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ELGI EQUIPMENTS LIMITED
th 50 Annual General Meeting
Date
Day
Time
Place
:
:
: 10.00 a.m.
: 'Ardra' No.9, North Huzur Road, (Near Codissia Building) Coimbatore - 641 018.
6th Day of December, 2010
Monday
16th December 2010 to 17th December, 2010 (both dates inclusive)
Notice of the 50th Annual General Meeting
Management Discussion and Analysis
Directors' Report
Corporate Governance Report
Auditor's Report
Annual Accounts
Cash Flow Statement & Analysis of performance
Consolidated Financial Statements
Annual Report of Subsidiary Company
Elgi Factories, Branches and Foreign Offices
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Contents
Sri L.G. Varadarajulu
(Upto 19th May 2010)
Dr. Jairam Varadaraj
Sri N.Mohan Nambiar
Dr.T.Balaji Naidu
Sri B.Vijayakumar
Sri Sudarsan Varadaraj
Dr.Ganesh Devaraj
Sri M.Ramprasad
Sri. S. Sriram
Sri. S. Raveendar
M/s. RJC Associates
Chartered Accountants
Dr. G.L. Sankaran
Cost Accountant
Central Bank of India
State Bank of India
Elgi Industrial Complex,
Trichy Road, Singanallur
Coimbatore - 641 005
Phone : 91-422-2589555
Fax : 91-422-2573697
Website : www.elgi.com
Link Intime India Private Limited
Coimbatore Branch
"Surya" 35 Mayflower Avenue
(2nd Floor) Behind Senthil Nagar
Sowripalayam Road,
Coimbatore - 641 028.
BOARD OF DIRECTORS
NON-EXECUTIVE CHAIRMAN
MANAGING DIRECTOR
NON-EXECUTIVE DIRECTORS
CHIEF FINANCIAL OFFICER
COMPANY SECRETARY
STATUTORY AUDITORS
COST AUDITOR
BANKERS
REGISTERED OFFICE
REGISTRAR &
TRANSFER AGENTS
BookClosure Dates
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
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thNotice of the 50 Annual General Meeting
NOTICE is hereby given that the 50th Annual General Meeting of the Company will be held on Monday, the 6th Day of December, 2010 at 10.00AM at 'ARDRA', No.9, North Huzur Road (Near Codissia Building), Coimbatore 641 018 to transact the following business:
ORDINARY BUSINESS
1. To receive, consider and adopt the audited Profit and Loss Account for the financial year ended 31st March, 2010, the Balance Sheet as at that date, the Report of the Board of Directors and the Report of the Auditors thereon.
2. To Confirm the interim dividends paid as the final dividend for financial year ended 31st March, 2010
3. (i) To appoint a Director in the place of Sri. B. Vijayakumar who retires by rotation and being eligible offers himself for re-appointment.
. (ii) To appoint a Director in the place of Sri. N. Mohan Nambiar who retires by rotation
and being eligible offers himself for re-appointment.
4. To appoint Auditors to hold office till the conclusion of next Annual General Meeting and to fix their remuneration.
SPECIAL BUSINESS
5. To consider and if thought fit, to pass with or without modification the following resolution as a Special Resolution.
RESOLVED THAT subject to the provisions of Section 31 and other applicable provisions, if any, of the Companies Act, 1956, the Articles of Association of the Company be and are hereby altered by inserting the following new Article(s) 27 & 28 after the existing Articles 26.
27. Any General Meeting may resolve that any moneys, investments, or other assets forming part of the undivided profits of the Company standing to the credit of the Reserves or any Capital Redemption Reserve Account or in the hands of the Company and available for dividends or representing premiums received on the issue of shares and standing to the credit of share premium account be capitalized and distributed amongst such of the shareholders as bonus shares as would be entitled to receive the same.
28. Subject to the provisions of Section 81(1A) and
other applicable provisions, if any, of the Act and subject to the Articles of Association, the Board or a committee of the Board may, from time to time, create, offer and issue to or for the benefit of the employees including Directors and Whole-time directors of the Company and its subsidiaries such number of equity shares / bonds /equity warrants/options/any other security convertible or non-convertible of the Company, for subscription on such terms and conditions and at such price as may be
determined by the Board or a Committee of the Board prior to the issue and offer, in consultation with the authorities concerned and in accordance with such guidelines or other provisions of law as may be prevalent at that time but ranking pari passu with the existing equity shares of the Company.
All such issue as above are to be made in pursuance of Employees' Stock Option (ESOP) Scheme or Employees Stock Purchase Scheme (ESPS) to be drawn up and approved by the Board or a committee thereof.
6. To consider and if thought fit, to pass with or without modification the following resolution as an Ordinary Resolution.
RESOLVED THAT pursuant to Section 94(1) and other applicable provisions if any, of the Companies Act, 1956, that the Authorised Share Capital of the Company be and is hereby altered by converting 55,00,000 12% Cumulative Redeemable Preference Shares of Rs.10/- each into 5,50,00,000 Equity Shares of Re.1/- each and 30,00,000 5% Redeemable Preference Shares of Rs.10/- each into 3,00,00,000 Equity Shares of Re.1/- each and that accordingly the Authorised Share Capital be altered as Rs. 30,00,00,000/= (Rupees Three Hundred Millions only) divided into 30,00,00,000 (Three Hundred Millions only) equity shares of Re.1/- each.
7. To consider and if thought fit, to pass with or without modification the following resolution as an Ordinary Resolution.
RESOLVED THAT Clause V of the Memorandum of Association be and is hereby altered in the following manner
The existing clause V of the Memorandum of Association be deleted and the following new Clause V be substituted thereof.
V. The Authorised share capital of the Company is Rs.30,00,00,000 (Rupees Three Hundred Millions only) divided into 30,00,00,000 (Three Hundred Million only) Equity shares of Re. 1/- each and the Company shall have power to increase or reduce the Capital and will be at liberty to issue any shares with special rights or privileges as to voting, dividend, capital or otherwise or to subject the same to any restrictions, limitations or conditions as the Company deems fit and to vary, modify or abrogate any such rights, privileges or conditions in such manner as may be permitted by the Companies Act, 1956 (including any amendment to or re-enactment thereof) and as the Company deems fit and necessary.
8. To consider and if thought fit, to pass with or without modification the following resolution as a Special Resolution.
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
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RESOLVED THAT Article 2 of the Articles of Association be and is hereby altered in the following manner;
The existing Article 2 of the Articles of Association be deleted and the following new Article 2 be substituted thereof.
2. The Authorised share capital of the Company is Rs.30,00,00,000 (Rupees Three Hundred Millions only) divided into 30,00,00,000 (Three Hundred Million only) Equity shares of Re. 1/- each and the Company shall have power to increase or reduce the Capital and will be at liberty to issue any shares with special rights or privileges as to voting, dividend, capital or otherwise or to subject the same to any restrictions, limitations or conditions in such manner as may be permitted by the Companies Act, 1956 (including any amendment to or re-enactment thereof) and as the Company deems fit and necessary.
9. To consider and if thought fit, to pass with or without modification the following resolution as a Special Resolution.
RESOLVED THAT subject to the Memorandum and Articles of Association of the Company and subject to such consents and approvals as may be required and subject to the compliance with relevant guidelines issued by the Securities and Exchange Board of India (SEBI), the Companies Act 1956 and the Foreign Exchange Management Act, 1999 an amount of Rs.78,935,454/- out of the amount standing to the credit of Share Premium Account as on 31st March 2010 be capitalized and transferred from the said account to the equity share capital account and be applied to payment in full for the allotment of 78,935,454 fully paid equity shares of the face value of Re.1/- each as bonus shares to the holders of the existing equity shares of the Company, whose names appear on the Register of Members of the Company or whose names appear as the beneficial owners of the equity shares of the Company on the records of the Depositories as on such date (hereinafter referred to as the "Record Date") as may be fixed by the Board of Directors of the Company (hereinafter referred to as the "Board" which term shall be deemed to include any committee of the Board) in the proportion of ONE new equity share for every ONE existing equity share of the Company held by them, on the following terms and conditions:
1. That the new equity shares so allotted shall be treated as an increase in the nominal amount of the paid up capital of the Company held by each member and not as income.
2. That the new equity shares to be allotted as bonus shares will be allotted subject to the terms of the Memorandum and Articles of Association of the Company, and shall rank pari passu in all respects with and carry the same rights as the existing fully paid-up equity shares
of the company and notwithstanding the date or dates of allotment thereof shall be entitled to participate in full in any dividend to be declared in respect of the financial year in which the allotment of the new equity shares pursuant to this resolution is made.
3. That the issue and allotment of the bonus shares in favour of non resident members of the Company shall be made in accordance with the guidelines issued by the Reserve Bank of India from time to time.
4. That in the case of shares held in dematerialized form, the intimation of allotment of the bonus shares shall be sent, while in case of shares held in physical form, share certificates shall be issued directly instead of allotment letter within the Statutory time limit
RESOVLED FURTHER THAT the Board be and is hereby authorized:
1. To apply, for listing of the new equity shares issued as bonus shares along with the existing share capital of the Company to the Stock Exchange(s) where the Company's shares are be listed / traded and to make an application to the depositories for crediting the Bonus shares to the individual depository accounts of the allottees;
2. To modify the terms and conditions, quantum and amount to be capitalized, and number of new equity shares to be allotted, relating to the aforesaid issue of bonus shares, if the circumstances so arise as would necessitate these and to settle all questions or difficulties that may arise with regard to the allotment and issue of the said new equity shares in such manner as they shall determine in their absolute discretion.
RESOLVED FURTHER THAT the Board be and is hereby authorized to prepare and file the necessary forms, documents, with Registrar of Companies and other authorities and to do all such acts, deeds and things as may be required or deemed necessary in this regard.
10. To consider and if thought fit, to pass with or without modification the following resolution as a Special Resolution.
RESOLVED THAT in accordance with the provisions contained in the Articles of Association and Sections 81 (1A) and all other applicable provisions of the Companies Act, 1956 ("the Act") and the provisions contained in the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("the Guidelines") (including any statutory modification(s) or re-enactment of the Act or the Guidelines, for the time being in force) and subject to such other approvals, permissions and sanctions as may be necessary and subject to such
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
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conditions and modifications as may be prescribed or imposed while granting such approvals, permissions and sanctions which may be agreed to by the Board of Directors of the Company (hereinafter referred to as "the Board" which term shall be deemed to include ESPS Compensation Committee which the Board may constitute having independent Directors in majority to exercise its powers, including the powers conferred by this resolution), consent of the members of the Company be and is hereby accorded to the Board to create, offer, issue/allot not more than 1,000,000 (One Million) Equity shares of Re.1/- each in one or more tranches to eligible employees (both present and future) and Directors of the Company whether working in India or outside India and whether they are shareholders of the Company or not through Employee Stock Purchase Scheme (ESPS) on such terms and conditions as may be fixed or determined by the Board.
RESOLVED FURTHER THAT the said equity shares may be allotted directly to such employees/ Directors in accordance with a Scheme framed in that behalf .
RESOLVED FURTHER THAT the new Equity Shares to be issued and allotted by the Company in the manner aforesaid shall rank pari passu in all respects with the then existing Equity Shares of the Company unless otherwise decided by the Board of Directors of the Company.
RESOLVED FURTHER THAT for the purpose of giving effect to any creation, offer, issue, allotment or listing of Equity shares, the Board be and is hereby authorised on behalf of the Company to evolve, decide upon and bring into effect the Scheme and make any modifications, changes, variations, alterations or revisions in the said Scheme from time to time or to suspend, withdraw or revive the Scheme from time to time as may be specified by any statutory authority and to do all such acts, deeds, matters and things as it may in its absolute discretion deem fit or necessary or desirable for such purpose and with power on behalf of the Company to settle any questions, difficulties, or doubts that may arise in this regard without requiring the Board to secure any further consent or approval of the members of the Company."
11. To consider and if thought fit, to pass with or without modification the following resolution as a Special Resolution.
RESOLVED THAT in accordance with the provisions contained in the Articles of Association and Sections 81 (1A) and all other applicable provisions of the Companies Act, 1956 ("the Act") and the provisions contained in the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("the Guidelines") (including any statutory modification(s) or re-enactment of the Act or the Guidelines, for the time being in force) and subject to such other approvals, permissions and
sanctions as may be necessary and subject to such conditions and modifications as may be prescribed or imposed while granting such approvals, permissions and sanctions which may be agreed to by the Board of Directors of the Company (hereinafter referred to as "the Board" which term shall be deemed to include ESPS Compensation Committee which the Board may constitute having independent Directors in majority to exercise its powers, including the powers conferred by this resolution), consent of the members of the Company be and is hereby accorded to the Board to extend the benefits of ESPS proposed in the Resolution number 10 in this Notice within the overall limits mentioned therein, to employees / Directors of the Company's direct and Indirect subsidiaries, whether Indian or Foreign Subsidiaries, existing and as and when formed and whether they are shareholders of the Company or not as may time to time be allowed under prevailing laws, rules and regulations and /or amendments thereto and on such terms and conditions as may be fixed or determined by the Board on the basis of Salient Features of ESPS mentioned in aforesaid resolution and its annexure.
RESOLVED FURTHER THAT the said Equity shares may be allotted directly to such employees/ Directors in accordance with a Scheme framed in that behalf .
RESOLVED FURTHER THAT the new Equity Shares to be issued and allotted by the Company in the manner aforesaid shall rank pari passu in all respects with the then existing Equity Shares of the Company unless otherwise decided by the Board of Directors of the Company.
RESOLVED FURTHER THAT for the purpose of giving effect to any creation, offer, issue, allotment or listing of Equity shares, the Board be and is hereby authorised on behalf of the Company to evolve, decide upon and bring into effect the Scheme and make any modifications, changes, variations, alterations or revisions in the said Scheme from time to time or to suspend, withdraw or revive the Scheme from time to time as may be specified by any statutory authority and to do all such acts, deeds, matters and things as it may in its absolute discretion deem fit or necessary or desirable for such purpose and with power on behalf of the Company to settle any questions, difficulties, or doubts that may arise in this regard without requiring the Board to secure any further consent or approval of the members of the Company.
12. To consider and if thought fit, to pass with or without modification the following resolution as a Special Resolution.
"RESOLVED THAT in accordance with the provisions of Section 198, 269, 309 and 310 read with Schedule XIII and other applicable provisions, ifany, of the Companies Act, 1956 and subject to such approvals as may be required, the remuneration payable to Dr. Jairam Varadaraj,
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
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Managing Director of the Company, be and is hereby revised on the following terms, with retrospective effect from 1st April, 2010.
The total remuneration would be Rs. 86 lakh per annum of which 30% would be variable component. All other terms and conditions shall remain the same as approved by the share holders at their meeting held on 22nd July, 2006.
FURTHER RESOLVED THAT in addition to above, Leave Encashment, Gratuity and other special perquisites, if any shall be the same structure as applicable to other senior managerial personnel of the company.
FURTHER RESOLVED THAT for the purpose of giving effect to this Resolution, the Board of Directors of the Company be and is hereby authorized to do all such acts, deeds and things as it may deem expedient in the interest of the Company."
Explanatory Statement pursuant to Section 173 of the Companies Act 1956
Item No. 5
The Board of Directors at their meeting held on 28.10.2010 have recommended amendment of Articles of Association of the Company providing for issue of Bonus shares and for issue of shares to employees of the Company under the Employees Stock Option Scheme (ESOS) or under the Employees Share Purchase Scheme (ESPS). Accordingly necessary Article No. 27 and 28 are proposed to be inserted in the Articles of Association of the Company as setout in Item No. 5 of the Notice.
A copy of the Articles of Association together with the proposed amendments will be available for inspection by the members during office hours on any working day. The Directors recommend this Resolution for approval of the members.
None of the directors are concerned or interested in this resolution.
Item No. 6,7 & 8
The present Authorised Capital of the Company is Rs.30,00,00,000/- (Rupees Three Hundered Millions only) divided into 21,50,00,000 (Two Hundred and Fifteen Million only) equity shares of Re.1/- each and 55,00,000 (Five and Half Million only) 12% Cumulative Redeemable Preference Shares of Rs.10/- each and 30,00,000 (Three Million only) 5% Redeemable Preference Shares of Rs.10/- each. It is considered desirable that the unissued Redeemable Preference Shares of the company be converted into Equity shares Accordingly, the unissued 85,00,000 Redeemable Preference shares of Rs.10/- each in the Authorised Share Capital is proposed to be converted into 8,50,00,000 equity shares of Re.1/- each.
Accordingly the Authorised Share Capital of the Company be altered as Rs.30,00,00,000/- (Rupees Three Hundred Million only) divided into 30,00,00,000 (Three Hundred Million only) Equity shares of Re.1/- each.
Consequent upon the above alteration(s) in the Authorised Capital of the company, the Memorandum and Articles of Association will require alteration so as to
reflect the conversion of unissued Redeemable Preference Shares into equity Shares. Hence the resolution proposed in item no. 7 of the notice is to alter clause V of the Memorandum of Association and the special resolution set out in item no.8 is to alter the Article 2 of the Articles of Association.
A copy of the Memorandum and Articles of Association together with proposed alterations are available for inspection at the registered office of the Company on any working day during the usual business hours.
None of the directors are concerned or interested in this resolution.
Item No. 9
The Company has to its credit Rs.2503.09 Millions in Reserves & Surplus which includes a sum of Rs 440.79 Million in Share Premium Account as on 31st March 2010. The paid up capital of the company after the amalgamation of Elgi Industrial Products Limited (formerly known as "Elgi Finance Limited") with the Company is Rs.78,935,454/- divided into 78,935,454 equity shares of Re.1/- each. The Board of Directors considered desirable that it will be advantageous to the company and the shareholders if a portion of Share Premium Account is capitalized by issue of bonus share. Hence, the Board of Directors have recommended that bonus equity shares be issued and allotted in the proportion of ONE new equity share for every ONE existing equity shares held by the eligible Members of the Company on the Record date to be fixed by the Board of Directors for this purpose.
The said bonus shares shall rank pari passu with the existing equity shares in all respects and carry the same rights as the existing fully paid up equity shares of the Company.
The bonus shares shall be issued pursuant to the applicable provisions of the Companies Act, 1956, Article 27 of the Articles of Association of the Company, and the Securities & Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.
The board recommends the passing of the resolution set our in Item No. 9 of the Notice convening the meeting.
None of the directors of the Company is concerned or interested in the said resolution except to the extent they would be entitled for bonus shares in relation to their shareholding in the Company.
Item No. 10
The Company has completed its 50 years of operations on 14th day of March 2010 and would like to honour the employees who have spent their time and effort in building the Company from strength to strength. To recognize their contribution, the Board of Directors of the Company has recommended that an Employee Stock Purchase Scheme (ELGI ESPS 2010) be implemented for all employees of the Company, including employees of Subsidiary companies.
Board of Directors at its meeting on 28th October 2010 has constituted a Committee to be called as Compensation Committee for administration and Superintendence of ELGI ESPS 2010 Scheme.
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
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The information required as per Clause 6.2 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ("SEBI ESPS Guidelines") is given below.
The total number of Shares to be Issued
Identification of classes of employees entitled to participate in ELGI ESPS 2010 Scheme.
Requirements of vesting, period of vesting and maximum period within which Shares shall be vested.
Exercise price and pricing formula
Exercise period and process of exercise
The appraisal process for determining the eligibility of employees to ELGI ESPS 2010 Scheme
Maximum number of Shares to be issued per employee and in aggregate
The method the Company shall use to value its shares: fair value or Intrinsic value
Taxes and duties
Shares issued under the scheme shall not exceed 1,000,000 (One Million only).
All employees of the Company including Directors (including whole time Directors) of the Company, its subsidiary companies and as may be decided by the Compensation Committee constituted for the purpose. Promoter Directors will not be included.
The Shares will have the lock in period of three years form date of allotment.
The price shall be at par i.e. Re. 1/- per share.
The exercise period will be three months from the date of offer or may be extended by the Compensation Committee.
The eligibility of such employees to receive shares will be determined in terms of the ELGI ESPS 2010 Scheme formulated aforesaid. Each employee who has completed minimum one year of service will be offered such number of shares as may be determined by the Compensation Committee
The maximum number of shares that may be issued under the ELGI ESPS 2010 Scheme to an individual Eligible Participant shall not exceed 2500 shares. The limit on the maximum number of shares shall also be applicable to Directors, including independent Directors. The number of Shares to be issued per employee will be determined by the Compensation Committee.
The Company may use the Intrinsic Value method to value its Shares. In this respect, Intrinsic Value means the excess of the market price of the share under ESPS over the exercise price of the share (including up-front payment, if any).
In the event of any Tax liability of any kind arising on account of the issue of the Shares, sale of shares or any other event, the liability for such Tax shall be that of the Eligible Participant alone. In the event that any Taxes are required to be paid by the Company, the same shall be recovered from Eligible Participant.
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The Company shall confirm to the accounting policies specified in the SEBI ESPS Guidelines.
The offer of shares to the employees under the scheme shall be after completion of the Bonus issue of shares to the members of the Company.
The Board / Committee shall have the absolute authority to vary or modify the terms of ESPS in accordance with the regulations and guidelines prescribed by SEBI or regulations that may be issued by any appropriate authority from time to time, unless such variation, modification or alteration is detrimental to the interest of the Employee / Directors.
In the terms of Section 81 (1A) and other applicable provisions, if any, of the Companies Act, 1956 and the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the shareholders' consent is sought to authorize the Board
to issue equity shares in the manner set out in the resolution aforesaid.
The Board recommends the resolution for approval by the shareholders.
None of the Directors of the Company are in any way, concerned or interested in the resolution, except to the extent of the equity shares that may be offered to them under ELGI ESPS 2010 Scheme.
Item No. 11
As stipulated by SEBI guidelines, a separate resolution is required to be passed if the benefits of ESPS are to be extended to employees/ Directors of subsidiaries of the Company.
Thus, a separate resolution has been proposed. The features of scheme mentioned in explanatory notes of
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ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
item 10 are same for employees/ Directors of subsidiary Companies.
The Board recommends the resolution for approval by the shareholders.
None of the Directors of the Company are in any way, concerned or interested in the resolution, except to the extent of the equity shares that may be offered to them under ELGI ESPS 2010 Scheme.
Item No. 12
Dr. Jairam Varadaraj was reappointed as Managing Director of the Company in terms of the resolution passed at the Annual General Meeting held on 22nd July, 2006 for a period of 5 years with effect from 01/04/2006. The Board of Directors at their meeting held on 29/07/2010 have decided to enhance the remuneration payable to Dr. Jairam Varadaraj, Managing Director, as per the recommendation of the Remuneration Committee, in line with the industry benchmarks.
The increased remuneration payable to Dr. Jairam Varadaraj is well within the limits specified under Section 309 of the Companies Act, 1956. In compliance with the provisions of Section 310 of the Companies Act, 1956 read with Schedule XIII, the increase in remuneration payable to Dr. Jairam Varadaraj is now being placed before the shareholders for their approval.
None of the directors except Dr. Jairam Varadaraj, Mr. Sudarsan Varadaraj and Dr. T. Balaji Naidu are in any way concerned or interested in this resolution.
The Board therefore recommends this resolution
NOTES:
1) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER. THE INSTRUMENT APPOINTING A PROXY SHOULD BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING.
2) The Register of Members and the Share Transfer Books of the Company will remain closed from 16th Day of December 2010 to 17th Day of December 2010 (both days inclusive) for the purpose of ; (i) Annual Book Closure (ii) Bonus issue of shares, if approved by the
members.
3) Members holding shares in physical form are requested to notify immediately the change, if any, in their residential address and bank accounts to the Company's Registrar & Share Transfer Agent - M/s. Link Intime India Pvt. Limited, Coimbatore Branch, "Surya", 35 May Flower Avenue, Behind Senthil Nagar, Sowripalayam, Coimbatore- 641028.
4] Members are requested to encash their unclaimed dividend warrants immediately as dividends remaining unpaid for seven years are now required to be transferred to the "Investors Education and Protection Fund" established by the Central Government and you shall not be able to claim any unpaid dividend from the said fund or from the Company thereafter.
5) Unclaimed Dividend up to the year 2003 has been transferred to the Investor Education & Protection Fund as notified by the Government.
6) Members and / or their Proxies should bring the Attendance Slips duly filled in for attending the meeting.
7) Members who are having multiple accounts are requested to intimate to the Company, the ledger folios of such accounts to enable the Company to consolidate all shareholdings into one account.
8) Members are requested to bring their personal copy of this Annual Report to the Meeting.
9) Pursuant to the provisions of Section 109A of the Companies Act, 1956, Members are requested to file Nomination Forms in respect of their physical shareholdings. Any Member wishing to avail this facility may submit to the Company's Registrar & Share Transfer Agent the prescribed Statutory Form 2B. Should any assistance be desired, Members should get in touch with the Company's Registrar & Share Transfer Agent.
10) Members who have not received the Split Share Certificates (Re.1/- face value) are requested to receive the Split Share Certificates by surrendering their old Share Certificates (Rs.10/- face value) to the Company's Registrar & Share Transfer Agent immediately.
Sl.No.
