 d) Software service export 1,383.58 997.74 e) Test track service usage 264.35 159.31 f) Research and Development service export 384.61 87.43 g) Tool development income (net of expenses) 300.83 165.82 h) Dividend income – 0.44 i) Interest income (gross) (refer note 13 of Schedule XVII) 56.25 6.67 3,143.18 1,827.69 XV. MATERIALS CONSUMED Opening stock : Raw materials and components 3,069.74 3,340.75 Work-in-process 198.61 135.35 Finished goods 926.27 542.47 4,194.62 4,018.57 Add : Purchases 52,187.56 33,200.10 Total (a) 56,382.18 37,218.67 Less : Closing stock Raw materials and components 4,439.53 3,069.74 Work-in-process 342.14 198.61 Finished goods 2,104.63 926.27 Total (b) 6,886.30 4,194.62 Net (a)-(b) 49,495.88 33,024.05 33


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    Schedules (continued) (Rupees in lakhs) Year ended Year ended 31.03.2011 31.03.2010 XVI. SALARIES & WAGES, STORES CONSUMED AND OTHER EXPENSES Salaries, wages and bonus (includes Rs. 75.92 lakhs to wholetime directors) (last year Rs. 76.68 lakhs) 5,873.87 4,508.00 Contribution to provident and other funds (includes Rs. 5.30 lakhs to wholetime directors) (last year Rs. 4.89 lakhs) 450.85 403.30 Workmen and staff welfare expenses (includes Rs. 0.22 lakhs to wholetime directors) (last year Rs. 0.21 lakhs) 794.77 531.72 Stores and tools consumed 3,555.41 2,157.83 Power and fuel 1,430.63 988.97 Rent 259.08 139.54 Rates and taxes 79.67 63.93 Repairs and maintenance a) Building 296.65 300.98 b) Machinery 470.05 349.49 c) Other assets 41.99 35.08 Insurance 55.51 21.28 Commission 48.61 23.81 Audit fees (refer note 14 of Schedule XVII) 17.90 20.12 Cash discount 34.87 32.12 Travel and conveyance 683.07 486.73 Packing and forwarding 3,926.13 2,195.15 Data processing 100.86 108.25 Sitting fees to directors 4.35 3.75 Research and development 577.15 471.74 Other expenses 1,125.08 1,473.76 Loss on sale / scrapping of assets 4.00 40.13 19,830.50 14,355.68 34


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    Schedules (continued) XVII. NOTES ON ACCOUNTS 1. Background WABCO- TVS (INDIA) Limited ("the Company") was incorporated originally as Auto (India) Engineering Limited on 18th November 2004. The name of the company was changed to WABCO-TVS (INDIA) Limited on 3rd May 2007. The company is into its present business pursuant to the scheme of demerger of the brakes division of Sundaram-Clayton Limited into the company. The Company is primarily engaged in the manufacture of air brake actuation systems for commercial vehicles. The Company also provides software development services to the group companies of WABCO. On June 3, 2009, Clayton Dewandre Holdings Limited increased its percentage ownership to 75% by acquiring the shares from the other joint venture partner, TVS Group. Post acquisition, the Company has become a subsidiary of Clayton Dewandre Holdings Limited and the company's ultimate holding company is WABCO Holdings Inc. 2. Statement of Significant Accounting Policies (a) Basis of preparation The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. (b) Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. (c) Inventories Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a moving weighted average basis. Work-in-process and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on a moving weighted average basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. (d) Cash and Cash equivalents Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. (e) Fixed assets Fixed assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. (f) Depreciation Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the management, or at the rates prescribed under schedule XIV of the Companies Act, 1956 whichever is higher. 35


