Integra India Group Company Ltd Merged Directors Report

INTEGRA INDIA GROUP COMPANY LIMITED (FORMERLY KNOWN AS HINDUSTAN CONTROL LIMITED) ANNUAL REPORT 2010 DIRECTORS REPORT Dear Shareholders, The Directors submit their Twenty Fourth Annual Report and the Audited Accounts of the Company for the period ended 31st December, 2010. Financial Results (Amount in Rs.) 9 Months 12 Months ended on ended on 31st December, 2010 31st March, 2010 Profit/(Loss) before taxation (16,288,301) 20,931,372 Less: Provisions for taxation (5,093,057) 7,156,213 Less: Short/ Excess) provision in respect of earlier years(net) 870,465 1,059,753 Profit/ (Loss) after taxation (12,065,609) - Less: Prior Period Item 1,590,978 - Net Profit/ (Loss) (13,656,587) 12,715,406 Add: Balance brought forward from previous year 54,126,245 44,596,614 Profit available for appropriation 40,469,658 57,312,020 Appropriation: Transfer to General Reserve - 1,390,000 Proposed Dividend - 1,540,000 Tax on distributed Profit - 2,55,775 Surplus carried to Balance Sheet 40,469,658 54,126,245 Dividend In view of the financial performance of the Company, the Directors do not recommend any dividend for the year ended 31st December 2010. Performance The Company has changed its accounting year from 1st April - 31st March to 1st January - 31st December. Consequently, the year under the report is for nine months compared to the previous year results for the twelve months ended 31st March, 2010. The performance for the period ended 31st December, 2010 is adversely affected by substantial decline in turnover, higher operating expenses particularly financial expenses, high cost of input, etc. The management is taking corrective actions for a much better year ahead. Kindly refer Annexure-A reflecting management discussions and analysis. Transfer to Investor Education and Protection Fund: In terms of Section 205C of the Companies Act, 1956 the unclaimed dividend amount (account 001105004584) aggregating to Rs.37,721/- lying with the Company for a period of Seven years pertaining to year ended on 31st March 2003, was transferred during the year under review, to the Investor Education and Protection Fund, established by the Central Government. Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo: The particulars as prescribed under clause (e), of sub-section (I) of Section 217 of the Companies Act, 1956, read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, are given in the Annexure-B, attached here. Human Resource The strongest resource of the company is its employees. Your company has been investing into development and training of employees at all levels to improve their abilities to contribute towards the companys performance. Your company is also taking full initiatives to effectively implement measures of welfare, health and safety. The Companys HR norms and policies are currently being reviewed in the light of current practices. Quality Accreditations It is reported with appreciation that the ISO Audit conducted by TUV INDIA in October 2010 has been completed successfully. Your Company has received the ISO 9001:2008 certification, now with a revised scope not only including design, manufacturing and supply of Railway Control Systems but also manufacturing and supply of Intelligent Transport Systems and Power Products. This accomplishment reflects the efforts of our employees, at all levels, individually and in team, who contribute towards customers satisfaction, in terms of product quality and services. Particulars of Employees Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended is not applicable as the Company does not have any employee whose particulars are required to be disclosed under the said provisions. Directors Responsibility Statement Pursuant to provisions of Section 217(2AA) of the Companies Act, 1956, the Directors, to the best of their knowledge and belief, confirm that: (i) In the preparation of the annual accounts, the applicable accounting standards have been followed by the Company. (ii) Appropriate accounting policies have been selected and applied consistently and such judgments and estimates have been made, 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 financial period ended 31st December, 2010 and of the profit of the company for the period ended on that date. (iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. (iv) The annual accounts have been prepared on a going concern basis. Fixed Deposits The Company has not accepted any Fixed Deposit from the public during the period under review. Compliance with the provisions of the Companies