Download annual report 2004

annual report 2004
REWRITING THE FUTURE
contents
Letters to Shareholders
04
Our Differentiators
11
Achievements 2003-04
15
Board of Directors
18
Management's Discussion & Analysis
22
Directors' Report
44
Corporate Governance
53
Annual Accounts/Financials
70
Moser Baer India Limited
European Optic Media Technology GmbH (Europtic)
Consolidated Financial Statements
Change is not mandatory.
Success is a choice.
In today's technology intensive
world, change is an appropriate
synonym for success.
At Moser Baer, we embrace
change. Rapid transformation lies
at the core of our very foundation
as we make our mark in an
industry, which is continuously
expanding and evolving.
deepak puri
CHAIRMAN & MANAGING DIRECTOR
Converging into the
Future
Converging into the Future
Change is inevitable… and who would know it better than those in our industry. For, unlike other old
economy industries like the automobiles sector where change generally means a new model each year,
in our industry, when we think of change, it is usually in weeks, sometimes months and rarely in years.
In turn, adapting to change is unavoidable. It's how you respond to change that sets you apart. A simple
observation by perhaps the greatest writer of our times, George Bernard Shaw, explained this in his
inimitable way. “The only man I know who behaves sensibly is my tailor,” wrote Shaw, “He takes my
measurements anew each time he sees me. The rest go on with their old measurements and expect me
to fit them.”
Proactive and rapid change
You can either embrace change proactively or follow it on a reactive note. In our world, there is only one
way to go. Proactive and rapid change. The 3/3/3 rule authored by Stan Shih in the IT sector is well
known. That is 3 months to conceive and introduce a product; 3 months to make money, and 3 months
to get out. While optical discs do not face the same pressures as semiconductors and memory chips,
the parallels are striking. Time to market is the over-riding consideration.
The future beckons
The thrust of consumer demand continues to push us towards continuous investment in technology to
try and attain the highest speed and the largest capacities possible. It is our constant endeavour to attain
the leadership status in our core focus area. Additionally, having established an early headstart into the
digital world, we have a unique opportunity to exploit our skill sets by leveraging them to drive value in a
broader sense.
Synergy and growth
The knowledge economy is a specialized domain and our expertise in precision manufacturing, process
intensive and knowledge intensive technological applications is clearly established. It would provide us
immense advantage if we were to explore synergistic areas for seamless avenues of growth beyond our
current portfolio.
Historically, this has been the way forward once you attain critical mass in a particular area. Moser Baer
has displayed foresight and sharp business acumen in investing in the right products at the right time. It
is perhaps time to probe the future by an intense but broader look at synergistic avenues, keeping in
mind the right mix of investment, risk and market potential and stability.
Without a doubt, the avenues should be on the cutting edge of technology with global market potential
and perhaps requiring high quality, low cost mass production. Moser Baer has expertise and experience
broadening its basket and will leverage its considerable core competencies to broaden its portfolio and
balance risk for future growth.
Small steps for Large strides
Small steps forward that redefine and upgrade our everyday experiences come together to change our
world. From diskettes to videos, from CDRs to DVDs, from red laser to blue laser, from 8X to 16X, and
before you know it, the world has changed around you. On a broader level, the move from analog to
digital meant simply a move from reading curves to reading dots and dashes.
And what a world of a difference that has made!
ratul puri
EXECUTIVE DIRECTOR
New Rules for a
New Game
New Rules for a New Game
Every once in a while, the market throws up the cards and sends the players back to the starting line. It changes the rules of the
game forcing each contestant back to the drawing board to flesh out game-plans anew.
The successful takeover of the analog world by digital technology has resulted in something similar. It has brought all the players
back to the starting gate and continues to do so with regularity.
Previous credentials or experience provide little advantage without foresight and agility. The digital market bows only to new
leaders who play the new game by its fresh rules. Victory will embrace players who display speed, strength, ability, innovation and
anticipation.
Timing is everything
In this new world timing is everything. The right time to invest, the right time to market, the right time to enter a product and the right
time to exit and move forward.
At Moser Baer, this is our strength. We have cultivated the foresight to predict market movements and embrace change.
We first invested in optical discs at a time when the market was in a downturn by correctly anticipating the underlying growth
drivers and long-term market potential. At the same time, we accurately foresaw the very powerful long-term competitive
advantage that an India based enterprise could offer in an evolving industry; a highly skilled workforce, a competitive cost
structure, and a differentiated manufacturing option.
We have consistently synergised our research, engineering, manufacturing capabilities to our marketing network to optimize our
time to market and maximize return on investment and emerge as a market leader and the most profitable player in the removal
storage media industry.
The multiple avatars of Change
Change is the only constant in our industry and manifests itself in many varied forms. It could emerge in the form of format
changes, speed changes, process changes or market changes.
We, at Moser Baer, have been prepared. Moving into digital technology early, we have made a headstart with the right levels of
investment and have captured a significant international market share in the optical storage media industry.
The lowest common denominator
With the industry becoming increasingly commoditised, the market today has moved everything to the lowest common
denominator. Yet, we have maintained our leadership by converting the art of playing the commodities game into a science. We
took the value route when volume was the mantra. We stayed nimble-footed and agile despite catering to a mass-scale global
market.
Destination Next
As a prominent player on a worldwide canvas, Moser Baer understands its leadership responsibilities. We recognise the need to
make the most of our strong research, development and engineering capabilities to deliver even higher value added products to
markets, while continuing to focus on increasing production efficiencies and yields to further increase our cost leadership
globally.
The exploding global market in DVD and the growing disposable income levels within the domestic market presents immense
scope ahead and we are well positioned to exploit this emerging opportunity. We intend to leverage our manufacturing base,
expanded capacities, customer relationship and the explosive growth to significantly enhance our global share and not merely
retain, but further improve our leadership position within the industry. In addition, we intend to utilize our core mass manufacturing
capabilities, especially in high technology process driven industries to capitalize on the growing global trend towards
outsourcing. Our strong core expertise in thin film coating provides us multiple opportunities in a number of high growth areas
both within and outside storage media industry. Together, this canvas represents Destination Next at Moser Baer.
p m pai
PRESIDENT
From Technology Leadership to
Process Leadership
From Technology Leadership to Process Leadership
Moser Baer is well known for its technology leadership. It has established with agility and speed its ability
to stay ahead of the curve in a fast growing and rapidly transforming industry. In addition to investment in
technology, Moser Baer has continuously gained market share by maintaining a sharp focus on cutting
edge products, world-class quality, cost leadership, and customer satisfaction.
Ensuring continuity in Technology, Quality and Cost Leadership
This year, we have taken a big step forward in establishing systems internally to attain the critical
ingredient for continuity of success - process leadership.
We have adopted this year the Balanced Scorecard, in order to ensure that each and every individual in
our organization continues to stay aligned to the collective corporate goals even as the organization
grows by a monthly average of 150 new hires a month.
Strategic Themes
The Moser Baer corporate scorecard rests on five broad strategic themes of Long Term financial
stability, Customer first, Process standardization, Operational excellence and Employee engagement.
These, in turn, flow into the strategic objectives. It goes without saying that long term financial stability
would require strong pillars of ROCE, revenue growth, profitability, asset utilization and cost leadership
for sustenance.
Similarly, a customer first choice orientation would require a first to market approach, relentless focus on
customer satisfaction and relationship management. Having entered the branded segment in the
domestic market, it would also need sustained effort in maintaining leadership.
Process standardization needs to be all encompassing. Not only in the manufacturing processes, but
also in our financial processes including budgeting and control. In addition, we are focusing on
standardization of our supply chain management processes as well as our HR processes. This is
symbiotic with operational excellence, which would focus on process improvement, supply demand
balancing and cycle time reduction.
Flowing across the organization
All of the above need to rest on a foundation of a skillful and motivated workforce. Employee satisfaction,
skill building, a culture of ownership and knowledge management have been the foundations on which
Moser Baer has built its success and we will continue to focus on improvement in these areas through
engagement, alignment and recognition.
The strategic themes and objectives identified are now flowing down to each and every level of the
organization, aligning and sharpening focus on our collective direction. Each function has formulated
strategic measures by identifying critical processes and resources central to their success. Function
and unit scorecards have been finalized flowing down to individuals with appropriate KRAs with the right
weightings.
Maintaining the lifeline
We, at Moser Baer, are clear about our success drivers in the past and at no point will our internal
process focus take away from the established priorities of technology, quality and cost leadership.
Process leadership is intended to only seal these with a stamp of continuity in success.
Change... in speed
At the macro level, the global storage
market is transitioning from analogue to
digital. Our Optical disk world, not only
evolves from one format to another, but
within formats we see continuous
change, with write speeds increasing by
as much as 10 fold in short periods of
time. Working hand in hand with drive
manufacturers we have built a strong
capability to deliver cutting edge
products to our customers, allowing us
to command a premium position for our
products in the marketplace.
Change before you have to
- Jack Welch
our differentiators
What makes us who we are? Is it our fierce commitment to quality, our dogged determination to take the 'Made in India' label to the
world, or our constant efforts to offer the best to our customers? Is it our efficiency in manufacturing, the agility with which we
navigate the changing market, or our love of innovation and change?
It's all of the above factors put together that sets us apart. Our industry is driven by change and rapid innovation. At Moser Baer, we
believe that we can stay ahead in the race by reacting swiftly to these changes. That's why we have unique, result-oriented systems
and strategies in place, which enable us to operate flexibly. But that's not the only reason why we're different, or why we're
considered among the top players in the global market for optical media storage products.
Efficient Manufacturing: It's tough to sustain yourself without efficient manufacturing. We know this well, which is
why we have built innovative solutions to manage mass manufacturing. The capabilities of our engineering and design,
production lines, processes and manufacturing facilities allow us to move quickly from the concept stage to the finished product.
By engineering and designing our own facilities along with our equipment vendors, we've maximized quality and reliability, while
reducing our capital investment costs. Our human resources are exceptionally strong. In fact, we've leveraged our high quality
and low cost human resource base to create one of the highest ratios of technically qualified personnel in the industry. Due to the
vertical integration of our manufacturing operations, we are able to monitor quality and minimize costs. Our manufacturing
facilities are also highly flexible, allowing us to minimize obsolescence risks and adapt swiftly to changes in the market. For
instance, our format-flexible production equipment lets us switch seamlessly between different formats without incurring high
investment costs.
Speed: Our objective is to be first-to-market. Which means, we've got to respond to the twists and turns of the market with
speed and agility. In fact, we do it rather well and rapid commercialization is one of our key core competencies. Responding to
change with speed is like a reflex action for us, something that's intrinsic to the organization's culture. Using our expertise, we try
and develop new technologies as rapidly as possible. What helps us achieve speed is our decentralized yet cohesive
organizational structure that makes it easy to take decisions. And get moving on the job.
R&D: Our strong research and engineering base allows us to rapidly introduce products in the market. We view R&D as an
enabler that allows us to effectively deliver products to customers. Our R&D is of an applied nature that focuses on results. In this
way, it differs from the traditional and basic R&D that companies undertake. We produce virtually all our products using
proprietary in-house technologies. We attempt to understand customer requirements and develop processes that suit their
needs. Recently, in an unique partnership, we developed a specific solution for one of the world's best-known PC makers, which
enabled them to provide value to their customers. Our R&D alliances with other global companies have resulted in the
development of acclaimed product and process innovations. The company spent INR 306 million on R&D during the year,
amounting to 1.9 per cent of total revenues. The company has over 80 people in its R&D division, with a extensive and wide range
of expertise. This has enabled the company to launch new and innovative products and also helped increase production
efficiencies and process yields.
Quality and Cost: We believe that our commitment to providing quality products to customers has been vital to our
success. We are always looking to innovate on ways to reduce costs, so that we can pass on the benefit to our customers. To this
end, we have very structured cost-reduction programmes in place across all functional areas. At any point in time, you'll always
find several QICR, or quality implementation and cost reduction programmes, running simultaneously across our operations.
We're also fanatically obsessed with measurement, to the point that we try and measure and benchmark every aspect of our
business in order to improve it. The goal is to make every business process predictable and scientific, in order to reduce our timeto-market. Our commitment to quality also reflects in the fact that our manufacturing facilities are certified by several leading
international certification bodies. Our newest manufacturing facility at Greater Noida achieved ISO 9002 within 12 months of
beginning production. There is a strong focus on quality control across the organization, not least because we have invested in
regular quality training and invested in building a quality conscious culture. Not to mention that our emphasis on quality means
that we have an extremely low defect rate, one of the lowest in the industry.
Customer Focus: In our business, building and sustaining customer relationships is critical, which is why our company
is driven by a strong customer focus. Our customer focus is evident in the fact that we've never lost a customer. On the contrary,
we're hailed by our customers as being the most flexible and innovative supplier. That's because we integrate and align ourselves
with our customers by trying to understand their requirements and developing specific programmes that often exceed their
expectations. This in turn enables them to differentiate themselves in the market and thus add value to their products. By
integrating our IT system with those of our customers, we enable them to check the status of their deliveries online from anywhere
in the world.
Supply Chain and Logistics: At Moser Baer, we realize that an efficient and seamless supply chain is crucial to our
global competitiveness. That's why we've invested so much thought and energy into ensuring that all our supply chain operations
are linked and customer deliveries are made swiftly and at a minimal cost. The entire production planning process works in
perfect synergy with our logistics department. We are, in fact, a bit of a trendsetter in the way exports are handled in north India
and there are several 'firsts' to our credit. For instance, the first round-the-clock customs clearance facility at ICDs was introduced
at our insistence. Similarly, we were the first company to have dedicated export trains for Moser Baer. We're also one of the few
companies to provide total logistics solutions to our customers. We've even built our own in-house software for managing
inbound and outbound shipments to help track documents and containers instantly.
People Skills: We're nothing without our intellectual capital. The power of this capital is reflected in process efficiencies,
reengineered equipment, enhanced productivity, low manufacturing cost and new product launches, amongst others. We've also
taken innovative steps to conserve our intellectual capital. For instance, we have a merit-led remuneration system. We also
regularly invest in the training of our people. And we have incorporated and benchmarked the best HR practices. Needless to say,
this has been a key driver of our success.
Change Managers: Our proactive approach to current and future challenges makes us good at dealing with change.
In our industry, where short market cycles, rapid growth and the constant introduction of new products are routine, staying ahead
can be tough. With our systems approach to forecasting business cycles, however, we have been able to employ our capital at the
right time for the right product in the right market. When we spot an opportunity, we are able to leverage our technological
capabilities to maximise benefits from any change in the environment. Our entry and exit into any market is pre-determined and
always follows a specific plan. In fact, we have accurately forecasted technological changes thereby enabling us to be first-tomarket with new products. Our expertise, capabilities and flexibility also stand us in good stead to develop complementary
products outside our core business of optical media manufacturing.
Marketing Strategy:
Our marketing strategy is differentiated, to enable us to minimize our risk and optimise the value
we offer to our customers. We have been able to build long term relationships with our customers, which offers stability and
mitigates business risk. Our aim is to not simply provide them with products but with integrated solutions. Our global marketing
offices, subsidiaries and logistical and distribution centres make it possible for us to react quickly to customer requirements. In
India, we launched the Moser Baer brand of storage media and are now enjoying a 25 per cent domestic market share in high
value branded segments.
Financial Strategy: As we operate in a high-growth and capital-intensive industry, efficiently financing our rapid growth
is a critical factor driving competitive advantage. We are prudent when it comes to financial management. Our prudent mix of
equity, debt and internal accruals to finance our expansion plans has yielded significant returns and has helped us achieve a
conservative risk to cost ratio. Over the past five years, we have successfully raised almost USD 350 million from international and
domestic lenders and USD 229 million from capital markets. Our overall goal is to maximise returns on invested capital and
increase the spread over weighted average cost of capital.
Change... in format
Driven by emerging new applications
and evolving end-user requirements,
formats are destined to change in our
industry, which is why Moser Baer
plans its entry and exit precisely to
maximize returns on investment. From
diskettes to CDs to DVDs we have been
at the cutting edge of change as the
world changed from analog to digital
and promise to continue to do so as we
move into the future.
We must become the change
we want to see.
- Mahatma Gandhi
achievements 2003-04
What have we achieved this year? We've managed to grow, attract new customers and increase production efficiencies. We've built
a brand, introduced new products and managed to sustain our state-of-the-art manufacturing facilities. Revenues and earnings
have grown substantially, and so has our global market share.
Yet, it's been a year of mixed fortunes. On the upside, the market for CD and DVD Recordable discs in India is expected to grow at
over 50 per cent annually, and the
brand has made significant inroads into the domestic market.
On the other hand, we have seen a significantly competitive market environment emerge, resulting in a need for us to intensify our
efforts at cost reduction, increase our investments in technology and R&D, create better platforms to service customers, and over
all enhance the value package we deliver to customers.
The Greater Noida manufacturing complex: Our Greater Noida facility is the largest single-site optical
media production facility in the world. Within one year, we've ramped up operations at the facility in order to meet the increasing
demand for optical media products. Civil construction facilities for the second phase of expansion at this facility began in October
2003.
The modular structure of the Greater Noida facility, along with the existing infrastructure and utilities, has provided the company
with the flexibility to quickly react to changes in market conditions at lower incremental costs.
DVD manufacturing: A year after we started mass manufacturing of the DVD Recordable and Rewritable formats,
we've made serious progress in R&D and significantly ramped up production capacities. In the short span of one year, we
launched new products including the 2X, 4X and 8X DVD Recordable and the 2.4x and 4X DVD Rewritable formats. We believe
that our early leadership position in the DVD formats gives us a significant advantage over the next 2-3 years to capitalize on the
explosive growth that is expected.
Revenues: We substantially increased gross revenues to INR 15,792.2 million, a growth of 45.5 per cent over FY02-03. We
were ranked amongst the fastest growing companies (for our size and scale) in the country.
EBITDA: EBITDA (net of other income) at INR 6,359.0 million grew by 67.8 per cent over FY03. Also, EBITDA margins (net of
other income) rose to 41.4 per cent in FY04 as compared to 39.0 per cent in FY03.
Earnings: Our net earnings after current years tax grew 50.7 per cent, over FY03, to INR 3577.2 Million . However, net profit for
the year after making provisions of INR 338.7 million for previous year/ deferred tax, grew 36.5 per cent to 3238.5 million in FY04.
GDRs: During the year we raised INR 6753.6 million, by placing Global Depository Receipts (GDR) and warrants with affiliates
of Warburg Pincus LLC. The proceeds from this issue will be used mainly to grow our DVD capacities during the coming year.
Capacity Building: The company has almost doubled its production capacities during FY04, with an increment of only
38 per cent in its gross fixed assets. Using our in-house design and development capabilities, we managed to reduce our
investments to USD 170 million, which was substantially below budgeted levels. We also substantially grew our finishing,
fulfilment and global delivery capabilities, which will enable us to substantially improve our “total value delivery system” to
customers.
Brand building: Our brand initiative in the domestic market got off to a successful start. In the first year of operations itself,
the
brand of storage media products has been able to garner a market share of 25 per cent.
Global Market Share: We've acquired new customers, scaled up existing customers and within a short time became
a vital part of their global supply chain.
Investment in IT: We continued our strong investments in technology, integrating our entire supply chain from vendors to
customers. This internal and external integration, has significantly reduced our time to market.
Human Resources: We added 1661 personnel during the year, and significantly increased the number of shares
under our ESOP scheme to 4.4 million from 2.2 million, in a continuing effort to provide members of the organization with a shared
sense of ownership.
Change... in environment
The environment we operate in
undergoes continuous change. We have
engineered models to accurately predict
this change and are an active
participant in the standard setting
bodies that drive these changes. This
enables us to be proactive in the new
environment, effectively reducing the
risk profile of our business, while
enhancing the rewards.
Change is the law of life, and
those who look only to the
past or the present are
certain to miss the future.
- John F. Kennedy
boards of directors
deepak puri
MANAGING DIRECTOR
Deepak Puri provides strategic direction to the company. He is the driving force in creating an
environment of integrity, fair business practices, a respect for intellectual property and a
ceaseless quest for human capital development. He is also the chairman of Electronics and
Computer Software Export Promotion Council (ESC), a non-profit, autonomous organisation
of the Ministry of Information Technology, Government of India. He holds a master's degree in
mechanical engineering from Imperial College, London, and is an alumnus of St. Stephen's
College and Modern School, New Delhi.
ratul puri
EXECUTIVE DIRECTOR
Ratul Puri joined Moser Baer in 1994 and has been Executive Director since 2001. Prior to his
assuming the Directorship, Ratul was General Manager - Business Development. In this
capacity, he was instrumental in setting up plants for manufacturing compact discrecordables, the first to come up in India.
harnam wahi
DIRECTOR
Harnam Wahi brings a wealth of experience and global expertise to the Board of the company,
having worked in various senior positions in prestigious Indian and international organizations
such as the Inchcape Group, London; Flender Macneill & Co, Germany; Johnstan Pumps
(India) Ltd; Containers & Closures Ltd; Dewrance Macneill & Co Ltd; Kilburn & Co. Ltd;
Ganges Printings Co. Ltd; and Ganges Rope Co. Ltd. and was closely associated with several
industry associations.
nita puri
DIRECTOR (Administration & HR)
Nita Puri is a whole-time Director. A graduate from Calcutta University, she has 31 years of
business experience. As Director (Administration and HR), she has been closely involved with
the company since inception.
prakash karnik
DIRECTOR
Prakash Karnik is an engineer from the reputed Indian Institute of Technology (Madras) and a
management graduate, he has over 25 years of work experience in the engineering and
finance sectors. He has worked in senior positions in the government and private sector
organisations such as Jardine Fleming India Securities Ltd, Unit Trust of India, Economic
Development Corporation of Goa Ltd, amongst others.
rajesh khanna
DIRECTOR
Rajesh Khanna has been working with Warburg Pincus for the last six years. He is an MBA
from Indian Institute of Management, Ahmedabad, and also a Chartered Accountant. He has
worked with leading finance and consulting firms such as Citibank N.A., and Arthur Andersen
& Co.
bernard gallus
DIRECTOR
Bernard Gallus brings to the company’s Board over 40 years of experience in international
technology and finance. He was earlier Managing Director and member on the Board of J.
Bosshard S.A. Lausanne, later taken over by W Moser Baer AG, Switzerland.
arun bharat ram
DIRECTOR
Arun Bharat Ram graduated in Industrial Engineering from the University of Michigan, USA. He
started his career with DCM Ltd., moved to SRF Ltd. as Managing Director in 1975 and
appointed Vice Chairman in 1988. He played a key role in professionalising the company. He
has been on various Government-Industry Committees. He is ex- President of the Association
of Synthetic Fibre Industry and has served on the Managing Committee of Development Panel
on Man-Made Fibre Industry. He has been the Chairman of Indo-Korea Joint Business
Council. He was earlier Chairman of the Northern Region of Confederation of Indian Industry
(CII) and is the past President of the National Body of CII. He is also deeply involved in the field
of education and philanthropy.
john levack
DIRECTOR
John Levack is Managing Director of Electra Partners Asia Limited. He has over 20 years of
private equity experience with Electra and 3i plc in Asia and Europe, four years of which have
been in India. He is a director at Aksh Optifibre Limited, Zensar Technologies Limited, SPI
Technologies Inc., Meghmani Organics Limited and RT Packaging Limited. Mr Levack has a
degree in Business Administration from Bath University in UK.
organisation chart
Mr V J Prakash
MD - European Mfg. Proj.
Mr Robert O'Donnell
GM - European Operation
Mr B Bartholomeusz
VP - Strategic Initiaves
Mr D P Nanda
GM - Commercial
Mr Ratul Puri
Executive Director
Mr M Kobayashi
VP - Japan
Mr Vivek ChaturvedI
GM - Intl Sales & Mktg
Mr Rakesh Govil
Head Strategy & Treasurer
Mr Tarun Jaitly
GM - Investor Relations
Mr Saurabh Chawla
GM - CS & T
Mr G R Nyati
Head - Engg & Tech
Mr B Ganesh
GM - Log. & Supply chain
Mr Muthu Kumar
GM - IT
Mr Naresh Jand
GM - Finance
Mr R Ganesan
GM - Accounts
Mr Deepak Puri
Chairman & Managing Director
Mr Bhasker Sharma
VP - Domestic Marketing
Mr S Rajalingam
Sr GM - Plant A-164
Mr Deepak Shetty
GM - Domestic Sales
Mr Praveen Jaiswal
GM - Operations
Mr R W Ghei
Sr GM - HR
Mrs Nita Puri
Director - Admin
Mr Ashish Bhanu
GM - A/V
Mr N C Jain
GM - SPAD
Mr Anil Bhargava
GM - Quality
Mr P M Pai
President
Mr Shiv Nath
GM - Operations (OMG)
Mr Vijay Bijlani
GM - Operations (P&P)
Mr V C Agerwal
VP - 66GN
Mr N K Chaudhary
Sr GM - Projects
Mr Anil Sawhney
GM - Admin
key people
Mr P M Pai
President
Mr V J Prakash
MD - European Mfg. Proj.
