Igarashi Motors India Limited BOARD OF DIRECTORS K. K. NOHRIA (CHAIRMAN) K. IGARASHI C.P. DUSAD G.N. MANI T. IGARASHI KEIICHI IGARASHI A.J. PRASAD* KAVITA PRASAD* M.S.S. SRINATH* JACOB MATHEW* MANAGING DIRECTOR P. MUKUND HEAD - FINANCE R. CHANDRASEKARAN COMPANY SECRETARY T.S. MAHARANI AUDITORS SHARP & TANNAN CHARTERED ACCOUNTANTS PARSN MANERE, A-WING 3RD FLOOR, 602, ANNA SALAI CHENNAI - 600 006 BANKERS STATE BANK OF INDIA ICICI BANK LIMITED REGISTERED OFFICE & FACTORY PLOTS NO.B-12 TO B-15, PHASE II MEPZ - SEZ, TAMBARAM, CHENNAI - 600 045. * Appointed as a Director w.e.f. 28th July 2011 As a measure of economy, copies of the Annual Report will not be distributed at the Annual General Meeting. Members are requested to bring their copies to the Meeting.
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Igarashi Motors India Limited€¦ · Igarashi Motors India Limited ... Your management has ... i am very impressed with the research and Technology capability of hBl and the clear
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The demand from our customers continue to be robust and our operations show consistentimprovement.weshouldpostrobustprofitablegrowthinthecomingyears.
Thesignificantimpetustothefinancialstabilityofyourcompanywasprovidedbythestrategicinvestment made by agile electric Drives Technologies and holdings Private limited (agileelectric).
wefindgreatsynergybetweenthevaluesandvisionofhBlandyourcompany.Thisaugurswell for futuregrowth,asweare in theprocessofmergingagileelectricwithyourcompany.Thisprocessislikelytotakebetween12to18monthstimeasnecessaryforcompletingvariousformalitiesinvolved.
itismyhappinesstoseethatigarashiindiahasturnedaroundwellandhasreturnedtoProfitability.wewereoneof the fewsmejapanesecompanieswhoset foot in indiaover15yearsago,envisioningtheindianmarkettobecomeagoodfuturegrowthmarket.
iwishtomentionthatallourcustomers,suppliers,Bankersandfinanciershavedemonstratedtheirfaithinusandiofferimmensegratitudetoallofthem.ouremployeeshavedemonstratedthematerial theyaremadeof topullupfromtheunprecedentedcrisis,buildasuitablemodeland return to good times once again and consider De-risking as an all important aspect ofmanagement.
itwillnotbeoutofplace tosay, that inmy lifetime,japanhasseenmanygravechallengingsituationsinthepastandcurrentearthquake,TsunamiandNucleardangerhavenotleftjapanfreefromsuchNaturalcalamitiesandDisasters.Butiamconfidentthatthenationwillspringback.
m/s.sharp&Tannan,charteredaccountants,chennai are the retiringauditorsandareeligible forreappointment.
specIaL BusIness
5. re-appointment of Managing director
Toconsiderand, if thought fit, topasswithorwithoutmodification(s) the following resolutionasanspecialresolution:
“resolveDThaTpursuant to theprovisionsofsections198,269,309readwithschedule Xiiiofthecompaniesact,1956andotherapplicableprovisionsifany,ofthecompaniesact,1956(includingany statutorymodificationsor re-enactment thereof for the timebeing in force)andsubject to suchapprovalsasmaybenecessaryandfurthersubjecttotheapprovalofmembersinthegeneralmeeting,mr.P.mukundbeand isherebyre-appointedas themanagingDirectorof thecompanyfora furtherperiodof5yearsfrom01.04.2011,onthetermsandconditionsassetoutintheexplanatorystatementtothisresolution”.
6. to appoint a director other than a retiring director
“resolveD ThaT Dr. a.j.Prasad appointed as an additional Director under section 260 of thecompaniesact,1956intheBoardmeetingheldon28thjuly,2011andwhosetermofofficeexpiresintheensuingannualgeneralmeetingbeandisherebyre-appointedundersection257ofthecompaniesact,1956,andisliabletoretirebyrotation”.
7. to appoint a director other than a retiring director
Place: chennai ByorderoftheBoardDate : july28,2011 forIgarashi Motors India Limited registeredoffice: t.s.MaharaniPlotNo.B-12toB-15,Phaseii, companysecretarymePz-sez,Tamabram,cheNNai-600045.
notes:
a) amemBereNTiTleDToaTTeNDaNDvoTeiseNTiTleDToaPPoiNTaProXYToaTTeNDaND voTe iNsTeaD of himself. a ProXY NeeD NoT Be a memBer. The ProXY formDUlYcomPleTeDmUsTBereTUrNeDsoasToreachTheregisTereDofficeofThecomPaNYNoTlessThaN48hoUrsBeforeTheTimeofThecommeNcemeNTofTheaforesaiDmeeTiNg.
b) The register of members of the company will remain closed from 12th september 2011 to15thseptember2011(bothdaysinclusive)forbookclosurepurpose.