Name Qualification Directorships in other Public Limited Companies incorporated in India
Membership of Committees in other Public Limited Companies incorporated in India
Experience
1.
2.
Mr. B.Vijayakumar
Mr. N. Mohan Nambiar
B.Sc.
B.A. (Eco.)
1. L.G. Balakrishnan & Bros. Ltd2. LGB Forge Ltd.,3. Super Spinning Mills Ltd 4. Elgi Automotive Services Limited5. LGB Auto Products Ltd6. South Western Engg.(I) Ltd7. LG Farm Products Ltd.,8. Rolon Fine Blank Ltd.9. LGB Rolon Chain Ltd.10. LG Sports Ltd.,
1. Lakshmi Apparels and Wovens Ltd.2. The Palaniandavar Mills Ltd.3. Adwaith Lakshmi Industries Ltd.
More than 23 yearsexperience as an Industrialist.
More than 37 Years experience as an Industrialist
Share Transfer Committee
Share Transfer CommitteeAudit Commitee
Share Transfer Committee
INFORMATION REQUIRED TO BE FURNISHED UNDER CLAUSE 49 OF THE LISTING AGREEMENT.
As required under Clause 49 of the Listing Agreement the particulars of Directors who are proposed to be appointed/reappointed at this Meeting are given below:-
By Order of the Board
For ELGI EQUIPMENTS LIMITED
S. RAVEENDARCompany Secretary
Place: CoimbatoreDate: 28/10/2010
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ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
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Management Discussion and Analysis
Management at the outset conveys its heartiest greetings to all the stake holders of Elgi, as we celebrate the Golden Jubilee year. It is indeed a moment of immense pride, joy and satisfaction for the ELGI family who have put in their best in the past five decades.
The year under review witnessed uneven recovery in business from the economic crisis that had crippled most of the industries at different levels. Even though there was a marked improvement in the economic activity, the speed and the quantum of recovery were in patches and significantly lower than the pre crisis levels.
The compressor business grew on the back of strong performance across all segments in domestic market but the recovery was at snail's pace in the international market in sync with the slow economic climb up. During this year the company had acquired a French compressor company as a wholly owned subsidiary.
COMPRESSORS
The compressor business accounted for 86% of the total sales of the company. This business accounts for 95% of the profits of the company and 82% of the capital employed by the company. This business presently employs 1278 people. This year this business grew by 21%.
PERFORMANCE
All the segments in the domestic market have contributed to the impressive growth in the performance. Rotary compressor segment managed to grow well in the second half of the year while the first half growth was supported by some select segments.
Construction and Mining segment sustained its performance during this year being helped by the Government stimulus to the infrastructure sector. On the backdrop of an average monsoon investments into capacity increase in water well segment continued this year as well. The business being cyclic in nature is expected to decline in the coming year. As the trend indicates this business is already at the cyclical peak.
While the domestic market has grown well, the international business struggled to grow in the light of sluggish growth in the global economies. However focus on select geographical segments has yielded sustenance of some business. Introduction of Elgi products in Chinese and Brazilian markets found good acceptance and this contributed significantly to the international sales.
Company's focus on the aftermarket segment resulted in the sales growth by 24%. Plans are on the anvil to grow this segment on par with the global standards.
While challenges on the higher input costs are imminent, the company is poised for further growth in
performance with the expected revival of global demand combined with strong domestic industrial growth. The company's focus will continue to be on its excellence journey and improving profitability.
OPPORTUNITIES
The world economy is on the mend. After a sharp global meltdown in 2009, a number of countries have registered notable recovery in industrial production. The company is exploring various organic and inorganic growth opportunities in much geography. Taking this into account the company has initiated number of projects for developing new products to meet market needs. The acquisition of the French company SA Belair was an initial stepping stone in this direction.
The company is identifying and working on strategic markets across the world to focus its presence and efforts. The organization is being aligned to support this initiative. The company continues to pursue acquisition opportunities in various strategic markets to support the growth aspirations.
THREATS
The global economy is yet to recover fully from the recessionary trend though Asian markets and patches of other international markets have shown sporadic growth. Inflation is another concern which will be an impediment to growth, however with the GOI firm in its counter measures we expect the domestic market to sustain and support the company's growth if not better.
ATS - Elgi
The automotive equipment business accounted for 13% of the total sales of the company. This business accounts for 9% of the profits of the company and 13% of the capital employed by the company. The business employs 303 people. It contributes to 6% of the international business of the company.
PERFORMANCE
This business is directly dependent on the growth of "Passenger Car" segment in the domestic market. The passenger car sales during the current year grew by 15% over the previous year. This resulted in the setting up of new garages and increase in the capacity of the present ones.
Taking lead from the growing market condition, ATS ELGI registered a sales growth of over 20% compared to the previous financial year. The company's aggressive approach in the market despite the pricing pressure from the competition resulted in substantial growth in Lifting equipments, Body shop products and wheel alligning equipments.
The company's business in Mobile Service Units registered significant growth and is expected to sustain in the coming years also.
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
11
Continued focus in improving customer satisfaction resulted in sustaining the growth and brand amidst severe competition from the unorganized sector.
Exports performed only marginally in line with the continued economic impasse in the global market.
OPPORTUNITIES
The demand for vehicle servicing is bound to go up as the population of cars keeps on increasing. Many manufacturers are launching new models of cars in the small segment which is bound to fuel the growth in car sales and calls for strengthening and increasing the servicing network. All this will increase the requirement of garage equipments.
THREATS
Due to shortage of space and high cost of manpower, many of the established garages are working towards increasing the productivity by implementing new concepts and products. We are already working in this direction and would be able to service these requirements.
The company continues to invest resources in R&D to develop selected new products for the Garage segment. At the same time sourcing of new products from globally renowned manufacturers would also continue. These efforts would help us to maintain our supremacy in the market.
MANUFACTURING ENGINEERING
Manufacturing and marketing globally high value and low variety components was the objective of this business. This business generated revenue of 56 million. The business employs 77 people. International business of this division contributes 6% of the total exports. The business grew by 48%.
Our experience with this business has not been very encouraging with constant margin and price pressures from the customers who constantly look for alternates. With the growing internal demand for capacity from the compressor business, the company has taken a decision not to further its interests in growing this business. Available capacity is being utilized for in house growth needs and meeting the existing customer needs.
OVERALL PERSPECTIVES
While the world economy continued to improve, the pace of the recovery is too weak to scale up to the pre crisis levels. The recovery is uneven across countries with lackluster economic activity in developed economies and below potential growth elsewhere in the developing world. Our focus will continue to be on the three critical aspects of improvement viz cost, quality and cash. This will remain embedded in our activities irrespective of the market situation.
We will continue our exploration of acquiring compressors or compressor related businesses.
Though we are partially successful in our European acquisition we still have a long way to go as we would like to be cautious in the choice of the targets.
We have finalized the land for building a new facility and we have initiated steps in formalizing the project plans. The company is also working on a Plan to build our own foundry to support our critical needs of high quality components and casting. We are exploring all avenues to optimize on various fronts in executing these two critical projects for support our growth aspirations.
Human Resource Development
Our initiatives on training our blue collar employees in collaboration with PSG College of Technology are at an advanced stage; the last batches are undergoing training now. They have now been organized into self managed teams in both production and non-production areas; these initiatives are expected to release hitherto untapped energies amongst both blue collar employees as well as their immediate supervising engineers.
The company's on-going talent management programme to identify in-house executive talent is paying off; we have been able to meet several new and emerging manpower needs in the company through in-house talent.
The company is also driving a Wellness Programme amongst all employees; this involves 20 minutes daily practice of carefully selected physical and breathing exercises, topped off by a few minutes of meditation. This practice has been well received.
A Tribute
Mr. LG Varadaraj, our Chairman passed away on the 19th of May, 2010. He has been the guiding force in the creation and growth of this company. He was instrumental in identifying the various products that the company ventured into during its history. Along with this he architected various collaborations with companies all over the world to bring cutting edge technology into the company.
He sowed the seeds for a culture of caring deeply for the employees. This has resulted in an organization that has some very innovative HR practices. He firmly believed that people can make all the difference in an organization and we are experiencing the fruits of this belief.
He believed that our company should be a good corporate citizen and towards this end he spearheaded the development of schools that are managed by the company, the participation in socially conscious movements involving water conservation, the participation in relief work in areas struck by catastrophe.
While we would miss him we will continue to steer the company on the values laid down by him and continue to be a responsible corporate citizen.
Directors' Report
Particulars
Profit before Depreciation, Tax and Non Recurring ItemsLess: DepreciationProfit before Tax and Non Recurring ItemsLess: Provision for Tax (Net of Deferred Tax)Profit before Non Recurring ItemsLess: Non Recurring Items (Net)Net Profit after Non Recurring Items (Net of prior year adjustments)Add: Opening Balance in P&L AccountTransfer on Amalgamation and prior year adjustment Amount available for AppropriationsThe Directors recommend the following AppropriationsDividendDividend Tax Transfer to General ReserveProfit carried to Balance Sheet
2009-10
1034.2391.96
942.27330.41611.8660.07
551.791085.55(290.09)1347.25
144.7524.6056.00
1121.90
2008-09
712.1679.52
632.64235.20397.44
0.00397.44826.25(2.74)
1220.95
81.5413.8640.00
1085.55
Dear Shareholders,
Your Directors are pleased to present the 50th Annual Report of the Company along with the audited accounts for the year ended 31st March 2010.
FINANCIAL RESULTS
The performance of the Company is summarized in the financial statements given below: (Rs In Million)
Issue of Additional Shares and Change in Share Capi ta l consequent to the Scheme of Amalgamation.
The Scheme of Amalgamation under Section 391 and 394 of the Companies Act, 1956 was sanctioned by the Hon'ble High Court of judicature at Madras vide its order dated 24/09/2010 and was filed with the Registrar of Companies, Coimbatore on 04/10/2010.
As per the Scheme, Elgi Industrial Products Limited (Formerly known as Elgi Finance Limited) has been merged with the Company. In accordance with the exchange ratio specified in the Scheme, 7,62,600 equity shares of Re. 1/- each of Elgi Equipments Limited are being allotted to the shareholders of Elgi Industrial Products Limited. The Authorised Share Capital and the paid up share capital of the Company are being increased to Rs. 300 million and 78.94 million respectively consequent to the above Scheme of Amalgamation.
Additional Shares of 7,62,600 equity shares to be allotted as per the Scheme of Amalgamation will be listed in the Bombay Stock Exchange Limited and National Stock Exchanges Limited
Conversion of partly paid-up shares into fully paid-up shares
During the financial year the final call money of Rs. 12.75 per share consisting of 85 paise on face value and Rs. 11.90 on share premium on 1,81,74,240 partly paid-up shares was called up for converting fully paid-up shares of Re. 1/- each
Dividend
The Board of Directors have declared and paid an interim dividend of 200 % on the paid up share capital of 78.16 million pre merger of the Company during the financial year 2009-10. The outflow (excl.taxes) was Rs. 144.75 million as against a total of Rs. 81.54 million paid for the previous financial year 2008-09
The interim dividends paid shall be the final dividend for financial year ended 31-03-2010.
Fixed Deposit
The company has not accepted any public deposits and hence there were no unclaimed deposits as on 31-03-2010
Review of Operations
The company ended with net sales of Rs.5811.55 million as against Rs. 4811.86 million an increase of 20.78 %. The details of division wise performance and other operational details are discussed at length in the Management Discussion and Analysis Report, given elsewhere in this report.
Subsidiary companies
a. The Company has been exempted from publishing the audited financial results of its wholly owned subsidiary companies, M/s. Adisons Precision Instruments Manufacturing Co. Ltd , M/s. Elgi Equipments (Zhejiang) Ltd., M/s. Elgi Compressors Trading (Shanghai) Co. Ltd., M/s. Elgi Gulf (FZE) along with this annual report, for the year 2009-10, vide letter No. 47/79/2010-CL-III, dated 24/02/2010 from the Government of India, Ministry of Company Affairs.
b. The Company has been exempted from publishing the audited financial results of its wholly owned subsidiary company, M/s. SA Belair along with this annual report, for the year 2009-10, vide letter No. 47/79/2010-CL-III, dated 07/05/2010 from the Government of India, Ministry of Company Affairs.
The annual accounts of the above subsidiary companies are available for inspection by any shareholder, at the registered office of the holding and subsidiary companies.
c. The Annual Report of the wholly owned Subsidiary
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
12
Company M/s. ATS ELGI Limited for the year 2009-10 and the information specified in Section 212 of the Companies Act, 1956 is given separately in this report.
Future Plans
a. DomesticThe Compressor business registered 21% growth over the previous year on the backdrop of significant economic recovery in the domestic market. The Company's focus would be on the sustenance of this momentum and drive the organization in fully aligning to service and after sales market.
b. InternationalExports market started recovering from the recessionary trend only during the second half of the financial year. The recovery is sporadic and slow. Operations at China is stabilizing and expected to pick up during the coming year. Procedural formalities for establishing the Brazil outfit were complete and the company will be targeting to expand its business significantly.
The company achieved a significant milestone during the year by acquiring a French Compressor company M/s. SA Belair as a wholly owned subsidiary which will be a gateway for spreading the business into Europe.
Capital Expenditure and funding
The Capital Expenditure incurred and funded for the year is Rs. 121.07 million, of which Rs. 63.03 million pertain to plant and machinery.
Shareholder initiatives
1. Your company adheres strictly to all the statutory and other legal compliances.
2. Your company has been one of the first to implement any initiatives for shareholder benefit directed from SEBI. On occurrence of any event, which has a bearing on the share price or otherwise, your company intimates the stock exchanges, within the stipulated period.
3. Your company has in place regulations for preventing and regulating insider trading and has adhered to a code of conduct and business ethics by which the shareholder is treated at par with an employee on availability of information about the company.
4. Your company regularly intimates the shareholders (through quarterly newsletters) on the performance of the company, even though it is not mandatory;
5. Your company has consistently paid dividend throughout these years, with nil long term debts.
6. Your company has been prompt and regular in its replies to your queries received by them.
7. Your company also replies within the stipulated time to all legal and statutory authorities.
8. The custodial charges paid by your company to both NSDL and CDSL for the FY 2010-11 amounts to Rs. 1,10,194/-.
9. During this year, the Company dematted 2,11,520 shares. With this, the total numbers of shares dematted as on 31st March 2010 are 6,77,75,947 Shares which represent 86.70% of the shares of the Company.
Directors
In accordance with the provisions of Articles of Association of the Company Sri. B. Vijayakumar and Sri. N. Mohan Nambiar, Independent Directors of the Company retire at the ensuing Annual General Meeting and are being eligible offer themselves for reappointment. Your Board recommends their reappointment as Directors of your Company.
None of your directors are disqualified from being reappointed.
Your Directors record their profound grief on the sad demise of our Chairman Sri.L.G.Varadarajulu on 19th May 2010. The contribution of Shri.L.G.Varadarajulu to our Company has been immense. He touched the lives of all those who came in contact with him. We pledge to follow the path he has set out for us, and to abide by the high principles and ethics he believed in.
Directors' Responsibility Statement
The Board of Directors confirm
i. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
ii. that the directors had selected such accounting policies and applied them consistently and made judgments and estimate that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;
iii. that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv. that the Directors had prepared the annual accounts on a going concern basis.
Statutory Auditors and their appointment
M/s.RJC Associates, Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting of the Company. Your Board recommends their reappointment as the Statutory Auditors of the Company.
Cost Auditor
Approval of the Government of India through the Ministry of Company Affairs was granted for the appointment of Dr. G.L.Sankaran as the cost auditor of
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
13
your company for the financial year ended 31st March 2010.
Human Resources and Industrial Relations
The Company continues to enjoy the cordial relationship with its employees at all levels. The total strength of employees as on 31st March, 2010 was 1658
Other Information
The statement showing the particulars of technology absorption pursuant to section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors)Rules, 1988, is given in the annexure forming part of this report.
Corporate Governance
A Report on Corporate Governance together with a
Practicing Company Secretary's Certificate on
Compliance with the conditions of Corporate
Governance as stipulated under Clause 49 of the
Listing Agreement is provided elsewhere in the Annual
Report.
Acknowledgements
Your Directors take this opportunity to place on record
their appreciation of the dedication and commitment of
employees at all levels in maintaining the sustained
growth of your Company. Your Directors thank and
express their gratitude for the support and co-operation
received from Central and State Governments,
stakeholders including vendors, financial institutions,
banks, investors, service providers as well as
regulatory and governmental authorities.
The Board also thanks the employees for their
dedicated and sincere service.
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
14
For and On behalf of the Board
Place : CoimbatoreDate : 28/10/2010
DR. JAIRAM VARADARAJManaging Director
N. MOHAN NAMBIARDirector
I. STATEMENT CONTAINING PARTICULARS P U R S U A N T T O T H E C O M P A N I E S (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS' REPORT.
A. Energy Conservation / Cost saving Activities carried out for the year 2009 -10
As a measure of Energy Conservation/Cost Saving Activities, the Company has made the following attempts during the year 2009-10;
1. Introduction of " LIGHT PIPES" in Canteen/Elgi Sauer/Casting Bay/Rotor Bay area in order to reduce the total lighting load.
2. Replacement of 250 KW fluorescence light with LED for Common area .
3. The Hydraulic Circuits for LOCUS machine were modified by introduction of directional control valve to utilize the power effectively from 10 HP to 5 HP.
4. Introduction of SOLAR lights in common area at different locations.
5. Introduction of 800 HP VFD for testing the compressor load as a measure of energy saver.
6. Installation of Thyristor electrical heating circuit for Gas Carburizing Furnace to reduce the maximum demand by 30 KVA.
7. Introduction of intensifier in Holroyd machines to maintain constant Hydraulic Pressure with the same capacity pump.
8. Procurement of HSD directly from HPCL Cochin.
9. Utilization of the Sewage Treated water for Gardening purpose for reducing the Ground water consumption by 40 KL/day.
10. Converting Lubrication oil with Grease and reduced the Hydraulic oil consumption.
11. Developing and the installation of indigenous motor for Holroyd machine while upgrading the CNC machine.
12. Reuse the existing scrap wood for packing purpose.
Impact of implementation
All the above measures contributed savings in cost as well as fuel close to Rs. 7.70 million for the year 2009-10.
New ideas under consideration
1. Introduction of Hybrid Air Conditioner to reduce 40% of the Energy for Human comfort.
2. Installation of 325 HP - VFD to reduce Diesel consumption.
3. Reduction of lighting load by installing Air Motors & Wind Mill.
4. Installation of LED in Office area
B. Technology Absorption
1. Research & Development
a. A new Oil flooded airend Axis-310 that covers the power range of 160 to 300 kW was developed. This is a superior performance airend and its performance figures are higher than equivalent 2-stage machines. Commercial production of this airend will commence in 2010-11.
2. Technology absorption, adaptation and innovation
a. The NVH team successfully developed a new code for design of resonators for controlling narrow-band noise arising from suction and discharge of compresses. This code can be adapted for new product designs in screw and reciprocating compressors.
b. An encapsulated version of the airend Axis-73s that covers the power range of 5.5 to 15kW was developed. Commercial production of this product will commence in 2010-11. The development of Encap range from 15 to 75 kW is under progress
3. Foreign Exchange Earnings and outgo:
Particulars are given in the notes forming part of accounts. Kindly refer the same.
Annexure to the Directors' Report
(Rs.In Million)
2008-09
4.7166.2770.98
1.48
Capital Revenue Total R&D Expenditure as a Percentage of Turnover
2009-10
6.3781.0087.37
1.50
EXPENDITURE ON R&D
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
15
II. Statement annexed to Directors' Report showing the names and other particulars of every employee of the company pursuant to section 217(2A) of the companies act, 1956, read with the Companies (Particulars of Employee) Rules 1975.
* Remuneration for part of the Financial Year 2009-10.
Note :
1. The nature of employment of Dr.Jairam Varadaraj, Managing Director of the company is contractual.
2. Remuneration includes salary, allowances, contribution to Provident Fund and other taxable perquisites and also performance pay.
3. Dr.Jairam Varadaraj is related to Sri.Sudarsan Varadaraj and Dr.T.Balaji Naidu as per Schedule IA of the Companies Act, 1956.
Employee Name
Designation Qualification ExperienceAgeRemuneration(Rs. In Million)
Date of Joining
Previous Employment
Dr.Jairam Varadaraj
Mr.V.T.GovindaRajan
Mr. SreenivasaRao
Dr. Madhu Ganesh
Mr. Mathew Kurien
Mr. N. Seshadri
Mr. N. Raghavan
Mr.S. Sriram
Mr. B. Ranganathan
Mr. S. Suriyanarayanan
Mr. R. Jayakanthan
Mr. P.R. Salim
Mr. Rajesh Radhakrishnan
Mr. Jayashankar Jayaraman
Mr. N. Srikanth
48
51
45
44
42
48
43
51
48
46
46
45
44
49
42
Managing Director
Director - Global Business
Director - Operations
GM - Technology Development
Head - Manufacturing Engineering
Sr. GM - MFG.
Sr. GM - Sales & Services
Chief Financial Officer
Sr. GM - MFG
Head-Quality
Sr. GM - Corporate Strategy
Group Head - R&D/Electricals & Electronics
Director - Corporate Strategy
Director HR
GM-Business Development
6.07
5.06
5.06
3.24
3.46
3.57
3.59
3.38
2.73
3.19
3.33
3.59
3.16*
2.01*
2.80
21
28
24
22
21
23
22
27
22
26
23
22
17
23
20
B.Com., MBA., PhD
B.E. PGDBM
B.COM,AICWAI, MBA
B.TECH, M.S., PH.D.
B. TECH
B.E., M.TECH., DBA
B.E., PGDM
B.Sc.,FCA, FICWA, CISA
B.E., PGTD&M, ADQM
DME., B.E.
B. COM
B. TECH, M.S.
MBA
BA,LLB,PGDPM
BE, PGDMM
29/05/1992
03/01/2007
01/06/2006
16/02/2004
29/05/2006
23/07/1999
02/02/2007
11/07/2007
06/06/2008
27/07/2007
07/01/2009
09/03/2009
18/11/2009
02/11/2009
08/04/2002
Nil
Rane TRW Steering Systems Ltd.
Rane Brake Linings Ltd
Applied Thermal Technologies
BFW Ltd.
Motors Industries Co., Ltd
Rane TRE Steering Systems Ltd.
Cholayil Pvt. Ltd.
Wheels (India) Ltd
Ford (I) Pvt. Ltd
Kennametal (I) Ltd.
L.G. Electronics(I) Ltd.
Pentair Corp.
Watanmal Group
Bahwan Automotive Centre Mascat
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
16
For and On behalf of the Board
Place : CoimbatoreDate : 28/10/2010
DR. JAIRAM VARADARAJManaging Director
N. MOHAN NAMBIARDirector
Corporate Governance
COMPANY'S PHILOSOPHY ON CODE OF GOVERNANCE
Elgi has always believed in and followed best business practices, and has been compliant with all the laws, exercised
fairness and integrity in all its dealings, thereby reiterated its commitment to enhancement of stakeholders' value. The
company has a defined set of guidelines for its internal governance based on business ethics, legal compliance and
professional conduct. The company has been following transparency in its accounting practices and procedures, in
framing and adhering to policies and guidelines, in insisting on responsibility and accountability and by regular audit of
its policies and procedures;
BOARD OF DIRECTORS
The Board of Directors of the Company consists of 8 Directors, out of which 4 are independent Directors. Dr. Jairam
Varadaraj is the Executive Director and all other Directors are Non-executive Directors.
The Board met Six times during the Financial Year on 30th April, 2009, 31st July, 2009, 29th August 2009, 31st
October, 2009, 30th January, 2010 and 01st March, 2010. The composition and attendance of Directors at the Board
Meetings and the Annual General Meeting held during the years is as under:-
# Excludes directorships in Private Companies and Foreign Companies $ Only Audit Committee and Investor Grievance Committee are considered.* Sri.L.G.Varadarjulu expired on 19th May 2010Dr.Jairam Varadaraj is related to Sri.L.G.Varadarajulu, Sri.Sudarsan Varadaraj and Dr.T.Balaji Naidu as per schedule IA of the Companies Act, 1956.
COMMITTEES OF THE BOARD
AUDIT COMMITTEE
The majority of the members of the Audit Committee are independent and have knowledge of finance, accounts and engineering industry. The quorum for audit committee meeting is minimum of two independent directors.
The role, powers and functions of the Audit Committee are as per section 292A of the Companies Act, 1956 and the guidelines set out in the listing agreement with the Stock Exchanges. The terms of reference of this Committee are as required by SEBI - under clause 49 of the Listing Agreement. Besides having access to all the required information from within the Company, the Committee can obtain external professional advice whenever required. The Committee acts as a link between the Statutory and Internal Auditors and the Board of Directors of the Company. It is authorized to select and establish accounting policies, review reports of the Statutory and the Internal Auditors and meet with them to discuss their findings, suggestions, and other related matters. The Committee is empowered to recommend the appointment and remuneration payable to the Statutory Auditors.
During the year under review, the Committee met 4 times on 30th April 2009, 31st July 2009, 31st October 2009 and 30th January 2010. The Composition of the Audit Committee and the attendance of each member of the Committee is given below.