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    Schedules (continued) XVII. NOTES ON ACCOUNTS (Continued) Rates (SLM) Schedule XIV Rates (SLM) Buildings 1.63% - 3.34% 1.63% - 3.34% Plant and machinery 4.75% -10.34% 4.75% - 10.34% Computers (included in furniture, fixtures and equipments) 30.00% 16.21% Furniture, fixtures and equipments 6.33% 6.33% Vehicles 18.00% 9.50% Depreciation in respect of assets whose actual cost does not exceed Rs 5,000/- has been provided at 100%. Leasehold lands are amortised over the primary lease period. (g) Impairment i. The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. ii. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. iii. A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment. iv. During the year there was no provision for impairment. (h) Intangible assets i. Costs incurred towards purchase of computer software are depreciated using the straight-line method over a period based on management's estimate of useful lives of such software, or over the license period of the software, whichever is shorter. Other fixed assets (Intangibles) are amortised over a period of two years. ii. Research costs are expensed as incurred. (i) Revenue recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Sale of Goods Sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. In accordance with the terms of arrangements with the customers, in the current year, the company has not recognised sales of Rs 1774.00 lakhs and the related costs and margin on the materials despatched to the customer locations as such materials have not been received by the customers as at the balance sheet date. Excise Duty deducted from turnover (gross) is the amount that is included in the amount of turnover (gross) and not the entire amount of liability that arose during the year. Income from Services Income from services is recognised in accordance with the specific terms of the contract with the customer. Interest Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. 36


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    Schedules (continued) XVII. NOTES ON ACCOUNTS (Continued) Dividends Dividend income is recognised when the right to receive payment is established by the balance sheet date. Profit on sale of investments Profit on sale of investment is recognised only at the time when the investments are realised. (j) Foreign currency translation i. Initial recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. ii. Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. iii. Exchange differences Exchange differences arising on the settlement of monetary items or on reporting such monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise. (k) Investments Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value, if any, is made to recognise a decline other than temporary in the value of the investments. (l) Retirement and other employee benefits i. Retirement benefits in the form of provident fund and employee state insurance are defined contribution schemes and the contributions are charged to the Profit and Loss Account of the year when the contributions to the funds are due. There are no other obligations other than the contribution payable to the funds. ii. Gratuity and pension liabilities are defined benefit obligations and are provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. iii. Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation at the year end. The actuarial valuation is done as per projected unit credit method iv. Actuarial gains/losses are taken to profit and loss account and are not deferred. v. Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss Account when such payments are made. (m) Segment reporting The Company is engaged in the business of manufacture of automotive components and related services and accordingly this is the only primary segment. The Company has considered geographical segment as the secondary segment, based on the location of the customers. 37


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    Schedules (continued) XVII. NOTES ON ACCOUNTS (Continued) (n) Leases Where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item the leases are classified as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss account on a straight-line basis over the lease term. (o) Earnings Per Share Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares if any. (p) Income taxes Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income taxes reflects the net impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each balance sheet date the company re-assesses unrecognised deferred tax asset. The company recognises all unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised. (q) Provisions A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates or on actuarial valuation where applicable. Provision for warranty is estimated based on trend of past claims. 38


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    Schedules (continued) XVII. NOTES ON ACCOUNTS (Continued) (Rupees in lakhs) As at/ As at/ As at/ As at/ Year ended Year ended Year ended Year ended 31.03.2011 31.03.2010 31.03.2011 31.03.2010 3. Disclosure under Accounting Standard 11 a) Net exchange differences debited to Profit and Loss Account – purchase of raw materials and components 138.86 17.28 – sale of goods and services 211.59 173.58 b) 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 In Foreign currency - lakhs 1 Import of goods and services USD 8.20 0.70 369.18 33.28 JPY 0.49 – 0.26 – Euro 3.70 2.30 235.48 139.83 2 Import of capital goods JPY 6.76 – 3.65 – 608.57 173.11 3 Export of goods & services USD 37.15 14.60 1,663.02 659.04 Euro 45.51 18.40 2,868.00 1,114.30 4,531.02 1,773.34 4. Disclosure under Accounting Standard 13 (i) Investments made during the year. 77,83,747.44 units (last year 1,58,63,553.7847) in SBI Funds Management Private Limited, Mumbai 1,600.00 3,200.00 26,05,998.321 Units (last year 5,67,573.79) UTI Asset Management Company Private Limited, Mumbai 38,800.00 7,644.77 40,400.00 10,844.77 (ii) Investments realised during the year 77,83,747.44 units (last year 1,63,23,553.7847) in SBI Funds Management Private Limited, Mumbai 1,600.00 3,246.00 25,43,853.723 Units (last year 6,21,600.6660) UTI Asset Management Company Private Limited, Mumbai 37,800.00 8,279.22 39,400.00 11,525.22 (The amounts of Rs 40,400.00 lakhs (last year 10,844.77) and Rs 39,400.00 (last year 11,525.22) are cumulative figures). Cost of investments held as at balance sheet date 1,220.24 220.24 39


