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    WABCO INDIA LIMITED 9th Annual Report 2013


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    WABCO INDIA LIMITED Board of Directors Share Transfer Agent Plant - 1 M LAKSHMINARAYAN Sundaram-Clayton Limited Chairman "Jayalakshmi Estates", Plot No. AA8, Central Avenue, 29 (Old No.8), Haddows Road, Auto Ancillary SEZ, D E UDWADIA Chennai - 600 006. Mahindra World City, Natham Sub-Post, Chengalpet, NARAYAN K SESHADRI Tel. : 044 - 2827 2233 Kancheepuram District 603 002 044 - 2828 4959 Tel. : 044 4744 2000 NIKHIL MADHUKAR VARTY# Fax : 044 - 2825 7121 Fax : 044 4749 0006 LEON LIU E-mail : kr.raman@scl.co.in sclshares@gmail.com Plot No.11, Sector 4, SIDCUL, TREVOR LUCAS investorscomplaintssta@scl.co.in IIE Pantnagar, VINCENT PICKERING$ sivalaisenthilnathan.n@wabco-auto.com Rudrapur Udham Singh Nagar, Uttarakhand - 263 153 MICHAEL EDWARD THOMPSON@ Bankers KH No. 159-162, 164 Somaiya Nagar STATE BANK OF INDIA Whole-time Director Barabanki Dewa Road, Barabanki Corporate Accounts Group Branch Lucknow, Uttar Pradesh 225 123 P KANIAPPAN 3rd Floor, Sigappi Achi Building 18/3, Rukmanilakshmipathy Road Plant - 2 Egmore, Chennai 600 008 Chief Financial Officer Plot No. AA8, Central Avenue, T S RAJAGOPALAN Auditors Auto Ancillary SEZ, Mahindra World City, S.R. BATLIBOI & ASSOCIATES LLP General Manager - Finance and Natham Sub-Post, Chengalpet, Chartered Accountants Company Secretary Kancheepuram District 603 002 Tidel Park, 6th & 7th Floor, Tel. : 044 4744 2000 R MADHAVAN+ A - Block (Module 601, 701-702), Fax : 044 4749 0006 N SIVALAI SENTHILNATHAN++ 4, Rajiv Gandhi Salai, Chennai 600 113 Software Design Centres Audit Committee Solicitors & Advocates “Ispahani Centre”, 5th & 7th Floor, NARAYAN K SESHADRI 123/124 Nungambakkam High Road, UDWADIA UDESHI & ARGUS PARTNERS Chennai 600 034 Chairman Solicitors & Advocates Tel. : 044 2828 5000 Elphinstone House Fax : 044 2833 2212 D E UDWADIA 1st Floor, 17 Murzban Road TREVOR LUCAS Mumbai 400 001 CONTENTS Page No. Investors’ Grievance Committee Registered Office NARAYAN K SESHADRI Plot No. 3 (SP), III Main Road, Notice to the shareholders 4 Chairman Ambattur Industrial Estate, Chennai 600 058 Directors’ report to the shareholders 7 P KANIAPPAN Tel. : 044 4224 2000 TREVOR LUCAS Fax : 044 4224 2009 Management discussion and analysis report 11 Website : www.wabcoindia.com Listing of Shares with Report on corporate governance 15 Madras Stock Exchange Limited Factories Chennai Auditors’ certificate on corporate governance 24 Plot No. 3 (SP), III Main Road, National Stock Exchange of India Limited Ambattur Industrial Estate, Auditors’ report to the shareholders 25 Mumbai Chennai 600 058 Tel. : 044 4224 2000 Balance sheet 28 Bombay Stock Exchange Limited Fax : 044 4224 2009 Mumbai Statement of Profit & Loss 29 Large Sector, $ from 23rd May 2012 Adityapur Industrial Area, Gamharia, # upto 24th July 2012 Cash flow statement 30 Seraikella-Kharsawan Dist. @ from 24th July 2012 Jharkhand 832 108 + upto 15th May 2013 Notes to financial statements 32 Tel. : 0657 661 6800 ++ from 15th May 2013 Fax : 0657 238 7997 1


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    WABCO INDIA LIMITED FINANCIAL HIGHLIGHTS Rupees in lakhs Year ended March 31st 2008-09 2009-10 2010-11 2011-12 2012-13 Profit and Loss Account Sales/Revenue from operations # 42,594 59,126 89,252 104,564 96,592 Other income 2,003 1,828 536 1,206 1,264 Total income 44,597 60,954 89,788 105,770 97,856 Gross profit before interest, depn & tax 7,354 13,574 20,600 23,199 20,668 Depreciation 1,394 1,444 1,442 1,564 2,172 Profit before interest & tax 5,960 12,130 19,158 21,635 18,497 Interest 705 296 20 12 2 Profit before taxation 5,255 11,834 19,138 21,623 18,495 Profit after taxation 3,552 7,819 12,743 15,340 13,079 Balance Sheet Net Fixed assets 19,528 18,677 19,031 24,300 28,892 Investments 900 221 1,220 2,320 2,545 Net current assets 5,758 9,178 18,984 26,726 34,479 Long term loans and advances – – 1,582 1,827 1,566 Total 26,186 28,076 40,817 55,173 67,482 Share capital 948 948 948 948 948 Reserves & surplus 18,818 26,084 37,724 51,962 63,932 Net worth 19,766 27,032 38,672 52,910 64,880 Loan funds/Non current liabilities ## 6,020 719 1,330 1,169 1,431 Deferred taxation (net) 400 325 815 1,094 1,171 Total 26,186 28,076 40,817 55,173 67,482 EPS (Rs) 18.73 41.22 67.18 80.87 68.95 DPS (Rs) 2.50 2.50 5.00 5.00 5.00 Book value per share (Rs) 104.21 142.51 203.89 278.95 342.04 Return on capital employed (ROCE) % 26.3 44.7 55.6 45.1 30.2 Return on net worth (RONW) % 19.4 33.4 38.8 33.5 22.2 Fixed assets turnover (no of times) 2.3 3.1 4.7 4.8 3.6 Working capital turnover (no of times) 12.9 7.9 6.3 4.6 3.2 Gross profit as % of sales (EBITDA) 17.3 23.0 23.1 22.2 21.4 Gross profit as % of total income 16.5 22.3 22.9 21.9 21.1 Net profit as % of total income 8.0 12.8 14.2 14.5 13.4 # Figures for the years 2008-09 and 2009-10 represents "sales" and for 2010-11, 2011-12 and 2012-13 represents "Revenue from operations". # # Figures for the years 2008-09 and 2009-10 represents "Loan funds" and for 2010-11, 2011-12 and 2012-13 represents "Non current liabilities". ROCE is profit before interest and taxation divided by average networth plus loan funds. RONW is profit after tax divided by average networth. Fixed assets turnover is sales divided by average net fixed assets as at the end of the year. Working capital turnover is sales divided by average net current assets as at the end of the year. 3


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    WABCO INDIA LIMITED Notice to the Shareholders the Companies Act, 1956 along with a deposit of Rs.500/- from a shareholder intimating his intention NOTICE is hereby given that the Ninth Annual General to propose Mr Michael Edward Thompson for Meeting of the Company will be held at "The Music directorship, be and he is hereby appointed as a Academy", New No. 168 (Old No. 306), T.T.K Road, director of the Company. Chennai 600 014 on Wednesday, the 24th day of July 2013 at 10.00 a.m. to transact the following business: 6. To consider and if thought fit, to pass with or without modification, the following resolution as 1. To consider and, if thought fit, to pass with or an ordinary resolution: without modification, the following resolution as an ordinary resolution: RESOLVED THAT Messrs S.R. Batliboi & Associates LLP (formerly known as S.R. Batliboi & Associates), RESOLVED THAT the audited balance sheet as at Chartered Accountants, Tidel Park, 6th & 7th Floor - 31st March, 2013 and the profit and loss account A Block (Module 601,701-702), No. 4, Rajiv Gandhi of the Company for the year ended on that date, Salai, Taramani, Chennai 600 113, holding ICAI Firm together with the directors' report and the auditors' Registration No.101049W allotted by the Institute of report thereon as presented to the meeting be and Chartered Accountants of India, be and are hereby the same are hereby approved and adopted. appointed as the statutory auditors of the Company 2. To consider and, if thought fit to pass with or to hold office from the conclusion of this Annual without modification, the following resolution as General Meeting until the conclusion of the next Annual an ordinary resolution: General Meeting of the Company. RESOLVED THAT pursuant to the recommendation RESOLVED FURTHER THAT the board of directors of the board of directors of the Company, a dividend of the Company be and is hereby authorised to fix of Rs.5/- per share on 1,89,67,584 equity shares their remuneration and reimburse their travelling and of Rs.5/- each fully paid up absorbing a sum of out of pocket expenses. Rs.948.38 lakhs be and is hereby declared for the year ended 31st March, 2013 and the same be paid By order of the board to the shareholders whose name appear in the register of members of the Company as at the close Chennai R MADHAVAN of 18th July, 2013. 15th May 2013 General Manager - 3. To consider and, if thought fit, to pass with or Finance and Secretary without modification, the following resolution as an ordinary resolution: Registered office: Plot No 3 (SP), III Main Road RESOLVED THAT Mr Leon Liu, director who retires Ambattur Industrial Estate by rotation and being eligible for re-appointment, be Chennai 600 058. and is hereby re-appointed as a director of the Company. Notes: 4. To consider and, if thought fit, to pass with or 1. A member entitled to attend and vote at the without modification, the following resolution as meeting is entitled to appoint one or more proxies an ordinary resolution: to attend and vote instead of himself and the RESOLVED THAT Mr Narayan K Seshadri, director proxy or proxies so appointed need not be a who retires by rotation and being eligible for member or members, as the case may be, of the re-appointment, be and is hereby re-appointed as Company. The instrument appointing the proxy a director of the Company. and the power of attorney or other authority, if any, under which it is signed or a notarially 5. To consider and, if thought fit, to pass with or certified copy of that power or authority shall be without modification, the following resolution as deposited at the registered office of the Company an ordinary resolution: not later than 48 hours before the time fixed for RESOLVED THAT Mr Michael Edward Thompson, holding the meeting. who was appointed as a director of the Company 2. An explanatory statement pursuant to Section 173(2) with effect from 24th July, 2012 to fill in the casual of the Companies Act, 1956 in respect of item vacancy caused by the resignation of Mr Nikhil no. 5 as set out in the notice is annexed hereto. Madhukar Varty who would have held office upto the date of this Annual General Meeting had he not 3. The Register of Members and the share transfer resigned, and in respect of whom the Company has register will remain closed for a period of 6 days received a notice in writing under Section 257 of from 19th July, 2013 to 24th July, 2013 (both days 4


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    WABCO INDIA LIMITED inclusive) for the purpose of dividend to be approved relationships with other directors in the Company are by the shareholders at the ensuing Annual General given below: Meeting of the Company. Brief resume and other information in respect of 4. In terms of Section 205A read with Section 205C directors seeking re-appointment at the Annual of the Companies Act, 1956, the dividends declared General Meeting by the Company, which remain unclaimed for a period of seven years will be transferred to the Mr Leon Liu Investor Education and Protection Fund (IEPF), established by the Central Government on the due Born on 13th November 1961, Mr Leon Liu is WABCO's dates. The particulars of due dates for transfer of President for the Asia business units responsible for such unclaimed dividends to IEPF are furnished in WABCO's business objectives in Asia and he leads the the report on Corporate Governance forming part team that drives regional business, integrates local market of the annual report. needs and requirements and implements strategies aligned with product and after market business units. He has got Members who have not encashed their dividend more than 23 years experience in U.S and Asia Pacific warrants in respect of the above periods are Automobile industry. He has got masters degree in requested to make their claim by surrendering the Business Administration in General Management and unencashed warrants immediately to the Company. PhD in Materials Science & Engineering. 5. Members holding shares in physical form, in their He is not a member of any committee of board of directors own interest, are requested to dematerialize the of any other company or the Company. He does not hold shares to avail the benefits of electronic holding / any share in the Company and he is not related to any trading. other directors of the Company. Details of his other 6. Members are requested to register their e-mail directorships are given below: address with the Company/Share transfer Agents S. immediately and participate in the "Green initiative" Name of the company Position held No. launched by the Ministry of Corporate Affairs. 1. WABCO Korea Limited Director 7. Members holding shares in depository are requested to register their e-mail address with their depository 2. Shandong Weiming Automotive Product Co Ltd Chairman/Director participants and participate in the "Green initiative" 3. WABCO (China) Co Ltd Chairman/Director launched by the Ministry of Corporate Affairs. 8. Members are requested to notify to the Company/ 4. WABCO Automotive Products Ltd Director Share Transfer Agent immediately any change in 5. WABCO Asia Pvt Ltd Director their address. Members holding shares in depository are requested to advise change of address to their 6. WABCO Australia Pty Ltd Chairman/Director depository participants. 7. WABCO Hong Kong Ltd Director 9. As a measure of economy, copies of the annual 8. WABCO Logistics (Quingdao) Co., Ltd Chairman/Director report will not be distributed at the Annual General Meeting. Members are, therefore requested to bring 9. WABCO (Shanghai) Management Co Ltd Chairman/Director their copies of the annual report to the meeting. 10. WABCO Japan Inc Director 10. Members are requested to affix their signature at 11. WABCO Foundation Brakes Pvt Ltd Director the space provided on the attendance sheet annexed to the proxy form and hand over the slip at the 12. Guang Dong Wabco Fuwa Vehicle Brakes Co Ltd Director entrance of the meeting hall. Mr Narayan K Seshadri 11. In terms of clause 49 (IV)(G) of the listing agreement with the stock exchanges, a brief resume of directors, Born on 13th April 1957, Mr Narayan K Seshadri is a who are proposed to be re-appointed in this meeting, graduate of Science and a Chartered Accountant with nature of their expertise in specific functional areas, over 30 years of professional experience. their other directorships and committee memberships He is the founder of Tranzmute Capital & Management and their shareholdings in the Company and their Pvt Ltd, an Investment Advisory and Management 5