Mr Brian Bartholomeusz
VP - Strategic Business Initiatives
Mr Rakesh Govil
Head Strategy & Treasurer
Mr M Kobayashi
VP - Japan
Mr V C Agerwal
VP - 66 GN
Mr Bhaskar Sharma
VP - Domestic Marketing
Mr G R Nyati
Head - Engg. & Tech.
Mr S Rajalingam
Sr - GM Plant A-164
Mr N K Chaudhary
Sr GM - Projects
Mr R W Ghei
Sr GM - HR
Mr Robert O'Donnell
GM - European Operation
Mr D P Nanda
GM - Commercial
Mr Vivek Chaturvedi
GM - International Sales & Marketing
Mr Tarun Jaitly
GM - Investor Relations
Mr Saurabh Chawla
GM - CS&T
Mr B Ganesh
GM - Log. & Supply Chain
Mr Muthu Kumar
GM - IT
Mr Naresh Jand
GM - Finance
Mr R Ganesan
GM - Accounts
Mr Deepak Shetty
GM - Domestic Sales
Mr Praveen Jaiswal
GM - Operations
Mr Ashish Bhanu
GM A/V
Mr N C Jain
GM SPAD
Mr Anil Bhargava
GM - Quality
Mr Shiv Nath
GM - Operations (OMG)
Mr Vijay Bijlani
GM - Operations (P&P)
Mr Anil Sawhney
GM - Admin
management's discussion & analysis
Your Company
Moser Baer India, headquartered in New Delhi, India, was
established in 1983. The Company has successfully
developed cutting-edge technologies for recordable optical
media, constantly innovating and introducing new products
and process. An emphasis on high quality products and
services has enabled Moser Baer emerge as one of India's
leading technology companies and the third largest player in the global optical storage media industry. The
company currently employs over 4,000 people and has multiple manufacturing facilities in the suburbs of New Delhi. The
company services its customers through 6 marketing offices and subsidiaries in India, the US and Europe, and sells its products
in over 40 countries globally.
Global industry structure
The removable storage media industry comprises three distinct categories:
Magnetic media (diskettes, data cartridges, magnetic tapes such as compact cassettes, VHS and Beta Cam, among others)
Optical media (CD, DVD formats including recordable, rewritable and pre-recorded formats) and
Solid state media (memory sticks and multimedia cards, among others).
We estimate that more than 70 per cent of the world's manufacturing capacity for recordable optical storage media (the segment
in which Moser Baer operates) is based in Taiwan and Japan. Market sources indicate that most of this capacity is highly
concentrated, with the top 5 manufacturers accounting for over 80 per cent of this capacity.
Manufacturing in the industry is characterized by high entry barriers, driven by large capacities needed to derive economies of
scale and the fast pace of technological evolution constantly requiring the ability to innovate and develop new generations of
products. Due to the scale and size of the manufacturing facilities and the pace with which capacities need to be established,
successful companies within the industry must have strong capabilities to establish highly complex facilities, and mature
manufacturing processes, involving nanometer scale technologies.
As the leading brands, most of which are owned by major multinational companies, control over 80 per cent of the global market,
successful manufacturing companies in the industry must develop the ability to meet exacting quality standards across the large
volumes needed to service the requirements of customers. Establishing a strong global logistics, distribution and customer
service capability is also imperative to service the needs of customers.
In this competitive environment, Moser Baer has capitalized on its mass manufacturing, engineering and development
capabilities to emerge as one of the world's most profitable players in the removable optical storage media industry. The
Company's Revenues has grown 10 times over the last 5 years and has emerged as the third largest manufacturer of optical
storage media in the world. The company is also the largest manufacturer in India with a 25 per cent share of the domestic
branded segment.
Global industry developments in 2003-04
During the last year, the global optical storage media industry witnessed robust growth. With demand-supply evenly matched for
most part of the year, manufacturers were able to increase pricing, leading to improving performance from all major industry
players.
The global optical storage media industry has started to experience pricing pressure for it's products, specially in the CD-R format
since Q4 FY04. However, this is expected to be a transient trend and more of a seasonal effect rather than a fundamental and
structural change in the industry.
Drive shipments continue to be robust. An expanding global base of installed writers, increasing product applications,
penetration and customer acceptance, coupled with the ever reducing cost of data storage for optical media format will continue
to drive growth of the global optical storage media industry for years to come.
The calendar year 2003 emerged as the first 100 million drive year for the global optical storage media industry. The installed base
of read/write drives grew by over 48 per cent in CY03 to 314 million units from 212 million units in CY02.
Product-wise analysis and outlook
1. CD-Rs
One of the key factors that will ensure a long life cycle for CD-R
media is the backward compatibility of drives. Hence a DVD
recordable drive and a combo (CDR/RW + DVD ROM) can
write and read CD-R discs. If these are all factored in alongwith
CD and DVD ROM drives, current estimates suggest that this
year alone the total population of devices that can read CD-R media exceeds 1.5 billion. All of this lends credence to
the views expressed by industry analysts that CD-R will continue to be a major low cost recordable format of choice in the future.
During CY03, the installed base of CD-R write drives grew by over 48 per cent. In its latest update, Techno Systems & Research
(TSR) expects the CD-R/RW drive population to expand to almost 393 million units in CY04, a 31 per cent growth over CY03.
However, the quantum of incremental yearly shipments is falling due to increased shipments of DVD-R/RW drives which also write
and read CD-R media.
CDR media consumption grew by 28.5 per cent to 11.2 billion units, representing a little over 94 per cent of recordable optical
media consumed in CY03. CD-R media growth will continue as discs reach a run-rate of 13.3 billion in the fourth quarter of CY04,
up from 11.2 billion for CY03.
CDR media pricing remained firm for most part of FY04 with a favorable demand-supply situation. However, since the fourth
quarter of the financial year, there is a transient oversupply situation, which has impacted product pricing. This is expected to be a
short term phenomenon and continued growth in demand will rationalize the supply/demand equation.
2. DVD-Rs
After a tentative start characterized by a very visible and counter-productive format battle the blank DVD market is now globally
established and growing faster than almost anyone anticipated. The prices of both drives and media have reached mass
consumption levels. Also, unlike for CD-R writers, the PC manufacturers have from the outset aggressively incorporated DVD
writers across their product lines. This integrated availability and a
plethora of easy to use software applications have opportunistically
capitalized on the global acceptance and momentum generated by
CD-R and contributed to the rapid acceptance of DVD-R.
DVD recordable drives represented just under 25 per cent of the
writable drives shipped in 2003. By the fourth quarter of 2004, DVD
drive shipments will be nearly 55 per cent of Writer-drives shipped.
The installed-base of DVD drives will nearly triple in CY04 while
annualised media consumption increases by over 400 per cent by
the fourth quarter of CY04 over CY03's shipments.
Demand for DVD-R/RW media formats grew sharply to 675 million
units in CY03, against 125 million units in CY02. This number is
expected to triple in CY04, with a fourth quarter run rate of 2.9 billion
DVD-R/RW discs consumed.
The transition to DVD writers is moving as fast as production capacities can ramp up. DVD pricing is expected to continue to fall in
the near term as manufacturing costs drop sharply and demand/production volumes rise sharply.
In contrast to the past, we see that the storage hardware industry is very aggressively driving the development of format
enhancements in an attempt to reverse the severe margin degradation that characterizes any PC peripheral. The 1x-52x CD-R
speed race was one example of this. The DVD speed race is well underway with recent 8x product introduction and the
expectation of 16x recordable products by year end. In addition, significant efforts are underway to define and develop the next
generation blue laser storage format. At this point there are a number of contending format concepts. These formats will provide
a platform for the distribution and recording of High Definition Video and basically serve as the linchpin for a major transition to a
new class of hardware products in much the same way DVD drove the adoption of more powerful PCs, larger hard drives,
surround sound systems, large screen TVs, and the like.
moserbaer - a SWOT analysis
Strengths
Lower capital investment, manpower and overhead costs make Moser Baer one of the most competitive manufacturers in the
world
Strong focus on R&D and engineering enables Moser Baer to constantly innovate product offerings, and continually reduce
costs
A growing captive local market adds to our growth potential and differentiation
Integrated manufacturing gives us cost efficiencies, tailor-made delivery capabilities and enhances our speed to market
Committed shareholders add strength, longevity and sustainability to our future plans
Weaknesses
As Moser Baer continues to grow rapidly, we need to scale up our operation, human resources, management bandwidth, and
evolve internal controls in line with the exponential growth.
As demand for most of our products is growing extremely fast, we need to constantly expand manufacturing capacities,
requiring continuous and high levels of capital investment.
Opportunities
The exploding recordable DVD (DVD-R) market presents the biggest opportunity for our company. With world-class
capacities to manufacture DVD's, an existing top-tier customer base, and an efficient in-house developed technology, we are
well positioned to exploit this emerging and profitable opportunity.
India, with its large population and growing disposable income level represents a big opportunity for us. India has one of the
largest music and video industries in the world, publishing thousands of titles each year. India is the second largest compact
cassette (audio cassette) market in the world. As consumers shift to using CD's for audio, and DVD's for their video
requirements, the domestic market for these products should explode. Moser Baer has a “home field advantage” in this
potential INR 15 billion market (by FY05).
A number of new CD and DVD applications are being opportunistically developed. The ability to conveniently transfer video
to a computer and edit or otherwise modify it in a random access fashion is proving to be a paradigm shift. Low cost DVD
recorders that resemble VCRs and which over time are expected to eventually replace them, are now freely available and
increasingly affordable. These devices share a number of common components with DVD-ROM drives and by capitalizing on
the economies of scale are expected to drop in price and replace not just VCRs but also DVD Video players.
Significant efforts are underway to define and develop the next generation blue laser storage format. With capacities in the
+20Gbyte range these formats will provide a platform for the distribution and recording of High Definition Video and basically
serve as the linchpin for a major transition to a new class of hardware products. We already recognise the potential that this
format offers and are ensuring that we are present right at the commencement of the products life cycle.
Threats
Emerging technologies
In a dynamic technology environment, Moser Baer's business
could be threatened from more efficient emerging
technologies. However, considering the explosive growth in
digital content, the low cost and ease of storage on optical
media, the huge installed base of both read and write drives
and the time to market for a new format, this threat is perceived as low. The company's strong R&D capability and joint R&D
programs with leading technology players enables the company to lead innovation rather than trail it.
Anti-dumping and anti-subsidy inquiry
The company derives a significant part of its revenues from international markets, US and Europe being the most prominent ones.
A growing protectionist attitude and a tendency by some local Governments, driven by a desire to protect local jobs, tend to use
anti dumping and other trade protection tools to provide some measure of protection to local high cost and inefficient
manufacturers. This poses a significant threat to our ability to efficiently access these markets. There are anti-dumping duties
imposed by the European Commission (EC) against most of our competitors. While Moser Baer does not have an anti-dumping
duty, the EC has imposed a 7.3 per cent anti-subsidy duty on recordable compact discs (CD-Rs) manufactured in India. We are
contesting this imposition at various levels.
These type of investigations could be instituted again in future and continue to pose a risk to our sales into Europe. However, we
are following an active strategy to mitigate this threat by diversifying our global presence, customer base and rapidly moving into
newer and larger markets like the USA.
Sharp fall in product prices
As the products move into the mature phase in their life cycle, they start to emulate commodity type characteristics. Also as the
industry is characterised by high volume , large capacities and investments, a sharp reduction in product pricing can severly
impact performace. The pricing in the industry could fall due to oversupply, low demand, cost reduction due to reduction in input
costs or setting up capacities in low cost regions. In addition to having highly efficient manufacturing process and facilities,
Moser Baer has the advantage of being situated in a low cost economy which enables the company to emerge as an extremely
efficient manufacturer in the world .
Strategy
Short / Medium term
Our near term strategy is to leverage our manufacturing base, expanded capacities, customer relationships to capture the
explosive growth expected in the DVD Recordable formats and to significantly enhance our global share. We believe, the optical
media industry in the medium term offers us sufficient growth opportunity with relatively low risk and high returns on invested
capital.
Long term
Our long-term strategy is to utilize our core mass manufacturing capabilities, especially in high technology process driven
industries to capitalize on the growing global trend towards outsourcing. Our strong core expertise in precision thin film coating
provides us multiple opportunities in a number of high growth areas both within and outside storage media industry.
Near term operational objectives
Further increase competitive edge
We are continuing our relentless efforts to further drive down production costs. At the same time we are also focused on increasing
production efficiencies and yields to further increase our cost leadership in the global industry.
Value added products
We plan to improve our sales mix by leveraging our strong research and development and engineering capabilities to deliver
higher value added products to markets. These products are
designed to meet the specific enhanced functionality
demanded by high end customers.
Strengthen customer base
Even though we are today supplying to 11 of the 12 largest
global brands in the world, we plan to significantly strengthen
customer relations by entering into strategic alliances with
customers. We also plan to provide our customer base with enhanced quality, product capability, packaging options,
and logistic and supply chain capability.
Improve geographical sales and distribution
Over the last few years, we have significantly reduced our share of sales in the European community and enhanced sales into the
North American market. Going forward, we plan to penetrate and grow in emerging markets like China, India, the Middle East and
Latin America.
Time to market
As we move up the technological curve and ally with the leading technology developers within the industry, our ability to bring
products to market and rapidly commercialize those products and grow capacities to generate economies of scale are vital to our
success in a competitive environment. A number of measures, including the development of flexible manufacturing systems,
multiple format ready facilities, and the ready availability of skilled manpower, will enable us to achieve these goals.
Moser Baer - Developments in 2003-04
Gross revenue in FY04 jumped 45.5 per cent over the previous year to INR 15,792.2 million, and net sales rose 40.9 per cent to INR
15,021.7 million over the previous year. Net earnings after tax (including deferred tax for the current year) at INR 3,577.3 million,
increased by 50.8 per cent over FY03. EBITDA (net of other income) at INR 6,359.0 million grew 67.8 per cent over the previous
fiscal, while EBITDA margins (net of other income) rose to 41.4 per cent during the year under review compared with 39.0 per cent
in FY03.
Fully diluted earnings per share (before prior year items & not annualized) for FY04 is INR 36.8 against INR 24.4 in the previous
year, representing a growth of 50.7 per cent. The fully diluted earnings per share is INR 33.4 following the adjustment for prior year
deferred tax. Gross cash flow grew 55.3 per cent during the year to INR 5,507.4 million.
The key highlights of the year are, strong demand situation and firm pricing in first half of the year and emergence of DVD
Recordable as the future optical storage format. The situation reversed in the second half with the emergence of oversupply in the
system, pressure on pricing and rising costs of inputs. This oversupply situation is expected to be transient as drive shipments
continue to be robust and real demand from consumers continues to grow.
Despite the imposition of the anti-subsidy duty on CD-R sales into EU during the first quarter and the impact of change in
commercial terms with key customers in fourth quarter, revenues grew at a fast clip in FY04, driven by a near doubling of installed
capacities and fast scale up in DVD Recordable disc sales. The company continued to expand its competitive edge through R&D
initiatives aimed at new/innovative products and efficiency improvements during the year.
On the marketing front the company further expanded its market reach and also moved into the high growth Indian market for
branded storage products by launching the “moserbaer” range of storage media.
The company also raised USD 110 million through an issue of Global Depository Receipts (GDRs) and warrants to affiliates of
Warburg Pincus LLC. This cashflow significantly strengthens the balance sheet and provides the platform to strategically grow
capacities to capitalize on the attractive DVD Recordable growth curve. As over 90 per cent of this capital expenditure will be
growth oriented, it is expected to lead to a sharp growth in operating cash flows.
During the year the company also offered bonus shares to existing shareholders in the ratio of 1:1 to improve liquidity in the stock,
which should benefit shareholders of the company. Additionally the company introduced its maiden ESOP scheme of 4.4 million
shares to its employees and directors (other than promoter directors).
Product wise performance & outlook
The company is a leading global manufacturer of storage
media products, both optical and magnetic. Storage media
comprising of various CD-R/RW and DVD-R/RW formats,
floppy diskettes, among others, constituted almost 97 per cent
of the company's revenues in FY03-04, up from 94 per cent in
FY02-03.
In the optical storage media products, while CD-R/RW formats will continue to be a large and profitable business for the company,
DVD-R/RW products are emerging as the key driver for growth.
FY05 will be the first big-bang year for the DVD formats. Given Moser Baer's process technology, ramp-up with key accounts and
expanding capacity, the company is well positioned to rapidly increase its share of the highly profitable DVD market.
Optical media pricing remained firm for most part of FY04. However, during the second half of the year, normal softer demand
trend and some inventory in trade channels depressed pricing of CD-R/RW products. We expect this to be a transient trend. The
pricing of DVD-R/RW products will fall sharply as manufacturers derive scale economies, volumes rise sharply and as format race
emerges. However, this is the normal feature of this industry.
New Projects and expansion plans
The modular structure of the Greater Noida facility, along with the existing infrastructure and utilities, has provided the company
with the flexibility to quickly react to changes in market conditions at lower incremental costs. The company has rapidly doubled its
installed capacity to 2 billion units per annum during FY04 at only a 38 per cent accretion to the gross block. This has not only
created a platform to increase our global market share, but will also enable us to achieve it more efficiently, thereby increasing our
competitiveness and ROCE.
The company has now embarked on the next phase of expansion, in line with our aim of capturing a higher market share of the fast
growing global optical storage media industry by leveraging our low-cost advantage and world-class infrastructure and
technology. The company plans to spend USD 135 million in FY05 to further increase its capacity to 2.4 billion units per annum. In
line with the company's extremely strong project management and commercialization capabilities, this project is expected to
commence production by the second half of FY05.
The company also plans to set up a new manufacturing unit in Germany. Moser Baer has incorporated European Optic Media
Technology GmbH, (Europtic), as its 100 per cent subsidiary in Erfurt, Germany to implement this project. This project will provide
a strategic thrust to the global marketing position of Moser Baer. In addition to the benefits of close proximity to customers,
Europtic will work closely with various technology companies to develop high value added and customized products for niche
market segments. Niche products constitute a fast growing and high margin segment of the global optical storage market.
Manufacturing
During the year, Moser Baer has almost doubled its media production capacity from 1.1 billion units per annum to 2 billion units
per annum, with an increment of only 38 per cent in it's gross fixed assets. At the end of FY04, the company has now cumulatively
invested USD 555 million (INR 25160 million) in establishing a world class-manufacturing infrastructure.
The company commissioned its new state-of-the-art Mastering and Galvanics facility in July 2003 to manufacture a wide range of
stampers for CD-ROM, DVD-ROM, CD-R/RW and DVD R/RW formats. This should help significantly reduce cost and shorten
product development times.
The company has ventured into backward integration of packaging materials by setting up an integrated facility for the
manufacture of high quality Jewel, Slim & Cake Boxes, for meeting the captive requirements of disc packaging. Printing and
packaging capacities were additionally ramped up with innovatively designed production flow layouts and material handling
systems.
The company continued to take various initiatives in the area of
process optimisation, resulting in significantly higher overall
equipment efficiency and production yields. Significant
reduction in raw material costs were also achieved through
improvement in material efficiency yields, closed loop
recycling of dyes and enhancement of stamper life.
The company continued its forward thrust on building
additional capacity to cater to the growing demand for DVD
Recordable media. Towards this end, civil construction activities for the second phase of expansion at the Greater Noida facility
have commenced. The company has also commissioned an additional power plant of 15 mw capacity to achieve complete selfsufficiency in meeting its power requirements.
Marketing
Moser Baer marketed a growing variety of products with a visible
branding differentiation in FY04. The company continues to enjoy
strong customer loyalties driven by high product quality, strict
confidentiality of proprietary processes and delivery of promised
standards. In-house developed, and patented, packaging
variations, enabled us to offer a visibly differentiated product
offering to customers.
The captive Indian market, growing at over 50 per cent per annum,
is one of the fastest growing markets for optical storage media in
the world. During the year, the company launched its domestic
brand business, under the “moserbaer” brand name, to capture
this high growth market opportunity. In less than 12 months of
operation, ”moserbaer” brand has been able to garner a 25 per cent share of the branded segment of the domestic market.
Supply Chain Management
Moser Baer realizes that its supply chain is a critical function and a key element towards its global competitiveness. High product
quality and innovation has to be duly complimented with improvements in distribution and logistics infrastructure for ensuring
stringent delivery compliances on export shipments as mandated by the various global technology OEMs.
Quality Control
Moser Baer's quality commitment remains enshrined in its Quality Policy:
“We are committed to Excellence and Total Customer Satisfaction through team work, Ceaseless Innovation, and Timely Delivery
of Quality Products of International Standards.”
During the year FY04, Moser Baer continued to maintain a sharp focus on strengthening its Quality Management Systems. As a
result of the various measures undertaken, the Greater Noida facility was accorded the ISO 9001:2000 Certification by DNV for the
design, manufacture and supply of all formats of Optical Media and Stampers in December 2003.
Moser Baer has continuously created quality products through the intelligent use of technology, committed human resources,
and the extensive use of advanced statistical techniques to monitor and control prouduct quality. As a result of this we have
surpassed world-class quality standards, with defect ratio for some of our products approaching six sigma levels. We moved
closer to our vision to make the 'Made in India' mark respected by customers and a testimony of world-class manufacturing
standard.
Research and development
Moser Baer continued its multi-pronged R&D initiatives during
the year. The company spends 1.9 per cent of its revenues on
R&D. The focus on R&D has enabled the company to develop
new and innovative products, both in CD-R/RW and
DVD-R/RW formats, and optimize production/efficiency
parameters to reduce the cost of production. Moser Baer also
continued to work very closely with key global technology
majors to research and develop various potential media formats in the Write-Once and Re-Writeable Technologies.
Moser Baer also entered into a technology license agreement with Hewlett-Packard Company [HP], to manufacture optical
media [all CD and DVD formats] using unique “LightScribe” technology. Moser Baer is one of the first media companies to
collaborate with HP on the deployment of this technology.
Some of the other key developments during the past year include continuous development and certification of high-speed
writable and re-writable products. The company successfully implemented a multi pronged approach of increasing process
yields, increasing production output and innovating on component and input development to manufacture better products at
competitive costs.
During the year FY04, some of the products launched by the company, include, 4x DVD Recordable followed by 8X, High Speed
CD-RW and DVD+RW media.
Extensive research and process development is being carried out for developing proprietary designs and groove geometry to
facilitate improved disc replication and to ensure wider Drive compatibility.
Technology Challenges
As a major manufacturer of optical disc products for leading global brands, Moser Baer has a broad product portfolio covering
CD-R, CD-RW, DVD-R, DVD+R and DVD+RW. Apart from the CD formats that have now attained some degree of maturity, the
company has to simultaneously manage very rapid format evolution, cost reduction, and volume expansion for the other formats.
This is a very sensitive balancing act that often requires seemingly contradictory technical solutions. Time to market and
compatibility with the installed base of writers are two of the most critical aspects governing the company's technology efforts.
Close technical links that have been forged with our strategic technology partners provides us with early access to a variety of
possible technical solutions. At the same time, our active participation in various International standard setting bodies and
industry consortia provide us with early indications of the emerging technical benchmarks. Through the application of our rapid
commercialization core competency we are able to very quickly devise an optimal solution, often with a high degree of
indigenisation.
The strong links that we have formed with major drive manufacturers permit us to engage them in all stages of our product
development process to ensure that the new generation of drives are fully compatible with Moser Baer media. As a result, we are
one of the first wave of media companies certified by one or another drive manufacturer at product launch. At the same time, we
work to ensure compatibility of our new media versions with the installed base of older drives. This emphasizes the importance we
place on compatibility, which we believe to be the key value proposition of blank CD and DVD.
There are often enhancements that are developed within a given format or across whole format families and as a major supplier to
leading global brands Moser Baer has to be at the forefront of these developments. Apart from basic disc design it has become
clear by now that a major factor governing the rapid ramp up of a new format is the capability of the manufacturing platforms
themselves. Moser Baer has a relatively advanced and modern manufacturing infrastructure and the internal experience and
expertise permit a substantial degree of equipment improvement and customization. For example, the advanced generation DVD
manufacturing equipment used by the company permitted the seamless migration to higher speed formats with their increasingly
stringent specifications and decreasing tolerances. At the same time, the flexible manufacturing asset base provides the
company the freedom to adjust its output to meet the blended demand profile.