  • Page 41

    Schedules (continued) XVII. NOTES ON ACCOUNTS (Continued) (Rupees in lakhs) As at/ As at/ As at/ As at/ Year ended Year ended Year ended Year ended 31.03.2011 31.03.2010 31.03.2011 31.03.2010 5. Disclosure under Accounting Standard 15 Pension Gratuity (a) Expenses recognised in the Profit & Loss Account (i) Current service cost – – 43.02 44.84 (ii) Interest cost 59.28 52.35 45.55 47.25 (iii) Expected return on plan assets – – (52.53) (53.82) (iv) Net actuarial loss /(gain) recognised in the year 37.36 29.32 29.02 36.69 Total 96.64 81.67 65.06 74.96 (b) Change in defined benefit obligation during the year (i) Present value of obligation as at beginning of the year 697.39 615.72 569.39 590.67 (ii) Interest cost 59.28 52.35 45.55 47.25 (iii) Current service cost – – 43.02 44.84 (iv) Benefits paid – – (79.93) (150.07) (v) Actuarial gain/ (loss )on obligation 37.36 29.32 29.02 36.70 (vi) Present value of obligation as at the end of the year 794.03 697.39 607.05 569.39 (c) Change in fair value of plan assets during the year (i) Fair value of plan assets at the beginning of the year – – 573.62 669.87 (ii) Expected return on plan assets – – 52.53 53.82 (iii) Contributions made during the year – – 61.21 – (iv) Benefits paid – – (79.93) (150.07) (v) Actuarial gain on plan assets – – – – (vi) Fair value of plan assets as at the end of the year – – 607.43 573.62 (d) Balance Sheet movements (i) Value of benefit obligations / (net assets) at the beginning of the year 697.39 615.72 573.62 669.87 (ii) Actual return on plan assets – – 52.53 53.82 (iii) Contributions made during the year – – 61.21 – (iv) Expenses 96.64 81.67 – – (v) Benefits paid – – (79.93) (150.07) (vi) Value of benefit – – – – (vii) Fair value of plan assets as at the end of the year 794.03 697.39 607.43 573.62 Funded status – – 0.38 4.22 The net asset in respect of gratuity plan is not recognised as it is lying in an irrecoverable trust fund approved by Income tax authorities. (e) Actuarial assumptions (i) Discount rate used 8.50% 9.50% 8.00% 8.00% (ii) Expected return on plan assets NA NA 8.00% 8.00% Estimates of future salary increase considered in actuarial valuation take into account the inflation, seniority and other relevant factors. 40


  • Page 42

    Schedules (continued) XVII. NOTES ON ACCOUNTS (Continued) (Rupees in lakhs) As at/ As at/ Year ended Year ended 31.03.2011 31.03.2010 6. Disclosure under Accounting Standard 17 a) Sales India 75,000.76 53,600.32 Others 11,778.97 5,525.48 Total 86,779.73 59,125.80 b) Total assets India 46,325.10 35,876.21 Others 4,531.02 1,773.34 Total 50,856.12 37,649.55 c) Capital expenditure India 1,802.02 986.34 Others – – Total 1,802.02 986.34 7. Disclosure under Accounting standard 29 Warranty Opening balance 687.76 773.78 Provision made during the year 221.12 295.59 Total 908.88 1,069.37 Less: Utilised / withdrawn during the year 338.69 381.61 Closing balance 570.19 687.76 8. Amount of loan repayable within one year: Secured - from banks 56.90 719.23 9. Sundry creditors include: a) Total outstanding dues to Micro and Small enterprises 394.25 360.93 b) Total outstanding dues to creditors other than Micro and Small enterprises 3,526.32 5,080.21 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). The company is regular in making payments of dues to such enterprises before due dates agreed upon. Hence the question of payment/provision of interest towards belated payments does not arise. c) Investor Education and Protection Fund Unclaimed dividend 9.27 6.99 10. Bank balance include: Unclaimed dividend 9.27 6.99 11. Loan and Advances include: a) Amount lying with central excise – 30.00 b) Amount due from an officer of the company 1.66 1.74 c) Maximum amount due from an officer of the company at any time during the year 1.81 1.81 41


