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    WABCO INDIA LIMITED 8th Annual Report 2012


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) 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. LEON LIU sclshares@gmail.com Jharkhand 832 108 investorscomplaintssta@scl.co.in Tel. : 0657 661 6800 TREVOR LUCAS madhavan.rajagopalan@wabco-auto.com Fax : 0657 238 7997 KURT LEHMANN* Bankers Plot No. AA8, Central Avenue, VINCENT PICKERING$ STATE BANK OF INDIA Auto Ancillary SEZ, Corporate Accounts Group Branch Mahindra World City, Whole-time Director 3rd Floor, Sigappi Achi Building Natham Sub-Post, Chengalpet, 18/3, Rukmanilakshmipathy Road Kancheepuram District 603 002 P KANIAPPAN Egmore, Chennai 600 008 Tel. : 044 4744 2000 Fax : 044 4749 0006 Chief Financial Officer Auditors T S RAJAGOPALAN Plot No.11, Sector 4, SIDCUL, S.R. BATLIBOI & ASSOCIATES IIE Pantnagar, Chartered Accountants Rudrapur Udham Singh Nagar, General Manager - Finance and Secretary Tidel Park, 6th & 7th Floor, Uttarakhand - 263 153 R MADHAVAN A - Block (Module 601, 701-702), 4, Rajiv Gandhi Salai, Software Design Centres Chennai 600 113 Audit Committee “Ispahani Centre”, 5th & 7th Floor, NARAYAN K SESHADRI Solicitors & Advocates 123/124 Nungambakkam High Road, Chairman Chennai 600 034 UDWADIA UDESHI & ARGUS PARTNERS Tel. : 044 2828 5000 D E UDWADIA Solicitors & Advocates Fax : 044 2833 2212 Elphinstone House C N PRASAD# 1st Floor, 17 Murzban Road TREVOR LUCAS@ Mumbai 400 001 CONTENTS Page No. Investors’ Grievance Committee NARAYAN K SESHADRI Registered Office Notice to the shareholders 4 Chairman Plot No. 3 (SP), III Main Road, Ambattur Industrial Estate, Directors’ report to the shareholders 8 P KANIAPPAN Chennai 600 058 CN PRASAD# Tel. : 044 4224 2000 Management discussion and analysis report 12 TREVOR LUCAS@ Fax : 044 4224 2009 Web Site : www.wabcoindia.com Report on corporate governance 15 Listing of Shares with Madras Stock Exchange Limited Auditors’ certificate on corporate governance 24 Chennai Auditors’ report to the shareholders 25 National Stock Exchange of India Limited Mumbai Balance sheet 28 Bombay Stock Exchange Limited Mumbai Statement of Profit & Loss 29 # upto 12th May 2011 Cash flow statement 30 @ from 12th May 2011 * upto 25th January 2012 Notes to financial statements 32 $ from 23rd May 2012 1


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) 2


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) FINANCIAL HIGHLIGHTS Rupees in lakhs Year ended March 31st 2007-08 2008-09 2009-10 2010-11 2011-12 Profit and Loss Account Sales/Revenue from operations# 54,655 42,594 59,125 89,252 104,564 Other income 1,266 2,003 1,828 536 1,206 Total income 55,921 44,597 60,954 89,788 105,770 Gross profit before interest, depreciation and tax 11,822 7,354 13,574 20,600 23,199 Depreciation 1,012 1,393 1,444 1,442 1,564 Profit before interest and tax 10,810 5,960 12,130 19,158 21,635 Interest 373 705 296 20 12 Profit before tax 10,437 5,255 11,834 19,138 21,623 Profit after tax 6,984 3,552 7,819 12,743 15,340 Balance Sheet Net fixed assets 17,407 19,528 18,677 19,031 24,300 Investments 866 901 221 1,220 2,320 Net current assets 843 5,758 9,178 18,984 26,726 Long term loans and advances 1,582 1,827 Total 19,116 26,186 28,076 40,817 55,173 Share capital 948 948 948 948 948 Reserves and surplus 15,820 18,818 26,084 37,724 51,962 Net worth 16,768 19,766 27,032 38,672 52,910 Loan funds/Non current liabilities## 2,024 6,020 719 1,330 1,169 Deferred tax (net) 324 400 325 815 1,094 Total 19,116 26,186 28,076 40,817 55,173 EPS (Rs.) 36.82 18.73 41.22 67.18 80.87 DPS (Rs.) 10.98 2.50 2.50 5.00 5.00 Book value per share (Rs.)@ 88.40 104.21 142.51 203.89 278.95 Return on capital employed (ROCE) %@ 112.4 26.3 44.7 55.6 45.1 Return on net worth (RONW) %@ 83.3 19.4 33.4 38.8 33.5 Fixed assets turnover (no of times)@ 6.2 2.3 3.1 4.7 4.8 Working capital turnover (no of times) 129.1 12.9 7.9 6.3 4.6 Gross profit as % of sales (EBITDA) 21.6 17.3 23.0 23.1 22.2 Gross profit as % of total income 21.1 16.5 22.3 22.9 21.9 Net profit as % of total income 12.5 8.0 12.8 14.2 14.5 # Figures for the years 2007-08 to 2009-10 represents "sales" and for 2010-11 and 2011-12 represents "Revenue from operations". # # Figures for the years 2007-08 to 2009-10 represents "Loan funds" and for 2010-11 and 2011-12 represents "Non current liabilities". ROCE is profit before interest and tax 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 demerger figures and hence not comparable with the ratios for 2008-09, 2009-10. 3


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notice to the Shareholders to propose Mr Vincent Pickering for directorship, be and he is hereby appointed as a director of the NOTICE is hereby given that the Eighth Annual General Company. Meeting of the Company will be held at "The Music Academy", New No 168 (Old No 306), T.T.K Road, Chennai 6. To consider and if thought fit, to pass with or 600 014 on Wednesday, the 25th day of July 2012 at without modification, the following resolution as 10.00 a.m. to transact the following business: an ordinary resolution: 1. To consider and, if thought fit, to pass with or RESOLVED THAT Messrs. S.R. Batliboi & Associates without modification, the following resolution as Chartered Accountants, Tidel Park, 6th & 7th Floor - an ordinary resolution: A Block (Module 601,701-702), No. 4, Rajiv Gandhi Salai, Taramani, Chennai - 600113, holding Firm RESOLVED THAT the audited balance sheet as at Registration No.101049W allotted by the Institute of 31st March, 2012 and the profit and loss account of Chartered Accountants of India, be and are hereby the Company for the year ended on that date, together appointed as the statutory auditors of the Company with the directors' report and the auditors' report to hold office from the conclusion of this Annual thereon as presented to the meeting be and the same General Meeting until the conclusion of the next Annual are hereby approved and adopted. General Meeting of the Company. 2. To consider and, if thought fit to pass with or RESOLVED FURTHER THAT the board of directors without modification, the following resolution as of the Company be and is hereby authorized to fix an ordinary resolution: their remuneration and reimburse their travelling and RESOLVED THAT pursuant to the recommendation out of pocket expenses. of the board of directors of the Company, a dividend 7. To consider and if thought fit, to pass with or of Rs. 5/- per share on 1,89,67,584 equity shares of without modification, the following resolution as Rs. 5/- each fully paid up absorbing a sum of an ordinary resolution: Rs. 948.38 lakhs be and is hereby declared for the year ended 31st March, 2012 and the same be paid RESOLVED THAT subject to Section 310 and other to the shareholders whose name appear in the register applicable provisions of the Companies Act, 1956, read of members of the Company as at the close of with Schedule XIII thereto and in partial modification 19th July, 2012. of the ordinary resolution at item No. 7 passed by the shareholders, in the Sixth Annual General Meeting of 3. To consider and, if thought fit, to pass with or the Company held on 26th August, 2010, approval of without modification, the following resolution as the shareholders of the Company be and is hereby an ordinary resolution: accorded to the undermentioned increase in the RESOLVED THAT Mr Trevor Lucas, director who remuneration payable to Mr P Kaniappan, Whole-time retires by rotation and being eligible for re-appointment, Director from 1st July 2012 until the expiry of his be and is hereby re-appointed as a director of the present term of office on 16th June 2014. Company. (i) Salary and commission on net profits or 4. To consider and, if thought fit, to pass with or performance linked incentive or bonus; without modification, the following resolution as subject to a ceiling of Rs.90 lakhs per annum an ordinary resolution: and RESOLVED THAT Mr D E Udwadia, director who RESOLVED FURTHER THAT the Supplemental retires by rotation and being eligible for re-appointment, Agreement dated 23rd May 2012 between the Company be and is hereby re-appointed as a director of the and Mr P Kaniappan placed on the table incorporating Company. the above increase in his remuneration, be and is 5. To consider and, if thought fit, to pass with or hereby approved. without modification, the following resolution as an ordinary resolution: By order of the board RESOLVED THAT Mr Vincent Pickering, who was appointed as a director of the Company with effect Chennai R MADHAVAN from 23rd May, 2012 to fill in the casual vacancy 23rd May 2012 General Manager - caused by the resignation of Mr Kurt Lehmann and Finance and Secretary holds office upto the date of this Annual General Meeting and in respect of whom the Company has Registered office: received a notice in writing under Section 257 of Plot No 3 (SP), III Main Road the Companies Act, 1956 along with a deposit of Ambattur Industrial Estate Rs. 500/- from a shareholder intimating his intention Chennai 600 058. 4


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes: Members are, therefore requested to bring their copies of the annual report to the meeting. 1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend 10. Members are requested to affix their signature at the and vote instead of himself and the proxy or proxies space provided on the attendance sheet annexed to so appointed need not be a member or members, the proxy form and hand over the slip at the entrance as the case may be, of the Company. The instrument of the meeting hall. appointing the proxy and the power of attorney or 11. In terms of clause 49 (IV)(G) of the listing agreement other authority, if any, under which it is signed or with the stock exchanges, a brief resume of directors, a notarially certified copy of that power or authority who are proposed to be re-appointed in this meeting, shall be deposited at the registered office of the nature of their expertise in specific functional areas, Company not later than 48 hours before the time their other directorships and committee memberships fixed for holding the meeting. and their shareholdings in the Company and their 2. An explanatory statement pursuant to Section 173(2) relationships with other directors in the Company are of the Companies Act, 1956 in respect of item no. given below: 5 and 7 as set out in the notice is annexed hereto. Brief resume and other information in respect of 3. The Register of Members and the share transfer directors seeking re-appointment at the Annual General register will remain closed for a period of 6 days from Meeting. 20th July, 2012 to 25th July, 2012 (both days inclusive) for the purpose of dividend to be approved by the Mr Trevor Lucas: shareholders at the ensuing Annual General Meeting Born on 3rd June 1948, Mr Trevor Lucas is a Bachelor of Business of the Company. Studies (Honours), University of Dublin and a fellow member of the 4. In terms of Section 205A read with Section 205C of Institute of Chartered Accountants in Ireland. the Companies Act, 1956, the dividends declared by He has served KPMG, Dublin from 1975 to 1982 as General Practice the Company, which remain unclaimed for a period Manager. He was with CPC Europe, holding various positions as of seven years will be transferred to the Investor Manager Finance and Taxes, Manager Financial Services and Education and Protection Fund (IEPF), established by Systems and Manager Financial Accounting. the Central Government on the due dates. The particulars of due dates for transfer of such unclaimed He has also served as head of Finance for Council for Education, dividends to IEPF are furnished in the report on Recruitment and Training for the Hotel, Catering and Tourism Industry, Corporate Governance forming part of the annual Dublin. report. He was with Best Foods Europe/Africa/Middle East, Brussels (later Members who have not encashed their dividend part of the Unilever Group) during 1989-2002 as Director Finance warrants in respect of the above periods are requested and Taxes. to make their claim by surrendering the unencashed He joined American Standard, Brussels, (WABCO Division) in 2003 warrants immediately to the Company. as Vice President-Taxes. Following the spin off of WABCO Division 5. Members holding shares in physical form, in their own from American Standard, he is presently the Vice President-Taxes interest, are requested to dematerialize the shares to of WABCO Holdings Inc. avail the benefits of electronic holding / trading. He is a member of Audit committee, Investors' Grievance committee 6. Members are requested to register their e-mail address and Administrative committee of directors of the Company. with the Company/Share transfer Agents immediately He does not hold any share in the Company and he is not related and participate in the "Green initiative" launched by to any other directors of the Company. the Ministry of Corporate Affairs. 7. Members holding shares in depository are requested Details of his other directorships are given below: to register their e-mail address with their depository S. participants and participate in the "Green initiative" Name of the company Position held No. launched by the Ministry of Corporate Affairs. 1 WABCO Air Compressor Holdings Inc., Director 8. Members are requested to notify to the Company/ Share Transfer Agent immediately any change in their 2 WABCO Automotive Control Systems Inc., Director address. Members holding shares in depository are 3 WABCO Automotive Products Limited Director requested to advise change of address to their 4 WABCO Group Inc., Director depository participants. 5 WABCO Group International Inc., Director 9. As a measure of economy, copies of the annual report will not be distributed at the Annual General Meeting. 6 WABCO Inc., Director 5