At the same time as we are involved with the internal evolution
of current DVD formats, the company has begun exploring the
next generation, blue-laser based formats that are under
development. The plan is to follow the proven path and work
with selected technology partners while at the same time aim
for a high degree of indigenization and customization that will
bring a Moser Baer flavor to the final product and fully realize
the benefits of our strengths and inherent advantages.
financial analysis
Review of operating performance: (INR in million)
Particulars
FY04
FY03
YoY growth %
15792.2
10855.2
45.5
Other income
229.7
288.2
(20.3)
Increase/(decrease) in stock of finished/semi-finished goods
320.1
(957.3)
16342.0
10186.1
60.4
8982.7
5915.5
51.9
693.4
542.7
27.8
Depreciation
2268.9
1174.7
93.1
Profit before taxation
3626.5
2359.8
53.7
49.2
12.9
281.4
3577.3
2372.7
50.8
Taxation (earlier year and deferred)
338.7
0.0
Net Profit available for appropriation
3238.5
2372.7
36.5
Proposed dividend
167.3
129.5
29.2
Dividend distribution tax
21.43
15.5
38.3
3049.8
2227.8
36.9
Income from operations
Total income
Total expenditure
Interest
Provision for taxation (current)
Profit after taxation
Transfer to general reserve
Revenue analysis
The FY04 has been a year of growth, challenges and opportunities for Moser Baer. The industry witnessed a strong demand
situation and firm pricing during the first half of the year. The situation reversed in the second half with the emergence of
oversupply in the system and pressure on pricing and rising costs of inputs. The European Commission (EC) dropped the antidumping inquiry against the company. However, the EC imposed an anti-subsidy on Indian exports of CDRs into Europe, which
negatively impacted the company's revenue from that region. Additionally, the company changed delivery terms with few key
accounts in Europe, thereby further depressing revenue growth in the last quarter of the financial year.
Despite these developments, Moser Baer's revenues grew at a fast clip in FY04, driven by a near doubling of our installed
capacities and fast scale up in DVD-R sales. The company has implemented its strategy to capitalize on the emerging market
opportunity for DVD-R formats. The company continues to expand its competitive edge through R&D initiatives aimed at
new/innovative products and efficiency improvements during the year.
Consequently, gross revenues increased from INR 10,855
millions in FY03 to INR 15,792 millions in FY04, representing a
growth of 45.5 per cent.
Product pricing
The Average Selling Price (ASP) of the company is impacted by
a number of factors:
The ratio of sales of different formats in the overall sales mix.
The type and style of packaging - CD-R and DVD-R are packaged in many different types of cases / boxes which can
significantly impact the selling price.
The ratio of sales to cross licensee and non-cross licensees.
The company's ASP for optical media remained flat in FY04. However, the ASP declined in Q4 FY04, mainly due some pricing
pressure, changes in packaging mix, a growing proportion of sales to cross licensee customers and the continued appreciation
of the Indian Rupee.
Margins
EBITDA margins increased by 241 bps (basis points) over the previous years level to 41.5 per cent in FY04. The key contributors to
the margin growth of the company are, 1) firm pricing environment during the year, 2) scale economies on nearly doubled
capacities 3) improving production efficiencies 4) Improving product portfolio with increasing contribution from DVD-R formats
5) full benefits of backward integration projects.
Capital structure
As of March 31, 2003 the company's sharecapital was INR 484.06 million, comprising 48.4 million equity shares of INR 10 each.
During the year, the company issued bonus shares to its existing shareholders in the ratio of 1:1, thereby doubling its issued and
paid-up share capital. The company also implemented its maiden ESOP (employee stock option plan) of 4.4 million shares
during the year.
Moser Baer issued Global Depository Receipts (GDR's) equivalent to 14.7 million underlying shares to affiliates of Warburg Pincus
LLC. In addition to the above, the company also issued warrants, equivalent to 5.4 million shares to affiliates of Warburg Pincus
LLC. Each GDR was priced at an effective price per underlying share of INR 336. Warrants are convertible at the option of the
investor into one equity share, at any time within 18 months from the date of allotment at a price of INR 336 per share. The paid-up
equity capital is INR 1115.2 million as of March 31, 2004.
Reserves
Moser Baer's reserves increased 67 per cent from INR 10,994 million to INR 18,352 million in FY04, despite the capitalization
during the year. This increase was primarily on account of 37 per cent rise in retained earnings and a INR 4792.2 million addition to
the share premium reserve during the year from the proceeds of the GDRs. The Securities Premium Account comprised 48 per
cent of the total reserves, while General Reserve comprised 52 per cent. There are no revaluation reserves as on March 31, 2004.
Loans
Over the years, Moser Baer has part funded its ongoing
expansion programmes through loans raised at progressively
lower costs. We have also tried to build a prudent basket of
currencies to hedge against currency risks, and minimize
costs. As a result, our average cost of long term debt remained
at 5 per cent in FY04. Our current currency-wise total debt
outstanding is as follows:
Currency
Amount in currency
Amount in INR
% of total debt
USD
44,022,164
1924,208,808
13.25
EUR
95,941,099
5156,834,092
35.52
7438,801,771
7438,801,771
51.23
INR
We believe that our current total debt to equity ratio of 0.74 and interest service cover ratio of 9.2 place us in a prudent and
comfortable position.
The company's financial profile is characterised by high revenue growth resulting from the substantial expansion of its optical
media capacity, strong operating margins and healthy debt coverage indicators.
Financial objectives, initiatives and achievements
The company is taking proactive measures to ensure financial costs are effectively reduced to positively impact the bottom line.
New benchmarks are being set continuously and at the same time raising the bar on existing benchmarks. The company has
shifted to working capital borrowings in foreign exchange, thereby reducing interest costs. Strong earnings growth and improving
working capital management has enabled the company to generate INR 5,792.3 million of cash from operations in FY04. The
ongoing foreign exchange risk management policy has been further strengthened by putting in place new policies/procedures to
ensure there is no adverse impact of volatile exchange rates beyond the agreed tolerance levels.
Interest
The outflow on account of interest and finance charges increased from INR 543 million to INR 693 million in FY04, representing an
increase of 27.8 per cent, primarily on account of a rise in the our overall debt levels and the scale of business.
Capital expenditure
The company invested INR 7448.7 million (USD 170 million) during FY04 at its state of the art manufacturing facilities, to meet the
increased demand for optical media products from our global client base. The company intends to enhance optical media
capacity from 2 billion units per annum to 2.4 billion units per annum during FY05. The incremental capital expenditure is being
funded through a prudent mix of debt, equity infusion and internal accruals. Incremental investments for capacity creation are
between 20-25 per cent lower than our historic costs.
Gross block and depreciation
In FY04, gross block increased by 38.2 per cent from INR 19768.1 million to INR 27315.1 million on account of the almost doubling
of optical media manufacturing capacity. Moser Baer's revenues-to-assets ratio improved from 0.56 in FY03 to 0.67 in FY04,
reflecting an improved asset utilisation. Depreciation increased from INR 1175 million in FY03 to INR 2269 million in FY04 on
account of increase in fixed assests. Due to the flexible nature of the asset base (most of our assets, production lines and facilities
can be used to manufacture multiple formats) and the relatively long life cycles of products in industry we believe that the risk of
asset base becoming obsolete is low.
Working capital management
We have effectively managed working capital levels during the
year through better information systems. Overall net working
capital is 19.8 per cent of revenues in FY04.
Working Capital (INR in million)
Particulars
FY01
FY02
FY03
FY04
1,361.0
2,604.4
2,778.0
3,059.9
145.8
137.8
93.4
70.7
1,731.4
2,402.4
998.5
1,984.9
Days
185.5
127.1
33.5
45.9
Creditors
615.8
1,093.3
1,724.9
2,307.8
65.9
57.8
58.0
53.3
Debtors
Days
Inventory
Days
A reduction in the receivables cycle: We significantly reduced receivables from 93 days of revenues in FY03 to 71 days in FY04
as against an industry benchmark of 90-120 days.
Inventory: By better utilizing our information systems, and managing our stock levels, we were able to control and effectively
manage inventory levels during the year. The change in commercial terms with key customers and slackness in industry
environment during the last quarter of FY04, led to a marginal increase in inventory levels.
Loans and advances
In FY04, loans and advances stood at INR 781.5 million compared to INR 493.9 million in FY03, a 58.2 per cent increase. The
company disbursed loans and made advances to the suppliers of capital goods and raw materials. Most of these advances were
to capital equipment suppliers, which were secured against bank guarantees.
Capital employed
The total capital employed invested in the business increased from INR 23,237 million in FY03 to INR 34,513 million in FY04,
representing an increase of 48.5 per cent. The company continues to generate a healthy Return on Average Capital Employed.
Surplus management
In a growing business, there were junctures when the temporary availability of resources was higher than the immediate use.
These short-term surpluses were invested in low risk financial instruments that optimized returns and protected the invested
principal.
Significant accounting policies
1 Revenue Recognition
Revenue from sales of goods is recognised on transfer of significant risks and rewards of ownership to the customer and when no
significant uncertainty exists regarding realisation of the consideration. Sales are recorded net of sales returns, rebates and trade
discounts and price differences and are inclusive of duties.
2
Inventory valuation
Finished Goods, Work in process, Goods held for resale, Raw
Materials, Packing Materials and Stores & Spares: at lower of
cost and net realisable value. Cost of raw material, goods held
for resale, packing materials and stores and spares, is
determined on the basis of the weighted average method. Cost
of work in process & finished goods, is determined by
considering direct material cost and appropriate proportion of
overheads .
3 Fixed Assets
Tangible fixed assets are stated at cost less accumulated depreciation. Cost includes all incidental and direct expenses.
Expenses of revenue nature which can be regarded as incidental and related to project set-up are transferred to "Incidental
Expenditure Pending Capitalisation". These expenses are allocated to related productive fixed assets in the year of
commencement of the related project.
4 Depreciation and Amortisation
Depreciation on tangible fixed assets is provided on straight line method on pro-rata basis at rates and in the manner specified in
Schedule XIV to the Companies Act, 1956 other than on certain plant and machinery at the magnetic and optical media
manufacturing units which is depreciated at the rate of 10.34 per cent which has been determined based on the management's
estimate of useful life of the assets and is higher than the rates specified in Schedule XIV to the Companies Act, 1956.
5 Taxation - Current
Provision is made for current income tax liability based on the applicable provisions of the Income Tax Act 1961 , for the income
chargeable under the said Act and as per the applicable overseas laws relating to the foreign branch.
Deferred
The company provides for deferred tax using the net liability method based on the tax effect of timing differences resulting from
recognition of items in the financial statements. The deferred tax charge or credit is recognised using the tax rates and tax laws
that have been enacted or substantially enacted by the balance sheet date.
Human Resources/Industrial Relations
Moser Baer recognises that a large part of its success is attributed to the excellent human resource base created over the year.
This intellectual capital is reflected in the quality of our business strategy, our customer relationships, our manufacturing systems,
strong project management & commercialisation skills, our financial health and our product development capabilities.
st
During FY03-04, we added 1661 personnel, taking our employee strength as on 31 March, 2004 to 3882. The company also
introduced the “Employee Stock Option Plan" during the year. We are also in the process of implementing an integrated
Performance Management System (PMS) across the company. The new system will ensure objective measurement of
performance by setting Individual KRAs.
Year
New Hires
2001
2002
2003
2004
438
875
1006
1661
Internal control systems and their adequacy
The efficiency of the internal control system have improved with implementation of an ERP system ( Enterprise Resource Planning
software ) which provides a high level of system-based checks and controls . All transactions are authorized, recorded and
reported correctly. Regular internal audits and checks are carried out to ensure that the responsibilities are executed effectively
and that adequate systems are in place to maintain authenticity and correctness of the recorded transactions .
Disclosures
During the year under review, the company has not entered into
any transaction of material nature with its Promoters, the
Directors or the management, their subsidiaries or relatives,
etc. that may have potential conflict with the interest of the
company at large.
Management's responsibility
statement
The management is responsible for preparing the company's consolidated financial statements and related information that
appears in this annual report. The management believes that these financial statements fairly reflect the form and substance of
transactions and reasonably represent the company's financial condition and results of operations in conformity with Indian
Generally Accepted Accounting Principles (GAAP).
Disclaimer
Some of the statements in this report that are not historical facts are forward-looking statements. The forward-looking statements
include our financial growth projections as well as statements concerning our plans, strategies, intentions and beliefs concerning
our business and the markets in which we operate. These statements are based on information currently available to us, and we
assume no obligation to update these statements as circumstances change. These are risks include, but uncertainties that could
cause actual events to differ materially from these forward-looking statements. These risk include, but are not limited to, the level
of market demand for our services, the highly-competitive market for the types of products that we offer, market conditions that
could cause our customers to reduce their spending for our products, our ability to create, acquire and build new businesses and
to grow our existing businesses, our ability to attract and retain qualified personnel, currency fluctuations and market conditions
in India and elsewhere around the world and other risks not specifically mentioned.
risk management
Risk Management
As a company poised to take on the mantle of industry leadership, Moser Baer is exposed to various risks. Some of these risks are
external and result from the business environment we operate in, while some are internal to the company. We have developed a
risk reporting management process to help manage potential risks in an informed manner.
We have a three-pronged risk management process.
Our comprehensive risk governance culture ensures that business decisions taken balance risk and reward. Consequently, our
earnings-generating initiatives are consistent with our risk standards.
Our risk-management revolves around corporate policies that outline standards and provide measurement guidelines for each
risk category. The company proactively evaluates and puts in place risk-mitigation initiatives, sets prudent limits on the quantum
of risk undertaken and does risk evaluation of major policy decisions.
We manage the variables impacting business risk with a disciplined risk management process in keeping with established
standards. The risk management strategies and processes are constantly reviewed in keeping with the changing environment.
Moser Baer's risk-management mechanisms are consistent with the strategic direction of the company, desired total returns to
shareholders and the credit rating of the company. Our risk appetite dictates the risk-management initiatives.
Risk environment
A number of potential risks in the current environment might make the optical media industry prospects unattractive over the
coming years. These risks may stem from technology obsolescence, customer concentration risk and geographical risks
amongst others. Moser Baer is, however, well poised to manage and mitigate these risks.
Technology Obsolesce Risk Management
The obsolescence of technology is inevitable and Moser Baer's real challenge is to anticipate and respond to both evolutionary
and disruptive changes. However, many technologies may prove to be more resilient than anticipated. For example, the
removable storage segment has proven to be remarkably resilient in the face of rapid technological developments with the need
for broad based global compatibility being a strong stabilizing influence. The 3.5 inch floppy diskette still survives and is only now
making its exit after 22 years despite being regularly confronted with far more advanced and capable storage solutions.
The same solid entrenchment is observed with CD-R whereby a huge global installed base of readers and writers, estimated to far
exceed 2 billion units by 2005, have served to provide the format with considerable staying power even in the face of exiting new
options such as high capacity optical disc, solid state memory, broadband, and wireless delivery. The position is further
strengthened by a number of compelling factors; The versatility of the CD and DVD format families has served to establish them
as a bridge between the information storage and entertainment segments thereby greatly extending their utility and reach. The
rapidly proliferating DVD format, the most rapidly growing Consumer Electronic (CE) product in history, not only maintains
seamless backwards compatibility with CD-R and the other members of the CD family but opens up complementary new video,
multi-media, and game application segments further strengthening the global mass appeal of the 120mm disc formats.
The flexibility and reach of the CD and DVD formats has proven to be compelling technology enabler for a broad range of
Industries spanning the Personal Computer and CE segments. These now have a vested interest in the preservation and orderly
evolution of this technology infrastructure.
Moser Baer expects that the above factors will prolong the decay time for CDR media beyond 2010 and that the market for DVD
recordable and rewritable disc will grow to comparable levels; with global demand climbing to the level of billions of discs in the
next few years.
At the same time, the company has taken concrete steps to ensure that its manufacturing infrastructure and technology base are
fully capable to meet the needs and requirements of the anticipated evolution in optical disc technology from CD to DVD and
beyond this, to the Blue Laser/high density formats.
Thus, while various new and emerging technologies have the potential to compete technologically with CD and DVD, we believe
that significant barriers are in place to prevent, or at least slow down, the displacement and eventual obsolescence of these
formats. These include:
Hundreds of millions of satisfied, cost conscious users and an estimated global installed infrastructure base of over 1.5 billion
compatible hardware devices.
The latest projections suggest that even as far out as 2010 almost 80 per cent of the installed base of optical disc writers will be
CD-R compatible.
A broad coalition made up of almost all major global PC/CE companies and content providers into whose business models
CD/DVD products and applications have been integrated and who must gain from any transition.
Billions of dollars invested in CD/DVD hardware and disc manufacturing capacity and the need for similar infrastructure
investments for alternative technologies.
Steps taken to mitigate technologies risks
In the dynamic storage market segment, significant technological risks exist in a number of critical areas, all of which can have
considerable commercial/financial implications. Moser Baer has invested substantially in addressing and mitigating risks in all
these areas, often with multiple degrees of redundancy.
Ability to rapidly commercialise new products:
The internal R&D resources have been steadily expanded and strengthened and today cover the spectrum from CD to DVD (prerecorded, recordable and rewritable). Numerous internal innovations have resulted in a product leadership position for Moser
Baer in CD-R and we are rapidly extending this to other formats.
The newly commissioned state-of-the art mastering facility will round off Moser Baer's technology platform and equip the
company with resource base required for the next decade. In fact, preliminary R&D efforts in Blue laser based formats (expected
to reach the mass market in the 2005/2006 timeframe) have begun.
Access to new technology
Through long standing strategic partnerships and working projects with key technology providers, including many of the leading
global companies at the forefront of new format development, we have unfettered access to cutting edge technology and
process know-how.
Drive/media compability
Today, by virtue of being recognized as one of the major suppliers of optical media to the global markets, Moser Baer has forged
excellent cooperative links with all major hardware suppliers. They commonly utilize our media in their product development
activities and regularly provide Moser Baer with pre-production samples to ensure seamless compatibility. In addition, Moser
Baer's blue-chip customer base provides an additional level of product compatibility assurance.
Evolutionary capabilities of manufacturing infrastructure
By virtue of its relatively late expansion, Moser Baer is in the unique position of possessing a very high proportion of advanced, 3rd
generation, multi-format capable manufacturing platforms. These will provide us a seamless pathway to “future proof” its capital
investments and more importantly, to tailor its operations to provide an optimal, evolutionary product mix.
Other risks and key management initiatives
Industry Risk Management
Moser Baer operates in an industry where technology trends are constantly changing and evolving which may
jeopardize future growth.
The company, however, faces no immediate threat from the dynamic environment in which it operates. On the contrary, it stands to
benefit from the current growth trends in the DVD R/RW formats.
As consumption evolves from analogue to digital technology, it is prompting legacy recordings to migrate to new media. Besides,
the growing popularity and increased functionality of new products like drives, readers, writers and PCs owing to their better
storage capacity, wider applications and greater security, are expected to drive demand exponentially.
Customer Attrition Risk Control
Our over-dependence on a few customers could impact revenues in the event of attrition.
Given our product quality, unbeatable price-value proposition and excellent service, Moser Baer has now acquired 11 of the 12
top global brands as its customers. A combination of these initiatives extended our reach to a wider larger spread of customers.
Due to our wide customer base (we believe that we have one of the widest customer bases in the industry), and the ability that
gives us to increase volumes with customers, we believe that the impact on the company in the event of customer attrition would
be low.
Geographic Risk Management
A geographically concentrated revenue base may affect growth in the event of some of these regions not performing
up to expectations.
To mitigate the risks arising from servicing customers in only a few regions - USA, Europe and Japan - Moser Baer marketed
products to 40 geographies over the last few years. We continue to focus on emerging markets like India, Latin America and the
Middle East, even as we service customers in Europe and North America.
As a de-risking measure, we have reduced our exposure to European customers, to minimize the impact of protectionist
measures the EC may undertake in the future.
People Risk Management
High quality human resources are vital to the success of our business.
Being in a highly competitive & technology advanced environment, retaining talent is always the primary focus for HR. During the
year our attrition was well within the manageable limit. However, in order to retain the talent our company has been promoting the
sense of ownership and pride in association by way of several HR initiatives. Various initiatives like Long Associate Awards,
ESOPs, employee friendly policies etc have helped us in keeping the attrition rate well in control & below the industry average.
The company has worked towards providing challenging high growth environment for its employees. We have continuously
benchmarked ourselves to improve our HR policies and practices.
Competition De-risking
As installed capacities in global data storage industry have risen, prices have sharply declined.
Moser Baer has responded to price-based competition with an unbeatable price-value proposition superior quality, timely
delivery, attractive price and regular introduction of new products. The success of this approach is reflected in the company's
increasing global share and high growth.
Cash Flow Risk
Efficient cash flow management imperitive to grow.
The company operates in a high growth and capital intensive industry. Hence it is imperative to efficiently estimate and manage
cash flows in this volatile environment. The company's working capital arrangements are well in place to guard against any
uneven or seasonal factors. Besides, the company has also tied up additional alternative financing for cost optimization / funding
the operations. The company monitors liquidity on a daily basis. Besides liquidity needs are estimated over a 12 month period on
a rolling basis and compared with amount of available liquidity for management thereof.
Security Risk Management
Operations could be disrupted due to natural, political and economic disturbances.
As a part of its Disaster Recovery Plan, all related risks have been mapped by the company. A Disaster Management Team has
been entrusted with mobilization of resources and asset safety during emergencies.
os
Creating Value
Economic Value Added (EVA)
EVA analysis starts with the premise that investors are primarily concerned with the cash return on their cash investment and the
risk associated with that investment.
This return can be directly compared with the return expected by investors, the company's WACC. Value is created/destroyed if
the business generates a return above/below its cost of capital. EVA is thus defined as: EVA = (ROIC - WACC) x Capital
Risk-free return (R f )
We have used the yield on the 10-year government bond as the risk-free rate. This bond currently yields 6.0% per annum, having
come off the levels in FY03.
Equity beta (ß e )
Based on an analysis of comparable optical storage media companies in Asia as well as Moser Baer's beta estimate from
Bloomberg, Moser Baer's adjusted equity beta is estimated to be 0.94 for FY03-04.
Market risk premium (MRP)
The MRP is the additional return over and above the risk-free return investors require to invest in the market portfolio. We estimate
the MRP to be 6.0%.
EVA Fact Sheet
EVA Calculation
Year ended March 31
2004
2003
2002
2001
2000
1999
1998
Average capital employed (INR in million)
25864.8
17227.3
12018.9
6727.7
2714.9
1289.0
934.0
Average debt (INR in million)
13181.5
10021.8
5927.8
3092.9
1709.4
813.4
601.7
Beta Variant
0.9
1.0
1.3
1.3
1.1
1.2
1.1
Risk-free debt cost (%)
6.0
7.5
7.5
10.1
10.0
12.0
12.0
Market risk premium
6.0
6.0
7.0
8.0
8.5
8.5
8.5
Prime lending Rate (%)
10.3
10.8
11.3
11.5
11.3
12.0
13
Marginal Tax Rate (%)
35.7
35.7
35.7
40.3
40.3
40.3
35
Cost of equity (%)
11.6
13.6
16.9
20.7
19.6
22.2
21.3
6.6
6.9
7.3
6.9
6.8
7.2
8.5
10.1
10.4
13.9
18.3
16.8
13.8
11.9
Operating profit (PBT excl extraordinaries)
3594.6
2359.8
2200.3
1385.9
441.5
204.6
132.1
Less: tax
-350.3
12.9
42.4
0.3
0.3
0.2
0.1
Less: cost of capital
2615.0
1792.0
1669.0
1234.0
457.0
178.0
111.0
Economic value added
1330.0
555.0
489.0
152.0
-15.0
26.0
21.0
30275.5
11085.9
13119.1 14758.7
6113.2
642.6
223.1
6534.7
9051.8
2283.6
1499.0
513.5
602.4
36810.3
20137.7
20256.6 17042.4
7612.1
1156.1
825.5
EVA as a percentage of capital employed (%)
5.1
3.2
4.1
2.3
-0.6
2.0
2.2
Enterprise value/average capital employed
1.4
1.2
1.7
2.5
2.8
0.9
0.9
Post-tax cost of debt (%)
Weighted average cost of capital (WACC) (%)
Economic value added (EVA)
Enterprise value
Market value of equity
Less: cash and cash equivalents
Add: net debt
Enterprise value
7137.5
Ratio
Ratio Analysis
Ratio analysis
Year ended March 31
2004
2003
2002
2001
2000
82.2%
85.0%
81.2%
84.7%
84.6%
Gross profit/total revenue (%)
53.0
47.9
58.2
62.0
46.4
Selling, general & administrative expenses/total revenue (%)
11.1
13.2
11.8
8.1
7.9
Employee cost/total revenue (%)
3.3
3.0
2.7
2.6
3.3
Operating profit/total revenue (%)
41.0
38.6
42.8
48.5
36.5
1.4
-0.6
1.9
0.0
0.0
16.0
16.8
21.4
24.4
12.7
Average debt-equity ratio (%)
66.0
85.2
64.3
46.3
91.5
Debtors turnover days
70.7
93.4
139.7
147.8
98.9
Inventory turnover days
45.9
33.6
128.8
188.0
143.4
Creditors turnover days
64.7
55.9
58.6
66.9
58.9
Sales value (%)
45.5
59.5
102.5
117.1
52.8
Export revenue growth (%)
34.3
57.6
88.7
128.8
64.0
Operating profit (%)
61.6
26.1
66.5
219.8
75.1
Net earnings (%)
36.5
10.0
55.7
214.1
115.9
Earnings per share (INR)
36.8
24.4
22.3
15.4
7.1
Fully diluted earnings per share (INR)
33.5
24.4
22.3
14.9
7.1
Cash earnings per share (INR)
50.5
37.8
29.1
26.9
8.5
1.5
2.5
2.6
3.1
1.7
176.2
120.0
95.2
107.3
30.0
Price/earnings (x)
8.3
4.7
5.7
7.4
11.5
Price/cash earnings (x)
6.1
6.0
8.7
8.4
13.1
Price/book value (x)
1.7
1.9
2.6
2.1
3.3
Financial performance ratios
Export revenue/total revenue (%)
Tax/PBT (%)
ROCE (EBIT/average capital emploed) (%)
Balanced sheet ratios
Growth ratios
Per share data
Dividend per share (INR)
Book value per share (INR)
directors' report
Dear Shareholders,
Your Directors are pleased to present the 21st Annual Report and Audited Accounts for the financial year ended 31st March, 2004.