c) members/Proxiesshouldbringtheattendanceslipdulyfilledinforattendingthemeeting.
d) membersarerequestedtonotifychangeinaddress,ifany,incaseofsharesheldinelectronicformto the concerned Depository Participant quoting their iD No. and in case of physical shares to theregisteredofficeofthecompany.
i) our company’s shares are tradable compulsorily in electronic form and through cameo corporateserviceslimited,registrarsandshareTransferagents.wehaveestablishedconnectivitywithboththedepositories,i.e.NationalsecuritiesDepositorylimited(NsDl)andcentralDepositoryserviceslimited(cDsl).The internationalsecurities identificationNumber (isiN)allotted toyourcompany’ssharesundertheDepositorysystemisiNe188B01013.asonmarch31st,2011,over98%ofourcompany’sshareswereheldindematerializedformandtherestareinphysicalform.
The Board of Directors, at their meeting held on 28th july, 2011 re-appointed mr.P.mukund as managingDirectorofthecompanyforafurtherperiodoffiveyearswitheffectfrom01.04.2011,onthefollowingtermsandconditions,subjecttotheapprovaloftheshareholdersinthegeneralmeeting.
for thepurposeofcalculating theaboveceilings,perquisitesshallbeevaluatedasper income-taxrules,whereverapplicable.intheabsenceofanysuchrules,perquisitesshallbeevaluatedatactualcosts.
in the event of absence or inadequacy of profits in any financial year during the tenure of the managingDirector, theaforesaidremunerationpayable to themanagingDirectorshallbe theminimumremunerationpayabletohim.
IteM no.6 : appointment of director other than a retiring director
in pursuant to article 97 of the articles of association, and section 260 of the companies act, 1956,Dr.a.j.PrasadappointedasanadditionalDirectorintheBoardmeetingheldon28thjuly,2011andwhosetermofofficeexpiresatthisannualgeneralmeeting.
IteM no.7 : appointment of director other than a retiring director
in pursuant to article 97 of the articles of association, and section 260 of the companies act, 1956,mrs.Kavita Prasad appointed as an additional Director in the Board meeting held on 28th july, 2011 andwhosetermofofficeexpiresatthisannualgeneralmeeting.
IteM no.8 : appointment of director other than a retiring director
in pursuant to article 97 of the articles of association, and section 260 of the companies act, 1956,mr.m.s.s.srinathappointedasanadditionalDirectorintheBoardmeetingheldon28thjuly,2011andwhosetermofofficeexpiresatthisannualgeneralmeeting.
in view of inadequacy of profits to wipe out the losses of last year, Directors recommend no payment ofDividendtotheirshareholdersfortheyearunderreview.
During the year under review, your company’s paid up equity share capital has been increased fromrs.138,743,820tors.203,743,820/-bywayofPreferentialallotmentof65,00,[email protected]/-eachatapremiumofrs.66.30persharetoagileelectricDrivesTechnologiesandholdingsPrivatelimitedwithanobjecttoaugmenttheNetworthofthecompany.
The brief resume/details relating to Directors being re-appointed as stipulated under clause 49(vi)(a)of the listing agreement executed with the stock exchanges are furnished in the report on corporategovernance.
audItors
m/s. sharp & Tannan, auditors of the company retire at the ensuing annual general meeting and beingeligible,offerthemselvesforre-appointment.membersarerequestedtoappointauditorsforthecurrentyearandauthorizetheBoardtofixtheirremuneration.
Your company had introduced the employees stock option Plan -2006 in accordance with the seBi(employeesstockoptionschemeandemployeesstockPurchasescheme)guidelines1999.Thescheme
a report on corporate governance along with a certificate from the auditors of the company regardingcomplianceoftherequirementsofcorporategovernancepursuanttoclause49ofthelistingagreementwiththestockexchangesareannexedhereto.
management Discussion and analysis report of the company for year under review as required underclause49ofthelistingagreementwiththestockexchanges,isgivenasaseparatestatementintheannualreport.
a) inthepreparationoftheannualaccounts,theapplicableaccountingstandardshavebeenfollowedwithexplanationrelatingtomaterialdepartures,ifany;
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b) theyhaveselectedsuchaccountingpoliciesandappliedthemconsistentlyandmadejudgmentsandestimatesthatarereasonableandprudentsoastogivetrueandfairviewofthestateofaffairsofthecompanyasat31stmarch2011andoftheprofitofthecompanyfortheyearendedonthatdate;
c) Proper care has been taken for maintenance of adequate accounting records for safeguarding theassetsofthecompanyanddetectingfraudandotherirregularities;
YourDirectorsarepleasedtoinformyouthatduringtheyearyourcompanycontinuedtoworkonliveaPQP(advanced Product Quality Planning) processes for different Programs in the automotive industry. ThisensuresaneffectiveadvancefailuremodeanalysistoensurethatQualitygetsbuiltintotheDesignaswellasProcess.