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Mr D E Udwadia: S. Committee membership/ Name of the company Position held Mr D E Udwadia is a post graduate from University of No. chairmanship Bombay. He is an Advocate and Solicitor of the Bombay 10 Nitesh Estates Ltd Director Audit committee - member High Court. He is also a Solicitor of the Supreme Court of England. 11 Wyeth Ltd Director Audit committee - member Mr D E Udwadia was a partner of Crawford Bayley & Co., 12 Conservation Corporation Mumbai, one of the India's leading law firms for nearly of India Pvt Ltd Director 22 years. He is a founder partner of Udwadia & Udeshi, Advocates and Solicitors, Mumbai. Consequent upon the 13 Habasit Iakoka Pvt Ltd Director reconstitution of the firm, its name was changed to Udwadia 14 J M Financial & Investment Udeshi & Argus Partners effective 1st April 2012. His firm Consultancy Services Pvt Ltd Director and he are legal advisors to several Indian and multinational companies and foreign banks having a presence in India. 15 JM Financial Trustee Company Pvt Ltd Director He has during his nearly 47 years of active law practice acquired valuable knowledge, experience and expertise in 16 Quantum Advisors Pvt Ltd Director the areas of corporate law, mergers, acquisitions and take 17 Rossi Gearmotors (India) overs, corporate restructuring, foreign collaboration, joint Pvt Ltd Director ventures, project and infrastructure finance, intellectual property, international loans and finance related transactions Mr Vincent Pickering: and financial instruments, mutual funds, real estate and conveyancing. Born on 27th September 1968, Mr Vincent Pickering has law degree from the University of London, and is qualified as a U K Solicitor. He is a member of the Audit committee of directors of the Company. He does not hold any shares in the Company He began his career at the European Commission's Directorate and he is not related to any other director of the Company. General for Competition. He also gained diverse legal experience Details of his other directorships and memberships/ working with leading international law firms while based in Brussels chairmanships of committees are given below: and London. S. Committee membership/ He served as General Counsel and Head of Regulatory Affairs at Name of the company Position held Bulldog Communications, a U K based telecom service provider. No. chairmanship He also served for 8 years at Microsoft Corporation in Redmond, 1 ABB Ltd Director 1. Audit committee - Washington, USA, as Associate General Counsel for the company's member Worldwide Licensing and Pricing Division. While there, he was 2. Shareholders' responsible for legal support for Microsoft's global commercial sales, as well as Microsoft financing and the company's emerging market grievance committee - initiatives. chairman He does not hold any share in the Company and he is not related 2 Astra Zeneca Pharma India Chairman Audit committee - member to any other directors of the Company. Ltd Details of Directorships are given below: 3 The Bombay Burmah Trading Director Audit committee - member S. Corporation Ltd Name of the company Position held No. 4 Development Credit Bank Ltd Director Audit committee - member 1 WABCO North America LLC Director 5 Eureka Forbes Ltd Director 2 WABCO Air Compressor Holdings Inc., Director 6 ITD Cementation India Ltd Director Audit committee - member 3 WABCO Automotive Control Systems Inc., Director 7 JM Financial Ltd Director 4 WABCO Automotive Holdings Inc., Director 8 MPS Limited Vice Audit committee - member 5 WABCO Group Inc., Director Chairman 6 WABCO Group International Inc., Director 9 IRD Mechanalysis Ltd Director 7 WABCO Expats Inc., Director 6


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956. Item No. 5 st Mr Vincent Pickering was appointed as a director at the annum to Rs. 90 lakhs per annum effective 1 July 2012 board meeting held on 23rd May, 2012 in the casual up to the expiry of his tenure as whole-time director on th vacancy caused by the resignation of Mr Kurt Lehmann 16 June 2014. th on 25 January, 2012. Mr Kurt Lehmann would have held The increase in remuneration of Mr P Kaniappan is well office as a director upto the date of this Annual General within the limits prescribed under Schedule XIII of the Meeting had he not resigned. Pursuant to Section 262 of Companies Act, 1956. the Companies Act, 1956, Mr Vincent Pickering holds office upto the date of this Annual General Meeting. All other terms and conditions of his appointment, as approved by the shareholders at the Sixth Annual General Notice has been received from a shareholder of the Meeting of the Company held on 26th August 2010, Company under Section 257 of the Companies Act, 1956, remain unchanged. along with a deposit of Rs. 500/- signifying his intention to propose the candidature of Mr Vincent Pickering for the The above increase in the ceiling is subject to the approval office of director. of the shareholders in a General Meeting. Hence the resolution at item no. 7 is proposed. The directors recommend for approval the resolution at rd A Supplemental Agreement dated 23 May 2012 has been item no. 5 of the Notice. entered into by the Company with Mr P Kaniappan Mr Vincent Pickering is interested or concerned in the incorporating the above increase in his remuneration. resolution, since it relates to his appointment. rd A copy of the Supplemental Agreement dated 23 May 2012 referred to in the resolution at item no. 7 of the Notice Item No: 7 will be open for inspection by shareholders between Mr P Kaniappan was appointed as a Whole-time director 11.00 a.m. and 2.00 p.m. on any working day of the th for a period of five years with effect from 17 June 2009 Company at the Company's Registered Office. th by the board of directors of the company on 17 June 2009. His appointment as whole-time director and payment The directors recommend the resolution for approval by of remuneration to him were approved by the shareholders the shareholders. passed at the Fifth Annual General Meeting of the Company Mr P Kaniappan is interested or concerned in the resolution th held on 24 September 2009. since it relates to his remuneration. In line with the general increase in remuneration payable By order of the board to senior executives of the Company, the increase in his Chennai R MADHAVAN duties, functions and responsibilities and in recognition of rd 23 May 2012 General Manager - the valuable services provided by him, the board of directors, Finance and Secretary rd in their meeting held on 23 May 2012, increased the Registered office: remuneration payable by way of salary and commission Plot No. 3 (SP), III Main Road on net profits or performance linked incentive or bonus Ambattur Industrial Estate by increasing the present ceiling of Rs. 65 lakhs per Chennai 600 058. 7


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Directors’ report to the shareholders The directors have pleasure in presenting the eighth annual report and a sum of Rs. 948.38 lakhs for approval of the shareholders at the the audited accounts for the financial year ended 31st March 2012. ensuing annual general meeting. 2. CHANGE OF NAME OF THE COMPANY 5. PERFORMANCE The shareholders had at the last Annual General Meeting held on During the year 2011-12, sales of medium and heavy commercial 27th July 2011 approved the change of name of the Company, vehicles (MHCV), grew 7 % over the previous year. Sales of light subject to the approval of the Central Government. Central commercial vehicles (LCV) registered a growth of 29% during the Government approval having been obtained, the change of name same period. Overall, the commercial vehicle (CV) grew 19% over to WABCO INDIA LIMITED became effective on 2nd August 2011, the previous year. being the date of issue of a fresh Certificate of Incorporation by During the year, the Company achieved a total revenue from operations the Registrar of Companies, Chennai. and other income of Rs. 1,057 crores as against turnover of 3. FINANCIAL HIGHLIGHTS Rs. 898 crores in the previous year; a significant growth of 17.7%. Rupees in lakhs The Company has outperformed MHCV market growth in OE Details Year ended Year ended through, 31.03.2012 31.03.2011 a. increased content per vehicle and b. improved market share Sales (net) 1,00,497.08 86,574.79 6. CAPITAL EXPENDITURE Other Operating income 4,067.16 2,676.87 Capital expenditure of Rs. 50 crores is planned for the year Other income 1,205.90 535.95 2012-13 considering the industry growth in this year. Total revenue from operations 7. DIRECTORS and other income 1,05,770.14 89,787.61 Mr D E Udwadia, director, Mr Trevor Lucas, director and Mr Vincent Gross profit before interest and Pickering, director retire at the ensuing Annual General Meeting depreciation 23,198.63 20,600.08 of the Company. Being eligible, they offer themselves for Finance costs 11.88 20.47 re-appointment. A brief resume of the above three directors and other required Depreciation 1,563.72 1,442.45 information is given in the notice convening the annual general Profit before tax 21,623.03 19,137.16 meeting of the Company. Necessary resolutions for their reappointment will be placed for approval of the shareholders at Provision for tax (including the ensuing annual general meeting. Your directors recommend deferred tax and tax relating to their reappointment as directors of the Company. earlier years) 6,283.07 6,393.98 Mr Kurt Lehmann resigned as a director with effect from Profit after tax 15,339.96 12,743.18 25th January 2012. The Board of Directors at its meeting on Surplus / (loss) brought forward 25th January 2012 placed on record its appreciation of the valuable from previous year 22,003.29 11,636.66 services rendered by him during his tenure as a director. Mr Vincent Pickering was appointed as a director in the casual vacancy caused Total 37,343.25 24,379.84 by the resignation of Mr Kurt Lehmann at the board meeting on 23rd May 2012. Appropriations: 8. AUDITORS Proposed dividend 948.38 948.38 Messrs S.R.Batliboi & Associates, Chartered Accountants, Chennai Dividend tax payable 153.85 153.85 retire at the ensuing Annual General Meeting and are eligible for Transfer to general reserve 3,000.00 1,274.32 re-appointment. Surplus / (Loss) in profit and loss account 33,241.02 22,003.29 9. COST AUDITOR 37,343.25 24,379.84 The Ministry of Corporate Affairs, Cost Audit Branch, Government of India has issued an Order on 24th January 2012. In terms of this order, Companies whose shares are listed on Stock Exchanges 4. DIVIDEND or whose turnover is more than Rs. 100 crores in the immediately The board of directors have recommended a dividend of preceding financial year and engaged in Engineering machinery Rs. 5 per share for the year ended 31st March 2012 absorbing products are required to have the cost accounting records audited 8


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) by a Cost Accountant or a firm of Cost Accountants effective fair view of the state of affairs of the Company at the end 1st April 2012. of the financial year and of the profit of the Company for Accordingly, the board of directors at its meeting on 23rd May 2012 the year under review; had on the recommendation of the audit committee of directors, (iii) that the directors have taken proper and sufficient care for appointed Mr A N Raman, Chennai, a practising Cost Accountant the maintenance of adequate accounting records in accordance and a fellow member of The Institute of Cost Accountants of India with the provisions of the Companies Act, 1956 for safeguarding as Cost Auditor. He will audit the cost accounting records of the the assets of the Company and for preventing and detecting Company for the year 2012-13. fraud and other irregularities; and 10. STATUTORY STATEMENTS (iv) that the directors have prepared the accounts for the financial Conservation of energy, technology absorption and foreign year ended 31st March 2012 on a going concern basis. exchange earnings and outgo 11. CORPORATE GOVERNANCE Information regarding conservation of energy, technology absorption The Company has complied with the provisions of the Listing and foreign exchange earnings and outgo is given in Annexure I Agreement concerning corporate governance and a report to this to this report, as per the requirements of Section 217(1)(e) of the effect is attached, as required by clause 49 of the Listing Agreement Companies Act, 1956, read with the Companies (Disclosure of with the stock exchanges. The certificate issued by the auditors Particulars in the Report of Board of Directors) Rules, 1988. of the Company regarding compliance with the corporate governance Particulars of employees requirements is also annexed to this report. Particulars of employees pursuant to Section 217(2A) of the The whole-time director (CEO) and the chief financial officer (CFO) Companies Act, 1956, read with the Companies (Particulars of of the Company have certified to the board on financial statements Employees) Rules, 1975, as amended, are set out in Annexure II and other matters in accordance with clause 49(V) of the Listing and form part of this report. However, pursuant to Agreement pertaining to CEO/CFO certification for the financial year Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and ended 31st March 2012. Accounts are being sent to all the Members excluding the aforesaid The management discussion and analysis report, as required by information. The said particulars will be made available to a Member the Listing Agreement, is also attached and forms part of this report. upon request and also made available for inspection at the Registered Office of the Company. Any Member interested in obtaining such 12. ACKNOWLEDGEMENT particulars may write to the Company Secretary at the Registered The directors gratefully acknowledge the continued support and Office of the Company. co-operation received from WABCO Europe BVBA, Belgium. Directors’ Responsibility Statement The directors thank the vehicle manufacturers, distributors, vendors and bankers for their continued support and assistance. Pursuant to Section 217(2AA) of the Companies Act, 1956 it is hereby confirmed: The directors wish to place on record their appreciation of the excellent work done by employees of the Company at all levels (i) that in the preparation of annual accounts for the financial during the year. The directors specially thank the shareholders for year ended 31st March 2012, the applicable accounting standards have been followed along with proper explanation the confidence reposed by them in the Company. relating to material departures; For and on behalf of the board (ii) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates Chennai M LAKSHMINARAYAN that were reasonable and prudent so as to give a true and 23rd May 2012 Chairman 9


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Annexure I to the Directors’ report Information as required under Section 217(1)(e) of the Companies Act,1956 A. CONSERVATION OF ENERGY B. TECHNOLOGY ABSORPTION Research & Development (R & D) 1. Measures taken i) Provision of Natural Solar Light tubes at 10 places in office 1. Specific areas in which R & D is carried out by the Company. areas. Existing activities: ii) Replacement of street lights to CFL / LED lights - 20 nos. (a) Full range of Brake chambers with permanent crimping for North American Market - design and product validation completed. iii) Replacement of High bay lights to CFL / LED lamp to maintain optimum luminous level in warehouse. (b) Double Diaphragm Spring brake actuators for drum brakes for North American Market - design and product validation completed. iv) Introducing efficient coolant in new grinding machines thereby resulting in reduced power consumption. (c) Type new range of Spring Brake Actuators-65 mm stroke - design has been completed and samples offered to customer. v) Replacement of air guns by coolant guns at 7 places in Compressor machining cells. (d) Development of low cost "Pressure Sensor" with low pressure warning indication on Vehicle Dashboard, for the domestic vi) Modifying the light fittings in production area from both sides customers. to centre line of the gang way resulted in half of the lighting (e) Value Engineered "ABS Wiring Harness" for domestic customers power consumption. has been launched in production. vii) Modification of Anodizing Chiller pump thereby 10KW motor (f) Launching of Lift axle control system for truck application for pump eliminated. domestic customers; concept proven and detail design started. viii) Removal of Chip Conveyors from Machinery at 10 places (g) Adjusting valve for domestic customers for reducing tyre wear. where minimum chips is generated from machine resulted in saving of 100 KW / day power consumption. (h) Air Processing and Distribution Assembly (APDA) development for domestic customers. This is a new generation air processing This will result in a saving of about 5.58 lakh units and device combining several new functions, improving customer Rs. 30.71 lakhs per annum. value and reducing cost. Lab validation and field validation under progress. 2. Measures Proposed 3 (i) 318cm compressors have been developed for domestic i) Modification of anodising chiller design to reduce the capacity customers. from 90TR to 10TR. ii) Auto switching off the fans and lights in shop floor during lunch 2. Benefits derived as a result of R & D: time through PLC. (a) Market expansion and improved competitive position through iii) Introduction of energy efficient air blower instead of compressed significantly improved products for new markets. air for agitation process in anodising plant. (b) New opportunity in North America by introducing new range iv) Replacement of compressed air to energy efficient air blowers of valves and permanent crimp brake chambers. in all ultrasonic washing machines in shop floor. (c) Improved competency for designing products executing projects v) Periodic replacement of air guns with energy efficient nozzles. for global market. vi) Introduce solar lights for street lights instead of CFL lamp. (d) Acquiring competency in new areas like low cost pressure vii) Replace the coolants with energy efficient coolant (Quaker). sensors and switches. viii) Introduce induction lamps instead of doom lights in shop floor. 3. Future plan of action: ix) Provide electronic timers in all AMS machines to switch off (i) Launch of new products under development for domestic the same during idle time. customers. This will result in a saving of about 6.75 lakh units and (ii) Reengineered products for brake system and driveline controls Rs. 32.33 lakhs per annum. to improve customer value and reduce cost. 10