Financial Results
(INR in Million)
Year ended March 31,
2004
2003
16,021.86
11,143.38
PROFIT BEFORE DEPRECIATION & INTEREST
6,588.71
4,077.27
DEPRECIATION
2,268.87
1,174.69
693.37
542.74
3,626.47
2,359.84
387.96
(12.89)
PROFIT AFTER TAX
3,238.51
2,372.73
PROFIT AVAILABLE FOR APPROPRIATION
3,238.51
2,372.73
167.27
129.45
21.43
15.51
3,047.80
2,227.77
GROSS SALES AND OTHER INCOME
INTEREST AND FINANCE CHARGES
PROFIT BEFORE TAX
PROVISION FOR TAXATION (inc. Deferred Tax)
APPROPRIATIONS:
DIVIDEND (PROPOSED)
PROVISION FOR TAX ON PROPOSED DIVIDEND
TRANSFER TO GENERAL RESERVE
Operations
Revenues grew 43.8 per cent to INR 16.02 billion, EBIDTA (Earnings Before Interest Depreciation and Tax) grew 61.6 per cent to
INR 6.59 billion, and Profit After Tax grew 36.5 per cent to INR 3.24 billion. The market environment during the year was strong, with
significant growth in all areas of the optical media market. 2003 was the first year of mass market adoption of the DVD-R format,
with global demand growing 3 times over 2002. During the year, your company firmly established itself in this important and
rapidly growing segment, which will be the main engine of growth for the company over the next 2-3 years. The company rapidly
expanded its capacities at its Greater Noida Complex, further reinforcing it's position as the single largest Optical Disk production
site in the world.
Market Environment
The market environment substantially improved during the second half of the financial year, which was reflected by significantly
reduced inventories, improving prices, and strong demand. Key highlights for the financial year are:
Revenues of INR.16,021.86 million
Cash profits (Earnings before Depreciation and Taxes)- INR.5,507.38 Million.
Profit After tax of INR.3,238.51 million
Earnings per share of INR.33.41 (After prior period items)
Significant working capital reductions, due to improved market conditions and benefits from use of technology.
Working Capital (INR in million)
Particulars
FY01
FY02
FY03
FY04
1,361.0
2,604.4
2,778.0
3,059.9
145.8
137.8
93.4
70.7
1,731.4
2,402.4
998.5
1,984.9
Days
185.5
127.1
33.5
45.9
Creditors
615.8
1,093.3
1,724.9
2,307.8
65.9
57.8
58.0
53.3
Debtors
Days
Inventory
Days
Significant increases in capacity at the Greater Noida complex.
Your company started production of 8x DVD-R's and 4x DVD-RW's.
Working Capital has been one of the key focus areas for the company during the year. Consequently, Net Working Capital as a
percentage of gross revenues stands at 19.8 per cent.
Market Development
Moser Baer marketed a growing variety of products with a visible branding differentiation in FY03-04. Your company continues to
enjoy strong customer loyalties driven by high product quality, product and process innovation and delivery of promised
standards. In-house developed and patented packaging variations enabled us to offer a visibly differentiated product offering to
customers.
The captive Indian market, expected to grow at a CAGR of over 40 per cent over the next 3 years, is one of the fastest growing
markets for optical storage media in the world. During the year, your company promoted its domestic brand business, under the
“moserbaer” brand name, to capture this high growth market opportunity and the “moserbaer” brand has been able to capture an
estimated 25 per cent share of the branded segment of the domestic market. The company's retail strategy has been extremely
successful, with the “moserbaer” brand being associated with quality and innovation, and widely distributed across over 10,000
retail outlets in 32 cities in the country.
New Projects and Expansion Plans
The modular structure of the Greater Noida facility, along with the existing infrastructure and utilities, has provided your company
with the flexibility to quickly react to changes in market conditions at lower incremental costs. The company has nearly doubled its
installed capacity to 2 billion units per annum during FY03-04 with a 38 per cent increase in fixed assets. This has not only created
a platform to increase our global market share, but will also enable us to achieve it more efficiently, resulting in an increasing
competitiveness and raising our returns on deployed capital.
Your company has now embarked on the next phase of expansion, in line with our aim of capturing a higher market share of the
fast growing global optical storage media industry. We will do this by leveraging our low-cost advantage and world-class
infrastructure and technology. This project is expected to commence production by the end of FY04-05.
Your company's subsidiary - European Optic Media Technology GmbH (Europtic) will provide a strategic thrust to the global
marketing position of Moser Baer. In addition to the benefits of close proximity to customers, Europtic will work closely with various
technology companies to develop very high value added and customized products for niche market segments.
Technology, Engineering and Research & Development
Moser Baer continued its multi-pronged R&D initiatives during the year. The focus on R&D has enabled your company to develop
new and innovative products, both in CD-R/RW and DVD-R/RW formats, and optimize production/efficiency parameters to
reduce the cost of production. Moser Baer also continued to work very closely with key global technology majors to research and
develop various potential media formats in the Write-Once and Re-Writeable Technologies.
Subsidiary Company
The company has incorporated a subsidiary company in Germany viz., European Optic Media Technology GmbH (hereinafter
referred to as- “Europtic”) to expand its area of operations to Europe. The annexed accounts pertain for the period January, 2003
to March, 2004. As required under Section 212 of the Companies Act, 1956, the Balance Sheet, P & L Account and the Directors'
Report on the affairs of Europtic are annexed herewith together with the statement of the said subsidiary company. Also, the
German law does not regulate any audit duties for its financial statements as the provisions of Code of Commercial Law of
Germany are not attracted for the said duration. Accordingly, Auditors' Report has not been prepared for the said period.
During the year under review, the company has divested its investment in Glyphics Media Inc, realizing the full value of its initial
investment. However, the accounts of Glyphics Media Inc till 30th August, 2003 have been included while preparing the
consolidated accounts of your company.
Associate Company
During the year under review, your company and Imation Corp have entered into a 49:51 joint venture and established a company
- Global Data Media FZ LLC in Dubai for marketing and distribution and research and development of the company's products.
Dividend
Your Directors are pleased to recommend dividend @ 15 per cent on the paid-up Equity Share Capital of the company for
FY03-04. The total pay-out will be INR 188.70 million inclusive of dividend tax and surcharge thereon.
Directors
In terms of the provisions of Sections 255 and 256 of the Companies Act, 1956 and Articles of Association of the company, Mr.
Ratul Puri, Executive Director and Mr. Harnam Dass Wahi, Director retire at the ensuing Annual General Meeting and, being
eligible, have offered themselves for reappointment.
Auditors
The term of M/s. K. C. Khanna & Co., Chartered Accountants is due to expire at the forthcoming Annual General Meeting.
Pursuant to a resolution of the Board of Directors of the company, it has been resolved that, subject to the approval of the
members in a general meeting by Special Resolution, M/s. Price Waterhouse, Chartered Accountants, be appointed as Statutory
Auditors of the company, in their place and M/s. Price Waterhouse shall hold office from the conclusion of the 21st Annual General
Meeting until the conclusion of the 22nd Annual General Meeting of the company.
Employees' Stock Option Plan
At the Extraordinary General Meeting of the company held on 29th August, 2003, you had approved the issue of stock options in
respect of 2,200,000 Equity Shares to the employees of the company and of its subsidiary companies. The company
implemented the Employees Stock Option Plan 2004 with a view to promote the success of the company and the interest of its
shareholders by rewarding, attracting, motivating and retaining employees for high levels of individual performance and for
efforts to improve the financial performance of the company.
th
At the Extraordinary General Meeting of the company held on 5 February, 2004, you had authorized the Board of Directors or any
Committee thereof to increase the number of options to be granted to the employees of the company and of its subsidiary
Companies to 4,400,000. The Compensation Committee of the Directors has granted 2,030,300 stock options to the eligible
employees on 9th January, 2004. The details of the Stock Options granted under the ESOP including grants to Senior
Management are given in the Annexure to the Directors' Report.
The company has used intrinsic value of the stock options. Had compensation cost for the ESOP been determined in a manner
consistent with the fair value approach, the company's net income and Basic Earnings Per Share (EPS) would have been reduced
to the amounts indicated below:Year ending 31st March, 2004
Net Income
Basic & Diluted EPS
As reported
Less: Amount amortised*
Adjusted amount
As reported (after prior period items)
Adjusted amount
INR
INR
INR
INR
INR
3,238,510,943
127,232,133
3,111,278,810
33.41
32.09
The fair value of each option has been estimated on the date of the grant of the options using the Black Scholes (Enhanced
Model) with the following assumptions:Stock Price
INR 351 (as on 9th January 2004 as per NSE data)
Exercise Price
INR 342 - Market price.
Total life of the options
7 years
Vesting period
3 years
Exit rate (pre-vesting)
NIL
Exit rate (post-vesting)
3 per cent p.a.
Exercise multiple
1.25x (assuming that employees would exercise the options vested with
them once the multiple, i.e. Market Price over Exercise Price reaches
1.25x)
Risk free rate
4.21per cent (for 6 years, source-Reuters as on 9th January 2004)
Expected Volatility p.a.
70 per cent (based on 4 year stock data from NSE)
Expected Dividend Yield p.a.
1 per cent (based on the dividend history of past 3 financial years, with a
weighted of 50 per cent, 30per cent and 20 per cent for financial year
ending '03, financial year ending '02 and financial year ending '01)
*Thus the fair value of the options comes to INR 188 per option.
Total value of the options = 2,030,300 x INR 188 = INR 381,696,400
Amortisation = INR 127,232,133.
Issue and Allotment of Global Depository Receipts and Warrants
th
At the Extraordinary General Meeting of the company held on 5 February, 2004, you had approved the issue and allotment of
American Depository Receipts/ Global Depository Receipts, Equity Shares and convertible Warrants on a preferential basis so
that the aggregate issue of Equity Shares (including upon conversion of Warrants) do not exceed 20,100,000 Equity Shares.
On 29th March, 2004, 14,700,000 Equity Shares of INR 10 each at a premium of INR 326 per share have been issued to the
depository- Deutsche Bank Trust Company Americas. These Equity Shares are underlying in 147,000 Global Depository Receipts
of the face value of INR 336 each, which have been issued to Woodgreen Investment Ltd., an affiliate of Warburg Pincus LLC.
On 29th March, 2004, 5,400,000 Warrants of the face value of INR 336 each have also been allotted to Woodgreen Investment Ltd.
These Warrants are convertible into an equal number of Equity Shares of INR 10 each at a premium of INR 326 per share within a
period of 18 months from the date of allotment at the option of the Warrant-holder.
Bonus Shares
At the Annual General Meeting of the company held on 21st October, 2003, you had approved capitalization of reserves of the
Company to issue Bonus Shares in the ratio of 1:1 to then existing Equity Shareholders of the company. On 18th December, 2003,
48,406,472 Equity Shares of INR 10 each were issued to those persons who were members/beneficial owners of the shares of the
company as on 28th November, 2003.
Countervailing Duty
The European Commission announced the termination of its anti-dumping proceedings against your company with respect to the
manufacturing of Recordable Compact Discs (CD-R) as its investigations did not reveal any evidence of dumping by your
company. Thus, no anti-dumping duty was imposed with respect to the manufacturing of CD-Rs. However, the European
Commission has imposed a 7.3 per cent countervailing duty on the value of imports of CD-Rs originating in India. The duty is paid
by importers of CD-R media in Europe, and does not affect any of the company's other products like CD-R/W, DVD-R & DVD-R/W.
Particulars of Employees
Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the companies (Particulars of
Employees) Rules, 1975, as amended, form part of this report. However, in pursuance of Section 219(1)(b)(iv) of the companies
Act, 1956, this report is being sent to all the shareholders of the company excluding the aforesaid information and the said
particulars are made available at the Registered Office of the company. The members interested in obtaining such particulars may
write to the Company Secretary at the Regd. Office of the company.
Conservation of Energy, Research and Development, Technology Absorption,
Foreign Exchange Earnings and Outgo
The information pertaining to conservation of energy, research & development, technology absorption, foreign exchange
earnings and outgo, as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of
particulars in the report of the Board of Directors) Rules, 1988 is given as per Annexure and forms part of Directors' Report.
Fixed Deposits
During the year under review, the company has not accepted any deposit under Section 58A of the Companies Act, 1956 read
with Companies (Acceptance of Deposits) Rules, 1975.
Corporate Governance
A report on Corporate Governance along with a certificate from the Statutory Auditors has been included in the Annual Report
detailing the compliances of corporate governance norms as enumerated in Clause 49 of the Listing Agreements with the Stock
Exchanges.
Management Discussion and Analysis
A Management Discussion and Analysis Report has been attached and forms part of the Directors' Report.
Directors' Responsibility Statement
Your Directors state:(i) that in the preparation of the annual accounts, the applicable accounting standards have been followed;
(ii) that we have selected such accounting policies and applied them consistently and 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 at the end of the FY03-04 and of
the profit of the company for that year;
(iii) that we have taken proper and sufficient care 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) that we have prepared the annual accounts on a going concern basis.
Conclusion
Your company continues to consolidate its leadership position in its business through value addition to its products and services.
It is also progressively gaining international competitiveness in quality and cost benchmarks and aims to build shareholder value
and sustain its performance track record. Your Directors look forward to the future with confidence.
Your Directors place on record their appreciation for the overwhelming co-operation and assistance received from investors,
customers, business associates, bankers, vendors, regulatory and governmental authorities. Your Directors also thank the
employees at all levels, who through their dedication, co-operation, support and smart work have enabled the company to
achieve rapid growth.
For and on behalf of the Board of Directors
of MoserBaer India Limited
Place : New Delhi
Date :29th June, 2004
Sd/Deepak Puri
Chairman & Managing Director
annexure A
Information regarding the Employee Stock Option Scheme
(as on 31-03-2004)
a) Number of Stock Options granted
2,030,000 numbers
b) Pricing formula
The average of the two weeks' high and low price of the
share prior to the date of grant of options as quoted at
National Stock Exchange, rounded-off to the nearest
Rupee.
c) Number of Options vested
Nil
d) Number of Options exercised
Nil
e) Number of shares arising as a result of exercise of options
Nil
f)
Nil
Number of Options lapsed
g) Variance of terms of options
Nil
h) Money realized by exercise of options
Nil
i)
Number of options in force
2,030,000 numbers
j)
Employee wise details of options granted to
No. of options
(i) Senior managerial personnel
a) Mr P M Pai, President
400,000
b) Mr V J Prakash, MD-European Operations
24,000
c) Mr Brian J, VP - Strategic Initiatives
200,000
d) Mr M Kobayashi, VP - Japan Operations
24,000
e) Mr Rakesh Govil, Head - Corp Strategy & Treasury
150,000
(ii) Employees who were granted options amounting to
5 per cent or more of the options granted during the year Mr P M Pai, President
Mr. Brian J, VP - Strategic Initiatives
Mr. Rakesh Govil, Head - Corp Strategy & Treasury
(iii) Employees who were granted options in any
one year equal to or exceeding 1 per cent of the
issued capital of the company.
NIL
k) Diluted Earnings Per Share (EPS) pursuant to issue of
shares on exercise of options calculated in accordance
with International Accounting Standard (IAS) 33
Not Applicable (as no option has been exercised so far)
l)
Not Applicable (as no option has been exercised so far)
Weighted average exercise price of the options
m) Weighted average fair value of the options
n) A description of the method and significant assumptions
used during the year to estimate the fair value of options,
including the following weighted average information:-
Not Applicable (as no option has been exercised so far)
(i) risk free interest rate
4.21per cent (for 6 years, source-Reuters as on
09/01/2004)
(ii) expected life
7 years
(iii) expected volatility
70 per cent (based on 4 year stock data from NSE)
(iv) expected dividends
1per cent (based on the dividend history of past 3
financial years, with a weighted of 50 per cent,30 per cent
and 20 per cent for financial year ending '03, financial year
ending '02 and financial year ending '01)
(v) the price of the underlying share in market at the
time of option grant
INR 342 per share
annexure B
Information as per Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Report
for the year ended 31st March, 2004.
A. Conservation of energy:
Your company's energy requirements continue to develop significantly as it commissioned new manufacturing facilities and as it
increased production at its existing facilities. The company undertook a number of measures during the year to reduce the energy
consumption including:1. Commissioning of steam based vapour absorption systems, which effectively recycle exhaust gases from the company's
power plants.
2. The company developed a new production process which had process windows far wider than its earlier process enabling
reduction in the level of conditioning needed in the coating areas and thereby further reducing energy consumption.
3. The company is working on a number of energy reduction projects, the estimated investments in these projects amount to
approx. INR 15 million and should result in energy savings in the region of INR 8 - 10 million each year.
B. Technology absorption, adaptation and innovation, research & development:
I.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
As technology plays a bigger role in our ability to offer a complete basket of products to our customers, your company has
entered in the acquisition of technology and the right to use technology belonging to other third party companies. During
the year, a number of agreements were completed to acquire technology belonging to companies whose R&D efforts
have been complementary to our technology development program. This technology has been successfully
incorporated into some of the company's products and an ongoing effort is being made to improve the utilization of this
technology and produce newer innovative products based on this technology.
At the same time, your company is also part of many International Forums and R&D initiatives that are dedicated to the
development of future formats like scribe technology, HD DVD and Blue ray. Such participative activities have significantly
enhanced the image of your company as an individual entity and our country as a whole in the mind of the International
community.
II. RESEARCH & DEVELOPMENT
1. Specific areas in which R&D carried out by the company
(a) Development of high speed CD-R 52X process using alternate dye technologies resulting in significant reduction
in cost per CD-R.
(b) Development of 4X, 8X DVD-R and 4X DVD+RW processes to keep pace with technology and market trends.
(c) Improvement in existing processes to achieve significant improvement in archival life of products.
(d) Establishment of highly advanced state of the art Mastering and Galvanics facility. This has further improved our
overall cost of operation.
2. Future Plan of Action
(a) To develop 16X DVD-R, 8X DVD+RW and dual layer DVD+R products.
(b) To work on development of future formats like HD DVD and Blue-ray discs.
3. Expenditure incurred on R&D during FY 03-04:(a) Capital Expenditure:
INR 126 Million
(b) Recurring Expenditure: INR 180 Million
(c) Total Expenditure:
INR 306 Million
(d) Total R&D expenditure as a percentage of total turnover: 1.9 %
C. Foreign exchange earnings and outgo:
Your company has undertaken the following steps in respect of activities relating to increasing the exports and for development of
new export markets for the company's products:(a) The company has established an office in Japan to cater to the Far- East market.
(b) The company has established a 49:51 joint venture Company in Dubai, namely- Global Data Media FZ LLC to cater to the
Middle East market.
(c) Focus on Latin America, Middle East and South East Asian markets.
(d) B2B initiative with customers.
(e) CEBIT, GITEX, IFA participation.
Total foreign exchange earned comprising of FOB value of exports was INR 12,347.42 Million and total foreign exchange used
comprising of CIF value of imports, dividend remitted and other outgoings was INR 12,757.40 Million.
For and on behalf of the Board of Directors
of MoserBaer India Limited
Place : New Delhi
Date :29th June, 2004
Sd/Deepak Puri
Chairman & Managing Director
corporate governance
1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE
Moser Baer India Limited is committed to adhere to the code of corporate governance as it means adoption of best business
practices aimed at growth of the company coupled with bringing benefits to investors, customers, creditors, employees and the
society at large.
2. BOARD OF DIRECTORS
The present strength of the Board is Nine Directors. The Board comprises of three Executive Directors and six Non-Executive
Independent Directors. The Non-Executive Directors bring independent judgement in the Board's deliberations and decisions.
COMPOSITION OF THE BOARD
Name of the Director
Category
Equity Investors represented
Mr. Deepak Puri*
Executive
N.A.
Mr. Harnam D. Wahi
Independent and Non-Executive
N.A.
Mr. Arun Bharat Ram
Independent and Non-Executive
N.A.
Mrs. Nita Puri
Executive
N.A.
Mr. John Levack
Independent and Non-Executive
Electra Partners Mauritius Limited.
Mr. Rajesh Khanna
Independent and Non-Executive
Bloom Investments Limited (BIL), Ealing
Investments Limited (EIL), Randall Investments
Limited (RIL) and Woodgreen Investment Ltd (WIL).
BIL, EIL, RIL and WIL are affiliates of Warburg
Pincus LLC.
Mr. Prakash Karnik
Independent and Non-Executive
N.A.
Mr. Bernard Gallus
Independent and Non-Executive
N.A.
Mr. Ratul Puri
Executive
N.A.
*During the year FY03-04, Mr. Rakesh Govil was appointed as an Alternate Director to Mr. Deepak Puri. However, he ceased to be
the Alternate Director w.e.f. 16th January, 2004.
DIRECTORSHIP IN OTHER COMPANIES AND BOARD COMMITTEES:
None of the Directors of the Board serve as members of more than 10 Committees nor are they Chairman of more than 5
Committees, as per the requirements of the Listing Agreement.
Name of the Director
No. of Committee Memberships
No. of other Directorships
(including MBIL's Committees)
(excluding foreign companies
and private limited companies)
Chairman
Mr. Deepak Puri
Mr. Harnam D. Wahi*
Mr. Arun Bharat Ram
Mrs. Nita Puri
Mr. John Levack
Mr. Rajesh Khanna
Mr. Prakash Karnik
Mr. Bernard Gallus
Mr. Ratul Puri
1
1
10
1
4
2
-------
Member
--3
---------------
2
--5
1
5
2
3
--1
*Mr. Harnam D. Wahi has notified the company that he has ceased to be a Director in DCM Shriram Consolidated Limited w.e.f.
18th August, 2003.
The Board met seven times on the following dates during the financial year 2003-2004 and the gap between two meetings did not
exceed four months:
rd
(i) 23 April, 2003
(iv) 20th September, 2003
th
(vii) 27 January, 2004
th
th
(ii) 29 July, 2003
(v) 24th October, 2003
(iii) 5 August, 2003
(vi) 11th January, 2004
The information as required under Annexure I to Clause 49 of the Listing Agreement is made available to the Board. Adequate
information is circulated as part of the agenda papers to enable the Board to take informed decisions.
ATTENDANCE RECORD OF DIRECTORS:
Name of the Director
Board Meetings
Meetings attended
Attended last AGM
held during the year
held on October 21,
2003
In Person
Through Audio
Conferencing
Mr. Deepak Puri
Mr. Harnam D. Wahi
Mr. Arun Bharat Ram
Mrs. Nita Puri
Mr. John Levack
Mr. Rajesh Khanna
Mr. Prakash Karnik
Mr. Bernard Gallus
Mr. Ratul Puri
Mr. Rakesh GovilAlternate Director to
Mr. Deepak Puri
7
7
7
7
7
7
7
7
7
4
7
2
3
4
4
6
Leave of absence
7
1
----1
--2
-------
Yes
Yes
No
Yes
No
No
No
No
Yes
7
1
---
N.A.