TheBoardplacesonrecorditssincereappreciationforthecontinuedsupportfromtherelevantgovernmentauthorities, Promoter companies, shareholders, suppliers, customers, employees and other businessassociates,fortheirstrongsupport.
forandonbehalfoftheBoardofDirectors
Place :chennai k.k nohriaDate : july28,2011 chairman
B) ThePricingformula Theexercisepriceforthepurposesofthegrantofoptions as decided by the esoP compensationcommittee is rs.40.15, the price being not lessthan the Par value of the equity share of thecompanyandnotmorethanthemarketpriceason17thannualgeneralmeetingdate(i.eseptember30,2009)beingrelevantdatesubjecttotheseBi(employee stock option scheme and employeestockPurchasescheme)guidelines,1999.
iii) identifiedemployeeswhoweregrantedoption,duringanyoneyear,equaltoorexceeding1%of the issued capital (excluding outstandingwarrants and conversions) of thecompanyatthetimeofgrant
1,75,000options
Nil
managingDirector4,83,000options
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K) DilutedearningsPershare(ePs)pursuanttoissueofsharesonexerciseofoptioncalculatedinaccordancewith accounting standard (as) 20 “earnings Pershare”
rs.4.92
l) i) the method of calculation of employeecompensationcost
fairvaluemethod
ii) Differencebetweentheemployeecompensationcostsocomputedat(i)aboveandtheemployeecompensation cost that shall have beenreorganized if it had used the fair value ofoptions
N.a
iii) The impactof thedifferenceonprofitsandonePsofthecompany
N.a
m) weighted average exercise prices and weightedaverage fair values of options shall be disclosedseparately for options whose exercise price eitherequalsorexceedsorislessthanthemarketprice
N.a
N) adescriptionofthemethodandsignificantassumptionsused during the year to estimate the fair values ofoptions , including the following weighted averageinformation:
Place : chennai k.k nohriaDate : july28,2011 chairman
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ManageMent dIscussIon and anaLysIs report
gLoBaL autoMotIVe Industryasunprecedentedinhistorywasthecrisisof2008and2009,sowastherecoveryinYear2010.Theglobalautomotiveindustrysurpasseditspreviousbestlevelsandthemaindriverforthiswasasiaandsouthamerica.Theautomotiveindustryreachedarecordlevelof76millioncarsandcommercialvehiclesin2010.chinaandindiashowedaverydramaticincreaseintheautomotiveproductionin2010aswell.
interestingly, the recoveryofgiants likegeneralmotors,fordandchrysleradded to theadvancement inapplicationofnewerTechnologyproductsandenabledtosupplychainmembersalsotoparticipateinsuchProjects.ithadbecomeclearthatthosewhosurvivedthecrisishaveandwillbenefitinthecomingyearstotaketheirBusinessforward.
sHIft In MarketsThegeographicalsplitofsalesofourcompanyduringtheperiod2010-11isrepresentedinchartbelow.Thisisindicativeofhowourcompany’ssalesareshiftinginlinewiththemarketshifttoasiaand,itwillcontinuetodoso.
igarashi from japan continued to support and banks and institutions also took positive note of thechangesthattookplaceinthepast2years.
4. future Business outlook:
asannouncedintheopenofferdocumentduringthecomingyear,thecompanywillinitiateallactionsto merge all the indian operations related to electric motors in one single entity and this group isexpectedtogeneraterevenuesofover100millionUs$in2yearsandthereafter-looktodoublinginthenext3to4years.
as your company addresses global automotive component industry, it is exposed to various riskssuchasfirerisk,machineryBreakDownrisk,Productliabilityrisk,marinerisketc.Yourcompanyregularlyreviewsandwhereverpossible,usestheinstrumentofinsurancetomitigatetheserisks.
iii) Interest rates:
with interest rates going up, your company’s interest burden increased in absolute terms. activedialoguesare inprogress tosee if someof theborrowingscanbesubstitutedbyforeigncurrencyborrowingasthereisanaturalhedge.
iv) exchange risk :
Yourcompanyisexposedtothefluctuationsinforeignexchangeratesonexportsandimports.sincethematerialspurchasedareimported,thereisanautohedgemechanism.however,basedonthepastexperiences,thecompanyisquotingwithacurrencyvariationfactortominimizefurther.atabroaderlevel, thecompany isdevelopingmarkets in indiasothat thewholebusiness is fairlyderiskedfromcurrencyfluctuations.
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Igarashi Motors India Limited
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v) product Liability, Warranty claims and product recall risks :
Your company has in place adequate systems of internal control and documented procedures coveringall financialandoperatingfunctions.all theassetsaresafeguardedandprotectedandall transactionsarerecordedpromptly.internalauditiscarriedoutinaprogrammedwayandfollowupactionsweretakenforallauditobservations.
The particulars of Directors, their attendance during the financial year 2010-2011 and also otherDirectorshipsandBoardcommitteerepresentationsofPubliclimitedcompaniesareasunder:
InforMatIon aBout dIrectors retIrIng By rotatIon seekIng re-appoIntMent
1. mr.K.igarashi,age73yearsold, is theworldwideheadof igarashigroupas itsPresidentandhasbeen in international business for over 4 decades from japan. he was responsible for globalizingigarashiandmovetowardschinaandindiaforoperationsandhasbuiltaglobalsalesandmarketinginfrastructureinUsa,europeandfareast.