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    WABCO INDIA LIMITED Services organization. Earlier he founded Halcyon Group S. Committee membership/ that had partnered with a US investment management Name of the company Position held No. chairmanship group and established a USD 300 million Special Situations Fund investing in distressed companies and 9. IRIS Business Services Limited Director Member- latent businesses with considerable potential for growth. Audit Committee He is the Chairman of the Audit committee of directors 10. TVS Investments Limited Director Chairman- and Investors' Grievance committee of directors of the Audit Committee Company. He does not hold any share in the Company and he is not related to any other directors of the 11. AstraZeneca Pharma India Company. Details of his other directorships and Limited Director membership/chairmanship of committees are given below: 12. Arthveda Fund Management Pvt Ltd Director S. Committee membership/ Name of the company Position held 13. Halcyon Resources & No. chairmanship Management Pvt Ltd Director 1. Tranzmute Capital & Management Private Limited Director Mr Michael Edward Thompson 2. Magma Fincorp Limited Director Chairman- Audit Committee Born on 29th October 1968, Michael Edward Thompson has Bachelor of Science (BS) degrees and a Doctor of Philosophy 3. PI Industries Limited Director Member- (PhD) degree in Materials Science. Audit Committee Mr Thompson is the vice president, Compression & Braking business 4. A2O Software India Pvt Ltd Director in WABCO since February 2012. He had vast experience in global 5. Kalpataru Power Transmission Member- marketing and strategy and business development in his previous assignments. Limited Director Audit Committee He is not a member of any committee of board of directors of 6. SBI Capital Markets Limited Director Member- any other company or the Company. He does not hold any share Audit Committee in the Company and he is not related to any other directors of 7. Radiant Life Care Private the Company. Details of his other directorship is given below: Limited Director S. Nature of 8. Halcyon Enterprises Private No. Name of the company Interest Limited Director 1. WABCO Europe BVBA Director EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956. Item No. 5 The directors recommend for approval the resolution at Mr Michael Edward Thompson was appointed as a director item no.5 of the Notice. th at the board meeting held on 24 July, 2012 in the casual Mr Michael Edward Thompson is interested in the vacancy caused by the resignation of Mr Nikhil Madhukar resolution, since it relates to his appointment. Varty on 24th July, 2012. Mr Nikhil Madhukar Varty would have held office as a director upto the date of this Annual By order of the board General Meeting had he not resigned. Pursuant to Section 262 of the Companies Act, 1956, Mr Michael Edward Thompson holds office upto the date of this Annual Chennai R MADHAVAN General Meeting. 15th May 2013 General Manager - Finance and Secretary Notice has been received from a shareholder of the Company under Section 257 of the Companies Act, 1956, Registered office: along with a deposit of Rs.500/- signifying his intention to Plot No 3 (SP), III Main Road propose the candidature of Mr Michael Edward Thompson Ambattur Industrial Estate for the office of director. Chennai 600 058. 6


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    WABCO INDIA LIMITED Directors’ report to the shareholders The directors have pleasure in presenting the ninth annual report and However, after market sales segment registered a growth of 16.5% the audited accounts for the financial year ended 31st March 2013. over the previous year and exports segment registered a growth of 34.2% over the previous year. 2. FINANCIAL HIGHLIGHTS Rs. in lakhs 5. CAPITAL EXPENDITURE Details Year ended Year ended Capital expenditure of Rs.63 crores is planned for the year 31.03.2013 31.03.2012 2013-14 considering the industry growth in this year. Sales (net) 91,735.78 1,00,497.08 6. DIRECTORS Other Operating income 4,856.60 4,067.16 Mr Leon Liu, Mr Narayan K Seshadri, and Mr Michael Edward Thompson, retire at the ensuing Annual General Meeting of the Other income 1,263.50 1,205.90 Company. Being eligible, they offer themselves for re-appointment. Total revenue from operations In compliance with clause 49 of the Listing Agreement, a brief and other income 97,855.88 1,05,770.14 resume of the above three directors and other required information Gross profit before interest and is given in the notice convening the annual general meeting of depreciation 20,668.37 23,198.63 the Company. Necessary resolutions for their reappointment will be placed for approval of the shareholders at the ensuing annual Finance costs 1.76 11.88 general meeting. Your directors recommend their reappointment Depreciation 2,171.78 1,563.72 as directors of the Company. Profit before tax 18,494.83 21,623.03 Mr Nikhil Madhukar Varty resigned as a director with effect from 24th July 2012. The Board of Directors at its meeting on 24th July Provision for taxation (including 2012 placed on record its appreciation of the valuable services deferred tax and tax relating rendered by him during his tenure as a director. Mr Michael to earlier years) 5,416.00 6,283.07 Edward Thompson was appointed as a director in the casual Profit after tax 13,078.83 15,339.96 vacancy caused by the resignation of Mr Nikhil Madhukar Varty at the board meeting on 24th July 2012. Surplus brought forward from previous year 33,241.02 22,003.29 7. AUDITORS Total 46,319.85 37,343.25 Messrs S.R.Batliboi & Associates LLP, Chartered Accountants have informed that that the name of their firm Viz S.R.Batliboi Appropriations: & Associates, Chartered Accountants has been changed to Proposed dividend 948.38 948.38 S.R.Batliboi & Associates LLP on the conversion of the firm to limited liability partnership effective 1st April 2013. They retire at Dividend tax payable 161.18 153.85 the ensuing Annual General Meeting and are eligible for Transfer to general reserve 5,000.00 3,000.00 re-appointment and the re-appointment will be made in the new Surplus in profit & loss account 40,210.29 33,241.02 firm name. 46,319.85 37,343.25 8. COST AUDITOR Mr A N Raman was appointed as Cost auditor of the Company for 2012-13 by the board of directors at their meeting held 3. DIVIDEND on 23 rd May 2012. The board at their meeting held on The board of directors have recommended a dividend of Rs.5 15th May 2013 have re-appointed Mr A N Raman as Cost auditor per share for the year ended 31st March 2013 absorbing a sum for 2013-14. of Rs.948.38 lakhs for approval of the shareholders at the ensuing 9. STATUTORY STATEMENTS annual general meeting. Conservation of energy, technology absorption and foreign 4. PERFORMANCE exchange earnings and outgo During the year 2012-13, sales of medium and heavy commercial Information regarding conservation of energy, technology absorption vehicles (MHCV), dropped by 24% over the previous year. and foreign exchange earnings and outgo is given in Annexure I The Company achieved a total revenue from operations and other to this report, as per the requirements of Section 217(1)(e) of the income of Rs.978 crores as against turnover of Rs.1,057 crores Companies Act, 1956, read with the Companies (Disclosure of in the previous year, a reduction of 7.5%. Particulars in the Report of Board of Directors) Rules, 1988. 7


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    WABCO INDIA LIMITED Particulars of employees 10. CORPORATE GOVERNANCE Particulars of employees pursuant to Section 217(2A) of the The Company has complied with the provisions of the Listing Companies Act, 1956, read with the Companies (Particulars of Agreement concerning corporate governance and a report to this Employees) Rules, 1975, as amended, are set out in Annexure effect is attached, as required by clause 49 of the Listing II and form part of this report. However, pursuant to Section Agreement with the stock exchanges. The certificate issued by 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts the auditors of the Company regarding compliance with the are being sent to all the Members excluding the aforesaid corporate governance requirements is also annexed to this report. information. The said particulars will be made available to a The whole-time director (CEO) and the chief financial officer (CFO) Member upon request and also made available for inspection at of the Company have certified to the board on financial statements the Registered Office of the Company. Any Member interested in and other matters in accordance with clause 49(V) of the Listing obtaining such particulars may write to the Company Secretary Agreement pertaining to CEO/CFO certification for the financial at the Registered Office of the Company. year ended 31st March 2013. Directors’ Responsibility Statement The management discussion and analysis report, as required by the Listing Agreement, is also attached and forms part of this report. Pursuant to Section 217(2AA) of the Companies Act, 1956 it is hereby confirmed: Para (xxi) of the Annexure to the Auditors' Report dated May 15, 2013 is self-explanatory. The investigation referred therein is (i) that in the preparation of annual accounts for the financial entrusted to an external agency and the Company is wholly year ended 31st March 2013, the applicable accounting co-operating therewith. Also, the Company has further standards have been followed along with proper explanation strengthened its internal controls to prevent such an occurrence. relating to material departures; (ii) that the directors have selected such accounting policies 11. ACKNOWLEDGEMENT and applied them consistently and made judgments and The directors gratefully acknowledge the continued support and estimates that were reasonable and prudent so as to give co-operation received from WABCO Europe BVBA, Belgium. a true and fair view of the state of affairs of the Company The directors thank the vehicle manufacturers, distributors, vendors at the end of the financial year and of the profit of the and bankers for their continued support and assistance. Company for the year under review; The directors wish to place on record their appreciation of the (iii) that the directors have taken proper and sufficient care for excellent work done by employees of the Company at all levels the maintenance of adequate accounting records in during the year. The directors specially thank the shareholders accordance with the provisions of the Companies Act, 1956 for the confidence reposed by them in the Company. for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and For and on behalf of the board (iv) that the directors have prepared the accounts for the financial Chennai M LAKSHMINARAYAN year ended 31st March 2013 on a going concern basis. 15th May 2013 Chairman 8


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    WABCO 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 ix) Introduction of inverter drive for grinding machine to reduce power consumption. 1. Measures taken This will result in a saving of about 6.40 lakhs units and i) Modification of anodising chiller design to reduce the capacity Rs.38.40 lakhs per annum. from 90TR to 10TR to reduce power consumption ii) Introduction of auto switching off the fans & lights in shop B. TECHNOLOGY ABSORPTION floor during lunch time through Programmable Logic Controller Research & Development (R & D) (PLC); 1. Specific areas in which R & D is carried out by the Company. iii) Introduction of energy efficient Air Blower instead of Existing activities: compressed air for agitation process in anodising plant for (a) Products launched 2 nos; i. Compressor 230 CC capacity iv) Introduction of solar lights for street lights instead of Compact Fluorescent Light (CFL) - 6 nos; ii. Compressor 318 CC capacity iii. Integral pedal unit v) Replace the coolants with energy efficient coolant to reduce power consumption; iv. Automatic slack adjuster vi) Introduction of Induction lamps instead of Doom lights in v. Exhaust brake assembly shop floor - 20 nos to reduce power consumption; vi. Hand brake valve with self return vii) Provided electronic timers in all Computer Numerical Control vii. Adjusting valve (CNC) machines to switch off the same during idle time; (b) Long Stroke Brake chamber-75 mm stroke - design and This will result in a saving of about 6.24 lakhs units and product validation completed; Rs.31.20 lakhs per annum. (c) New range of brake chambers and actuators for VOLVO in advanced stage of validation; 2. Measures Proposed (d) Development of lift axle control system for truck application i) Implementing of Adiabatic cooling system for reducing energy for domestic customers. Product validated and ready for in air conditioning systems; launch; ii) Replacing 400W metal halide lamp to 80W Compact (e) Launch of Value Engineered Type 24/24 Spring Brake Fluorescent Light (CFL) to reduce power consumption; Actuators for cost reduction; iii) Recover the waste heat from air compressor to surface (f) Conversion of aluminum to plastic in magnetic valves to protection unit for reducing air compressor power optimize material cost; consumption; (g) New range of relay valves and quick release valves under iv) Use of solar power for lighting in office areas covering 100% concept development. of all lighting load in marketing and Research & Development department; 2. Benefits derived as a result of R & D: v) Replacing of Del Star Convertors to Air Compressors to (a) Market expansion and improved competitive position through reduce the power consumption; significantly improved products for new markets. vi) Introduction of air blowers in washing machines to reduce (b) New opportunity in global market by introducing new range the energy consumption; of actuators and brake chambers. vii) Providing Air Solenoid in machines to reduce compressed (c) Improved competency for designing products for global air consumption in idle stage of machines; market. viii) Replacement of Induction motor to servo motor in performance (d) Acquiring competency in new areas like Hydraulic Brake test rig to reduce power consumption; Boosters. 9


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    WABCO INDIA LIMITED 3. Future plan of action: (b) Benefits derived as a result of the above efforts: (i) Launch of Actuators for emerging market and Russia. 1. Development of products with best in class performance and (ii) Expanding market for Automatic Slack Adjusters. reliability to retain market leadership. (iii) Launch of Air Processing and Distribution Assembly (APDA) 2. Continued expansion of simulation capabilities to reduce with ASP feature for Indian market. product development lead time and quality of design. (iv) Development of compressor with clutch for energy saving. 3. Improved corrosion resistance of the products helped to (v) Launch of new products like lift axle control system under obtain new business opportunities with global customers. development for domestic customers. (c) Details relating to imported technology: (Technology imported (vi) New concept developments for innovative next generation during the last 5 years reckoned from the beginning of the products like hybrid lift axle control system, foot brake valve, financial year). relay valves and actuators. Nil 4. Expenditure on R & D: Rs. in Lakhs Capital expenditure 279.27 C. FOREIGN EXCHANGE EARNINGS AND OUTGO Recurring expenditure (including salaries) 745.78 EXPORT ACTIVITIES: 1,025.05 st Exports during the year ended 31 March 2013 amounted to Total expenditure as percentage of sales turnover 1.05% Rs.19,882.04 lakhs. Technology absorption, adaptation and innovation: Total foreign exchange used and earned: (a) Efforts in brief: a) Foreign exchange used Rs. 13,492.94 lakhs 1. Creation of coefficient of discharge data base and library b) Foreign exchange earned Rs. 23,604.17 lakhs for standardized features with theoretical simulation. 2. Enhance corrosion resistance of reservoirs, modulator valves, actuators and other aggregates. For and on behalf of the board 3. Wear and friction study of brake parts. Chennai M LAKSHMINARAYAN 4. Three international patents filed. 15th May 2013 Chairman 10