3. AUDIT COMMITTEE
The company has a qualified and independent Audit Committee. Mr Harnam D. Wahi is the Chairman of the Audit Committee.
Other members of the Committee are- Mr. Prakash Karnik, Mr. Rajesh Khanna and Mr. John Levack. The Company Secretary of
the company acts as the Secretary of the Committee.
Terms of reference:The Audit Committee performs the following functions:a) Overseeing the company's financial reporting process and the disclosure of financial information to ensure that the financial
statement is correct, sufficient and credible.
b) Recommending the appointment and removal of external auditors, fixation of audit fee and also approval for payment for any
other service.
c) Reviewing with management the annual financial statements before submission to the Board, focusing primarily on;
Any changes in accounting policies and practices.
Major accounting entries based on exercise of judgement by management.
Qualifications in draft audit report.
Significant adjustments arising out of audit.
The going concern assumption.
Compliance with accounting standards.
Compliance with stock exchange and legal requirements concerning financial statements.
Any related party transactions i.e. transactions of the company of material nature, with promoters or the management,
their subsidiaries or relatives etc. that may have potential conflict with the interests of company at large.
d) Reviewing with the management, external and internal auditors, the adequacy of internal control systems.
e) Reviewing the adequacy of internal audit function, including the structure of the internal audit department staffing and
seniority of the official heading the department, reporting structure coverage and frequency of internal audit.
f)
Discussing with internal auditors any significant findings and follow up thereon.
g) Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or
irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.
h) Discussing with external auditors before the audit commences- nature and scope of audit as well as have post-audit
discussion to ascertain any area of concern.
i)
Reviewing the company's financial and risk management policies.
j)
Looking into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of
non-payment of declared dividends) and creditors, if any.
During the year, the Committee met seven times on the following dates:
(i) 23rd April, 2003
(iv) 5th August, 2003
th
(vii) 27 January, 2004
(ii) 29th July, 2003
(v) 20th September, 2003
(iii) 30th July, 2003
(vi) 24th October, 2003
Following are the details regarding the Committee meetings attended by the members:Member Director
Meetings Attended
Committee Meetings
held during the year
In Person
Through Audio Conferencing
Mr. Harnam D. Wahi (Chairman)
7
7
---
Mr. Prakash Karnik
7
7
---
Mr. Rajesh Khanna
7
5
2
Mr. John Levack
7
4
Mr. Ratul Puri *
7
7
--th
* Mr. Ratul Puri resigned from the membership of the Audit Committee with effect from 25 March, 2004.
4. COMPENSATION COMMITTEE
Mr Harnam D. Wahi is the Chairman of the Compensation Committee. Other members of the Committee are - Mr. Prakash Karnik,
Mr. John Levack and Mr. Rajesh Khanna. The Company Secretary of the company acts as the Secretary of the committee.
Terms of reference:The company's compensation policy is based on the principles of responsibility, performance and potential. The company's
Compensation Committee has been constituted to administer the Employees Stock Option Plan and to decide about the
remuneration package of all the Executive Directors of the company.
During the year, the Committee met four times on the following dates:
(i) 23rd April, 2003
(iv) 11th January, 2004
(ii) 29th July, 2003
(iii) 24th October, 2003
Following are the details regarding the Committee meetings attended by the members:Member Director
Committee Meetings held during the year
No. of Meetings Attended
Mr. Harnam D. Wahi (Chairman)
4
4
Mr. Prakash Karnik
4
2
Mr. Rajesh Khanna
4
3
Mr. John Levack
4
2
Mr. Deepak Puri *
4
3
Mr. Rakesh GovilAlternate Director to
Mr. Deepak Puri
4
1
* Mr. Deepak Puri resigned from the membership of the Compensation Committee with effect from 25th March, 2004.
REMUNERATION POLICY
(i) Executive Directors:The details of the remuneration paid to Mr. Deepak Puri, Managing Director, Mrs. Nita Puri, Whole Time Director and Mr. Ratul
Puri, Executive Director during the year FY03-04 are as follows:
Particulars
Managing Director
Whole Time Director
Executive Director
1,725,600
454,800
2,910,000
115,200
36,000
180,000
95,054
103,400
107,990
1,935,854
594,200
3,197,990
Salaries, Allowances
PF Contribution
Perquisites
TOTAL
Service Contracts, Notice Period, Severance Fees
Mr. Deepak Puri, Managing Director; Mrs. Nita Puri, Whole Time Director and Mr. Ratul Puri, Executive Director
The company has executed a Service Contract each with Mr. Deepak Puri, Managing Director, Mrs. Nita Puri, Whole Time Director
and Mr. Ratul Puri, Executive Director whereby each of them has been appointed for a period of five years w.e.f. 1st September,
2001, 1st December, 2001 and 1st October, 2001 respectively. Each of them is entitled to resign from his/her office at any time upon
giving to the company at least three calendar months' written notice. No severance fees shall be payable to either of them.
(ii) Non-Executive Directors:The Non-Executive Directors have not drawn any remuneration from the company for the year ended March 31, 2004. However,
they were paid a sitting fee of Rs.5,000 for each Board/Committee meeting attended till 21st October, 2003 and Rs.20,000 for each
Board Meeting and Rs.10,000 for each Committee meeting attended thereafter. Mr. Rajesh Khanna, nominee Director of BIL, EIL,
RIL and WIL does not charge any Sitting Fees for attending any meeting of the Board or Committees thereof.
Service Contracts, Notice Period, Severance Fees
Mr. Harnam D. Wahi, Mr. Arun Bharat Ram, Mr. Bernard Gallus and Mr. Prakash Karnik are liable to retire by rotation. No severance
fees will become payable to them if they desire not to continue as Directors of the company.
Mr. John Levack non-rotational nominee Director- representative of Electra Partners Mauritius Ltd.: - No severance fees will
become payable to him if Electra Partners Mauritius Ltd. withdraws his nomination as a Director of the company.
Mr. Rajesh Khanna non-rotational nominee Director-representative of BIL, EIL, RIL and WIL - affiliates of Warburg Pincus LLC.: No severance fees will become payable to him if BIL, EIL, RIL and WIL withdraw his nomination as a Director of the company.
5. INVESTORS' GRIEVANCE COMMITTEE
The Chairman of the committee, Mr. Harnam D. Wahi, is a Non-Executive Independent Director. Other members of the Committee
are- Mr.Prakash Karnik, Mr. John Levack, Mr. Deepak Puri and Mrs. Nita Puri. The Company Secretary of the company acts as the
Secretary of the Committee.
Terms of reference:The Investors' Grievance Committee looks into redressal of shareholders' and investors' complaints like - transfer of shares,
non-receipt of Annual Reports, non-receipt of dividend and allied matters.
During the year, the committee met four times on the following dates:
(i) 23rd April, 2003
(iv) 27th January, 2004
(ii) 29th July, 2003
(iii) 24th October, 2003
Following are the details regarding the Committee meetings attended by the members:Names of members
Committee Meetings held during the year
No. of Meetings Attended
Mr. Harnam D. Wahi (Chairman)
4
4
Mr. Prakash Karnik
4
3
Mr. John Levack
4
3
Mr. Deepak Puri
4
3
Mrs. Nita Puri
4
2
Name and designation of the Compliance Officer:- Mrs. Minni Katariya, Company Secretary.
The transfer / transmission of physical share certificates is approved by the Company Secretary generally on a weekly basis on
the basis of recommendations received from the company's Registrars and Share Transfer Agent-M/s. MCS Limited.
The investors may lodge their grievances through e-mail at [email protected] or contact the Compliance Officer at the
following numbers: Telephone numbers : 51635201-5, 26911570-74
Fax number
: 51635211, 26911860
Information regarding complaints received from the shareholders
Complaints received and processed by M/s. MCS Limited and the Company from 1st April, 2003 to 31st March, 2004
Nature of complaints
Received
Disposed off
Pending
Relating to transfer, transmission, etc.
19
19
---
Relating to dematerialization
1
1
---
Relating to dividend
3
3
---
Relating to miscellaneous matters
15
15
---
Relating to bonus
17
17
---
TOTAL
55
55
---
Received
Disposed off
Pending
Relating to transfer, transmission, etc.
28
28
---
Relating to dematerialization
---
---
---
Relating to dividend
18
18
---
Relating to miscellaneous matters
---
---
---
Relating to bonus
12
12
---
TOTAL
58
58
---
SEBI / DSE/ BSE Complaints status from 1st April, 2003 to 31st March, 2004
Nature of complaints
6. CORPORATE GOVERNANCE COMMITTEE
Terms of reference:Guided by the principles of good corporate governance, the company has constituted a Committee on Corporate Governance
during the year 2003-04:(a) to advise the company on the best practices being followed on corporate governance issues worldwide and to implement
them in the company appropriately;
(b) to appoint any outside agency to report on corporate governance matters; and
(c) to appoint consultants in this regard.
The Chairman of the committee, Mr. Rajesh Khanna, is a Non-Executive Independent Director. Other members of the Committee
are:- Mr. Prakash Karnik, Director; Mr. John Levack, Director; and Mr. Deepak Puri, Managing Director. The Company Secretary of
the company acts as the Secretary of the Committee.
During the year, the committee met three times on the following dates:
(i) 20th September, 2003
(ii) 24th October, 2003
(iii) 27th January, 2004
Following are the details regarding the Committee meetings attended by the members:Names of members
Committee Meetings held during the year
No. of Meetings Attended
Mr. Rajesh Khanna (Chairman)
3
2
Mr. Prakash Karnik
3
2
Mr. John Levack
3
2
Mr. Deepak Puri
3
1
7. COMPLIANCE WITH SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2002
In pursuance of these regulations, the company has formulated Standing Instructions for the Employees and Directors for dealing
in Shares of the company and these Standing Instructions were implemented with effect from 9th September, 2002. Various forms
have been designed to receive periodical information from the employees and the Directors of thecCompany, as required in
terms of these regulations. Further, the Trading Window for dealing in shares of the company has been closed for the Directors
and employees of the Company as per the following details: Dates of closure of trading window
Purpose of closure
Tuesday, 01/04/2003 to Thursday, 24/04/2003
Consideration of un-audited financial results
for the quarter ended 31st March, 2003.
Wednesday, 09/07/2003 to Wednesday, 30/07/2003
Consideration of un-audited financial results
for the quarter ended 30th June, 2003.
Wednesday, 17/09/2003 to Monday, 22/09/2003
Consideration of audited annual accounts of the
Company for the year 2002-03.
Tuesday, 07/10/2003 to Saturday, 25/10/2003
Consideration of un-audited financial results
for the quarter ended 30th September, 2003.
Thursday, 01/01/2004 to Saturday, 31/01/2004
Consideration of un-audited financial results
for the quarter ended 31st December, 2003.
Thursday, 01/04/2004 to Friday, 30/04/2004
Consideration of un-audited financial results
for the quarter ended 31st March, 2003.
8. PARTICULARS OF ANNUAL GENERAL MEETINGS AND EXTRAORDINARY GENERAL MEETINGS
HELD DURING THE LAST THREE YEARS
General Meeting
Date
Time
Venue
Annual General Meeting
28/09/2001 9:30 A.M.
Centaur Hotel,
New Delhi- 110 037
Annual General Meeting
27/09/2002 9:30 A.M.
Centaur Hotel,
New Delhi- 110 037
Extraordinary General
Meeting
29/08/2003 9.30 A.M.
Centaur Hotel,
New Delhi- 110 037
Special Resolutions passed
For shifting of statutory registers,
records, documents, etc of the
company from its registered
office to its corporate office.
Nil
(a) For getting the Equity Shares
of the company de-listed from the
Stock Exchanges located at Delhi,
Kolkata, Ahmedabad and Kanpur.
(b) For alteration of the Article 6 of
the Articles of Association of the
company.
(c) For alteration of the Article 5(a)
of the Articles of Association of the
company.
(d) For shifting of statutory registers,
records, documents, books of
accounts, etc of the company from
its corporate office to its registered
office.
(e) For issue of Equity Shares under
SEBI (ESOS and ESPS) Guidelines,
1999 to the employees of the
company.
(f) For issue of Equity Shares under
SEBI (ESOS and ESPS) Guidelines,
1999 to the employees of subsidiary
companies of the company.
Annual General Meeting
21/10/2003 9.30 A.M.
FICCI Golden Jubilee (a) For alteration of the Article 94 of the
Auditorium,
Articles of Association of the
Federation House,
company.
Tansen Marg,
New Delhi- 110 001
(b) For capitalisation of reserves of the
company for issuing Bonus Shares.
Extraordinary General
Meeting
05/02/2004 10.00 A.M.
Centaur Hotel,
New Delhi- 110 037
(a) For alteration of the Article 5(a) of
the Articles of Association of the
company.
(b) For increasing the number of Equity
Shares to be issued under SEBI
(ESOS and ESPS) Guidelines, 1999
to the employees of the company.
(c) For increasing the number of Equity
Shares to be issued under SEBI
(ESOS and ESPS) Guidelines, 1999
to the employees of subsidiary
Companies of the Company.
(d) For issue and allotment of
ADRs/GDRs on a preferential basis
to various Institutional Investors.
(e) For issue and allotment of Equity
Shares on a preferential basis to
Woodgreen Investment Ltd or any
other affiliates of Warburg Pincus
LLC.
(f) For issue and allotment of Warrants
convertible into Equity Shares on a
preferential basis to Woodgreen
Investment Ltd or any other
affiliates of Warburg Pincus LLC.
(g) For increasing the shareholding
limit for FIIs in the Company to 74%.
Further, no resolution was required to be put through postal ballot at the last Annual General Meeting. No resolution is proposed
to be passed through postal ballot at the forthcoming Annual General Meeting.
9. DISCLOSURES
a) Disclosures on materially significant related party transactions, i.e. transactions of the company of material nature, with its
Promoters, the Directors or the management, their subsidiaries or relatives, etc. that may have potential conflict with the
interest of the company at large - NIL.
b) Details of non-compliance by the company, penalties, strictures imposed by Stock Exchange or SEBI or any statutory
authority, on any matter related to capital markets, during the last three years- NIL
10.MEANS OF COMMUNICATION
a) The company ensures that its financial results are sent to the concerned Stock Exchanges immediately after the same have
been considered and taken on record by the Board of Directors and published in the following newspapers:(i) The Economic Times.
(ii) The Times of India.
(iii) The Hindustan Times.
(iv) The Pioneer.
(v) Navbharat Times.
(vi) Business Standard.
(vii) Financial Express.
b) The company also ensures that these results are promptly and prominently displayed on the company's website:www.moserbaer.com
c) The company also complies with SEBI regulations regarding filing of its financial results under the EDIFAR system.
d) The company's official news releases are also displayed on the company's web site.
e) Management Discussion and Analysis Report is a part of the Annual Report of the company for the year FY03-04.
11. GENERAL SHAREHOLDER INFORMATION
st
a) 21 ANNUAL GENERAL MEETING
Date
Time
Venue
:
:
:
Monday, 26th July, 2004
9:30 AM
FICCI Golden Jubilee Auditorium,
Federation House, Tansen Marg, New Delhi 110 001
b) FINANCIAL CALENDAR
:
1st April to 31st March
c) BOOK CLOSURE
:
Thursday, 22nd July, 2004 to Monday, 26th July, 2004
d) DIVIDEND PAYMENT DATE
:
The dividend for the year2003-04, as recommended
by the Directors and if declared at the forthcoming
Annual General Meeting, will be paid on or
before Tuesday, 24th August, 2004 to those
members whose names appear:-
:
(i) as beneficial owners as at the closure of the
business hours on Monday, 26th July, 2004 as per
the list being furnished by National Securities
Depository Limited and Central Depository
Services (India) Limited in respect of the shares
held in electronic form; and
(ii) as members in the Register of Members of the
company as at the closure of business hours on
Monday, 26th July, 2004
e) LISTING
The Equity Shares of the company are listed at the
following Stock Exchanges*
:
i) The Stock Exchange, Mumbai.
ii) National Stock Exchange of India Limited.
iii) The Calcutta Stock Exchange Association Limited.
* During the year 2003-04, the equity shares of the company were voluntarily delisted by the company from The Ahmedabad
Stock Exchange, The Delhi Stock Exchange and The Uttar Pradesh Stock Exchange. Further, the company has filed an
application with The Calcutta Stock Exchange for voluntary delisting. Application for the same is under process and approval
is pending.
f)
STOCK CODE
The Stock Code at: i) Mumbai Stock Exchange is
ii) National Stock Exchange is
iii) Calcutta Stock Exchange is
:
:
:
517140
MOSERBAER
23164 and 10023164
g) STOCK PRICE DATA
st
st
Stock Market Data at BSE and NSE for the period 1 April, 2003 to 31 March, 2004
Monthly high and low quotations of shares traded at the Stock Exchange, Mumbai (BSE) and National Stock Exchange
Ltd. (NSE) are as follows: MONTHS
April, 2003
May, 2003
June, 2003
July, 2003
August, 2003
September, 2003
October, 2003
November, 2003
December, 2003
January, 2004
February, 2004
March, 2004
g) i)
BSE
NSE
Highest
Lowest
Highest
Lowest
284.50
306.90
345.00
375.00
333.00
418.75
512.80
598.00
362.70
421.00
360.00
332.90
227.50
266.05
284.00
305.00
244.95
277.30
372.50
281.00
278.25
311.15
306.00
234.00
284.90
330.00
345.00
380.00
321.50
417.45
513.00
598.00
362.20
419.00
360.00
333.00
225.25
230.00
248.00
305.00
253.20
271.60
351.15
281.50
242.00
311.00
306.00
233.20
STOCK PERFORMANCE IN COMPARISON TO NSE INDEX:Moser Baer vs Nifty
600.00
2100.00
2000.00
560.00
1900.00
520.00
1800.00
480.00
1700.00
440.00
1600.00
1500.00
400.00
1400.00
360.00
1300.00
320.00
1200.00
1100.00
280.00
1000.00
240.00
900.00
200.00
800.00
Moser Baer India Ltd.
N S E Nif ty
h) ADJUSTED STOCK PRICE DATA:- Calculated after taking into consideration the issue of Bonus Shares in the ratio of 1:1 (the
th
th
record date being - 28 November, 2003 and the date of allotment being - 18 December, 2003).
MONTHS
April, 2003
May, 2003
June, 2003
July, 2003
August, 2003
September, 2003
October, 2003
November, 2003
December, 2003
January, 2004
February, 2004
March, 2004
h) i)
BSE
NSE
Highest
Lowest
Highest
Lowest
142.25
153.45
172.50
187.50
166.50
209.38
256.40
299.00
362.70
421.00
360.00
332.90
113.75
133.03
142.00
152.50
122.48
138.65
186.25
140.50
278.25
311.15
306.00
234.00
142.45
165.00
172.50
190.00
160.75
208.73
256.50
299.00
362.20
419.00
360.00
333.00
112.63
115.00
124.00
152.50
126.60
135.80
175.58
140.75
242.00
311.00
306.00
233.20
STOCK PERFORMANCE IN COMPARISON TO NSE INDEX:Moser Baer vs Nifty
2100.00
380.00
2000.00
1900.00
340.00
1800.00
1700.00
300.00
1600.00
1500.00
260.00
1400.00
220.00
1300.00
1200.00
180.00
1100.00
1000.00
140.00
900.00
100.00
800.00
Moser Baer India Ltd.
N S E Nifty
i)
DISTRIBUTION OF SHAREHOLDING AS ON 31st MARCH, 2004
No. of Equity Shares
No. of shareholders
Per cent
No. of shares
Per cent
32,988
2,469
915
243
116
53
101
153
37,038
89.07
6.67
2.47
0.66
0.31
0.14
0.27
0.41
100.00
4294987
1923210
1428582
631579
423028
245782
702701
101863075
111512944
3.85
1.72
1.28
0.57
0.38
0.22
0.63
91.35
100.00
Upto 5,000
5,001 to 10,000
10,001 to 20,000
20,001 to 30,000
30,001 to 40,000
40,001 to 50,000
50,001 to 100,000
100,001 & above
Total
j)
REGISTRARS AND SHARE TRANSFER AGENTS
MCS Limited is the Registrar & Share Transfer Agent of the company and its office is located at W-40, Okhla Industrial Area,
Phase-II, New Delhi 110 020. Contact Person: - Mr. K.R.Menon. Contact numbers are as follows:
Phone numbers
:
26384909-11 and 51609386
Fax number
:
26384907
E-mail address
:
[email protected]
k) SHARE TRANSFER SYSTEM
The application for transfer, transmission and transposition of shares are received by the company at its registered office or
at the office of Registrars and Share Transfer Agent- M/s. MCS Limited.
Following is the procedure of transfer of physical share certificates:i)
Entry of share certificates in the computer on receipt thereof in the office.
ii) Scrutiny of transfer deeds.
iii) Tallying of transferor's signature with the specimen signature available with the Registrar and Share Transfer Agent.
iv) Data entry of transfer deeds.
v) Preparation of objection memos and notices in respect of un-transferred shares.
vi) Generation of checklist for valid and invalid transfer deeds.
vii) Correction of data in the computer system on the basis of changes marked in the checklist.
viii) Recording of transfer of shares in the computer system.
ix) Endorsement and signatures on the reverse side of the share certificates.
x) Generation of covering letters for the transferred share certificates and dispatch of transferred share certificates, objection
memos and notices by registered post.
Upon completion of the share transfer process, an offer letter is sent to the transferee with an option to receive credit of the
transferred shares in electronic form, if so desired, under the “Transfer-cum-Demat” facility extended by the company. In terms of
SEBI's letter number D&CC/NSDL-CDSL/3524/2003 dated 12th February, 2003, this facility is available for transfer upto 500
shares. Shareholders who opt for this facility by submitting the offer letter along with Dematerialisation Request Form (DRF) duly
authenticated by Depository Participant (DP), receive electronic credit of their shares in their Demat Account maintained with DP.
In case transferee opts to receive transferred share certificate(s) in physical form or does not submit the offer letter within the
stipulated time, share certificate(s) is/are sent to the transferee.
Following is the procedure for dematerialization of shares:i)
Entry of the share certificates and the dematerialization request form in the computer.
ii) Scrutiny of the share certificates and the dematerialization request form in the computer.
iii) Tallying of signature of the shareholder on the dematerialization request form with the specimen signature available with the
Registrar and Share Transfer Agent.
iv) Data entry of transfer deeds.
v) Generation of checklist.
vi) Change of shares from physical to demat mode.
vii) Send confirmation to NSDL and CDS(I)L.
l)
DEMATERIALISATION OF SHARES AND LIQUIDITY
The Equity Shares of the company are actively traded at major Stock Exchanges in demat mode. As on 31st March, 2004, 69.34%
of the shares were held in dematerialized mode by 90.86% of the total shareholders of the Company.
m) CONVERSION OF INSTRUMENTS
On 29th March, 2004, the company has allotted, on a private placement basis, 14,700,000 Equity Shares of Rs. 10/- each at a
premium of Rs. 326 per share to Deutsche Bank Trust Company Americas, which has issued 147,000 Global Depository Receipts
(GDRs) of the face value of Rs. 336 per GDR to Woodgreen Investment Ltd.
On 29th March, 2004, the company has also allotted 5,400,000 Warrants convertible into 5,400,000 Equity Shares of Rs. 10/- each
at a premium of Rs. 326 per Share to Woodgreen Investment Ltd., on a private placement basis and on receipt of a consideration
which is 10% of the face value of the Warrants. These Warrants are convertible, at the option of the Warrant- holder, within a period
of 18 months from the date of allotment and on payment of the balance consideration of 90% of the face value of the Warrants, into
an equivalent number of Equity Shares.
As on date, Woodgreen Investment Ltd has neither exchanged its GDRs with Equity Shares nor has it converted the Warrants into
Equity Shares.
n) PLANT LOCATIONS
i)
ii)
iii)
iv)
v)
vi)
66, NSEZ, Noida, District- Gautam Budh Nagar U.P.
A-164, Sector 80 Noida- II, Distt. Gautam Budh Nagar U.P.
B-4, NSEZ, Noida, District- Gautam Budh Nagar U.P.
B-17, Sector 9, Noida, District- Gautam Budh Nagar U.P.
A-33, Sector-57, Noida, U.P.