Act, 1956 As required under Section 383A of the Companies Act, 1956, a copy of the Certificate from Mr. Devesh A Pathak, the Secretary in whole time practice, regarding compliance with provisions of the Companies Act, 1956, forming part of this report, is attached herewith. Directors Pursuant to and in accordance with the provisions of the Companies, Act, 1956 and Articles of Association of the Company, Mr. K N Shenoy and Mr. Adrian Oehler, retire from the Board of Directors by rotation and are eligible for re-appointment. Mr. Ashok Dullu has resigned as Managing Director and Director of the Company with effect from 15th November, 2010. The Directors place on record the appreciation of the services rendered by him while he was Managing Director of the Company. Auditors The Companys Auditors M/s. O.P. Rathi & Co., Chartered Accountants hold office up to the conclusion of the ensuing Annual General Meeting. The Company has received a requisite certificate from them pursuant to Section 224(1B) of the Companies Act, 1956 confirming their eligibility for reappointment as Auditors of the Company. Acknowledgement The Board expresses its gratitude to INTEGRA Holding AG, Switzerland, Gorba AG, Switzerland and Moser-Baer AG, Switzerland for their continued support. The Board also takes this opportunity to record its thanks to the Companys valued Customers , including ABB-Vadodara, and Suppliers, various Central and State Government Departments, Financial Institutions, Bankers, and the Shareholders of the Company for their continued support. It also extends its appreciation to the Employees of the Company at all levels for their commitment, dedication and team work. For and on behalf of the Board of Directors, Halol, Panchmahals K N Shenoy 27th January, 2011. Chairman Annexure - A MANAGEMENT DISCUSSION AND ANALYSIS 1) Introduction: INTEGRA Holding AG, Switzerland has established its presence in India through INTEGRA India Group Co. Ltd. (INTEGRA India) in 1987. The company was formed as a joint Venture with ABB under the name of Integra Hindustan Control Ltd. These strong roots between Switzerland and India are poised for a high trajectory growth offered by Indian Market. In 2008 INTEGRA has taken over the shares from ABB and started repositioning your company for newgrowth. INTEGRA India has an established presence in Railway Signalling in Metal- to-Metal technology and it also has a strong contract manufacturing capability through its association with ABB. Moreover, in line with its newly defined vision to be INTEGRA Groups strategic pillar for sustainable growth in India your company has not only taken forward its cooperation with its existing partners Gorba and Moser Baer but has also entered into new cooperation agreements with INTEGRA Biosciences Group, Aquametro, Fogmaker and TEQ. 2) Business Environment: The global business environment has remained full of insecurities in the last year. Even though there have been strong signs of recovery, the sustainability of the actions taken by our global leaders remain questioned largely. The US monetary policies to curb the local economy have been impacting business on a global scale, leading to rising interest rates in emerging markets such as India and curtailing investment financed by borrowing. In the Indian context, a slowdown in the release of funds by Railways has had a major impact has also had an impact on the business of your company. However, the market share of our diversified businesses is low and thus a huge potential for growing in each of our business exists. Nevertheless, the continuous focus on infrastructure improvement by the Indian Government and investments in public transport will continue to provide additional growth opportunities with our new partner companies. 3) Company: Your company has a diversified set of activities. Due the slowdown in railway sectors the past year has not met expectations. Whereas costs have been increased substantially to match the expected growth, order intake and revenue could not hold pace. A large part of expenses however was investment into business enablers expected to pay-off during 2011. Measures have been taken to strongly control the performance and we expect an improved business again in 2011. 3.1) Railway Signalling The Railway Signalling business has had less Orders and Revenue as compared to 2009-10. Based on market forecasts, the business is expected to pick up again in 2011. 