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    WABCO INDIA LIMITED Management discussion and analysis report I. Industry Structure and Development: India's Gross Domestic Product (GDP) at factor cost (constant prices) started showing a declining trend from 5.5% in the first quarter to 4.5% in the third quarter of financial year 2012-13 and the financial year 2012-13 is likely to end at 5.0%. The slowdown in manufacturing and ban in mining sectors in Goa, Karnataka and Odisha coupled with supply side constraints contributed to low industrial growth. The agriculture sector was hugely affected owing to poor monsoon, recording a deficit of 13% throughout the country. Overall moderation in the economy is due to weak external demand, structural bottlenecks, increasing interest rates & twin deficits, high inflation and declining business confidence. Broad sector wise growth for 2009-10 to 2012-13 is given below:- Growth rate of GDP (%) at factor cost (constant prices) Sector 2009-10 2010-11 2011-12 2012-13 (Forecast) Agriculture 0.8 7.9 3.6 1.8 Industry 9.2 9.2 3.5 3.1 Services 10.5 9.8 8.2 6.6 GDP (constant prices) 8.6 9.3 6.2 5.0 Source :- Central Statistical Organization The commercial vehicle (CV) industry is considered to be the II. Business outlook and overview key barometer of economic activity. The industry entered a The economic growth outlook for the year 2013-14 to be in the cyclical phase in 2012-13, after witnessing volume growth of over range of 6 - 6.5% as estimated by various rating agencies and 30% in 2009-10 and 2010-11. The industrial growth measured Government bodies. Prime Minister's Economic Advisory Council by Index of industrial production witnessed a flat growth of 0.9% (PMEAC) has also indicated the economy to have bottomed out during the period April 2012 to February 2013. The mining output end of March 2013 and is likely to recover in 2013-14 on the dropped by (2.5%), manufacturing output which contributes to back of external demand and recent policy measures by government. 75% of total industrial production witnessed only a growth of The growth for 2013-14 is likely to be driven by gradual recovery 1.0% and electricity generation expanded by 4.0% during the in industrial production, normal monsoon for the agricultural activity period April 2012 to February 2013. Weak industrial growth has and steady growth in services sector. The government has started resulted in lower utilization rates of trucks. Low freight availability addressing the supply-side constraints that would activate the flow has affected transporters' profitability and the delinquencies in of shelved investments into the economic cycle. The industry is CV loans is also showing an increasing trend to as high as expected to perform better than last year as the leading industry 95% owing to limited credit availability. indicators suggest a turnaround in IIP (Index for Industrial The development of road infrastructure is a key factor that Production) growth owing to low base effects. Overall the domestic influences the growth of the Indian commercial vehicle industry. growth outlook for 2013-14 looks a little better than in 2012-13. The newly set up Cabinet Committee on Investment (CCI) in The Society of Indian Automobile Manufactures (SIAM) has January 2013 to provide faster clearance and approval of major projected a marginal recovery of 1 - 3% in the M&HCV goods infrastructure projects, has cleared Rs.74,000 Crores worth category for the period 2013-14. With the increasing acceptance projects during January and February 2013. However, the of hub-and-spoke model of transportation, the Light Commercial government's action of speeding up the reforms in terms of land Vehicle (LCV) goods carrier sales is expected to increase in the acquisition, regulatory clearance, power distribution and fuel range of 10 - 12% in FY ‘14. linkage will result in increased investments and participation from III. Opportunities & Threats the private players. WABCO INDIA provides solutions to the commercial vehicle Owing to the above growth enablers and constraints, the segment of the automotive industry. The recent announcement commercial vehicle industry registered a declining performance in the 2013-14 Union budget of allocating Rs.14,873 Crores in 2012-13 with 24% drop in Medium & Heavy Commercial towards the Jawaharlal Nehru National Urban Renewal Mission Vehicles (M&HCV) sales volume to 287,282 units in 2012-13 (JNNURM) is likely to boost the CV sector as the large part from 377,711 units in 2011-12. The production of M&HCV in of this allocation will be used towards the purchase of 10,000 2012-13 declined by 28% compared to 2011-12. buses across the country under the city modernization scheme. Figures in units With improved road infrastructure, the demand for faster vehicles Category 2011-12 2012-13 Growth that carry higher payloads is increasing. M&HCV production 384,801 278,560 (28%) Local market growth opportunities through increase in content per vehicle in the form of introducing new systems / technologies M&HCV Sales 377,711 287,282 (24%) like Automated Manual Transmission (AMT), Automatic Slack Source: SIAM Adjusters, Adjusting valve, Clutch actuation systems, higher 11


  • Page 12

    WABCO INDIA LIMITED capacity compressors etc., will result in increased business • Average rubber prices are expected to be 12 - 15% higher opportunities for WABCO INDIA. in 2013-14, as compared to 2012-13 levels due to continuous In the aftermarket side, further potential in retro fitment of Anti increase in synthetic rubber prices. Lock Braking System (ABS) in tanker trucks operated for major • Significant increase in the energy cost in India by more oil companies is being explored. In addition, the aftermarket is than 37% during the year 2012-2013 as against 2011-2012 also planning to introduce new products like Adjusting Valve and in tandem with the energy deficit of about 25% in the Lift Axle Valves to market for increasing the sales. southern region of the country continues to extend an So far, the company has commissioned 161 authorized service upward pressure on the conversion cost. centers at strategic locations across the country, to provide Commercial Vehicles manufacturers are likely to pass on these quicker and better service on air brake aggregates. Further, to additional costs to customers. However, the sensitivity of improve availability of quality service in rural areas, the company transporters' profitability to the increase in vehicle cost would also commissioned 152 certified workshops. These initiatives determine the extent of the cost actually passed on to the end would result in improved service practices, availability of genuine customer. parts and generate additional revenue for the Company. As part Since, major growth is expected from Exports as well as from of increasing export business, further expansion has been done new systems; new product launch at the right time will be the at Mahindra World City near Chennai which caters to the needs focus area. Suitable measures have been factored in the of WABCO plants globally. With the revival of global economy company's operating plan. The OEM customers across the world expected in the near future, business opportunities for this unit would continue their pressure on price reduction from their will increase. suppliers. The Company plans to mitigate this risk through cost The Company's competitors are active and continue to supply reduction initiatives such as value engineering, localization and to key customers. global sourcing. IV. Risks and concerns V. Internal control system and their adequacy The cyclical nature of the Indian commercial vehicle industry The Company has a proper and adequate system of internal (Company's major customer segment) might affect the demand. controls to ensure that all assets are safeguarded and protected In 2013-14, operating expenses are likely to rise with the expected against loss from unauthorized use or disposition thereof. increase in prices of key raw materials, energy cost & scarcity All transactions are authorized, recorded and reported correctly. of power in state. The internal controls are checked by internal auditors. The The trend in prices of key raw materials is as follows:- observations made by them, management action and time frame are reviewed by the audit committee of the Board of Directors. • Steel prices have remained fairly constant throughout the Concerns if any are reported to the Board. year in 2012-13 and have reduced by 1.6% compared to 2011-12. This is primarily due to the fact that the weakening Para (xxi) of the Annexure to the Auditors' Report dated May of the Indian Rupee has supported prices by making 15, 2013 is self-explanatory. The investigation referred therein imports expensive; however reduced demand exerted is entrusted to an external agency and the Company is wholly downward pressure. Thus despite weak demand, steel co-operating therewith. Also, the Company has further prices remained stable on account of a weakened rupee. strengthened its internal controls to prevent such an occurrence. Fall in Indian rupee against US Dollar by 13.1% in 2012-13 has impacted on the key raw materials imports - VI. Operations review Iron ore and coal but there has been some respite on A. Manufacturing the domestic steel prices. The increase in Iron ore price by 12.6% in October 2012 and the continuous deficit of During the year under review, as part of expansion and coal in India will lead to increase the steel price in quarter to set up a plant near the major customers, the company 1 and quarter 2 of 2013 as the import levels of coal will completed the construction of its plant near Lucknow in also not increase significantly as the removal of the current the State of Uttar Pradesh. The company commenced trial import tax is insufficient for any major change. production during March 2013 and the commercial • Domestic aluminum prices increased by 12% in 2012-13 production is expected to be started in June 2013. compared to 2011-12. The impact of drop in LME index The Company's manufacturing facilities follow the best did not have any effect on aluminum price due to weaker practices such as Total Quality Management (TQM), Total rupee against dollar. The steep rise in price of furnace Productive Maintenance (TPM) and Lean Manufacturing oil during 2012-13 by 24% compared to 2011-12 has and has best-in-class practices for safety, work environment, impacted in the aluminum price. Average aluminum prices water and energy conservation. These initiatives are are expected to be 8 - 10% higher in 2013-14, as compared deployed companywide to achieve significant improvement to 2012-13 levels. in productivity and reduction in manufacturing cost. 12


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    WABCO INDIA LIMITED Continuous improvement actions are implemented to D. Information Technology improve manufacturing quality and productivity in all the The Company uses ERP system that integrates all business manufacturing locations. processes across the Company as well as customers and During the year under review, the company obtained the suppliers. During the year, the Company has focused on national award for excellence in cost management from further leveraging the ERP system. Special emphasis on the Institute of Cost Accountants of India for the second automation of repetitive activities through the usage of IT time in a row. Other awards won by the company include was done across several functions. Projects focused towards "Best efforts in value engineering and cost reduction in paperless office such as e-Purchase order system, on-line 2011-12" award from MAN, "Long association award" from field claims processing system, on-line attendance AMW, "Outstanding contribution to new product development monitoring system, on-line leave management system etc. award" from VECV, "Best kaizen" award from Ashok Leyland. have been implemented. The company also received certificate of appreciation for VII. Human Resource Development "Best Poka Yoke" from Mahindra & Mahindra and for safety practices from Government of Tamil Nadu. The Company focuses on attracting the best talent and enjoys a good brand image across leading educational institutions and B. Quality talent pool. The current average hiring speed of the lateral talent The quality system at the factory aims at achieving total is within 80 days. The Company blends successfully mid career customer satisfaction through its focus on improving product recruitment with internally grown talent through a robust globally quality to World standards. This is achieved through total managed talent management process. Rewards and recognition employee involvement and continuous improvement culture. system is in place to retain and provide fast track growth for Rigorous usage of poka-yokes, utilization of statistical tools high potential employees. Talent Retreat workshops are under for process optimization and control also contribute towards taken every year by the Leadership to identify such high potential improving the product quality. employees and facilitate career moves within India and Global The standardization of the quality procedures is aligned sites. Our Voluntary retention rate is at 8.7%, that is benchmark with QS 9000 / TS 16949 requirements. WABCO INDIA while similar Industry attrition rates are at 11% and above. LIMITED is certified for TS 16949. Potential talents are sponsored to overseas and inland universities TQM is a way of life at WABCO INDIA LIMITED. 100% for developing their capabilities to handle new technologies and participation in employee involvement has been successful management practices. Customized management development for the past 13 consecutive years. programs have been developed in partnership with reputed Employees have completed more than 222 projects by educational institutions to hone the leadership skills of the senior applying statistical tools through QC Circles in 2012-13. executives. The average number of suggestions implemented per The Company continues to maintain its impeccable record on employee is 61 in 2012-13 which is close to international industrial relations. benchmark. As of 31st March 2013, the Company had 1,211 employees on C. Cost management its rolls. The Company continues its rigorous focus on its costs VIII. Environment & Safety through an effective cost deployment system. Value Safety management is integrated with the overall Safety Health engineering and global sourcing projects are being pursued and Environment (SHE) management system. During the year for cost reduction and also to insulate from cost escalation. under review, the unit at Mahindra world City has been certified Cost reduction workshops are conducted periodically to for Integrated Management System viz., ISO 14001 and OHSAS identify cost reduction opportunities on various product 18001. The Company has also obtained "Best Safety Drive" groups. Some of the strategies for cost reduction include award from ACMA. material change, process change, source change etc. The Company is committed to energy conservation. During the Commodity sourcing from prime producers and price year the following implemented projects have gained momentum: negotiation with customers helps in managing the cost effectively and efficiently. • Replacement of High bay lights to CFL/LED lamp wherever suitable to maintain the luminous level. Other significant cost reduction projects include. • Introducing efficient coolant in new grinding machines • Usage of new generation cutting tools, thereby thereby resulting of reduced power consumption. improving the productivity levels. • Removal of chip conveyor from machinery where minimum • Utilizing third party power to reduce energy cost. chips is generated from machine. This results in reduced • Low cost automation to improve the productivity. power consumption. 13


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    WABCO INDIA LIMITED IX. Community development and social responsibility As a corporate citizen, the Company believes in its social responsibility and community development activities. This year the team planned to contribute to the society through internal engagement of employees, resources & driving activities which would help the needy. Employees at WABCO India made donations and contributed financially to bring cheer to destitute at "Little Drops"- a home for the destitute, based in Chennai, India. And also WABCO India invited about 100 students from Chennai corporation school to the Ambattur factory to teach them the manufacturing work environment, TQM practices, skill sets to be developed by the students to equip themselves to the corporate world and the lessons on practical applicability of engineering concepts they learn in their textbooks. X. Financial statement Year ended 31st March 2013 Year ended 31st March 2012 Particulars Rs. in lakhs % Rs. in lakhs % Sales (net) 91,735.78 93.8 1,00,497.08 95.0 Other Operating income 4,856.60 4.9 4,067.16 3.8 Other income 1,263.50 1.3 1205.90 1.2 Total income 97,855.88 100.0 1,05,770.14 100.0 Raw materials consumed 51,080.88 52.2 57,926.44 54.7 Changes in inventories of Finished goods and WIP 638.07 0.7 (692.74) (0.6) Staff cost 10,701.04 10.9 9,428.80 8.9 Stores & tools consumed 2,943.92 3.0 5,091.37 4.8 Power & fuel 1,756.13 1.8 1,435.17 1.4 Repairs & maintenance 1,016.72 1.0 902.39 0.8 Other expenses 9,050.75 9.2 8,480.08 8.0 Finance costs 1.76 0.0 11.88 0.0 Depreciation 2,171.78 2.2 1,563.72 1.5 Total expenditure 79,361.05 81.0 84,147.11 79.5 Profit before tax 18,494.83 19.0 21,623.03 20.5 Provision for taxation 5,416.00 5.6 6,283.07 5.9 Profit after tax 13,078.83 13.4 15,339.96 14.6 XI. Cautionary statement Statements in the management discussion and analysis report describing the Company's objectives, projections, estimates and expectations may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include, among others, economic conditions affecting demand / supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors. 14