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) (iii) Design and development of "Continuous Brake Lining Wear 3. Developed innovative products to improve competitive position Sensor" integrated to Automatic Slack Adjuster. in the market, expand market through new technologies and (iv) Series production of brake system valve devices for North systems and leverage global markets. American OEMs - phase II. 4. Significant growth in R&D engineers with standardized training (v) Development of compressor with clutch for energy saving. methods to enhance competency. 5. Reduction of rework through improved analysis tools in Model 4. Expenditure on R & D: Rs. in Lakhs based Engineering. Capital expenditure 280.68 Recurring expenditure (including salaries) 866.35 (c) Details relating to imported technology: (Technology imported during the last 5 years reckoned from the beginning of the 1,147.03 financial year). Total expenditure as percentage of sales turnover 1.08% Nil Technology absorption, adaptation and innovation: (a) Efforts in brief: C. FOREIGN EXCHANGE EARNINGS AND OUTGO 1. Development and validation of analysis techniques like harmonic EXPORT ACTIVITIES: analysis in FEA, flow simulation libraries in AME Sim. st Exports during the year ended 31 March 2012 amounted to 2. Knowledge acquisition in electromechanical product design like Rs. 14,811.60 lakhs. pressure sensors, electric motors, switches and solenoids. 3. Enhance corrosion resistance of parts through improved painting Total foreign exchange used and earned: technology. a) Foreign exchange used Rs. 11,951.21 lakhs (b) Benefits derived as a result of the above efforts: b) Foreign exchange earned Rs. 18,021.65 lakhs 1. Development of products with best in class performance and reliability. For and on behalf of the board 2. The new simulation technologies have reduced the product development time and cost significantly. This has resulted in improved project delivery of new products enhancing customer Chennai M LAKSHMINARAYAN confidence. 23rd May 2012 Chairman 11


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) MANAGEMENT DISCUSSION AND ANALYSIS REPORT WABCO INDIA LIMITED is the pioneer in the manufacture of automotive vehicle control systems in India. The Company has positioned itself as a "Total Solution Provider" for the braking system requirements of the customers. The company recorded all time high total revenue (revenue from operations and other income) of Rs. 1,057 crores during 2011-12 as against Rs. 898 crores in 2010-11, registering a growth of 17.7%. The Company has achieved this performance in spite of slow down of the economy and lower growth in sectors like agriculture, industry and static growth in services sector in 2011-12 as compared to 2010-11. I. Industry Structure and Development: India's real Gross Domestic Product (GDP) started decreasing from 1st quarter of 2011-12 itself, GDP at 7.7% is likely to end at 6.8% for full year 2011-12. GDP growth for full year 2010-11 was at 8.4%. Broad sector wise growth for 2009-10 to 2011-12 is given below:- Growth rate of real GDP (%) Sector 2009-10 2010-11 2011-12 (Forecast) Agriculture 1.0 7.0 3.0 Industry 8.4 7.2 4.1 Services 10.4 9.3 9.0 Real GDP 8.4 8.4 6.8 Source :- CMIE Deceleration in the manufacturing sector growth and decline in the mining sector output contributed to the fall in GDP growth in 2011-12. The commercial vehicle industry registered a moderate performance in 2011-12 with a growth of 7% in Medium and Heavy Commercial Vehicles (MHCV) sales volume. This was a result of government focus on infrastructure development, rapid urbanization, robust freight demand and improved transporter profitability. The development of road infrastructure is a key factor that influences the growth of the Indian commercial vehicle industry. With the Government paving the way for increased investment in the road and bridges sector, the total investment is set to be increased substantially during 12th Five year plan as compared to 11th Five year plan. Year wise break up of proposed investment in Roads and Bridges sector during 12th Five year plan is give below. In Rs. Billions th Plan Sector 11 2012-13 2013-14 2014-15 2015-16 2016-17 12th Plan 2008-12 2012-17 Roads & Bridges 2,787 1,022 1,176 1,336 1,515 1,715 6,764 Total investment in Infra. Sector 20,542 6,194 7,127 8,095 9,180 10,395 40,992 Infrastructure Investment % of GDP 7.55 9.00 9.50 9.90 10.30 10.70 9.95 Source: Planning Commission, SBI CAP Securities Research Owing to the above growth drivers and enablers, the production of Medium and Heavy Commercial Vehicles (MHCV) in 2011-12 compared to 2010-11 has recorded growth of 11% as per data given below: Category 2011-12 2010-11 Growth Commercial vehicle production is likely to rise by 9.7% in Medium and Heavy Commercial 2012-13. Better road infrastructure coupled with a robust demand Vehicles Production 3,83,277 3,45,818 11% for light commercial vehicles, owing to the increasing acceptance of the hub-and-spoke model of transportation is expected to drive (Source: SIAM) the industry's production growth during the year. Indian companies are gaining recognition as manufacturers of high III. Opportunities & Threats quality automotive components in the international market. Presence of global players like VOLVO, MAN, Navistar and Daimler will drive The Company caters to requirements of commercial vehicle segment technology in our Market. of the automotive industry. As the national highway network will be strengthened, the mode of transportation for bulk commodities II. Business outlook and overview like steel products, cement and food grains will gradually shift from Reserve Bank of India in its latest Monetary Policy Statement has rail to road. The share of road in the transport of all commodities projected a baseline GDP growth for 2012-13 at 7.3%. is hence likely to rise from 53% in 2009-10 to 58% in 2014-15. The rationale for this projection is that industry will perform better With improved road infrastructure, the demand for faster vehicles than in last year as leading indicators of industry suggest a turnaround that carry higher payloads is increasing. in IIP (Index for Industrial Production) growth. The global outlook Local market growth opportunities through increase in content per also looks slightly better than expected earlier. Overall the domestic vehicle in the form of introducing new systems / technologies like growth outlook for 2012-13 looks a little better than in 2011-12. Automated Manual Transmission (AMT), Automatic Slack Adjusters, 12


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Clutch actuation systems, higher capacity compressors etc., plans to mitigate this risk through cost reduction initiatives such will result in increased business opportunities. as value engineering and global sourcing. In the aftermarket side, so far, the Company has commissioned V. Internal control system and their adequacy 179 authorized service centers at strategic locations across the The Company has a proper and adequate system of internal country, to provide quicker and better service on air brake aggregates. controls to ensure that all assets are safeguarded and protected Further, to improve availability of quality service in rural areas, against loss from unauthorized use or disposition thereof. the Company also commissioned 145 certified workshops. These All transactions are authorized, recorded and reported correctly. initiatives would result in improved service practices, availability of The internal controls are checked by internal auditors. genuine parts and generate additional revenue for the Company. The observations made by them, management action and time The unit located at Mahindra World City, a Special Economic Zone frame are reviewed by the audit committee of the Board of Directors. caters to the needs of WABCO plants globally. With the revival Concerns if any are reported to the Board. of global economy expected in the near future, business opportunities VI. Operations review for this unit will increase. In line with this, the company has gone A. Manufacturing on an expansion of this unit, construction has been completed and manufacturing activity has commenced during April 2012. During the year under review, as part of expansion and to set up a plant near the major customers, the company has The Company's competitors are active and continue to supply to purchased land and production shed at Pant Nagar in the key customers. State of Uttrakhand. This unit has started manufacturing IV. Risks and concerns activity and commercial invoice was raised during The cyclical nature of the Indian commercial vehicle industry March 2012. The company proposes to start the construction (Company's major customer segment) might affect the demand. In of its plant near Lucknow in the State of Uttar Pradesh during 2012-13. The company expects to commence commercial 2012-13, operating expenses are likely to rise with the expected production during February / March 2013. increase in prices of key raw materials, Energy cost & scarcity of power in state. The Company's manufacturing facilities follow the best practices such as Total Quality Management (TQM), Total Productive The trend in prices of key raw materials is as follows:- Maintenance (TPM) and Lean Manufacturing and has • Steel prices have increased by 5% in 2011-12 compared to best-in-class practices for safety, work environment, water 2010-11 in spite of increased steel production by 7.9% for and energy conservation. These initiatives are deployed the period April 2011 - November 2011. Fall in Indian rupee company wide to achieve significant improvement in productivity against US Dollar by 13.5% in 2011-12 has impacted on the and reduction in manufacturing cost. key raw materials imports - Iron ore and coal in turn steel Continuous improvement actions are implemented to improve price. The increase in Iron ore price by 67% in Mid-December manufacturing quality and productivity in all the manufacturing 2011 and coal by 43% in open market expects to increase locations. the steel price in Q1 and Q2 of 2012 as the inventory is During the year under review, the company obtained the low compared to demand. national award for excellence in cost management from the • Domestic aluminum prices increased by 10% in 2011-12 Institute of Cost Accountants of India. Other awards won by compared to 2010-11. The impact of drop in LME index did the company include Excellence in Quality and Excellence not have effect on aluminum price due to fall in rupee against in Innovation and Technology awards and INNOVENDOR dollar. The steep rise in price of furnace oil during 2011-12 award from TATA Motors Limited. The company also has by 38% compared to 2010-11 has impacted in the aluminum bagged Silver award from ACMA for technology in 2011. price. Average aluminum prices are expected to be 6-8% B. Quality higher in 2012-13, as compared to 2011-12 levels. The quality system at the factory aims at achieving total • Average rubber prices are expected to be 12-15% higher in customer satisfaction through its focus on improving product 2012-13, as compared to 2011-12 levels due to continuous quality to World standards. This is achieved through total increase in synthetic rubber prices. employee involvement and continuous improvement culture. Commercial Vehicles manufacturers are likely to pass on these Rigorous usage of poka-yokes, utilization of statistical tools additional costs to customers. However, the sensitivity of transporters' for process optimization and control also contribute towards profitability to the increase in vehicle cost would determine the improving the product quality. extent of the cost actually passed on to the end customer. The standardization of the quality procedures is aligned with Since, major growth is expected from Exports as well as from new QS 9000 / TS 16949 requirements. WABCO INDIA LIMITED systems; new product launch at the right time will be the focus is certified for TS 16949. area. Suitable measures have been factored in the company's TQM is a way of life at WABCO INDIA LIMITED. 100% operating plan. The OEM customers across the world would continue participation in employee involvement has been successful their pressure on price reduction from their suppliers. The Company for the past 12 consecutive years. 13


  • Page 16

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Employees have completed more than 208 projects by applying • Removal of chip conveyor from machinery where minimum statistical tools through QC Circles in 2011-12. The average chips is generated from machine. This results in reduced number of suggestions implemented per employee is 61 in power consumption. 2011-12 which is close to international benchmark. IX. Community development and social responsibility C. Cost management As a corporate citizen, the Company believes in its social The Company continues its rigorous focus on its costs through responsibility and community development activities. Activities to an effective cost deployment system. Value engineering and be undertaken in this regard will be identified and action will be global sourcing projects are being pursued for cost reduction taken thereof. and also to insulate from cost escalation. Cost reduction workshops are conducted periodically to identify cost reduction X. Financial statement opportunities on various product groups. Some of the strategies Particulars Year ended Year ended for cost reduction include material change, process change, 31st March 2012 31st March 2011 source change etc. Commodity sourcing from prime producers and price negotiation with customers helps in managing the Rs. in lakhs % Rs. in lakhs % cost effectively and efficiently. Sales (net) 1,00,497.08 95.0 86,574.79 96.4 Other Operating D. Information Technology income 4,067.16 3.8 2,676.87 3.0 The Company uses ERP system that integrates all business processes across the Company as well as customers and Other income 1,205.90 1.2 535.95 0.6 suppliers. During the year, the Company has focused on Total income 1,05,770.14 100.0 89,787.61 100.0 further leveraging the ERP system. Special emphasis on Raw materials automation of repetitive activities through the usage of IT was consumed 57,926.44 54.7 50,817.77 56.6 done across several functions. Changes in VII. Human Resource Development inventories of The Company focuses on attracting the best talent and enjoys a Finished goods good brand image across leading educational institutions and job and WIP (692.74) (0.6) (1,321.89) (1.4) seekers. The Company blends successfully mid career recruitment Staff cost 9,428.80 8.9 7,119.49 7.9 with internally grown talent through talent management process. Stores & tools A reward and recognition system is in place to provide fast track consumed 5,091.37 4.8 3,555.41 4.0 growth for high potential employees. Career development workshops Power & fuel 1,435.17 1.4 1,430.63 1.6 are undertaken to identify such high potential. Repairs & Executives are sponsored to overseas and inland universities for maintenance 902.39 0.8 808.69 0.9 developing their capabilities to handle new technologies and management practices. Customised management development Other expenses 8,480.08 8.0 6,777.43 7.5 programs have been developed with reputed educational institutions Finance costs 11.88 0.0 20.47 0.0 to hone the leadership skills of the senior executives. Depreciation 1,563.72 1.5 1,442.45 1.6 The Company continues to maintain its impeccable record on Total expenditure 84,147.11 79.5 70,650.45 78.7 industrial relations. Profit before tax 21,623.03 20.5 19,137.16 21.3 As of 31st March 2012, the Company had 1,161 employees on Provision for its rolls. taxation 6,283.07 5.9 6,393.98 7.1 VIII. Environment & Safety Profit after tax 15,339.96 14.6 12,743.18 14.2 Safety management is integrated with the overall Safety Health and Environment (SHE) management system. During the year under XI. Cautionary statement review, the unit at Mahindra world City has been certified for Statements in the management discussion and analysis report Integrated Management System viz., ISO 14001 and describing the Company's objectives, projections, estimates and OHSAS 18001. The Company has also obtained "Best Safety expectations may be "forward looking statements" within the meaning Drive" award from ACMA. of applicable securities laws and regulations. Actual results could The Company is committed to energy conservation. During the year differ materially from those expressed or implied. Important factors the following implemented projects have gained momentum: that could make a difference to the Company's operations include, • Replacement of High bay lights to CFL/LED lamp wherever among others, economic conditions affecting demand / supply and suitable to maintain the luminous level. price conditions in the domestic and overseas markets in which the • Introducing efficient coolant in new grinding machines thereby Company operates, changes in the Government regulations, tax laws resulting of reduced power consumption. and other statutes and incidental factors. 14


