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Kirloskar Electric Company Ltd.
Change Company :  Go
Chairman : Vijay R Kirloskar Industry : Electric Equipment
Last Price Today's Change Open Prev Close Day's Range 52 Week Range
26.40 0.45 26.15 25.95 (27.45)   (26.00) (41.35)   (15.95)
BSE Code 533193
ISIN Demat INE134B01017
Book Value (Rs.) 19.64
Dividend Yield (%) 0.00
Market Cap (Rs Mn) 1333.76
P/E 0.00
EPS (Rs.) -16.60
Face Value (Rs.) 10
Volume 3024.00
March 2014

DIRECTORS' REPORT AND MANAGEMENT DISCUSSION & ANALYSIS

To

The Shareholders

Your Directors have pleasure in presenting the 67th Annual Report on the business operations of the company, together with the Audited Statement of Accounts for the year ended 31st March, 2014. The financial highlights on the Business operations of the Company are as follows:

Company's Performance

During the year under report, your Company has achieved a turnover of Rs. 67,984.27 lakhs (previous year Rs.80,194.27 lakhs). The operations have resulted in a net loss of Rs.4,100.96 lakhs (previous year net profit of Rs. 416.03 lakhs).

Industry Outlook

The market for your company products remains subdued. The present manufacturing capacity in India is in far excess of the existing demand. This has lead to very aggressive competition and subsequent negative pressure on the prices of products. Your Company has taken several steps to mitigate the impact of this by taking several measures for optimizing the capacity utilization, market reach and performance.

Dividend

In order to conserve resources for Company' s growth, your Directors do not propose to declare any dividend for the year under report. The Company has not transferred any amount to its General Reserve.

Subsidiary - Kirsons B.V.

The operations of Kirsons B.V., your subsidiary have resulted in net loss of € 2.94 lakhs (Previous year € 1.04lakhs).

Subsidiary Companies

The Company as of March 31, 2014 had one subsidiary, viz., Kirsons B.V., Netherlands (Kirsons). Kirsons is having two subsidiaries - Lloyd Dynamowerke GmbH & Co. KG, Germany and Lloyd Beteiligungs-GmbH, Germany. Pursuant to section 212 of the Companies Act, the annual accounts of subsidiary companies for the year ended 31st March, 2014 along with the statements referred to in the said section, are attached with Consolidated Financial Statements as required.

Lloyd Dynamowerke GmbH & Co. KG, Germany (LDW)

As you are aware, your Company holds 94.89% shares in Lloyd Dynamowerke GmbH & Co. KG, Germany and the entire shareholding in Lloyd Beteiligungs-GmbH, Germany through its subsidiary in The Netherlands - Kirsons B.V. Lloyd Dynamowerke GmbH & Co. KG,Germany is a limited partnership existing in accordance with the Laws of Germany which owns an electrical machine manufacturing plant at Bremen. During the year ended 31st March, 2014 Lloyd Dynamowerke GmbH & Co. KG, had turnover of € 390.41 lakhs(Rs.31,622.97 lakhs) {Previous year € 399.57 lakhs (Rs. 27,942 lakhs)} with a net loss after tax of € 58.43 lakhs(Rs.4,826.92 lakhs) {Previous year net loss € 64.60 lakhs (Rs.4,496 lakhs)}.

Rotating Machines Group

During the year under review the sales under Rotating Machines Group amounted to Rs.68,983.02 lakhs as against Rs.69,935.88 lakhs in 2012-13.

Power Generation and Distribution Group

During the year under review the sales under Power Generation and Distribution Group amounted to Rs.31,608.77 lakhs as against Rs.40,861.21 lakhs in 2012-13.

Others

During the year under review the sale of other Electrical Products amounted to Rs.5,368.11 lakhs as against Rs.4,719.32 lakhs  in 2012-13.

Human Resources

The Company considers its employees as its most valuable asset. Employees at all levels have put in their best to the services of the Company and the Board puts on record the sincere appreciation of their dedication and loyalty. The Company focuses on building an organization through induction and development of talent to meet current and future needs. Various HR initiatives have been taken to align the HR Policies of the Company with the growth projections of the Company. The Company has 1686 employees as on 31.03.2014.