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    WABCO INDIA LIMITED Report on corporate Governance 1. Company's philosophy on code of governance of the Company as defined under clause 49 of the Listing The Company believes in transparency, professionalism and Agreement. accountability, which are the basic principles of Corporate The number of Independent Directors is one third of its Governance. The Company would constantly endeavour to improve total strength. Thus, the Company meets with the on these aspects. requirements of composition of the board as per the Listing Agreement. 2. Board of directors 2.2 Board Meetings: 2.1 Composition and category of directors: The Company, in consultation with the Directors, prepares and circulates a tentative annual calendar for the meetings As of 31st March 2013, the total strength of the Board of the committees / board in order to assist the Directors of Directors (the board) was eight 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 2012-13, the Board met 4 times on During 2012-13, Mr Vincent Pickering was appointed as 23rd May 2012, 24th July 2012, 24th October 2012 and a Director on 23rd May 2012 and Mr Michael Edward 18th January 2013 and the gap between two meetings did Thompson was appointed as a Director on 24th July 2012. not exceed four months. The total strength of the Board of Directors as on 2.3 Attendance and other directorships: 15th May 2013 is eight directors. The details of attendance of the Directors at the board Out of the seven Non-Executive Directors, three Directors meetings, during the year, and at the last Annual General viz., Messrs. M Lakshminarayan (Chairman), D E Udwadia Meeting held on 25th July 2012 and also the number of and Narayan K Seshadri are Independent Directors. other directorships and committee memberships / Chairman is a Director and not related to any promoter chairmanships as on 31st March 2013 is as follows: Attendance Number of directorships and particulars committee member / chairmanships Name of the director Category Messrs Board Last Other Committee Committee meeting AGM directorships* memberships** chairmanships M Lakshminarayan C-I 4 Yes 8 2 – P Kaniappan WTD-NI 4 Yes 1 – – Narayan K Seshadri NE-I 4 Yes 13 6 2 D E Udwadia NE-I 3 Yes 17 7 1 Nikhil Madhukar Varty# NE-NI – – – – – Leon Liu NE-NI 1 No 12 – – Trevor Lucas NE-NI 4 Yes 1 – – Vincent Pickering$ NE-NI 2 Yes 12 – – Michael Edward Thompson@ NE-NI 2 Yes 1 – – $ appointed on 23rd May 2012 # Resigned on 24th July 2012 @ appointed on 24th July 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


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    WABCO 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 discussion and consideration at its meetings in terms of the responsibility to supervise the Company's internal control clause 49 of the Listing Agreement. and financial reporting process and inter-alia performs the Functional heads are present whenever necessary and following functions: apprise all the directors about the developments. They also a. Overseeing the Company's financial reporting process make presentations to the board and audit committee of and the disclosure of financial information. directors. Apart from this, the observations of audit carried out by b. Reviewing with the management quarterly and annual the internal auditors and the compliance report on payment financial statements before submission to the board of statutory liabilities submitted by a firm of Chartered for approval with particular reference to the matters Accountants are placed at the audit committee of the specified in the Listing Agreement. directors. c. Reviewing the related party transactions. The board also reviews the declarations made by the d. Reviewing the reports of internal auditors and ensuring Whole-time Director, Vice President- Legal and General that adequate follow-up action is taken by the Manager- Finance and Secretary of the Company regarding management on observations and recommendations compliance of all applicable laws on quarterly basis. made by the internal auditors. 2.5 Code of Business Conduct and Ethics for board and senior e. Recommending to the board the appointment / re- management personnel: appointment / replacement of the statutory auditors The Company has in place the Code of Business Conduct and the fees payable for audit and for other services and Ethics for Board and Senior Management personnel rendered by the statutory auditors. (the Code) approved by the board. The Code has been 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, and the adequacy of internal control systems. have affirmed compliance with the Code for the year ended h. Reviewing the adequacy of internal audit functions 31st March 2013. The annual report contains a declaration and systems, structure, reporting process, audit to this effect signed by the Whole-time Director and General coverage and frequency of internal audit. Manager-Finance and Secretary of the Company as compliance officer for the Code. i. Discussion with external auditors regarding audit plan as well as post-audit discussion to ascertain any area 2.6 Appointment of directors: of concern. In terms of clause 49(IV)(G) of the Listing Agreement with the Stock Exchanges, a brief resume of directors, proposed j. Ascertainment of reasons for substantial defaults in to be re-appointed, nature of their expertise in specific the payment to creditors and in case of payment of functional areas, their other directorships and committee declared dividends to the shareholders. memberships, their shareholdings and their relationships k. Review of management discussion analysis of financial with other directors are provided in the notice convening conditions and results of operations and other matters the ensuing annual general meeting of the Company. specified under clause 49 of the Listing Agreement. 3. Audit Committee l. Review of financial statements, in particular the The primary objective of the Audit Committee is to monitor and investments made by the unlisted subsidiary. provide effective supervision of the management's financial m. In addition, review of such other functions as envisaged reporting process with a view to ensure accurate, timely and under Section 292A of the Companies Act, 1956 and proper disclosures and transparency, integrity and quality of Clause 49 of the Listing Agreement with Stock financial reporting. Exchanges. 16


  • Page 17

    WABCO INDIA LIMITED 3.2 Composition, name of members and the chairman of the are of routine nature have been reported elsewhere in the Audit Committee: annual report as per Accounting Standard 18 (AS 18) As of date, the Audit Committee consists of the following issued by The Institute of Chartered Accountants of India. directors: The Audit Committee is briefed, inter alia, on the following aspects: Name of the directors - Status (i) the related party transactions undertaken by the Messrs Company in the ordinary course of business Narayan K Seshadri Non-executive, (summary); Independent director (ii) material individual transactions, if any, which were not D E Udwadia Non-executive, in the normal course of business; and Independent director (iii) material individual transactions, if any, with related Trevor Lucas Non-executive, parties or others, which were not at arm's length basis. Non-Independent director 4.2 Disclosure of accounting treatment: M Lakshminarayan@ Non-executive, The Company follows the Accounting Standards issued by Independent director the Institute of Chartered Accountants of India and @ appointed as a member of audit committee only for Companies (Accounting Standards) Rules, 2006. the meeting held on 18th January 2013. 4.3 Risk Management: Mr Narayan K Seshadri, Independent Director, is the The Company has laid down procedures to inform Board Chairman of the Audit Committee. Mr R Madhavan, General members about the risk assessment and minimization Manager -Finance and Secretary of the Company acted procedures. These procedures are periodically reviewed to as the Secretary of the Audit Committee. ensure that executive management controls risk through means of a properly defined framework. Chairman of the Audit Committee was present at the annual general meeting held on 25 th July 2012. 4.4 Instances of non-compliances, if any: The composition of the committee is in accordance with There were no instances of non-compliances by the the requirements of Clause 49 of the Listing Agreement Company, penalties and strictures imposed on the Company and Section 292A of the Companies Act, 1956. by the Stock Exchanges or SEBI or any other statutory authorities on any matter related to the capital markets 3.3 The particulars of meetings and attendance by the members during the last three years. of the committee during the year under review are given in the table below: 4.5 Disclosure by senior management personnel: The senior management personnel have made disclosure Date of the Members present to the board relating to all material, financial and other meeting Messrs transactions stating that they did not have personal interest Narayan K Seshadri, D E Udwadia that could result in a conflict with the interest of the 23rd May 2012 and Trevor Lucas Company at large. Narayan K Seshadri, D E Udwadia 4.6 CEO and CFO Certification: 24th July 2012 and Trevor Lucas The Whole-time Director (CEO) and Chief Financial Officer Narayan K Seshadri, D E Udwadia (CFO) of the Company have certified to the board on 24th October 2012 and Trevor Lucas financial and other matters in accordance with Clause Narayan K Seshadri, Trevor Lucas 49(V) of the Listing Agreement pertaining to CEO/CFO 18th January 2013 and M Lakshminarayan certification for the financial year ended 31st March 2013. 4.7 Compliance with mandatory / non-mandatory requirements: 4. Disclosures The Company has complied with all applicable mandatory 4.1 Materially significant related party transactions: requirements in terms of clause 49 of the Listing Agreement. During the year, the Company has not entered into any The non-mandatory requirements have been adopted to transaction of material nature with the directors, their the extent and in the manner as stated under the appropriate relatives or management which is in conflict with the headings detailed elsewhere in this report. interests of the Company. 4.8 Management discussion and Analysis Report: The transactions with the related parties, namely its The management Discussion and Analysis Report has promoters, its subsidiary and associate companies etc., been attached to the Directors' Report. 17


  • Page 18

    WABCO INDIA LIMITED 5. Remuneration Committee of the non-executive directors' vis-à-vis of the Company. The board has not constituted a remuneration committee, None of the directors is related to each other. as the need for forming such committee has not arisen. 5.4 Particulars of remuneration paid to the whole-time director The remuneration to the Whole-time Director was decided by during the financial year 2012-13: the Board of Directors subject to the approval of the shareholders. (Rs. in lakhs) 5.1 Remuneration to directors: Name of the Contribution Perquisites Mr P Kaniappan, director of the Company, was appointed as director Salary to PF and & Total a Whole-time Director of the Company for a period of five Messrs other funds Allowances years effective 17th June 2009 on a remuneration consisting P Kaniappan 71.29 6.02 27.00 104.31 salary and other perquisites in terms of the agreement entered into between him and the Company on 17th June 2009. 5.5 Presently, the Company does not have a scheme for grant A supplemental agreement was entered with Mr P Kaniappan of any stock option either to the executive directors or on 28th July 2010 to give effect to the increase in remuneration employees. effective 1st April 2010 and approved by the shareholders at their meeting held on 26th August 2010. 6. Investors' grievance committee: A second supplemental agreement was entered with 6.1 As on 31st March 2013, the investors' grievance committee Mr P Kaniappan on 23rd May 2012 to give effect to the increase in remuneration effective 1st July 2012 and approved consisted of three members, viz., Mr Narayan K Seshadri, by the shareholders at their meeting held on 25th July 2012. Director, Mr Trevor Lucas, Director and Mr P Kaniappan, Whole-time director of the Company. The Committee met The remuneration payable to the Whole-time Director is four times during the year on 23rd May 2012, 24th July fixed by the board within the limits approved by the 2012, 24th October 2012 and 18th January 2013. shareholders in terms of the relevant provisions of the Companies Act, 1956. 6.2 Mr R Madhavan General Manager - Finance and Secretary As approved by the shareholders by passing special was the Compliance office till his retirement from the Company resolution by postal ballot on 21st December 2010, non on 15th May 2013. As required by Securities and Exchange executive independent directors are being paid commission Board of India (SEBI), Mr N Sivalai Senthilnathan, General not exceeding 1% of the net profits of the Company subject Manager - Finance and Company Secretary of the Company to a limit of Rs 7.50 lakhs per annum per director fixed has been appointed as the compliance officer w.e.f. 15th May by the board of directors, for every financial year for a 2013. For any clarification/complaint, the shareholders may period of five years from 1st April 2011 to 31st March 2016. contact Mr N Sivalai Senthilnathan, General Manager - Finance and Company Secretary of the Company 5.2 Particulars of sitting fees paid to non executive directors and commission payable to non-executive independent (email: sivalaisenthilnathan.n@wabco-auto.com) directors during the financial year 2012-13. 6.3 The committee oversees and reviews all matters connected with share transfers, issue of duplicate share certificates Name of the Sitting fee Commission Total Messrs (Rs.) (Rs.) (Rs.) and other issues pertaining to shares. The committee also looks into the redressal of investors' grievances pertaining M Lakshminarayan 75,000 7,50,000 8,25,000 to transfer of shares, non-receipt of balance sheet, D E Udwadia 1,05,000 7,50,000 8,55,000 non-receipt of declared dividends, etc. The Company, Narayan K Seshadri 1,80,000 7,50,000 9,30,000 as a matter of policy, disposes investor complaints within Total 3,60,000 22,50,000 26,10,000 a span of seven days. Other non-executive directors, Messrs Leon Liu, Nikhil 6.4 Complaints received and redressed during the year Madhukar Varty, Trevor Lucas, Vincent Pickering and Michael 2012-13: Edward Thompson have waived the sitting fees payable No. of to them. S.No. Nature of complaint complaints 5.3 Details of shareholdings of non-executive directors in the 1 Non receipt of share certificates 1 Company as on 31st March 2013: 2 Non receipt of dividend warrants 5 Mr M Lakshminarayan holds 50 shares and all other 3 Non receipt of annual reports 4 directors do not hold any share in the Company. There are no other material pecuniary relationships or transactions Total 10 18


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    WABCO INDIA LIMITED 6.5. All the complaints were resolved and, as on 31st March (c) Approval of shareholders by way of Special Resolution 2013, no complaint was pending. All requests for was obtained pursuant to Section 163 of the dematerialization of shares were carried out within the Companies Act, 1956 for keeping the register of stipulated time period. members, the index of members, the register and index of debenture holders if any and copies of all 6.6 Secretarial Audit returns prepared under Section 159 of the Act together A qualified practising company secretary carried out with copies of certificates and documents required to secretarial audit on a quarterly basis to reconcile the total be annexed thereto under Section 161 of the Act, at admitted capital with National Securities Depository Limited the new office of the Share Transfer Agent viz., (NSDL) and Central Depository Services (India) Limited Sundaram-Clayton Limited at "Jayalakshmi Estates", (CDSL) and the total issued and listed capital and placed No 29 Haddows Road, Chennai 600 006. The result the report for perusal of the Board. The secretarial audit was announced on 16th April 2013. report confirms that the total issued and listed capital is 7.3 None of the subjects placed before the shareholders in in agreement with the total number of shares in physical the last / ensuing Annual General Meeting required/requires form and the total number of shares in dematerialized form approval by a postal ballot. held with NSDL and CDSL. 8. Means of communication 7. General body meeting: 8.1 Quarterly results: 7.1 Location and time where the Annual General Meetings were held during the last three years. The unaudited quarterly financial results of the Company were published in the English and vernacular newspapers. Year Location Date Time These are not sent individually to the shareholders. 2009-10 Sathgurugnananda Hall, 26.08.2010 10.00 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 "The Hindu" and T.T.K. Road, Chennai 600 018 the Tamil version in a Tamil daily viz., "Dinamani". 2010-11 The Music Academy, 27.07.2011 10.00 A.M. 8.3 Website: No. 168, (Old No. 306), The Company has in place a web site addressed as T.T.K. Road, www.wabcoindia.com. The unaudited results, quarterly Chennai 600 014 compliance report on corporate governance and the 2011-12 The Music Academy, 25.07.2012 10.00 A.M. quarterly distribution schedules as filed with the Stock No. 168, (Old No. 306), Exchanges are published in Company website. The T.T.K. Road, Company makes use of its website for publishing official Chennai 600 014 news releases and presentations, if any, made to institutional investors / analysts. 7.2 Special resolutions passed in the previous three Annual General Meetings: 9. General shareholder information (a) Approval of shareholders by way of Special Resolution 9.1 Annual general meeting: was obtained pursuant to Section 309 of the Companies Act 1956 for payment of commission to Date and time : 24th July 2013 at 10.00 a.m. Non-executive Independent Directors effective 1st April Venue : "The Music Academy", 2011 by way of Postal Ballot process. The result was No. 168 (Old No. 306) announced on 21st December 2010. T.T.K. Road, Chennai 600 014 (b) At the annual general meeting of the Shareholders 9.2 Financial year : 1st April to 31st March of the Company held on 27th July 2011, consent/ Financial calendar approval of the shareholders was obtained for change 2013-14 (Tentative) : of name of the Company pursuant to Section 21 of Financial reporting for the Companies Act, 1956. Approval of Central the quarter ending : Financial calendar Government was obtained on 2nd August 2011 and fresh certificate of incorporation was issued by the 30th June 2013 : between 15th to 31st July 2013 Registrar of Companies Chennai on 2nd August 2011 30th September 2013 : between 15th to 31st October 2013 consequent upon change of name of the Company. 31st December 2013 : between 15th to 31st January 2014 19


