DIRECTORS
The Board of Directors take pleasure in presenting the 8th annual report and the
audited accounts for the year ended March 31, 2014. The Management Discussion and Analysis
(MD & A) Report have been included at the appropriate places in this report.
Abstract of the Financial Results of the Company
|
|
(Rs. in million) |
|
2013-2014 |
2012-2013 |
| Profit before depreciation and tax |
259.99 |
268.96 |
| Less : Depreciation |
50.92 |
36.30 |
| Profit before taxation |
209.07 |
232.66 |
| Less: Provision for taxation |
51.63 |
52.13 |
| (Add) / Less: Provision for deferred tax |
6.20 |
3.22 |
| Profit after tax |
151.24 |
177.31 |
| Add: Opening surplus |
932.76 |
812.94 |
| Add: Dividend distribution tax of earlier year return back |
|
3.85 |
| Profit available for appropriation |
1,084.00 |
994.10 |
| Appropriation |
|
|
| General reserve |
15.12 |
17.73 |
| Proposed dividend |
18.52 |
40.04 |
| Dividend distribution tax |
- |
3.57 |
| Balance surplus carried to balance sheet |
1,050.36 |
932.76 |
Dividend
The directors recommend a dividend of INR 0.37 per equity share of INR 1.00 each. This
comes to INR 18.52 million. The dividend will be paid, upon approval by the members of the
Company at the ensuing annual general meeting to the registered members, who are in the
register of members as on the book closure date and in respect of the dematerialised
shares, dividend will be paid to the beneficial owners based on the list provided by the
depositories.
Review of Operations and Future Outlook
During the year under review, the Company recorded sales of INR 1442.86 million as
against INR 1407.32 million in the previous year. The company earned a net profit of INR
151.24 million as against INR 177.31 million in the previous year.
The Indian Subsidiaries, Treadsdirect Limited and Titan Tyrecare Products Limited
achieved sales of INR 1670.88 million and INR 45.66 million respectively during the year
under review. The revenue from windmill operations increased to INR 35.41 million from INR
33.63 million in the previous year recording an increase of 5%.
There was only marginal improvement in overall sales due to global economic slowdown.
The decrease in input costs was inadequate to offset the increases in employee,
depreciation and overhead costs. Hence the margins were lower.
In February 2014, the Company commenced manufacture of buffing rasp blades, with the
installation and commissioning of a state of the art furnace and relocated two presses at
Kovilpalayam in September 2013 at total cost of INR 72.75 million.
The Company acquired the entire business of its wholly owned subsidiary Titan Tyrecare
Products Limited with effect from 01.09.2013 consisting of manufacture of retreading
machineries and a 100% EOU division engaged in manufacture of brazed carbide products for
a consideration of INR 169.63 million.
During the year under review, two hydraulic presses were installed at Annur and new
moulds were procured at a total cost of INR 20.62 million.
The Karur facility manufacturing tyre repair units was shifted to Annur in order to
consolidate operations.
The wholly owned subsidiary Treadsdirect LLC, USA acquired the assets of Western states
manufacturing company Inc which was engaged in manufacture and distribution of tyre repair
and related products.
The Company has successfully retreaded aircraft tyres for the Indian Airforce on
commercial basis in November 2013.
The Company expects to have considerable growth in sales and profitability in future on
account of substantial capital investments made during the year.
Risk and Concerns
The company does not face any risks other than those that are prevalent in the
industry. The company has taken all possible steps to overcome such risks. The main
concerns are the volatility in raw material prices and fluctuations in foreign exchange
rates. Effective planning in raw material purchasing and the ability to pass on raw
material price increases have minimised the risk relating to the volatility in raw
material prices. Foreign exchange fluctuation risk is minimised through proper planning
and natural hedging.
As a part of the overall risk management strategy, all assets are appropriately
insured.
Internal Control Systems
Quarterly Internal Audit is carried out by an independent firm of Chartered Accountants
and the observations are reported to the management. Immediate steps are taken to rectify
any discrepancies. All significant audit observations are discussed in the audit committee
meetings.
Human Resources and Industrial Relations
The Company continues to enjoy a cordial relationship with all its employees. The
employee count as on March 31, 2014 is 306.
Subsidiaries
The consolidated financial statements presented in this annual report include financial
results of all the subsidiary companies. The details of the Subsidiary Companies are
furnished in the statement pursuant to section 212 of the Companies Act, 1956.