3. Dr.a.j.Prasad,age65yearsold,isaPromoterDirector.heisanengineeringgraduateinTechnologyfrom iiT, Kharagpur and a Post graduate in management from miT, Usa and also a Doctorate ininternationalBusinessfromcolumbiaUniversity,Usa.heisthechairmanandmanagingDirectorofhBl Power systems limited, hyderabad. The company is in the business of design, developmentandmanufactureofspecializedbatteriesandassociatedelectronics.Dr.a.j.PrasadistheheadofhBlgroup.hehasover33yearsofexperienceinthefieldofspecializedbatteries.
5. mr.m.s.s.srinath,age41yearsold,isaPromoterDirector.heisagraduateinartswithspecializationin economics. he is a whole-time Director in hBl Power systems limited and has over 16 yearsexperienceinthemarketingactivitiesandin-chargeofoveralladministrationofthecompany.
6. mr.jacobmathew,age45yearsold, isan independentDirector.he isacivilengineerandaPostgraduateDiplomaholderinmanagementfromiim,calcutta.heisthefounderandmanagingDirectorof maPe advisory group which was started in the year 2001 with offices in mumbai, chennai andBangalore.maPeistheinvestmentBankwhichisamongthetop10firmsintheBloombergleagueTableforindia.maPehasworkedwithleadingcorporates,viz.,Dr.reddylabs,ranbaxy,wockhardt,iNggroup,l&T,indianoil,glenmark,crisil,icicigroup,godrejgroup.
Duringtheyear,besidestheregularreviewofthefinancialreportingprocesses,financialstatements,internal control systemsof the companyandcompliancewith regulatoryguidelines,were reviewed.Thecommitteeheldregularinteractionwithstatutoryauditorsandinternalauditorstobenefitfromtheirprofessionalperspectiveonthecompany’saccounts.
although not mandatory in terms of the listing agreement with the stock exchanges the companyhasaremunerationcommitteecomprising3Non–executive&independentDirectors.Presently,thecommitteecomprisesmr.K.K.Nohria(chairman),mr.c.P.Dusadandmr.g.N.mani.
as required under the Provisions of the companies act, 1956, the company has obtained centralgovernmentapprovalforincreaseinthemanagingDirector’sremunerationforoneyearperiodfrom01.04.2010to31.03.2011videletterNo.B05040407/5/2011-cl-viidated18.04.2011.
remuneration policy:
Payment of remuneration to the managing Director is governed by the resolution recommended bythe Board and approved by the shareholders. The remuneration structure comprises of salary,commission,perquisitesandotherallowances.TheindependentNon-executiveDirectorsdonotdrawanyremunerationfromthecompanyotherthansittingfees.
Thedetailsofsitting feespaid to theNon-executiveDirectors for the financialyear2010-2011 isasunder:
name of the director sitting fees paid rs.
mr.K.K.Nohria 25,000
mr.c.P.Dusad 30,000
mr.g.N.mani 30,000total 85,000
The Non executive & Non independent Directors viz. mr. K. igarashi, mr. T. igarashi andmr.Keiichiigarashihavenotbeenpaidanysittingfees.independentDirectors,mr.KKNohriaholds2,20,000shares(1.08%),mr.cPDusadholds1shareandmr.gNmaniholds601sharesinthecapitalofthecompany.
10.00a.m i) De-listing of shares from themadras stock exchangelimited
ii) re-setting of exercise priceunderesoPscheme2006
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B) Detailsonextra-ordinarygeneralmeetingheldduringtheyear-None
c) During the year 2010-11, pursuant to section 192a of the companies act, 1956 the shareholdersof the companyhaveapproved the following resolutionsbymeansofPostalBallot on08thjanuary2011.
The company has complied with all the requirements relating to related party transactions and thedetailswerereportedinschedule2ofthenotesformingpartofaccounts.
i. annualgeneralmeeting Date : 15thseptember,2011at3.00P.m. venue : sathgurugnananandahall,Naradaganasabha Trustcomplex,minihall,314,T.T.Kroad chennai–600018
ii. financialcalendar : 1staprilto31stmarch a) firstQuarterresults : 22ndjuly2010 b) secondQuarterresults : 27thoctober2010 c) ThirdQuarterresults : 29thjanuary2011 d) lastquarterresultsand annualauditedresults : 26thmay2011
iii. DateofBookclosure : 12thseptember,2011to15thseptember,2011
iv. listingonstockexchanges : Thecompany’ssharesarelistedonBse,Nse& msebutareeffectivelytradedonlyontheBombay stockexchangelimitedandNationalstock exchangelimited
xiv. Dematerializationofshares : over98%ofequityshareshavebeendematerializedup to 31 march 2011. Trading in your company’ssharesispermittedonlyinthedematerializedformaspernotificationsissuedbyseBi
xv. outstandinggDrs/aDrs/ : Notapplicable warrantsoranyconvertible instruments
xvi. Plantlocation : PlotsB-12–B–15,Phaseii mePz-sez,Tambaram, chennai-600045.