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    WABCO INDIA LIMITED 31st March 2014 : between 1st to 15th May 2014 9.7 Share Transfer Agents (STA) and share transfer system: Annual General Meeting a. With a view to rendering prompt and efficient service (next year) : July / August 2014 to the investors, Messrs. Sundaram-Clayton Limited 9.3 Date of book closure : 19th July 2013 to 24th July 2013 (SCL), which has been registered with SEBI as the Share Transfer Agent (STA) in Category II, has been (both days inclusive) appointed as the STA of the Company. 9.4 Particulars of dividend payment The shareholders have also been advised about this The board of directors had recommended a dividend of appointment of STA to handle share registry work Rs.5.00 per share for the year 2011-12, absorbing a sum pertaining to both physical and electronic segments of Rs.948.38 lakhs, and approved by the shareholders in of the Company. the last annual general meeting. This dividend was paid on 31st July 2012. b. All matters connected with the share transfer, both physical and electronic, dividends and other matters 9.5 Listing on Stock Exchanges: are handled by the STA located at the address mentioned elsewhere in this report. Name of the stock exchange Stock code Madras Stock Exchange Ltd (MSE) – c. Shares lodged for transfer will be processed within 10 days from the date of lodgement, if the documents Bombay Stock Exchange Ltd (BSE) 533023 are clear in all respects. All requests for National Stock Exchange of India Ltd. (NSE) WABCOINDIA dematerialization of securities are processed and the ISIN allotted by depositories INE342J01019 confirmation will be given to the depositories within (Company ID Number) 7 days. Grievances received from investors and other miscellaneous correspondence on change of address, (Note: Annual listing fees for the year 2013-14 have been mandates etc will be processed by the STA within duly paid to the above stock exchanges). 7 days. 9.6 Market Price Data: d. Pursuant to clause 47(c) of the Listing Agreement with Stock Exchanges, certificates, on half-yearly basis, National Stock Exchange Bombay Stock Exchange will be issued by a Company Secretary-in-practice for Share Price Share Price due compliance of share transfer formalities by the Month Company. High Low High Low e. Pursuant to SEBI (Depositories and Participants) April 2012 1836.80 1521.00 1797.45 1540.00 Regulations, 1996, certificates from a Company May 2012 1735.00 1467.10 1740.00 1475.00 Secretary-in-practice for timely dematerialization of the shares of the Company and for conducting a June 2012 1616.60 1400.00 1599.00 1403.05 secretarial audit on a quarterly basis for reconciliation of the share capital of the Company will be obtained. July 2012 1585.00 1441.00 1565.00 1436.00 August 2012 1655.00 1475.00 1629.00 1490.00 f. The Company, as required under clause 47(f) of the Listing Agreement, has designated the following e-mail September 2012 1699.00 1531.00 1700.00 1545.00 IDs, namely investorscomplaintssta@scl.co.in (share transfer agent) / sivalaisenthilnathan.n@wabco-auto.com October 2012 1709.70 1422.05 1701.00 1572.65 (compliance officer) for the purpose of registering November 2012 1636.70 1525.50 1622.00 1500.00 complaints, if any, by the investors and expeditious redressal of their grievances. December 2012 1774.00 1562.00 1765.00 1541.20 g. The shareholders are, therefore, requested to January 2013 1670.00 1550.00 1680.00 1550.10 correspond with the STA at the address mentioned February 2013 1617.00 1340.00 1620.00 1342.00 elsewhere in this report for any change of names and queries pertaining to the shareholding and dividends March 2013 1489.90 1279.00 1480.00 1260.60 etc. 20


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    WABCO INDIA LIMITED h. During the year STA has shifted the office and in this 9.10 Dematerialization of shares and liquidity: regard shareholders have given the approval through Out of 47,41,900 shares held by persons other than postal ballot process. Therefore, shareholders are promoters, 44,41,666 shares have been dematerialised as requested to correspond with the STA at "Jayalakshmi on 31st March 2013 accounting for 93.67%. Estates" First Floor, No.29 Haddows Road, Chennai 600 006. 9.11 The Company has not issued any Global Depository Receipt / American Depository Receipt / Warrant or any 9.8 Shareholding pattern as on 31st March 2013: convertible instrument, which is likely to have impact on Particulars No. of % to the Company's equity. shares held total (a) Shareholding of Promoter and 9.12 Plant locations: Promoter Group Factories: I. Plot No. 3 (SP), III Main Road, (1) Indian - Bodies Corporate – – Ambattur Industrial Estate, (2) Foreign- Bodies Corporate 1,42,25,684 75.00 Chennai 600 058. Total Shareholding of Promoter Tel : 044 4224 2000 and promoter Group (A) 1,42,25,684 75.00 Fax : 044 4224 2009 (b) Public Shareholding II. Large Sector, Adityapur Industrial Area, 1. Institutions Gamharia, Seraikella-Kharsawan District, (a) Mutual Funds 16,39,616 8.64 Jharkhand 832 108. (b) Banks, Financial Institutions, Tel : 0657 661 6800 Insurance Companies Fax : 0657 238 7997 (Central, State Government III. Plant-1 Plot No. AA8, Central Avenue, Institutions, Non-Government Auto Ancillary SEZ, Mahindra World City, Institutions) 1,252 0.01 Nathan Sub-Post, Chengalpet, (c) Foreign Institutional Investors 4,52,384 2.39 Kancheepuram District 603 002. Sub Total Institutions 20,93,252 11.04 Tel : 044 4744 2000 2. Non - Institutions Fax : 044 4749 0006 a) Bodies Corporate 6,79,728 3.58 IV. Plot No.11, Sector 4, SIDCUL, b) Individuals <1 lakh 16,45,984 8.68 IIE Pantnagar, c) Individuals >1 lakh 2,91,613 1.54 Rudrapur Udham Singh Nagar, d) NRI - Repartiable 16,886 0.09 Uttarakhand - 263 153. e) NRI - Non - Repartiable 14,437 0.07 V. KH No. 159-162, 164 Somaiya Nagar Sub Total Non - Institutions 26,48,648 13.96 Barabanki Dewa Road, Barabanki Total (B) 47,41,900 25.00 Lucknow, Uttar Pradesh 225 123. Grand Total (A) +(B) 1,89,67,584 100.00 VI. Plant-2 Plot No. AA8, Central Avenue, 9.9 Distribution of Shareholding as on 31st March 2013: Auto Ancillary SEZ, Mahindra World City, Shareholding No. of % No. of % Nathan Sub-Post, Chengalpet, (Range) Shares Members Kancheepuram District 603 002. Upto 5,000 17,21,907 9.08 16,886 99.56 Tel : 044 4744 2000 5,001 - 10,000 1,36,572 0.72 19 0.11 Fax : 044 4749 0006 10,001 - 20,000 2,55,555 1.35 18 0.11 Software Design Centre: 20,001 - 50,000 6,00,222 3.16 18 0.11 "Ispahani Centre", 5th & 7th Floor, 123/124 Nungambakkam High Road, 50,001 - 1,00,000 8,96,694 4.73 12 0.07 Chennai 600 034. 1,00,001 & above 1,53,56,634 80.96 7 0.04 Tel : 044-2828 5000 Total 1,89,67,584 100.00 16,960 100.00 Fax : 044-2833 2212 21


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    WABCO INDIA LIMITED 9.13 Address for investors Correspondence: 10.5 Training of board members / Mechanism for evaluating non-executive directors: (i) For transfer / dematerialisation Sundaram-Clayton Limited of shares, payment of dividend Share transfer department The present board consists of well-experienced and on shares and any other query “Jayalakshmi Estates” responsible members of society. All the directors are well relating to the shares of the No. 29, Haddows Road, aware of business model as well as the risk profile of the business parameters of the Company and their Company. Chennai 600 006. responsibilities as directors. Hence, in the opinion of the (ii) for any query on non-receipt Tel : 044 2828 4959 board, they do not require any further training. There is of annual report; and Fax : 044 2825 7121 also no specific mechanism for evaluating the performance of the non-executive directors of the Company. (iii) for investors grievance & Email : 10.6 Whistle blower policy: general correspondence kr.raman@scl.co.in The Company has not adopted whistle blower policy. sclshares@gmail.com However, the Company has not denied access to any investorscomplaintssta@scl.co.in sivalaisenthilnathan.n@wabco-auto.com personnel to approach the management on any issue. 10. Non-mandatory disclosure: 11. Request to shareholders: The non-mandatory requirements have been adopted to the Shareholders are requested to follow the general safeguards / extent and in the manner as stated under the appropriate procedures as detailed hereunder in order to serve them efficiently headings detailed below: and avoid risks while dealing in securities of the Company. 10.1 The Board: Demat of Shares: Both executive and non-executive directors of the Company Shareholders are requested to convert their physical holding to are liable to retire by rotation and if eligible, offer themselves demat / electronic form through any of the depository participants for re-appointment. No specific tenure has been fixed for (DPs) to avoid any possibility of loss, mutilation etc. of physical the independent directors. share certificates and also to ensure safe and speedy transaction in securities. 10.2 Remuneration committee: Registration of Electronic Clearing Service (ECS) Mandate: The board has not set up a remuneration committee, as ECS helps in quick remittance of dividend without possible loss/ the need for the same has not arisen. delay in postal transit. Shareholders, who have not earlier availed 10.3 Shareholder rights: this facility, are requested to register their ECS details with the The half-yearly results of the Company will be published STA or their respective DPs. in English and vernacular newspapers and are also Transfer of shares in physical mode: displayed on the Company's website, namely Shareholders should fill in complete and correct particulars in www.wabcoindia.com The results are not sent to the the transfer deed, for expeditious transfer of shares. Wherever shareholders individually. applicable, registration number of power of attorney should also 10.4 Audit Qualifications: be quoted in the transfer deed at the appropriate place. The observation of the statutory auditors with regard to Shareholders, whose signatures have undergone any change clause (xxi) of the Companies (Auditor's Report) Order, over a period of time, are requested to lodge their new specimen 2003 as under: signature duly attested by a bank manager to the STA. "We have been informed that an employee of the Company Shareholders are requested to note that as per SEBI circular had misappropriated funds amounting to Rs. 31.82 lakhs no. MRD/DoP/Cir -05/1009 dated 20th May 2009, it is mandatory out of which the company has recovered a sum of for transferees to furnish a copy of Permanent Account Number Rs. 18.68 lakhs during the year under audit and the same (PAN) for registration of transfer of shares to be held in physical has been expensed in the financial statements. Investigation mode. is in progress and the concerned employee has been In case of loss / misplacement of share certificates, Shareholders issued with a charge sheet. Further the Company is also should immediately lodge a FIR / Complaint with the police covered by fidelity insurance cover." and inform the Company / STA with original or certified copy 22


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    WABCO INDIA LIMITED of FIR / acknowledged copy of complaint for marking stop to transfer of unclaimed dividends beyond seven years to Investor transfer of shares. Education and Protection Fund. Consolidation of Multiple Folios: As required by SEBI, shareholders are requested to furnish Shareholders, who have multiple folios in identical names are details of their bank account number and name and address requested to apply for consolidation of such folios and send the of the bank for incorporating the same in the warrants. relevant share certificates to the Company. This would avoid wrong credits being obtained by unauthorized persons. Registration of Nominations: Shareholders who have not encashed their dividend warrants Nomination in respect of shares - Section 109A of the Companies in respect of dividends declared for the year ended 31st March, Act, 1956 provides facility for making nominations by shareholders 2008 and for any financial year thereafter may contact the in respect of their holding of shares. Such nomination greatly Company and surrender their warrants for payment. facilitates transmission of shares from the deceased shareholder to his / her nominee without having to go through the process Shareholders are requested to note that the dividend not claimed of obtaining succession certificate / probate of the Will etc. for a period of seven years from the date they first became due for payment shall be transferred to "Investors Education and It would therefore be in the best interests of the shareholders Protection Fund" (IEPF) terms of Section 205C of the Companies holding shares in physical form registered as a sole holder to Act, 1956. Shareholders are requested to note that as per the make such nominations. Investors, who have not availed Companies Act, 1956, unclaimed dividends once transferred to nomination facility, are requested to avail the same by submitting IEPF will not be refunded. the nomination in form 2B. This form will be made available on request. Investors holding shares in demat form are advised to Web based applications - SEBI/NSE contact their DP's for making nominations. In line with the circular No CIR/OIAE/2/2011 dated 3rd June 2011 Updation of address: from SEBI, the investors' complaints are now centrally monitored through web based complaints redressal system called SCORES. Shareholders are requested to update their address registered The Company processes the investor complaints through this with the Company, directly through the STA located at the system and updates status periodically. address mentioned above to receive all communications promptly. In line with the circular No NSE/LIST/C/2011 dated 29th September Shareholders, holding shares in electronic form are requested 2011 from the National Stock Exchange of India Ltd, (NSE) the to deal only with their depository participant (DP) in respect of Company now uploads its quarterly shareholding pattern, change of address and furnishing bank account number, etc. corporate governance report, financial results and announcements SMS Alerts: through a web based application designed for corporates by NSE Investors are requested to note that National Securities Depository called as NEAPS. Limited (NSDL) and Central Depository Services (India) Limited Information in respect of unclaimed dividends due for remittance (CDSL) have announced the launch of SMS alert facility for into IEPF is given below: demat account holders whereby investors will receive alerts for debits / credits (transfers) to their demat accounts a day after PARTICULARS OF UNCLAIMED DIVIDEND the transaction. These alerts will be sent to those account holders who have provided their mobile numbers to their Financial Date of Date of transfer to Date of transfer Depository participants (DPs). year Declaration special account to IEPF No charge will be levied by NSDL / CDSL on DPs providing 2007-08 this facility to investors. This facility will be available to investors 20.08.2008 25.09.2008 25.09.2015 (2nd interim) who request for the same and provide their mobile numbers to the DPs. Further information is available on the website of 2008-09 08.12.2008 13.01.2009 13.01.2016 NSDL and CDSL namely www.nsdl.co.in and www.cdslindia.com, (1st Interim) respectively. 2009-10 26.08.2010 01.10.2010 01.10.2017 Timely encashment of dividends: 2010-11 27.07.2011 01.09.2011 01.09.2018 Shareholders are requested to encash their dividends promptly 2011-12 25.07.2012 31.07.2012 31.07.2019 to avoid hassles of revalidation / losing their right of claim owing 23