  • Page 43

    Schedules (continued) XVII. NOTES ON ACCOUNTS (Continued) (Rupees in lakhs) As at/ As at/ Year ended Year ended 31.03.2011 31.03.2010 12. Liability not provided for a) Contingent liabilities i) On counter guarantee given to bankers 37.92 1.80 ii) On letters of credit opened with bankers 22.08 15.05 iii) On account of future export obligations (under Export Promotion – 327.43 Capital Goods scheme and Advance Licence) iv) Bills discounted 8,586.58 7,470.49 b) Contested liabilities i) Customs duty – 5.17 ii) Excise Duty 11.27 11.11 iii) Income Tax 183.30 93.34 iv) Service Tax 8.67 4.72 v) License fees due to local authorities 19.53 – vi) Tamilnadu Town and Country Planning Department 49.25 – c) Capital commitments not provided for 347.14 308.12 13. Tax deducted at source on : a) Interest receipts 6.51 1.25 b) Miscellaneous income 7.70 5.64 14. Audit fees consists of : a) Audit fees 13.00 12.00 b) Certification fees – 1.00 c) Taxation matters 3.00 2.00 d) Reimbursement of expenses 1.90 3.37 e) Other services – 1.75 15. Contribution to provident and other funds include: a) Gratuity as per scheme framed by Life Insurance Corporation of India 31.64 38.98 b) Pension fund 96.63 143.21 c) Deposit linked insurance as per scheme framed by Life Insurance Corporation of India 8.65 4.18 16. Repairs include : Stores consumed 11.52 26.61 17. Interest a) Interest on fixed loans – 95.63 b) Interest on others 16.92 200.45 c) Less: Interest receipts on Bonds, deposits, staff advances and other advances made (gross) 56.25 6.67 Net interest expense (income) (39.33) 289.41 42


  • Page 44

    Schedules (continued) XVII. NOTES ON ACCOUNTS (Continued) (Rupees in lakhs) As at/ As at/ Year ended Year ended 31.03.2011 31.03.2010 18. Research and development a) Revenue Expenditure 885.24 867.17 b) Capital Expenditure - Land and buildings 61.01 – c) Capital Expenditure - other than land and buildings 108.44 108.06 19. Previous year's figures have been regrouped wherever necessary to conform to current year's classification. 20. Disclosure made in terms of clause 32 and clause 41of the lisiting agreement with stock exchanges (Rupees in lakhs) Amount Maximum Amount outstanding amount due outstanding Particulars Name of the company as on at any one time as on 31.03.2011 during the year 31.03.2010 (a) Loans and advances (i) Loans and advances in the nature of The company does not have any of loans made to subsidiary company subsidiary. (ii) Loans and advances in the nature of The company does not have any loans made to associate company associate company. (iii) Loans and advances in the nature of The company has not given any loans made to firms/companies in advance to firms/companies which directors of the company are in which directors of the interested company are interested. (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 company On 3rd June 2009, the company became a subsidiary of Clayton Dewandre Holdings Limited, Rotterdam, The Netherlands, when the latter acquired 35.83% of share capital and is now holding 75 % of share capital. 43


  • Page 45

    Schedules (continued) XVII. NOTES ON ACCOUNTS (continued) 21. Related party disclosure LIST OF RELATED PARTIES a) Reporting entity WABCO-TVS (INDIA) Limited b) Subsidiary companies The reporting entity does not have any subsidiary company. c) Associate companies Nil d) Holding company Clayton Dewandre Holdings Limited, (CDH) Rotterdam, The Netherlands (became a subsidiary of this company from 3rd June 2009) e) Ultimate holding company WABCO Holdings Inc., USA f) Fellow Subsidiary companies 1 WABCO Fahrzeugsysteme,GmbH, Germany 2 WABCO China Co Ltd, China 3 WABCO France SAS, France 4 Meritor WABCO Vehicle Control Systems, USA 5 Shandong Weiming Automotive Products Co. Ltd, China 6 WABCO (Shanghai) Management Co Limited, China 7 WABCO Automotive SouthAfrica 8 WABCO Automotive UK Ltd, United Kingdom 9 WABCO Asia Private Limted, Singapore (Direct subsidiary of CDH) 10 WABCO Compressor Manufacturing Co. USA 11 WABCO Hong Kong Limited, Hong Kong 12 WABCO Japan Inc, Japan 13 WABCO Korea Ltd, Korea 14 WABCO Polska Sp.z o.o. Poland 15 WABCO Development GmbH, Germany 16 WABCO Logistics GmbH, Germany 17 WABCO Australia Pty Limited, Australia (Subsidiary of CDH through WABCO Asia Private Limited) 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 Ltda, Brazil 22 WABCO Brzdy K Vozidlum spol S.R.O, Czech 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 44