The company has in place a prevention of insider Trading code based on seBi (insider Trading)regulations,1992.ThiscodeisapplicabletoallDirectorsanddesignatedemployees.Thecodeensurespreventionofdealingissharesbypersonshavingaccesstounpublishedpricesensitiveinformation.
Thecomplianceofconditionsofcorporategovernance is theresponsibilityof themanagement.ourexaminationwaslimited to the procedures and implementation thereof, adopted by the company for ensuring the compliance of theconditionsofcorporateguarantee.itisneitheranauditnoranexpressionofopiniononthefinancialstatementsofthecompany.
a. Thesestatements,tothebestofourknowledgeandbelief:
i. donotcontainanymateriallyuntruestatementoromitanymaterialfactorcontainstatementsthatmightbemisleading;
ii. presentatrueandfairviewofthecompany’saffairsandareincompliancewithexistingaccountingstandards,applicablelawsandregulations.
b. Tothebestofourknowledgeandbelief,therearenotransactionsenteredintobythecompanyduringtheyear,whicharefraudulent,illegalorviolativeofthecompany’scodeofconduct.
c. weacceptresponsibilityforestablishingandmaintaininginternalcontrolsandhaveevaluatedtheeffectivenessofinternalcontrolsystemsofthecompanypertainingtofinancialreportingandhavedisclosedtotheauditorsandtheauditcommittee,deficienciesinthedesignoroperationofinternalcontrols,ofwhichweareawareandthestepstakenandproposedtobetakentorectifythesedeficiencies.
d. wehavealsoindicatedtotheauditorsandtheauditcommittee:
(i) significant changes in the internal controls with respect to financial reporting during the year and theachievementofadequateinternalcontrolswithinthecompany’serPsystems;
(ii) significantchangesinaccountingpoliciesduringtheyearandthesehavebeendisclosedinthenotestothefinancialstatements;
e. Tothebestofourknowledgeandbelief,therearenoinstancesofsignificantfraudinvolvingeitherthemanagementoremployeeshavingasignificantroleinthecompany’sinternalcontrolsystemswithrespecttofinancialreporting.
Place : chennai p.Mukund r.cHandrasekaranDate : july28,2011 managingDirector head-finance
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Igarashi Motors India Limited
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audItors’ report to tHe MeMBers of IgarasHI Motors IndIa LIMItedwehaveauditedtheattachedbalancesheetofigarashimotorsindialimited(“thecompany”)asat31stmarch2011,theprofitandlossaccountandthecashflowstatementforthefinancialyearendedonthatdateannexedthereto.Thesefinancialstatementsaretheresponsibilityofthecompany’smanagement.ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.
weconductedourauditinaccordancewithauditingstandardsgenerallyacceptedinindia.Thosestandardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financialstatementsarefreeofmaterialmisstatement.anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosures in the financial statements.anaudit also includesassessing theaccountingprinciplesusedandsignificantestimatesmadebythemanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.webelievethatourauditprovidesareasonablebasisforouropinion.
e) on the basis of the written representations received from directors of the company as at31stmarch2011,andtakenonrecordbytheBoardofDirectors,wereportthatnoneofthedirectorsisdisqualifiedason31stmarch2011frombeingappointedasadirectorintermsofclause(g)ofsub-section(1)ofsection274ofthecompaniesact,1956.
f) in our opinion, and to the best of our information and according to the explanations given to us,the said accounts, subject to Note 8(a) & 8(b) in schedule 2 regarding inter corporate loans andtransactionscoveredundersec.297ofthecompaniesact,1956respectively,readtogetherwiththesignificantaccountingpolicies inschedule1andnotesappearing inschedule2 thereon,give theinformationrequiredbythecompaniesact,1956,inthemannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinindia:
(b) inouropinionandaccordingtotheinformationandexplanationsgiventous,therateofinterestandother termsandconditionsfor the loanareprimafacienotprejudicial to the interestof thecompany.
(b) inouropinionandaccording to the informationandexplanationsgiven tous, the transactionsmadeinpursuanceofsuchcontractsorarrangementsenteredintheregistermaintainedundersection301ofthecompaniesact,1956andexceedingthevalueofrupeesfivelakhsinrespectofanypartyduringtheyear,havebeenmadeatthepriceswhicharereasonablehavingregardtoprevailingmarketpriceattherelevanttime.
(viii) wehavebroadly reviewed thebooksofaccountmaintainedby thecompanypursuant to the rulesprescribedby thecentralgovernment for themaintenanceof cost recordsundersection209(1)(d)ofthecompaniesact,1956inrespectofelectricalmotorsandareoftheopinionthatprimafacietheprescribedaccountsandrecordshavebeenmadeandmaintained.Thecontentsoftheseaccountsandrecordshavenotbeenexaminedbyus.
(ix) (a) accordingtotheinformationandexplanationsgiventousandonthebasisofourexaminationofthebooksofaccount,thecompanyisgenerallyregularindepositingundisputedstatutoryduesincludingProvidentfund,investoreducationandProtectionfund,employees’stateinsurance,income-tax, sales-tax, custom Duty, excise Duty, cess and any other material statutory duesduringtheyearwiththeappropriateauthorities.asat31stmarch2011,therewerenoundisputedamountspayableformorethansixmonthsfromthedatefromwhichtheybecamepayable.