  • Page 17

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) 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 Agreement. accountability, which are the basic principles of Corporate 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: The Company, in consultation with the Directors, prepares 2.1 Composition and category of directors: and circulates a tentative annual calendar for the meetings As of 31st March 2012, the total strength of the Board of of the committees / board in order to assist the Directors Directors (the board) was seven directors. All the directors for planning their schedules to participate in the meetings. except the whole-time director are non-executive directors. During the year 2011-12, the Board met 4 times on During 2011-12, Mr C N Prasad resigned as Director on 12th May 2011, 26th July 2011, 20th October 2011 and 12th May 2011, Mr Kurt Lehmann has resigned as director 25th January 2012 and the gap between two meetings did on 25th January 2012 and Mr Vincent Pickering was appointed not exceed four months. as a director on 23rd May 2012. The total strength of the 2.3 Attendance and other directorships: Board of Directors as on 23rd May 2012 is eight directors. The details of attendance of the Directors at the board meetings, during the year, and at the last Annual General Out of the seven Non-Executive Directors, three Meeting held on 27th July 2011 and also the number of other Directors viz., Messrs. M Lakshminarayan, D E Udwadia and directorships and committee memberships / chairmanships as Narayan K Seshadri are independent Directors. on 31st March 2012 are as follows: Attendance Number of directorships and Name of the director particulars committee member / chairmanships Category Messrs Board Last Other Committee Committee meeting AGM directorships* memberships** chairmanships M Lakshminarayan C-I 4 Yes 6 2 – P Kaniappan WTD-NI 4 Yes – – – C N Prasad @ NE-NI 1 NA – – – Narayan K Seshadri NE-I 4 Yes 13 7 3 D E Udwadia NE-I 4 Yes 17 9 1 Nikhil Madhukar Varty NE-NI 1 Yes 3 – – Leon Liu NE-NI 1 Yes 11 – – Trevor Lucas NE-NI 3 No 6 – – Kurt Lehmann $ NE-NI 1 Yes – – – Vincent Pickering # NE-NI – – 7 – – @ Resigned on 12th May 2011 $ Resigned on 25th January 2012 # appointed on 23rd May 2012 * includes private companies. ** includes committees where the director is also chairman. C-I : Chairman Independent WTD-NI : 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. 15


  • Page 18

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) 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 Functional heads are present whenever necessary and apprise functions: 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 Accountants approval with particular reference to the matters specified are placed at the audit committee of the directors. 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 (the and the fees payable for audit and for other services 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.wabcoindia.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 31st March 2012. The annual report contains a declaration h. Reviewing the adequacy of internal audit functions and to this effect signed by the Whole-time Director and General systems, structure, reporting process, audit coverage Manager - Finance and Secretary of the Company as and frequency of internal audit. compliance officer for the Code. i. Discussion with external auditors regarding audit plan as 2.6 Appointment of directors: well as post-audit discussion to ascertain any area of concern. In terms of clause 49(IV)(G) of the Listing Agreement with the Stock Exchanges, a brief resume of directors, proposed j. Ascertainment of reasons for substantial defaults in the to be re-appointed, nature of their expertise in specific functional payment to creditors and in case of payment of declared areas, their other directorships and committee memberships, dividends to the shareholders. their shareholdings and their relationships with other directors k. Review of management discussion analysis of financial are provided in the notice convening the ensuing annual conditions and results of operations and other matters general meeting of the Company. specified under clause 49 of the Listing Agreement. 3. Audit Committee l. Review of financial statements, in particular the investments made by the unlisted subsidiary. The primary objective of the Audit Committee is to monitor and provide effective supervision of the management's financial reporting m. In addition, review of such other functions as envisaged process with a view to ensure accurate, timely and proper disclosures under Section 292A of the Companies Act, 1956 and and transparency, integrity and quality of financial reporting. Clause 49 of the Listing Agreement with Stock Exchanges. 16


  • Page 19

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) 3.2 Composition, name of members and the chairman of the Audit The transactions with the related parties, namely its promoters, 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 directors: The 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 Chairman procedures. These procedures are periodically reviewed to of the Audit Committee. Mr R Madhavan, General Manager- ensure that executive management controls risk through means Finance and Secretary of the Company acts as the Secretary of a properly defined framework. of the Audit Committee. 4.4 Instances of non-compliances, if any: Chairman of the Audit Committee was present at the annual There were no instances of non-compliances by the Company, general meeting held on 27th July 2011. The composition of penalties and strictures imposed on the Company by the the committee is in accordance with the requirements of Stock Exchanges or SEBI or any other statutory authorities Clause 49 of the Listing Agreement and Section 292A of the on any matter related to the capital markets during the last Companies Act, 1956. three years. 3.3 The particulars of meetings and attendance by the members 4.5 Disclosure by senior management personnel: of the committee during the year under review are given in The senior management personnel have made disclosure to the table below: the board relating to all material, financial and other transactions stating that they did not have personal interest that could Date of the Members present result in a conflict with the interest of the Company at large. meeting Messrs 4.6 CEO and CFO Certification: Narayan K Seshadri, D E Udwadia The Whole-time Director (CEO) and Chief Financial Officer 12th May 2011 and C N Prasad (CFO) of the Company have certified to the board on financial 26th July 2011 Narayan K Seshadri, D E Udwadia and other matters in accordance with Clause 49(V) of the Narayan K Seshadri, D E Udwadia Listing Agreement pertaining to CEO/CFO certification for the 20th October 2011 and Trevor Lucas financial year ended 31st March 2012. Narayan K Seshadri, D E Udwadia 4.7 Compliance with mandatory / non-mandatory requirements: 25th January 2012 and Trevor Lucas 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 headings detailed elsewhere in this report. During the year, the Company has not entered into any 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. 17


  • Page 20

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) 5. Remuneration Committee non-executive directors' vis-à-vis of the Company. None of The board has not constituted a remuneration committee, as the the directors is related to each other. need for forming such committee has not arisen. The remuneration 5.4 Particulars of remuneration paid to the whole-time director to the Whole-time Director was decided by the Board of Directors during the financial year 2011-12: subject to the approval of the shareholders. (Rs. in lakhs) 5.1 Remuneration to directors: Name of the Contribution Perquisites director Salary to PF and & Total Mr P Kaniappan, director of the Company, was appointed Messrs other funds Allowances as a Whole-time Director of the Company for a period of five P Kaniappan 55.92 5.61 26.21 87.74 years effective 17th June 2009 on a remuneration consisting salary and other perquisites in terms of the agreement entered 5.5 Presently, the Company does not have a scheme for grant of into between him and the Company on 17th June 2009. any stock option either to the executive directors or employees. A supplemental agreement was entered with Mr P Kaniappan 6. Investors' grievance committee: on 28th July 2010 to give effect to the increase in remuneration effective 1st April 2010 and approved by the shareholders at 6.1 As on 31st March 2012, the investors' grievance committee their meeting held on 26th August 2010. consisted of three members, viz., Mr Narayan K Seshadri, Director, Mr Trevor Lucas, Director and Mr P Kaniappan, The remuneration payable to the Whole-time Director is fixed Whole-time director of the Company. The Committee met four by the board within the limits approved by the shareholders times during the year on 12th May 2011, 26th July 2011, 20th in terms of the relevant provisions of the Companies Act, October 2011 and 25th January 2012. 1956. During the year 2011-12, on 12th May 2011, Mr C N Prasad As approved by the shareholders by passing special resolution ceased to be a member of Investors' Grievance Committee by postal ballot on 21st December 2010, non executive in view of his resignation as a director. Mr Trevor Lucas, a independent directors are being paid commission not exceeding non-independent director was appointed as a member of 1% of the net profits of the Company subject to a limit of Investors' Grievance Committee on 12th May 2011. Rs. 7.50 lakhs per annum per director fixed by the board 6.2 As required by Securities and Exchange Board of India (SEBI), of directors, for every financial year for a period of five years Mr R Madhavan, General Manager - Finance and Secretary from 1st April 2011 to 31st March 2016. of the Company has been appointed as the compliance officer. 5.2 Particulars of sitting fees paid to non executive directors and For any clarification/complaint, the shareholders may contact commission payable to non-executive independent directors Mr R Madhavan, General Manager - Finance and Secretary during the financial year 2011-12. of the Company. Name of the Sitting fee Commission Total 6.3 The committee oversees and reviews all matters connected Messrs (Rs.) (Rs.) (Rs.) with share transfers, issue of duplicate share certificates and other issues pertaining to shares. The committee also looks M Lakshminarayan 60,000 7,50,000 8,10,000 into the redressal of investors' grievances pertaining to transfer D E Udwadia 1,20,000 7,50,000 8,70,000 of shares, non-receipt of balance sheet, non-receipt of declared Narayan K Seshadri 1,80,000 7,50,000 9,30,000 dividends, etc. The Company, as a matter of policy, disposes C N Prasad # 45,000 – 45,000 investor complaints within a span of seven days. Total 4,05,000 22,50,000 26,55,000 6.4 Complaints received and redressed during the year 2011-12: # No. of resigned on 12th May 2011 S.No. Nature of complaint complaints Other non-executive directors, Messrs Leon Liu, Nikhil Madhukar 1 Non receipt of share certificates 2 Varty, Trevor Lucas and Vincent Pickering have waived the 2 Non receipt of dividend warrants 2 sitting fees payable to them. 3 Non receipt of annual reports 2 5.3 Details of shareholdings of non-executive directors in the Company as on 31st March 2012: Total 6 Mr M Lakshminarayan holds 50 shares and all other directors 6.5. All the complaints were resolved and, as on 31st March 2012, do not hold any share in the Company. There are no other no complaint was pending. All requests for dematerialization particular pecuniary relationships or transactions of the of shares were carried out within the stipulated time period. 18


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) 6.6 Secretarial Audit of the shareholders was obtained for change of name A qualified practising company secretary carried out secretarial of the Company pursuant to section 21 of the Companies audit on a quarterly basis to reconcile the total admitted Act, 1956. Approval of Central Government was obtained capital with National Securities Depository Limited (NSDL) on 2nd August 2011 and fresh certificate of incorporation and Central Depository Services (India) Limited (CDSL) and was issued by the Registrar of Companies Chennai on 2nd August 2011 consequent upon change of name of the total issued and listed capital and placed the report for the Company. perusal of the Board. The secretarial audit report confirms that the total issued and listed capital is in agreement with 7.3 None of the subjects placed before the shareholders in the the total number of shares in physical form and the total last / ensuing Annual General Meeting required / requires number of shares in dematerialized form held with NSDL and approval by a postal ballot. CDSL. 8. Means of communication 7. General body meeting: 8.1 Quarterly results: 7.1 Location and time where the Annual General Meetings were The unaudited quarterly financial results of the Company were held during the last three years. published in the English and vernacular newspapers. These Year Location Date Time are not sent individually to the shareholders. 2008-09 Sathgurugnananda Hall, 24.09.2009 10.15 A.M. 8.2 Newspapers wherein results normally published: Narada Gana Sabha Trust, The results are normally being published in the English No. 314, (Old No. 254), newspapers, namely "Times of India" and "Business Line" and T.T.K. Road, the Tamil version in a Tamil daily viz., "Dinamani". Chennai 600 018 8.3 Website: 2009-10 Sathgurugnananda Hall, 26.08.2010 10.00 A.M. The Company has in place a web site addressed as Narada Gana Sabha Trust, www.wabcoindia.com. The unaudited results and the quarterly No. 314, (Old No. 254), distribution schedules as filed with the Stock Exchanges are T.T.K. Road, published in Company website. The Company makes use of Chennai 600 018 its website for publishing official news releases and 2010-11 The Music Academy, 27.07.2011 10.00 A.M. presentations, if any, made to institutional investors / analysts. No. 168, (Old No. 306), T.T.K. Road, 9. General shareholder information (Mowbrays Road) 9.1 Annual general meeting: Chennai 600 014 Date and time : 25th July 2012 at 10.00 a.m. 7.2 Special resolutions passed in the previous three Annual General Venue : "The Music Academy", Meetings: No. 168 (Old No. 306) T.T.K. Road, (a) At the Annual General Meeting of the Shareholders of Chennai 600 014 the Company held on 24th September 2009, consent / 9.2 Financial year : 1st April to 31st March approval of the shareholders was obtained for alteration Financial calendar to certain clauses of Articles of Association of the 2012-13 (Tentative) : Company under Section 31 and other applicable provisions of the Companies Act, 1956. Financial reporting for the quarter ending : Financial calendar (b) Approval of shareholders by way of Special Resolution was obtained pursuant to section 309 of the Companies 30th June 2012 : between 15th to 31st July 2012 Act 1956 for payment of commission to Non-executive 30th September 2012 : between 15th to 31st October 2012 Independent Directors effective 1st April 2011 by way of Postal Ballot process. The result was announced on 31st December 2012 : between 15th to 31st January 2013 21st December 2010. 31st March 2013 : between 1st to 15th May 2013 (c) At the Annual General Meeting of the Shareholders of Annual General Meeting the Company held on 27th July 2011, consent / approval (next year) : July / August 2013 19