  • Page 46

    Schedules (continued) XVII. NOTES ON ACCOUNTS (continued) 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 Middle East and Africa FZCO, Dubai 34 WABCO Centro de Distribuicao de pecas Automotives Ltda, Brazil 35 WABCO Foundation Brakes Private Limited, Chennai (Subsidiary of CDH through WABCO Asia Private Limited) 36 WABCO IP Holdings LLC 37 WABCO Automotive Products Ltd 38 WABCO Air Compressor Holdings Inc., 39 WABCO Automotive Control Systems Inc., 40 WABCO Group Inc., 41 WABCO Group International Inc., g) Key management personnel Mr.P Kaniappan - Whole Time Director (from 17-06-2009) Mr C N Prasad - Whole Time Director (till 17-06-2009) 22. Related party transactions (Rupees in lakhs) Key Management Associate Fellow Subsidiary Sl. Nature of Personnel Name of the company No. transactions Year ended Year ended Year Ended 31.03.2011 31.03.2010@ 31.03.2011 31.03.2010 31.03.2011 31.03.2010 1 Purchase of goods Sundaram Industries Limited, Madurai – 113.29 – – – – Shandong Weiming Automotive Product Co. Ltd, China – – 18.14 19.12 – – WABCO Fahrzeugsysteme GmbH, Germany – – 2,312.69 1,354.24 – – WABCO do Brasil Industria e Comercio de Freios Ltda., Brazil – – 124.12 32.19 – – Meritor WABCO Vehicle Control Systems,USA – – 3.17 – – – WABCO BV, Netherlands – – 0.37 – – – WABCO France S.A.S, France – – 126.64 151.79 – – WABCO China Co Ltd, China – – 59.71 85.12 – – WABCO Compressor Manufacturing Co, USA – – 4.76 10.87 – – – 113.29 2,649.60 1,653.33 – – 2 Receiving of services Southern Roadways Limited, Madurai – 0.20 – – – – WABCO (Shanghai) Management Co., Limited, China – – – 61.38 – – – 0.20 – 61.38 – – 3 Sale of goods T V Sundram Iyengar & Sons Limited, Madurai. – 641.29 – – – – Meritor WABCO Vehicle Control Systems, USA – – 199.73 118.24 – – WABCO Logistics GmbH, Germany – – 1,090.58 413.22 – – WABCO China Co Ltd, China – – 1,959.25 2,038.91 – – WABCO Automotive, SouthAfrica – – 15.94 11.62 – – WABCO Compressor Mfg. Co,USA – – 2,985.72 1,964.75 – – WABCO Polska sp.z.o.o, Poland – – 1,315.48 291.84 – – WABCO Automotive UK Ltd, United Kingdom – – 190.18 359.13 – – WABCO Korea Ltd, Korea – – 29.07 22.02 – – 45