Directors
The Board of Directors, at their meeting held on 31st July, 2014, have
appointed Ms Vidyasankar Bhuvaneswari as an Additional Director of the Company and she
holds office upto the ensuing Annual General Meeting. Further, the Board has recommended
the appointment of Ms Vidyasankar Bhuvaneswari as the Independent Director and accordingly
necessary Resolution has been included in the Agenda of the Notice convening the Annual
General Meeting.
Further, the Board of Directors, at their meeting held on 31st July, 2014,
has recommended the appointment of Mr Suresh Jagannathan, Mr P Vijay Raghunath and Mr M D
Selvaraj, as the Independent Directors of the Company for a period of 5 consecutive years.
Accordingly, necessary Resolution(s) proposing their appointment(s) has been included in
the Agenda of the Notice convening the Annual General Meeting.
Dr Jairam Varadaraj, Director of the Company, retires by rotation and being eligible
offers himself for re-appointment.
Auditors
Pursuant to the Section 139 of Companies Act, 2013 read with the Company (Audit and
Auditors) Rules, 2014, the present auditors, M/s. Reddy, Goud and Janardhan, Chartered
Accountants, Bangalore, is recommended for appointment as Statutory Auditors of the
Company to hold the office for 3 years from the conclusion of the ensuing Annual General
Meeting till the conclusion of 11th Annual General Meeting of the Company.
Further, such appointment is liable to ratification by the members of the company at every
annual general meeting during their tenure of office.
Directors’ Responsibility Statement
In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, the
Directors confirm that they have
1. In the preparation of the annual accounts, followed the applicable accounting
standards and there are no material departures.
2. Selected such accounting policies and applied them consistently and made judgements
and estimates that are reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company and of the profit of the Company for the financial year.
3. 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.
4. Prepared the annual accounts on a going concern basis.
Other Information
Particulars as required by Section 217(1) (e) of the Companies Act, 1956, relating to
Conservation of Energy, Technology absorption and Foreign Exchange earnings and outgo are
provided as an annexure to this report. There are no employees who are in receipt of
remuneration exceeding the specified limit as notified by the Government.
The Company has not accepted any fixed deposits and hence there were no unclaimed fixed
deposit as on 31.03.2014.
Corporate Governance
A separate report on the compliance with Clause 49 of the Listing Agreement with the
Stock Exchanges and the Auditor’s Certificate on the compliance form part of this
report.
Cautionary Statement
Statements in this report, especially those relating to MD & A giving details of
company’s objectives, projections, estimates and expectations may be construed as
"forward looking statements" within the realm of applicable laws and
regulations. Actual results are liable to differ materially from those either expressed or
implied.
Acknowledgement
The Directors thank the Company’s customers, vendors, investors, business
associates and bankers for their support to the Company. The Directors also wish to place
on record their appreciation of the contributions made by all the employees towards the
growth of the Company
Annexure to Directors’ Report
A. Conservation of energy
a. Energy conservation measures taken
Energy conservation is an on-going process
b. Additional investments and proposals, if any, being implemented for reduction of
consumption of energy
There are no significant proposals
c. Impact of the measures taken in (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods.
No significant reduction
d. Total energy consumption per unit of production
Not applicable
B. Technology absorption
e. Efforts made in technology absorption
i. Research and Development (R & D)
1. Specific areas in which R & D is carried out by the Company
Improvements in products and processes
2. Benefit derived as a result of above R & D
Increase in orders from new markets
3. Future plan of action
No significant plans
| 4 Expenditure on R & D |
Rs. in Million |
| a. Capital |
: Nil |
| b. Recurring |
: 9.15 |
| c. Total |
: 9.15 |
| d. Total R & D expenditure as a percentage of total turnover |
: 0.63 % |
ii. Technology absorption, adaptation and innovation
Not applicable
C. Foreign exchange earnings & outgo
f. Activities relating to exports; initiatives taken to increase exports, development
of new export markets for products and services and export plan
The Company is constantly and consciously planning to penetrate unexplored markets to
improve its international market share.
g. Total foreign exchange earned and used
| Foreign exchange earned |
: Rs. 251.73 million |
| Foreign exchange used |
: Rs. 38.38 million |
|
For the Board of Directors |
| Coimbatore |
Sudarsan Varadaraj |
| 31.07.2014 |
Chairman & Managing Director |
+91-9892691696