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) 9.3 Date of book closure : 20th July 2012 to 25th July 2012 pertaining to both physical and electronic segments of (both days inclusive) the Company. 9.4 Particulars of dividend payment b. All matters connected with the share transfer, both The board of directors had recommended a dividend of physical and electronic, dividends and other matters are Rs. 5.00 per share for the year 2010-11, absorbing a sum handled by the STA located at the address mentioned of Rs. 948.38 lakhs, and approved by the shareholders in elsewhere in this report. the last annual general meeting. This dividend was paid on c. Shares lodged for transfer will be processed within 3rd August 2011. 10 days from the date of lodgement, if the documents are clear in all respects. All requests for dematerialization 9.5 Listing on Stock Exchanges: of securities are processed and the confirmation will be Name of the stock exchange Stock code given to the depositories within 7 days. Grievances Madras Stock Exchange Ltd (MSE) – received from investors and other miscellaneous Bombay Stock Exchange Ltd (BSE) 533023 correspondence on change of address, mandates etc will be processed by the STA within 7 days. National Stock Exchange of India Ltd. (NSE) WABCOINDIA d. Pursuant to clause 47(c) of the Listing Agreement with ISIN allotted by depositories INE342J01019 Stock Exchanges, certificates, on half-yearly basis, will (Company ID Number) be issued by a Company Secretary-in-practice for due compliance of share transfer formalities by the Company. (Note: Annual listing fees for the year 2012-13 have been duly paid to the above stock exchanges). e. Pursuant to SEBI (Depositories and Participants) Regulations, 1996, certificates from a Company Secretary- 9.6 Market Price Data: in-practice for timely dematerialization of the shares of National Stock Exchange Bombay Stock Exchange the Company and for conducting a secretarial audit on Share Price Share Price a quarterly basis for reconciliation of the share capital Month of the Company will be obtained. High Low High Low April 2011 1,058.80 988.15 1,065.50 985.00 f. The Company, as required under clause 47(f) of the May 2011 1,055.00 971.10 1,059.00 964.10 Listing Agreement, has designated the following e-mail June 2011 1,099.00 981.20 1,083.00 974.10 IDs, namely investorscomplaintssta@scl.co.in (share transfer agent) / madhavan.rajagopalan@wabco-auto.com July 2011 1,324.80 1,016.15 1,323.90 1,055.00 (compliance officer) for the purpose of registering August 2011 1,330.00 1,176.25 1,330.90 1,171.80 complaints, if any, by the investors and expeditious September 2011 1,399.95 1,215.10 1,334.00 1,196.40 redressal of their grievances. October 2011 1,400.10 1,220.00 1,405.00 1,220.00 g. The shareholders are, therefore, requested to correspond November 2011 1,509.70 1,206.25 1,524.95 1,215.00 with the STA at the address mentioned elsewhere in December 2011 1,340.00 1,132.30 1,309.90 1,125.15 this report for any change of names and queries pertaining January 2012 1,395.00 1,160.00 1,385.00 1,143.05 to the shareholding and dividends etc. February 2012 1,588.00 1,271.30 1,570.00 1,251.00 9.8 Shareholding pattern as on 31st March 2012: March 2012 1,577.45 1,480.00 1,569.00 1,490.10 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 (1) Indian - Bodies Corporate – – Transfer Agent (STA) in Category II, has been appointed as the STA of the Company. (2) Foreign- Bodies Corporate 1,42,25,684 75.00 Total Shareholding of Promoter The shareholders have also been advised about this and promoter Group (A) 1,42,25,684 75.00 appointment of STA to handle share registry work 20


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) No. of % to 9.12 Plant locations: Particulars shares held total Factories: I. Plot No. 3 (SP), III Main Road, (b) Public Shareholding Ambattur Industrial Estate, 1. Institutions Chennai 600 058 Tel : 044 4224 2000 (a) Mutual Funds 20,75,825 10.94 Fax : 044 4224 2009 (b) Banks, Financial Institutions, Insurance Companies II. Large Sector, Adityapur Industrial Area, (Central, State Government Gamharia, Seraikella-Kharsawan District, Institutions, Non-Government Jharkhand 832 108 Institutions) 402 0.00 Tel : 0657 661 6800 Fax : 0657 238 7997 (c) Foreign Institutional Investors 2,07,773 1.10 Sub Total Institutions 22,84,000 12.04 III. Plot No. AA8, Central Avenue, Auto Ancillary SEZ, Mahindra World City, 2. Non - Institutions Nathan Sub-Post, Chengalpet, a) Bodies Corporate 4,38,151 2.31 Kancheepuram District 603 002 b) Individuals <1 lakh 16,93,206 8.93 Tel : 044 4744 2000 c) Individuals >1 lakh 2,95,839 1.56 Fax : 044 4749 0006 d) NRI - Repatriable 14,023 0.07 IV. Plot No.11, Sector 4, SIDCUL, e) NRI - Non-Repatriable 16,681 0.09 IIE Pantnagar, Sub Total Non-Institutions 24,57,900 12.96 Rudrapur Udham Singh Nagar, Uttarakhand - 263 153 Total (B) 47,41,900 25.00 Grand Total (A) +(B) 1,89,67,584 100.00 Software Design Centre: "Ispahani Centre", 5th & 7th Floor 9.9 Distribution of Shareholding as on 31st March 2012: 123/124 Nungambakkam High Road Chennai 600 034 Shareholding No. of % No. of % Tel : 044-2828 5000 (Range) Shares Members Fax : 044-2833 2212 Upto 5,000 1,705,042 8.99 16,115 99.60 9.13 Address for investors Correspondence: 5,001 - 10,000 97,298 0.51 13 0.08 (i) For transfer / dematerialisation Sundaram-Clayton Limited 10,001 - 20,000 248,330 1.31 17 0.11 of shares, payment of dividend Share transfer department 20,001 - 50,000 424,893 2.24 13 0.08 on shares and any other query New No. 22 (old No. 31) relating to the shares of the Railway Colony, 3rd Street 50,001 - 1,00,000 931,645 4.91 13 0.08 Company. Mehta Nagar, 1,00,001 & above 15,560,376 82.04 8 0.05 Chennai 600 029 Total 18,967,584 100.00 16,179 100.00 (ii) for any query on non-receipt Tel : 044 2374 1889, of annual report; and 044 4224 2000, 9.10 Dematerialization of shares and liquidity: (iii) for investors grievance & 044 2374 2939 Out of 47,41,900 shares held by persons other than general correspondence Fax : 044 2374 1889, promoters, 44,17,790 shares have been dematerialised as on 044 4224 2009 31st March 2012 accounting for 93.16%. Email: 9.11 The Company has not issued any Global Depository kr.raman@scl.co.in Receipt / American Depository Receipt / Warrant or any sclshares@gmail.com convertible instrument, which is likely to have impact on the investorscomplaintssta@scl.co.in Company's equity. madhavan.rajagopalan@wabco-auto.com 21


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) 10. Non-mandatory disclosure: The non-mandatory requirements have been adopted to the extent Registration of Electronic Clearing Service (ECS) Mandate: and in the manner as stated under the appropriate headings ECS helps in quick remittance of dividend without possible loss/ detailed below: delay in postal transit. Shareholders, who have not earlier availed 10.1 The Board: this facility, are requested to register their ECS details with the Both executive and non-executive directors of the Company STA or their respective DPs. are liable to retire by rotation and if eligible, offer themselves Transfer of shares in physical mode: for re-appointment. No specific tenure has been fixed for the Shareholders should fill in complete and correct particulars in the independent directors. transfer deed, for expeditious transfer of shares. Wherever applicable, 10.2 Remuneration committee: registration number of power of attorney should also be quoted The board has not set up a remuneration committee, as the in the transfer deed at the appropriate place. need for the same has not arisen. Shareholders, whose signatures have undergone any change over 10.3 Shareholder rights: a period of time, are requested to lodge their new specimen The half-yearly results of the Company will be published in signature duly attested by a bank manager to the STA. English and vernacular newspapers and are also displayed Shareholders are requested to note that as per SEBI circular no. on the Company's website, namely www.wabcoindia.com MRD/DoP/Cir -05/1009 dated 20th May 2009, it is mandatory for The results are not sent to the shareholders individually. transferees to furnish a copy of Permanent Account Number (PAN) 10.4 Audit Qualifications: for registration of transfer of shares to be held in physical mode. The statutory financial statements of the Company are In case of loss / misplacement of share certificates, Shareholders unqualified. should immediately lodge a FIR / Complaint with the police and inform the Company / STA with original or certified copy of 10.5 Training of board members / Mechanism for evaluating FIR / acknowledged copy of complaint for marking stop transfer non-executive directors: of shares. The present board consists of well-experienced and responsible Consolidation of Multiple Folios: members of society. All the directors are well aware of business model as well as the risk profile of the business Shareholders, who have multiple folios in identical names, are parameters of the Company and their responsibilities as requested to apply for consolidation of such folios and send the directors. Hence, in the opinion of the board, they do not relevant share certificates to the Company. require any further training. There is also no specific mechanism Registration of Nominations: for evaluating the performance of the non-executive directors Nomination in respect of shares - Section 109A of the Companies of the Company. Act, 1956 provides facility for making nominations by shareholders 10.6 Whistle blower policy: in respect of their holding of shares. Such nomination greatly The Company has not adopted whistle blower policy. However, facilitates transmission of shares from the deceased shareholder the Company has not denied access to any personnel to to his / her nominee without having to go through the process of approach the management on any issue. obtaining succession certificate / probate of the Will etc. It would therefore be in the best interests of the shareholders 11. Request to shareholders: holding shares in physical form registered as a sole holder to make Shareholders are requested to follow the general safeguards / such nominations. Investors, who have not availed nomination procedures as detailed hereunder in order to serve them efficiently facility, are requested to avail the same by submitting the nomination and avoid risks while dealing in securities of the Company. in form 2B. This form will be made available on request. Investors Demat of Shares: holding shares in demat form are advised to contact their DPs for making nominations. Shareholders are requested to convert their physical holding to demat/ electronic form through any of the depository participants Updation of address: (DPs) to avoid any possibility of loss, mutilation etc. of physical Shareholders are requested to update their address registered with share certificates and also to ensure safe and speedy transaction the Company, directly through the STA located at the address in securities. mentioned above, to receive all communications promptly. 22


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Shareholders, holding shares in electronic form, are requested to Shareholders are requested to note that the dividend not claimed deal only with their depository participant (DP) in respect of change for a period of seven years from the date they first became due of address and furnishing bank account number, etc. for payment shall be transferred to "Investors’ Education and Protection Fund" (IEPF) in terms of Section 205C of the Companies SMS Alerts: Act, 1956. Shareholders are requested to note that as per the Investors are requested to note that National Securities Depository Companies Act, 1956, unclaimed dividends once transferred to Limited (NSDL) and Central Depository Services (India) Limited IEPF will not be refunded. (CDSL) have announced the launch of SMS alert facility for demat Web based applications - SEBI/NSE account holders whereby investors will receive alerts for debits / In line with the circular no. CIR/OIAE/2/2011 dated 3rd June 2011 credits (transfers) to their demat accounts a day after the transaction. from SEBI, the investors' complaints are now centrally monitored These alerts will be sent to those account holders who have through web based complaints redressal system called SCORES. provided their mobile numbers to their Depository participants (DPs). The Company processes the investor complaints through this system No charge will be levied by NSDL / CDSL on DPs providing this and updates status periodically. facility to investors. This facility will be available to investors who In line with the circular no. NSE/LIST/C/2011 dated 29th September request for the same and provide their mobile numbers to the DPs. 2011 from the National Stock Exchange of India Ltd, (NSE) the Further information is available on the website of NSDL and CDSL Company now uploads its quarterly shareholding pattern and the namely www.nsdl.co.in and www.cdslindia.com, respectively. corporate governance report through a web based application designed for corporates by NSE called as NEAPS from the quarter Timely encashment of dividends: ended 30th September 2011. Shareholders are requested to encash their dividends promptly to Information in respect of unclaimed dividends due for remittance avoid hassles of revalidation/ losing your right of claim owing to into IEPF is given below: transfer of unclaimed dividends beyond seven years to Investor PARTICULARS OF UNCLAIMED DIVIDEND Education and Protection Fund. As required by SEBI, shareholders are requested to furnish details Financial Date of Date of transfer to Date of transfer year Declaration special account to IEPF of their bank account number and name and address of the bank for incorporating the same in the warrants. This would avoid wrong 2007-08 20.08.2008 25.09.2008 25.09.2015 (2nd interim) credits being obtained by unauthorized persons. 2008-09 Shareholders who have not encashed their dividend warrants in 08.12.2008 13.01.2009 13.01.2016 (1st Interim) respect of dividends declared for the year ended 31st March, 2008 2009-10 26.08.2010 01.10.2010 01.10.2017 and for any financial year thereafter may contact the Company and surrender their warrants for payment. 2010-11 27.07.2011 01.09.2011 01.09.2018 Declaration pursuant to Clause 49 of the listing agreement regarding adherence to the Code of Business Conduct and Ethics To The Shareholders of WABCO 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 st of directors for the year ended 31 March 2012. Chennai P KANIAPPAN R MADHAVAN rd 23 May 2012 Whole-time Director General Manager - Finance and Secretary 23


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Auditors’ Certificate To The Members of WABCO INDIA LIMITED We have examined the compliance of conditions of corporate governance by WABCO INDIA Limited ('the Company'), for the year ended on March 31, 2012, 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 rd 23 May 2012 Membership No. 053315 24