3.2) Contract Manufacturing After Contract Manufacturing for ABB Relays has been marginally affected by the slow-down in the MV Switchgear Market in the beginning of the year, it has picked up again during the last quarter. Despite the slowdown in volume our delivery performance was excellent and we have been able to perform with a delivery record in December. 3.3) PIS (Passenger Information System) The Joint Venture with Gorba AG, Switzerland in the form of Gorba INTEGRA Systems Pvt. Ltd. (GISPL) has invested into strengthening its position in the market. Your company as a manufacturing partner has manufactured destination boards and has also provided services for installation and commissioning of these destination boards. The continued need for city bus transportation and feeder buses to metros ensures immense potential of this business. 3.4) TSS (Time Solution System) Based on the license agreement with our Technology partner Moser Baer signed during the last year, we have completed the technology transfer and are ready to execute first expected orders. With the increased investments into up gradation of airports, railway stations, new metros and power plants we see a good potential in this business. 3.5) INTEGRA Biosciences During the year we have signed a Distribution Agreement with INTEGRA Biosciences Group for the sale of INTEGRA laboratory tools in the Indian market. Their innovative liquid handling and cell culture solutions are highly attractive for the booming Bioscience, Pharma and Generics markets. We have already started appointing distributors in all major hubs and received first orders. We anticipate high performance from this business in the following years. 4) Outlook: In the coming year we are planning to revive our railway business by taking on signalling projects to strengthen and leverage our position as supplier of railway solutions. We are also optimizing our processes to improve our offering and to increase our attractiveness as contract manufacturer. We see a large potential in the growth of urban infrastructure and aim at positioning ourselves as an integrated solution provider to rail and automotive sectors. To leverage the existing PIS business with additional and integrated solutions we have started partnerships with TEQ for multiplexing, Fogmaker for fire extinguisher and Aquametro for diesel fuel meters. There is large requirement for these systems and we expect the same to contribute to our growth in the next year. In addition, we also expect great success with the INTEGRA Biosciences line of products. For and on behalf of the Board of Directors, Halol, Panchmahals K N Shenoy 27th January, 2011. Chairman Annexure B to Directors Report (A) Conservation of Energy: The Company does not have production, which is energy intensive. However, in the routine use of electricity, we exercise all options to conserve the same. (B) Technology Absorption: The company has initiated actions helping us develop components, locally for our technology partners. This will eventually become the base of our localization. However this year we have not spent very significant amounts, in this domain. Our product range is based on the Technology from our Principles & partners abroad * INTEGRA Holding AG, Switzerland - Conventional Railway Signalling Technology (1987 as year of import) * Gorba AG, Switzerland - Passenger Information Systems Technology (PIS) (2008 as year of import) * Moser Baer AG, Switzerland - Time Solution System Technology (TSS) (2009 as year of import) The product range resulting from localizing the above Technology is briefly as under: Conventional Signaling Relay Systems: Signaling Relays Domino Panels Key lock Relays Functional Groups Pre Wired Base Plate Passenger Information Systems: Exterior Displays: TOP LEAN LED Displays Coach Displays (with integrated control unit): Top voyage LED CU2 TS Interior Displays: INFORM LED Displays Time Solutions: 1. Slave Clock - Analog 2. Slave Clock - Digital (C) Foreign Exchange Earnings and Outgo: Foreign Exchange earned Rs. 2,495,751 Earned against Export Sales Foreign Exchange used Rs. 16,731,534 Used for Import Material (Rs.15,811,567), Foreign Travel (Rs.134,567) & Dividend (Rs.785,400) For and on behalf of the Board of Directors, Halol, Panchmahals K N Shenoy 27th January, 2011. Chairman Compliance Certificate CIN: L33130GJ1987PLC009305 Authorized Capital. 