(xii) according to the informationandexplanationsgiven tous, thecompanyhasnotgranted loansandadvancesonthebasisofsecuritybywayofpledgeofshares,debenturesandothersecurities.
(xiv) inouropinionandaccording to the informationandexplanationsgiven tous, thecompany isnotadealerortraderinshares,securities,debenturesandothersecurities.
(xxi) During the course of our examination of the books and the records of the company, carried out inaccordancewith thegenerallyacceptedauditingpractices in india,andaccording to the informationandexplanationsgiventous,wehaveneithercomeacrossanyinstancesofmaterialfraudonorbythecompany,noticedor reportedduring theyear,norhavewebeen informedofsuchcaseby themanagement.
sHarp & tannan
charteredaccountantsicairegistrationNo.003792s
Place: chennai L. Vaidyanathan
Date : may26,2011 PartnermembershipNo.16368
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Igarashi Motors India Limited
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BaLance sHeet as at MarcH 31, 2011schedule as at asat
31.03.2011 31.03.2010rupees rupees rupees rupees
sources of fundsshareholders’ funds
sharecapital a 203,743,820 138,743,820reservesandsurplus B 814,344,940 383,394,940
23,763,221 47,414,096Investments f 286,164,900 143,300,000deferred tax asset 1,190,759 723,889(referNoteNo.22inschedule2)current assets, Loans and advances g
asperourreportattached P. Mukund k.k. nohria k. igarashisharP & Tannan managingDirector chairman C.P. dusad charteredaccountants g.n. Mani icairegistrationNo.003792s T. igarashi r. Chandrasekaran T.s. Maharani keiiChi igarashiL. VaidyanaThan head-finance companysecretary Directors Partner membershipNo.16992 membershipNo.16368 Place : chennai Date : may26,2011
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profIt and Loss account for tHe year ended MarcH 31, 2011
schedule 2010-2011 2009-2010
rupees rupees
IncoMe
sales I 1,972,123,795 1,587,054,895
otherincome J 4,083,680 5,423,383
1,976,207,475 1,592,478,278
eXpendIture
materials,manufacturingandTradingexpenses k 1,534,039,668 1,261,949,468
staffexpenses L 87,501,925 72,097,612
sellingandadministrationexpenses M 78,290,964 70,885,799
interestandcommitmentcharges n 100,381,774 85,115,344
Depreciation,amortisationandobsolescence o 105,326,189 64,805,066
asperourreportattached P. Mukund k.k. nohria k. igarashisharP & Tannan managingDirector chairman C.P. dusad charteredaccountants g.n. Mani icairegistrationNo.003792s T. igarashi r. Chandrasekaran T.s. Maharani keiiChi igarashiL. VaidyanaThan head-finance companysecretary Directors Partner membershipNo.16992 membershipNo.16368 Place : chennai Date : may26,2011
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scHeduLes forMIng part of accounts
as at asat31.03.2011 31.03.2010
rupees rupeesscHeduLe ashare capitalauthorised capital :
assetsofthecompany,presentandfuture (ii) (a) & (b) working capital Term loan and working
capital loans from banks are secured by charge onall current assets of the company, present and futureand by second charge over residual value of movablefixed assets of the company after term loan. Thecharge also extends to bills discounted amounting tors.83,406,368/-(Previousyearrs.104,376,085/-)
scHeduLes forMIng part of accountsscHeduLe 1sIgnIfIcant accountIng poLIcIes1. BasIs of presentatIon The accounts have been prepared under the historical cost convention and on the basis of going
a) revenuefromsaleofproductsisrecognisedwhenallthesignificantrisksandrewardsofownershipof the products are passed on to the customers, which is generally on dispatch of goods andacceptance.sales includeexcisedutyandadjustmentsmadetowards liquidateddamagesandpricevariation,whereverapplicable.salesexcludevalueadded tax /sales tax,brokerageandcommission.
b) interestincomeisaccruedatapplicableinterestrates.
c) otheritemsofincomeareaccountedasandwhentherighttoreceivearises.
3. fIXed assets fixed assets are stated at original cost net of tax/ duty credits availed, if any, less accumulated
allemployeebenefitsfallingduewhollywithintwelvemonthsofrenderingtheserviceareclassifiedas short term employee benefits. The benefits like salaries, wages, short term compensatedabsencesetc.andtheexpectedcostofbonus,ex-gratia,arerecognizedintheperiodinwhichtheemployeerenderstherelatedservice.
b) Post-employmentbenefits:
i. Definedcontributionplans:Thecompany’sstategovernedprovidentfundscheme,employeestateinsuranceschemeandemployeepensionschemearedefinedcontributionplans.Thecontributionpaid/payableunder the schemes is recognizedduring theperiod inwhich theemployeerenderstherelatedservice.