66, Udyog Vihar Industrial Area, Greater Noida, U.P.
o) ADDRESS FOR CORRESPONDENCE
i)
All correspondence regarding transfer and dematerialization of share certificates should be addressed to our Registrar
and Share Transfer Agent - MCS Limited located at W-40, Okhla Industrial Area, Phase-II, New Delhi - 110 020. Following
are the contact numbers: -
Telephone numbers
Fax number
E-mail address
ii)
:
:
:
26384909-11 and 51609386
26384907
[email protected]
For any other information, the shareholders may contact the Company Secretary at the Registered Office of the company
located at 43- A, Okhla Industrial Estate, New Delhi - 110020. Following are the contact numbers:Telephone numbers
Fax numbers
E-mail address
:
:
:
51635201 to 51635205, 26911570-74
51635211, 26911860
[email protected]
12. OTHER INFORMATION
(a) In terms of the provisions of Section 205C of the Companies Act, 1956, unclaimed equity dividend for the year 1995-96 has
been transferred to the Investor Education and Protection Fund.
(b) The company will transfer the amount remaining unpaid in its dividend account for the year 1996-97 to the Investor Education
and Protection Fund by Friday, 10th December, 2004. Those members who have not yet encashed their dividend warrants for
the said year may refer the matter along with relevant details to the Company Secretary at the Registered Office of the
company located at 43-A, Okhla Industrial Estate, New Delhi-110020 latest by Monday, 15th November, 2004 to claim their
unpaid dividend.
Certificate
To the members of
Moser Baer India Limited
We have examined the compliance of conditions of Corporate Governance by Moser Baer India Limited, for the year ended on
March 31, 2004, as stipulated in Clause 49 of the Listing Agreement of the said company with Stock Exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to
procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions of the Corporate
Governance. It is neither an audit nor an expression of opinion on the financial statements of the company.
In our opinion and to the best of our information and according to the explanations given to us :1. We certify that the company has complied with the conditions of Corporate Governance as stipulated in the above mentioned
Listing Agreement.
2. As per the records maintained by the Investors' Grievance Committee, no investor grievances against the company are
pending for a period exceeding one month.
3. We further state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or
effectiveness with which the Management has conducted the affairs of the company.
For K. C. Khanna & Co.,
Chartered Accountants
(Nitin K. Jain)
Partner
Membership No. 83084
H-96, Connaught Circus,
New Delhi 110 001
Date : June 18, 2004
list of working capital lenders
IDBI Bank Ltd.,
Surya Kiran Building,
K.G.Marg,
New Delhi-110 001
State Bank of Travancore,
Industrial Finance Branch,
Travancore House,
K.G.Marg, New Delhi-110 001
HSBC Limited,
ECE House,
K.G.Marg,
New Delhi-110 001
UTI Bank Ltd.,
Statesman House,
Barakhamba Road,
New Delhi-110 001
State Bank of Saurashtra,
C-37,
Connaught Circus,
New Delhi-110 001
CitiBank,
DLF Centre,
Parliament Street,
New Delhi-110 001
HDFC Bank Limited,
Kailash Building,
K.G.Marg,
New Delhi-110 001
The Karnataka Bank Ltd.,
Chaudhry Building,
K Block, Connaught Circus,
New Delhi-110 001
Standard Chartered Bank,
Parliament Street,
New Delhi 110001
State Bank of India,
Overseas Branch,
Vijya Building,
Barakhamba Road,
New Delhi-110 001
Punjab National Bank,
Large Corporate Branch,
A-9,
Connaught Circus,
New Delhi-110 001
BNP Paribas,
1st India Place,
A Block, Sushant Lok Phase I,
Mehrauli Gurgaon Road,
Gurgaon
State Bank of Patiala,
Chanderlok Building,
New Delhi-110 001
The Bank of Nova Scotia,
Dr.Gopal Das Bhawan,
28, Barakhamba Road,
New Delhi-110 001
Export Import Bank of India,
Centre One,
Floor 21, World Trade Centre,
Cuffe Parade, Mumbai-400 005
State Bank of Bikaner & Jaipur,
G-72,
Connaught Circus,
New Delhi-110 001
Union Bank of India,
M Block,
Connaught Circus,
New Delhi-110 001
ING Vysya Bank Ltd,
G-35,
Connaught Place,
Opp. Madras Hotel,
New Delhi-110 001
financials
auditors' report
To the Members of Moser Baer India Limited
st
1. We have audited the attached Balance Sheet of MOSER BAER INDIA LIMITED, as at 31 March, 2004, the Profit and Loss
Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are
the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of subsection (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report that :
i)
We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for
the purposes of our audit;
ii)
In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our
examination of those books;
iii)
The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the
books of account;
iv)
In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply
with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;
v)
On the basis of written representations received from the directors, as on 31st March, 2004, and taken on record by the
Board of Directors, we report that none of the directors is disqualified as on 31st March, 2004 from being appointed as a
director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
vi)
In our opinion and to the best of our information and according to the explanations given to us, the said accounts read
with the Accounting Policies and Notes thereon, give the information required by the Companies Act, 1956, in the
manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
st
a)
in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2004;
b)
in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
c)
in the case of the Cash Flow Statement, of the cash flow for the year ended on that date.
For K.C. Khanna & Co.,
Chartered Accountants
(Nitin K. Jain)
Partner
Membership No. 83084
H-96, Connaught Circus,
New Delhi 110 001.
Dated : June 18, 2004
annexure to auditors' report
(Referred to in paragraph 3 of our report to the members of Moser Baer India Limited)
1
(a) The Company has maintained proper records to show full particulars, including quantitative details and situation of its
fixed assets.
(b) A major portion of the fixed assets have been physically verified by the Management during the year and there is a
regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the
nature of its assets. According to the information and explanations given to us, no material discrepancies have been
noticed on such physical verification as compared to the book records.
(c) During the year, the Company has disposed of some items of the plant and machinery. According to the information and
explanations given to us, we are of the opinion that the sale of the said items of plant and machinery has not affected the
“going concern” status of the Company.
2
(a) Physical verification has been carried out by the Management in respect of inventory at reasonable intervals including as
on 31.03.2004, as per the records reviewed by us.
(b) Based on information and explanations given and the records produced, in our view, the procedures of physical
verification of inventory followed by the Management during the accounting year are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. As per the information furnished by the Management, no
material discrepancy was observed between physical inventories and the book records, and the same has been
properly dealt with in the books of account.
3. The Company has, during the year, neither granted nor taken any loans, secured or unsecured to / from companies, firms or
other parties covered in the register maintained under section 301 of the Companies Act, 1956; and accordingly the question
of repayment of principal / interest or any overdues, is not relevant.
4. In our opinion and according to the information and explanations given to us during the course of audit, there are internal
control procedures, generally considered adequate, commensurate with the size of the Company and the nature of its
business for purchases of inventory and fixed assets and with regard to sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weakness in internal controls.
5
(a) According to the information and explanations given to us, there are no contracts or arrangements entered into by the
Company during the year that are required to be entered into the register maintained under section 301 of the
Companies Act, 1956.
(b) In our opinion and according to the information and explanations given to us, the Company has not entered into any
transaction during the year exceeding the value of rupees five lakhs in respect of any party required to be noted in the
register maintained under section 301 of the Companies Act, 1956.
6. The Company did not have, during the year, any deposits requiring compliance of the provisions of Section 58A and 58AA of
the Companies Act, 1956 and the rules framed thereunder with regard to acceptance of deposits.
7. The Company has an internal audit system which, in our opinion, is considered as commensurate with the size of the
Company and the nature of its business.
8. As explained to us, the Central Government has not prescribed under Section 209 (1) (d) of the Companies Act, 1956, the
maintenance of cost records in respect of the Company's business.
9
(a) (i)
The Company is regular in depositing with appropriate authorities, undisputed statutory dues including provident
fund, investor education and protection fund, employees' state insurance, income-tax, wealth-tax, sales-tax,
custom duty, excise-duty, cess and other material statutory dues applicable to it.
(ii)
According to the information and explanations given to us, no undisputed amounts payable in respect of incometax, wealth-tax, sales-tax, custom duty, excise duty and cess were in arrears, as at 31.3.2004 for a period of more
than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of income-tax, wealth-tax, sales-tax,
custom duty, excise duty and cess which have not been deposited on account of any dispute, except as furnished
hereunder:
Name of the statute
Nature of the dues
Entry Tax Act
Realization of Entry tax for
Assessment Year 1999-2000
and 2000-01 on account of
entry tax exemption for
purchase of machinery
Goods found in excess of the
quantity disclosed in the
register maintained for stock
keeping of excisable goods
Central Excise Act
Total
Amount (Rs)
106,059,645
105,250
Period to which
the amount relates
1999-2000 and 2000-01
Forum where dispute
is pending
Supreme Court of India
1997-98
Customs, Excise and
Service tax Appellate
Tribunal
106,164,895
10. The Company has neither accumulated losses at the end of the financial year nor incurred cash losses during the year and in
the immediately preceding year.
11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of
dues to any financial institution or bank. The Company does not have any debenture holders.
12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities, and accordingly, the maintenance of records in this
regard is not relevant for the year.
13. The Company is not a chit fund or a nidhi /mutual benefit fund / society; and accordingly, the provisions of clause 4(xiii) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly,
the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.
15. In accordance with the information and explanations given to us, the Company has not given any guarantees for loans taken
by others from banks or financial institutions.
16. In our opinion, the term loans taken by the Company, have been applied for the purpose for which they were raised.
17. According to the information and explanations given to us and on an overall examination of the balance sheet of the
Company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds
have been used to finance short-term assets, except permanent working capital.
18. During the year the Company has not made any preferential allotment of shares to parties and companies covered in the
register maintained under section 301 of the Companies Act, 1956.
19. The Company did not have any outstanding debentures during the year.
20. The Company has not raised any money by public issue during the year.
21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported
during the course of our audit.
For K.C. Khanna & Co.,
Chartered Accountants
(Nitin K. Jain)
Partner
Membership No. 83084
H-96, Connaught Circus,
New Delhi 110 001.
Dated : June 18, 2004
balance sheet
As at 31st March (Amount in Rupees)
I.
Schedule
2004
2003
SOURCES OF FUNDS
SHAREHOLDERS FUNDS
Share Capital
1
1,115,129,440
484,064,720
Reserves and Surplus
2
18,352,371,076
10,994,425,663
19,467,500,516
11,478,490,383
181,440,000
--
SHARE WARRANTS - Fully Convertible
(Refer Note 11 of Schedule 19 - Part B)
LOAN FUNDS
Secured Loans
3
14,387,677,195
10,986,798,722
Unsecured Loans
4
132,167,476
772,375,736
345,144,000
--
34,513,929,187
23,237,664,841
27,315,091,445
19,768,057,986
4,628,534,811
2,369,833,413
22,686,556,634
17,398,224,573
Deferred Tax Liability
(Refer Note 5 of Schedule 19 - Part B)
TOTAL
II.
APPLICATION OF FUNDS
FIXED ASSETS
5
Gross Block
Less: Depreciation
Net Block
Capital Work-in-progress
875,650,614
797,940,483
23,562,207,248
18,196,165,056
6
4,861,037
99,003,414
7
524,469,719
413,553,784
Inventories
8
1,984,976,423
998,534,150
Sundry Debtors
9
3,059,948,316
2,778,042,980
Cash and Bank Balances
10
7,944,656,032
2,720,116,744
Loans and Advances
11
781,488,645
493,921,747
13,771,069,416
6,990,615,621
3,075,358,858
2,313,919,611
INCIDENTAL EXPENDITURE PENDING CAPITALISATION
(New Projects)
INVESTMENTS
CURRENT ASSETS, LOANS AND ADVANCES
Less: CURRENT LIABILITIES AND PROVISIONS
12
Current Liabilities
Provisions
Net Current Assets
MISCELLANEOUS EXPENDITURE
273,319,375
173,430,997
3,348,678,233
2,487,350,608
10,422,391,183
4,503,265,013
--
25,677,574
34,513,929,187
23,237,664,841
13
(To the extent not written off or adjusted)
TOTAL
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
As per our report of even date
For K. C. Khanna & Co.
Chartered Accountants.
Nitin K. Jain
Partner
Membership No 83084
Place: New Delhi
Date: June 18, 2004
Deepak Puri
Chairman and Managing Director
19
Harnam D.Wahi
Director
Minni Katariya
Company Secretary
R Ganesan
General Manager Accounts
profit and loss account
For the year ended 31st March (Amount in Rupees)
Schedule
2004
2003
15,792,194,139
10,855,218,951
770,524,261
193,337,862
15,021,669,878
10,661,881,089
INCOME
Gross Sales
Less: Duty (Including Excise Duty)
Other Income
14
229,667,068
288,166,585
Increase/(Decrease) in stock of Finished Goods/Work in Process
15
320,057,794
(957,265,443)
15,571,394,740
9,992,782,231
5,614,030,633
3,342,910,085
EXPENDITURE
Raw Materials and Components Consumed
Trade Purchases
12,728,467
86,057,181
461,864,960
423,631,628
16
526,660,862
305,462,865
Administration and Other Expenses
17
2,367,396,759
1,757,453,903
Interest and Finance Charges
18
693,375,767
542,736,289
2,268,870,139
1,174,690,104
11,944,927,587
7,632,942,055
3,626,467,153
2,359,840,176
Stores, Spares and Tools Consumed
Personnel Expenses
Depreciation
PROFIT BEFORE TAX
Provision for Taxation:
Current Tax
32,500,000
23,500,000
Deferred Tax
16,713,000
(36,392,225)
3,577,254,153
2,372,732,401
10,312,210
--
Prior Period Item - Refer Note 5 of Schedule 19 - Part B)
328,431,000
--
NET PROFIT/SURPLUS AVAILABLE FOR APPROPRIATION
3,238,510,943
2,372,732,401
Net Profit after Provision for Taxation
Short Provision of Taxation for earlier years
Provision for Deferred Tax for earlier years (Considered as
APPROPRIATIONS
Dividend:
– Preference Shares
– Equity Shares (Proposed)
Corporate Tax on Proposed Dividend
--
8,435,959
167,269,416
121,016,180
167,269,416
129,452,139
21,431,394
15,505,198
Transfer to General Reserve
3,049,810,133
2,227,775,064
TOTAL
3,238,510,943
2,372,732,401
- Before prior period items
36.80
24.42
- After prior period items
33.41
24.42
Earnings per share (Face Value of Rs. 10 each)
Basic & Diluted :
(Refer Note 8 of Schedule 19 - Part B)
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
As per our report of even date
For K. C. Khanna & Co.
Chartered Accountants.
Nitin K. Jain
Partner
Membership No 83084
Place: New Delhi
Date: June 18, 2004
Deepak Puri
Chairman and Managing Director
19
Harnam D.Wahi
Director
Minni Katariya
Company Secretary
R Ganesan
General Manager Accounts
schedules to the accounts
As at 31st March (Amount in Rupees)
1
2004
2003
1,425,000,000
625,000,000
SHARE CAPITAL
Authorised
142,500,000 (Previous Year 62,500,000) Equity Shares of Rs.10 each
750,000 Preference Shares of Rs.100 each
75,000,000
75,000,000
1,500,000,000
700,000,000
1,115,129,440
484,064,720
1,000,000
1,000,000
As per last Balance Sheet
4,583,484,724
4,583,484,724
Added during the year
4,792,200,000
--
9,375,684,724
4,583,484,724
Issued, Subscribed and Paid-up
*111,512,944 (Previous Year 48,406,472)
Equity Shares of Rs. 10 each fully paid up
Note
* Includes:
-
48,406,472 Shares issued as fully paid Bonus Shares by capitalisation of
Securities Premium; and
-
14,700,000 Shares allotted in cash at a premium of Rs. 326 each to
Deutsche Bank Trust Company Americas (DBTCA), DBTCA issued 147,000
Global Depository Receipts (GDRs), each GDR represents 100 Shares,
to Woodgreen Investment Limited.
2
RESERVES AND SURPLUS
Capital Reserve
State Capital Investment Subsidy
Securities Premium Account
Less: Utilised during the year
484,064,720
--
8,891,620,004
4,583,484,724
6,409,940,939
4,147,950,072
General Reserve
As per last Balance Sheet
Add: Adjustment for Deferred Tax Liability as on 01.04.2001
Transfer from Profit and Loss Account
TOTAL
3
--
34,215,803
3,049,810,133
2,227,775,064
9,459,751,072
6,409,940,939
18,352,371,076
10,994,425,663
SECURED LOANS
1
Term Loans
A.
Rupee Loans
i)
Export Import Bank of India-EXIM Bank
##
Working Capital Term Loan (WCTL)
30,750,000
51,250,000
##
Research & Development Loan (R&D)
48,000,000
64,000,000
##
Production Equipment Finance Loan
42,310,944
70,518,240
121,060,944
185,768,240
ii)
The Federal Bank
500,000,000
500,000,000
#
iii)
ING-Vysya Bank
450,000,000
450,000,000
##
iv)
State Bank of India - I
154,122,522
253,693,988
v)
State Bank of India - II
250,000,000
--
vi)
Union Bank of India (including interest accrued and due - Rs. 3,445,355)
509,090,866
--
vii)
State Bank of Saurashtra
500,000,000
--
#
viii) Canara Bank
260,000,000
--
ix)
IDBI Bank Ltd
200,000,000
--
x)
United Bank of India
500,000,000
--
xi)
State Bank of Indore
500,000,000
--
xii)
Syndicate Bank
499,999,691
--
xiii) State Bank of Mysore
249,997,380
--
xiv) Indian Bank (including interest accrued and due - Rs. 10,960)
500,010,960
--
5,194,282,363
1,389,462,228
schedules to the accounts
As at 31st March (Amount in Rupees)
3
2004
2003
783,720,300
1,141,461,000
134,121,032
230,000,671
1,793,667,046
1,481,779,861
896,833,523
740,889,916
SECURED LOANS (Contd..)
B)
#
Foreign Currency Loans
i)
From Exim Bank of India
(US$ 17,930,000: Previous Year US$ 23,930,000)
##
ii)
From Industrial Development Bank of India
(US$ 3,068,429: Previous year US$ 4,821,817)
iii)
From Bayeriesche Hypo - und Vereinsbank AG, (Munich)
(Euro 33,370,549: Previous year Euro 28,359,424)
iv)
From ANZ Bank, (Frankfurt)
(Euro 16,685,275: Previous year Euro 14,179,711)
v)
From Standard Chartered Bank (London)
896,833,523
740,889,916
vi)
(Euro 16,685,275: Previous year Euro 14,179,711)
From Canara Bank
655,650,000
715,500,000
218,550,000
238,500,000
1,569,500,000
1,831,362,500
(US$ 15,000,000: Previous year US$ 15,000,000)
##
vii)
From Karnataka Bank
(US$ 5,000,000: Previous year US$ 5,000,000)
viii) From International Finance Corporation, Washington, USA
(Euro 29,200,000: Previous year Euro 35,050,000)
2
6,948,875,424
7,120,383,864
12,143,157,787
8,509,846,092
2,241,548,089
2,475,178,894
2,971,319
1,773,736
Other Loans
A)
Short Term Loans from Banks
(@ including interest accrued and due Rs. 1,314,921)
@
Secured by hypothecation of stock-in-trade and book debts.
(Guaranteed by directors to the extent of Rs. 921,212,462: Previous Year 1,275,902,114)
B)
From Others
Secured by hypothecation of specific vehicles
(Amount due within one year Rs. 667,747: Previous year Rs. 666,108)
TOTAL
2,244,519,408
2,476,952,630
14,387,677,195
10,986,798,722
Notes:
1
Loans from State Bank of India, Union Bank of India, State Bank of Saurashtra, Canara Bank, Federal Bank, Exim Bank - WCTL, R&D loans and Foreign currency loans from
banks/financial institutions are secured by way of first mortgage and charge on all the immovable and movable assets, present and future, of the Company (subject to prior charge
on specified movables as otherwise stated, including in favour of the company's bankers by way of security for the borrowing for working capital), ranking pari-passu with charges
for the Term Loans.
2
Production Equipment Finance Loan from Exim Bank is secured by way of hypothecation of specific equipments acquired/to be acquired with finance out of the loan.
3
Loan from ING Vysya Bank is secured by way of pari-passu first charge on current assets.
4
Loan from IDBI Bank is secured by way of subsequent and subservient charge on Current Assets.
5
Loans from United Bank of India, State Bank of Indore, Syndicate Bank and State Bank of Mysore are secured by way of hypothecation of whole of the movable fixed assets.
6
Loan from Indian Bank is secured by way of hypothecation of whole of the movable assets.
7
Guaranteed by #2 Directors, ##3 Directors of the Company
8
Term Loans repayable within one year - Rs. 2,801.12 million (Previous year - Rs. 1,498.77 million)
9
Charges are registered after Balance Sheet date in respect of Term Loans taken from State Bank of India (Rs. 250 Million) and Indian Bank (Rs. 500 Million)
10
Foreign currency converted @ US$ 1 = Rs 43.71 : (Previous year US$1 = Rs 47.70) and @ 1 Euro - Rs 53.75 (Previous year 1 Euro - Rs 52.25)
4
UNSECURED LOANS
Short Term Loans - from Banks
- Rupee Loan
- Foreign Currency Loans (USD 3,023,735 : Previous year USD 14,000,000)
Add: Interest accrued and due
Total
Note: Foreign currency converted @ US$ 1 = Rs 43.71 : (Previous year US$1 = Rs 47.70)
--
100,025,500
132,167,476
667,800,000
132,167,476
767,825,500
--
4,550,236
132,167,476
772,375,736
schedules to the accounts
As at 31st March, 2004 (Amount in Rupees)
5 - FIXED ASSETS
DESCRIPTION
As at
01.04.2003
GROSS BLOCK
Additions
Deductions
As at
31.03.2004
Upto
01.04.2003
DEPRECIATION
For the Deductions
year
Upto
31.03.2004
NET BLOCK
As at
As at
31.03.2004
31.3.2003
Tangible Assets
Land (Leasehold except to
the extent of Rs 170,081) 268,919,516
--268,919,516
2,598,005
2,911,722
-5,509,727
263,409,789
Buildings
1,871,472,542
146,228,828
3,542,611 2,014,158,759
101,169,312
65,161,935 1,920,632
164,410,615
1,849,748,144
Leasehold Improvements
-22,497,009
-22,497,009
-1,864,320
-1,864,230
20,632,689
Plant and Machinery,
Electrical Installation
and other Equipments
17,413,041,085 7,346,424,631 95,764,454 24,663,701,262 2,234,144,549 2,159,217,924 7,501,181 4,385,861,292 20,277,839,970
Furniture, Fixtures
and office Equipments
93,825,972
36,123,263
999,426
128,949,809
19,053,084
8,004,510
364,627
26,692,967
102,256,842
Computers
41,909,113
33,936,562
724,835
75,120,840
7,781,985
10,086,938
177,281
17,691,642
57,429,198
Vehicles
13,985,574
1,001,815
16,662
14,970,727
3,841,095
1,544,433
205,020
5,180,508
9,790,219
Intangible Assets
Software
9,785,106
7,995,264
-17,780,370
5,367
3,028,947
-3,034,314
14,746,056
Technical Know How
52,083,202
52,260,269
-104,343,471
-16,392,302
-16,392,302
87,951,169
Leased Assets
Vehicles
3,035,876
1,613,806
-4,649,682
1,240,016
657,108
-1,897,124
2,752,558
Total
19,768,057,986 7,648,081,447 101,047,988 27,315,091,445 2,369,833,413 2,268,870,139 10,168,741 4,628,534,811 22,686,556,634
PREVIOUS YEAR
9,131,951,534 10,670,027,822 33,921,370 19,768,057,986 1,205,055,777 1,174,690,104 9,912,468 2,369,833,413
Capital work-in-Progress (including capital advances Rs. 93,838,078 : Previous year Rs. 83,784,046)
875,650,614
Total
23,562,207,248
Notes:
1. Additions to fixed assets include Rs.291,871,810 (Previous year Rs. 684,596,111) and deductions include Rs. 78,099,384 (Previous year Rs Nil)on account of exchange differences.
2. Interest Capitalised during the year Rs. 21,148,355 ( Previous Year Rs. 68,710,975).
As at 31st March (Amount in Rupees)
266,321,511
1,770,303,230
--
15,178,896,536
74,772,888
34,127,128
10,144,479
9,779,739
52,083,202
1,795,860
17,398,224,573
797,940,483
18,196,165,056
2004
2003
99,003,414
331,147,605
Consumption of Materials, Stores, Tools etc
--
60,637,648
Electricity and Power
--
71,244,390
16,928,034
51,582,948
6
INCIDENTAL EXPENDITURE
PENDING CAPITALISATION (New Projects)
Opening Balance
Additions during the year :
Salaries, allowances and other benefits
Travelling Expenses (including for Directors)
Interest & Financial Charges (net)
Insurance
2,895,795
6,017,877
18,950,736
110,828,550
--
12,204,514
9,296,741
13,749,665
Legal and Professional Charges
Total
-147,074,720
16,172,507
673,585,704
Less: Capitalised during the year
142,213,683
574,582,290
4,861,037
99,003,414
Miscellaneous Expenses
Balance carried to Balance Sheet as at the year end
7
INVESTMENTS
Long Term: Unquoted - at cost (Trade):
Investments in Subsidiaries
European Optic Media Technology GmbH*
Share Capital of Euro 2,025,000
111,263,750
--
Glyphics Media Inc - USA**
95 shares of US$ 10 each
--
111,263,750
92,880,000
320,673,784
320,668,823
92,880,000
Investments in Others
CAPCO LUXEMBOURG S.a.r.l.