1,50,00,000/- To, The Members, INTEGRA INDIA GROUP COMPANY LIMITED 7/A, Rajpath Society, Old Padra Road, Vadodara - 390 020. We have examined the registers, records, books and papers of INTEGRA INDIA GROUP COMPANY LIMITED (Formerly known as: Integra Hindustan Control Limited) (hereinafter referred to as the Company) as required to be maintained under the Companies Act, 1956, (hereinafter referred to as the Act) and the rules made thereunder and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year commencing from 1st April, 2010 and ended on 31st December, 2010. In our opinion and to the best of our information and according to the examinations carried out by us and explanations furnished to us by the Company, its officers and agents, we certify that in respect of the aforesaid financial year: 1. The Company has kept and maintained all registers as stated in Annexure A to this certificate, as per the provisions of the Act and the rules made thereunder and all entries therein have been duly recorded. 2. The Company has duly filed the forms and returns as stated in Annexure B to this certificate, with the Registrar of Companies, Regional Director, Central Government, Company Law Board or other authorities wherever applicable within the time prescribed under the Act and the rules made there under. 3. The Company, being a Public Limited Company, has the minimum prescribed paid up capital. 4. The Board of Directors duly met FOUR times respectively on 28th April, 2010, 29th July, 2010, 29th October, 2010 and 15th November, 2010 in respect of which meetings, proper notices were given and the proceedings were properly recorded and signed including the circular resolution passed in the Minutes Book maintained for the purpose. 5. The Company closed its Register of Members from 20th July, 2010 to 29th July, 2010 (both days inclusive) and necessary compliance of Section 154 of the Act has been made. 6. The Annual General Meeting for the financial year ended on 31st March, 2010 was held on 29th July, 2010 after giving due notice to the members of the Company and the resolutions passed thereat were duly recorded in the Minutes Book maintained for the purpose. 7. No Extra-Ordinary General Meeting (EGM) was held during the financial year. 8. The Company has not advanced any loan to its directors or persons firms or companies referred in Section 295 of the Act. 9. The Company has not entered into any contract falling within the purview of the provisions of Section 297 of the Act. 10. The Company has made necessary entries in the register maintained under Section 301 of the Act. 11. As there were no instances falling within the purview of Section 314 of the Act, the Company has not obtained any approvals from the Board of Directors, Members or Central Government. 12. The Board of Directors/duly constituted committee has approved the issue of duplicate certificate. 13.(i) The Company has delivered all the certificates on lodgment for transfer/ transmission or any other purpose in accordance with the provisions of the Act. However, there was no allotment of securities during the financial year. (ii) The Company has deposited the amount of dividend declared in a separate Bank Account, within five days from the date of declaration of dividend. (iii) The Company has posted dividend warrants/drafts for dividend to all members or remitted Dividend vide ECS, in applicable cases, within a period of 30 days from the date of declaration of dividend and that unclaimed/ unpaid dividend has been transferred to Unpaid dividend Account of the Company with ICICI Bank Ltd., Vadodara Branch, on 29.08.2010. (iv) As there was no application money due for refund, matured deposits, matured debentures, and interest accrued thereon which have remained unclaimed or unpaid, for a period of seven years, the Company was not required to transfer any amounts to Investor Education and Protection Fund during the financial year. However, the Company has transferred the amounts in unpaid Dividend Account which have remained unclaimed or unpaid for a period of seven years to Investor Education and Protection Fund. (v) The Company has duly complied with the requirements of Section 217 of the Act. 14. The Board of Directors of the Company is duly constituted. The appointments of Additional Director as well re appointment of retiring Directors were duly made, respectively. However, there was no appointment of Alternate Director and Director to fill casual vacancy during the financial year. 15. The appointment of Managing Director has been made in compliance with the provisions of Section 269 read with Schedule XIII to the Act and hence approval of the Central Government was not required in that behalf. 