ii. Definedbenefitplans:Thecompany’sobligationtowardsgratuity isadefinedbenefitplan.ThepresentvalueoftheobligationundersuchdefinedbenefitplanisdeterminedbasedonactuarialvaluationusingtheProjectedunitcreditmethod,whichrecognizeseachperiodofserviceasgivingrisetoadditionalunitofemployeebenefitentitlementandmeasureseachunitseparatelytobuildupthefinalobligation.Theobligationismeasuredatthepresentvalueof theestimated futurecash flows.actuarialgainsand lossesare recognized immediatelyintheProfitandlossaccount,andgainsorlossesonthecurtailmentorsettlementofanydefinedbenefitplanarerecognizedwhenthecurtailmentorsettlementoccurs.
c) longtermemployeebenefits:
The obligation for long term employee benefits such as long term compensated absences isrecognizedinthesimilarmannerasinthecaseofdefinedbenefitplansasmentionedin(b)(ii)above.
Depreciation on impaired assets is provided by adjusting the depreciation charge in the remainingperiodssoastoallocatetheasset’srevisedcarryingamountoveritsremainingusefullife.
Deferred taxassets relating tounabsorbeddepreciation/business lossesare recognizedandcarriedforward to the extent there is virtual certainty that sufficient future taxable income will be availableagainstwhichsuchdeferredtaxassetscanberealized.
Product Development expenses on new products are capitalized under ‘intangible assets’ and areamortizedoveraperiodof60monthsfromthedateofcommencementofcommercialproduction.
amortisationon impairedassets isadjusted in the futureperiods insuchamanner that the revisedcarryingamountoftheassetisallocatedoveritsremainingusefullife.
14. proVIsIons, contIngent LIaBILItIes and contIngent assets Provisionsare recognized for liabilities that canbemeasuredonlybyusingasubstantialdegreeof
7. Deposit accounts with banks under cash and bank balances in schedule g includes margin moneydepositofrs.26,065,340/-(previousyearrs.15,882,115/-),fixeddepositofrs.12,07,183/-(previousyearrs.11,33,747/-)andrs.6,021/-(previousyearrs.6,021/-)pledgedassecuritywithsalestaxdepartment.
15. segmentreporting:(i)Thecompanyisengagedinsinglesegmentofproductionofmicromotorsanditsaccessoriesmainlyfor the automotive sector. hence disclosure of primary segment under accounting standard (as)17-”segmentreporting”doesnotarise.Thedetailsofsecondarysegmentbeing“geographicalsegment”aregivenbelow.
(ii) segmentidentification,reportablesegmentsanddefinitionofeachreportablesegment (a) secondarysegmentreportingformat in respectofsecondarysegment information, thecompanyhas identified itsgeographical
17. factorybuildinghasbeenconstructedonlandtakenonleasefrom1stmay1991foraperiodoffifteenyears from madras export Processing zone (mePz) and monthly rent paid has been charged in theaccounts.Thesaidleasehassincebeenrenewedforafurtherperiodoffiveyearsw.e.f2ndmay2006andisrenewablefurtherthereafterattheoptionofthecompanyonmutuallyagreedtermswithmePz.in theeventof thecompanydeciding tovacate thepremises, the lessor(mePz)willcompensate thecompanyamutuallyagreedconsiderationforthesaleofthefactorybuilding.accordinglydepreciationhasbeenprovidedattheratesprescribedinscheduleXivofthecompaniesact,1956.
The company has taken certain premises on cancellable operating lease. These lease agreementsarenormallyrenewedonexpiry.Thecompanyhastakencarsoncancellableoperatinglease.amountpaidtowardstheseleasesareincludedinselling&administrativeexpenses.Therearenoexceptional/restrictivecovenantsintheseleaseagreements.leaserentalschargedtoProfitandlossaccountfortheyearisrs.22,01,435/-(previousyearrs.29,08,488/-).contingentrentrecognisedrs.Nil(previousyearrs.Nil).
19 a) Thecompanydoesnothave taxable incomeunder theconventionalmethodofcomputationofincome and further is covered by the provisions of the special economic zone act, 2005 andaccordinglynotliableforminimumalternateTaxundersection115jBoftheincometaxact,1961.hence,noprovisionforcurrenttaxhasbeenmadefortheyear.
b) ThecompanydoesnothavetaxablewealthandhencenoprovisionhasbeenmadeforwealthtaxundertheprovisionsofwealthTaxact,1957.
20 employeestockoptionscheme:
a) Thecompanyhasgranted750,000optionsundertheemployeesstockoptionPlan,2006toitsemployeesandDirectorson27thaugust2010,withavestingperiodofoneyearfromthedateofgrantoftheoption.Theexerciseperiodisfiveyearsfromthedateofissue.
b) Thegrantofoptionstotheemployeesundertheemployeesstockoptionschemeisonthebasisoftheirperformanceandothereligibiltycriteria.Theoptionsarevestedequallyoveraperiodofoneyear,subjecttothediscretionofthemanagementandfulfillmentofcertainconditions.
c) Thedetailsofgrantsundertheaforesaidschemearesummarisedbelow-
23 Thecompanyhas reviewed the futurecash flowson thebasisof value inuseof itsassetsandhassatisfiedthattheestimatedrecoverableamountismorethantheamountcarriedinthebooks.accordingly,noprovisionforimpairmentlossisrequiredtobemadeintheseaccounts.