Name of the Director
Mr.L.G.Varadarajulu *Dr.Jairam VaradarajMr.B.VijayakumarMr.Sudarsan VaradarajDr.T.Balaji NaiduMr.N.Mohan NambiarMr.M.RamprasadMr.Ganesh Devaraj
Category
Non-Executive Chairman- PromoterManaging Director - PromoterNon-Executive - Independent Non-Executive - Promoter Non-Executive - Promoter Non-Executive- IndependentNon-Executive- IndependentNon-Executive- Independent
AttendanceParticulars
Board Meeting
564---6544
LastAGM
PresentPresent
--------
PresentPresentPresent
----
No. of Directorships
inother
Companies
4
10107221---
No.of Committee
Positions held in
all companies
Chairman
---
---------11---
Member
143422--1
# $
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
17
The Company Secretary acts as the Secretary to the Committee. The representatives of the Statutory Auditors and Internal Auditors of the Company and the CFO have also attended the committee meetings. The minutes of the Audit Committee meetings were circulated to the Board, where it was discussed and taken note of. The Audit Committee considered and reviewed the accounts for the year 2009-10, before it was placed in the Board.
REMUNERATION COMMITTEE
The Committee comprises of Three Non-executive Independent directors, namely Sri M. Ramprasad (Chairman), Dr. Ganesh Devaraj and Sri N. Mohan Nambiar.
This Committee would basically look into and determine the Company's policy on remuneration packages to the Executive Directors. The Committee met on 31st July 2009 to review and approve the remuneration of Dr.Jairam Varadaraj, Managing Director. Two members were present at the meeting.
The Managing Director is paid remuneration approved by the Board of Directors on the recommendation of Remuneration Committee. The remuneration so approved is subject to the approval by the shareholders at the general meeting and such other authorities as the case may be.
The remuneration paid/ payable to the Managing Director of the Company for the year ended 31st March 2010, is as under:-
* Remuneration includes salary, allowances, contribution to Provident Fund and other taxable perquisites and also performance pay
The Company does not pay remuneration to any of its Non-executive Directors barring sitting fees for attendance during the meeting(s).
Total meetings Attended
4344
Name of the member
Sri.M.Ramprasad Sri.N.Mohan NambiarSri.L.G.Varadarajulu*Sri.Ganesh Devaraj
Position
ChairmanMemberMemberMember
* Sri.L.G.Varadarjulu expired on 19th May 2010
Name of Directors
Dr.Jairam Varadaraj(Managing Director)
Gross Remuneration paid/payable
6.07 Million *
Service Contract
5 Years with effect from 01/04/2006
Name of the Director
Mr.N.Mohan Nambiar
Mr.M.Ramprasad
Mr.Ganesh Devaraj
Mr.B.Vijayakumar
Mr.L.G.Varadarajulu
Dr.T.Balaji Naidu
Sitting Fees
(In Rupees)
160000
160000
160000
80000
180000
120000
Name of the Director
Mr.M.Ramprasad
Mr.B.Vijayakumar
Mr.L.G.Varadarajulu
Dr.T.Balaji Naidu
Mr.Sudarsan Varadaraj
No of Shares held.
( As on 31.03.2010)
4000
25000
100
15000
17240
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
18
The details of the sitting fees paid during the year ended 31st March 2010 to the non-executive directors are as under:
Statement showing number of Equity Shares held by the Non- Executive Directors as on March 31,2010 :-
There has been no materially relevant pecuniary transaction or relationship between the Company and its Non-executive Independent Directors during the year.
The Company currently does not have any Stock Option Scheme but has proposed to introduce Employees Stock Purchase Scheme (ESPS) during the current year
SHARE HOLDERS' COMMITTEE
This committee was constituted with Sri N. Mohan Nambiar as Chairman and Dr.Jairam Varadaraj and Dr.Balaji Naidu as members.
Compliance Officer: Mr.S.Raveendar, Company Secretary.
The Committee deals in matters relating to transfer and transmission of shares, issue of duplicate share certificates, review of dematerialized shares, redressing of investors complaints such as non-receipt of shares, non-receipt of dividends etc. and other matters related to shares.
The Share Transfers/ transmissions approved by the committee are placed at the board meetings from time to time. During the year ended 31st March 2010, 14 meetings of the Committee were held.
The total number of complaints received and replied to the satisfaction of shareholders during the year ended on 31st March 2010 was 19. There was no outstanding complaints as on 31st March 2010.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report forms part of this Annual Report.
Date
31.07.200926.07.200828.07.2007
Year
2008-092007-082006-07
Location
ARDRA, No-9 North Huzur Road,Coimbatore - 641018---do as above-------do as above----
Time
17.00 hrs17:00 hrs17:00 hrs
GENERAL BODY MEETINGS
Location and time for last three AGMs held
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
19
Out of the previous three Annual General Meetings, a Special Resolution was passed at the 49th AGM held on 31st July, 2009 for revision in payment of remuneration to Dr.Jairam Varadaraj, Managing Director of the Company for the year 2008-09.
An Extra-ordinary General Meeting was held on 24th September, 2009 during the year 2009-10 and two Special Resolutions were passed for Alteration of Articles of Association of the Company and for revision in payment of remuneration to Dr. Jairam Varadaraj, Managing Director of the Company for the year 2009-10.
No special resolutions were put through postal ballot last year and there is no proposal for this year.
DISCLOSURES:
(i) Disclosures on materially significant related party transactions that may have potential conflict with the interest of the company at large
Kindly refer to the notes forming part of accounts for the details of related party transactions. There is no materially significant Related Party Transaction that may have potential conflict with the interest of the Company at large.
(ii) Details of non-compliance by the company, penalties, strictures imposed on the company by Stock Exchanges or SEBI or any Statutory Authorities, on any matter relating to capital markets, during the last three years.
The Company has complied with all the requirements of the Listing Agreement of the Stock Exchanges as well as regulations and guidelines of SEBI, No Penalties have been levied or strictures have been passed by SEBI, Stock Exchanges or any other Statutory Authority on matters relating to capital markets, in the last three years.
(iii) Whistle Blower policy and affirmation that no personnel has been denied access to the audit committee
The company conducts regular 'employee meets' frequently where all the employees have a chance to interact directly with the Managing Director of the company. Besides this the Managing Director is reachable via e-mail and landline. Any issue brought to the attention of the management, whether resolved or not is placed before the Audit committee for its perusal and comments.
Period of reporting
thQtr ending 30 June 2010thQtr ending 30 September 2010stQtr ending 31 December 2010
stYear ending 31 March 2011
Proposed Board meeting dates
Last week of July 2010Last week of October 2010Last week of January 2011Last week of April 2011
Date of Book closure : 16.12.2010 to 17.12.2010 (both days inclusive)Dividend payment date : Not applicable
Listing of shares on Stock Exchanges : Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai - 400 001
National Stock Exchange of India Ltd Exchange Plaza, 5th Floor, Plot No. C/1, 'G' Block, Bandra-Kurla Complex, Bandra (Eqst), Mumbai - 400 051
Coimbatore Stock Exchange Limited Stock Exchange Building, Trichy Road, Coimbatore - 641 005
Note:
Annual listing fees for the year 2009-10 were paid to Bombay Stock Exchange Limited & National Stock Exchange of India Limited. Due to non-receipt of necessary intimation letter from Coimbatore Stock Exchange Limited the listing fee has not been paid so far.
GENERAL SHAREHOLDER INFORMATION
th50 Annual General Meeting
Date and Time : 06.12.2010 at 10.00 a.mVenue : ARDRA, No-9 North Huzur Road, Coimbatore 641018
FINANCIAL CALENDAR
(iv) Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of clause 49
The Company complies with all the requirements of the listing agreement including the mandatory requirements of Clause 49 of the agreement.
The Company has adopted the following non-mandatory requirements on Corporate Governance recommended under clause 49 of the listing agreement.
1. Company has a Remuneration Committee comprises of three Non-executive independent directors.2. Quarterly results are being sent to all the members.
Code of Conduct
The Board of Directors has laid down a code of conduct for all Board Members and Senior Management of the Company. The same has been posted on the website of the Company. All Board Members and Senior Management personnel have affirmed their compliance with the code of conduct of conduct for the year under review.
The Company's Managing Director's declaration to this effect forms a part of this report.
Code for prevention of Insider Trading
The Company has framed a Code of Conduct for prevention of Insider Trading based on SEBI (Insider Trading) Regulations, 1992. This code is applicable to all directors / officers / designated employees. The Code ensures the prevention of dealing in shares by persons having access to unpublished price sensitive information.
MEANS OF COMMUNICATION
The quarterly results and annual results are published in newspapers viz. Business Line (all editions), Financial Express (Western edition) and Dhinamani (Vernacular paper) and simultaneously posted on the Company's web site (www.elgi.com). In addition to this, the company has the practice of mailing quarterly results to the Company's members and the members are also kept informed about important developments in the Company. The presentations, if any, made to institutional investors or to the analysts are also posted on Company's website.
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
20
STOCK MARKET DATA
Stock Code Re.1/- Fully Paid : 522074 Bombay Stock Exchange Limited: ELGIEQUIP - National Stock Exchange of India Limited: 21003 - Coimbatore Stock Exchange Limited
Re.0.15ps Partly Paid : 890080 Bombay Stock Exchange Limited
Partly paid shares were not traded on the Stock Exchanges after 12/11/2009, since final call money was called up on partly paid shares.
APRIL -09
MAY-09
JUNE-09
JULY -09
AUGUST-09
SEPTEMBER-09
OCTOBER-09
NOVEMBER-09
DECEMBER-09
JANUARY-10
FEBRUARY-10
MARCH-10
Total
HIGH
40.55
53.30
60.80
59.90
73.00
79.80
89.85
83.10
93.50
98.30
95.35
94.40
LOW
31.95
34.00
45.10
41.60
55.10
64.00
68.00
69.50
81.10
78.55
76.55
81.55
QTY
2,04,724
9,28,450
14,98,631
3,71,904
11,60,029
19,93,638
48,71,087
16,77,881
21,64,032
14,56,506
6,93,802
13,65,232
1,83,85,916
NSEMONTH
Stock Price Data: (Re. 1/- fully paid up)
For the Period: April 2009 to March 2010
HIGH
40.50
53.15
60.75
59.80
72.80
81.00
89.90
83.10
93.75
98.50
97.70
94.30
LOW
33.15
35.15
45.70
44.05
55.10
64.50
66.20
69.20
81.00
79.00
77.00
81.20
QTY
1,94,676
6,44,279
13,72,627
3,32,602
9,74,800
17,00,201
46,13,929
11,74,072
13,03,789
10,84,680
4,53,391
10,68,538
1,49,17,584
BSE
120
110
100
90
80
70
60
50
40
30
20000.00
19000.00
18000.00
17000.00
16000.00
15000.00
14000.00
13000.00
12000.00
11000.00
10000.00
Month
Elgi High Sensex High
Sh
are
Pri
ce (
in R
s.)
BS
E S
en
sex
Elgi Share Price Vs BSE Sensex
April
2009
May 2
009
June
2009
July
2009
Augu
st 20
09
Septe
mber
2009
Octob
er 20
09
Nove
mber
2009
Dece
mber
2009
Janu
ary 2
010
Febr
uary
2010
March
2010
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
21
Categories of Shareholders as on 31/03/2010
CategoryFully paid (Re. 1 each) Partly paid (Re. 0.15 paid)
% To Total % To Total % To Total
Total
No. of Shares No. of Shares Shares
Promoters
Financial institutions/Banks
Mutual Funds
Foreign Institutional Investors
Bodies Corporate
Non Resident Indians
Market Maker
Clearing Members
Public
TOTAL
2,56,70,797
66,490
54,53,836
21,45,446
1,09,91,172
8,01,206
6,155
31,986
3,29,89,235
7,81,56,323
32.85
0.08
6.98
2.75
14.06
1.03
0.01
0.03
42.21
100.00
-
-
-
-
319
1640
-
-
15958
17917
-
-
-
-
1.78
9.15
-
-
89.07
100.00
2,56,70,797
66,490
54,53,836
21,45,446
1,09,91,491
8,02,846
6,155
31,986
3,30,05,193
7,81,74,240
32.84
0.08
6.98
2.74
14.06
1.03
0.01
0.04
42.22
100.00
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
22
Shareholding Distribution Schedule as on 31/03/2010
No. of shares
1 to 5000
5001 to 10000
10001 to 20000
20001 to 30000
30001 to 40000
40001 to 50000
50001 to 100000
100001 and above
Total
No. of holders
12,879
300
185
67
35
28
43
93
13,630
% of holders
94..49
2.20
1.36
0.49
0.26
0.20
0.31
0.68
100.00
No.of shares
68,06,616
22,47,894
27,74,756
16,28,696
12,23,449
13,22,439
30,54,097
5,90,98,376
7,81,56,323
% of total shares
18.71
2.88
3.55
2.08
1.57
1.69
3.91
75.61
100.00
Re.1/- fully paid up
PROMOTERS
MUTUAL FUNDS
BODIES CORPORATE
MARKET MAKERS
PUBLIC
FINANCIAL INSTITUTIONS / BANK
FIIs
NON-RESIDENT INDIANS
CLEARING MEMBERS
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
23
Elgi Demat Percentage
86.70%
Demat Physical
Outstanding GDRs/ADRs/Warrants or any Convertible Instruments and their likely impact on equity.There are no outstanding warrants or any convertible instruments. The Company has not issued GDR/ADR.
Registrar and Share Transfer Agents (for both physical and demat segments)
Head Office : Branch:Link Intime India Private Ltd Link Intime India Private LtdC-13,Pannalal Silk Mills Compound Coimbatore BranchL.B.S.Marg, Bhandup (west) "Surya", 35, May Flower Avenue Mumbai 400 078 (II Floor), Behind Senthil NagarTel: 022-25963838 Sowripalayam Road, Coimbatore 641028Fax: 022-25946969 Tel: 91-0422-2314792 & 2315792E-mail : [email protected] Fax: 91-0422-2314792
E-mail: [email protected]
Compliance Officer's Details
S.RaveendarCompany SecretaryElgi Equipments Ltd, Elgi Industrial Complex, Trichy Road, Singanallur, Coimbatore - 641005e-mail : [email protected] Contact Nos. of Secretarial Department 91- 422- 2589136, 2589137 Fax: 91-422-2573697
In order to facilitate investor servicing, the Company has designated an e-mail-id: [email protected] mainly for registering complaints by investors.
Share Transfer System
The company's shares being in compulsory dematerialised (demat) list are transferable through the depository system. Shares in physical form are processed by the Registrar and Share Transfer Agents, Link Intime India Private Limited and approved by the Shareholder and Investor Grievance Committee of the Company. The Share transfers are processed within a period of 21 days from the date of receipt of the transfer documents by Link Intime India Private Limited, if the documents are complete in all respects. All requests for dematerialization of shares are processed and confirmed to the depositories, NSDL and CDSL, within 15 days. The Share holder and Investor Grievance Committee generally meets as and when required to effect the shares received for transfer in physical form.
ISIN number allotted for equity shares
Fully paid(Re 1/- each) : INE 285A01027Partly paid (Re 0.15 paise) : IN 9285A01033 (Non-operative)
As on 31.03.2010, 1,81,47,823 partly paid shares were converted into fully paid shares following receipt of final call moneys.
Dematerialisation of Shares and liquidity
The Company has arrangement with National Securities Depository Ltd. (NSDL) as well as Central Depository Services (India) Limited (CDSL) for demat facility.
During the financial year 2009-10, 2,11,520 shares were dematted. As on 31st March,2010, Out of 7,81,74,240 shares, total shares in demat form is 6,77,75,947 Shares and 1,03,98,293 shares in physical form. This represents 86.70% shares of the company are in demat form and 13.30% shares are in physical form. The shares are compulsorily tradable in demat form with effect from 26.6.2000 for all investors.
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
24
Plant location: Address for Correspondence:
1. Elgi Equipments LimitedElgi Industrial ComplexTrichy Road, SinganallurCoimbatore - 641005
Declaration for code of conduct
I hereby affirm and state that all board members and senior management personnel of the company have given a declaration pursuant to clause 49(I) (D) of the Listing Agreement and I hereby affirm compliance with the said code of conduct for the financial year 2009-2010.
Place: CoimbatoreDate : 28.10.2010
Dr.Jairam VaradarajManaging Director
Report on Corporate Governance 31.03.2010Certificate
To the Members of Elgi Equipments Limited,
I have examined the compliance of conditions of Corporate Governance by M/s Elgi Equipments Limited, for the year ended on March 31, 2010 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. My 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 my opinion and to the best of my information and according to the explanations given to me, I certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
I state that no investor grievance is pending for a period exceeding one month against the Company as per the records maintained by the Investors' Relation Committee.
I 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.
M D SelvarajCoimbatore 28.10.2010 C.P.No.: 411 ( FCS.960)
Practicing Company Secretary
S.Raveendar Company SecretaryElgi Equipments LtdElgi Industrial ComplexTrichy Road, SinganallurCoimbatore - 641005e-mail : [email protected] Nos. of secretarial department91- 422- 2589136, 2589137
Ten Years Performance
Particulars
Sales (incl. Excise duty)
Total Income
Total Expenditure
PBDIT
Depreciation
Profit Before Tax
Income Tax(inc FBT from 2005-06)
Profit After Tax
Dividend (%)
Capital Employed (LT)
Net Worth
Total Loan Funds
Gross Fixed Assets
Net Block incl. Capital WIP
Investments
Current Assets
Current Liabilities
Net Working Capital
Total Tangible Assets
2009-10
6,747.84
6,829.34
5,791.77
1,037.57
97.13
940.44
361.21
579.23
200.00
2,645.21
2,645.21
-
1,726.68
710.69
142.99
4,324.25
2,550.84
1,773.41
2,645.21
2008-09
5,509.56
5,577.33
4,840.51
736.81
82.74
654.07
246.65
407.42
130.00
1,967.28
1,967.28
-
1,580.94
666.44
142.99
2,525.89
1,371.94
1,153.95
1,967.34
2007-08
5,040.30
5,108.01
4,448.34
659.67
70.31
589.36
170.65
418.71
120.00
1,670.92
1,670.92
-
1,383.22
516.43
142.98
2,745.51
1,758.58
986.93
1,671.00
2006-07
3,785.77
3,823.32
3,408.98
414.34
69.20
345.14
111.02
234.12
100.00
1,343.54
1,341.83
1.82
1,288.70
400.36
143.68
2,068.06
1,274.28
793.78
1,343.65
2005-06
3,120.70
3,185.00
2,823.09
361.91
93.19
268.72
92.38
176.34
100.00
1,248.37
1,202.06
46.31
1,178.22
355.33
160.04
1,662.93
931.56
731.37
1,246.74
2004-05
2,852.64
2,918.31
2,513.34
404.97
96.08
308.89
94.99
213.90
100.00
1,187.34
1,098.49
88.85
1,118.14
394.38
222.07
1,421.27
828.02
593.25
1,209.99
2003-04
2,905.07
2,965.57
2,944.64
379.31
88.57
290.73
100.27
190.46
120.00
989.90
944.41
45.51
1,053.28
409.92
148.71
1,217.69
760.84
456.85
1,015.17
2002-03
2,213.90
2,249.56
2,073.86
256.49
72.85
175.70
61.80
113.90
90.00
751.76
690.74
4.32
972.81
391.29
37.03
1,106.77
725.49
381.28
809.57
2001-02
1,942.69
1,988.66
1,734.92
253.73
68.69
167.08
56.10
110.98
5.00
783.04
773.80
105.09
930.72
390.13
40.70
970.60
508.98
461.62
892.45
2000-01
1,639.35
1,676.89
1,513.20
170.18
66.79
63.44
20.90
42.54
25.00
898.21
740.19
399.87
904.40
416.81
132.56
1,121.59
530.90
590.69
1,140.06
(Rs. In Million)
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
25
Analysis of Performance
RATIO CATEGORY / Ratio
OPERATIONAL PERFORMANCEMaterial Consumption ratio (%)Personnel expenses ratio (%)Regular expenses (Incl VRS)VRS paymentsProfit sharing expensesOther Expenses ratio (%)Interest component ratio (%)Depreciation component ratio (%)Tax component ratio (%)Other Income / Total Income (%)Sales (net) per employee (Rs in million)
FINANCIAL STRUCTURINGLong Term Debt Equity RatioNet Working Capital / Total AssetsInvestments / Total AssetsInventory / Net Working CapitalDebtors / Net Working Capital
LIQUIDITYCurrent RatioLiquidity Ratio
EFFICIENCYCurrent Assets Turnover Ratio (CATR)Average Current Assets - no. of daysAverage Inventory - No. of days RM & Components WIP Finished GoodsDebtors' turnover ratio (DTR)Debtors - no of days of net salesTrade Creditors’ Turnover Ratio (TCTR)Trade Creditors - no of daysCapital Turnover RatioNet Fixed Assets Turnover Ratio (NFATR)Gross Fixed Assets Net Turnover ratio (GFATR)
PROFITABILITYGross Profit Margin (%)PBIT Margin (%)Pre-tax Profit Margin (%)Net Profit Margin (%)Post Tax Margin from Operations (%)ROTA (%)ROCE (%)
SHAREHOLDER' EARNINGSRONWEarnings Per Share (current equity)Dividend Per Share (Rs)Dividend Payout Ratio (%)Price Earnings Ratio (current equity)Dividend YieldDividend to Net Worth Ratio (%)Book Value per share (Rs)
2009-10
60.560.007.800.001.72
14.400.011.445.030.524.50
0.000.680.050.450.50
1.721.39
1.98185
435
107.84
474.20
872.94
10.044.08
15.9214.2214.23
8.077.77
48.4844.44
25.367.341.83
24.999.202.725.57
32.94
2008-09
62.350.008.150.001.45
15.770.031.504.100.993.92
0.000.590.070.610.71
1.841.33
2.09175
436
146.28
584.33
853.039.473.72
13.1910.8510.87
6.776.22
40.4235.87
22.405.211.30
20.017.962.524.14
25.17
2007-08
63.8
7.160.001.52
15.630.081.393.041.034.44
0.000.590.090.720.95
1.561.16
2.09175
396
156.32
584.00
913.34
11.243.80
12.8110.4110.48
7.456.79
43.4538.79
27.765.361.20
21.0411.151.894.51
21.35
2006-07
63.06
8.040.121.42
17.360.101.832.650.763.45
0.000.590.120.700.82
1.621.18
2.03180
446
135.77
634.07
902.9710.23.09
10.938.368.235.595.11
32.2727.41
18.342.991.00
31.0020.74
1.494.66
17.23
2005-06
61.48
8.331.650.61
17.110.132.992.411.712.92
0.000.590.130.560.90
1.791.34
2.02181
497
135.41
683.641012.718.542.72
10.458.768.615.655.4828.6
29.53
18.592.811.00
33.1422.24
1.605.80
19.16
2004-05
62.06
6.610.141.37
17.750.083.372.981.852.64
0.000.490.180.770.83
1.721.17
2.16169
548
186.77
543.90
942.737.342.63
11.899.479.686.706.0735.8
28.95
20.943.411.00
33.1413.92
2.115.68
17.51
2003-04
58.73
6.293.611.68
18.560.043.053.021.533.56
0.050.450.151.030.76
1.600.98
3.42107
497
1510.09
364.62
794.419.083.92
10.978.458.755.735.41
55.1542.60
20.463.081.20
43.9415.34
2.547.65
15.28
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
26
2002-03
59.93
7.71.341.41
19.410.793.292.431.401.88
0.000.430.051.000.92
1.421.00
2.13172
477
147.47
493.17116
2.975.962.33
9.977.236.924.49
4.132.2824.66
15.391.870.90
50.8012.87
4.798.01
12.34
Auditors' Report
For RJC AssociatesRegn. No. : 003496S
Chartered Accountants
R.JayachandranPlace : Coimbatore Partner Date : 28.10.2010 Membership No. 021848
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
27
1. We have audited the attached Balance Sheet of Elgi Equipments Limited, as at 31st March 2010, the Profit and Loss account and also the Cash Flow Statement of the Company for the year ended on that date annexed thereto. The financial statements are prepared consequent to the amalgamation of Elgi Industrial Products Limited with this company effective from 1st April 2009 duly approved by the Honarable High Court of Madras vide its order dated 24th September 2010. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 and Companies (Auditor's Report) (Amendment) Order, 2004 (together the Order) issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure,a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report that:
i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;
REPORT TO THE MEMBERS OF ELGI EQUIPMENTS LIMITED
ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;
iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;
v) On the basis of the written representations received from the Directors, as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;
vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) In the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March 2010;
b) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and
c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.
Annexure to the Auditors' Report :
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
28
Referred to in paragraph 3 of our report of even date,
i. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) All the assets have been physically verified by the Management during the year. No material discrepancies were noticed on such verification.
(c) No substantial part of fixed assets were disposed off during the year, hence it will not have any effect on the going concern assumption.
ii. (a) The inventory has been physically verified by the Management during this year. In our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.
iii. (a) The Company has granted loan to Companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the Year was Rs. 124.04 millions and the year end balance of loans granted by the company was Rs.114.04 million.