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Auditors’ report to the Shareholders To iii. The balance sheet, profit and loss account and cash flow The Members of WABCO INDIA LIMITED (formerly known as statement dealt with by this report are in agreement with WABCO-TVS (INDIA) LIMITED). the books of account; 1. We have audited the attached Balance Sheet of WABCO INDIA iv. In our opinion, the balance sheet, profit and loss account LIMITED ('the Company') (formerly known as WABCO-TVS and cash flow statement dealt with by this report comply (INDIA) LIMITED) as at March 31, 2012 and also the Profit and with the accounting standards referred to in sub-section Loss account and the cash flow statement for the year ended (3C) of section 211 of the Companies Act, 1956; on that date annexed thereto. These financial statements are v. On the basis of the written representations received from the responsibility of the Company's management. Our responsibility the directors, as on March 31, 2012, and taken on record is to express an opinion on these financial statements based by the Board of Directors, we report that none of the on our audit. directors is disqualified as on March 31, 2012 from being 2. We conducted our audit in accordance with auditing standards appointed as a director in terms of clause (g) of sub-section generally accepted in India. Those Standards require that we (1) of section 274 of the Companies Act, 1956; plan and perform the audit to obtain reasonable assurance about vi. In our opinion and to the best of our information and whether the financial statements are free of material misstatement. according to the explanations given to us, the said accounts An audit includes examining, on a test basis, evidence supporting give the information required by the Companies Act, 1956, the amounts and disclosures in the financial statements. in the manner so required and give a true and fair view An audit also includes assessing the accounting principles used in conformity with the accounting principles generally and significant estimates made by management, as well as accepted in India; evaluating the overall financial statement presentation. We believe a) in the case of the balance sheet, of the state of affairs that our audit provides a reasonable basis for our opinion. of the Company as at March 31, 2012; 3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government of India in b) in the case of the profit and loss account, of the profit terms of sub-section (4A) of Section 227 of the Companies Act, for the year ended on that date; and 1956, we enclose in the Annexure a statement on the matters c) in the case of cash flow statement, of the cash flows specified in paragraphs 4 and 5 of the said Order. for the year ended on that date. 4. Further to our comments in the Annexure referred to above, we report that: For S.R. Batliboi & Associates i. We have obtained all the information and explanations, Chartered Accountants which to the best of our knowledge and belief were necessary Firm Registration No. 101049W for the purposes of our audit; ii. In our opinion, proper books of account as required by Per S. BALASUBRAHMANYAM law have been kept by the Company so far as appears Place : Chennai Partner from our examination of those books; Date : May 23, 2012 Membership No. 053315 25


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Annexure referred to in paragraph 3 of our report of even date. Re: WABCO INDIA LIMITED ('the Company') (formerly known as WABCO-TVS (INDIA) LIMITED). (i) (a) The Company has maintained proper records showing full lakhs have been entered into during the financial year at particulars, including quantitative details and situation of fixed prices which are reasonable having regard to the prevailing assets, market prices at the 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 on such verification. commensurate with the size and nature of its business. (c) There was no substantial disposal of fixed assets during the (viii) We have broadly reviewed the books of account maintained by year. the Company pursuant to the rules made by the Central Government (ii) (a) The management has conducted physical verification of for the maintenance of cost records under section 209(1) (d) of inventory at reasonable intervals during the year. the Companies Act, 1956, related to the manufacture of automotive parts and accessories and are of the opinion that prima facie, the (b) The procedures of physical verification of inventory followed prescribed accounts and records have been made and maintained. by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, (c) The Company is maintaining proper records of inventory and investor education and protection fund, employees' state no material discrepancies were noticed on physical verification. insurance, income-tax, sales-tax, wealth-tax, service tax, (iii) (a) According to the information and explanations given to us, customs duty, excise duty, cess and other material statutory the Company has not granted any loans, secured or unsecured dues applicable to it. to companies, firms or other parties covered in the register (b) According to the information and explanations given to us, maintained under section 301 of the Companies Act, 1956. no undisputed amounts payable in respect of provident fund, Accordingly, the provisions of clause 4(iii) (a) to (d) of the investor education and protection fund, employees' state Order are not applicable to the Company and hence not insurance, income-tax, wealth-tax, service tax, sales-tax, commented upon. customs duty, excise duty, cess and other materials statutory (b) According to information and explanations given to us, the dues were outstanding, at the year end, for a period of more Company has not taken any loans, secured or unsecured, than six months from the date they became payable. from companies, firms or other parties covered in the register (c) According to the records of the Company, the dues outstanding maintained under section 301 of the Companies Act, 1956. of income-tax, sales-tax, wealth-tax, service tax, customs Accordingly, the provisions of clause 4(iii) (e) to (g) of the duty, excise duty and cess on account of any dispute, are Order are not applicable to the Company and hence not as follows: commented upon. Amount Period to which Forum where Nature of Nature of (iv) In our opinion and according to the information and explanations (Rs. the amount dispute is Statute dues in lakhs) relates pending given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of Income Tax Income Tax 93.30 2006 - 2007 Commissioner of Act, 1961 Income Tax its business, for the purchase of inventory and fixed assets and (Appeals), Chennai for the sale of goods and services. During the course of our audit, Income Tax Income Tax 90.00 2007 - 2008 Commissioner of we have not observed any major weakness or continuing failure Act, 1961 Income Tax to correct any major weakness in the internal control system of (Appeals), Chennai the company in respect of these areas. Central Excise duty - 11.27 2008 - 2009 Commissioner of Excise Cenvat credit Central Excise (v) (a) According to the information and explanations provided by Act, 1944 reversal 2009 - 2010 (Appeals), Chennai the management, we are of the opinion that the particulars Service Tax Service tax - 8.67 2007 - 2010 Commissioner of of contracts or arrangements referred to in section 301 of Credit reversal Central Excise the Companies Act, 1956 that need to be entered into the on certain (Appeals), Chennai inputs register maintained under section 301 have been so entered. Service Tax Service tax- 81.10 2008 - 2009 Commissioner of (b) In our opinion and according to the information and explanations Credit reversal Central Excise, given to us, the transactions made in pursuance of such on certain Chennai contracts or arrangements exceeding value of Rupees five inputs 26


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Annexure referred to in paragraph 3 of our report of even date. Re: WABCO INDIA LIMITED ('the Company') (formerly known as WABCO-TVS (INDIA) LIMITED). of the Companies (Auditor's Report) Order, 2003 (as amended) are Amount Period to which Forum where Nature of Nature of not applicable to the Company. (Rs. in the amount dispute is Statute dues lakhs) relates pending (xiv) In our opinion, the Company is not dealing in or trading in shares, Service Tax Service tax- 44.25 2009 - 2010 Commissioner of securities, debentures and other investments. Accordingly, the Credit reversal Central Excise, provisions of clause 4(xiv) of the Companies (Auditor's Report) on certain Chennai Order, 2003 (as amended) are not applicable to the Company. inputs (xv) According to the information and explanations given to us, the Service Tax Service tax- 15.16 2010 - 2011 Additional Credit reversal Commissioner of Company has not given any guarantee for loans taken by others on certain Central Excise, from bank or financial institutions. inputs Chennai (xvi) The Company does not have any term loans outstanding during Service Tax Service tax- 1.27 2010 - 2011 Deputy the year. Credit reversal Commissioner of on certain Central Excise, (xvii) According to the information and explanations given to us and on inputs Chennai an overall examination of the balance sheet of the Company, we Sales Tax For sales 40.49 2009 - 2010 Assistant report that no funds raised on short-term basis have been used made without Commissioner, for long-term investment. C form and Commercial Taxes, (xviii) The Company has not made any preferential allotment of shares input tax credit Chennai to parties or companies covered in the register maintained under availment for capital goods section 301 of the Companies Act, 1956. Sales Tax For sales 45.56 2010 - 2011 Assistant (xix) The Company did not have any outstanding debentures during the made without Commissioner, year. C form and Commercial Taxes, input tax credit Chennai (xx) The Company has not raised any money by public issues and availment for accordingly, provisions of clause 4 (xx) of the Companies (Auditor's capital goods Report) Order, 2003 (as amended) are not applicable to the Company. (x) The Company has no accumulated losses at the end of the financial (xxi) Based upon the audit procedures performed for the purpose of year and it has not incurred cash losses in the current and reporting the true and fair view of the financial statements and as immediately preceding financial year. per the information and explanations given by the management, (xi) Based on our audit procedures and as per the information and we report that no fraud on or by the Company has been noticed explanations given by the management, we are of the opinion that or reported during the course of our audit. the Company has not defaulted in repayment of dues to banks. The Company does not have dues payable to financial institutions, or debenture holders. For S.R. Batliboi & Associates Chartered Accountants (xii) According to the information and explanations given to us and Firm Registration No. 101049W based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Per S. BALASUBRAHMANYAM (xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual Place : Chennai Partner benefit fund / society. Therefore, the provisions of clause 4(xiii) Date : May 23, 2012 Membership No. 053315 27


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Balance Sheet as at 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) Notes 31st March 2012 31st March 2011 à lakhs à lakhs Corporate information 1 Basis of preparation 2 EQUITY AND LIABILITIES Shareholders’ funds Share capital 3 948.38 948.38 Reserves and surplus 4 51,962.20 37,724.47 (A) 52,910.58 38,672.85 Non-current liabilities Deferred tax liabilities (net) 5 1,093.29 815.22 Other long-term liabilities 6 6.00 4.00 Long-term provisions 7 1,162.37 1,325.45 (B) 2,261.66 2,144.67 Current liabilities Short-term borrowings 8 87.52 56.90 Trade payables 9.1 10,801.84 8,400.21 Other current liabilities 9.2 252.31 201.68 Short-term provisions 7 1,469.18 1,379.81 (C ) 12,610.85 10,038.60 TOTAL (A+B+C) 67,783.09 50,856.12 ASSETS Non Current assets Fixed assets Tangible assets 10 22,975.37 18,029.55 Intangible assets 10 48.28 9.61 Capital work-in-progress 11 1,276.20 991.73 Non-current investments 12 220.24 220.24 Long-term loans and advances 13 1,826.55 1,582.16 (A) 26,346.64 20,833.29 Current assets Current investments 15 2,100.00 1,000.00 Inventories 16 11,576.24 7,986.29 Trade receivables 14.1 15,749.86 17,118.38 Cash and cash equivalents 17 8,187.01 1,285.97 Short-term loans and advances 13 3,812.84 2,627.59 Other current assets 14.2 10.50 4.60 (B) 41,436.45 30,022.83 TOTAL (A + B) 67,783.09 50,856.12 Summary of significant accounting policies 2.1 The accompanying notes are an integral part of the financial statements. As per our report of even date For and on behalf of the board of directors of WABCO INDIA LIMITED For S.R. BATLIBOI & ASSOCIATES Chartered Accountants M LAKSHMINARAYAN P KANIAPPAN Firm Registration No. 101049W Chairman Whole-time Director R MADHAVAN T S RAJAGOPALAN Per S BALASUBRAHMANYAM Chennai General Manager - Finance and Secretary Chief Financial Officer Partner 23rd May, 2012 Membership No. 053315 28


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Statement of Profit & Loss for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) Notes 31st March 2012 31st March 2011 à lakhs à lakhs CONTINUING OPERATIONS Revenue Revenue from operations (gross) 18 114,335.94 97,769.26 Less: Excise duty 9,771.70 8,517.60 Revenue from operations (net) 104,564.24 89,251.66 Other income 19 1,205.90 535.95 Total revenue (I) 105,770.14 89,787.61 Expenses Cost of raw material and components consumed 20 57,926.44 50,817.77 Changes in inventories of finished goods and work-in-process 21 (692.74) (1,321.89) Employee benefits expense 22 9,428.80 7,119.49 Other expenses 23 15,909.01 12,572.16 Finance costs 24 11.88 20.47 Depreciation and amortization expense 10 1,563.72 1,442.45 Total expenses (II) 84,147.11 70,650.45 Profit before tax (I - II) 21,623.03 19,137.16 Tax expenses Current tax 6,005.00 5,900.00 Income tax relating to earlier years – 3.33 Deferred tax 278.07 490.65 Total tax expense 6,283.07 6,393.98 Profit for the year 15,339.96 12,743.18 Summary of significant accounting policies 2.1 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 80.87 67.18 The accompanying notes are an integral part of the financial statements. As per our report of even date For and on behalf of the board of directors of WABCO INDIA LIMITED For S.R. BATLIBOI & ASSOCIATES Chartered Accountants M LAKSHMINARAYAN P KANIAPPAN Firm Registration No. 101049W Chairman Whole-time Director R MADHAVAN T S RAJAGOPALAN Per S BALASUBRAHMANYAM Chennai General Manager - Finance and Secretary Chief Financial Officer Partner 23rd May, 2012 Membership No. 053315 29


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    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Cash Flow Statement for the year ended 31st March 2012 Year ended Year ended 31st March 2012 31st March 2011 à lakhs à lakhs A. CASH FLOW FROM OPERATING ACTIVITIES Profit before tax 21,623.03 19,137.16 Non-cash adjustment to reconcile profit before tax to net cash flows: Depreciation/ amortization 1,563.72 1,442.45 Net foreign exchange gain (not realised) (214.35) (135.47) Profit on sale of investments (145.79) (101.08) Loss / (Profit) on sale of fixed assets (3.43) 2.50 Interest paid 11.88 20.47 Interest income (233.09) (59.81) 978.94 1,169.06 Operating profit before working capital changes 22,601.97 20,306.22 Adjustments for: (Increase) / decrease in inventories (3,589.95) (3,379.54) (Increase) / decrease in trade receivable 1,539.34 (5,062.06) (Increase) / decrease in other current assets (5.90) (0.05) (Increase) / decrease loans and advances (950.59) (1,721.28) Increase / (decrease) in long term liabilities 2.00 – Increase / (decrease) in trade payable and current liabilities 2,452.26 1,188.32 Increase / (decrease) in provisions (73.71) 14.71 (626.55) (8,959.90) 21,975.42 11,346.32 Direct taxes paid (6,440.52) (6,425.27) Net cash from operating activities (A) 15,534.90 4,921.05 B. CASH FLOW FROM INVESTING ACTIVITIES Additions to fixed assets including capital work-in-progress (6,837.11) (1,802.02) Sale of fixed assets during the year 7.86 3.52 Purchase of investments (55,449.97) (40,400.00) Redemption of investments 54,495.76 39,501.08 Interest received 233.09 59.81 Net cash from / (used in) investing activities (B) (7,550.37) (2,637.61) 30


