PPAP Automotive Ltd

BSE: 532934 | NSE: PPAP | ISIN: INE095I01015 
Market Cap: [Rs.Cr.] 150.99 | Face Value: [Rs.] 10
Industry: Auto Ancillaries

Director's Report
DIRECTORS

Dear Members,

PPAP Automotive Limited

Your Directors are pleased to present their Nineteenth Annual Report together with theAudited Statement of Accounts for the Financial Year ended March 31, 2014.

FINANCIAL HIGHLIGHTS

We are delighted to present the highlights of the Financial Results of your Company forthe year ended March 31, 2014.

Particulars For the year ended
31-Mar-14 31-Mar-13
Total Revenue 25,525.02 21,959.12
Earnings before Interest, Tax, Depreciation and amortization expense 3,627.01 1,974.61
Less: Interest 304.04 114.18
Depreciation & Amortization 1,974.76 1,811.13
Profit/(Loss) before exceptional and extra-ordinary items and Tax 1,348.21 49.30
Add: Exceptional items - 8.66
Profit/ (Loss) before Extraordinary items and tax (PBT) 1,348.21 57.96
Less: Extraordinary items 546.06 -
Profit/ (Loss) before tax (PBT) 802.15 57.96
Add/ (Less): Tax Expenses
Current Tax (331.39) 7.28
Deferred Tax 75.11 88.75
Profit/(Loss) for the period 545.87 153.99
Add : Profit brought forward from previous year 8,982.63 8,828.64
Balance available for appropriation 9,528.50 8,982.63

BUSINESS OPERATIONS

The Total Sales (net of excise) of your Company for FY 2013-14 stood at Rs. 24,675.69lakhs as against Rs. 21,542.83 lakhs in the previous year showing an increase of 14.54%.

Profit after tax increased by 254.48% from Rs. 153.99 lakhs in 2012-13 to Rs. 545.87 inFY 2013-14.

During the year under review, the management has taken several measures toimprovetheoperationalefficiencyand to reduce the costs.

Your Company is in the expansion mode and has started the commercial production at itsnew manufacturing facility at Pathredi (Rajasathan) in the month of May 2014. The Companyhas also increased the production volume at its existing manufacturing facility atChennai.

The Company has during the year under review, introduced new technologies viz. SUS typeExtrusion (Bright Stainless Steel type), Slide Rail (exclusive Extrusion process) andRotary Stretch Bending, to meet the demands of its customers for the passenger carsegments.The Company, continuously focuses on acquiring the latest technologies.It hasreceived further orders for Injection Molding parts for latest models of Maruti SuzukiIndia Limited, the production of which shall start in FY 2015-16 from the Pathredi plant.

The Company through its Joint Venture, utilises the Rubber (Metal and Non-Metal) andTPO (Glass Run Channel) Extrusion technology for making the Automotive Sealing ExtrudedParts. Now, the Company has all the technologies to cater the complete demand of ourcustomer for the Sealing System parts.

TRANSFER OF "WHITE GOODS BUSINESS DIVISION" AND "MAINLINE POWERDISTRIBUTION SYSTEM BUSINESS DIVISION"

During the Financial Year 2013-14, the Company has transferred its White Goods BusinessDivision" and "Mainline Power Distribution System Business Division" as agoing concern on slump sale basis to its related entities, ‘Ajay Poly PrivateLimited’ and ‘Seiki Auto India Private Limited’ respectively.

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 Company from ‘B-II/29,Mohan Co-operatives Industrial Estate Badarpur, New Delhi to ‘B-206A, Sector –81, Phase – II, Noida - 201305’ with effect from May 8, 2013.

CHANGE OF NAME OF THE COMPANY

The name of the Company has been changed from ‘Precision Pipes and ProfilesCompany Limited’to ‘PPAP Automotive Limited’ with effect from May16, 2014, subsequent to the Members approval vide Special Resolution passed through PostalBallot on April 3, 2014 and consequently upon receipt of approval from Ministry ofCorporate Affairs.

SUBSIDIARIES

The Company has no subsidiary as on March 31, 2014.

TECHNICAL COLLABORATION

The Technical Collaboration with Tokai Kogyo Co. Limited, Japan and Nissen ChemitecCorporation, Japan, continues to be active and the Company is receiving the requisitesupport, whenever required.

JOINT VENTURE COMPANY

The Joint Venture Company, PPAP Tokai India Rubber Private Limited, has started itsoperations in the Financial Year 2013-14 and started supplying automotive parts to MarutiSuzuki India Limited and Honda Cars India Limited to meet the demand for the passengercars. The JV Company also exports to Thailand.

DIVIDEND

With a view to conserve the resources for future business requirements and expansionplans, your Directors are of view that the current year’s profit be ploughed backinto the operations and hence no dividend is recommended for the year under review.

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.

DIRECTORS

Mr. Ajay Kumar Jain and Mr. Abhishek Jain, in the past, were non-retiring Directors.However, in terms of the provisions of the Companies Act, 2013, the Board in its meetingheld on August 14, 2014 categorized them as Directors liable to retire by rotation.

Thus,Mr. Ajay Kumar Jain retires from the Board by rotation this year and beingeligible, offers himself for re-appointment.

As per the provisions of the Companies Act, 2013, Independent Directors shall not beliable to retire by rotation. Accordingly,Mr. Pravin Kumar Gupta, who was earlierappointed by the Members as an Independent Director of the Company liable to retire byrotation, is proposed to be reappointed at the ensuing Annual General Meeting as anIndependent Director not liable to retire by rotation for a period upto March 31, 2019.Your Board recommends the said appointment.

