PPAP Automotive Ltd

BSE: 23818 | NSE: 532934 | ISIN: INE095I01015 
Market Cap: [Rs.Cr.] 112.28 | Face Value: [Rs.] 10
Industry: Plastics Products

Director's Report
DIRECTORS

Dear Members,

Precision Pipes and Profiles Company Limited

Your Directors are pleased to present their Eighteenth Annual Report together with theAudited Statement of Accounts for the Financial Year ended March 31, 2013.

Financial Highlights

We are delighted to present the highlights of Financial Results of your Company for theyear ended 31st March, 2013.

Rs. In lakhs

Particulars For the year ended
31-mar-13 31-Mar-12
Revenue from operations 21,959.12 18,740.81
Profit Before Depreciation and amortization expense 1,860.43 3,285.70
Less: Depreciation & Amortization 1,811.13 1,807.82
Profit/(Loss) before exceptional and extra-ordinary items and Tax 49.30 1,477.88
Exceptional items 8.66 66.91
Profit/ (Loss) before tax (PBT)

57.96

1,544.79

Les: Tax Expenses
Current Tax (7.28) 536.13
Deferred Tax (88.75) (279.98)
Profit/(Loss) for the period 153.99 1,288.64
Add: Profit brought forward from previous year 8,828.64 7,540.00
Profits carried forward to the following year 8,982.63 8,828.64

Business Operations

PPAP is the principal manufacturer of automotive Body Sealing, Exterior & Interiorparts. PPAP is also engaged in the business of manufacturing of profiles for White GoodsIndustry and Mainline Power Distribution System.

The Company’s esteemed customers include Maruti Suzuki India Limited, Honda CarsIndia Limited, General Motors (India) Limited, Toyota Kirloskar Motors, Renault NissanAutomotive India Private Limited, Tata Motors Limited, Ford India Private Limited,Mahindra and Mahindra Limited and International Cars and Motors Limited along with theirTier 1 suppliers. Your company has a technical collaboration with Tokai Kogyo Co. Ltd,Japan and Nissen Chemitec Corporation, Japan to develop automotive products. In the WhiteGoods Industry, your Company develops customized profiles for Godrej, Voltas, Videocon andCarrier Refrigerators.

Your Company has achieved Total Sales (net of excise) of Rs. 21542.83 lakhs in theFinancial Year ended March 31, 2013 as against Rs. 18464.34 lakhs in the previous year.Profit after tax for 2012-13 is Rs. 153.99 lakhs as compared to Rs. 1288.64 lakhs in2011-12.

Market Scenario

Thetotal car sales for the Indian Automotive Industry stood at 26,86,429 units in FY2012-13 compared to 26,18,072 units FY 2011-12 [source: The Society of Indian AutomobileManufacturers (SIAM)].

In the last fiscal, the strike at Manesar plant of Maruti Suzuki India Ltd. (MSIL) andlabour unrest at Argentum, Greater Noida of PAN India Motors Limited, resulted inreduction of customer orders.

In September 2012, car sales faced the second largest downslide at 5.36 percent afterthe 22.39 percent dip witnessed in FY 2001-02 [source: SIAM].The car industry isexperiencing sluggish sales due to high interest rates, inflation, rising fuel prices andvolatility in exchange rates.

Passenger car sales in India are forecast to grow at a rate of 3-5 per cent in theongoing fiscal on expectations of an improvement in overall macro-economic conditions,despite witnessing a fall of 6.69 per cent during FY 2012-13. [source: SIAM]

Dividend

Your Company is focusing on enhancing its product portfolio and therefore your Companyhas decided to plough back the profits to realize the expansion plans in order to cater tothe new business. Therefore, your company has not recommended any dividend for theFinancial Year ended March 31, 2013.

Transfer to Reserves

Your Company has not made any transfer to the Reserves during the Financial Year2012-13.

Transfer of ‘White Goods Business Division’ and ‘Mainline PowerDistribution System Business Division’

Subsequent to the year end, the Shareholders of the Company by way of Postal Ballothave given their approval under Section 293(1)(a) of the Companies Act, 1956 for transferof the Company’s ‘White Goods Business Division’ and ‘Mainline PowerDistribution System Business Division’ as a going concern on slump sale basis,effective on such date as the Board deems fit for the Company, to ‘Ajay Poly PrivateLimited’ and ‘Seiki Auto India Private Limited’ respectively.

Fixed Deposits

During the year under review, your Company has not invited or accepted any FixedDeposits from the Public pursuant to the provisions of Section 58A of the Companies Act,1956 read with the Companies (Acceptance of Deposits) Rules, 1975.

Change of Registered Office

The Registered Office of your Company has been shifted from ‘4561, Deputy Ganj,Sadar Bazar, Delhi 110006’ to ‘54 Okhla Industrial Estate, Phase III, NewDelhi-110020’ with effect from May 8, 2013.