  • Page 33

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Cash Flow Statement for the year ended 31st March 2012 Year ended Year ended 31st March 2012 31st March 2011 à lakhs à lakhs C. CASH FLOW FROM FINANCING ACTIVITIES Dividend and dividend tax paid (1,102,23) (552.95) Interest paid (11.88) (20.47) Net cash from financing activities (C) (1,114.11) (573.42) D. NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) 6,870.42 1,710.02 Opening cash and cash equivalents – Cash and bank balances 1,285.97 238.28 – Cash credit utilisation (56.90) 1,229.07 (719.23) (480.95) Closing cash and cash equivalents – Cash and bank balances (refer note 17) 8,187.01 1,285.97 – Cash credit utilisation (87.52) (56.90) 8,099.49 1,229.07 Notes : 1 The above statement has been prepared in indirect method except in case of dividend and investments which have been considered on the basis of actual movement of cash. 2 Cash and cash equivalent include cash and bank balances. Closing cash and cash equivalents include Rs. 13.66 lakhs. (31st March 2011 : Rs. 9.27 lakhs) towards unpaid dividend accounts which are meant for settlement of unpaid dividend amounts. 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 23rd May, 2012 General Manager (Finance) and Secretary Chief Financial Officer Partner Membership No. 053315 31


  • Page 34

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 1. CORPORATE INFORMATION WABCO INDIA LIMITED (formerly known as 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 INDIA LIMITED on 2nd August 2011. 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. 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. 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 accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below. 2.1 Summary of Significant Accounting Policies (a) Change in accounting policy During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year. (b) Use of estimates The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. (c) Tangible 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. All expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of Profit and Loss for the period during which such expenses are incurred other than expenses which increase the future benefit of the existing assets. Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of Profit and Loss when the asset is de-recognized. (d) Depreciation on tangible fixed assets 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. 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 office & other 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 on a straight line basis over the primary lease period ranging from 30 to 99 years. 32


  • Page 35

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (e) Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. Costs incurred towards purchase of computer software are depreciated using the straight-line method over a period of two years based on management's estimate of useful lives of such software, or over the license period of the software, whichever is shorter. Research costs are expensed as incurred. (f) Impairment of tangible and intangible assets 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. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. 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. (g) 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. (h) 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 statement of Profit and Loss on a straight-line basis over the lease term. Operating lease arrangements of the company are cancellable. (i) 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. (j) 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. The company collects sales tax and value added tax (VAT) on behalf of the Government and therefore, these are not economic benefits flowing to the company. Hence they are excluded from revenue. 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, the company has not recognised sales of Rs. 2,427.11 lakhs (31st March 2011 : Rs. 1,774.00 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 upon completion of the contracts, 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. 33


  • Page 36

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 Profit on sale of investments Profit on sale of investment is recognised only at the time when the investments are realised. (k) Foreign currency translation 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. Conversion Foreign currency monetary items are re-translated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. 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. (l) Retirement and other employee benefits Retirement benefits in the form of provident fund and employee state insurance are defined contribution schemes and the contributions are charged to the statement of Profit and Loss of the year when the contributions to the funds are due. There are no other obligations other than the contribution payable to the funds. The company operates two defined benefits plans viz. gratuity and pension for its employees. Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on separation at 15 days of last drawn salary for each completed year of service. The scheme is funded with Life Insurance Corporation of India. The company operates a pension plan for selected senior managers, the eligibility and the terms and conditions of payment are at the discretion of the company. 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. 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. The company presents the leave as a current liability in the balance sheet to the extent is expects to pay in the next year. Actuarial gains/losses are taken to the statement of Profit and Loss and are not deferred. Expenses towards voluntary retirement scheme are charged to the statement of Profit and Loss when incurred. (m) Income tax 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. (n) 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. 34


  • Page 37

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (o) 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 their 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. Warranty provisions Provisions for warranty related costs are recognized when the product is sold or service provided. Provision is based on historical experience. The estimate of such warranty related costs is revised annually. A provision is recognized for expected warranty claims on products sold, based on past experience of the level of repairs and returns. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about returns based on the average warranty period for the product portfolio of the company. (p) Contingent liabilities A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company. It includes a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. It also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements. (q) 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. 35


  • Page 38

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 31st March 2012 31st March 2011 à lakhs à lakhs 3. SHARE CAPITAL Authorised shares (in numbers) 20,000,000 (31st March 2011: 20,000,000) Equity shares of Rs.5/- each 1,000.00 1,000.00 Issued, subscribed and fully paid-up shares (in numbers) 1,89,67,584 (31st March 2011: 1,89,67,584) Equity shares of Rs.5/- each 948.38 948.38 Total issued, subscribed and fully paid-up share capital 948.38 948.38 a. There is no movement of the shares outstanding at the beginning and at the end of the reporting period b. Terms/rights attached to equity shares The company has only one class of equity shares having a par value of Rs.5 per share. Each holder of equity shares is entitled to one vote per share. During the year ended 31st March 2012, the amount of per share dividend proposed as distributions to equity shareholders is Rs.5 (31st March 2011: Rs.5) which is subject to approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive the assets of the company, in proportion to the number of equity shares held by the shareholders. c. Shares held by holding company Out of equity shares issued by the company, shares held by its holding company are as below: In Number of shares 31st March 2012 31st March 2011 à lakhs à lakhs Clayton Dewandre Holdings Limited, Rotterdam, Holding Company 1,42,25,684 (31st March 2011 - 1,42,25,684) Equity shares of Rs. 5 each fully paid 711.28 711.28 Apart from the above, there are no shares held by the ultimate holding company, or their subsidiaries or associates. d. Aggregate number of bonus shares issued, share issued for consideration other than in cash and shares bought back during the period of five years immediately preceding the reporting date: 31st March 2012 31st March 2011 In numbers In numbers Equity shares allotted as fully paid-up pursuant to contracts for consideration other than in cash 1,89,67,584 1,89,67,584 Pursuant to the scheme of demerger of Brakes division 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. 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. e. Details of shareholders holding more than 5% shares in the company As at 31st March 2012 As at 31st March 2011 Name of the shareholder In numbers % holding In numbers % holding in the class in the class Equity shares of Rs.5 each fully paid Clayton Dewandre Holdings Limited, Rotterdam, Holding Company 1,42,25,684 75% 1,42,25,684 75% As per records of the company, including its register of members, the above shareholding represents both legal and beneficial ownerships of shares. 36


  • Page 39

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) Notes 31st March 2012 31st March 2011 4. RESERVES AND SURPLUS à lakhs à lakhs (a) Capital reorganisation reserve Balance as per last financial statements (A) 5.00 5.00 (b) General reserve Balance as per last financial statements 15,716.18 14,441.86 Add: Amount transferred from statement of Profit and Loss 3,000.00 1,274.32 Closing Balance (B) 18,716.18 15,716.18 (c) Surplus in the statement of Profit and Loss Balance as per last financial statements 22,003.29 11,636.66 Profit for the year 15,339.96 12,743.18 37,343.25 24,379.84 Less: Appropriations Proposed final equity dividend 948.38 948.38 (amount per share Rs.5 (31st March 2011 Rs. 5) Tax on proposed equity dividend 153.85 153.85 Transfer to general reserve 3,000.00 1,274.32 Total appropriations 4,102.23 2,376.55 Net surplus in the statement of Profit and Loss (C ) 33,241.02 22,003.29 (d) Total reserves and surplus (A+B+C) 51,962.20 37,724.47 5. DEFERRED TAX LIABILITIES (NET) (a) Deferred tax liability (i) Fixed assets: Impact of difference between tax depreciation and depreciation/ amortization charged for the financial reporting 1,793.52 1,753.44 Gross deferred tax liability (A) 1,793.52 1,753.44 (b) Deferred tax assets Impact of expenditure charged to the statement of Profit and Loss in the current year but allowed for tax purposes on payment basis (i) Provisions relating to employee benefits 497.32 455.12 (ii) Provision for warranty 154.08 185.00 (iii) Provision for doubtful debts and other losses 48.83 298.10 Gross deferred tax assets (B) 700.23 938.22 Net deferred tax liabilities (A–B) 1,093.29 815.22 6. OTHER LONG-TERM LIABILITIES Others Deposits from customers 6.00 4.00 6.00 4.00 37


  • Page 40

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 7. PROVISIONS Long-term Short-term 31st March 2012 31st March 2011 31st March 2012 31st March 2011 à lakhs à lakhs à lakhs à lakhs (a) Provision for employee benefits (i) Provision for leave benefits 166.59 173.56 55.02 60.70 (ii) Provision for pension - refer note 25 855.23 790.10 11.79 3.93 1,021.82 963.66 66.81 64.63 (b) Other provisions (i) Provision for warranties 140.55 357.24 295.59 212.95 (ii) Proposed dividend – – 948.38 948.38 (iii) Provision for tax on proposed dividend – – 153.85 153.85 (iv) Provision for fringe benefit tax (net of advance tax payments) – 4.55 4.55 – 140.55 361.79 1,402.37 1,315.18 1,162.37 1,325.45 1,469.18 1,379.81 Provision for warranties The table below gives information about movement in warranty provisions: 31st March 2012 31st March 2011 à lakhs à lakhs Opening balance 570.19 687.76 Add: Provision made during the year 254.47 221.12 Total 824.66 908.88 Less: Utilised / withdrawn during the year 388.52 338.69 At the end of the year 436.14 570.19 Current portion 295.59 212.95 Non-current portion 140.55 357.24 8. SHORT-TERM BORROWINGS Cash credit from bank (secured) 87.52 56.90 87.52 56.90 The above is secured by hypothecation of raw materials, components, work-in-process, finished goods, book debts, stores, spares and tools. 9. OTHER CURRENT LIABILITIES 9.1 Trade payables (refer note 29 for details of dues to micro and small enterprises) 10,801.84 8,400.21 9.2 Other current liabilities (a) Advance from customers 147.47 69.25 (b) Investor Education and Protection Fund will be credited by following amounts (as and when due) Unpaid dividend 13.66 9.27 (c ) Others (i) Income tax deducted at source payable 25.92 25.82 (ii) Employees' Provident Fund payable 7.46 5.72 (iii) Employees' State Insurance payable 7.72 6.35 (iv) Employees' Family Pension Fund deductions payable 13.80 11.49 (v) Sales Tax payable 36.28 73.78 252.31 201.68 11,054.15 8,601.89 38


  • Page 41

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 10. TANGIBLE AND INTANGIBLE ASSETS (Rupees in lakhs) Tangible Assets Intangible Assets Lease Buildings Plant & Furniture Office Computer Description Land hold Machinery, & Fixtures & other Vehicles Total Software Total Land Dies & Jigs equipments and licences Cost of assets As at 1st April 2010 1,556.81 356.87 5,534.06 17,066.32 424.69 993.09 223.90 26,155.74 323.20 323.20 Add : Additions during the year 259.40 – 81.39 974.95 3.46 135.80 0.74 1,455.74 15.86 15.86 Less : Disposed during the year – – – 6.26 – 45.33 11.32 62.91 – – As at 31st March 2011 1,816.21 356.87 5,615.45 18,035.01 428.15 1,083.56 213.32 27,548.57 339.06 339.06 Add : Additions during the year 12.85 208.78 1,626.82 4,452.15 21.66 158.66 17.27 6,498.19 54.45 54.45 Less: Disposed during the year – – – 9.55 – 13.94 17.55 41.04 – – As at 31st March 2012 1,829.06 565.65 7,242.27 22,477.61 449.81 1,228.28 213.04 34,005.72 393.51 393.51 Depreciation As at 1st April 2010 – 25.08 680.67 6,574.98 133.72 642.96 92.76 8,150.17 312.74 312.74 Add : Charge for the year – 6.09 181.95 1,084.54 25.93 106.25 20.98 1,425.74 16.71 16.71 Less : On assets disposed during the year – – – 5.94 – 40.19 10.76 56.89 – – As at 31st March 2011 – 31.17 862.62 7,653.58 159.65 709.02 102.98 9,519.02 329.45 329.45 Add : Charge for the year – 6.67 190.04 1,191.07 26.38 112.15 21.63 1,547.94 15.78 15.78 Less: On assets disposed during the year – – – 8.71 – 13.36 14.54 36.61 – – As at 31st March 2012 – 37.84 1,052.66 8,835.94 186.03 807.81 110.07 11,030.35 345.23 345.23 Written down value As at 31 March 2011 1,816.21 325.70 4,752.83 10,381.43 268.50 374.54 110.34 18,029.55 9.61 9.61 As at 31 March 2012 1,829.06 527.81 6,189.61 13,641.67 263.78 420.47 102.97 22,975.37 48.28 48.28 31st March 2012 31st March 2011 à lakhs à lakhs 11. CAPITAL WORK-IN-PROGRESS Buildings – 331.35 Furniture, fixtures and equipments – 11.24 Machinery under installation 1,276.20 649.14 1,276.20 991.73 12. NON-CURRENT INVESTMENTS Non-trade investments (at cost) Investment towards Pension obligation with ICICI Prudential Life Insurance Group Superannuation Fund, Mumbai (unquoted) 220.24 220.24 220.24 220.24 39


  • Page 42

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 13. LOANS AND ADVANCES Non-Current Current 31st March 2012 31st March 2011 31st March 2012 31st March 2011 à lakhs à lakhs à lakhs à lakhs Capital advances Unsecured, considered good 314.98 398.38 – – (A) 314.98 398.38 – – Security deposit Unsecured, considered good 448.63 410.58 – 1.05 (B) 448.63 410.58 – 1.05 Advances recoverable in cash or kind Unsecured, considered good – – 3,286.24 2,339.16 (C) – – 3,286.24 2,339.16 Other loans and advances (Unsecured, considered good) Advance income-tax (net of provision for taxation) 1,029.64 728.84 134.72 – Prepaid expenses – – 151.47 67.39 Loans to employees 33.30 44.36 24.01 14.94 Balances with government authorities – – 216.40 205.05 (D) 1,062.94 773.20 526.60 287.38 Total (A+ B + C + D) 1,826.55 1,582.16 3,812.84 2,627.59 Loans and advances due by officers, etc. Loans to employees include Dues from officers 1.50 1.58 0.08 0.08 14. TRADE RECEIVABLES AND OTHER CURRENT ASSETS 14.1 Trade receivables (unsecured) Unsecured, considered good unless stated otherwise Outstanding for a period exceeding six months from the date they are due for payment Unsecured, considered good – – 368.49 32.18 Doubtful – – 150.49 150.49 – – 518.98 182.67 Provision for doubtful receivables – – (150.49) (150.49) (A) – – 368.49 32.18 Other receivables Unsecured, considered good – – 15,381.37 17,086.20 (B) – – 15,381.37 17,086.20 Total (A + B) – – 15,749.86 17,118.38 14.2 Other current assets (Unsecured, considered good) Interest accrued on fixed deposits – – 10.50 4.60 40