The Board of Directors of the Company co-opted Mr. Bhuwan Kumar Chaturvedi and Mr.Ashok Kumar Jain, as Additional Directors of the Company with effect from December 26,2013 and May 27, 2014 respectively, in the category of Non-Executive Independent Directorsand Ms. Vinay Kumari Jain, in the category of Non-Executive Director with effect fromDecember 26, 2013, pursuant to Section 149, 161 of the Companies Act, 2013 read with theArticles of Association of the Company.

Mr. Bhuwan Kumar Chaturvedi, Ms. Vinay Kumari Jain and Mr. Ashok Kumar Jain, hold theoffice of Director, as Additional Directors, until the date of the ensuing Annual GeneralMeeting of the Company and are eligible for appointment as the Directors. Keeping in viewtheir experience and expertise, the Board considers it desirable that the Company shouldcontinue to avail the services of Mr. Bhuwan Kumar Chaturvedi, Ms. Vinay Kumari Jain andMr. Ashok Kumar Jain, as their presence as Director on the Board would be of immensebenefit to the Company. The Resolutions proposing their appointment will be placed beforethe Shareholders for their approval at the ensuing Annual General Meeting of the company.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed both undersub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of theListing Agreement with the Stock Exchanges.

Mr. Sharat Chand Jain, Mr. Rajeev Jain, Mr. Anuj Jain have resigned from theDirectorship of the Company with effect from April 29, 2013, Mr. Ashok Kumar Aggarwal witheffect from November 20, 2013, Mr. Devendra Chandra Jain, with effect from December 30,2013 and Mr. Manmohan Singh Kapur with effect from February 13, 2014. The Board ofDirectors placed on record their appreciation for the valuable services and guidanceprovided by them, during their tenure as Directors of the Company.

Brief resume/details of the Directors, who are to be appointed or re-appointed asmentioned herein above have been furnished in the Corporate Governance Report, formingpart of the Annual Report. The Board recommends their appointment or re- appointment atthe ensuing Annual General Meeting.

CORPORATE SOCIAL RESPONSIBILITY

The Companies Act, 2013 notified Section 135 of the Act concerning Corporate SocialResponsibility alongwith the Rules made thereunder and revised Schedule VII to the Act on27 February 2014 to come into effect from 1 April 2014.

The Company being covered under the provisions of the said section, has taken necessaryinitial steps in this regard. A Committee of the Directors, titled ‘Corporate SocialResponsibility Committee’, has been formed by the Board in its meeting held on 27 May2014, consisting of the following Directors:

1. Mr. Ashok Kumar Jain, Chairman

2. Ms. Vinay Kumari Jain

3. Mr. Abhishek Jain

The said section being enacted with effect from 1 April 2014, necessary details asprescribed under the said section shall be presented to the members in the Annual Reportfor the year 2014-15.

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information andexplanations obtained, your Directors make the following statement in terms of Section217(2AA) of the Companies Act, 1956:

i. that in the preparation of Annual Accounts for the Financial Year ended March 31,2014, the applicable Accounting Stan- dards 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, 2014 and of theprofit of the Company for the Financial Year ended March 31, 2014;

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;

iv. that the Annual Accounts for the Financial Year ended March 31, 2014 have beenprepared on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A report on Management Discussion and Analysis is appended as Annexure to this reportas per the requirements of Listing Agreement with Stock Exchanges.

CORPORATE GOVERNANCE

The Company has been making every effort to improve governance and transparency in theconduct of the business. Your Company is committed to good Corporate Governance coupledwith good corporate practices.

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a report onCorporate Governance is annexed as a separate section and forms part of this AnnualReport.

AUDITORS

M/s. O.P. Bagla & Co. (Firm Registration No. 000018N), Chartered Accountants, thestatutory auditors of the Company, will retire at the conclusion of the ensuing AnnualGeneral Meeting and are eligible to hold office for a period of four years, upto 2018,pursuant to the provisions of Sections 139, 142 and other applicable provisions, if any,of the Companies Act, 2013, subject to the approval of the Members and thereafter,ratification by the Members annually.

The members are requested to appoint M/s. O.P. Bagla & Co. (Firm Registration No.000018N), Chartered Accountants, as auditors for four years from the conclusion of theensuing Annual General Meeting till the conclusion of the 23rd Annual GeneralMeeting, in 2018.

The Notes on the Financial Statements referred to in the Auditors’ Report areself-explanatory and do not call for any further comments.

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-14 31-Mar-13
Foreign Exchange Earning
(a) Export 1.15 70.32
Foreign Exchange Outgo
(a) Payment to Collaborators 1236.63 1,150.14
(b) Directors/ Employees Visit abroad 92.76 55.13
(c) Raw Materials & Consumable Stores 5268,27 7,803.11
(d) Machinery, Dies and Moulds 1,284.28 1,555.57
(d) Interest on ECB - 1.53

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 theCompany’s performance.

Your Directors acknowledge with gratitude the co-operation and continuous supportextended by the technical collaborators viz.

Tokai Kogyo Co. Ltd., Japan, and Nissen Chemitec 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 : 14.08.2014 Chairman & Managing Director Whole Time Director

ANNEXURE TO DIRECTORS’ REPORT

ANNEXURE-A FORM B

Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors)Rules, 1988. Form for Disclosure of Particulars with respect to Absorption 2013-14

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, : New products are being launched by the company to satisfy customer requirements
e.g. product improvement, cost reduction, product development. 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) Tokai Kogyo Co Ltd., Japan, since 1989
(b) Nissen Chemitec Corporation, Japan, since 2007
(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 : 14.08.2014 Chairman & 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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