Change of Corporate Office

The Corporate Office of your Company has been shifted from ‘B-II/29, MohanCo-operatives Industrial Estate Badarpur, New Delhi to ‘B-206A, Sector – 81,Phase-II, Noida - 201305’ with effect from May 8, 2013.

Joint Venture

In line with the focus of your company to continuously develop new products, yourcompany has entered into an equal partnership with Tokai Kogyo Co. Ltd. The name of thenew company is "PPAP Tokai India Rubber Private Limited". It is 50:50 JV companywith your company’s technical collaborators "Tokai Kogyo Co. Ltd., Japan",with whom your company has a relationship for more than 25 years. The Company willmanufacture Rubber Extrusion Products and TPO Glass Run Channel.

Directors

In terms of the provisions of the Companies Act, 1956 & the Articles of Associationof the Company, Mr. Devendra Chandra Jain, Director of the Company shall retire byrotation at the forthcoming Annual General Meeting of the Company and being eligible,offer himself for re-appointment.

Mr. Pravin Kumar Gupta was appointed as an Additional Director of the Company witheffect from May 8, 2013. In accordance with the provisions of the Companies Act, 1956, Mr.Pravin Kumar Gupta, in his capacity as an Additional Director holds office up to the dateof the forthcoming Annual General Meeting. The Company has received notice from a memberof the Company under section 257 of the Companies Act, 1956, proposing the candidature ofMr. Pravin Kumar Gupta for the Directorship.

Mr. Ajay Kumar Jain, Managing Director of the Company was reappointed for a furtherperiod of three years with effect from November 1, 2012. The Board of Directors on therecommendation of the Remuneration Committee approved reappointment of Mr. Ajay KumarJain, as the Managing Director of the Company for a further period of three yearscommencing from November 1, 2012 subject to the approval of shareholders and such otherapproval as may be required.

Mr.Surender Kumar Tuteja, Mr. Brij Behari Tandon, Mr.Vinod Vaish and Mr. Kaushal KumarMathur, Directors of the Company resigned from the Board with effect from June 11, 2012,June 12, 2012, June 13, 2012 and June 26, 2012 respectively. The Board of Directors placedon record their appreciation for the valuable services and guidance provided by themduring their tenure as Directors of the Company.

Brief resume/details of the Directors, who are to be appointed or re-appointed asmentioned herein above has been furnished alongwith the Notice of the ensuing AnnualGeneral Meeting. The Board recommends their appointment or re-appointment at the ensuingAnnual General Meeting.

Directors’ Responsibility Statement

To the best of our knowledge and belief and according to the information andexplanations obtained by us, your Directors make the following statement in terms ofSection 217(2AA) of the Companies Act, 1956:

i. that in preparation of Annual Accounts for the financial year ended March 31, 2013,the applicable Accounting Standards have been followed;

ii. that appropriate accounting policies have been selected and applied consistentlyand judgments and estimates that are reasonable and prudent have been made so as to give atrue and fair view of the state of affairs of the Company as at March 31, 2013 and of theprofit of the Company for the financial year ended March 31, 2013;

iii. that the proper and sufficientcare has been taken for the maintenance of adequateaccounting records, in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; and

iv. that the Annual Accounts for the year ended March 31, 2013 have been prepared on agoing concern basis.

Management Discussion and Analysis Report

In terms of requirement of Clause 49 of the Listing Agreement with Stock Exchanges,‘Management Discussion and Analysis Report’is annexed and forms part of thisAnnual Report.

Corporate Governance

Your Company is committed to benchmarking itself with global standards for providinggood Corporate Governance. The endeavor of the Company is not only to comply with theregulatory requirements but also practice good Corporate Governance that lays strongemphasis on integrity, transparency and overall accountability.

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a detailedreport on Corporate Governance is annexed as a separate section and forms part of thisAnnual Report.

Auditors

The term of M/s Dharam Taneja Associates, Chartered Accountants, New Delhi, asStatutory Auditors of the Company, expires at the conclusion of the forthcoming AnnualGeneral Meeting of the Company. M/s. Dharam Taneja Associates have expressed theirunwillingness for reappointment as Statutory Auditors. The Board hereby recordappreciation for the services rendered by them during their tenure. The Board on therecommendation of the Audit Committee has considered the appointment of M/s O. P. Bagla& Co., Chartered Accountants, New Delhi as a Statutory Auditors at the ensuing AnnualGeneral Meeting.

The Board recommends the appointment M/s O. P. Bagla & Co. Chartered Accountants,New Delhi who have given their consent and a certificate if made, will be within thelimits specified under Section 224 (1B) of the Companies Act, 1956.

Auditors’ Report

The observations of Auditors in their Report, read with the relevant notes to theaccounts are self explanatory and therefore do not require further explanation.

Cost Auditors

The Board has appointed M/s Chittora& Co., Cost Accountants, as Cost Auditor of theCompany under Section 233B of the Companies Act, 1956 for the Financial Year 2013-14 forconducting the audit of the Cost Records of the Company.