  • Page 43

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 15. CURRENT INVESTMENTS 31st March 2012 31st March 2011 à lakhs à lakhs Current investments (valued at lower of cost and fair value, unless stated otherwise) Quoted (a) 1,24,661.7656 units in SBI Mutual Fund of SBI Funds Management Private Limited, Mumbai 2,100.00 – (institutional plan - growth option) (b) 62,144.598 units in UTI Mutual Fund of UTI Asset Management Company Private Limited, Mumbai - UTI Liquid Cash Plan (institutional plan - growth option) – 1,000.00 2,100.00 1,000.00 Market value of quoted investments 2,102.49 1,000.56 16. INVENTORIES (VALUED AT LOWER OF COST AND NET REALISABLE VALUE) (a) Raw materials and components 5,778.61 4,439.53 (b) Work-in-process 449.38 342.14 (c ) Finished goods (refer note no. 2.1 (j)) 2,690.13 2,104.63 (d) Stores and spares 1,626.42 569.93 (e) Goods in transit - raw materials and components 1,031.70 530.06 11,576.24 7,986.29 17. CASH AND BANK BALANCES Non-Current Current 31st March 2012 31st March 2011 31st March 2012 31st March 2011 à lakhs à lakhs à lakhs à lakhs Cash and cash equivalents (a) Balances with banks: (i) On current accounts – – 1,493.14 1,266.63 (ii) On term deposit accounts – – 6,669.35 – (iii) On unpaid dividend account – – 13.66 9.27 (iv) Cash on hand – – 10.86 10.07 – – 8,187.01 1,285.97 18. REVENUE FROM OPERATIONS 31st March 2012 31st March 2011 à lakhs à lakhs Revenue from operations (a) Sale of products: (i) Finished goods 110,268.78 95,092.39 (b) Rendering of services 2,932.69 1,761.54 (c ) Test track service usage 311.86 264.35 (d) Scrap sales 822.61 650.98 Revenue from operations (gross) 114,335.94 97,769.26 Less: Excise duty 9,771.70 8,517.60 Revenue from operations (net) 104,564.24 89,251.66 41


  • Page 44

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) Details of products sold 31st March 2012 31st March 2011 à lakhs à lakhs Finished goods sold (net of excise duty) (a) Air assist and full air actuation system for automotive and non-automotive applications and elements thereof 66,967.97 55,633.94 (b) Spares 14,503.67 13,911.97 (c ) Exports of automotive components 14,811.60 11,574.03 (d) Anti lock braking system 4,213.84 5,454.85 100,497.08 86,574.79 Details of services rendered (a) Software services 2,204.78 1,376.93 (b) Research and Development services 571.13 384.61 (c ) Shared services 156.78 – 2,932.69 1,761.54 Tax deducted at source on test track service usage 22.91 7.70 19. OTHER INCOME (a) Interest income on (i) Bank deposits 216.36 56.25 (ii) Others 16.73 3.56 (b) Profit on sale of fixed assets 3.84 1.50 (c) Gain on sale of current investments 145.79 101.08 (d) Tool development income (net of expenses Rs. 71.58 lakhs - 31st March 2011 Rs. 96.73 lakhs) 205.78 300.83 (e) Exchange differences (net) 617.40 72.73 1,205.90 535.95 Tax deducted at source on interest income 22.04 6.51 20. COST OF RAW MATERIAL AND COMPONENTS CONSUMED Inventory at the beginning of the year 4,439.53 3,069.74 Add: Purchases 59,265.52 52,187.56 Less: Inventory at the end of the year 5,778.61 4,439.53 Cost of raw material and components consumed 57,926.44 50,817.77 Details of raw material and components consumed Steel sheets, bar materials and tubes 310.90 105.61 Castings and forgings 17,709.85 13,158.07 Intermediates and components (which individually do not account for 10% or 39,905.69 37,554.09 more of the total value of consumption) 57,926.44 50,817.77 42


  • Page 45

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 21. CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK-IN-PROCESS 31st March 2012 31st March 2011 à lakhs à lakhs (a) Inventories at the end of the year (i) Work-in-process 449.38 342.14 (ii) Finished goods 2,690.13 2,104.63 3,139.51 2,446.77 (b) Inventories at the beginning of the year (i) Work-in-process 342.14 198.61 (ii) Finished goods 2,104.63 926.27 2,446.77 1,124.88 (Increase) / decrease in inventories (692.74) (1,321.89) Details of inventory (a) Work-in-process Air assist and full air actuation system for automotive and non-automotive applications and elements thereof 449.38 342.14 (b) Finished goods (i) Air assist and full air actuation system for automotive and non-automotive applications and elements thereof 2,651.39 2,031.21 (ii) Spares 38.74 73.42 2,690.13 2,104.63 22. EMPLOYEE BENEFITS EXPENSE (i) Salaries, wages and bonus 7,923.87 5,873.87 (ii) Contribution to provident and other funds (note 25) 561.18 450.85 (iii) Workmen and staff welfare expenses 943.75 794.77 9,428.80 7,119.49 Contribution to provident and other funds include: (i) Gratuity as per scheme framed by Life Insurance Corporation of India 63.89 31.64 (ii) Pension fund 76.92 96.64 (iii) Deposit linked insurance as per scheme framed by Life Insurance Corporation of India 9.83 8.65 150.64 136.93 43


  • Page 46

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 23. OTHER EXPENSES 31st March 2012 31st March 2011 à lakhs à lakhs (i) Consumption of stores and spares 5,091.37 3,555.41 (ii) Power and fuel 1,435.17 1,430.63 (iii) Rent 412.58 259.08 (iv) Rates and taxes 140.89 79.67 (v) Repairs and maintenance a) Building 356.64 296.65 b) Machinery 457.35 470.05 c) Other assets 88.40 41.99 (vi) Insurance 65.22 55.51 (vii) Commission 67.94 48.61 (viii) Audit fees (Refer details below) 20.21 17.90 (ix) Cash discount 49.72 34.87 (x) Travel and conveyance 840.44 683.07 (xi) Packing and forwarding 4,324.46 3,926.13 (xii) Data processing 185.61 100.86 (xiii) Sitting fees to directors 4.05 4.35 (xiv) Royalty 518.44 – (xv) Research and development 388.77 577.15 st (xvi) Other expenses (includes Rs. 22.50 lakhs - 31 March 2011: Nil 1,461.34 986.23 commission payable to non-executive independent directors) (xvii) Loss on sale / scrapping of assets 0.41 4.00 15,909.01 12,572.16 Audit fees comprise of: (a) As auditor: Audit fee 13.00 13.00 Tax audit fee 4.00 3.00 (b) In other capacity - Certification fees 1.00 1.00 (c ) Reimbursement of expenses 2.21 0.90 20.21 17.90 Repairs and maintenance includes: Stores consumed 11.71 11.52 11.71 11.52 24. FINANCE COSTS Interest 11.88 20.47 11.88 20.47 44


  • Page 47

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 25. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS Disclosure under AS-15 - Refer Note 2.1 (l) (Rupees in lakhs) As at / year As at / year As at / year As at / year ended ended ended ended 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Particulars Pension Gratuity (a) Expenses recognised in the statement of Profit and Loss (i) Current service cost – – 58.09 43.02 (ii) Interest cost 67.33 59.28 48.56 45.55 (iii) Expected return on plan assets – – (52.40) (52.53) (iv) Net actuarial loss /(gain) recognised in the year 9.59 37.36 9.64 29.02 Total 76.92 96.64 63.89 65.06 (b) Change in defined benefit obligation during the year (i) Present value of obligation as at beginning of the year 794.03 697.39 607.05 569.39 (ii) Interest cost 67.33 59.28 48.56 45.55 (iii) Current service cost – – 58.09 43.02 (iv) Benefits paid (3.93) – (116.50) (79.93) (v) Actuarial gain/ (loss )on obligation 9.59 37.36 9.64 29.02 (vi) Present value of obligation as at the end of the year 867.02 794.03 606.84 607.05 ( c) Change in fair value of plan assets during the year (i) Fair value of plan assets at the beginning of the year – – 607.43 573.62 (ii) Expected return on plan assets – – 52.40 52.53 (iii) Contributions made during the year – – 65.74 61.21 (iv) Benefits paid – – (116.50) (79.93) (v) Actuarial gain on plan assets – – – – (vi) Fair value of plan assets as at the end of the year – – 609.07 607.43 (d) Balance Sheet movements (i) Value of benefit obligations / (net assets) at the beginning of the year 794.03 697.39 607.43 573.62 (ii) Actual return on plan assets – – 52.40 52.53 (iii) Contributions made during the year – – 65.74 61.21 (iv) Expenses 76.92 96.64 – – (v) Benefits paid (3.93) – (116.50) (79.93) (vi) Value of benefit – – – – (vii) Fair value of plan assets as at the end of the year 867.02 794.03 609.07 607.43 Funded status – – 2.23 0.38 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% 8.50% 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. The Company expects to contribute Rs. 75.58 lakhs to gratuity in the next year (31st March 2011: Rs. 71.99 lakhs). 45


  • Page 48

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) Amounts for the current and previous four periods are as follows: 31st March 2012 31st March 2011 31st March 2010 31st March 2009 31st March 2008 à lakhs à lakhs à lakhs à lakhs à lakhs Gratuity Defined benefit obligation 606.84 607.05 569.39 590.67 694.97 Plan assets 609.07 607.43 573.62 669.86 694.97 Surplus / (deficit) 2.23 0.38 4.23 79.19 - Experience adjustments on plan liabilities 9.64 29.02 36.70 (41.83) 80.14 Experience adjustments on plan assets – – – – – 26. SEGMENT INFORMATION 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. There are no other assets outside India. Year ended Year ended 31st March 2012 31st March 2011 à lakhs à lakhs a) Sales (net of excise duty) India 85,685.48 75,000.76 Others 14,811.60 11,574.03 Total 100,497.08 86,574.79 b) Total assets India 64,089.61 46,325.10 Others 3,693.48 4,531.02 Total 67,783.09 50,856.12 c) Capital expenditure India 6,837.11 1,802.02 Others – - Total 6,837.11 1,802.02 27. CONTINGENT LIABILITIES AND COMMITMENTS As at As at 31st March 2012 31st March 2011 (A) Liabilities not provided for à lakhs à lakhs (a) Contingent liabilities i) Bills discounted 6,075.20 8,586.58 (b) Counter guarantee given to bankers 126.28 37.92 (c ) On letters of credit opened with bankers – 22.08 (d) Claims against the company not acknowledged as debts primarily towards: i) Denial of Cenvat credit under Excise laws 11.27 11.27 ii) Denial of weighted deduction for Research and Development expenses claimed under Income tax Act for the years 2006-07 and 2007-08 183.30 183.30 iii) Reversal of service tax credit on certain inputs under the Service tax laws 150.45 8.67 iv) Denial of input tax credit under Tamil Nadu Value Added Tax laws for the years 2009-10 and 2010-11 86.05 – v) Increase of trade license fees by the local authorities 3.04 3.04 vi) Levy of infrastructure and amenities charges by the Tamil Nadu Town and Country Planning Department 49.25 49.25 In respect all the above, based on legal advice obtained, the management is of the view that the above claims are not tenable and the same can be successfully contested and hence no provision has been made in the accounts. (B) Commitments not provided for * (a) Capital 10.53 347.14 (b) Others 1,031.70 530.06 * As certified by management 46


  • Page 49

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 28. UNHEDGED FOREIGN CURRENCY EXPOSURE The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below: (Rupees in lakhs) Sl. Description Foreign Amount in FCY Amount in INR No. Currency (FCY) 31st March 2012 31st March 2011 31st March 2012 31st March 2011 1 Import of goods and services USD – 8.20 – 369.18 JPY – 0.49 – 0.26 EUR 4.75 3.70 308.51 235.48 2 Import of capital goods JPY – 6.76 – 3.65 3 Export of goods and services USD 37.07 37.15 1,896.29 1,663.02 EUR 26.30 45.51 1,797.19 2,868.00 29. DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER THE MSMED ACT, 2006 As at As at 31st March 2012 31st March 2011 Total outstanding dues to Micro and Small enterprises 581.47 394.25 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. During the year there was no interest payment under the above statute. 30. RELATED PARTY DISCLOSURE A. LIST OF RELATED PARTIES a) Reporting entity WABCO INDIA LIMITED (formerly 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 holding Company 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 South Africa 8 WABCO Automotive UK Ltd, United Kingdom 9 WABCO Asia Private Limited, Singapore (Direct subsidiary of CDH) 10 WABCO Compressor Manufacturing Co. USA 11 WABCO Hong Kong Limited, Hong Kong 12 WABCO Japan Inc, Japan 47


  • Page 50

    WABCO INDIA LIMITED (formerly WABCO-TVS (INDIA) Limited) Notes to financial statements for the year ended 31st March 2012 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 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., Cayman 38 WABCO Air Compressor Holdings Inc., 39 WABCO Automotive Control Systems Inc., 40 WABCO Group Inc., 41 WABCO Group International Inc., 42 WABCO Logistic (Quingdao) Co. Ltd 43 WABCO Inc., 44 WABCO North America LLC 45 WABCO Automotive Holdings Inc., 46 WABCO Expats Inc. g) Key management personnel Mr P Kaniappan - Whole Time Director 48

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