(b) In our opinion, the rate of interest and other terms and conditions on which loans have been granted to the Company listed in the register maintained under section 301 of the Companies Act,1956, are not, prima facie, prejudicial to the interest of the Company.
(c) The Company is regular in the receipt of principal and interest.
(d) There is no overdue amount of loans granted to Companies, listed in the register maintained under section 301 of the Companies Act, 1956.
(e) The Company has not taken any loans, secured or unsecured from Companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. Amalgamation of EPIL with the company ICD of 0.95 Million is out standing as long term unsecured loans.
iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in Internal Control System.
v. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act,1956 have been so entered.
(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements exceeding Rs 5 lakhs each have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.
vi. In our opinion, the Company has an Internal Audit System commensurate with the size and nature of its business.
vii. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.
viii. (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty and Cess were in arrears, as at 31st March 2010 for the year of more than six months from the date they became payable.
(c) Disputed Central Excise and Sales Tax aggregating Rs.10.56 million have not been deposited since matters are pending with relevant forum as indicated below:-
Name of the Statute
Sales Tax
Sales Tax
Central Excise
Nature of the dues
CST & LST &Penalty
CST & LST
Total
Excise Duty & Penalty
Excise Duty & Penalty
Total
Grand Total
Demand Amount
8.49
17.58
26.07
7.59
3.16
10.75
36.82
Forum where dispute is pending
Sales Tax Appellate DC
Sales Tax Appellate DC
Dy. Commnr.Appeals
Tribunal
ix The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.
x. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.
xi. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other Investments.
xii. The Company is not a chit fund, nidhi, mutual benefit fund or a society. Therefore the para 4(xiii) of the order are not applicable.
xiii. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and
other investments. Accordingly, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 and Companies (Auditor's Report) (Amendment) Order, 2004 (together the Order) are not applicable to the Company.
xiv. In our opinion, the terms and conditions, on which the Company has given guarantee for the loan taken by other Company from Bank, is not prejudicial to the interest of the Company.
xv. The Company has not obtained any long term loan during the year under audit. However on amalgamation of EIPL with the company ICD of Rs. 0.95 Million is outstanding as long term unsecured loans.
xvi. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.
xvii.The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under Section 301 of the Act.
xviii.The Company has not issued any debentures.
xix. During the year the Company has raised money of Rs 231.52 million by calling up the balance amount on partly paid up share of Rs12.75 per share comprising of 85 paise towards face value and Rs. 11.90/- towards share premium.
xx. To the best of our knowledge and belief and according to the information and explanation given to us, no material fraud on or by the Company was noticed or reported during the year.
For RJC AssociatesRegn. No. : 003496S
Chartered Accountants
R.JayachandranPlace : Coimbatore Partner Date : 28.10.2010 Membership No.021848
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
29
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
30
Balance sheet as at 31st March 2010
Sch.No. 31.03.10 31.03.09 PARTICULARS
I SOURCES OF FUNDS
1) Shareholders' Funds: a) Capital b) Reserves and Surplus
2) Loan Funds: a) Secured Loans b) Unsecured Loans
3) Deferred Tax Liability
Total
II APPLICATION OF FUNDS
1) Fixed Assets: a) Gross Block b) Less: Depreciation c) Net Block d) Capital Work in progress
2) Investments
3) Deferred Tax Assets
4) Current Assets, Loans & Advances a) Inventories b) Sundry Debtors c) Cash and Bank balances d) Other Current Assets e) Loans and Advances
Less: Current Liabilities and Provisions a) Liabilities b) Provisions
Net Current Assets
5) Miscellaneous Expenditure: (to the extent not written off or adjusted) Intangible Assets
Total
12
34
5
6
7
5
8
9
10
(A)
(B)
(A-B)
(Rs. In Million)
2582.01
0.95 21.77
2604.73
644.27 21.82
467.61
0.00
1456.39
14.64
2604.73
62.73 1905.43
0.00 0.00
1529.28 911.23
590.99 699.46 155.53
3.24 733.99
2183.21
538.73 708.80
1247.53
78.92 2503.09
0.00 0.95
1640.47 996.20
592.42 711.59
1021.40 11.74
1286.73 3623.88
1127.51 1039.98 2167.49
1968.16
0.00 0.00
1968.16
618.05 10.14
385.72
4.83
935.68
13.74
1968.16
The Schedules referred to above Accounting Policies and the Notes thereon form an integral part of the Balance Sheet.
For and on behalf of the Board "As per our report of even date"
S. RAVEENDARCompany Secretary
Dr.JAIRAM VARADARAJ Managing Director
S.SRIRAMChief Financial Officer
R. JAYACHANDRAN Partner
Membership No. 021848
For RJC ASSOCIATES Regn. No. : 003496S
N. MOHAN NAMBIARDirector
Chartered Accountants
Place Date
: Coimbatore : 28.10.2010
Profit and Loss Account For The Year ended 31st March 2010(Rs. In Million)
Sch.No. 31.03.10 31.03.09 PARTICULARS
1112
131415
(A)
(B)
(A-B)
(C)
(A-B-C)
6140.43 328.88
5811.55
30.26 40.29
5882.10
3514.16 500.31 826.00
91.96 7.40
4939.83
942.27
60.07
882.20
303.81 0.00
26.60
551.79
1085.55 (0.01)
(290.08)
1347.25
144.75
24.60 56.00
1121.90
1347.25
( In Rs.) 1.006.99 6.99
5178.84 366.98
4811.86
58.54 11.43
4881.83
2974.09 435.16 753.58
79.52 6.84
4249.19
632.64
0.00
632.64
210.00 5.05
20.15
397.44
826.25 (2.74)
0.00
1220.95
81.54 13.86 40.00
1085.55
1220.95
( In Rs.)1.006.34 5.08
INCOMEGross Sales Less : Excise Duty
Net Sales
Other IncomeInterest (Expenditure) / Income
Total Income
EXPENDITURE
Materials Consumed Salaries, Wages, Bonus, Gratuity, etcOther ExpensesDepreciationAmortisation of Intangible Assets
Total Expenditure
PROFIT BEFORE TAX & EXTRA-ORDINARY ITEMS
EXPENDITUREVRS - Compensation
PROFIT BEFORE TAX & AFTEREXTRA-ORDINARY ITEMS
Provision for Income TaxProvision for Fringe Benefit TaxDeferred Tax Liability
PROFIT AFTER TAX
Profit Brought ForwardPrior Year AdjustmentsTransfer on Amalgamation (refer Notes on Accounts : B.(1))
PROFIT AVAILABLE FOR APPROPRIATION
APPROPRIATIONSDividendDividend Tax Transfer to General ReserveProfit Carried to Balance Sheet
TOTAL
Earnings per shareNominal value of shareBasicDiluted
The Schedules referred to above Accounting Policies and the Notes thereon form an integral part of the Profit and Loss Account.
For and on behalf of the Board "As per our report of even date"
S. RAVEENDARCompany Secretary
Dr.JAIRAM VARADARAJ Managing Director
S.SRIRAMChief Financial Officer
R. JAYACHANDRAN Partner
Membership No.021848
For RJC ASSOCIATES Regn. No. : 003496S
N. MOHAN NAMBIARDirector
Chartered Accountants
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
31
Place Date
: Coimbatore : 28.10.2010
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
32
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.10 PARTICULARS
(Rs. In Million)
1 SHARE CAPITAL
AUTHORISED CAPITAL21,50,00,000 Equity Shares of Re.1/- each
55,00,000 12% Cumulative Redeemable Preference Shares of Re.10/- each30,00,000 5% Redeemable Preference Shares of Re.10/- each
ISSUED, SUBSCRIBED AND PAID UP CAPITALFULLY PAID UP7,81,59,043 Equity Shares of Re.1/- each issued and subscribed(Out of the above 4,87,50,000 Shares were issued asBonus Shares by Capitalization of Reserves)
Share Capital Suspense Account [Refer Notes on Accounts : B.(1)]7,62,600 Equity Shares of Re.1/- each to be issued
PARTLY PAID UP15197 Shares @ Rs.0.15 per Share
2 RESERVES AND SURPLUS
CAPITAL RESERVEShare of reserve on account of revaluation of assetsof a firm in which the Company is a partnerAdd: Reserve on Amalgamation [Refer Notes on Accounts : B.(1)] CAPITAL REDEMPTION RESERVESTransfer on Amalgamation [Refer Notes on Accounts : B.(1)] SHARE PREMIUM ACCOUNTAs per the last Balance SheetAdd: Call money amount received during the year Transfer on Amalgamation [Refer Notes on Accounts : B.(1)] STATUTORY RESERVE: (AS PER RBI NORMS)Transfer on Amalgamation [Refer Notes on Accounts : B.(1)]
GENERAL RESERVEAs per the last Balance SheetAdd: Transfer from Profit and Loss Account Transfer on Amalgamation [Refer Notes on Accounts : B.(1)] SURPLUSBalance as per Last Balance Sheet Add :Profit during the year Less:Appropriations during the year
31.03.09
100.00
0.00 0.00
100.00
60.00
0.00
2.7362.73
29.65
0.00
173.29
0.00
616.94
1085.55 1905.43
215.00
55.00 30.00
300.00
78.16
0.76
0.00 78.92
181.41
0.00
440.79
5.49
753.50
1121.90 2503.09
29.65 151.76
173.29 216.09
51.41
616.94 56.00 80.56
1085.55 261.70 225.35
29.65 0.00
173.29 0.00 0.00
576.94 40.00
0.00
826.25 394.70 135.40
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.10 31.03.09 PARTICULARS
(Rs. In Million)
3. SECURED LOANS
4. UNSECURED LOANS Inter Corporate Deposit
5. DEFERRED TAX LIABILITY / (ASSETS)
As per the last Balance SheetAdd / Less - for the Year
0.95
0.95
(4.83)26.6021.77
-
-
(24.98)20.15(4.83)
6. FIXED ASSETS
GROSS BLOCK DEPRECIATION
Description of Assets
Asat
01/04/09
During the year
Additions Deductions
Asat
31/03/10
Asat
01/04/09
Land
Buildings
Plant&Machinery
Furniture&OfficeEquipments
Motor Vehicle
Canteen Equipments
Grand Total
Previous Year
23.29
198.06
1,198.72
101.27
5.72
2.21
1,529.28
1,345.66
47.64
1.12
63.03
9.25
0.03
0.00
121.07*
226.15
0.00
0.00
1.89
7.94
0.05
0.00
9.88
42.53
70.93
199.19
1,259.87
102.58
5.70
2.21
1,640.47
1,529.28
0.00
110.64
724.29
71.58
3.30
1.41
911.22
863.52
0.00
7.93
77.25
8.82
0.43
0.15
94.57
79.52
0.00
0.00
1.84
7.71
0.04
0.00
9.59
31.81
0.00
118.57
799.70
72.69
3.69
1.55
996.20
911.23
70.93
80.61
460.17
29.90
2.01
0.66
644.27
618.05
23.29
87.43
474.43
29.69
2.41
0.80
618.05
482.14
During the year
Additions Deductions
Asat
31/03/10
Asat
31/03/10
Asat
31/03/09
NET BLOCK
- -
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
33
Note : Addition include asset taken over on amalgamation Refer notes on accounts : B(1)
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
34
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
PARTICULARS
(Rs. In Million)
7. INVESTMENTS (AT COST)
LONG TERM
NON-TRADE QUOTED EQUITY SHARES (FULLY PAID)
Lakshmi Machine Works Ltd
State Bank of India
HDFC Bank Limited
HDFC Limited
Magna Electro Castings Ltd
Rajshree Sugars & Chemicals Ltd
Pricol Ltd
L.G.Balakrishnan & Bros.Ltd.
LGB Forge Limited
Treadsdirect Limited
Elgi Rubber Company Ltd
Total[A]
NON-TRADE UNQUOTED EQUITY SHARES (FULLY PAID)
Coimbatore Pvt.Industrial Estates Ltd.
The Mill Officers Co-Op Housing Colony
Ltd.,Ahmedabad
Elgi Securities Ltd
Total[B]
INVESTMENT IN SUBSIDIARY COMPANIES
-ATS Elgi Limited(Fully Paid)
-ELGI GULF-(FZE)
-Elgi Equipments (Zhejiang) Limited-(China) (Share 100%)
-Elgi Compressors Trading (Shanghai) Co.,Ltd.-(China) (Share 100%)
-SA Belair -(France) (Share 100%)
-Adisons Precision Instruments Mfg.Co. Ltd.
-Equity Shares (Fully Paid)
-Equity Shares (Partly Paid-Rs.2Paid)
Total[C]
INVESTMENT IN JOINT VENTURE
Elgi Sauer Compressors Ltd[Share 26%]
Total[D]
INVESTMENT IN PARTNERSHIP FIRMS
L.G.Balakrishnan & Bros (Share 98%)
Elgi Services (Share 80%)
Total[E]
Grand Total -[A+B+C+D+E]
50
360
500
2400
80000
229000
94245
1248
12480
2182000
1091000
0
5
99300
90000
1
42550
49000
169000
10.00
10.00
10.00
10.00
10.00
10.00
1.00
10.00
1.00
1.00
1.00
1000.00
50.00
10.00
10.00
10.00
10.00
0.01
0.12
0.01
0.03
1.25
7.55
0.54
0.02
0.01
5.30
2.65
17.49
0.00
0.00
0.99
0.99
180.90
1.78
55.66
22.75
44.98
16.87
0.10
323.04
1.69
1.69
124.00
0.40
124.40
467.61
50
300
500
2400
80000
229000
94245
12480
12480
2182000
1091000
77
5
99300
90000
1
42550
49000
0.01
0.12
0.01
0.03
1.25
7.55
0.54
0.02
0.01
5.30
2.65
17.49
0.00
0.00
0.99
0.99
180.90
1.78
41.50
0.00
0.00
16.87
0.10
241.15
1.69
1.69
124.00
0.40
124.40
385.72
No. ofShare / Units
Face Valueper Share / Unit 31.03.10
No. ofShare / Units
31.03.09
[Total Cost of Quoted Securities Rs.17.49 million (Previous year Rs.17.49 million) andTotal Market value of quoted Securities Rs.51.53 million (Previous year Rs.34.66 million)]
ELGI EQUIPMENTS LIMITED
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.10 31.03.09 PARTICULARS
(Rs. In Million)
8. CURRENT ASSETS, LOANS AND ADVANCES
a) INVENTORIES
Raw Materials and Components
Work-in-progress
Finished Products
Consumables Spares and Stores
Loose tools
b) SUNDRY DEBTORS
(Unsecured and considered good)
Debts outstanding for a period exceeding 6 months
Other Debts
c) CASH AND BANK BALANCES
Cash on Hand
With Scheduled Banks
-in Current Accounts
-in Deposit Accounts
(Includes Rs.11.59 million (Previous year
Rs.11.49 million) with bank as margin money
d) OTHER CURRENT ASSETS
Interest accrued
e) LOANS AND ADVANCES
(Unsecured and considered good)
Advances and Loans to Subsidiaries
-Corporate Loan
-Rent advance
Advances recoverable in cash or
in kind or for value to be received.
Loans to Companies
Others
Prepaid Expenses
Advance Payment of Income Tax
Security and Other Deposits
Income/Refund receivable
356.21
80.93
131.56
4.36
19.36
592.42
69.41
642.18
711.59
0.14
89.67
931.59
1021.40
11.74
11.74
0.00
2.50
114.04
299.16
6.99
796.97
24.31
42.76
1286.73
392.80
85.57
93.94
3.14
15.54
590.99
96.22
603.24
699.46
0.11
73.93
81.49
155.53
3.24
3.24
25.00
2.50
0.65
132.11
6.42
523.74
30.78
12.79
733.99
ANNUAL REPORT 2007-08
35
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.10 31.03.09 PARTICULARS
83.11
69.05 284.22
9.29 90.35
2.71 538.73
488.96 17.76 81.54 13.86
106.68
708.80
15.68 4.90 6.84
13.74
1.31 1.08
12.94 4.72
0.70 9.88
27.91
58.54
12.93
12.93
1.50 11.43
305.54 77.76
184.27 567.57
2978.83
(Rs. In Million)
9. CURRENT LIABILITIES AND PROVISIONS
a) CURRENT LIABILITIES
Acceptances Sundry Creditors
Micro, Small and Medium Enterprises Others
Due to Subsidiary Companies Advance and Deposits from Customers and Others
Unclaimed Dividends
b) PROVISIONS
Income Tax Fringe Benefit Tax Proposed Interim Dividend Provision for Dividend Tax Provision for Employee Benefits
10. MISCELLANEOUS EXPENDITURE
Intangible Assets Opening Balance Add: Addition during the year Less: Amortised during the year
11. OTHER INCOME
Profit on Sale of Assets Profit on Sale of Investments Royalty Receipts Rent Receipts (TDS Rs.1.04 million) (Previous Year Rs.1.39 million) Dividend Receipts Others Gain on Exchange Fluctuation
12. INTEREST (EXPENDITURE)/INCOME
Interest Receipts (TDS-Rs. 1.77 million)(Previous Year Rs.1.89 million)
Less:Interest ExpenditureOthers
13. MATERIALS CONSUMED
Opening Stock -Raw Materials -Semi-Finished Products -Finished Products
(A) Opening Stock Purchases (B)
167.82
104.69 551.45
4.62 295.95
2.98 1127.51
792.82 11.66 97.70 16.60
121.20
1039.98
13.74 8.30 7.40
14.64
0.72 0.00
13.88 4.28
0.93 10.45
0.00
30.26
40.29
40.29
0.00 40.29
392.80 85.57 93.94
572.31 3510.55
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
36
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.10 PARTICULARS
356.21 80.93
131.56 568.70
3514.16
323.83 3.11
70.50 22.10
7.17 25.29
4.66 43.65
500.31
33.10 47.55 13.20 42.72
30.31 52.64 12.54 11.21 4.31 6.69 9.37
69.47 2.02 4.38
21.81 22.84
0.79 0.14
26.49 65.75 32.65
0.82 10.84 69.16 84.64 96.98
2.94 0.11 0.06 5.65
13.69 0.12
21.17 9.84
826.00
(Rs. In Million)
Closing Stock -Raw Materials -Semi-Finished Products -Finished Products
Closing Stock (C)Materials Consumed (A+B-C)(Material consumed includes Machining Charges ofRs.50.69 million) (Previous Year Rs.42.87 million)
14. SALARIES, WAGES, BONUS, GRATUITY ETC., Salaries and Wages Bonus Performance Pay Profit Share Gratuity Contribution to PF and other Funds Managing Director's Remuneration (Excluding Performance Pay) Welfare Expenses
15. OTHER EXPENSES
Consumption of Stores spares Power,Fuel & Lighting Factory Expenses Tools Consumed Repairs and Maintenance of -Building -Machinery -Other Assets Rent Rates & Taxes Printing & Stationery Postage, Telegrams & Telephones Travelling & Conveyance Subscription, Periodicals & Filing Fees Insurance Donation Legal and Professional Charges Auditors' Remuneration -Audit Fees -Other Services Miscellaneous Expenses After Sales Expense Research & Development Expenses Directors' Sitting Fees Advertisement & Publicity Transport Charges Packing Material Commission & Discount Royalty Payment Service Tax Payments Loss on Sale of Assets Bad Debts Written off Loss on Exchange Fluctuation Assets Condemned & Written-Off Excise duty Payments Bank Charges
31.03.09
392.80 85.57 93.94
572.31 2974.09
286.83 3.25
48.40 28.20
6.48 19.07
4.40 38.53
435.16
26.46 43.74 12.33 41.74
15.43 35.56 12.89
6.11 4.70 7.18 9.91
68.11 1.04 5.52
25.34 18.27
0.41 0.12
35.61 48.11 30.66
0.78 18.61 69.65 76.54 78.63
2.58 0.33 0.13
26.88 0.00 0.00
17.29 12.92
753.58
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
37
Accounting Policies and Notes on Accounts
A. ACCOUNTING POLICIES
1) Basis for preparation of financial statements
The Company follows accrual method of Accounting. The financial statements have been prepared under the Historical cost convention on the basis of a going concern and in accordance with the accounting standards referred to in the Section 211(3C) of the Companies Act 1956, wherever applicable.
2) Inventories
Inventories have been valued at lower of cost and net realisable value. The cost of inventories has been assigned using the weighted average cost formula.
a) Purchased items - at FIFO - Net of CENVAT and VAT
b) Work-in-Progress - Purchase cost net of CENVAT and VAT plus proportionate overheads
c) Manufactured - at cost excluding items at Factory selling overheads
and VAT d) Trading Items - at cost and net of VAT e) Inventory items - at cost including
at Branches / applicable taxes Foregin Branches and duties.
3) Depreciation
i. Depreciation is charged at the rates specified in Schedule XIV of the Companies Act, 1956 as detailed below:
1. Plant & Machinery - Straight line methodand Vehicles
2. Assets costing less than Rs.5000 year of purchase.
3. All other assets - Written down value method
ii. Where the historical cost of an existing depreciable asset has undergone a change, the change in the cost is amortized over the residual life of the asset.
- Written off in the
4) Research and Development
Revenue expenditure is charged off in the period in which it is incurred. Capital expenditure is capitalised to the extent they have alternative economic use.
5) Revenue recognition
Sales : Sales, which includes excise duty, but excludes VAT, is recognised at the time of shipment of goods from plant or from stock points.
Service income : Service income is recognised on completion of service.
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
38
Royalty : Royalty is recognised on accrual basis in accordance with the terms of the relevant agreement.
Rent : Rental income is recognised on accrual basis in accordance with te rms o f respec t i ve ren t agreements.
Interest : Interest is recognised on accrual basis taking into account the amount outstanding and the rate applicable.
Dividend : Dividend is recognised and accounted when the right to dividend is established.
6) Fixed Assetsa) Fixed assets are recorded at historical cost of
acquisition, which includes all taxes, duties and other direct expenses incurred up to the stage of commissioning of the asset, net of CENVAT and VAT, wherever applicable.
b) Capital work-in-progress:Capital work in progress consisting of assets under cons t ruc t ion , e rec t ion and commissioning are valued at cost incurred up to the date of Balance Sheet.
c) An asset is considered as impaired in accordance with Accounting Standard 28 on "Impairment of Asset", when at Balance Sheet date there are indications of impairment and the carrying amount of the Asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount ( i.e. the higher of the asset's net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Profit and Loss Account.
7) Foreign Currency Transactions
Transactions in foreign currency are recorded at exchange rate prevailing on the date of the transaction. For transactions settled within the year, exchange variance is charged to Profit and Loss account. Outstanding liabilities and assets are restated at exchange rate prevailing at the end of the year. The resultant exchange variances are recognized in the profit and loss account prepared for the year on a net off basis.
8) Investments
Long term investments are valued at cost and short term investments are valued at cost or fair value whichever is lower.
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
39
9) Retirement Benefits
a. Provident Fund : Provident Fund contribution is as per the rates prescribed by the Employees Provident Fund Act 1952 and the same is charged to revenue account.
b. Superannuation: Company has an arrangement with Life Insurance Corporation of India for providing Superannuation benefits to employees eligible as per Company's Rules.Company's contribution to the Superannuation Fund is calculated as per agreed terms and provided in the accounts.
c. Leave Salary : Liability for leave encashment has been provided as per actuarial valuation.
d. Gratuity :The Company operates a defined benefit plan for the payment of post employment benefits for its employees in the form of Gratuity fund scheme managed by Life Insurance Corporation of India. The expenses is recognized based on the present value of obligation is determined in accordance with AS-15 (R) on "Employee Benefits".
e. Other short term employee benefits: All the other short term employee benefits such
as profit sharing, performance pay etc are measured and provided on actual basis.
10) Borrowing Cost
Borrowing cost includes:
a) Interest and Commitment charges on bank borrowings and other short term and long term borrowings.
b) Amortization of ancillary costs incurred in connection with the arrangement of borrowings.
c) Finance charges in respect of assets acquired under finance leases or under other similar arrangements.
d) Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.
11) Deferred Tax
Deferred Tax liability/assets are accounted for in respect of all timing differences, as per (AS) 22.
1) Amalgamation of Elgi Industrial Products Ltd. with the company
a) In accordance with the scheme of amalgamation approved by the Honorable High Court of Madras vide its order dated 24th Sep 2010 the entire undertaking of Elgi Industrial Products Ltd. (EIPL) with all its assets liabilities and reserves stand transferred to and vested in the company as a going concern with effect from 01/04/2009. The Amalgamation has been accounted under the "Pooling of Interest Method" as per accounting standards 14 - Accounting for Amalgamation issued by Institute of Chartered Accountants of India
b) Consequent to the above 7,62,600 Equity shares are proposed to be issued to the shareholders of EIPL as per the Scheme of Amalgamation.
c) In view of this amalgamation of the company by the High Court Order, the figures for the current year are not comparable with that of the previous year
2) Estimated amount of contracts remaining to be executed on capital account is Rs.1.16 million (previous year Rs.8.80 million).
3) Contingent Liabilities not provided for
31.03.2010(Rs. In Million)
31.03.2009(Rs. In Million)
Particulars
a) Guarantees and Letter of Credit
b) Uncalled liability in respect of Partly paid shares
86.14
0.39
108.34
0.39
B. NOTES ON ACCOUNTS
5) Details of Investment in Partnership Firms : (Rs. In Million)
Name of the Firm
L.G.Balakrishnan & Bros.