Environment, Safety and Energy Conservation

As required by the Companies (Disclosure of particulars in the Report of Directors) Rules, 1988, the relevant data pertaining to conservation of energy, technology absorption and other details are given in the Annexure to this report.

Particulars of Employees

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975,the names and other particulars of specified employees are set out in the Annexure to the Directors Report. However having regard to the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all members of the Company, excluding the aforesaid information. Any member interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company.

Corporate Governance

Pursuant to the requirements of the Listing Agreements with Stock Exchanges, your Directors are pleased to annex the following:

1. Management Discussion and Analysis Report

2. Report on Corporate Governance

3. Auditors Certificate regarding compliance of conditions of Corporate Governance

4. CEO & CFO Certificate

5. CEO Certificate regarding compliance with the Code of Conduct. These annexures form part of this report.

Directors

Mr.A.S.Lakshmanan retire by rotation at the ensuing Annual General Meeting and is eligible for re-appointment.

The Board has appointed Mr. K.Ganesh as an Additional Director of the Company at their meeting held on 30th September, 2013. Mr. K.Ganesh hold office upto the date of the Annual General Meeting and has been proposed for appointment.

The Board has appointed Mr.S.N.Agarwal, Mr.Sarosh J Ghandy, Mr.Anil Kumar Bhandari, Mr.V.P.Mahendra, Mr.Kamlesh Gandhi and Mr.Ram J Shahaney, as non Executive Independent Directors for a period of five years from the date of this Annual General Meeting and are not liable to retire by rotation.

The Board has appointed Mr. Vinayak Narayan Bapat as an Additional Director of the Company at their meeting held on 12th August, 2014. Mr. Vinayak Narayan Bapat hold office upto the date of the Annual General Meeting and has been proposed for appointment. He is appointed as Managing Director for a period of three years w.e.f. 12th August 2014.

The Board has appointed Mr. Anand B Hunnur as an Additional Director of the Company at their meeting held on 12th August,

2014. Mr. Anand B Hunnur hold office upto the date of the Annual General Meeting and has been proposed for appointment. He is appointed as Director - Sales for a period of three years w.e.f. 12th August 2014.

The Board has appointed Mr.Vijay R Kirloskar as Executive Chairman for a term of three years w.e.f. 12th August 2014. Mr.Alok Kumar Gupta, Joint Managing Director, resigned from the services of the Company from the close of office hours on 25th April, 2014. Your Directors place on record their appreciation of the valuable services rendered by Mr. Gupta during his tenure as a Director of the Company.

Directors' Responsibility Statement

Pursuant to the Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been generally followed.

2. Appropriate accounting policies have been selected and applied consistently and Directors have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the Profit and Loss Account for the year ended 31st March, 2014.

3. 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.

4. The annual accounts have been prepared on a going concern basis.

Auditors

M/s. B. K. Ramadhyani & Co., Chartered Accountants and M/s. Sundar & Associates, Chartered Accountants, are the retiring Auditors in India and Malaysia respectively. They are eligible for re-appointment. The required certificates to the effect that the re-appointments, if made, will be within the limit specified in Section 224(1 B) of the Companies Act, have been received from M/s. B. K. Ramadhyani & Co., and M/s. Sundar & Associates.

Fixed Deposits

40 persons had not claimed repayment of their matured deposits amounting to Rs.61.30 lakhs as at 31st March, 2014. Out of the above upto the date of this report, 34 Fixed Deposit amounting to Rs.57.60 lakhs has been repaid and balance 6 Fixed Deposit amounting to Rs.3.70 lakhs had not been claimed.

Acknowledgements

The Board of Directors take this opportunity to express its sincere appreciation for the continued support and confidence received from the Company' s Bankers, Financial Institutions, Customers, Suppliers, Depositors, Shareholders and Employees and on behalf of the Board of Directors of

Kirloskar Electric Company Limited

Vijay R Kirloskar

Chairman

Place : Bangalore

Date : August 12, 2014

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