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    WABCO INDIA LIMITED 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 st laid down by the board of directors for the year ended 31 March 2013. Chennai P KANIAPPAN R MADHAVAN th 15 May 2013 Whole-time Director General Manager - Finance and Secretary Auditors’ certificate on corporate governance 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, 2013, 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 LLP Chartered Accountants ICAI Firm Registration No. 101049W Per S BALASUBRAHMANYAM Chennai Partner th 15 May 2013 Membership No. 053315 24


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    WABCO INDIA LIMITED Independent Auditors’ report to the Shareholders To Opinion The Members of WABCO INDIA LIMITED. In our opinion and to the best of our information and according to the explanations given to us, the financial statements give Report on the Financial Statements the information required by the Act in the manner so required We have audited the accompanying financial statements of and give a true and fair view in conformity with the accounting WABCO INDIA Limited ("the Company"), which comprise the principles generally accepted in India: Balance Sheet as at March 31, 2013, and the Statement of (a) in the case of the Balance Sheet, of the state of affairs Profit and Loss and Cash Flow Statement for the year then of the Company as at March 31, 2013; ended, and a summary of significant accounting policies and (b) in the case of the Statement of Profit and Loss, of the profit other explanatory information. for the year ended on that date; and Management's Responsibility for the Financial Statements (c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Management is responsible for the preparation of these financial statements that give a true and fair view of the Report on Other Legal and Regulatory Requirements financial position, financial performance and cash flows of the Company in accordance with accounting principles generally 1. As required by the Companies (Auditor's Report) Order, accepted in India, including the Accounting Standards referred 2003 ("the Order") issued by the Central Government of to in sub-section (3C) of Section 211 of the Companies Act, India in terms of sub-section (4A) of Section 227 of the 1956 ("the Act"). This responsibility includes the design, Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements 2. As required by Section 227(3) of the Act, we report that: that give a true and fair view and are free from material (a) We have obtained all the information and explanations misstatement, whether due to fraud or error. which to the best of our knowledge and belief were necessary for the purpose of our audit; Auditor's Responsibility (b) In our opinion proper books of account as required by Our responsibility is to express an opinion on these financial law have been kept by the Company so far as appears statements based on our audit. We conducted our audit in from our examination of those books; accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards (c) The Balance Sheet, Statement of Profit and Loss, and require that we comply with ethical requirements and plan Cash Flow Statement dealt with by this Report are in and perform the audit to obtain reasonable assurance about agreement with the books of account; whether the financial statements are free from material (d) In our opinion, the Balance Sheet, Statement of Profit misstatement. and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) An audit involves performing procedures to obtain audit of Section 211 of the Companies Act, 1956; evidence about the amounts and disclosures in the financial (e) On the basis of written representations received from statements. The procedures selected depend on the auditor's the directors as on March 31, 2013, and taken on judgment, including the assessment of the risks of material record by the Board of Directors, none of the directors misstatement of the financial statements, whether due to is disqualified as on March 31, 2013, from being fraud or error. In making those risk assessments, the auditor appointed as a director in terms of clause (g) of sub- considers internal control relevant to the Company's section (1) of Section 274 of the Companies Act, 1956. preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the For S.R. Batliboi & Associates LLP circumstances. An audit also includes evaluating the Chartered Accountants appropriateness of accounting policies used and the ICAI Firm Registration No. 101049W reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence Per S. BALASUBRAHMANYAM we have obtained is sufficient and appropriate to provide a Place : Chennai Partner basis for our audit opinion. Date : May 15, 2013 Membership No. 053315 25


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    WABCO INDIA LIMITED Annexure referred to in paragraph 3 of our report of even date Re: WABCO INDIA LIMITED ('the Company') (i) (a) The Company has maintained proper records showing full financial year at prices which are reasonable having regard particulars, including quantitative details and situation of to the prevailing market prices at the relevant time. fixed assets. (vi) The Company has not accepted any deposits from the public. (b) Fixed assets have been physically verified by the (vii) In our opinion, the Company has an internal audit system management during the year and no material discrepancies commensurate with the size and nature of its business. were identified on such verification. (viii) We have broadly reviewed the books of account maintained by (c) There was no disposal of a substantial part of fixed assets the Company pursuant to the rules made by the Central during the year. Government for the maintenance of cost records under Section (ii) (a) The management has conducted physical verification of 209(1) (d) of the Companies Act, 1956, related to the manufacture inventory at reasonable intervals during the year. of automotive parts and accessories and are of the opinion that prima facie, the prescribed accounts and records have been (b) The procedures of physical verification of inventory followed 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 (c) The Company is maintaining proper records of inventory fund, employees' state insurance, income-tax, sales-tax, and no material discrepancies were noticed on physical wealth-tax, service tax, customs duty, excise duty, cess, verification. investor education and protection fund and other material (iii) (a) According to the information and explanations given to us, statutory dues applicable to it. the Company has not granted any loans, secured or (b) According to the information and explanations given to us, unsecured to companies, firms or other parties covered no undisputed amounts payable in respect of provident in the register maintained under Section 301 of the fund, investor education and protection fund, employees' Companies Act, 1956. Accordingly, the provisions of state insurance, income-tax, wealth-tax, service tax, sales- clause 4(iii) (a) to (d) of the Order are not applicable to tax, customs duty, excise duty, cess and other material the Company and hence not commented upon. statutory dues were outstanding, at the year end, for a (b) According to information and explanations given to us, the period of more than six months from the date they became Company has not taken any loans, secured or unsecured, payable. from companies, firms or other parties covered in the (c) According to the records of the Company, the dues register maintained under Section 301 of the Companies outstanding of income-tax, sales-tax, wealth-tax, service Act, 1956. Accordingly, the provisions of clause 4(iii) (e) tax, customs duty, excise duty and cess on account of to (g) of the Order are not applicable to the Company and any dispute, are as follows: hence not commented upon. Amount Period to which Forum where Nature of Nature of (iv) In our opinion and according to the information and explanations Statute dues (Rs. the amount dispute is in lakhs) relates pending given to us, there is an adequate internal control system commensurate with the size of the Company and the nature Income Tax Income Tax 1,010.59 2007 - 2008 Commissioner of Act, 1961 Income Tax of its business, for the purchase of inventory and fixed assets (Appeals), Chennai and for the sale of goods and services. During the course of Central Excise duty - 0.16 2008 - 2009 Commissioner of our audit, we have not observed any major weakness or continuing Excise Cenvat credit Central Excise failure to correct any major weakness in the internal control Act, 1944 reversal 2009 - 2010 (Appeals), Chennai system of the company in respect of these areas. Service Tax Service tax - 2.93 2009 - 2010 Deputy (v) (a) According to the information and explanations provided by Credit reversal Commissioner of the management, we are of the opinion that the particulars on certain Central Excise inputs (Appeals), Chennai of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into Service Tax Service tax- 19.21 2008 - 2010 The Customs, Credit reversal Excise and Service the register maintained under Section 301 have been so on certain Tax Appellate entered. inputs Tribunal (b) In our opinion and according to the information and Service Tax Service tax- 4.47 2010 - 2011 The Customs, explanations given to us, the transactions made in pursuance Credit reversal Excise and Service of such contracts or arrangements exceeding value of on certain Tax Appellate Rupees five lakhs have been entered into during the inputs Tribunal 26


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    WABCO INDIA LIMITED Annexure referred to in paragraph 3 of our report of even date Re: WABCO INDIA LIMITED ('the Company') (xii) According to the information and explanations given to us and Amount Period to which Forum where Nature of Nature of based on the documents and records produced to us, the (Rs. the amount dispute is Statute dues Company has not granted loans and advances on the basis of in lakhs) relates pending security by way of pledge of shares, debentures and other Service Tax Service tax- 1.27 2010 - 2011 Deputy securities. Credit reversal Commissioner of (xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual on certain Central Excise, benefit fund / society. Therefore, the provisions of clause 4(xiii) inputs Chennai of the Companies (Auditor's Report) Order, 2003 (as amended) Service Tax Service tax- 4.11 2010 - 2011 Deputy are not applicable to the Company. Credit reversal Commissioner of on certain Central Excise, (xiv) In our opinion, the Company is not dealing in or trading in shares, inputs Chennai securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Service Tax Service tax - 3.03 2011 - 2012 The Customs, Credit reversal Excise and Service Order, 2003 (as amended) are not applicable to the Company. on certain Tax Appellate (xv) According to the information and explanations given to us, the inputs Tribunal Company has not given any guarantee for loans taken by others Service Tax Service tax - 0.04 2011 - 2012 Deputy from banks or financial institutions. Credit reversal Commissioner of (xvi) The Company did not have any term loan outstanding during on certain Central Excise, inputs Chennai the year. Service Tax Service tax - 1.33 2011 - 2012 Assistant (xvii) According to the information and explanations given to us and Credit reversal Commissioner of on an overall examination of the balance sheet of the Company, on certain Central Excise, we report that no funds raised on short-term basis have been inputs Chennai used for long-term investment. Service Tax Service tax - 1.08 2012 Assistant (xviii) The Company has not made any preferential allotment of shares Credit reversal Commissioner of to parties or companies covered in the register maintained under on certain Central Excise, Section 301 of the Companies Act, 1956. inputs Chennai (xix) The Company did not have any outstanding debentures during Service Tax Service tax - 1.56 2010 - 2011 Assistant Credit reversal Commissioner of the year. on certain Central Excise, (xx) The Company has not raised any money by public issues and inputs Chennai accordingly, provisions of clause 4 (xx) of the Companies (Auditor's Service Tax Service tax - 17.23 2010 - 2012 Commissioner of Report) Order, 2003 (as amended) are not applicable to the Credit reversal Central Excise, Company. on certain Chennai (xxi) We have been informed that an employee of the Company had Sales Tax For sales 86.05 2009 - 2010 Assistant misappropriated funds amounting to Rs.31.82 lakhs out of which made without 2010 - 2011 Commissioner, the company has recovered a sum of Rs.18.68 lakhs during C form and Commercial Taxes, input tax credit Chennai the year under audit and the same has been expensed in the availment for financial statements. Investigation is in progress and the concerned capital goods employee has been issued with a charge sheet. Further the Company is also covered by fidelity insurance cover. (x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current For S.R. Batliboi & Associates LLP and immediately preceding financial year. Chartered Accountants ICAI Firm Registration No. 101049W (xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to Per S. BALASUBRAHMANYAM banks. The Company does not have dues payable to financial Place : Chennai Partner institutions or debenture holders. Date : May 15, 2013 Membership No. 053315 27


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    WABCO INDIA LIMITED Balance Sheet as at 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) Notes 31st March 2013 31st March 2012 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 63,931.47 51,962.20 (A) 64,879.85 52,910.58 Non-current liabilities Deferred tax liabilities (net) 5 1,170.64 1,093.29 Other long-term liabilities 6 4.00 6.00 Long-term provisions 7 1,427.08 1,162.37 (B) 2,601.72 2,261.66 Current liabilities Trade payables 8.1 10,247.45 10,801.84 Other current liabilities 8.2 297.53 252.31 Short-term provisions 7 1,285.60 1,469.18 (C ) 11,830.58 12,523.33 TOTAL (A+B+C) 79,312.15 67,695.57 ASSETS Non Current assets Fixed assets Tangible assets 9 26,208.75 22,975.37 Intangible assets 9 141.20 48.28 Capital work-in-progress 10 2,542.08 1,276.20 Non-current investments 11 220.24 220.24 Long-term loans and advances 12 1,565.52 1,826.55 (A) 30,677.79 26,346.64 Current assets Current investments 15 2,325.00 2,100.00 Inventories 16 13,562.47 11,576.24 Trade receivables 13 18,983.53 15,749.86 Cash and cash equivalents 17 9,913.34 8,099.49 Short-term loans and advances 12 3,843.36 3,812.84 Other current assets 14 6.66 10.50 (B) 48,634.36 41,348.93 TOTAL (A + B) 79,312.15 67,695.57 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 LLP Chartered Accountants M LAKSHMINARAYAN P KANIAPPAN ICAI 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 15th May, 2013 Membership No. 053315 28


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    WABCO INDIA LIMITED Statement of Profit & Loss for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) Notes 31st March 2013 31st March 2012 à lakhs à lakhs CONTINUING OPERATIONS Revenue Revenue from operations (gross) 18 106,475.81 114,335.94 Less: Excise duty 9,883.43 9,771.70 Revenue from operations (net) 96,592.38 104,564.24 Other income 19 1,263.50 1,205.90 Total revenue (I) 97,855.88 105,770.14 Expenses Cost of raw material and components consumed 20 51,080.88 57,926.44 Changes in inventories of finished goods and work-in-process 21 638.07 (692.74) Employee benefits expense 22 10,701.04 9,428.80 Other expenses 23 14,767.52 15,909.01 Finance costs 24 1.76 11.88 Depreciation and amortization expense 9 2,171.78 1,563.72 Total expenses (II) 79,361.05 84,147.11 Profit before tax (I - II) 18,494.83 21,623.03 Tax expenses Current tax 5,338.66 6,005.00 Deferred tax 77.34 278.07 Total tax expense 5,416.00 6,283.07 Profit for the year 13,078.83 15,339.96 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 68.95 80.87 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 LLP Chartered Accountants M LAKSHMINARAYAN P KANIAPPAN ICAI 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 15th May, 2013 Membership No. 053315 29


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    WABCO INDIA LIMITED Cash Flow Statement for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) Year ended Year ended 31st March 2013 31st March 2012 à lakhs à lakhs A. CASH FLOW FROM OPERATING ACTIVITIES Profit before tax 18,494.83 21,623.03 Non-cash adjustment to reconcile profit before tax to net cash flows: Depreciation / amortization 2,171.78 1,563.72 Net foreign exchange gain (not realised) 44.86 (214.35) Profit on sale of investments (173.27) (145.79) Loss / (Profit) on sale of fixed assets (net) 9.96 (3.43) Interest paid 1.76 11.88 Interest income (718.28) (233.09) 1,336.81 978.94 Operating profit before working capital changes 19,831.64 22,601.97 Adjustments for: (Increase) / decrease in inventories (1,986.23) (3,589.95) (Increase) / decrease in trade receivable (3,278.52) 1,539.34 (Increase) / decrease loans and advances (114.52) (950.59) Increase / (decrease) in long term liabilities (2.00) 2.00 Increase / (decrease) in trade payable and current liabilities (509.17) 2,452.26 Increase / (decrease) in provisions 73.80 (73.71) (5,816.64) (620.65) 14,015.00 21,981.32 Direct taxes paid (4,993.63) (6,440.52) Net cash from operating activities (A) 9,021.37 15,540.80 B. CASH FLOW FROM INVESTING ACTIVITIES Additions to fixed assets including capital work-in-progress (6,780.20) (6,837.11) Sale of fixed assets during the year 6.28 7.86 Purchase of investments (30,199.96) (55,449.97) Redemption of investments 30,148.23 54,495.76 Interest received 722.12 227.19 Net cash from / (used in) investing activities (B) (6,103.53) (7,556.27) 30