Elgi Services
Name of the Partner
Elgi Equipments Ltd
Elgi Ultra Industries Ltd
Elgi Equipments Ltd
Elgi Ultra Industries Ltd
Capital
Invested
124.00
2.50
0.40
0.10
Share %
98.00
02.00
80.00
20.00
Capital
Invested
124.00
2.50
0.40
0.10
Share %
98.00
02.00
80.00
20.00
31.03.2010 31.03.2009
Name of
the Statute
Sales Tax
Central Excise
Nature of
the dues
LST& Penalty
CST & Penalty
Excise Duty & Penalty
Excise Duty & Penalty
Demand
Amount
8.49
17.58
7.59
3.16
Amount
Paid/Adj.
8.51
17.58
0.00
0.17
Forum where
Dispute is Pending
Sales Tax Appellate
Tribunal (AB),Cbe.
Dy.Commnr.Appeals
Tribunal
The Company has filed appeals with the appropriate authorities of Central Excise and Sales Tax Departments against their claims.
4) Claims against the Company not acknowledged as debts: (Rs.In Million)
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
40
6) As per the profit share scheme effective from 01.04.05 which is available to employees below the level of officers, a sum of Rs 22.10 million has been provided under head of Salaries, wages, bonus and gratuity (previous year Rs 28.20 million )
7) Rent includes Rs.0.12 million paid to Subsidiary Company, M/s. Adisons Precision Instruments Manufacturing Company Limited. (Previous year Rs.0.12 million)
8) The Company has been exempted by the Ministry of Corporate Affairs under section 211 (4) vide letter No. 46/40/2010-CL-III Dt. 12/3/2010 from furnishing information under para 3(i) (a) and 3 (ii) (a) (1) & (2) of part II of Schedule VI to the Companies Act ,1956 for the year ended 31/03/10.
9) a) The Company has been exempted by the Ministry of Corporate affairs vide letter No, 47/79/2010-CL-III Dt. 24/02/2010 from publishing annual accounts of its following Subsidiary Companies as required under Section 212(8) of the Companies Act,1956.
1. Adisons Precision Instruments Mfg.Co.Limited, Coimbatore, India
2. Elgi Equipments Zhejiang Limited, China
3. Elgi Gulf (FZE), Sharjah, UAE.
4. Elgi Compressors Trading (Shanghai ) Co. Ltd. (China)
b) The Company has been exempted by the Ministry of Corporate affairs vide letter No, 47/79/2010-CL-III Dt. 07/05/2010 from publishing annual accounts of its following Subsidiary Company as required under Section 212(8) of the Companies Act,1956.
1. SA Belair - France
However the Company undertakes that the annual accounts of the Subsidiary Companies and the related detailed information will be made available to the Holding and Subsidiary Companies investors seeking such information at any point of time. The annual accounts of the Subsidiary Companies are kept open for inspection by any investor at the registered office of the Holding and Subsidiary Companies.
10) Balances in the accounts of Sundry Debtors, Sundry Creditors, Security and Other Deposits have been reconciled wherever letters of confirmation have been received and necessary effect has been given in the accounts.
a) The Principal amount due to Supplier under the act b) Interest accrued and due to Suppliers on the above amount (other than Section 16)
c) Interest paid to suppliers under the act,(Section16) d) Interest due & payable for delay (for payments during the year beyond due date.)
e) Payment made to suppliers (other than interest) beyond the appointed day, during the year
g) Interest accrued and remaining unpaid at the end of year to suppliers under the Act
f) Interest due and payable to suppliers under the Act for payments already made.
S 22 (i)
S 22 (i)
S 22 (ii)
S 22 (iii)
S 22 (iii)
S 22(iv)
S 22(v)
49.76
Nil
Nil
Nil
Nil
Nil
Nil
28.29
Nil
Nil
Nil
Nil
Nil
Nil
Section 31.03.2010
(Rs.In Million)31.03.2009
(Rs.In Million)
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
41
11) Micro, Small & Medium Enterprise under the Micro, Small & Medium Enterprise Development Act2006 have been determined based on the information available with the Company and the required disclosures are given below:
Note:
This information has been given in respect of vendors to the extent they could be indentified as "Micro and Small enterprises "on the basis of information available with the Company. 12) Details of security given for borrowing:
Borrowing
Open Loan, Demand Loan and
Packing Credit from Banks.
Details of Security
First Charge over specific fixed assets of the company along with Land and Building at Singanallur, Coimbatore and over the entire Current Assets of the Company
13) Details of Directors' Remuneration:
a) Computation of Net Profit in accordance with Section 349 of the Companies Act 1956.
Net Profit as per Profit & Loss Account ADD: Managing Director’s Remuneration Director’s Remuneration Sitting Fees
Less: Capital profit on sale of assets Profit on sale of Investments
Net Profit u/s 198Maximum remuneration payable to MD @5%Remuneration Actually Paid
31.03.2010(Rs.In Million)
6.07-
0.82
0.720.00
31.03.2009(Rs.In Million)
942.27
6.89949.16
0.72
948.4447.42
6.07
632.64
6.00-
0.78639.42
1.311.08
637.0331.85
6.00
b) Managerial Remuneration :31.03.2010
(Rs.In Million)31.03.2009
(Rs.In Million)
Salary,House rent allowance
Other allowances
Performance Pay* Contribution to Superannuation and PF Total
3.97
0.19
1.41
0.50
6.07
3.77
0.17
1.60
0.46
6.00
Dr.Jairam VaradarajManaging Director
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
42
* Performance Pay pertaining to 08-09
Provision for gratuity not considered since the amount is not ascertainable individually under the LIC Group Gratuity Cash Accumulation Scheme.
14) The Company has adopted the Revised Accounting Standard 15 in respect of defined benefit plan(Gratuity)
1.PRINCIPAL ACTUARIAL ASSUMPTIONS (Expressed as weighted averages Discount Rate Salary escalation rate Attrition rate Expected rate of return on Plan Asset
In the following tables, all amounts are in Rupees, Unless otherwise stated.
II. CHANGES IN THE PRESENT VALUE OF THE OBLIGATION (PVO)- RECONCILIATION OF OPENING AND CLOSING BALANCES: PVO as at the beginning of the period Interest Cost Current service cost Past service cost -(non vested benefits) Past service cost - (vested benefits) Benefits paid Actuarial loss/(gain) on obligation (balancing figure) PVO as at the end of the period 48.3243.69
III. CHANGES IN THE FAIR VALUE OF PLAN ASSETS- RECONCILITION OF OPENING AND CLOSING BALANCES: Fair value of plan assets as at the beginning of the period Expected return on plan assets Contributions Benefits period Actuarial gain/(loss) on plan assets (balancing figure) Fair value of plan assets as at the end of the period
IV.ACTUAL RETURN ON PALAN ASSETS Expected return on plan assets Actuarial gain (loss) on plan assets Actual return on plan assets
Gratuity(Funded)Rs. Millions
31/03/2010 31/03/2009
8.50%8.00%3.00%9.30%
43.693.224.47
--
-5.772.71
48.32
38.603.496.08
-5.780.36
42.76
3.480.363.85
7.90%6.50%3.00%9.00%
41.993.074.17
--
-8.362.82
43.69
35.383.178.01
-8.360.41
38.61
3.170.413.58
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
43
V. ACTUARIAL GAIN / LOSS RECOGNIZED Actuarial gain / (loss) for the period - Obligation Actuarial gain / (loss) for the period - Plan Assets Total (gain) / loss for the period Actuarial (gain) / loss recognized in the period Unrecognized actuarial (gain) / loss at the end of the year
VI. AMOUNTS RECOGNISED IN THE BALANCE SHEET AND RELATED ANALYSES Present value of the obligation Fair value of plan assets Difference Unrecognized tranditional liability Unrecognized past service cost- non vested benefits Liability recognizes in the balance sheet
VII. EXPENSES RECOGNISED IN THE STATEMENT OF PROFIT AND LOSS: Current service cost Interest Cost Expected return on plan assets Net actuarial (gain) /loss recognized in the year Transitional Liability recognized in the year Past service cost - non- vested benefits Past service cost - vested benefits Effect of the limit under para 59 (b) Expenses recoginized in the statement of profit and loss
VIII. MOVEMENTS IN THE LIABILITY RECOGNIZED IN THE BALANCE SHEET. Opening net liability Expense as above Contribution paid Closing net liability
IX. AMOUNT FOR THE CURRENT PERIOD Present Value of obligation Plan Assets Surplus (Deficit) Experience adjustments on plan liabilities- (loss) / gain Experience adjustments on plan assets - (loss) /gain
X.MAJOR CATEGORIES OF PLAN ASSETS ( AS PERCENTAGE OF TOTAL PLAN ASSETS) Government of India Securities State Government Securities High Quality Corporate Bonds Equity shares of listed companies Property Special Deposit Scheme Funds managed by insurer Others ( to specify ) Total
Gratuity(Funded)Rs. Millions
31/03/2010 31/03/2009
-2.710.362.352.35
-
48.3242.76
5.56--
5.56
4.473.22
-3.492.35
----
6.56
5.086.56
-6.095.56
48.3242.76-5.560.260.36
0.00%0.00%0.00%0.00%0.00%0.00%
100.00%0.00%
100.00%
-2.820.412.412.41
-
43.6938.61
5.08--
5.08
4.173.08
-3.172.41
----
6.48
6.616.48
-8.015.08
43.6938.61-5.08-2.820.41
0.00%0.00%0.00%0.00%0.00%0.00%
100.00%0.00%
100.00%
CommissionTravelling ExpensesOther ExpensesTOTAL
19.3419.0013.1451.48
11.5118.8711.3841.76
31.03.2010(Rs.In Million)
31.03.2009(Rs.In Million)
Particulars
15) Expenditure in Foreign Currency:
22) Earning Per Share:
Net ProfitWeighted average Number of Shares OutstandingNominal Value Per Share (in Rs)Basic Earnings Per Share (in Rs)Number of Shares after dilution (when partly paid shares become fully paid shares)Diluted Earning Per Share (in Rs)
Particulars
As on 31.03.2010
(Rs. In Million)
As on 31.03.2009
(Rs. In Million)
Raw Materials and ComponentsMachinery SparesCapital GoodsTraded Goods
375.63 10.04 16.65
108.47
381.26 3.26
153.41 90.67
31.03.2010(Rs.In million)
31.03.2009(Rs.In million)Particulars
16) CIF value of Imports:
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
44
18) Raw materials and Stores Consumption:
20) Installed Capacity / Actual Production (Quantity in Numbers):
ParticularsInstalled Capacity
Air Compressors 32500 2667732500 24408
31.03.2010 31.03.2009 31.03.2010 31.03.2009
Production
19) R&D Expenses
Particulars
Capital R&DSalaries & WagesR&D MaterialsMaintenanceOther ExpensesTotal
31.03.2010 31.03.2009
6.3738.2032.65
0.869.29
87.37
4.7127.6030.66
0.567.45
70.98
Particulars31.03.2010 31.03.2009
ImportedIndigenous Total
498.463048.803547.26
442.362558.193000.55
14.0685.95
100.00
(Rs.In Million) %
14.7485.26
100.00
(Rs.In Million) %
(Rs.In Million) (Rs.In Million)
17) Earnings in Foreign Exchange calculated on FOB basis:
Particulars31.03.2010
(Rs.In Million)31.03.2009
(Rs.In Million)
Direct ExportsIndirect Exports
689.77212.87
933.01170.36
21) Turnover:
Particulars
Air CompressorsOthersTotal
31.03.2010 31.03.2009
26987116
27103
5755.5156.04
5811.55
25900104
26004
4722.9888.88
4811.86
Quantity (In Nos)
Value (Rs.In Million)
Quantity (In Nos)
Value (Rs.In Million)
While the accounts of R&D department are maintained separately, for the purpose of presentation, the administrative and other expenses are clubbed along with other functional head of expenses and presented in the Profit and Loss Account.
551.7978.92
1.006.99
78.92
6.99
397.4462.73
1.006.34
78.17
5.08
23) Accounting Standard (AS) 18, Related Party Disclosures (Rs. In Million)
Subsidiaries Key Management Personnel
9.39
64.69
18.57
6.88
0.00
0.50
44.98
0.00
42.77
0.00
10.15
51.59
0.13
20.13
25.00
4.18
241.15
0.00
3.25
3.31
Particulars31/03/10 31/03/09 31/03/10 31/03/09 31/03/10 31/03/09
303.52
61.29
1.96
1.14
10.00
3.42
0.00
0.00
7.98
2.08
148.26
0.75
2.54
0.00
0.00
0.00
0.00
0.00
22.18
4.50
-
-
-
-
-
-
-
6.07
-
-
-
-
-
-
-
-
-
6.00
-
-
Purchase of goods
Sale of goods
Receiving of services
Providing of services
Finance
Interest Received
Investments
Remuneration
Balance (Receivable)
Balance (Payable)
Associates & Joint Venture
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
45
Note:
Names of related parties and description of relationship:
1. Holding Company
2. Subsidiaries
3. Fellow Subsidiaries
4. Associates
5. Joint Venture
6. Key Management Personnel
Elgi Equipments Limited
Adisions Precision Instruments Manufacturing Company LimitedATS Elgi Limited ELGI-GULF (FZE).Elgi Equipments Zhejiang Limited (China). Elgi Compressors Trading (Shanghai) Co.Ltd (China).SA Belair - France
Nil
a. Elgi Ultra Industries Limited.b. Treadsdirect Limited.c. Elgi Rubber Company Ltd.d. L.G.Balakrishnan & Bros Limited.e. Ellargi & Co.f. Elgi Services.g. LG.Balakrishnan & Bros .
Elgi Sauer Compressors Limited.
Dr.Jairam Varadaraj , Managing Director
24) The under noted companies constitute the "Group" in terms of Regulation 3(1) (e)( i ) of SEBI Substantial (Acquisition of Shares & Takeovers) Regulation,1997,as amended,with effect from 09.09.2002.
a) Elgi Ultra Industries Limited
b) Treadsdirect Limited
c) Elgi Rubber Company Limited.
d) L.G.Balakrishnan & Bros.Limited
e) Elgi Securities Limited
f) Dark Horse Portfolio Investments Limited
g) Madura Public Conveyance Private Limited
h) Premier Industrial Drives Private Limited
i) Elgi Sauer Compressors Limited.
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
46
25) STATEMENT IN PURSUANCE OF SECTION 212 OF THE COMPANIES ACT, 1956
1. Name of the Subsidiary Company
2. Financial Year of the Subsidiary Ended on
3. Holding Company's interest in the Subsidiary
4. Net aggregate amount of the Profit/Loss of the Subsidiary not dealt within the Holding Company's Account
a) For the current financial year of the Subsidiary Company (Rs. in Million)
b) For the previous financial year of the Subsidiary Company (Rs. in Million)
5. Net aggregate amount of the Profit/Loss of the Subsidiary dealt within the Holding Company's Accounts
a) For the current financial year of the Subsidiary Company
b) For the previous financial years of the Subsidiary Company
ATS Elgi Limited
31st March 2010
90,000EquityShares of Rs 10 each(100%)
50.70
16.91
Nil
Nil
Adision Precision Instruments Mfg.Co.Limited
31st March 2010
91,550 Equity Shares of Rs 10 each (100%)
0.01
0.05
Nil
Nil
ELGI-GULF (FZE)
31st March 2010
One Share of INR Rs 17,77,500(100%)
6.68
1.08
Nil
Nil
Elgi Equipments ZHEJIANG Limited
31st March 2010
CapitalInvested(100%) INR
(33.83)
Nil
Nil
Nil
Elgi Compressors Trading(Shanghai)Co.Limited
31st March 2010
CapitalInvested(100%) INR
(4.93)
Nil
Nil
Nil
SA Belair - France
31st March 2010
CapitalInvested (100%) INR
(0.49)
Nil
Nil
Nil
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
47
Cash Flow Statement
Particulars
A.CASH FLOW FROM OPERATING ACTIVITIES:Net Profit Before TaxAdd: Prior Year Adjustments
Adjustments for:DepreciationAssets Condemned and Written off(Profit)/Loss on sale of assetsDeferred Revenue expenditure(Profit)/Loss on sale of Investments(Profit)/Loss on sale of Auctionable claimsBad debts written offInterest and Bank Charges PaidDividend ReceivedInterest ReceivedOperating Profit Before Working Capital ChangesAdjustments for:Trade and Other ReceivablesInventoriesDeferred Revenue ExpenditureTrade PayablesCash Generated From Operations
Cash Generated from OperationsBank Charges PaidDirect Taxes Paid
Net Cash From Operating Activities
B.CASH FLOW FROM INVESTING ACTIVITIESPurchases of Fixed AssetsSale of Fixed AssetsPurchase of InvestmentsSale of InvestmentsLoans to CompaniesInterest ReceivedDividend ReceivedNet Cash Used in Investing Activities
C.CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Issue of Share CapitalProceeds from Issue of Share PremiumProceeds from Short Term BorrowingsInterest PaidDividend Paid
31.03.2010
882.19
73.09955.28
401.53 1356.81
(291.64)
1065.17
(130.10)2.07
(81.89)0.00
(113.39)40.29
0.93 (282.09)
16.19 216.09
0.95 0.00
(150.44)
31.03.2009
629.90
121.99 751.89
(272.91)478.98
(194.62)
284.36
(218.25)1.69
(44.98)1.08
75.50 12.93
0.70 (171.33)
0.00 0.00 0.00
(1.50)(44.04)
(Rs. In Million)
882.20 (0.01)
91.96 0.12
(0.66)7.40 0.00 0.00 5.65 9.84
(0.93)(40.29)
(465.63)(1.43)(8.30)
876.89
(9.84)(281.80)
(A)
(B)
(C)(A+B+C)
632.64 (2.74)
79.52 10.22 (1.18)
6.84 (1.08)
0.00 26.88 14.42 (0.70)
(12.93)
195.39 (10.77)
(4.90)(452.63)
(12.92)(181.70)
Note:Figures within Bracket denote Cash Outflow.
For and on behalf of the Board "As per our report of even date"
Coimbatore 28.10.2010
S. RAVEENDARCompany Secretary
Dr.JAIRAM VARADARAJ Managing Director
S.SRIRAMChief Financial Officer
R. JAYACHANDRAN Partner
Membership No.021848
For RJC ASSOCIATES Regn. No. : 003496S
N. MOHAN NAMBIARDirector
Chartered Accountants
Net Cash Used in Financing Activities
NET INCREASE IN CASH AND CASH EQUIVALENTS
OPENING BALANCE OF CASH AND CASH EQUIVALENTS
CLOSING BALANCE OF CASH AND CASH EQUIVALENTS
82.79
865.87
155.53
1021.40
(45.54)
67.49
88.04
155.53
ELGI EQUIPMENTS LIMITEDANNUAL REPORT 2009-10
48
Balance Sheet Abstract and Company's General Business Profile
I. Registration Details
Registration No. State Code Balance Sheet Date
II.Capital raised during the year (Rs. In Thousands)
Public Issue - (Final Call Money on Party paidup shares) Warrant conversion application money received Bonus issue Private Placement
III.Position of mobilisation and deployment of funds(Rs. In Thousands)
Total Liabilities Total Assets Sources of Funds: Paid up capital Reserves and Surplus Deferred Tax Liabilities Unsecured Loan Application of Funds: Net Fixed Assets Investments Net Current Assets Miscellaneous Expenditure
IV.Performance of Company (Rs. In Thousands)
Turnover Total Expenditure Profit/(Loss) before tax Profit/(Loss) after tax Earning per share (Rs.) Dividend Rate (%)
V.Generic Names of Three Principal Products of Company (as per Monetary terms)
Item Code No.(ITC Code) Product Description Item Code No.(ITC Code) Product Description
00035118
31.03.10
15435.19NilNilNil
2,604,735.382,604,735.38
78,923.922,503,093.45
21,768.02950.00
666,089.72467,615.85
1,456,387.3314,642.48
5,882,102.864,999,903.02
882,199.84551788.31
6.99200
841440.30Screw Compressor
841440.10Reciprocating Compressor
For and on behalf of the Board "As per our report of even date"
Coimbatore 28.10.2010
S. RAVEENDARCompany Secretary
Dr.JAIRAM VARADARAJ Managing Director
S.SRIRAMChief Financial Officer
R. JAYACHANDRAN Partner
Membership No.021848
For RJC ASSOCIATES Regn. No. : 003496S
N. MOHAN NAMBIARDirector
Chartered Accountants
Auditors' Report
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
49
REPORT TO THE MEMBERS OF ELGI EQUIPMENTS LIMITED
1) We have audited the attached Consolidated
Balance Sheet of M/s Elgi Equipments Limited,
Coimbatore, "the Company" and it's Subsidiaries
and Joint Venture constitute "the Group" as at
31st March 2010, the consolidated profit and
loss account for the year ended on that date and
the consolidated cash flow statements for the
year ended on that date annexed thereto. These
consolidated financial statements are the
responsibility of the Elgi Equipments Ltd's
management. Our responsibility is to express our
opinion on these financial statements based on
our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. We did not audit the financial statements of four Subsidiary Companies M/s Elgi Equipments (Zhejiang) Ltd-China, M/s Elgi Compressors Trading (Shanghai) Co.Ltd-China, Elgi Gulf (FZE)-UAE and M/s Belair SA-France. These financial statements and other information of the
subsidiaries have been audited by other auditors whose reports have been furnished to us, and our opinion, in so far as it relates to the amounts included in respect of those subsidiaries, is based solely on the report of other auditors.
4. Further we report that:
i) The consolidated financial statements have been prepared by the Company's Management in accordance with the requirements of Accounting Standard (AS-21), on Consolidated Financial Statements, and Accounting Standards (AS-27) on Financial Reporting of interests in Joint Ventures, issued by the Institute of Chartered Accountants on India, on the basis of the Individual financial statements of the Elgi Equipments Ltd and its subsidiaries included in the consolidated financial statements.
ii) Based on our audit and in consideration of the separate audit reports on individual audited financial statements of the subsidiaries of Elgi Equipments Ltd, and to the best of our information and according to the explanations given to us, we are of the opinion that the attached Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India:
a) In the case of the Consolidated Balance Sheet, of the state of the Affairs of the "Group" as at 31st March 2010;
b) In the case of the Consolidated Profit and Loss Account, of the profit of the "Group" for the year ended on that date; and
c) In the case of Consolidated Cash Flow Statement, of the cash flows of the "Group" for the year ended on that date.
For RJC AssociatesRegn. No. : 003496S
Chartered Accountants
R.JayachandranPlace: Coimbatore Partner Date: 28.10.2010 Membership No.021848
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
50
Balance sheet as at 31st March 2010
Sch.No. 31.03.10 31.03.09 PARTICULARS
I SOURCES OF FUNDS
1) Shareholders' Funds: a) Capital b) Reserves and Surplus
2) Loan Funds: a) Secured Loans b) Unsecured Loans
3) Deferred Tax Liability
Total
II APPLICATION OF FUNDS1) Goodwill2) Fixed Assets: a) Gross Block b) Less: Depreciation c) Net Block d) Capital Work in progress
3) Investments
4) Deferred Tax Assets
5) Current Assets, Loans & Advances a) Inventories b) Sundry Debtors c) Cash and Bank balances d) Other Current Assets e) Loans and Advances
Less: Current Liabilities and Provisions a) Liabilities b) Provisions
Net Current Assets
6) Miscellaneous Expenditure: (to the extent not written off or adjusted) Intangible Assets
Total
12
34
5
6
7
5
8
9
10
(A)
(B)
(A-B)
(Rs. In Million)
2632.15
27.57 17.44
2677.16
18.12
688.84 21.85
142.99
0.00
1773.41
31.95
2677.16
62.73 1934.19
0.00 0.00
1580.94 925.84
704.54 814.30 245.67
4.64 756.74
2525.89
627.39 744.55
1371.94
78.92 2553.23
26.62 0.95
1726.68 1037.84
810.01 906.64
1191.84 22.19
1339.53 4270.21
1365.88 1130.92 2496.80
1996.92
0.00 0.00
1996.92
0.00
655.10 11.34
142.99
3.91
1153.95
29.63
1996.92
The Schedules referred to above Accounting Policies and the Notes thereon form an integral part of the Balance Sheet.