  • Page 47

    Schedules (continued) XVII. NOTES ON ACCOUNTS (continued) (Rupees in lakhs) Key Management Associate Fellow Subsidiary Sl. Nature of Personnel Name of the company No. transactions Year ended Year ended Year Ended 31.03.2011 31.03.2010@ 31.03.2011 31.03.2010 31.03.2011 31.03.2010 WABCO France S.A.S, France – – 884.02 4.71 – – WABCO do Brasil Industria e Comercio de Freios Ltda, Brazil – – 123.07 17.08 – – Shandong Weiming Automotive Product Co. Ltd, China – – 15.35 118.72 – – WABCO GmbH, Germany – – 243.28 71.50 – – WABCO Asia Private Ltd,, Singapore – – 35.43 22.72 – – WABCO Middle–East & Africa FZCO, Dubai – – 0.83 1.66 – – WABCO Development GmbH,Germany – – 24.60 1.21 – – WABCO Europe BVBA, Belgium – – 1,589.72 225.69 – – – 641.29 10,702.25 5,683.02 – – 4 Rendering of Services Software Service * WABCO Development GmbH, Germany – – 1,555.41 1058.18 – – R & D Service WABCO France S.A.S, France – – – 39.62 – – R & D Service WABCO Europe BVBA, Belgium – – 213.52 – – – R & D Service WABCO Development GmbH, Germany – – 171.09 – – – R & D Service WABCO do Brasil Industria e Comercio de Freios Ltda, Brazil – – – 0.24 – – R & D Service WABCO Polska sp.z.o.o, Poland – – – 2.87 – – – – 1,940.02 1,100.91 – – 5 Sale of fixed assets WABCO China Co Ltd, China – – – 383.55 – – 6 Receivables WABCO Logistics GmbH, Germany – – 136.77 258.86 – – WABCO China Co Ltd, China – – 543.86 577.67 – – WABCO Automotive UK Ltd, Uinted Kigdom – – 0.73 74.04 – – Meritor WABCO Vehicle Control Systems, USA – – 18.09 22.49 – – WABCO Development GmbH, Germany – – 175.92 202.37 – – WABCO Compressor Manufacturing Co,USA – – 950.34 60.19 – – Shandong Weiming Automotive Product Co. Ltd, China – – 0.29 37.02 – – WABCO Polska sp.z.o.o, Poland – – 956.82 142.45 – – WABCO do Brasil Industria e Comercio de Freios Ltda, Brazil – – 27.53 5.30 – – WABCO Asia Private Ltd,, Singapore – – 3.19 7.08 – – WABCO Europe BVBA, Belgium – – 215.29 16.94 – – WABCO GmbH, Germany – – 562.76 35.63 – – WABCO Automotive South Africa – – 3.24 – – – WABCO France S.A.S, France – – 645.65 40.84 – – WABCO Korea Ltd, Korea – – 5.82 – – – – – 4,246.30 1,480.88 – – 7 Payables Meritor WABCO Vehicle Control Systems, USA – – 3.17 – – – WABCO China Co Ltd, China – – 5.55 – – – WABCO BV, Netherlands – – 0.37 – – – WABCO do Brasil Industria e Comercio de Freios Ltda, Brazil – – – 10.71 – – WABCO France S.A.S, France – – 3.28 10.86 – – Shandong Weiming Automotive Product Co. Ltd, China – – 0.29 5.37 – – WABCO Fahrzeugsysteme GmbH, Germany – – 27.26 98.90 – – – – 39.92 125.84 – – 8 Remuneration to Key Management Personnel Mr C N Prasad – Whole Time Director – – – – – 20.05 Mr P Kaniappan – Whole Time Director – – – – 81.44 61.73 @ details for period from 01.04.2009 to 03.06.2009 only since these companies ceased to be associates from that date. * include capital expenditure reimbursements Rs. 196.43 lakhs (last year Rs. 35.43 lakhs). 46


  • Page 48

    Schedules (continued) XVII. NOTES ON ACCOUNTS (continued) (Rupees in lakhs) 23. Information pursuant to the provisions of part II of Schedule VI of the Companies Act, 1956 (vide notification dated 30th October, 1973 of the Department of Company Affairs, Government of India) Year ended 31.03.2011 Year ended 31.03.2010 Quantity Value Quantity Value I. RAW MATERIALS CONSUMED 1. a) Basic raw materials Steel sheets,bar materials & tubes Kgs 2,36,795 105.61 19,507 19.68 Castings and forgings Nos 1,19,56,354 13,158.07 51,72,099 6,869.50 b) Intermediates and components (which individually do not account for 10 % or more of the total value of consumption) 37,554.09 26,581.93 50,817.77 33,471.11 % of total % of total consumption consumption 2 Consumption of raw materials and components a) Imported 9.1 4,633.91 11.3 3,798.08 b) Indigeneous 90.9 46,183.86 88.7 29,673.03 100.0 50,817.77 100.0 33,471.11 II. CONSUMPTION OF MACHINERY SPARES a) Imported 0.5 0.83 – – b) Indigeneous 99.5 166.84 100.0 130.84 100.0 167.67 100.0 130.84 III. IMPORTS (CIF value) a) Raw materials and components 7,665.08 4,115.47 b) Stores and tools 186.70 149.76 c) Capital goods 207.46 154.53 IV. EXPENDITURE IN FOREIGN CURRENCY a) Commission on export sales 20.72 2.50 b) Travel 151.96 122.41 c) Training 13.11 5.21 d) Consultancy, retainer - Productivity improvement 58.56 27.08 e) Others 63.58 45.45 V. PAYMENT TO NON RESIDENT SHAREHOLDERS a) No. of non resident shareholders One One b) No. of shares held by non residents 14,225,684 14,225,684 c) Dividend – relating to 31st March 2010 355.64 – VI. EARNINGS IN FOREIGN EXCHANGE a) Exports (on FOB basis) 11,441.86 5,367.31 b) Freight and insurance recovery 337.11 158.17 c) Software service 1,383.58 997.74 d) R & D Service 384.61 87.43 e) Others 607.29 995.30 47