16. The Company has not appointed any Sole Selling Agent during the financial year. 17. The Company was not required to obtain any approvals of the Company Law Board, Regional Director, Registrar and/or such authorities as may be prescribed under the various provisions of the Act. 18. The Directors have disclosed their interest in other firms/ companies to the Board of Directors pursuant to the provisions of the Act and the rules made thereunder. 19. The Company has not issued any shares, debentures or other securities during the financial year. 20. The Company has not bought back shares during the financial year. 21. There was neither redemption of preference shares nor debentures during the financial year as the Company has issued neither of them. 22. There were no transactions necessitating the Company to keep in abeyance the rights to dividend, right shares and bonus shares pending registration of transfer of shares. 23. The Company has not accepted any deposits including any unsecured loans falling within the purview of Section 58A during the financial year. 24. The amount borrowed by the Company during the financial year ended 31st December, 2010 is within the borrowing limits of the Company pursuant to section 293(1)(d) of the Act. 25. The Company has neither made any loans and investments nor given guarantee nor provided securities to any other body corporate. 26. The Company has not altered the provisions of the Memorandum with respect to situation of the Companys registered office from one State to another during the year under scrutiny. 27. The Company has not altered the provisions of the Memorandum with respect to the Objects of the Company during the year under scrutiny. 28. The Company has not altered the provisions of the Memorandum with respect to Name of the Company during the year under scrutiny and complied with the provisions of the Act. 29. The Company has not altered the provisions of the Memorandum with respect to Share Capital of the Company during the year under scrutiny. 30. The Company has not altered its Articles of Association during the Financial year. 31. There was no prosecution initiated against or show cause notices received by the Company during the financial year, for offences under the Act. 32. The Company has not received any security from its employees during the year under certification. 33. Provisions of Section 418 of the Act are not applicable to the Company, as the Company has not constituted separate Provident Fund within the meaning of Section 418 of the Act. For D. Pathak & Associates Practising Company Secretaries Date : 22.01.2011 CS Devesh A. Pathak Place : Vadodara C.P. No. 2306 Annexure - A To Compliance Certificate Registers as maintained by the Company 1. Register of Charges u/s 143 2. Register of Members u/s 150 3. Register of Transfers 4. Books of Account u/s 209 5. Register of Directors, Managing Director, Manager and Secretary u/s 303. 6. Register of Directors shareholding u/s 307. 7. Register of Investments or loans made, guarantee given or security provided u/s 372A. 8. Register of Renewed and Duplicate Certificate under Rule 7 of the Companies (Issue of Share Certificate) Rule, 1960. 9. Minutes for meetings of the Board of Directors and General Meetings. Annexure-B To Compliance Certificate Forms and Returns as filed by the Company with the Registrar of Companies, Regional Director, Central Government or other authorities during the financial year ended on 31st December, 2010. 1) Form 32 for appointment of Managing Director of the Company w.e.f. 28.04.2010 filed u/s 303(2) of the Act vide SRN A89459499 dated 19.07.2010. 2) Form 25C in respect of appointment of Mr. Ashok Kumar Dullu as a Managing Director w.e.f. 28th April, 2010 filed u/s 269(2) and Schedule XIII of the Act, 1956 on 19.07.2010 vide SRN A89462543. 3) Form No. 66 (Compliance Certificate) for the year ended on 31.03.2010, filed u/s 383A on 21.08.2010 vide SRN P49941198. 4) Form No. 23AC (Balance Sheet) as at 31st March, 2010 and 23 ACA (Profit & Loss) for the year ended on 31.03.2010 filed u/s 220 on 21.08.2010 vide SRN P49942295. 5) Form 23 in respect of appointment of Mr. Ashok Dullu as a Managing Director of the Company filed u/s 269 read with 198, 309 and 310 of the Act on 25.08.2010 vide SRN A92312156 dated. 6) Form No. 20B (Annual Return) as at 29.07.2010 filed under Section 159 & 161 on 27.08.2010 vide SRN P50415629. 7) Form I in respect of unpaid/unclaimed dividend for the year 2002-03 filed under Rule 3 of the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001 on 29.10.2010 vide SRN A97043053. 8) Forms 32 in respect of resignation of Mr. Ashok Dullu from the Managing Directorship of the Company w.e.f. 15.11.2010 filed u/s 303(2) of the Act on 26.11.20 10 vide SRN A99100133.