For and on behalf of the Board "As per our report of even date"
Coimbatore 28.10.2010
S. RAVEENDARCompany Secretary
Dr.JAIRAM VARADARAJ Managing Director
S.SRIRAMChief Financial Officer
R. JAYACHANDRAN Partner
Membership No.021848
For RJC ASSOCIATES Regn. No. : 003496S
N. MOHAN NAMBIARDirector
Chartered Accountants
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
51
Profit and Loss Account For The Year ended 31st March 2010(Rs. In Million)
Sch.No. 31.03.10 31.03.09 PARTICULARS
1112
131415
(A)
(B)
(A-B)
(C)
(A-B-C)
7141.14 371.57
6769.57
37.58 43.92
6851.07
4086.30 642.18 993.43
97.13 10.51
5829.55
1021.52
81.08
940.44
339.87 21.34
0.00
579.23
1118.43 (0.01)
(290.08)
1407.57
144.75 24.60 56.00
1182.22
1407.57
( In Rs.)1.00 7.34 7.34
5955.39 424.58
5530.81
59.29 8.48
5598.58
3435.09 528.93 890.07
82.74 7.68
4944.51
654.07
0.00
654.07
219.11 20.68
6.86
407.42
849.13 (2.72)
0.00
1253.83
81.54 13.86 40.00
1118.43
1253.83
( In Rs.)1.00 6.49 5.21
INCOMEGross Sales Less : Excise Duty
Net Sales
Other IncomeInterest (Expenditure) / Income
Total Income
EXPENDITURE
Materials Consumed Salaries, Wages, Bonus, Gratuity, etcOther ExpensesDepreciationAmortisation of Intangible Assets
Total Expenditure
PROFIT BEFORE TAX & EXTRA-ORDINARY ITEMS
EXPENDITUREVRS - Compensation
PROFIT BEFORE TAX & AFTEREXTRA-ORDINARY ITEMS
Provision for TaxDeferred Tax LiabilityFringe Benefit Tax
PROFIT AFTER TAX
Profit Brought ForwardPrior Year AdjustmentsTransfer on Amalgamation (refer Notes on Accounts : B.(1))
PROFIT AVAILABLE FOR APPROPRIATION
APPROPRIATIONSDividendDividend Tax Transfer to General ReserveProfit Carried to Balance Sheet
TOTAL
Earnings per shareNominal value of share BasicDiluted
The Schedules referred to above Accounting Policies and the Notes thereon form an integral part of the Profit and Loss Account.
For and on behalf of the Board "As per our report of even date"
Coimbatore 28.10.2010
S. RAVEENDARCompany Secretary
Dr.JAIRAM VARADARAJ Managing Director
S.SRIRAMChief Financial Officer
R. JAYACHANDRAN Partner
Membership No.021848
For RJC ASSOCIATES Regn. No. : 003496S
N. MOHAN NAMBIARDirector
Chartered Accountants
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
52
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.10 PARTICULARS
(Rs. In Million)
1 SHARE CAPITAL
AUTHORISED CAPITAL21,50,00,000 Equity Shares of Re.1/- each
55,00,000 12% Cumulative Redeemable Preference Shares of Re.10/- each30,00,000 5% Redeemable Preference Shares of Re.10/- each
ISSUED, SUBSCRIBED AND PAID UP CAPITALFULLY PAID UP7,81,59,043 Equity Shares of Re.1/- each issued and subscribed(Out of the above 4,87,50,000 Shares were issued asBonus Shares by Capitalization of Reserves)
Share Capital Suspense Account [Refer Notes on Accounts : B.(1)] 7,62,600 Equity Shares of Re.1/- each to be issued
PARTLY PAID UP15197 Shares @ Rs.0.15 per Share
2 RESERVES AND SURPLUS
CAPITAL RESERVEShare of reserve on account of revaluation of assetsof a firm in which the Company is a partnerAdd: Reserve on Amalgamation [Refer Notes on Accounts : B.(1)] Capital Redemption ReservesTransfer on Amalgamation SHARE PREMIUM ACCOUNTAs per the last Balance SheetAdd: Call money amount received during the year Tranfer on Amalgamation [Refer Notes on Accounts : B.(1)] Statutory Reserve: (As Per RBI Norms)Transfer on Amalgamation [Refer Notes on Accounts : B.(1)]
GENERAL RESERVEAs per the last Balance SheetAdd: Transfer from Profit and Loss Account Tranfer on Amalgamation [Refer Notes on Accounts : B.(1)] Add: Exchange fluctuation Reserve
Less: Loss incurred by subsidiary after the acquisitionSURPLUSBalance as per Last Balance Sheet Add :Profit during the year Less:Appropriations during the year
31.03.09
100.00
0.00
0.00
100.00
60.00
0.00
2.73
62.73
29.65
0.00
173.29
0.00
612.82
1118.43 1934.19
215.00
55.00
30.00
300.00
78.16
0.76
0.00
78.92
181.41
0.00
440.79
5.49
743.32
1182.22 2553.23
29.65 151.76
173.29 216.09
51.41
618.94 56.00 80.56
755.50 (4.16)
751.34 8.02
1118.43 289.14 225.35
29.65 0.00
173.29 0.00 0.00
578.94 40.00
0.00 618.74
2.36 621.10
8.48
849.13 404.70 135.40
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
53
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.10 31.03.09 PARTICULARS
(Rs. In Million)
3. SECURED LOANSLoans and advances from banksOpen Loan
4. UNSECURED LOANS Fixed Deposit
5. DEFERRED TAX LIABILITY / (ASSETS)
As per the last Balance SheetAdd / Less - for the Year
26.62 26.62
0.95 0.95
(4.79)22.23 17.44
0.00 0.00
0.00 0.00
(24.58)20.67 (3.91)
6. FIXED ASSETS
GROSS BLOCK DEPRECIATION
Description of Assets
Asat
01/04/09
During the year
Additions Deductions
Asat
31/03/10
Asat
01/04/09
Land
Buildings - Actual - Revaluation
Plant&Machinery
Furniture&OfficeEquipments
Electrical Fittings
Motor Vehicle
Canteen Equipments
Intengible Assets-Technical Knowhow
Grand Total
Previous Year
23.29
198.9217.73
1223.64
105.01
0.61
5.71
2.68
3.35
1580.94
1383.22
47.64
2.12
78.63
27.22
0.00
0.03
0.00
0.00
155.64*
240.25
0.00
0.00
1.90
7.95
0.01
0.04
0.00
0.00
9.90
42.53
70.93
201.0417.73
1300.37
124.28
0.60
5.70
2.68
3.35
1726.68
1580.94
0.00
110.759.29
727.01
72.82
0.12
3.30
1.46
1.08
925.83
874.45
0.00
8.06
86.93
24.76
0.09
0.43
0.23
0.68
121.18
83.19
0.00
0.000.42
0.00
0.00
0.00
0.00
0.00
0.00
0.42
0.00
0.00
118.819.72
812.10
89.86
0.21
3.69
1.69
1.76
1037.84
925.84
70.93
82.238.01
488.27
34.42
0.39
2.01
0.99
1.59
688.84
655.10
23.29
88.178.44
496.63
32.19
0.49
2.41
1.22
2.27
655.11
508.77
During the year
Additions On revalued
Asat
31/03/10
Asat
31/03/10
Asat
31/03/09
NET BLOCK
0.00
0.00
1.84
7.72
0.00
0.04
0.00
0.00
9.60
31.80
Deductions
Note : Addition include asset taken over on amalgamation Refer notes on accounts : B(1)
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
54
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
PARTICULARS
(Rs. In Million)
7. INVESTMENTS (AT COST)
LONG TERM
NON-TRADE QUOTED EQUITY SHARES (FULLY PAID)
Lakshmi Machine Works Ltd
State Bank of India
HDFC Bank Limited
HDFC Limited
Magna Electro Castings Ltd
Rajshree Sugars & Chemicals Ltd
Pricol Ltd
L.G.Balakrishnan & Bros.Ltd.
LGB Forge Limited
Treadsdirect Limited
Elgi Rubber Company Ltd
Total[A]
NON-TRADE UNQUOTED EQUITY SHARES (FULLY PAID)
Coimbatore Pvt. Industrial Estates Ltd.,
The Mill Officers Co-Op Housing Colony
Ltd.,Ahmedabad
Elgi Securities Ltd
Marol Co-operative Industrial Estate Ltd
Total[B]
INVESTMENTS IN PARTNERSHIP FIRMS
L.G.Balakrishnan & Bros (Share 98%)
Elgi Services (Share 80%)
Total[C]
Grand Total -[A+B+C]
50
300
500
2400
80000
229000
94245
1248
12480
2182000
1091000
0
5
99300
1053
10.00
10.00
10.00
10.00
10.00
10.00
1.00
10.00
1.00
1.00
1.00
1000
50.00
10.00
100.00
0.01
0.12
0.01
0.03
1.25
7.55
0.54
0.02
0.01
5.30
2.65
17.49
0.00
0.00
0.99
0.11
1.10
124.00
0.40
124.40
142.99
50
300
500
2400
80000
229000
94245
12480
12480
2182000
1091000
77
5
99300
1053
0.01
0.12
0.01
0.03
1.25
7.55
0.54
0.02
0.01
5.30
2.65
17.49
0.00
0.00
0.99
0.11
1.10
124.00
0.40
124.40
142.99
No. ofShare / Units
Face Valueper Share / Unit 31.03.10
No. ofShare / Units
31.03.09
[Total Cost of Quoted Securities Rs.17.49 million (Previous year Rs.17.49 million) andTotal Market value of quoted Securities Rs.51.53 million (Previous year Rs.44.66 million)]
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
55
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.10 31.03.09 PARTICULARS
(Rs. In Million)
8. CURRENT ASSETS, LOANS AND ADVANCES
a) INVENTORIES
Raw Materials and Components
Work-in-progress
Finished Products
Consumables Spares and Stores
Loose tools
b) SUNDRY DEBTORS
(Unsecured and considered good)
Debts outstanding for a period exceeding 6 months
Other Debts
c) CASH AND BANK BALANCES
Cash on Hand
With Scheduled Banks
-in Current Accounts
-in Deposit Accounts
(Includes Rs.11.59 million (Previous year
Rs.9.44 million) with bank as margin money
d) OTHER CURRENT ASSETS
Interest accrued
e) LOANS AND ADVANCES
(Unsecured and considered good)
Advances recoverable in cash or
in kind or for value to be received.
Loans to Companies
Others
Prepaid Expenses
Advance Payment of Income Tax
Security and Other Deposits
Income/Refund receivable
493.05
100.55
191.46
4.49
20.46
810.01
84.09
822.55
906.64
0.58
172.84
1018.42
1191.84
22.19
22.19
100.00
291.79
12.39
863.34
28.30
43.71
1339.53
429.24
93.66
164.24
3.21
14.19
704.54
114.31
699.99
814.30
0.53
132.02
113.12
245.67
4.64
4.64
0.65
146.20
7.19
557.75
32.16
12.79
756.74
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
56
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.10 31.03.09 PARTICULARS
109.74
80.62 335.88
98.44 2.71
627.39
510.15 20.55 81.54 13.86
118.45
744.55
15.68 21.63
7.68
29.63
1.32 1.08
12.94 4.52
10.78 27.95
0.70 59.29
9.95
9.95
0.00 1.47 8.48
345.67 87.80
259.74 693.21
3429.02
(Rs. In Million)
9. CURRENT LIABILITIES AND PROVISIONS
a) CURRENT LIABILITIES
Acceptances Sundry Creditors
Micro, Small and Medium Enterprises Others
Advance and Deposits from Customers and OthersUnclaimed Dividends
b) PROVISIONS
Provision for Taxation Fringe Benefit Tax Proposed Interim Dividend Provision for Dividend Tax Provision for Employee Benefits
10. MISCELLANEOUS EXPENDITURE
Intangible Assets Opening Balance Add: Addition during the year Less: Amortised during the year
11. OTHER INCOME
Profit on Sale of Assets Profit on Sale of Investments Royalty Receipts Rent Receipts (TDS Rs.1.04 million) (Previous Year Rs.1.39 million) Others Gain on Exchange Fluctuation Dividend Receipts
12. INTEREST (EXPENDITURE)/INCOME
Interest Receipts (TDS-Rs. 1.77 million)(Previous Year Rs.1.89 million)
Less:Interest Expendit u re
Term LoansOthers
13. MATERIALS CONSUMED
Opening Stock -Raw Materials -Semi-Finished Products -Finished Products
(A) Opening Stock Purchases (B)
190.61
124.60 736.17 311.52
2.98 1365.88
849.36 15.15 97.70 16.60
152.11
1130.92
27.79 14.67 10.51
31.95
1.23 0.00
13.88 4.10
17.44 0.00 0.93
37.58
44.45
44.45
0.53 0.00
43.92
429.24 93.66
164.24 687.14
4184.22
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
57
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.10 PARTICULARS
493.05 100.55 191.46 785.06
4086.30
420.59 3.96
89.50 26.61
9.73 30.34
8.73 52.72
642.18
37.44 53.66 13.47 47.31
33.42 55.04
0.39 13.97 20.55
5.10 9.99
13.01 95.90
2.64 5.00
21.81 27.54
1.31 0.19
35.90 78.22 39.35
0.86 13.11 84.57
103.67 118.87
3.01 2.21 0.11 0.06 8.06
13.92 0.13
21.73 11.91
993.43
(Rs. In Million)
Closing Stock -Raw Materials -Semi-Finished Products -Finished Products
Closing Stock (C)Materials Consumed (A+B-C)(Material consumed includes Machining Charges ofRs.61.01 million) (Previous Year Rs.52.81 million)
14. SALARIES, WAGES, BONUS, GRATUITY ETC., Salaries and Wages Bonus Performance Pay Profit Share Gratuity Contribution to PF and other Funds Managing Director's Remuneration Welfare Expenses
15. OTHER EXPENSES
Consumption of Stores spares Power,Fuel & Lighting Factory Expenses Tools Consumed Repairs and Maintenance of -Building -Machinery -Vehicle -Other Assets Rent Rates & Taxes Printing & Stationery Postage, Telegrams & Telephones Travelling & Conveyance Subscription, Periodicals & Filing Fees Insurance Donation Legal and Professional Charges Auditors' Remuneration -Audit Fees -Other Services Miscellaneous Expenses After Sales Expense Research & Development Expenses Directors' Sitting Fees Advertisement & Publicity Transport Charges Packing Material Commission & Discount Royalty Payment Sales Tax Payments Service Tax Payments Loss on Sale of Assets Bad Debts Written off Loss on Exchange Fluctuation Assets Condemned & Written-Off Excise duty Payments Bank Charges
31.03.09
429.24 93.66
164.24 687.14
3435.09
357.73 4.15
48.40 31.60
8.94 23.66
8.47 45.98
528.93
31.11 48.47 13.28 45.57
17.22 38.64
0.00 14.53
7.38 5.91 8.96
12.99 90.42
1.18 6.09
25.34 22.46
0.64 0.21
44.92 62.71 32.12
0.82 23.87 89.14 85.06 95.22
2.68 0.00 0.34 0.13
27.22 0.06 0.00
21.25 14.13
890.07
ANNUAL REPORT 2007-08 CONSOLIDATED FINANCIAL STATEMENTS
Accounting Policies and Notes on Accounts
58
A. ACCOUNTING POLICIES
Significant Accounting Policies to the Consolidated Balance Sheet and Profit and Loss Account.
1) Basis of Accounting
The Company maintains its accounts on accrual basis following the historical cost convention in accordance with Generally Accepted Accounting Principles ("GAAP") and in compliance with the provisions of the Companies Act,1956 and the Accounting Standards (as specified in the C o m p a n i e s ( A c c o u n t i n g s t a n d a r d s ) Rules,2006,prescr ibed by the Central Government).
The accounts of all the Subsidiaries and Joint Venture have been prepared in compliance with the Accounting standards as specified in the C o m p a n i e s ( A c c o u n t i n g s t a n d a r d s ) Rules,2006,prescr ibed by the Central Government, and have been prepared in compliance with the local laws and applicable Accounting Standards.
2) Principles of Consolidation:
The Consolidated Financial Statements relate to Elgi Equipments Limited ("the Company") and its subsidiary companies. The Consolidated Financial Statements have been prepared on the following basis.
i. The financial statement of the Company and its Subsidiary Companies are combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealized profit or losses in accordance with the Accounting Standard (AS) -21 "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India.
ii. Investments in Joint Ventures are accounted
for by using the proportionate consolidation method laid down in Accounting Standard (AS) - 27 on "Financial Reporting of interests in Jo in t Ventures" In ter -Company transactions and balances are eliminated to the extent of the Company's interest in the joint venture.
For the purpose of consolidation, the Financial Statements of the Subsidiaries and Joint Venture are drawn up to and as on 31st March 2010.
iii. As far as possible, the Consolidated Financial Statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the Company's separate financial statements.
iv. Foreign Currency Translation
Indian Rupees is the reporting currency for the Group. However, the local currency of overseas subsidiaries is different from the reporting currency of the Group. All the overseas subsidiaries have been classified as non-integral operation according to Accounting Standard 11. In respect of overseas subsidiaries, all the assets and liabilities are translated using exchange rate prevailing at the Balance Sheet date. Revenue, cost and expenses are translated using average exchange rates of the foreign currency gain/loss has been disclosed as "Foreign Currency Translation Reserves & Surplus.
. v. Intangible Assets and Amortisation
In case of Parent and its Subsidiaries, expenditure towards intangible assets up to 31st March 2010 in the book of Subsidiaries are expensed out as revenue expenditure and are being amortized over a period of time (maximum five years) in the Consolidated Financial Statements depending upon the nature of the expenditure and evaluation of future benefits there from.
4. Uniform Accounting Policies
The Consolidated Financial Statements of Elgi Equipments Limited and its subsidiary and Joint Venture have been prepared using uniform accounting policies for like transactions and other
events in similar circumstances.
5 Investments other than in subsidiaries and associates have been accounted as per Accounting Standard 13 on Accounting for Investments.
6. Other Significant Accounting Policies:
These are set out under "Notes on Accounts " as given in the Unconsolidated Financial Statements of Elgi Equipments and its Subsidiaries.
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
59
B. NOTES ON ACCOUNTS
The Notes forming part of Consolidated Financial Statements for the year ended 31/03/10. 1. The Subsidiary Companies considered in the Consolidated Financial Statements are:
S.No
1
2
3
4
5
6
Name of the Subsidiary
ATS Elgi Limited
Adisons PrecisionInstruments Manufacturing Company Limited
Elgi Gulf (FZE )
Elgi Equipments(Zhejiang) Limited
Elgi CompressorsTrading(Shanghai) Ltd
SA Belair - France
Country ofincorporation
India
India
Gulf
China
China
France
% ofOwner ship
100
100
100
100
100
100
Reporting Date
31/03/10
31/03/10
31/03/10
31/03/10
31/03/10
31/03/10
Difference in Reporting Date
-
-
-
-
-
-
2. Joint Venture Company
Elgi Sauer Compressors Limited India 26 31/03/10. -
3. The value of Investments made in the wholly owned Subsidiary Companies have been accounted in Compliance with Accounting Standard (AS-21 & AS- 27).
4. Other Notes Forming Part of Accounts:
These are set at in and under schedules and notes forming part of the accounts for the year ended 31/03/2010. as given in unconsolidated Financial Statements of Elgi Equipments Limited and its Subsidiaries.
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
60
5. Summary of Financial Information of Subsidiary Companies Rs in Millions
Name of the Subsidiary
Reporting CurrencyExchange RateFunds Employed :A.CapitalB.ReservesLoansDeferred Tax LiabilityTotal LiabilitiesC.Total Funds EmployedD.AssetsNet Block ( includingCapital WIP) InvestmentsDefered Tax AssetNet Current AssetsMiscellaneous Expenditure to the extend not written off
Total Assets ( Net)E.TurnoverF. Profit before TaxesG.Provision for TaxationH.Profit after TaxesI. Proposed Dividend
ATS Elgi Limited
IND -
0.90 270.90
0.00 0.00
271.80
29.32
-4.37
238.11 -
271.80 892.44
76.80 26.10 50.70
-
Adisons Precision
Instruments Mfg.Co.Limited
IND -
0.52 10.10
- -
10.62
8.12
0.11 -
2.39 -
10.62 0.12 0.01
-0.01
-
Elgi Gulf (FZE)
DHS11.92
1.78 7.27
- -
9.05
0.32
- -
8.73 -
9.05 59.00
6.68 -
6.68 -
Elgi Equipments ZHEJIANG
Limited
RMB6.59
55.66 (40.82)
13.49 -
28.33
3.21
- -
14.18 10.94
28.33 21.06
(33.83) -
(33.83)-
Elgi Compressors
Trading (Shanghai)
Co.Ltd
RMB6.59
22.75 (7.02)
- -
15.73
0.09
- -
15.64 -
15.73 15.46 (4.93)
-(4.93)
-
SA Belair - France
Euro60.80
44.98 (2.42)26.62
-69.18
2.18
- -
42.51 -
69.18 30.76 (0.49)
-(0.49)
-
The annual accounts of the above Subsidiary Companies are available for inspection by any shareholder at the registered office of the Holding and Subsidiary Companies.
6) SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED(Rs. In Million)
PARTICULARS
Segment Revenue
(Sales and income from Services)
a) Compressors
b) Automotive Equipments
c) Others
Total Segment Revenue
Less: Inter Segment Revenue
Net Sales/Income from Operations
Segment Results
(Profit before Interest and Tax)
a) Compressors
b) Automotive Equipments
c) Others
Total Segment Results
Less:
i) Interest Expense
ii) Unallocable expenditure net of other income
iii) Extra-ordinary items
Total Profit Before Tax
Capital Employed
(Segment Assets less Segment Liabilities)
a) Compressors
b) Automotive Equipments
c) Others
Total Capital Employed in Segments
Add:Unallocable Corporate Assets
less Corporate Liabilities
Total Capital Employed in Company
3 monthsended
31/03/2010
Audited
17675.1
2381.5
321.9
20378.5
20378.5
2509.6
257.2
49.4
2816.2
(159.0)
193.0
811.0
1971.2
21105.7
2682.7
1051.3
24839.7
1612.4
26452.1
11570.0
1900.0
203.0
13673.0
13673.0
1529.0
(144.0)
(68.0)
1317.0
(13.0)
(44.0)
0.0
1374.0
14453.0
2470.0
1300.0
18223.0
1450.0
19673.0
58280.1
8863.5
690.9
67834.5
67834.5
9005.6
978.2
(207.6)
9776.2
(439.0)
0.0
811.0
9404.2
21105.7
2682.7
1051.3
24839.7
1612.4
26452.1
47030.0
7325.0
1083.0
55438.0
55438.0
5917.0
283.0
(208.0)
5992.0
(85.0)
(464.0)
0.0
6541.0
14453.0
2470.0
1300.0
18223.0
1450.0
19673.0
7) The Previous year's figures have been regrouped or reclassified wherever necessary to confirm to the current year's classification.
61
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
Corresponding3 months
ended31/03/2009
Audited
Year to Datefigures for
current periodended
31/03/2010Audited
Previous Accounting year ended31/03/2009
Audited
Previous period figures have been regrouped wherever necessary. The accuracy and granularity of allocation of expenditure has improved and consequently the expenditure hitherto shown as unallocable has been allocated to the respective business.
For and on behalf of the Board of Directors
Dr. Jairam VaradarajManaging Director
Place: CoimbatoreDate : 28.10.2010
Cash Flow Statement
Particulars
A.CASH FLOW FROM OPERATING ACTIVITIES:Net Profit Before TaxAdd: Prior Year Adjustments
Adjustments for:DepreciationAssets Condemned and Written off(Profit)/Loss on sale of assetsDeferred Revenue expenditure & VRS compensation(Profit)/Loss on sale of Investments(Profit)/Loss on sale of Auctionable claimsBad debts written offInterest and Bank Charges PaidDividend ReceivedInterest ReceivedOperating Profit Before Working Capital ChangesAdjustments for:Trade and Other ReceivablesInventoriesDeferred Revenue ExpenditureTrade PayablesCash Generated From Operations
Cash Generated from OperationsBank Charges PaidDirect Taxes Paid
Net Cash From Operating Activities
B.CASH FLOW FROM INVESTING ACTIVITIES
Purchases of Fixed AssetsSale of Fixed AssetsSale of InvestmentsLoans to CompaniesInterest ReceivedDividend ReceivedNet Cash Used in Investing Activities
C.CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Issue of Share CapitalProceeds from Issue of Share PremiumProceeds from Short Term BorrowingsInterest PaidDividend Paid
31.03.2010
940.43
81.72 1022.15
276.09 1379.32
(357.17)1379.32
(163.50)1.47 0.00
(99.35)44.45
0.93 (216.00)
16.19 216.09
27.57 (0.53)
(150.44)
31.03.2009
651.35
130.54 781.89
(238.63)543.26
(206.83)336.43
(233.71)1.69 1.07
55.50 9.95 0.70
(164.80)
0.00 0.00 0.00
(1.47)(44.04)
(Rs. In Million)
940.44 (0.01)
97.13 0.13
(1.17)10.51
0.00 0.00 8.06
12.44 (0.93)
(44.45)
(601.39)(105.47)
(12.83)1076.86
(11.91)(314.12)
(A)
(B)
(C)
(A+B+C)
654.07 (2.72)
82.74 10.22 (1.19)
7.68 (1.08)
5.98 21.24 15.60 (0.70)(9.95)
266.58 2.42
(21.63)(486.00)
(14.13)(192.70)
Note:Figures within Bracket denote Cash Outflow.