26 (a) The investments in ijTPlastics&ToolsPrivatelimited (“ ijTPl”)consistingof7,430,000equitysharesoffacevalueofrs.10/-eachfullypaidwasreplacedwith2,451,900sharesofrs.10/-eachfullypaidofagileelectricsubassemblyPrivatelimited(“aesPl”)pursuanttomergerofijTPlwithaesPlvideorderofthehonorablehighcourtofmadrasjudicaturecPNo.312/2010dated2ndmarch2011,swapratiobeing33equitysharesofrs.10/-eachfullypaidupofaesPlforevery100equitysharesofrs.10/-eachfullypaidupofijTPl.
27 (a) Deduction of product development expenses under capital work in progress - intangible assetsincludesdevelopmentexpenditureamountingtors.2,840,537/-foraprojectinprogresstransferredatcosttoafellowsubsidiaryduringtheyearandrs.2,862,425/-recoveredfromacustomertowardsproductdevelopment.
(b) During theyear, thecompanyhaswrittenoff productdevelopmentexpenditureunder intangibleassetamountingtors.7,872,278/-(net)asthesamehasbeenobsoletedduetodiscontinuanceoftheproductdevelopment.
28 subsequenteventsThe company has obtained central government approval for payment of increased remuneration ofrs.9,600,000/-perannumtomr.P.mukund,managingDirectorofthecompany,foraperiodofoneyearfrom01.04.2010to31.03.2011videletterno.B5040407/5/2011-cl-viidated18.04.2011.
BaLance sHeet aBstract and coMpany’s generaL BusIness profILei. registration details :
registrationNo. 2 1 9 9 7
BalancesheetDate 3 1 0 3 2 0 1 1 statecode 1 8
Date month Year
ii. Capital raised during the year (amount in rs. Thousands)
Publicissues rightsissue
N i l N i l
Bonusissue Preferentialissue
N i l 4 9 5 9 5 0
iii. Position of Mobilisation and deployment of Funds (amount in rs. Thousands)
Totalliabilities Totalassets
1 7 2 3 0 1 8 1 7 2 3 0 1 8
sources of Funds
Paid-up-capital reserves&surplus
2 0 3 7 4 4 8 1 4 3 4 5
employeestockoptionsoutstanding securedloans
8 1 9 0 5 7 8 2 3 5
Unsecuredloans DeferredTaxliability
2 9 8 1 2 8 8 6 9 2
application of Funds
Netfixedassets&Netintangibleassets investments
8 8 4 7 0 5 2 8 6 1 6 5
DeferredTaxassets Netcurrentassets
1 1 9 0 3 5 8 4 7 1
Profit&losscount
1 9 2 4 8 7
iV. Performance of Company (amount in rs. Thousands)
Turnover Totalexpenditure
1 9 7 6 2 0 7 1 9 0 5 5 4 0
Profit/lossbeforetax Profit/lossaftertax
+- +-
+ 7 0 6 6 7
+ 7 5 8 3 6
(Pleasetickappropriatebox+forProfit-forloss)
62
Igarashi Motors India Limited
6�
+-Basicearningpershareinrs. Dividendrate%
+ 5 . 0 4 N i l
+-Dilutedearningpershareinrs.
+ 4 . 9 2
V. generic names of Three Principal Products / services of Company(aspermonetaryterms)
itemcodeNo.(iTccode) 8 5 0 1 3 3 0 1
ProductDescription e l e c T r i c m i c r o m o T o r s
P. Mukund k.k. nohria k. igarashi managingDirector chairman C.P. dusad g.n. Mani T. igarashi r. Chandrasekaran T.s. Maharani keiiChi igarashi head-finance companysecretary Directors membershipNo.16992
Place : chennai Date : may26,2011
62 6�
casH fLoW stateMent for tHe year ended MarcH 31, 2011
5. cash and cash equivalents inclue fixed deposits of rs. 6,021/- pledged as security with sales taxdepartment,notavailableforimmediateuse.
asperourreportattached P. Mukund k.k. nohria k. igarashisharP & Tannan managingDirector chairman C.P. dusad charteredaccountants g.n. Mani icairegistrationNo.003792s T. igarashi r. Chandrasekaran T.s. Maharani keiiChi igarashi head-finance companysecretary Directors L. VaidyanaThan membershipNo.16992 Partner membershipNo.16368
Place : chennai Date : may26,2011
64
DPid&clientiD:______________
folioNo:______________
i/we………………………………………………………………………………………………………...............of.……………………………………………………............beingamember/membersoftheabovenamedcompany,herebyappoint.....................…………………………………………………………………………or…………………………………………………failinghim/her……………………………………..…........as my /our Proxy to vote for me /us on my/our behalf at the 19th annual general meeting of thecompany to be held at the sathguru gnanananda hall, Narada gana sabha Trust complex,minihall,314,T.T.K.road,chennai-600018at3.00P.m.onThursday,15thseptember,2011andatanyadjournmentthereof.