1 Equity share of Euro 125 each
63,366 Preferred Equity Certificates of Euro 125 each
4,961
320,668,823
4,961
320,673,784
Global Data Media FZ LLC (Associate)*
7,194 Shares of AED 1,000 each
TOTAL (aggregate value of unquoted investments)
(*Acquired and **Solid during the year)
(For movements in other investments - Refer Note 4 of Schedule 19 - Part B)
92,532,185
524,469,719
413,553,784
schedules to the accounts
As at 31st March (Amount in Rupees)
2004
2003
Raw Materials and Components
842,735,460
368,188,197
Work in Process
351,034,267
192,851,987
Manufactured Finished Goods
435,567,182
267,007,765
8
INVENTORIES (As taken, valued and certified by the Management)
Trading Stock
Stores and Spares
Total
9
1,163,328
7,847,231
354,476,186
162,638,970
1,984,976,423
998,534,150
SUNDRY DEBTORS (Unsecured - considered good, unless otherwise stated)
Debts outstanding for a period exceeding six months
Considered Good
Considered Doubtful
Less: Provision for Doubtful Debts
306,887,998
24,114,070
54,102,105
35,265,827
360,990,103
54,102,105
306,887,998
59,379,897
35,265,827
24,114,070
Other Debts
Considered Good
Considered Doubtful
Less: Provision for Doubtful Debts
2,753,060,318
--
2,759,642,979
2,753,928,910
6,582,661
TOTAL
10
2,753,928,910
6,582,661
2,753,060,318
--
2,753,928,910
3,059,948,316
2,778,042,980
59,807,243
9,176,949
CASH AND BANK BALANCES
Cash on hand including cheques/drafts and imprest balances with employees
(*includes cheques - Rs 54,285,261 : Previous year Rs. 4,630,663)
Balances with Scheduled Banks:
Current Accounts
Margin Money/Fixed Deposit Accounts
514,318,671
186,304,078
6,988,229,819
2,122,097,606
5,709,205
5,382,909
(Including interest accrued)
(held under lien Rs. 559,340,982 : Previous year Rs. 264,782,784)
Unclaimed Dividend Account
EEFC Accounts (Euro 104,717 and USD 550,460
Previous Year Euro 2,361 and USD 48,366)
29,341,423
2,405,257
7,537,599,118
2,316,189,850
--
124,825
Balances with Other Banks:
-
Current Account with China Trust Commercial bank
Balances held outside India:
-
ABN Amro Bank N.V. - Current Account
5,316,795
380,813,122
327,622,299
--
14,310,577
13,811,998
(Euro 100,907 : Previous year Euro 3,335,704 ;
GBP 20,815 ; USD 4,412,682)
-
ING Bank N.V. - Current Account
(Euro 6,217,922 : Previous year Nil)
-
Deutsche Bank A.G. - Deposit Account
(Euro 271,599 : Previous year Euro 269,660)
Total
347,249,671
394,625,120
7,944,656,032
2,720,116,744
Notes:
1
Maximum balance outstanding at any time during the year was:
- ABN Amro Bank N.V. : (Euro 5,383,040 : Previous year Euro 4,741,664) (Rs. 283,632,378 : Previous year Rs. 242,868,030)
- ING Bank N.V. : (Euro 6,217,922 : Previous year Nil) (Rs. 327,622,299 : Previous year Rs. Nil)
- Deutsche Bank A.G. : (Euro 271,599 : Previous year Euro 6,348,099) (Rs. 14,310,577 : Previous year Rs. 267,001,040)
- China Trust Commercial Bank : (Rs. 124,825 : Previous year Rs. 124,925)
2
Rate of conversion applied:
Euro 1 = Rs. 52.69; USD 1 = Rs. 43.28 : Previous year Euro 1 = Rs. 51.22; GBP 1 = Rs. 74.34; USD 1 = Rs. 47.23
schedules to the accounts
As at 31st March (Amount in Rupees)
11
2004
2003
633,227,600
426,396,414
LOANS AND ADVANCES (Unsecured - Considered Good, unless otherwise stated)
Advances and other amounts recoverable in cash or in kind or for value to be received
- Considered Good
- Considered Doubtful
Less: Provision for Doubtful Advances
195,000
2,695,000
633,422,600
429,091,414
195,000
2,695,000
633,227,600
426,396,414
Share Application Money - European Optic Media Technology GmbH
24,256,296
--
Balance with Excise Authorities
11,506,818
6,953,818
Earnest Money/Security Deposits
11,662,857
9,554,199
Advance Tax/Tax Deducted at Source
100,835,074
51,017,316
Total
781,488,645
493,921,747
12
CURRENT LIABILITIES AND PROVISIONS
A.
Current Liabilities:
Sundry Creditors
-
Small Scale Industrial Undertakings (Refer Note 10 of Schedule 19 - Part B)
-
Others
Due to Directors
Other Liabilities (Includes Rs. 63,546,003 : Previous year Rs. 119,560,438 due to banks
being cheques issued in excess of book balances)
1,190,151
1,987,658,549
2,802,021,429
1,988,848,700
545,341
545,341
184,623,170
254,259,344
Security Deposits
44,028,892
12,950,989
Interest accrued but not due on Secured Loans
39,034,721
52,505,346
Unclaimed Dividend
Total
B
971,751
2,801,049,678
5,105,305
4,809,891
3,075,358,858
2,313,919,611
Provisions:
For Taxation
74,243,548
32,845,870
167,269,416
121,016,180
For Corporate tax on Dividend
21,431,394
15,505,198
For Retirement Benefits (Gratuity/Leave Encashment)
10,375,017
4,063,749
273,319,375
3,348,678,233
173,430,997
2,487,350,608
Deferred Revenue Expenditure
--
25,556,827
Share/Right Issue Expenses
--
120,747
Total
--
25,677,574
For Proposed Dividend
Total
Total
13
14
MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted)
OTHER INCOME
Interest Received (Gross):
a)
On Deposits with banks
b)
Others
93,505,306
4,334,481
42,219,789
97,839,787
199,285
42,419,074
(Tax Deducted at Source Rs.15,713,446 : Previous year Rs. 9,942,307)
Excess provisions and unclaimed credit balances written back
8,340,496
4,258,222
Difference in Exchange Rates (Net)
32,714,392
164,860,621
Profit on sale of Forward Contracts (Net)
15,286,497
12,925,620
57,714
--
Profit on sale of Fixed Assets
Dividend from:
-
long term investments
current investments
Miscellaneous Income
Total
--
13,125
593,386
74,834,796
135,673
63,554,250
229,667,068
288,166,585
schedules to the accounts
As at 31st March (Amount in Rupees)
15
2004
2003
INCREASE/(DECREASE) IN STOCK OF FINISHED GOODS/WORK IN PROCESS
Closing Stock:
Finished Goods
436,730,510
Work in Process
351,034,267
274,854,996
192,851,987
787,764,777
467,706,983
Less: Opening Stock:
Finished Goods
274,854,996
Work in Process
192,851,987
Total Increase/(Decrease)
16
1,243,933,777
181,038,649
467,706,983
1,424,972,426
320,057,794
(957,265,443)
458,430,015
23,537,449
265,020,642
15,003,966
34,470,586
21,479,307
PERSONNEL EXPENSES
Salaries, Allowances and Bonus
Contribution to Provident Fund and Other Funds
Employees Welfare Expenses
Leave Encashment
3,659,636
155,270
Gratuity
6,563,176
3,803,680
526,660,862
305,462,865
503,402,620
356,682,670
1,917,743
1,043,199
Total
17
ADMINISTRATION AND OTHER EXPENSES
Electricity and Power
Excise Duty
Commission on Sales (Other Selling Agents)
14,085,440
522,226
Rent (Including Lease Rent)
32,499,845
41,205,135
Repairs and Maintenance:
-
Building
-
Plant and Machinery
-
Others
2,164,250
469,325
12,408,987
4,093,059
15,048,759
8,334,954
Freight and Forwarding
354,628,887
236,259,845
Insurance
100,622,267
73,016,929
Rates and Taxes
5,577,333
2,931,174
Director's Sitting Fees
Remuneration to Auditors
589,050
4,068,520
145,000
3,661,450
811,761,616
704,839,739
Royalty/Technical Know-how Fees
Loss on sale of long term investments
Bad Debts Written Off
Provision for doubtful debts and advances
Miscellaneous Expenses
Stock Written Off
1,249,867
7,500
33,400,757
30,151,818
60,684,766
38,850,137
372,834,835
204,437,327
155,583
39,762,632
14,417,593
5,152,450
Provision for Taxation (Foreign Branch)
200,467
2,895,433
Miscellaneous Expenditure Written Off
120,747
419,731
25,556,827
2,572,170
2,367,396,759
1,757,453,903
Fixed Assets Written Off
(Refer Note 12(a) of Schedule 19 - Part B)
Deferred Revenue Expenditure Written Off
(Refer Note 12(b) of Schedule 19 - Part B)
Total
18
INTEREST AND FINANCE CHARTES
On Term Loans
531,476,176
328,968,297
Others (Including Bank Charges)
161,899,591
213,767,992
Total
693,375,767
542,736,289
schedules to the accounts
19
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
Part A
1.
SIGNIFICANT ACCOUNTING POLICIES
Method of Accounting
The financial statements are prepared in accordance with the historical cost convention on an accrual basis of accounting and in accordance with generally accepted accounting
practices in India and conform to the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant provisions of the Companies Act, 1956.
2.
Use of Estimates
The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported
amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual
results and estimates is recognised in the period in which the results are crystallised.
3.
Revenue Recognition
Revenue from sales of goods is recognised on transfer of significant risks and rewards of ownership to the customer and when no significant uncertainty exists regarding realisation
of the consideration. Sales are recorded net of sales returns, rebates and trade discounts and price differences and are inclusive of duties (including excise duty).
4.
Fixed Assets
Tangible Fixed Assets are stated at cost less accumulated depreciation. Cost includes all direct and incidental expenses including borrowing cost.
Expenses of revenue nature which can be regarded as incidental and related to projects being set-up are transferred to "Incidental Expenditure Pending Capitalisation". These
expenses are allocated to related productive fixed assets in the year of commencement of the related project.
Intangible fixed assets are stated at cost less accumulated amortization.
5.
Depreciation/Amortization
Depreciation on tangible fixed assets is provided on straight-line method on pro-rata basis at rates and in the manner specified in Schedule XIV to the Companies Act, 1956 other
than on certain Plant and Machinery and Optical Media manufacturing units which is depreciated at the rate of 10.34% which has been determined based on the management's
estimate of useful life of the assets and is higher than the rates specified in Schedule XIV to the Companies Act, 1956.
Intangible fixed assets are amortized on equated basis over their estimated economic life not exceeding 10 years.
Leasehold Land and improvement to the leased premises are amortised over the period of the lease.
The assets taken on finance lease are depreciated over the lease period.
6.
Investments
Long term investments are stated at cost of acquisition inclusive of expenditure incidental to acquisition. A provision for diminution is made to recognise a decline, other than
temporary in the value of long term investments.
Current investments are stated at lower of cost and fair value determined on an individual basis.
7.
Inventory Valuation
Finished Goods, Work in process, Goods held for resale
Raw Materials, Packing Materials and Stores & Spares
}
At lower of cost and
net realisable value
Cost of Raw Materials, goods held for resale, packing materials and stores and spares, is determined on the basis of 'Weighted Average' method.
Cost of Work in process & finished goods, is determined by considering direct material cost and appropriate portion of overheads.
Liability for excise duty in respect of goods manufactured by the company, other than for exports, is accounted upon completion of manufacture, and provision is made for exciseable
manufactured goods.
Customs duty exigible on materials (intended for domestic consumption), lying in bonded warehouses, is provided on accrual basis.
8.
Government Grants
Grants of the nature of contribution towards capital cost of setting up projects, are treated as Capital reserve and grants in respect of specific fixed assets are adjusted from the
cost of the related fixed assets.
9.
Borrowing Costs
Borrowing costs directly attributable to the acquisition of qualifying assets are capitalised as part of the cost of assets till the date of commencement of commercial use of the asset.
All other borrowing costs are charged to Profit and Loss Account.
10. Retirement Benefits
Liability towards gratuity payable on death/retirement of employees is accrued based on an actuarial valuation, and covered by funding/premium as determined by Life Insurance
Corporation of India.
Provision for the benefit of leave encashment to the employees as per Company's policy is based on an actuarial valuation as of the balance sheet date.
11. Foreign Currency Transactions
Transactions in foreign currency are converted at the exchange rate prevailing at the date of the transactions. Foreign currency monetary assets and liabilities not covered by
forward exchange contracts are restated at the year end rates and the resultant gains or losses are recognised in the Profit and Loss Account, except exchange differences arising
on settlement and/or translation of foreign currency liabilities relating to acquisition of fixed assets which are adjusted against the carrying costs of respective fixed assets.
In respect of foreign branches, all revenues, expenses, monetary assets/liabilities and fixed assets are accounted at the exchange rate prevailing on the date of the transaction.
Monetary assets and liabilities are restated at the year end rates and resultant gains or losses are recognised in the Profit and Loss Account.
Gains and losses on foreign exchange forward contracts are recognised in the Profit and Loss Account over the life of the contract, except in respect of liabilities incurred for
acquiring fixed assets, in which case such difference is adjusted to the carrying amount of the respective fixed assets. Any profit or loss arising on cancellation of a forward contract
is recognised as income or expense for the period.
12. MISCELLANEOUS EXPENDITURE
Expenditure in respect of issue of shares, pre-incorporation and other preliminary expenses, is written-off over a period of 10 years from the year in which these are incurred.
13. Taxation
Provision is made for current income tax liability based on the applicable provisions of the Income Tax Act 1961, for the income chargeable under the said Act and as per the applicable
overseas laws relating to the foreign branch.
schedules to the accounts
PART A SIGNIFICANT ACCOUNTING POLICIES (contd...)
The Company provides for deferred tax using the net liability method based on the tax effect of timing differences resulting from recognition of items in the financial statements. The
deferred tax charge or credit is recognized using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.
14. Leases
Assets acquired under finance leases are recognised as Asset and a Liability at the lower of the fair value of the leased assets at inception of the lease and the present value of
minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to periods
during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
15. Employees Stock Option Scheme
Stock options granted to the employees under the Company's Employees Stock Option Scheme are accounted in accordance with Securities and Exchange Board of India (Employees
Stock Option Scheme and Employees Stock Purchase Scheme) guidelines, 1999. Accordingly, the excess, if any, of the market price of the underlying equity shares as of the date of
the grant of the option over the exercise price of the option, is recognised as employee compensation cost and amortised on straight line basis over the vesting period.
Part B
1.
NOTES ON ACCOUNTS
Contingent Liabilities etc.
1.1 In respect of:
-
Bank guarantees given by/on behalf of the Company Rs.255.72 Million (Previous Year Rs. 240.24 Million)
-
Letters of Credit opened by banks on behalf of the Company - Rs. 2,387.00 Million (Previous Year Rs. 1,688.86 Million)
1.2 -
Disputed demands in respect of Income tax Rs. nil (Previous year Rs. 43.26 Million); Entry tax Rs. 106.00 Million (Previous year Rs. 91.72 Million);
Service tax Rs. 60.87 Million (Previous year Rs. Nil); Excise duty Rs. 0.11 Million (Previous year Rs. Nil) and Custom duty Rs. 140.71 Million (Previous year Rs. Nil)
1.3 Claims against the Company not acknowledged as debts - Rs 1.47 Million (Previous Year Rs.7.34 Million)
2.
Capital Commitments
Estimated value of contracts remaining to be executed on capital account and not provided for (net of advances) - Rs.2,245.48 Million (Previous Year Rs.1,438.70 Million).
3.
Lease Obligations
Future obligations for rentals under operating leases amount to Rs. 146.69 Million (Previous year Rs. 16.57 Million). The total lease payments recognised in the statement of profit
and loss account amounting to Rs. 21.35 Million (Previous year Rs. 20.90 Million)
Future obligations for rentals under finance lease arrangement for plant and machinery amount to Rs. Nil (Previous year Rs. 1.90 Million). Reconciliation of minimum lease payments
and their present value in respect of vehicles taken on lease , is as under
Present value of
Minimum Lease
minimum lease
Lease
payments (Rs)
payments (Rs)
charges (Rs)
2,579,558
1,587,512
992,046
994,009
667,747
326,262
Amount payable later than one year but not later than five years
2,646,019
2,312,022
333,997
Total
6,219,586
4,567,281
1,652,305
Previous year
4,299,025
2,641,606
1,657,419
Amount paid upto 31.3.2004
Amount payable not later than one year
The total cost of the vehicles and their carrying amount as at 31st March 2004 are Rs. 4,649,682 (Previous Year Rs.3,035,876) and Rs.2,752,558 (Previous Year Rs.1,795,860)
respectively.
4.
Movements in Other Investments
2003-04
Current Investments (Unquoted)
2002-03
No.
Cost (Rs.)
No.
Cost (Rs.)
(Mutual Fund Units of the Face value of Rs. 10 each acquired/sold during the year)
-
Birla Sun Life Mutual Fund
51,025,506
550,316,573
21,209,115
225,000,000
-
Prudential ICICI Mutual Fund
22,650,584
285,219,588
11,640,524
160,000,000
-
SBI Mutual Fund
4,755,111
50,038,012
--
--
78,431,201
885,574,173
32,849,639
385,000,000
Total
5.
Taxation
Provision for taxation has been made based on Minimum Alternate Tax as applicable to the company for the current year in accordance with the relevant provisions of the Income Tax
Act, 1961.
During the year ended 31.03.2003, based on expert opinion obtained, the deferred tax liability was considered at nil, in view of the exemption available to the undertakings of the
company under Income Tax Act, 1961, the computation / determination of such tax liability being measured in the proportion of profits of the undertakings from domestic operations
in section 10A/10B of the said act in accordance with the expert opinion obtained to that effect.
The management has made a review of the matter and sought a fresh opinion as regard the interpretation of ASI-5 read with AS-22 'Accounting for Taxes on Income' issued by the
Institute of Chartered Accountants of India; and based thereon and as a prudent measure decided to provide for the deferred tax liability upto the year 2003-04.
Deferred tax liability is net of deferred tax asset of Rs. 860,126,966 on account of losses to be setoff against taxable profit in future. Based on its existing and potential business in
the near future, including projections / profitability the management is virtually certain of such setoff of the unabsorbed losses; on which assertion the auditor have placed reliance.
In consonance with the methodology so adopted, a recomputation of deferred tax liability has been made for the year, as well as upto the preceding year end (which has been
considered as a prior period item and separately shown in the Profit and Loss Account).
schedules to the accounts
PART B NOTES ON ACCOUNTS (contd...)
The Break up of Net Deferred Tax Liability is as under:
Particulars of Timing Differences
(a)
Deferred Tax
Net Deferred
Assets (Rs.)
Liability (Rs.)
Tax Liability (Rs.)
--
790,769,638
790,769,638
443,874,000
--
(443,874,000)
Upto the Financial year 2002-03
Depreciation
Unabsorbed Depreciation
Brought Forward Losses
Total
(b)
Deferred Tax
18,464,638
--
(18,464,638)
462,338,638
790,769,638
328,431,000
For the Financial year 2003-04
Depreciation
--
414,501,328
414,501,328
Unabsorbed Depreciation
397,788,328
--
(397,788,329)
Total
397,788,328
414,501,328
Total Deferred Tax Liability
16,713,000
345,144,000
6
Employee Stock Option Plan (ESOP)
The Company, has on 09-01-2004, in terms of ESOP granted 2,030,300 stock options to its employees, at the exercise price of Rs. 342 per share. The Options granted are vested
over a period of maximum of four years from the date of grant. As at the date of balance sheet no option has been exercised by any employee.
7
ADDITIONAL INFORMATION PURSUANT TO REQUIREMENTS OF PART II OF SCHEDULE VI TO THE COMPANIES ACT, 1956 (As Certified By The Management), AND OTHER
DISCLOSURES
7.1 Licensed Capacity
Not Applicable for any product of the company
7.2 Installed Capacity
(figures in bracket are for the previous year)
Storage Media ( Nos.)
*Installed Capacity
Actual Production
2,125,820,000
1,608,396,069
(1,185,820,000)
(931,474,745)
* (As certified by the management and on which auditors have placed reliance without verification, this being a technical matter)
7.3 In terms of order no. 46/64/2004-CL-III dated 16.06.2004 issued by Department of Company Affairs under Section 211(4) of the Companies Act, 1956 disclosure has not
been made for the quantitative details for the accounting year 2003-04, in respect of details pursuant to paras 3(i) (a) and 3(ii) (a), (1) & (2) of part II of Schedule VI to the
Companies Act, 1956 (as amended vide Notification No GSR 494 (E) dated 30th October, 1973).
7.4 Composition of Raw Materials, Packing Materials and Spares Consumed:
(figures in bracket are for the previous year)
Raw Materials & Packing Material
a)
Imported
b)
Indigenous
Total
Stores & spares
Percentage
Value (Rs.)
Percentage
Value (Rs.)
54.13
3,038,794,910
76.87
355,053,248
(79.92)
(2,671,784,338)
(75.30)
(318,986,134)
45.87
2,575,235,723
23.13
106,811,712
(20.08)
(671,125,747)
(24.70)
(104,645,494)
100.00
(100.00)
5,614,030,633
(3,342,910,085)
100.00
(100.00)
461,864,960
(423,631,628)
2003-04 (Rs.)
2002-03 (Rs.)
7.5 Foreign Currency Transactions:
7.5.1 Value of Imports on C.I.F Basis:
Purchase of Finished Goods
13,044,068
67,878,743
Raw Materials & Components
4,397,395,533
2,293,174,829
Capital Goods (including Rs.498.29 Million : Previous year Rs. 580.37 Million debited to Capital work in progress)
6,431,204,686
5,536,767,467
530,378,919
298,044,749
58,959,943
35,997,503
Stores, Spares and Consumables
Packing Material
schedules to the accounts
PART B NOTES ON ACCOUNTS (contd...)
2003-04 (Rs.)
7.5.2 Expenditure in foreign currency (on payment basis):
a)
Travel
b)
2002-03 (Rs.)
7,984,801
10,668,635
Interest payment to Financial Institutions/ Banks in Foreign Currency
229,193,016
241,098,425
c)
Royalty/Technical Know-how Fees (including advance royalty)
980,915,465
592,550,202
d)
Directors Sitting Fees
e)
Other expenditure
f)
Expenditure of Foreign Branch:
Staff Welfare
Rent/Lease Rent
Packing Material
Freight and Forwarding
Legal and Professional Expenses
Miscellaneous Expenses
Financial Charges
Insurance
Salaries and Wages
Repairs and Maintenance
Commission on Sales (other selling agents)
109,870
--
34,054,614
29,383,821
2,247,335
4,225,559
-19,971,978
9,419,064
3,232,650
14,527,165
113,767
4,153,613
25,072
1,523,308
7,238
2,917,417
12,448,962
63,006,645
10,673,057
18,314,110
11,227,683
1,612,164
1,686,022
92,061
339,809
2003-04 (Rs.)
2002-03 (Rs.)
12,340,520,809
9,269,389,222
Services
6,794,750
--
Interest
109,745
--
7.5.3 Earnings in Foreign Exchange
-
Value of Exports on FOB basis
-
7.5.4 Amount remitted in Foreign Currencies for Dividend:
Dividend remitted on fully pad - up equity shares of Rs. 10 each
a)
Number of Non Resident Shareholders
b)
Number of Shares held
2
3
5,887,615
5,889,715
c)
Year to which relates
2002-2003
2001-2002
d)
Dividend remitted in (Rs.)
14,719,038
14,724,288
7.6 Managerial Remuneration (Remuneration to Directors):
(figures in bracket are for the previous year)
(Amount in Rupees)
DEEPAK PURI*
NITA PURI*
RATUL PURI*
Managing Director Whole time director Whole time director
a)
b)
c)
Salaries/Allowances
PF contribution
Perquisites
Total
1,725,600
454,800
2,910,000
(1,440,000)
(420,000)
(2,220,000)
115,200
36,000
180,000
(115,200)
(36,000)
(180,000)
95,054
103,400
107,990
(357,600)
(112,517)
(772,068)
1,935,854
594,200
3,197,990
(1,912,800)
( 568,517)
(3,172,068)
Note: Provision for leave encashment and Gratuity amounting to Rs. 272,988 and Rs. 652,309 respectively made during the year has not been included above.