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    WABCO INDIA LIMITED Cash Flow Statement for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) Year ended Year ended 31st March 2013 31st March 2012 à lakhs à lakhs C. CASH FLOW FROM FINANCING ACTIVITIES Dividend and dividend tax paid (1,102.23) (1,102.23) Interest paid (1.76) (11.88) Net cash from financing activities (C) (1,103.99) (1,114.11) D. NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) 1,813.85 6,870.42 Opening cash and cash equivalents – Cash and bank balances 8,099.49 1,285.97 – Cash credit utilisation – 8,099.49 (56.90) 1,229.07 Closing cash and cash equivalents – Cash and bank balances (refer note 17) 9,913.34 8,099.49 – Cash credit utilisation – – 9,913.34 8,099.49 Notes : 1 The above statement has been prepared in indirect method as per Accounting Standard 3. 2 Cash and cash equivalent include cash and bank balances. Closing cash and cash equivalents include Rs.17.88 lakhs (31st March 2012 Rs.13.66 lakhs) towards unpaid dividend accounts which are meant for settlement of unpaid dividend amounts. As per our report of even date For S.R. BATLIBOI & ASSOCIATES LLP Chartered Accountants M LAKSHMINARAYAN P KANIAPPAN ICAI 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 15th May, 2013 Membership No. 053315 31


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    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 1. CORPORATE INFORMATION WABCO 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 of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. 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 31 March 2013, the company changed its accounting policy on treatment of vendor toolings which was being expensed till 31st March 2012. Such tools are now capitalized as part of fixed assets and amortised over their useful life. Accordingly a sum of Rs.1,769.70 lakhs net of amortization was capitalized as at 31st March 2013. Consequently the profit net of tax is more by Rs.1,251.18 lakhs for the year ended 31st March 2013. (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% Tooling 33.33% 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


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    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (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. 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. Profit on sale of investments Profit on sale of investment is recognised only at the time when the investments are realised. 33


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    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (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. The company has no obligation other than the contribution payable to the fund. The company recognises the contribution payable to the above schemes as an expenditure when the employee renders related service. If the contribution payable to the schemes for services received before the Balance Sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognised as a liability after deducting the contribution already paid. If on the other hand the contribution already paid exceeds the contribution due for the services received before the Balance Sheet date, then the excess is recognised as an asset to the extent that the prepayment will lead to reduction in future payment or cash refund. 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 it 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 reflect 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. 34


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    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 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. (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 are 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


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    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 31st March 2013 31st March 2012 à lakhs à lakhs 3. SHARE CAPITAL Authorised shares (in numbers) 2,00,00,000 (31st March 2012: 2,00,00,000) 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 2012: 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 2013, the amount of per share dividend proposed as distributions to equity shareholders is Rs.5 (31st March 2012: 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: 31st March 2013 31st March 2012 In Number of shares à lakhs à lakhs Clayton Dewandre Holdings Limited, Rotterdam, Holding Company 1,42,25,684 (31st March 2012 - 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 2013 31st March 2012 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 2013 As at 31st March 2012 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 37

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) Notes 31st March 2013 31st March 2012 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 18,716.18 15,716.18 Add: Amount transferred from statement of Profit and Loss 5,000.00 3,000.00 Closing Balance (B) 23,716.18 18,716.18 (c) Surplus in the statement of Profit and Loss Balance as per last financial statements 33,241.02 22,003.29 Profit for the year 13,078.83 15,339.96 46,319.85 37,343.25 Less: Appropriations Proposed final equity dividend 948.38 948.38 (amount per share Rs.5 (31st March 2012 Rs. 5) Tax on proposed equity dividend 161.18 153.85 Transfer to general reserve 5,000.00 3,000.00 Total appropriations 6,109.56 4,102.23 Net surplus in the statement of Profit and Loss (C ) 40,210.29 33,241.02 (d) Total reserves and surplus (A+B+C) 63,931.47 51,962.20 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 2,153.54 1,793.52 Gross deferred tax liability (A) 2,153.54 1,793.52 (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 542.34 497.32 (ii) Provision for warranty 126.99 154.08 (iii) Provision for doubtful debts and other losses 82.66 48.83 (iv) Royalty and technical services fees 230.91 – Gross deferred tax assets (B) 982.90 700.23 Net deferred tax liabilities (A–B) 1,170.64 1,093.29 6. OTHER LONG-TERM LIABILITIES Others Deposits from customers 4.00 6.00 4.00 6.00 37


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    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 7. PROVISIONS Long-term Short-term 31st March 2013 31st March 2012 31st March 2013 31st March 2012 à lakhs à lakhs à lakhs à lakhs (a) Provision for employee benefits (i) Provision for leave benefits 219.21 166.59 53.91 55.02 (ii) Provision for pension - refer note 25 961.02 855.23 11.79 11.79 1,180.23 1,021.82 65.70 66.81 (b) Other provisions (i) Provision for warranties 246.85 140.55 105.79 295.59 (ii) Proposed dividend – – 948.38 948.38 (iii) Provision for tax on proposed dividend – – 161.18 153.85 (iv) Provision for fringe benefit tax (net of advance tax payments) – – 4.55 4.55 246.85 140.55 1,219.90 1,402.37 1,427.08 1,162.37 1,285.60 1,469.18 Provision for warranties The table below gives information about movement in warranty provisions: 31st March 2013 31st March 2012 à lakhs à lakhs Opening balance 436.14 570.19 Add: Provision made during the year 229.48 254.47 Total 665.62 824.66 Less: Utilised / withdrawn during the year 312.98 388.52 At the end of the year 352.64 436.14 Current portion 105.79 295.59 Non-current portion 246.85 140.55 8. OTHER CURRENT LIABILITIES 8.1 Trade payables (refer note 29 for details of dues to micro and small enterprises) 10,247.45 10,801.84 8.2 Other current liabilities (a) Advance from customers 90.33 147.47 (b) Investor Education and Protection Fund will be credited by following amounts (as and when due) Unpaid dividend 17.88 13.66 (c ) Others (i) Income tax deducted at source payable 32.29 25.92 (ii) Employees' Provident Fund payable 42.00 7.46 (iii) Employees' State Insurance payable 7.23 7.72 (iv) Employees' Family Pension Fund deductions payable 35.65 13.80 (v) Sales Tax payable 72.15 36.28 297.53 252.31 10,544.98 11,054.15 38


  • Page 39

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 9. 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 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 Add : Additions during the year (Refer Note 2.1.a) – – 176.91 4,967.37 29.77 167.72 – 5,341.77 172.55 172.55 Less : Disposed during the year – – – 96.03 – 0.72 0.45 97.20 – – As at 31st March 2013 1,829.06 565.65 7,419.18 27,348.95 479.58 1,395.28 212.59 39,250.29 566.06 566.06 Depreciation As at 1st April 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 Add : Charge for the year (Refer Note 2.1.a) – 8.41 239.80 1,672.09 28.47 125.49 17.89 2,092.15 79.63 79.63 Less : On assets disposed during the year – – – 80.49 – 0.04 0.43 80.96 – – As at 31st March 2013 – 46.25 1,292.46 10,427.54 214.50 933.26 127.53 13,041.54 424.86 424.86 Written down value 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 As at 31 March 2013 1,829.06 519.40 6,126.72 16,921.41 265.08 462.02 85.06 26,208.75 141.20 141.20 31st March 2013 31st March 2012 à lakhs à lakhs 10. CAPITAL WORK-IN-PROGRESS Machinery under installation 2,542.08 1,276.20 2,542.08 1,276.20 11. 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 40

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 12. LOANS AND ADVANCES Non-Current Current 31st March 2013 31st March 2012 31st March 2013 31st March 2012 à lakhs à lakhs à lakhs à lakhs Capital advances Unsecured, considered good 264.10 314.98 – – (A) 264.10 314.98 – – Security deposit Unsecured, considered good 450.15 448.63 – – (B) 450.15 448.63 – – Advances recoverable in cash or kind Unsecured, considered good – – 3,301.04 3,286.24 (C) – – 3,301.04 3,286.24 Other loans and advances (Unsecured, considered good) Advance income-tax (net of provision for taxation) 819.33 1,029.64 – 134.72 Prepaid expenses – – 236.60 151.47 Loans to employees 31.94 33.30 23.13 24.01 Balances with government authorities – – 282.59 216.40 (D) 851.27 1,062.94 542.32 526.60 Total (A+ B + C + D) 1,565.52 1,826.55 3,843.36 3,812.84 Loans and advances due by officers, etc. Loans to employees include Dues from officers 1.51 1.50 0.08 0.08 13. TRADE RECEIVABLES (UNSECURED) Current 31st March 2013 31st March 2012 à lakhs à lakhs Unsecured, considered good unless stated otherwise Outstanding for a period exceeding six months from the date they are due for payment Unsecured, considered good 497.45 368.49 Doubtful 254.76 150.49 752.21 518.98 Provision for doubtful receivables (254.76) (150.49) (A) 497.45 368.49 Other receivables Unsecured, considered good 18,486.08 15,381.37 (B) 18,486.08 15,381.37 Total (A+B) 18,983.53 15,749.86 14. OTHER CURRENT ASSETS (UNSECURED, CONSIDERED GOOD) Interest accrued on fixed deposits 6.66 10.50 40


  • Page 41

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 15. CURRENT INVESTMENTS 31st March 2013 31st March 2012 à lakhs à lakhs Current investments (valued at lower of cost and fair value, unless stated otherwise) Quoted (a) 71,940.661 units (31st March 2012 - 1,24,661.7656 units) in SBI Mutual fund of SBI Funds Management Private 1,325.00 2,100.00 Limited, Mumbai (institution plan - growth option) (b) 52,047.827 units (31st March 2012 - Nil units) in UTI Mutual Fund of UTI Asset Management Company Private Limited, Mumbai UTI Liquid Cash Plan 1,000.00 – (institutional plan - growth option) 2,325.00 2,100.00 Market value of quoted investments 2,327.34 2,102.49 16. INVENTORIES (VALUED AT LOWER OF COST AND NET REALISABLE VALUE) (a) Raw materials and components 8,004.26 5,778.61 (b) Work-in-process 412.14 449.38 (c) Finished goods 2,089.30 2,690.13 (d) Stores and spares 2,423.73 1,626.42 (e) Goods in transit - raw materials and components 633.04 1,031.70 13,562.47 11,576.24 17. CASH AND CASH EQUIVALENTS Current 31st March 2013 31st March 2012 à lakhs à lakhs (a) Balances with banks: (i) On current accounts 295.10 1,405.62 (ii) On term deposit accounts 9,587.30 6,669.35 (iii) On unpaid dividend account 17.88 13.66 (b) Cash on hand 13.06 10.86 9,913.34 8,099.49 The company has a cash credit facility from the bank which is secured by hypothecation of raw materials, components, work-in-process, finished goods, book debts, stores, spares and tools. 18. REVENUE FROM OPERATIONS 31st March 2013 31st March 2012 Revenue from operations à lakhs à lakhs (a) Sale of products: (i) Finished goods 101,619.21 110,268.78 (b) Rendering of services 4,076.46 3,244.55 (c ) Other operating revenue - Scarp sales 780.14 822.61 Revenue from operations (gross) 106,475.81 114,335.94 Less: Excise duty 9,883.43 9,771.70 Revenue from operations (net) 96,592.38 104,564.24 41


  • Page 42

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 31st March 2013 31st March 2012 Details of products sold 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 51,144.69 66,967.97 (b) Spares 16,892.17 14,503.67 (c ) Exports of automotive components 19,882.04 14,811.60 (d) Anti lock braking system 3,816.88 4,213.84 91,735.78 100,497.08 Details of services rendered (a) Software services 2,390.12 2,204.78 (b) Research and Development services 831.38 571.13 (c ) Shared services 299.28 156.78 (d) Test track service usage 555.68 311.86 4,076.46 3,244.55 Tax deducted at source on test track service usage 26.08 22.91 19. OTHER INCOME (a) Interest income on (i) Bank deposits 684.76 216.36 (ii) Others 33.52 16.73 (b) Profit on sale of fixed assets 1.89 3.84 (c) Gain on sale of current investments 173.27 145.79 (d) Tool development income (net of expenses Rs.50.46 lakhs - 31st March 2012 :Rs.71.58 lakhs) 97.52 205.78 (e) Test rig income 53.38 – (f) Exchange differences (net) 219.16 617.40 1,263.50 1,205.90 Tax deducted at source on interest income 72.71 22.04 20. COST OF RAW MATERIAL AND COMPONENTS CONSUMED Inventory at the beginning of the year 5,778.61 4,439.53 Add: Purchases 53,306.53 59,265.52 Less:Inventory at the end of the year 8,004.26 5,778.61 Cost of raw material and components consumed 51,080.88 57,926.44 Details of raw material and components consumed Steel sheets, bar materials and tubes 208.86 310.90 Castings and forgings 20,504.53 17,709.85 Intermediates and components (which individually do not account for 10% or 30,367.49 39,905.69 more of the total value of consumption) 51,080.88 57,926.44 42


  • Page 43

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 21. CHANGES IN INVENTORIES OF FINISHED GOODS AND WORK-IN-PROCESS 31st March 2013 31st March 2012 à lakhs à lakhs (a) Work-in-process (i) Inventories at the end of the year 412.14 449.38 (ii) Inventories at the beginning of the year 449.38 342.14 37.24 (107.24) (b) Finished goods (i) Inventories at the end of the year 2,089.30 2,690.13 (ii) Inventories at the beginning of the year 2,690.13 2,104.63 600.83 (585.50) (Increase) / decrease in inventories 638.07 (692.74) Details of inventory (a) Work-in-process Air assist and full air actuation system for automotive and non-automotive applications and elements thereof 412.14 449.38 (b) Finished goods (i) Air assist and full air actuation system for automotive and non-automotive applications and elements thereof 2,008.67 2,651.39 (ii) Spares 80.63 38.74 2,089.30 2,690.13 22. EMPLOYEE BENEFITS EXPENSE (i) Salaries, wages and bonus 9,003.70 7,923.87 (ii) Contribution to provident and other funds (refer note 25) 655.24 561.18 (iii) Workmen and staff welfare expenses 1,042.10 943.75 10,701.04 9,428.80 Contribution to provident and other funds include: (i) Gratuity as per scheme framed by Life Insurance Corporation of India 71.60 63.89 (ii) Pension fund 117.57 76.92 (iii) Deposit linked insurance as per scheme framed by Life Insurance Corporation of India 9.80 9.83 198.97 150.64 43