For and on behalf of the Board "As per our report of even date"
Coimbatore 28.10.2010
S. RAVEENDARCompany Secretary
Dr.JAIRAM VARADARAJ Managing Director
S.SRIRAMChief Financial Officer
R. JAYACHANDRAN Partner
Membership No.021848
For RJC ASSOCIATES Regn. No. : 003496S
N. MOHAN NAMBIARDirector
Chartered Accountants
CONSOLIDATED FINANCIAL STATEMENTSANNUAL REPORT 2009-10
62
Net Cash Used in Financing Activities
NET INCREASE IN CASH AND CASH EQUIVALENTS
OPENING BALANCE OF CASH AND CASH EQUIVALENTS
CLOSING BALANCE OF CASH AND CASH EQUIVALENTS
108.88
946.17
245.67
1191.84
(45.51)
126.12
119.55
245.67
Directors' Report
Auditor's Report
Annual Accounts
Contents
1
2
3
60 - 62
63 - 65
66 - 78
ANNUAL REPORT OF SUBSIDIARY COMPANY
ATS ELGI LIMITED
63
CHAIRMAN
MANAGING DIRECTOR
DIRECTOR
AUDITORS
REGISTERED OFFICE
Dr.Jairam Varadaraj
Mr. Harjeet Singh Wahan
Mr. M.Ramprasad
M/s. RJC AssociatesChartered AccountantsCoimbatore
S2/A11, Pollachi Main Road,Kurichy Private Industrial EstateKurichy, Coimbatore - 641 021.Ph : 0422 - 2589999
: 0422 - 2589800Fax
Dear Shareholders
rdYour directors are pleased to submit the 3 Annual Report with the Audited Annual Accounts of the Company for the year ended 31st March, 2010. (Rs. In Million)
Directors' Report
Particulars
Profit before depreciation and tax
Less: Depreciation
Profit After depreciation
Less: Provision for Tax (Net of Deferred Tax)
Profit After Tax
The Directors recommend the following appropriations:
Transfer to General Reserve
Balance Carried to Balance Sheet
31-03-2009
31.044
2.722
28.322
11.415
16.907
-
16.907
ATS ELGI LIMITEDANNUAL REPORT 2009-10
65
31-03-2010
80.419
3.617
76.802
26.100
50.702
-
50.702
Performance for the year
The company had improved its sales over the previou's year as the Auto Industry gained momentum for the year under review. Sales have grown by 20% over the previous year and PBT grew by 2.5 times over the previous year due to increase in sales.
Future plans
The Auto Industry had few new model launches by the car manufacturers due to buoyant market conditions. All the leading car manufacturers have planned to setup new garages and increase the capacity of garages to cater to their service needs. This will help bring us a sizeable amount of sales and gain market share.
During the year 2010-11, we are planning to increase our sales through new products such as Auto Car Washer, Centralized Lube Management System, Fume Extraction System and Invertors Welders .
In the lifting equipment category we are planning few new products which are under validation, and will be progressively launched.
International
In the International market our sales had a marginal increase by 4% over the previous year, this we feel may go up in coming year, as there are steady growth in Middle East countries and African countries.
We also expect a sizeable portion of market in Bangladesh since we have ventured into this market this year.
Our business ties with MAHA Germany to supply MAHA lifts to its customers have been finalized and this will also bring us sizeable exports. This tie-up will be formally executed through agreements.
1) Dividend: No Dividend has been recommended for the financial year 2009-10
2) Directors: Mr.Ramprasad, Director of your Company retires by rotation at the ensuing Annual General Meeting and being eligible seeks reappointment.
3) Auditors: The Auditors M/S RJC Associates, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for reappointment.
4) Fixed Deposits: The Company has not accepted any deposits from the public during the year.
5) Directors' Responsibility Statement.
The Board of Directors confirms
In terms of Section 217 (2AA) of the Companies Act, 1956,
the Board of Directors confirms;i. that in the preparation of the annual accounts,
the applicable accounting standards had been followed along with proper explanation relating to material departures;
ii. that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of
ATS ELGI LIMITEDANNUAL REPORT 2009-10
66
- The state of affairs of the company as on 31st March, 2010.
- The profit of the company for the year ended on that date.
iii. that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv that the Directors have prepared the annual accounts on a "going concern" basis.
Acknowledgements
The Board appreciates the support rendered by the
Customers, Suppliers, and Dealers, Banks Financial
Institution and Investors and the faith reposed by the
share holders on the Company.
The Board also thanks the employees for their
dedicated and sincere services.
Annexure to the Directors' Report
I. Statement containing particulars pursuant to the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Report.
A. CONSERVATION OF ENERGY
This year we have carried out following energy conservation and cost savings activities in the company.
Machine Shop : - Connection modification were carried out in the power supply to Lathe & CNC machines for appropriate consumption of power and timer devices installed for reducing unproductive power consumption.
General & Other utilities: Replacements of metal halide lights with compact fluorescent Lights (CFL) to reduce power consumption and installation of timer devices for air conditioners in Corporate and office building.
B. TECHNOLOGY ABSORPTION
1) Auto car wash system was developed to wash all the passenger cars with an objective to reduce the cleaning t ime & water consumption. This product is under the field validation.
2) Dual Car parking lifts has been developed, which will double the parking capacity. This product is under validation.
3) Two post hydraulic lift was developed for servicing of all passenger cars up to 4 ton capacity. It is under the pilot validation & same will be launched from Nov 2010.
4) Centralized Lubrication system with electrically operated grease pump is under development for dumper application and will be put in field validation around Oct'10.
C. Foreign Exchange Earnings and outgo are given in the notes forming part of accounts. Kindly refer the same.
II. Statement annexed to Director's Report showing the names and other particulars of every employee of the company pursuant to section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975.
Name Designation Qualification ExperienceAgeRemuneration(Rs. In Million)
Date of Joining
Previous Employment
Sri. Harjeet Singh Wahan Managing Director
B.E.(Elec,),D.B.M
36 years60 5.854 01/08/2007 Elgi Equipments Ltd
For and on behalf of the Board
Dr.JAIRAM VARADARAJ
ChairmanPlace : Coimbatore
: 29.04.2010Date
For and on behalf of the Board
Dr. JAIRAM VARADARAJ
ChairmanPlace : Coimbatore
: 29.04.2010Date
Auditors' Report
ATS ELGI LIMITEDANNUAL REPORT 2009-10
67
REPORT TO THE MEMBERS OF ATS ELGI LIMITED
I) We have audited the attached Balance Sheet of
ATS Elgi Limited as at 31st March 2010, the Profit
and Loss account and also the Cash Flow
Statement of the Company for the year ended on
that date annexed thereto. These financial
statements are the responsibility of the Company's
management. Our responsibility is to express an
opinion on these financial statements based on our
audit.
II) We conducted our audit in accordance with the
auditing standards generally accepted in India.
Those standards require that we plan and perform
the audit to obtain reasonable assurance about
whether the financial statements are free of
material misstatement. An audit includes
examining, on a test basis, evidence supporting
the amounts and disclosures in the financial
statements. An audit also includes assessing the
accounting principles used and significant
estimates made by management, as well as
evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
III) As required by the Companies (Auditor's Report)
Order, 2003 and as amended by the Companies
(Auditor's Report) amendment order,2004 issued
by the Central Government of India in terms of
Sub-Section (4A) of Section 227 of the Companies
Act, 1956, we enclose in the Annexure a statement
on the matters specified in paragraphs 4 and 5 of
the said Order.
IV) Further to our comments in the Annexure referred
to above, we report that:
a) We have obtained all the information and
explanations, which to the best of our
knowledge and belief were necessary for the
purposes of our audit;
b) In our opinion, proper books of account as
required by law have been kept by the
Company so far as appears from our
examination of those books;
c) The Balance Sheet, Profit and Loss Account
and Cash Flow Statement dealt with by this
report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, Profit and
Loss Account and Cash Flow Statement dealt
with by this report comply with the Accounting
Standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956;
e) On the basis of the written representations
received from the Directors, as on 31st March
2010 and taken on record by the Board of
Directors, we report that none of the directors of
the Company is disqualified as on 31st March
2010 from being appointed as a Director in
terms of clause (g) of sub-section (1) of section
274 of the Companies Act, 1956;
f) In our opinion and to the best of our information
and according to the explanations given to us,
the said accounts give the information required
by the Companies Act, 1956, in the manner so
required and give a true and fair view in
conformity with the accounting principles
generally accepted in India:
1) In the case of the Balance Sheet, of the
state of the affairs of the Company as at
31st March 2010;
2) In the case of the Profit and Loss Account,
of the profit for the year ended on that date;
and
3) In the case of Cash Flow Statement, of the
cash flows for the year ended on that date.
Place : Coimbatore : 29.04.2010Date
R. JAYACHANDRAN
Partner Membership No.021848
For RJC ASSOCIATES Regn. No. : 003496SChartered Accountants
Annexure to the Auditors' Report :
ATS ELGI LIMITEDANNUAL REPORT 2009-10
68
Referred to in paragraph 3 of our report of even date,
I) (a) The Company has maintained proper records
showing full particulars including quantitative
details and situation of fixed assets.
(b) All the assets have been physically verified by
the management during the year. No material
discrepancies were noticed on such
verification.
(c) No substantial part of fixed assets were
disposed off during the year, hence it will not
have any effect on the going concern
assumptions.
II) (a) The inventory has been physically verified
during the year by the management. In
our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical
verification of inventories followed by the
management are reasonable and adequate in
relation to the size of the company and the
nature of its business.
(c) On the basis of our examination of the records
of inventory, we are of the opinion that the
company is maintaining proper records of
inventory. The discrepancies noticed on
verification between the physical stocks and
the book records were not material.
III) The company has neither granted nor taken any
loans secured or unsecured to/from companies,
firms or other parties, which are covered in the
register maintained under Section 301 of the
Companies Act, 1956 during the year.
IV) In our opinion and according to the information
and explanations given to us, there are adequate
internal control procedures commensurate with
the size of the Company and the nature of its
business with regard to purchases of inventory,
fixed assets and with regard to the sale of goods
and services. During the course of our audit, we
have not observed any continuing failure to
correct major weaknesses in internal control
system.
V. (a) According to the information and explanations
given to us, we are of the opinion that the
particulars of contracts or arrangements that
need to be entered into the register
maintained under section 301 of the
Companies Act,1956 have been so entered.
(b) In our opinion and according to the
information and explanations given to us, the
transactions made in pursuance of contracts
or arrangements exceeding rupees five lakh
each have been made at prices which are
reasonable having regard to prevailing
market prices at the relevant time.
VI. The Company has not accepted any deposits
from public and hence provisions of para VI of the
said order are not applicable.
VII. In our opinion, the Company has an internal audit
system commensurate with the size and nature of
its business.
VIII.We have broadly reviewed the books of account
relating to materials, labour and other items of
cost maintained by the Company pursuant to the
rules made by the Central Government for the
maintenance of cost records under section 209
(1) (d) of the Companies Act, 1956 and we are of
the opinion that prima facie the prescribed
accounts and records have been made and
maintained.
IX. (a) According to the information and explanation
given to us and records examined by us, the
Company is regular in depositing with
appropriate authorities undisputed statutory
dues including Provident Fund, Employees
State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty,
Excise Duty, Cess and other material
statutory dues applicable to it.
(b) According to the information and explanation
given to us, no undisputed amounts payable
in respect of Income Tax, Wealth Tax, Service
Tax, Sales Tax, Customs Duty, Excise Duty
and Cess were in arrears, as at 31st March
2010 for a period of more than six months
from the date they became payable.
(c) Accord ing to the in format ion and
explanations given to us , there are no dues of
Income Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty and Cess, Sales
Tax which have not been deposited with the
appropriate authorities on account of any
dispute. X. The Company does not have any accumulated
losses at the end of the financial year. The
Company has not incurred cash losses during
the year covered by our audit and in the
immediately preceding financial year.
ATS ELGI LIMITEDANNUAL REPORT 2009-10
69
XI. The Company has not taken any loans from
Financial Institutions/Banks or has not issued
any debentures during the year.
XII. The Company has not granted any loans and
advances on the basis of security by way of
pledge of shares, debentures and other
securities.
XIII. The Company is not a chit fund, nidhi, mutual
benefit fund or a society, therefore the provision
of Para 4(xiii) of the order are not applicable.
XIV. In our opinion, the Company is not dealing in or
trading in shares, securities, debentures and
other investments. Accordingly, the provisions
of clause 4(xiv) of the order are not applicable to
the Company.
XV. In our opinion, the Company has not given any
guarantee for any loans taken by any other
Companies from Banks or Financial
Institutions.
XVI. The Company has not obtained any long term
loan during the year under audit.
XVII. According to the information and explanations
given to us and on an overall examination of the
Balance Sheet of the Company, we report that
no funds raised on short-term basis have been
used for long-term investment.
XVIII. The Company has not made any preferential
allotments of shares to the parties and
companies covered in the register maintained
under Section 301 of the Companies Act, 1956
and hence provisions of Clause (xviii) of para 4
of the order are not applicable.
XIX. The Company has not issued any debentures,
during the year.
XX. During the year covered by our audit, the
Company has not raised any money by way of
public issue.
XXI. To the best of our knowledge and belief and
according to the information and explanation
given to us, no material fraud on or by the
Company, was noticed or reported during the
year.
Place : Coimbatore : 29.04.2010Date
R. JAYACHANDRAN
Partner Membership No.021848
For RJC ASSOCIATES Regn. No. : 003496SChartered Accountants
Balance Sheet as at 31st March 2010
The Schedules referred to above and the Accounting Polices and Notes thereon form an integral part of this Balance Sheet.
Sch.No. 31.03.10 PARTICULARS
I SOURCES OF FUNDS
1) Shareholders' Funds: a) Capital b) Reserves and Surplus
2) Loan Funds: a) Secured Loans b) Unsecured Loans
3) Deferred Tax Liability / (Assets)
T o t a l
II APPLICATION OF FUNDS
1) Fixed Assets: a) Gross Block b) Less: Depreciation c) Net Block d) Capital Work in progress
2) Investments
3) Current Assets, Loans & Advances a) Inventories b) Sundry Debtors c) Cash and Bank balances d) Other Current Assets e) Loans and Advances
Less: Current Liabilities and Provisions a) Liabilities b) Provisions
Net Current Assets
T o t a l
12
34
5
6
7
8
9
(A)
(B)
(A-B)
(Rs. In Million)
0.900220.199221.099
-25.00025.000
0.925
247.024
28.7914.721
24.0701.195
-
98.360122.082
81.3680.028
50.333352.171
94.97735.434
130.412
221.759
247.024
0.900270.901271.801
---
(4.374)
267.427
37.6268.338
29.2890.034
-
101.492116.724138.099
0.82793.926
451.067
127.14085.822
212.963
238.104
267.427
ATS ELGI LIMITEDANNUAL REPORT 2009-10
70
31.03.09
Place Date
: Coimbatore : 29.04.2010
For and on behalf of the Board "As per our report of even date"
VARADARAJ Dr.JAIRAM Chairman
R. JAYACHANDRAN
Partner Membership No.021848
HARJEET SINGH WAHAN Managing Director
For RJC ASSOCIATES Regn. No. : 003496SChartered Accountants
Profit and Loss Account For The Year ended 31st March 2010(Rs. In Million)
The Schedules referred to above and the Accounting Polices and Notes thereon form an integral part of this Profit and Loss Account.
Sch.No. PARTICULARS
1011
121314
(A)
(B)
(A-B)
(C)
(A-B-C)
INCOMEGross Sales Less : Excise Duty
Net Sales
Other IncomeInterest (Expenditure) / Income
Total Income
EXPENDITURE
Materials Consumed Salaries, Wages, Bonus, Gratuity, etcOther ExpensesDepreciation
Total Expenditure
PROFIT BEFORE TAX & EXTRA-ORDINARY ITEMS
EXTRA-ORDINARY ITEMS
PROFIT BEFORE TAX & AFTEREXTRA-ORDINARY ITEMS
Provision for Income TaxProvision for Fringe Benefit TaxDeferred Tax Liability / (Asset)
PROFIT AFTER TAX
Balance Brought Forward
PROFIT AVAILABLE FOR APPROPRIATION
APPROPRIATIONSDividend - InterimProposed DividendDividend Tax Transfer to General ReserveBalance Carried to Balance Sheet
TOTAL
Earnings per share Nominal Value of ShareBasicDiluted
31.03.09
794.05657.599
736.457
0.398(2.992)
733.863
485.63588.076
129.1082.722
705.541
28.322
-
28.322
9.1001.7900.525
16.907
21.292 -
38.199
- - -
-38.199
38.199
( In Rs.)10.000
187.850 -
ATS ELGI LIMITEDANNUAL REPORT 2009-10
71
31.03.10
929.04042.694
886.346
2.1694.040
892.555
542.109113.491135.523
3.617
794.740
97.815
21.013
76.802
31.400-
(5.300)
50.702
38.199 -
88.901
- - -
-88.901
88.901
( In Rs.)10.000
563.355 -
Place Date
: Coimbatore : 29.04.2010
For and on behalf of the Board "As per our report of even date"
VARADARAJ Dr.JAIRAM Chairman
R. JAYACHANDRAN
Partner Membership No.021848
HARJEET SINGH WAHAN Managing Director
For RJC ASSOCIATES Regn. No. : 003496SChartered Accountants
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.0931.03.10 PARTICULARS
(Rs. In Million)
1. SHARE CAPITAL
AUTHORISED CAPITAL 1,00,000 Equity Shares of Re.10/- each
ISSUED, SUBSCRIBED AND PAID UP CAPITAL
FULLY PAID UP 90,000 Equity Shares of Re.10/- each issued and subscribed (All the shares are held by M/s Elgi Equipments Ltd, the holding company and its nominees)
2. RESERVES AND SURPLUS
SHARE PREMIUM
SURPLUS Balance in Profit and Loss Account
3 SECURED LOANS
4 UNSECURED LOANS From Corporates - Holding company
5. DEFERRED TAX LIABILITY / (ASSETS)
General Reserve
Opening Balance Add / Less - for the Year Asset Liability
1.0001.000
0.900
0.900
180.0002.000
88.901270.901
-
--
0.925
(5.710)0.410
(4.374)
6. FIXED ASSETS
GROSS BLOCK DEPRECIATION
Description of Assets
Asat
01/04/09
During the year
Additions Deductions
Asat
31/03/10
Asat
01/04/09
During the year
Additions Deductions
Asat
31/03/10
Asat
31/03/10
Asat
31/03/09
NET BLOCK
1.0001.000
0.900
0.900
180.0002.000
38.199220.199
-
25.00025.000
0.400
0.525-
0.925
Buildings
Plant & Machinery
Electrical Fittings
Furniture & OfficeEquipments
Canteen Equipments
Intangible AssetsTech Knowhow
Grand Total
Previous Year
0.114
21.260
0.474
3.127
0.475
3.341
28.791
19.616
0.972
7.529
-
0.351
0.005
-
8.857
9.175
-
0.004
0.006
0.011
0.001
-
0.022
-
1.086
28.785
0.468
3.467
0.479
3.341
37.626
28.791
0.015
2.318
0.097
1.149
0.059
1.082
4.720
1.999
0.071
2.266
0.068
0.467
0.080
0.668
3.620
2.722
-
-
0.001
0.002
-
-
0.003
-
0.085
4.584
0.164
1.615
0.139
1.751
8.338
4.721
1.001
24.201
0.304
1.853
0.340
1.590
29.288
24.070
0.100
18.942
0.377
1.977
0.416
2.258
24.070
17.616
(Rs. In Million)
ATS ELGI LIMITEDANNUAL REPORT 2009-10
72
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.0931.03.10 PARTICULARS
(Rs. In Million)
7. INVESTMENTS (AT COST)
8. CURRENT ASSETS, LOANS AND ADVANCES
a) INVENTORIES Raw Materials and Components Work-in-progress Finished Products Consumables Spares and Stores Loose tools b) SUNDRY DEBTORS (Unsecured and considered good) Debts outstanding for a period exceeding 6 months Other Debts
c) CASH AND BANK BALANCES Cash on Hand Fixed Deposits Balances with Scheduled Banks -in Current Accounts
d)
9. CURRENT LIABILITIES AND PROVISIONS
a) CURRENT LIABILITIES Acceptances Sundry Creditors Micro, Small and Medium Enterprises Others Advance and Deposits from Customers and Others
b) PROVISIONS Provision for Taxation Provision for Fringe Benefit Tax Provision for Employee Benefits
OTHER CURRENT ASSETS - Interest Accrued
e) LOANS AND ADVANCES (Unsecured and considered good) Advances recoverable in cash or in kind or for value to be received.
Due from Holding Company Others
Prepaid Expenses Advance Payment of Income Tax Security and Other Deposits Income/Refund receivable
73
-
29.8678.091
59.5430.0650.794
98.360
18.097103.985122.082
0.22730.000
51.14281.368
0.028
4.50510.276
0.51333.667
1.372-
50.333
13.317
11.56662.003
8.09194.977
20.9402.769
11.72535.434
-
32.87010.84856.414
0.1331.226
101.492
14.569102.155116.724
0.12780.000
57.973138.099
0.827
(2.337)31.122
0.66761.601
1.9270.945
93.926
22.786
19.91173.66510.779
127.140
52.3402.769
30.71385.822
ATS ELGI LIMITEDANNUAL REPORT 2009-10
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.0931.03.10 PARTICULARS
(Rs. In Million)
10. OTHER INCOME
Profit on Sale of Assets
Others
11. INTEREST (EXPENDITURE)/INCOME
Interest Receipts
Less: Interest Expenditure
Others
12. MATERIALS CONSUMED:
Opening Stock
Closing Stock
-Raw Materials
-Semi-Finished Products
-Finished Products
Closing Stock (C)
Materials Consumed
(Material consumed includes Machining
Charges of Rs. )
13. SALARIES, WAGES, BONUS, GRATUITY ETC.,
Salaries and Wages
Bonus
Performance Pay
Profit Share
Gratuity
Contribution to PF and other Funds
Managing Director's Remuneration
Welfare Expenses
Gain on Exchange Fluctuation
- Raw Materials
- Semi-Finished Products
- Finished Products
Opening Stock (A)
Purchases (B)
(A+B-C)
10.313 million
0.510
1.539
0.121
2.169
1.954
1.954
(2.086)
4.040
29.867
8.091
59.543
97.501
544.741
32.870
10.848
56.414
100.132
542.109
70.639
0.845
19.000
4.510
2.560
4.940
4.074
6.923
113.491
0.007
0.345
0.046
0.398
1.161
1.161
4.153
(2.992)
40.132
10.033
75.476
125.641
457.495
29.867
8.091
59.543
97.501
485.635
65.917
0.899
-
3.400
2.461
4.568
4.074
6.757
88.076
74
ATS ELGI LIMITEDANNUAL REPORT 2009-10
Schedules To Balance Sheet and Profit and Loss Account as at 31st March 2010
31.03.0931.03.10 PARTICULARS
(Rs. In Million)
14. OTHER EXPENSES
Consumption of Stores spares
Power,Fuel & Lighting
Factory Expenses
Tools Consumed
Repairs and Maintenance of
-Building
-Machinery
-Vehicles
-Other Assets
Rent
Rates & Taxes
Printing & Stationery
Postage & Telephones
Travelling & Conveyance
Subscription, Periodicals & Filing Fees
Insurance
Legal and Professional Charges
Auditors' Remuneration
- Audit Fees
-Other Services
Miscellaneous Expenses
After Sales Expense
Research & Development Expenses
Directors' Sitting Fees
Advertisement & Publicity
Transport Charges
Packing Material
Commission & Discount
Royalty Payment
Sales Tax Payments
Service Tax Payments
Bad Debts Written off
Excise Duty Payments
Assets Condemned & Written-Off
Bank Charges
4.311
4.165
0.247
3.717
2.988
2.334
0.015
1.403
1.001
0.158
1.920
2.076
18.801
0.051
0.386
3.479
0.160
0.009
7.922
12.315
6.696
0.040
1.225
10.629
18.779
24.960
0.070
1.271
-
2.406
0.562
0.013
1.413
135.523
4.293
4.270
0.957
3.246
1.729
3.073
0.079
1.552
1.250
0.174
1.726
2.724
20.851
0.093
0.572
3.646
0.098
0.030
6.703
14.601
1.465
0.040
4.895
11.752
15.402
17.145
0.094
1.270
0.016
0.349
3.962
-
1.052
129.108
75
ATS ELGI LIMITEDANNUAL REPORT 2009-10
Accounting Policies and Notes on Accounts
A. ACCOUNTING POLICIES
1) Basis for preparation of Financial Statements
The Company follows accrual method of accounting. The financial statements have been prepared under the Historical Cost convention on the basis of a going concern and in accordance with the accounting standards referred to in the Section 211(3C) of the companies Act 1956, wherever applicable.
2) Inventories
Inventories have been valued at lower of cost and net realisable value. The cost of inventories has been assigned using the weighted average cost formula.
a) Purchased items - at FIFO - Net of CENVAT and VAT
b) Work-in-Progress - Purchase cost net of CENVAT and VAT plus proportionate overheads
c) Manufactured - at cost excluding items at Factory selling overheads
and VAT d) Trading Items - at cost and net of VAT
Service income : Service income is recognised on completion of service.
Interest : Interest is recognised on accrual basis on a time proportion basis
taking into account the amount outs tand ing and the ra te applicable.