  • Page 49

    48 WABCO-TVS (India) Limited Schedules (continued) VII. PRODUCTION, SALES, OPENING & CLOSING STOCKS OF GOODS PRODUCED (Rupees in lakhs) Year ended 31.03.2011 Year ended 31.03.2010 Product Quantity Opening Production Sales Closing Stock Opening Stock Production Sales Closing Stock Stock meant meant for sale for sale in Qty. Value Qty. Qty. Value Qty. Value Qty. Value Qty. Qty. Value Qty. Value A Manufactured items a) Air assist and full air actuation system for automotive and non-automotive applications and elements thereof (Sets) 1,168 888.38 463,785 464,171 55,633.94@ 782 2,031.21 2,639 509.80 341,402 342,873 39,183.05@ 1,168 888.38 b) Spares 37.89 13,911.97 73.42 32.67 10,977.01 37.89 c) Exports 11,778.97 5,525.48 d) Anti lock braking system 5,454.85 3,440.26 926.27 86,779.73 2,104.63 542.47 59,125.80 926.27 @ Includes sale of assemblies and parts for which quantitative details are not furnished in view of large number of items Licensed / installed capacities information is not furnished in view of the abolition of the Industrial Licensing requirements M LAKSHMINARAYAN P KANIAPPAN As per our report of even date Chairman Whole-time Director For S.R. BATLIBOI & ASSOCIATES Chartered Accountants Firm Registration No. 101049W Chennai R MADHAVAN T S RAJAGOPALAN Per S. BALASUBRAHMANYAM 12th May, 2011 General Manager (Finance) and Secretary Chief Financial Officer Partner Membership No. 053315


  • Page 50

    Cash Flow Statement for the year ended 31st March 2011 (Rupees in lakhs) Year ended Year ended 31.03.2011 31.03.2010 A. CASH FLOW FROM OPERATING ACTIVITIES Profit before tax 19,137.16 11,833.19 Adjustments for: Depreciation 1,442.45 1,444.49 Profit on sale of investments (101.08) (31.51) Loss / (Profit) on sale of fixed assets 2.50 35.67 Interest (net) (39.33) 289.41 1,304.54 1,738.06 Operating profit before working capital changes 20,441.70 13,571.25 Adjustments for: (Increase) / decrease in Inventories (3,379.54) 23.64 (Increase) / decrease in Sundry debtors (5,180.53) (4,911.82) (Increase) / decrease in other current assets (0.05) 4.31 (Increase) / decrease in Loans and advances (1,721.28) (667.56) Increase / (decrease) in Current liabilities 1,171.32 2,076.97 Increase / (decrease) in Provisions 14.71 31.15 (9,095.37) (3,443.31) 11,346.33 10,127.94 Interest paid (16.92) (296.08) Direct taxes paid (6,425.27) (4,509.35) Net cash from operating activities (A) 4,904.14 5,322.51 B. CASH FLOW FROM INVESTING ACTIVITIES Additions to fixed assets including capital work in progress (1,802.02) (986.34) Sale of fixed assets during the year 3.52 356.78 Purchase of investments (40,400.00) (10,844.77) Redemption of investments 39,400.00 11,525.22 Profit on sale of investments 101.08 31.51 Interest received 56.25 6.67 Net cash from / (used in) investing activities (B) (2,641.17) 89.07 49

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