  • Page 44

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 23. OTHER EXPENSES 31st March 2013 31st March 2012 à lakhs à lakhs (i) Consumption of stores and spares 2,943.92 5,091.37 (ii) Power and fuel 1,756.13 1,435.17 (iii) Rent 421.64 412.58 (iv) Rates and Taxes 267.30 140.89 (v) Repairs and Maintenance a) Building 373.32 356.64 b) Machinery 522.30 457.35 c) Other assets 121.10 88.40 (vi) Insurance 76.33 65.22 (vii) Commission 67.67 67.94 (viii) Audit fees (refer details below) 26.00 20.21 (ix) Cash Discount 54.99 49.72 (x) Travel and Conveyance 876.16 840.44 (xi) Packing and Forwarding 3,780.11 4,324.46 (xii) Data processing 174.85 185.61 (xiii) Sitting fees to directors 3.60 4.05 (xiv) Royalty 698.31 518.44 (xv) Research and development 305.23 388.77 (xvi) Other expenses (includes Rs.22.50 lakhs - 31st March 2012: Rs.22.50 lakhs, commission payable to non-executive independent directors) 2,286.71 1,461.34 (xvii) Loss on sale / scrapping of assets 11.85 0.41 14,767.52 15,909.01 Audit fees comprise of: (a) As auditor: Audit fee 18.00 13.00 Tax audit fee 6.00 4.00 (b) In other capacity - Certification fees 2.00 1.00 (c ) Reimbursement of expenses 3.47 2.21 29.47 20.21 Repairs and maintenance includes: Stores consumed 10.65 11.71 10.65 11.71 24. FINANCE COSTS Interest 1.76 11.88 1.76 11.88 44


  • Page 45

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (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 / As at / As at / As at / year ended year ended year ended year ended Particulars 31st March 2013 31st March 2012 31st March 2013 31st March 2012 Pension Gratuity (a) Expenses recognised in the statement of Profit and Loss (i) Current service cost – – 61.64 58.09 (ii) Interest cost 73.21 67.33 48.55 48.56 (iii) Expected return on plan assets – – (52.62) (52.40) (iv) Net actuarial loss / (gain) recognised in the year 44.36 9.59 14.03 9.64 Total 117.57 76.92 71.60 63.89 (b) Change in defined benefit obligation during the year (i) Present value of obligation as at beginning of the year 867.02 794.03 606.84 607.05 (ii) Interest cost 73.21 67.33 48.55 48.56 (iii) Current service cost – – 61.64 58.09 (iv) Benefits paid (11.78) (3.93) (77.58) (116.50) (v) Actuarial gain / (loss )on obligation 44.36 9.59 14.03 9.64 (vi) Present value of obligation as at the end of the year 972.81 867.02 653.48 606.84 ( c) Change in fair value of plan assets during the year (i) Fair value of plan assets at the beginning of the year – – 609.07 607.43 (ii) Expected return on plan assets – – 52.62 52.40 (iii) Contributions made during the year – – 71.43 65.74 (iv) Benefits paid – – (77.58) (116.50) (v) Actuarial gain on plan assets – – – – (vi) Fair value of plan assets as at the end of the year – – 655.54 609.07 (d) Balance Sheet movements (i) Value of benefit obligations / (net assets) at the beginning of the year 867.02 794.03 609.07 607.43 (ii) Actual return on plan assets – – 52.62 52.40 (iii) Contributions made during the year – – 71.43 65.74 (iv) Expenses 117.57 76.92 – – (v) Benefits paid (11.78) (3.93) (77.58) (116.50) (vi) Value of benefit – – – – (vii) Fair value of plan assets as at the end of the year 972.81 867.02 655.54 609.07 Funded status – – 2.06 2.23 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.84.50 lakhs to gratuity in the next year (31st March 2012: Rs.75.58 lakhs). 45


  • Page 46

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) Amounts for the current and previous four periods are as follows: 31st March 2013 31st March 2012 31st March 2011 31st March 2010 31st March 2009 à lakhs à lakhs à lakhs à lakhs à lakhs Gratuity Defined benefit obligation 653.48 606.84 607.05 569.39 590.67 Plan assets 655.54 609.07 607.43 573.62 669.86 Surplus / (deficit) 2.06 2.23 0.38 4.23 79.19 Experience adjustments on plan liabilities 14.03 9.64 29.02 36.70 (41.83) 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 2013 31st March 2012 a) Revenue from operation à lakhs à lakhs (i) Sales (net of excise duty) India 71,853.74 85,685.48 Others 19,882.04 14,811.60 Total 91,735.78 100,497.08 (ii) Rendering of services India 555.68 311.86 Others 3,520.78 2,932.69 Total 4,076.46 3,244.55 b) Total assets India 72,745.52 64,002.09 Others 6,566.63 3,693.48 Total 79,312.15 67,695.57 c) Capital expenditure India 6,780.20 6,837.11 Other – – Total 6,780.20 6,837.11 27. CONTINGENT LIABILITIES AND COMMITMENTS (A) Liabilities not provided for (a) Contingent liabilities i) Bills discounted 7,074.25 6,075.20 (b) Counter guarantee given to bankers 134.61 126.28 (c) Claims against the company not acknowledged as debts primarily towards: i) Denial of Cenvat credit under Excise laws 0.16 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 iii) Reopening of assessment under Section 147 of Income tax Act for the 2006-07 1,010.59 – iv) Reversal of service tax credit on certain inputs under the Service tax laws 56.26 150.45 v) Denial of input tax credit under Tamil Nadu Value Added Tax laws for the years 2009-10 and 2010-11 – 86.05 vi) Increase of trade license fees by the local authorities – 3.04 vii) Levy of infrastructure and amenities charges by the Tamilnadu Town and Country Planning Department 49.25 49.25 viii) Property tax levied by Anjur Village Panchayat 91.68 – 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 358.05 10.53 (b) Others 633.04 1,031.70 * As certified by management 46


  • Page 47

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (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. Foreign Amount in FCY Amount in INR Description No. Currency (FCY) 31st March 2013 31st March 2012 31st March 2013 31st March 2012 1 Import of goods and services USD 2.23 – 117.94 – JPY 0.01 – – – CHF 0.06 – 3.44 – EUR 16.77 4.75 1,197.12 308.51 2 Export of goods and services USD 41.57 37.07 2,222.73 1,896.29 EUR 61.24 26.30 4,343.90 1,797.19 29. DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER THE MSMED ACT, 2006 As at As at 31st March 2013 31st March 2012 Total outstanding dues to Micro and Small enterprises 1,080.77 581.47 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 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 SouthAfrica 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 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) 47


  • Page 48

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 f) Fellow Subsidiary companies (Contd.) 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 IP Holdings LLC 35 WABCO Automotive Products Ltd, Cayman 36 WABCO Air Compressor Holdings Inc., 37 WABCO Automotive Control Systems Inc., 38 WABCO Group Inc., 39 WABCO Group International Inc., 40 WABCO Logistic (Quingdao) Co. Ltd 41 WABCO North America LLC 42 WABCO Expats Inc. 43 WABCO (Thailand) Limited 44 Guang Dong WABCO Fuwa Vehicle Brakes Co Limited 45 Ephicas BV 46 WABCO Foundation Brakes Private Limited, Chennai (Subsidiary of CDH through WABCO Asia Private Limited) 47 Ephicas BVBA 48 WABCO International LLC 49 WABCO Europe Holdings LLC 50 Ephicas Patents BVBA; 51 WABCO Financial Services SPRL; 52 WABCO France Logistics S.A.S.; 53 WABCO Services S.A.S 54 WABCO WURTH Workshop Services GmbH 55 WABCO Testbahn GmbH 56 WABCO Holding GmbH 57 WABCO Systeme GmbH 58 WABCO Holdings B.V. 59 WABCO Sandown B.V. 60 WABCO CV. 61 WABCO RUS LLC. 62 WABCO Vostok LLC. 63 WABCO Centro de Distribuicao de pecas Automotives Ltda, Brazil g) Key management personnel Mr P Kaniappan - Whole Time Director 48


  • Page 49

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) 31. RELATED PARTY TRANSACTIONS (Rupees in lakhs) Fellow Key Management Sl. Nature of Subsidiary Personnel Name of the company No. transactions Year ended Year Ended 31st March 2013 31st March 2012 31st March 2013 31st March 2012 1 Purchase of goods Shandong Weiming Automotive Product Co. Ltd, China 2.26 89.68 – – WABCO Fahrzeugsysteme GmbH, Germany 2,057.89 2,288.98 – – WABCO do Brasil Industria e Comercio de Freios Ltda., Brazil 227.83 97.17 – – WABCO BV, Netherlands 117.12 0.09 – – WABCO Polska sp.z.o.o, Poland 25.10 10.85 – – WABCO France S.A.S, France 44.02 42.45 – – WABCO China Co Ltd, China 290.34 44.71 – – WABCO Compressor Manufacturing Co, USA 36.37 150.45 – – 2,800.93 2,724.38 – – 2 Receiving of services WABCO IP Holdings LLC, USA 698.31 518.44 – – Royalty WABCO Europe BVBA, Belgium 459.71 155.38 – – Technical services WABCO (Shanghai) Management Company Limited 81.79 – – – 1,239.81 673.82 – – 3 Sale of products Meritor WABCO Vehicle Control Systems, USA 1,539.33 367.87 – – WABCO Logistics GmbH, Germany 498.75 677.89 – – WABCO China Co Ltd, China 611.01 976.62 – – WABCO Automotive, South Africa 14.40 12.94 – – WABCO Compressor Mfg. Co,USA 4,760.89 4,844.19 – – WABCO Polska sp.z.o.o, Poland 2,375.42 2,560.21 – – WABCO Development Gmbh, Germany 0.30 – – – WABCO Korea Ltd, Korea 33.51 29.66 – – WABCO France S.A.S, France 1,372.03 1,261.96 – – WABCO do Brasil Industria e Comercio.de Freios Ltda, Brazil 233.10 199.22 – – Shandong Weiming Automotive Product Co. Ltd, China 2.95 0.93 – – WABCO GmbH, Germany 258.33 362.94 – – WABCO Asia Private Ltd,, Singapore 77.96 94.37 – – WABCO Middle-East & Africa FZCO, Dubai 7.18 3.63 – – WABCO Europe BVBA, Belgium 7,256.41 2,790.32 – – WABCO Japan Inc. Japan 39.24 – – – WABCO North America L.L.C 37.07 – – – 19,117.88 14,182.75 – – 4 Rendering of Services Software Service * WABCO Development Gmbh, Germany 2,390.12 2,620.04 – – R & D Service WABCO Europe BVBA, Belgium 831.38 571.13 – – Tool development Meritor WABCO Vehicle Control Systems, USA 85.68 114.50 – – Tool development WABCO Compressor Mfg. Co, USA – 68.93 – – Tool development WABCO Europe BVBA, Belgium – 93.93 – – Tool development WABCO Polska sp.z.o.o, Poland 43.96 – – – Tool development WABCO do Brasil Industria e Comercio.de Freios Ltda, Brazil 10.99 – – – Shared services WABCO Europe BVBA, Belgium 299.28 156.78 – – 3,661.41 3,625.31 – – 49


  • Page 50

    WABCO INDIA LIMITED Notes to financial statements for the year ended 31st March 2013 (All amounts are in lakhs of Indian Rupees unless otherwise stated) (Rupees in lakhs) Fellow Key Management Sl. Nature of Subsidiary Personnel Name of the company No. transactions Year ended Year Ended 31st March 2013 31st March 2012 31st March 2013 31st March 2012 5 Receivables WABCO Logistics GmbH, Germany 120.94 83.47 – – WABCO Development GmbH, Hannover 201.88 189.24 – – WABCO China Co Ltd, China 135.27 180.34 – – Meritor WABCO Vehicle Control Systems, USA 917.68 153.42 – – WABCO Compressor Mfg. Co,USA 958.36 1,502.61 – – Shandong Weiming Automotive Product Co. Ltd, China 2.17 0.77 – – WABCO Polska sp.z.o.o, Poland 273.54 496.66 – – WABCO do Brasil Industria e Comercio.de Freios Ltda, Brazil 58.78 45.28 – – WABCO Asia Private Ltd, Singapore 3.47 12.32 – – WABCO Europe BVBA, Belgium 3,204.43 199.00 – – WABCO Japan Inc. Japan 36.01 – – – WABCO GmbH, Germany 36.61 418.73 – – WABCO Automotive South Africa 3.69 1.35 – – WABCO France S.A.S, France 408.40 234.99 – – WABCO North America L.L.C 37.07 – – – WABCO Middle-East & Africa FZCO, Dubai 4.84 2.38 – – WABCO Korea Ltd, Korea 3.89 6.01 – – 6,407.03 3,526.57 – – 6 Payables Meritor WABCO Vehicle Control Systems, USA 3.17 3.17 – – WABCO China Co Ltd, China 190.73 4.31 – – WABCO Polska sp.z.o.o, Poland 15.84 3.26 – – WABCO BV, Netherlands 58.62 0.46 – – WABCO do Brasil Industria e Comercio.de Freios Ltda, Brazil 16.40 – – – WABCO Compressor Mfg. Co,USA 19.64 2.04 – – WABCO France S.A.S, France 14.41 – – – Shandong Weiming Automotive Product Co. Ltd, China 0.11 0.51 – – WABCO IP Holdings LLC, USA 726.71 253.94 – – WABCO Europe BVBA, Belgium 615.09 155.38 – – WABCO (Shanghai) Management Company Limited 81.79 – – – WABCO Fahrzeugsysteme GmbH, Germany 605.00 332.73 – – 2,347.51 755.80 – – 7 Remuneration to Key management personnel Mr P Kaniappan - Whole Time Director – – 102.54 87.74 * include capital expenditure reimbursements Rs.Nil lakhs (last year Rs.415.26 lakhs) Note: The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are determined on an actuarial basis for the company as a whole. 50

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