6) Fixed Assets
a) Fixed assets are recorded at historical cost of acquisition, which includes all taxes, duties and other direct expenses incurred upto the stage of commissioning of the asset, net of CE N V AT and VAT, wherever applicable.
b) Capital work in progress consisting of assets under cons t ruc t ion , e rec t ion and commissioning are valued at cost incurred upto the date of Balance Sheet.
c) Intangible assets comprising of Technical know-how fees are amortized over a period of five years.
d) An asset is considered as impaired in
accordance with Accounting Standard 28 on "Impairment of Assets", when at balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset's net selling price and value in use ) , the carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Profit and Loss Account.
7) Foreign Currency Transactions
Transactions in foreign currency are recorded at exchange rate prevailing on the date of the transaction. For transactions settled within the year, exchange variance is charged to Profit and Loss account. Outstanding liabilities and assets are restated at exchange rate prevailing at the end of the year. The resultant exchange variances are accounted as income or expenses, on a net-off basis.
8) Employee Benefitsa. Provident Fund: Provident Fund contribution
is as per the rates prescribed by the Employees Provident Fund Act 1952 and the same is charged to revenue account.
b. Superannuation: The Company has an arrangement with Life Insurance Corporation of India for providing Superannuation benefits to employees eligible as per Company's Rules. Company's contribution to the Superannuation Fund is calculated as per agreed terms and provided for in the accounts.
3) Depreciation
i. Depreciation is charged at the rates specified in Schedule XIV of the Companies Act, 1956 as detailed below:
1. Plant & Machinery - Straight Line Methodand Vehicles
2. Assets costing less than Rs.5000 year of purchase.
3. All other assets - Written Down Value Method
ii. Where the historical cost of an existing depreciable asset has undergone a change, the change in the cost is amortized over the residual life of the asset.
4) Research and Development
Revenue expenditure is charged off in the period in which it is incurred. Capital expenditure is capitalised to the extent they have alternative economic use.
5) Revenue recognition
Sales : Sales, which includes excise duty, but excludes VAT is recognised at the time of shipment of goods from plant or from stock points.
- Written off in the
76
ATS ELGI LIMITEDANNUAL REPORT 2009-10
31.03.2009(Rs. In Million)
31.03.2010(Rs. In Million)
Particulars
a) Guarantees and Letter of Credit 12.21122.704
B. NOTES ON ACCOUNTS
1) Estimated amount of contracts remaining to be executed on capital account and not provided for is: Nil. (Previous year: Rs.Nil)
2) Contingent Liabilities not provided for
3) Claims against the company not acknowledged as debts. Rs.Nil (Previous year: Rs.Nil)
4) As per the profit share scheme available only to employees below the level of officers, a sum of Rs.4.510 million towards profit share has been provided under the head of Salaries, wages, bonus and gratuity (Previous year 3.400)
5) The Company has been exempted by the Ministry of Corporate Affairs vide its order No:46 /51/2010 - CL - III Dt. 12.04.10 from furnishing information under Section 211, paras 3 (i)(a) and 3 (ii)(a) of part II of Schedule VI of the Companies Act, 1956 for the year 2009-10.
6) Balances in the accounts of Sundry Debtors, Sundry Creditors, Security and Other Deposits have been reconciled wherever letters of confirmation have been received.
7) Micro, Small and Medium Enterprise under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company and the required disclosures are given below:
borrowings and other short term and long term borrowings.
b) Amortization of ancillary costs incurred in connection with the arrangement of borrowings.
c) Finance charges in respect of assets acquired under finance leases or under other similar arrangements.
d) Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.
10) Deferred TaxDeferred Tax liability/assets are accounted for in respect of all timing differences as per AS 22.
c. Leave Salary: Liability for leave encashment has been provided as per actuarial valuation.
d. Gratuity: The Company operates a defined benefit plan for the payment of post employment benefits for its employees in the form of gratuity fund scheme managed by LIC of India. The expense is recognized based on the present value of obligation determined in accordance with AS-15 (R) on "Employee Benefits".
e. Other Short term employee benefits: All the short term employee benefits such as profit Sharing etc are measured and provided on actual basis.
9) Borrowing CostBorrowing cost includes:a) Interest and Commitment charges on bank
Particulars 31.03.09(Rs. In Million)
31.03.10(Rs. In Million)
a Principal amount due to suppliers under the actb. Interest accrued and due to Suppliers on the above amount (other than Section 16)c. Interest paid to suppliers under the Act,(Section 16)d. Interest due & payable for delay (for payments during year beyond due date)e. Payment made to suppliers (Other than interest) beyond the appointed day, during the yearf. Interest accrued and remaining unpaid at end of year to suppliers under the Actg. Interest due and payable to suppliers under the Act for payments already made
19.911Nil
NilNil
Nil
Nil
Nil
11.566Nil
NilNil
Nil
Nil
Nil
Note: This information has been given in respect of vendors to the extent they could be identified as "Micro, Small and Medium enterprises" on the basis of information available with the Company.
ATS ELGI LIMITEDANNUAL REPORT 2009-10
77
The Company has adopted the Revised Accounting Standard 15 in respect of defined benefit plan ( Gratuity )
78
8) Warranty claims and liability towards free replacements to be made by the Company are provided for in the accounts.
9) Employee Benefits:
PRINCIPAL ACTUARIAL ASSUMPTIONS[Expressed as weighted averages] Discount RateSalary escalation RateAttrition rateExpected rate of return on Plan AssetsIn the following tables, all amounts are in Rupees,unless otherwise stated CHANGES IN THE PRESENT VALUE OF THE OBLIGATION (PVO) -RECONCILIATION OF OPENING AND CLOSING BALANCES:PVO as at the beginning of the periodInterest CostCurrent service costPast service cost - (non vested benefits)Past service cost - (vested benefits)Benefits paidActuarial loss/(gain) on obligation (balancing figure)PVO as at the end of the period CHANGES IN THE FAIR VALUE OF PLAN ASSETS - RECONCILIATION OF OPENING AND CLOSING BALANCES:Fair value of plan assets as at the beginning of the periodExpected return on plan assetsContributionsBenefits paidActuarial gain/(loss) on plan assets [balancing figure]Fair value of plan assets as at the end of the period ACTUAL RETURN ON PLAN ASSETSExpected return on plan assetsActuarial gain (loss) on plan assetsActual return on plan assets ACTUARIAL GAIN / LOSS RECOGNISEDActuarial gain / (loss) for the period - ObligationActuarial gain / (loss) for the period - Plan AssetsTotal (gain) / loss for the periodActuarial (gain) / loss recognized in the periodUnrecognised actuarial (gain) / loss at the end of the year AMOUNTS RECOGNISED IN THE BALANCE SHEET AND RELATED ANALYSESPresent value of the obligationFair value of plan assetsDifferenceUnrecognised transitional liabilityUnrecognised pas service cost - non vested benefitsLiability recognized in the balance sheet
8.50%8.00%3.00%9.15%
9.4580.6581.077
--
(2.254)1.221
10.161
7.6960.6952.303
(2.254)0.0928.533
0.6950.0920.787
(1.221)0.0921.1291.129
-
10.1618.5331.628
--
1.628
7.90%6.50%3.00%9.00%
9.4430.7840.964
---
(1.734)9.458
0.5740.3616.885
-(0.124)
7.696
0.361(0.124)
0.238
1.734(0.124)(1.610)(1.610)
-
9.4587.6961.762
--
1.762
I
II
III
IV
V
VI
31.03.2010 31.03.2009
Gratuity (Funded)(Rs. In Million)
Gratuity (Funded)(Rs. In Million)
ATS ELGI LIMITEDANNUAL REPORT 2009-10
EXPENSES RECOGNISED IN THE STATEMENT OF PROFIT AND LOSS:Current service costInterest CostExpected return on plan assetsNet actuarial (gain)/loss recognised in the yearTransitional Liability recognised in the yearPast service cost - non vested benefitsPast service cost - vested benefitsTotalAdd: Transferred from Elgi Equipments ( on demerger) net of opening liabilityExpenses recognised in the statement of Profit and Loss MOVEMENTS IN THE LIABILITY RECOGNISED IN THE BALANCE SHEETOpening net liabilityExpenses as aboveContribution paidClosing net liability AMOUNT FOR THE CURRENT PERIODPresent Value of obligationPlan AssetsSurplus (Deficit)Experience adjustments on plan liablities - (loss)/gainExperience adjustments on plan assets -(loss)/gain MAJOR CATEGORIES OF PLAN ASSETS (AS PERCENTAGE OF TOTAL PLAN ASSETS)Government of India SecuritiesState Government SecuritiesHigh Quality Corporate BondsEquity shares of listed companiesPropertySpecial Deposit SchemeFunds managed by insurerOthers (to specify)Total
1.0770.658
(0.695)1.129
---
2.169 -
2.169
1.7622.169
(2.303)1.628
10.1618.533
(1.628)(0.479)
0.092
------
100.00%-
100.00%
0.9640.784
(0.361)(1.610)
---
(0.223)3.1012.878
8.869(0.223)(6.885)
1.762
9.4587.696
(1.762)1.734
(0.124)
------
100.00%-
100.00%
VII
VIII
IX
X
10) Managing Directors' Remuneration:
Computation of Net Profits & Managing Director'sRemuneration as per Section 349 read with Section309(5) of the Companies Act, 1956
31.03.2009(Rs. In Million)
31.03.2010(Rs. In Million)
Net profit as per P&L account before extra-ordinary itemAdd:MD RemunerationDirectors RemunerationSitting Fees
TotalLess:Capital profit on sales of assetsProfit on sale of Investments
Net Profit u/s 198Maximum remuneration payable to MD @5%Remuneration Actually PaidExcess Remuneration (Refer Note Below)
28.322
3.67431.996
0.008
31.988 1.599 3.634 2.035
3.634-
0.040
0.008-
97.815
5.894 103.710
0.510
103.200 5.1605.8540.694
5.854-
0.040
0.510-
ATS ELGI LIMITEDANNUAL REPORT 2009-10
79
ATS ELGI LIMITEDANNUAL REPORT 2009-10
80
Particulars
Direct Exports 54.78857.082
13) Earnings in Foreign Exchange calculated on FOB basis:
Particulars
ImportedIndigenous Total
14) Raw materials and Stores Consumption:
Travelling Expenses Testing Charges
1.3750.042
0.882Nil
Particulars
11) Expenditure in Foreign Currency:
Particulars
Raw Materials and ComponentsCapital GoodsTraded Goods
84.862 Nil
97.773
64.915 Nil
92.374
12) CIF value of imports:
Note: For the above amount of Rs.0.694 Million being the amount paid in excess of the limit prescribed under Sec.309 of Companies Act Central Government approval is being applied. Pending receipt of such approval the aforesaid amount will be held by him under trust.
SalaryHouse Rent AllowanceEducation AllowanceSpecial AllowanceConveyance AllowanceMedical Performance PayTotal (Total excludes contribution to PF/SAF)
1.635 0.4910.1640.9840.1960.1642.2205.854
1.635 0.491 0.164 0.984 0.196 0.164
- 3.634
31.03.2009(Rs. In Million)
31.03.2009(Rs. In Million)
31.03.2009(Rs. In Million)
31.03.2009(Rs. In Million)
31.03.2010(Rs. In Million)
31.03.2010(Rs. In Million)
31.03.2010(Rs. In Million)
31.03.2010(Rs. In Million)
Particulars
Note: Provision of gratuity not considered since the amount is not ascertainable individually, under the LIC Group Gratuity a cash accumulation scheme.
b)
31.03.2009(Rs. In Million)
%%
31.03.2010(Rs. In Million)
186.764 359.656546.420
3466
100
148.678 341.250 489.928
3070
100
15) Installed Capacity / Actual Production (Quantity in Numbers):
Particulars
Automotive Equipments
Installed Capacity31.03.10
Installed Capacity31.03.09
Production31.03.10
Production31.03.09
22000 17408 22000 17497
Particulars
Automotive Equipments 886.34617882 736.45717345
16) Turnover:
Particulars
Net Profit
Weighted average Number of Shares Outstanding
Basic Earnings Per Share (in Rs)
50.702 0.09563.36
16.907 0.09187.85
As on 31.03.2009(Rs. In Million)
As on 31.03.2010(Rs. In Million)
17) Earning Per Share:
18) Accounting Standards (AS) 18, Related Party Disclosures: (Rs. In Million)
Holding CompanyParticulars Associates
Key Management Personnel
Total Total
Quantity (In Nos)
Quantity (In Nos)
Value (Rs. In Million)
Value (Rs. In Million)
31.03.200931.03.2010
Purchase of goods
Sale of goods
Receiving of services
Interest
- Payments
- Receipts
Remuneration
Payables
Receivables
Advances
- Payable
- Paid
09-10
1.729
9.397
15.186
0.486
2.337
25.000
08-09
1.651
10.152
14.375
4.181
4.505
25.000
20.000
09-10
1.826
0.454
0.331
08-09
1.599
0.320
09-10
5.854
08-09
3.634
09-10
3.555
9.397
15.186
0.486
0.454
5.854
2.668
25.000
08-09
3.250
10.152
14.375
4.181
3.634
0.320
4.505
25.000
20.000
Note: Names of related parties and description of relationship1. Holding Company Elgi Equipments Limited
2. Fellow Subsidiaries Adison Precision Instruments Manufacturing Company Limited ELGI-GULF (FZE). Elgi Equipments Zhejiang Limited (China). Elgi Compressors Trading (Shanghai) Co.Ltd (China). SA Belair - France 3. Associates a. Elgi Electric and Industries Limited b. Elgi Ultra Industries Limited. c. Treads direct Limited d. Elgi Rubber Company Ltd e. L.G.Balakrishnan & Bros Limited f. Ellargi & Co., g. Elgi Services h. L.G.Balakrishnan & Bros.
4. Key Management Personnel Dr.Jairam Varadaraj, Chairman Mr.Harjeet Singh Wahan, Managing Director
19 Previous year Figures have been regrouped and re-classified wherever necessary to make them comparable.
ATS ELGI LIMITEDANNUAL REPORT 2009-10
81
Note:Figures within Bracket denote Cash Outflow.
Cash Flow Statement (Rs. In Million)
82
31.03.200931.03.2010Particulars
A.CASH FLOW FROM OPERATING ACTIVITIESNet Profit Before TaxAdd: Transfer from Capital ReserveAdd: Prior Year Adjustments
Adjustments for:DepreciationFinance Lease paymentsAssets Condemned and Written off(Profit)/Loss on sale of assetsDeferred Revenue expenditure(Profit)/Loss on sale of Investments(Profit)/Loss on sale of Auctionable claimsBad debts written offInterest and Bank Charges PaidDividend ReceivedInterest Received
Operating Profit Before Working Capital Changes
Adjustments for:Trade and Other ReceivablesInventoriesDeferred Revenue Expenditure - Employees VRS PaymentTrade Payables
Cash Generated From OperationsInterest PaidDirect Taxes PaidNet Cash From Operating Activities (A)
B.CASH FLOW FROM INVESTING ACTIVITIES
Purchases of Fixed AssetsSale of Fixed AssetsPurchase of InvestmentsSale of InvestmentsLoans to CompaniesInterest ReceivedDividend ReceivedNet Cash Used in Investing Activities (B)
C.CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Issue of Share CapitalShare PremiumRepayment of loans - ElgiProceeds from short Term BorrowingsDividend PaidNet Cash Used in Financing Activities (C)NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C)OPENING BALANCE OF CASH AND CASH EQUIVALENTS CLOSING BALANCE OF CASH AND CASH EQUIVALENTS
28.322--
2.722--
(0.007)---
0.3495.202
-(1.161)
65.52528.386
-(32.115)
(5202)(12.764)
28.322
7.10535.427
61.79697.223
(17.966)79.257
(10.280)----
1.161-
(9.119)
--
(20.000)--
(20.000)50.13831.23081.368
97.815 - -
3.617 - -
(0.510) - - -
2.406 3.499
- (1.954)
(41.439) (3.132)
(21.013) 79.085
(3.499) (27.934)
97.815
7.058 104.873
13.501
118.374
(31.433) 86.941
(7.675) 0.510
- - -
1.954 -
(5.211)
--
(25.000)--
(25.000) 56.731 81.368
138.099
ATS ELGI LIMITEDANNUAL REPORT 2009-10
Place Date
: Coimbatore : 29.04.2010
For and on behalf of the Board "As per our report of even date"
VARADARAJ Dr.JAIRAM Chairman
R. JAYACHANDRAN
Partner Membership No.021848
HARJEET SINGH WAHAN Managing Director
For RJC ASSOCIATES Regn. No. : 003496SChartered Accountants
Balance Sheet Abstract and Company's General Business Profile
83
I. Registration Details
Registration No.
State Code
Balance Sheet Date
II.Capital raised during the year
Public Issue
Warrant conversion application money received
Bonus issue
Private Placement
III.Position of mobilisation and deployment of funds (Amount In Thousand)
Total Liabilities
Total Assets
Sources of Funds:
Paid up capital
Reserves and Surplus
Secured Loan
Unsecured Loan
Deferred Tax Liability
Application of Funds:
Net Fixed Assets
Investments
Net Current Assets
Miscellaneous Expenditure
IV.Performance of Company (Amount In Thousand)
Turnover
Total Expenditure
Profit/(Loss) before tax
Profit/(Loss) after tax
Earning per share (Rs.)
Dividend Rate (%)
V.Generic Names of Three Principal Products of Company (as per Monetary Terms)
Item Code No.(ITC Code)
Product Description
014125
18
31.03.10
Nil
Nil
Nil
Nil
267,427.17
267,427.17
900
270,901.17
0.00
0.00
(4,374.00)
29,322.79
0.00
238,104.38
0.00
892,556.30
815,753.81
76,802.49
50702.49
563.36
0
842519.10
Hydraulic Lift
ATS ELGI LIMITEDANNUAL REPORT 2009-10
Place Date
: Coimbatore : 29.04.2010
For and on behalf of the Board "As per our report of even date"
VARADARAJ Dr.JAIRAM Chairman
R. JAYACHANDRAN
Partner Membership No.021848
HARJEET SINGH WAHAN Managing Director
For RJC ASSOCIATES Regn. No. : 003496SChartered Accountants
FACTORY & REGISTERED OFFICE
FACTORY & REGISTERED OFFICE, SUBSIDIARY OFFICE, BRANCH OFFICES AND FOREIGN OFFICES
FOREIGN OFFICES
BANGLADESH Dealer Address: IFAD Enterprises Limited,Sonartori Tower, 15th & 16th Floor, 12, Biponon C/A, Dhaka-1000 Bangladesh.Ph: 88-0173007775, +8802-9671453-7 Fax: 8802-8616148 E-mail : [email protected]
INDONESIA Dealer Address: C/o PT Esa Bina Utama, JL, Pangeran Jayakarta, No.117/B 43, Jakarta -10730, IndonesiaPh: +62-21- 65090383 Fax: 6007066 E-mail: [email protected]
MALAYSIA Dealer Address: Sykt Lee Industries SDN BHD, Lot 73-75 Semambu Industrial Estate Kuantan, Pahang 25350, MalaysiaPh: 00-60-95661011 E-mail: [email protected]
SRILANKA Dealer Address: Elgi Equipments Ltd., 441, SG Arcade, 2nd Floor, Sri Sangaraja Mawatha, Colombo-10Ph: +94 11 2392425 , E-Mail: [email protected]
THAILAND Dealer Address: P.P.Parts Co. Ltd., 559/68 Thanapat Haus, Soi Chuenchit, Nonsee Road,Chongnonsee, Yannawa Bangkok 10120 ThailandPh: +66 22841081, Mob: +66 845558052, Fax: + 66 22841082 E-Mail: [email protected]
SOUTH AFRICA Elgi Equipments SA (Pty) Ltd. Resident office: P.O Box 14134, Farramere, BenoniSouth Africa 1518, Mobile: +27 11 780765191 E-mail: [email protected]
KENYA Dealer Address: 4, Van Dyk Road, Nestadt Industrial Sites, Benoni R.S.A. C/o Holman Brothers (East Africa) Limited, P.O. Box 42044, Bunyala Road, Nairobi. Tel: (+254-020) 550626, 558981,555388 Fax: (+254-020) 6530481 Cell: (+254) 710 272 528, 737 743 366 Email: [email protected], [email protected]
BRAZIL Dealer Address: AR Brasil Compressores Ltda, Av. Alta Mantiqueira 448, Pirituba, CEP: 05171.200 Sao Paulo, SP Brasil CNPJ: 62.029.426/0001-25 Ph: +55 11 5627 8887, Fax: +55 11 3904 8882 E-Mail: [email protected]
COLOMBIA Construaire Ltda, Cra.54 No.16-06, Puente Aranda, Bogota, COLOMBIAPh: 57-1-2614514 Ctct : Mr.Luis Antonio Diaz, E-MAIL: [email protected]
AHMEDABAD "ELGI HOUSE" 2, Mill Officer's Colony, Behind La-Gajjar Chambers, (Old Reserve Bank) Opp. Times of India, Ashram Road, AHMEDABAD - 380 009 Ph: +91-79-26583736,26581274 Fax:+91-79- 26587683
BANGALORE 15,16 Richmond Road, Bangalore - 560 025. Ph: 91-80-22240674, 22220296, 22122474 Fax: 91-80-22293274BHOPAL Plot no. 4, Waibhav complex, Major shopping centre, Zone 1, MP nagar, Bhopal - 462011 Ph: 91-755-2578281, 2578317, 4273317 Fax: 91-755- 2578289
CHENNAI 100, Mahalingapuram main road, S4, 2nd floor, Apollo Dubai Plaza Nungabakkam, Chennai 34 Ph: +91-44 28172599 Fax: 91-44-28174699
COIMBATORE Singanallur, Coimbatore - 641005. Ph: 91-422-2589555 Fax: 91-422-2573697
HYDERABAD 1-8-611, Airport Plaza, Third Floor, Opp. Old Airport, Begumpet Road, Hyderabad - 500 016Ph: 91-40-27764516, 27768226, 27768326 Fax: 91-40-27768327 E-mail: [email protected]
JAIPUR 602, Diamond tower, Purenichungi, Ajmer road, Jaipur - 302021 Ph: 91-141-2970120 Fax: 91-141-2970121
KOCHI 39/3973, Pallimukku, MG Road Ernakulam, Kochi - 682016. Ph: 91-484-2360155 Fax: 91-484-2351904
KOLKATTA II Floor, Parijaat Building, 24 A Shakespeare Sarani, Kolkatta - 700 017 Ph: 91-33-22834270, 22834271 Fax: 91-33-22834272
MUMBAI Plot No.48, Mathurdas Vassanji Road, Marol Co-op Industrial Estate, J.B.Nagar Post, Near Sakinaka, Andheri(East), Mumbai - 400 059 Ph: 91-22-42161000 Fax: 91-22-28591601
NEW DELHI 23, Shivaji Marg, New Delhi - 110 015. Ph: 91-11-25928593, 25153644, 25928095, 25175018 Fax: 91-11-25459375
PUNE White House ground floor, 388-A, 1/2240, Mumbai-Pune Road, Opp. Sandvik(Asia), Phugevadi Dapodi, Pune - 411 012Ph: 91-20-27146776, 27148892, 27145289 Fax: 91-20-27146776 E-mail: [email protected]
TIRUCHENGODE / SALEM 4/2, Nandhini Complex, 1st Floor, Velur Road, Tiruchengode - 637 211 Ph: 91-4288-257137 Fax: 91-4288-257693
MADURAI Dealer Address: C/o Shree A, 195/75, SMG Complex, Chandragandhi Nagar, Bypass Road, Madurai 625010Ph: 9790029029, Email: [email protected]
BRANCH OFFICES
SUBSIDIARY COMPANIES (FOREIGN)
M/s. ATS ELGI LIMITED, Kurichy Private Industrial Estate, Kurichy, Coimbatore - 641021, India, Phone No: 91-422-2672201-3/2589999, Fax: 91-422-2675446, Website: www.ats-elgi.com
M/s. ADISONS PRECISIONS INSTRUMENTS MFG. CO. LIMITEDELGI Industrial Complex III, Trichy Road, Singanallur, Coimbatore - 641005. India.
SUBSIDIARY COMPANIES (DOMESTIC)
Trichy Road, Singanallur, Coimbatore - 641005. India, Phone No: 91-422-2589555, Fax: 2573697, Email: [email protected]
84
ATS ELGI LIMITEDANNUAL REPORT 2009-10
CHINA FACTORY : M/s. Elgi Equipments, (Zhejiang) Limited Address: Building 3 No.375, Huayan Road, Jiaxing Economic Development ZoneJiaxing (ZHEJIANG), P.R.CHINA PHONE: +86 15001789005, Mob +86 13817163603
CHINA SHANGHAI OFFICE : M/s. Elgi Compressors Trading (SHANGHAI) Co, Ltd (Factory address) Room 402, No.19, Lane 1500 South Lianhua Road, Shanghai, China PHONE: +86 15001789005, Mob +86 13817163603 E-Mail: [email protected]
MIDDLE EAST Elgi Gulf FZE, Po Box 120695, Sharjah Airport International Free ZoneSharjah, UAE Ph: +97165579970 Fax: +97165579980 Email: [email protected]
FRANCE : SA Belair, Zone Industrielle de Moutti-Sud-74540 Alby sur Cheran 323 946 624 RCS ANNECY