Listing

The shares of the Company are presently listed on National Stock Exchange of IndiaLimited ("NSE") and Bombay Stock Exchange Limited ("BSE").

Energy Conservation, Technology Absorption and Research & Development and ForeignExchange Earnings and Outgo

Energy Conservation

The particulars in respect of Energy Conservation are not applicable to your Company interms of Section 217(1) (e) read with Companies (Disclosure of Particulars in the Reportof Board of Directors) Rules, 1988.

Technology Absorption and Research & Development

As required under Rule 2 of the Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988, the particulars relating to Technology Absorption andResearch and Development as per Form B are given in Annexure ‘A’ annexedherewith, which forms a part of this Directors’ Report.

Foreign Exchange Earnings and Outgo

Particulars For the year ended
31-Mar-13 31-Mar-12
Foreign Exchange Earning
(a) Export 70.32 218.32
Foreign Exchange Outgo
(a) Payment to Collaborators 1,150.14 200.83
(b) Directors/ Employees Visit abroad 55.13 37.32
(c) Raw Materials & Consumable Stores 7,803.11 5,878.12
(d) Machinery, Dies and Moulds 1,555.57 1,318.16
(e) Dividend - 4.50
(f) Interest on ECB 1.53 7.86

Environment

The Company is not involved in any type of operations hazardous to environment and doesnot discharge any trade effluents (solid, liquid or gaseous) causing pollution. TheCompany adheres to the provisions of environmental laws.

Particulars of Employees

None of the employee of the Company is in receipt of the salary exceeding the limits ofRs. 60,00,000/- per annum or Rs. 5,00,000/- per month as specified by Section 217(2A) ofthe Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 asamended by Companies (Particulars of Employees) Rules, 2011.

Acknowledgement

Your Directors wish to convey their appreciation to all the company’s employeesfor their enormous efforts as well as their collective contribution to the company’sperformance.

Your Directors acknowledge with gratitude the co-operation and continuous supportextended by the technical collaborators viz. Tokai Kogyo Co. Ltd., Japan, and NissenChemitec Corporation, Japan.

Your Directors also take this opportunity to convey their thanks to the shareholders,suppliers and all other business associates for the continuous support given by them tothe Company and their confidence reposed in the management

For and on behalf of the Board of Directors
Place : Noida Ajay Kumar Jain Abhishek Jain
Date : July 6, 2013 Managing Director Whole Time Director

ANNEXURE ‘A’ TO THE DIRECTORS’ REPORT

FORM B

See Rule 2 of the Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988. Form for Disclosure of Particulars with respect to Absorption2012-13.

Research and Development (R & D)
1. Specific areas in which R & D carried out by the . Company : Designing and optimizing the manufacturing process for yield and quality improvement
2. Benefits derived as a result of the above R & D : Achieving customer delight and improvement in overall performance of the products.
3. Future plan of action : To maintain the above.
4. Expenditure on R & D
(a) Capital : N.A.
(b) Recurring : N A
(c) Total : N A
(d) Total R & D expenditure as a Percentage of total turnover : N A
Technology Absorption, Adaptation and Innovation
1. Efforts, in brief, made towards Technology, Absorption, Adaptation and Innovation. : Progress was made during the year in development of new products and up gradation of technology to manufacture automotive products.
2. Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction product development. : New products are being launched by the Company to satisfy customer requirements
Overall improvement in Product performance
3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished:
(a) Technology Imported : Automotive Sealing System from Tokai Kogyo Co Ltd., Japan.
Interior and Exterior Injection Molded Products from Nissen Chemitec Corporation, Japan
(b) Year of Import : a) M/s Tokai Kogyo Co. Ltd., Japan.
Since 1989 ; Agreement renewed every 5 years.
b) M/s. Nissen Chemitec Corporation, Japan
Since 2007; Agreement renewed every 5 years
(c) Has technology been fully absorbed? : Yes
(d) If not fully absorbed, areas where this has not taken place, reasons thereof and future plans of action. : N.A.

 

For and on behalf of the Board of Directors
Place : Noida Ajay Kumar Jain Abhishek Jain
Date : July 6, 2013 Managing Director Whole Time Director
   
Futures & Options Quote
Future Data Not present
Key Information

Key Executives:

Ajay Kumar Jain , Managing Director

Abhishek Jain , Whole-time Director

Pravin Gupta , Independent Director

Sonia Bhandari , Company Secretary


Company Head Office / Quarters:

54 Okhla Industrial Estate,
Phase-III,
New Delhi,
New Delhi-110020
Phone : New Delhi- / New Delhi-
Fax : New Delhi- / New Delhi-
E-mail : investor@precisionpipes.com
Web : http://www.precisionpipes.com

Registrars:

Link Intime India Pvt Ltd
A-40 II Flr Phase-II,Naraina Indl Area,Near Batra Banquet,New Delhi - 110 028

 
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