7.7 Related Party Transactions:
In accordance with the requirements of Accounting Standard - 18 'Related Party Disclosures' the names of the related party where control exists/able to exercise significant
influence along with the aggregate transactions and year end balance with them as identified and certified by the management are given below:
7.7.1
Nature of relationship
Name of the related party
Share holding
Subsidiary
European Optic Media Technology GmbH
100%
Subsidiary
Glyphics Media Inc, USA
Divested
Associate Company
Global Data Media FZ LLC (including its subsidiaries)
49%
Key Management Personnel
Managing Director
Whole Time Directors
Mr Deepak Puri
Mrs Nita Puri
Mr Ratul Puri
schedules to the accounts
PART B NOTES ON ACCOUNTS (contd...)
7.7.2 Details of Transactions with the Related Parties in the ordinary course of business:
(figures in brackets are for the previous year)
Particulars
Purchases
Sale of Finished goods
(Amount in Rupees)
Subsidiaries
Associates
Key Management Personnel
--
--
--l
(356,534)
(--)
(--)
82,343,699
4,185,113,145
--
(201,726,762)
(--)
(--)
Outstanding receivables
-
In respect of sales
In respect of expenses
--
1,373,914,658
--
(136,794,343)
--
--
--
2,418,186
--
Equity Acquired
(--)
111,263,750
(--)
92,532,185
(--)
--
(--)
(--)
(--)
Equity Divested
92,880,000
--
--
(--)
(--)
(--)
Directors Remuneration
--
--
5,728,044
(--)
(--)
(5,653,385)
7.8 Remuneration to Auditors:
(Amount in Rupees)
2003-04
2002-03
2,088,000
1,946,700
This comprises the following, including Service Tax :
For Statutory audit ( incl. branch auditor's fee Rs Nil : Previous year Rs. 2,700)
For Limited Review
For Certification / Other Reports
For reimbursement of out of pocket expenses
Total
8
648,000
756,000
1,112,400
813,000
220,120
145,750
4,068,520
3,661,450
Earnings per share
a)
Calculation of Weighted Average number of equity shares
No. of Shares at the beginning of the year
48,406,472
48,406,472
Bonus Issue during the FY 2003-04 in 1:1 ratio
48,406,472
48,406,472
14,700,000
111,512,944
-96,812,944
Equity shares outstanding for 365 days
96,812,944
48,406,472
Equity shares outstanding for 3 days
14,700,000
--
Weighted Average number of equity shares outstanding during the year
96,933,766
96,812,944
3,238,510,943
2,364,296,442
Equity Shares issued on 29 March, 2004
Total number of equity shares outstanding at the end of the year
b)
Net Profit after tax available for equity shareholders
Earnings per share (face value per share Rs. 10 each)
Basic and Diluted:
-
Before prior period items (Rs.)
36.80
24.42
-
After prior period items (Rs.)
33.41
24.42
Note: Due to the issue of bonus Shares during the year 2003-04, the Earnings Per Share for financial year 2002-03 has been recomputed/restated.
9.
Secondary segment information (by Geographic segments)
Domestic
Operations
Overseas
Operations
Total
Revenues-Sales (net of taxes/duties) (Current Year)
2,348,182,348
12,673,487,530
15,021,669,878
Revenues-Sales (net of taxes/duties) (Previous Year)
10,661,881,089
1,225,058,915
9,436,822,174
Carrying Amount of Segment Assets (Current Year)
130,155,808
2,929,792,508
2,059,948,316
Carrying Amount of Segment Assets (Previous Year)
139,160,146
2,638,882,834
2,778,042,980
Notes on Segment Information:
Considering the nature of the company's business, its activities and operations, the internal financial reporting and the element of risk and returns, as also that it is predominantly
engaged in the manufacture of storage media products, there are no business segments within the meaning of AS 17 - Segment Reporting,Information has therefore, been given as
above in relation to the domestic/overseas operations, by way of geographic segments.
schedules to the accounts
PART B NOTES ON ACCOUNTS (contd...)
10. Creditors comprising Small Scale Industrial Undertakings to which the company owes amounts outstanding for more than 30 days (as per information available with the
management) are as under:
Advance Systems Inc.
AKS Packaging Co. Pvt. Ltd.
Highland Industries
Prabhat Containers Pvt. Ltd.
Packraft Containers (I) Pvt. Ltd
Vimal Hi-Tech Pvt. Ltd.
11. Pursuant to an agreement dated 25.03.2004, the Company issued 5,400,000 Share Warrants, each convertible into one equity share at an exercise price of Rs. 336 per warrant.
The Company has received an advance of 10% of the exercise price, amounting to Rs. 181,440,000 from Woodgreen Investment Limited (WIL). The warrants may be exercised at
the sole option of WIL at any time before September 28, 2005. If the warrants are exercised by WIL, the Company will allot 5,400,000 fully paid up equity shares of Rs. 10 each on
receipt of the balance consideration of Rs. 1,632,960,000. If the warrants are not exercised by WIL, the advance will be forfeited by the Company.
12. a)
b)
Fixed Assets written off comprise assets discarded (Rs. 14,417,593) on redundancy due to discontinuation of manufacturing operations in respect of one of the product line.
Deferred Revenue expenditure (Schedule 17 - Administration and Other Expenses) includes Rs. 10,931,719 pertaining to a product line discontinued during the year.
13. Corresponding figures for the previous year have been regrouped/rearranged, wherever necessary to conform to current year classification.
14. Schedules 1 to 19 are annexed to and form an integral part of the Balance Sheet as at 31.3.2004 and the Profit and Loss Account for the year ended on that date.
For K. C. Khanna & Co.
Chartered Accountants.
Nitin K. Jain
Partner
Membership No 83084
Place: New Delhi
Date: June 18, 2004
Deepak Puri
Chairman and Managing Director
Harnam D.Wahi
Director
Minni Katariya
Company Secretary
R Ganesan
General Manager Accounts
cash flow statement
(Pursuant to Listing Agreement with Stock Exchanges)
For the year ended 31st March (Rupees in Million)
A
2004
2003
3,626.47
2,359.84
2,268,87
1,174,69
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit before tax
Adjustment for:
Depreciation
Interest Expense
693.38
542.74
Interest Income
(97.84)
(42.42)
(0.59)
(0.15)
0.35
9.93
Income from Investments
Finance Lease Payments
Profit on Fixed Assets sold
(0.06)
--
Loss on sale of Investments
1.25
0.01
Miscellaneous Expenditure written off
0.12
0.42
Deferred revenue expenditure written off
25.56
2.57
Bad Debts Written off
33.40
30.73
Provision for Bad & Doubtful Debts
60.68
38.85
Unclaimed balances Written back
(8.34)
(4.26)
Provision for Gratuity & Leave Encashment
7.44
3.96
Taxation on Foreign Branch
0.20
2.90
1.91
50.72
14.42
5.15
Stock Written off
Fixed Asset Written off
Unrealised foreign exchange (gain)/loss
Operating profit before working capital changes
110.48
(164.86)
6,737.70
4,010,82
Adjustments for:
- Trade and Other Receivables
(660.39)
285.27
- Inventories
(988.36)
1,353.16
- Trade and Other Payables
Cash generated from operations
- Direct Taxes Paid
- Miscellaneous Expenditure
Net cash from operating activities
B
894.61
6,543.86
(26.79)
4.17
--
64.14
5,792.33
6,612.17
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Fixed Assets
(7,448.73)
(9,922.97)
Capital Work in Progress (including Incidental Expenditure)
16.43
2,906.53
Sale of fixed assets
90.94
--
Sale of investments
977.20
385.20
(1.089.37)
(385.00)
71.89
42.42
Purchase of investments
Interest Received
Income from Investments
Net cash used in investing activities
C
730.17
5,819.12
0.59
0.15
(7,381.05)
(6,973.67)
5,120.64
--
--
(75.00)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Issue of Share Capital/Share Warrants
(Including Share Premium)
Repayment of Preference Share Capital
Proceeds from Long Term Borrowings
Repayment of Long Term Borrowings
Proceeds from short term borrowings (net)
Finance Lease Rent Payment (Principal Portion)
4,615.72
9,896.08
(1,836.38)
(6,618.49)
(232.43)
(413.01)
(0.35)
(9.93)
Interest Paid
(709.27)
(488.92)
Dividend Paid (Including Corporate Dividend Tax)
(144.67)
(126.24)
Net cash from financing activities
6,813.26
2,164.49
cash flow statement (contd.)
(Pursuant to Listing Agreement with Stock Exchanges)
For the year ended 31st March (Rupees in Million)
D
NET INCREASE IN CASH AND CASH EQUIVALENT (A+B+C)
2004
2003
5,224.54
1,802.99
Cash and cash equivalents at the beginning of the year
2,720.12
917.13
Cash and cash equivalents at the end of the year
7,944.66
2,720.12
Cash and cash equivalents comprise:
Cash, Cheques / Drafts and imprest balances with employees
Fixed Deposits
Balance with Banks
59.81
9.18
6,988.23
2,122.10
896.62
588.84
7,944.66
2,720.12
Notes:
1
The above Cash flow statement has been prepared under the indirect method set out in AS-3 'Cash Flow Statements' issued by the Institute of Chartered Accountants of India
2.
3
Interest paid is exclusive of and purchase of Fixed Assets is inclusive of interest capitalised Rs. 21.15 Million (Previous Year Rs. 68.71 Million)
Purchase of Investments include purchase of shares in subsidiary and associate:
(a)
European Optic Media GmbH (Subsidiary) Rs. 111.26 Million (Previous Year Rs. Nil.)
(b)
Global Data Media FZ LLC (associate) Rs. 92.53 Million (Previous Year Rs. Nil.)
4
Previous year figures have been regrouped and recast wherever necessary to conform to the current year classification
5
Following non cash transactions have not been considered in the cash flow statement
6
-
Tax deducted at source
-
Assets acquired on credit/lease/hire purchase
Cash and cash equivalents include Rs. 5,709,205: Previous year Rs. 5,382,909 which are not available for use by the Company. (Refer schedule 10 in the accounts)
As per our report of even date
For K. C. Khanna & Co.
Chartered Accountants.
Nitin K. Jain
Partner
Membership No 83084
Place: New Delhi
Date: June 18, 2004
Deepak Puri
Chairman and Managing Director
Harnam D.Wahi
Director
Minni Katariya
Company Secretary
R Ganesan
General Manager Accounts
balance sheet abstract and company's general business profile
I
Registration Details
Registration No.
1
5
Balance Sheet Date
3
1
4
Date
II
1
8
0
3
Month
State Code
0
4
5
Capital Raised during the year
Public Issue
Rights Issue
N
I
L
0
6
5
Bonus Issue
8
4
Position of Mobilisation and Deployment of Funds
Total Liabilities
3
N
I
L
Private Placement)
4
III
5
Year
4
5
1
3
9
2
9
1
1
5
1
2
9
1
8
1
4
4
0
3
8
7
6
7
7
6
7
0
6
8
2
2
3
9
1
N
I
L
1
4
7
0
0
0
5
1
3
9
2
9
3
5
2
3
7
1
1
3
2
1
6
8
3
4
5
1
4
4
5
2
4
4
7
0
3
9
5
3
9
4
2
3
8
5
1
1
1
5
%
Total Assets
3
4
Sources of Funds
Paid-up Capital
1
Reserves & Surplus
1
Share Warrants
Unsecured Loans
Secured Loans
1
4
8
Deferred Tax Liability
Applications of Funds
Net Fixed Assets
2
3
Investments
5
Net Current Assets
1
0
4
Miscellaneous Expenditure
Accumulated Losses
IV Performance of the Company (Amount in Rs. thousands)
Turnover
1
Total Expenditure
6
0
2
1
8
6
1
2
6
4
6
7
3
.
4
1
1
Profit/Loss Before Tax
3
6
Profit/Loss After Tax
3
Earning per share in Rupees
3
V
2
Dividend Rate %
Generic Name of Three Principal Products/Services of Company (as per monetary terms)
Item Code No. : (ITC Code)
852320
Product Description :
MAGNETIC DISK
Item Code No : (ITC Code)
852390
Product Description :
COMPACT DISK RECORDABLE
Item Code No : (ITC Code)
Product Description :
847193.09
STORAGE UNITS
Deepak Puri
Chairman and Managing Director
Place: New Delhi
Date: June 18, 2004
Harnam D.Wahi
Director
Minni Katariya
Company Secretary
R Ganesan
General Manager Accounts
directors' report
of European Optic Media Technology GmbH (Europtic)
To the members,
The Directors are pleased to present the First Annual Report and Accounts for the year ended 31st March, 2004. A summary of the financial results is as follows:Particulars
Income (Bank Interest)
Administrative expenses
Net loss
Accumulated deficit at end of the year
For 2003-04
3,226
198,932
(195,706)
(195,706)
Operations
The Company is in the process of installing a manufacturing facility in the State of Thueringen. A plot of land has been identified and the architectural work
has been completed. All the requisite building permissions have been obtained.
Future Actions
This project is eligible for State aid and the Government also guarantees part of the bank funding. Efforts are also being made to obtain the financial
closure and the necessary Government sanctions for the state aid and guarantees. Construction of the factory premises is likely to start once all the
permissions are in place and the financial closure has been obtained.
Auditors
Since the Company is still in the start-up phase, no audit is required as per German laws.
Particulars of Employees
There were no employees on board till the 31st March 04.
Place: Erfurt
Date: 16th June, 2004
V J Prakash
Managing Director
balance sheet
As at 31st March, 2004
of European Optic Media Technology GmbH (Europtic)
EUR
Note
SOURCES OF FUNDS
Authorized Capital
Share Capital
2,025,000
3
2,025,000
RESERVES AND SURPLUS
Capital Reserve
464,000
Opening Balance
Profit/(Loss) during the period
(195,706)
Total
(195,706)
2,293,294
APPLICATION OF FUNDS
Assets
2.2
Project Expenses
1,211,950
Current Assets
Bank Balances
1,042,163
VAT receivable
60,472
Less: Current Liabilities & Provisions
4
Total
1,102,635
21,291
2,293,294
income statement of European Optic Media Technology GmbH (Europtic)
For the period ended 31st March, 2004
EUR
INCOME
Bank Interest
3,226
Total Income (A)
3,226
EXPENDITURE
Legal & Professional charges
Travelling Expenses
170,106
20,871
Bank Charges
2,784
Telephone Expenses
1,397
Printing & Stationary
Office Rent
Total Expenses (B)
Income/Expenditure = (A) - (B)
64
3,710
198,932
(195,706)
notes to financial statements
1
of European Optic Media Technology GmbH (Europtic)
GENERAL
European Optic Media Technology was incorporated in Erfurt, Germany on January 30, 2003. The Company has its registered office at Maiozerhofstrabe 12, 99084 Erfurt,
Germany.
The object of the company are the pan-European trade and production of data media. The Company may conduct all business which directly or indirectly promotes its objects or
which furthers the developments of its product.
The first financial year shall begin on 30th January 2003 and terminates on 31st March 2004.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Foreign currencies
The accounts are held in EURO Assets, Liabilities, Income and expenses are recorded at the rates Prevailing at the balance sheet date. Realised gains and losses as well as
unrealised losses are recorded in the profit and loss account.
2.2 Project Expenses
Project expenses represent expenses incurred during the project stage, which will be apportioned to the value of the assets capitalized.
3
CAPITAL
The subscribed capital is fully paid up and is represented by 1 share of a par value of EURO 2,025,000.
4
CREDITORS
Trade creditors represent expenses payable and due within one year.
section 212
Statement under Section 212 of the Companies Act, 1956 relating to the Subsidiary Company
1
Name of the Company
European Optic Media Technology GmbH
2
Financial period of the Subsidiary ended on
3
Holding Company’s Interest in the Subsidiary Company
4
Net aggregate amount of the Profit/(Loss) of the Subsidiary Company (concerning the members of
31st March, 2004
100% of Equity Share Capital of Euro 2,025,000
Moser Baer India Limited) not dealt with or provided for in the accounts of Moser Baer India Limited
(a)
For the current year
*(EURO 195,706)
(b)
For the previous years since it became a subsidiary
(Rs. 10,570,275)
Not applicable, since this is the first
period of operations of subsidiary
5
Net aggregate amount of the Profit/(Loss) of the Subsidiary Company (concerning the members of
Moser Baer India Limited) dealt with or provided for in the accounts of Moser Baer India Limited
(a)
For the current year
Nil
(b)
For the previous years since it became a subsidiary
NA
*converted at the year-end exchange rate.
Deepak Puri
Chairman and Managing Director
Place: New Delhi
Date: June 18, 2004
Harnam D.Wahi
Director
Minni Katariya
Company Secretary
R Ganesan
General Manager Accounts
auditors' report on consolidated financial statements
The Board of Directors
Moser Baer India Ltd.
New Delhi.
We have examined the attached Consolidated Balance Sheet of the group comprising Moser Baer India Limited (the Company), Glyphics
Media Inc. and European Optical Media Technology GmbH (the subsidiaries) and Global Data Media FZ LLC (the associate) as at March, 31,
2004 and also the Consolidated Profit and Loss Account and Consolidated Cash Flow Statement of the said Group for the year ended on that
date.
These consolidated financial statements are the responsibility of the Management of Moser Baer India Limited. Our responsibility is to express
an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted Auditing
Standards in India. These Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial
statements are prepared, in all material respects, in accordance with an identified financial reporting framework and are free of material misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall
financial statements. We believe that our audit provides a reasonable basis for our opinion.
We report that :
1.
We did not audit the Financial Statements of the subsidiaries, the financial statements of which reflect :
st
(a)
in case of the overseas subsidiary Glyphics Media Inc. (upto 31 August 2003) net assets of (-) Rs. 13,252,948 and revenues of
st
st
Rs. 272,829,271 for the period from 1 April, 2003 to 31 August, 2003; and
(b)
in case of the overseas subsidiary European Optical Media Technology GmbH (newly formed fully owned), net assets of
th
st
Rs. 124,949,771 and revenues of Rs. 174,239 for the period from 30 January, 2003 to 31 March, 2004.
The financial statements of these subsidiaries are unaudited, and in respect of European Optical Media Technology
GmbH, consolidation covers a period of more than 12 months.
th
2.
The Financial Statements of the associate, Global Data Media FZ LLC, for the period from 17 September, 2002 (date of incorporation) to
st
31 December, 2003, have been audited by another auditor whose report has been made available to us, and our opinion in so far as it
relates to the amounts included in respect of the associate, is based solely on the report of the other auditor, except that the reporting
period is more than 12 months not ending on the same date as that of the parent company.
3.
We report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of
Accounting Standard-21, “Consolidated Financial Statements” and Accounting Standard-23, “Accounting for Investments in Associates in
Consolidated Financial Statements”, issued by the Institute of Chartered Accountants of India and on the basis of the separate financial
statements of Moser Baer India Limited, its subsidiaries and associate included in the Consolidated Financial Statements.
4.
On the basis of the information and explanations given to us and on the consideration of the separate audit report on individual audited
financial statements of Moser Baer India Limited and its aforesaid subsidiaries and associate, subject to consolidation of results of
overseas entities on the basis as stated in paras 1 and 2 above, we are of the opinion that the consolidated financial statements
gives a true and fair view in conformity with the accounting principles generally accepted in India :
a)
in the case of Consolidated Balance Sheet, of the consolidated state of affairs of the company, its subsidiaries and associate as at
March 31, 2004;
b)
in the case of Consolidated Profit and Loss Account, of the consolidated results of operations of the Company, its subsidiaries and
associate, for the year then ended; and
c)
in the case of the Consolidated Cash Flow Statement, of the consolidated cash flow of the Company, its subsidiaries and associate
for the year then ended.
For K.C. Khanna & Co.,
Chartered Accountants
(Nitin K. Jain)
Partner
Membership No. 83084
H-96, Connaught Circus,
New Delhi 110 001.
Dated : June 18, 2004
consolidated balance sheet
As at 31st March (Amount in Rupees)
I.
of MoserBaer India Limited and its subsidiaries/associate
Schedule
2004
2003
SOURCES OF FUNDS
SHAREHOLDERS FUNDS
Share Capital
1
1,115,129,440
484,064,720
Reserves and Surplus
2
18,308,131,492
10,900,385,989
19,423,260,932
11,384,450,709
181,440,000
--
SHARE WARRANTS - Fully Convertible
(Refer Note 4.2.11 of Schedule 19)
LOAN FUNDS
Secured Loans
3
14,387,677,195
10,986,798,722
Unsecured Loans
4
132,167,476
772,375,736
345,144,000
--
34,469,689,603
23,143,625,167
--
4,641,794
27,315,091,445
19,770,371,711
4,628,534,811
2,371,151,535
22,686,556,634
17,399,220,176
Deferred Tax Liability
(Refer Note 4.2.5 of Schedule 19)
TOTAL
II.
APPLICATION OF FUNDS
FIXED ASSETS
Goodwill
Gross Block
5
Less: Depreciation
Net Block
Capital Work-in-progress
940,150,593
797,940,483
23,626,707,227
18,197,160,659
6
4,861,037
99,003,414
7
382,437,324
320,673,784
8
1,984,976,423
1,038,204,464
INCIDENTAL EXPENDITURE
PENDING CAPITALISATION
(New Projects)
INVESTMENTS
CURRENT ASSETS, LOANS AND ADVANCES
Inventories
Sundry Debtors
9
3,059,948,316
2,708,473,674
Cash and Bank Balances
10
8,000,119,947
2,744,574,300
Loans and Advances
11
760,450,669
494,933,559
13,805,495,355
6,986,185,997
Less: CURRENT LIABILITIES AND PROVISIONS
12
3,076,491,965
2,316,240,073
Current Liabilities
Provisions
Net Current Assets
MISCELLANEOUS EXPENDITURE
273,319,375
173,477,982
3,349,811,340
2,489,718,055
10,455,684,015
4,496,467,942
--
25,677,574
34,469,689,603
23,143,625,167
13
(To the extent not written off or adjusted)
TOTAL
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
As per our report of even date
For K. C. Khanna & Co.
Chartered Accountants.
Nitin K. Jain
Partner
Membership No 83084
Place: New Delhi
Date: June 18, 2004
Deepak Puri
Chairman and Managing Director
19
Harnam D.Wahi
Director
Minni Katariya
Company Secretary
R Ganesan
General Manager Accounts
consolidated profit and loss account of MoserBaer India Limited and its subsidiaries/associate
For the year ended 31st March (Amount in Rupees)
Schedule
2004
2003
15,981,117,269
11,119,910,347
INCOME
Gross Sales
Less: Duty (Including Excise Duty)
770,524,261
193,337,862
15,210,593,008
10,926,572,485
Other Income
14
332,876,237
289,386,296
Increase/(Decrease) in stock of Finished Goods/Work in Process
15
280,387,480
(969,972,946)
15,823,856,725
10,245,985,835
5,614,030,633
3,342,910,085
EXPENDITURE
Raw Materials and Components Consumed
Trade Purchases
151,300,075
336,425,595
Stores, Spares and Tools Consumed
461,864,960
423,631,628
Personnel Expenses
16
535,876,200
335,281,053
Administration and Other Expenses
17
2,391,231,797
1,774,641,750
Interest and Finance Charges
18
Depreciation
Share in loss of Associate
PROFIT BEFORE TAX
693,647,033
543,381,034
2,268,870,139
1,175,178,410
30,768,645
--
12,147,589,482
7,931,549,555
3,676,267,243
2,314,436,280
Provision for Taxation:
Current Tax
32,500,000
23,586,472
Deferred Tax
16,713,000
(36,392,225)
3,627,054,243
2,327,242,033
10,312,210
--
328,431,000
--
3,288,311,033
2,327,242,033
Net Profit after Provision for Taxation
Short Provision of Taxation for earlier years
Provision for Deferred Tax for earlier years (Considered as
Prior Period Item - Refer Note 4.2.5 of Schedule 19)
NET PROFIT AFTER TAX
Less: Minority interest
NET PROFIT/SURPLUS AVAILABLE FOR APPROPRIATION
--
(2,012,458)
3,288,311,033
2,329,254,491
--
8,435,959
167,269,416
121,016,180
167,269,416
129,452,139
APPROPRIATIONS
Dividend:
– Preference Shares
– Equity Shares (Proposed)
Corporate Tax on Proposed Dividend
21,431,394
15,505,198
Transfer to General Reserve
3,099,610,223
2,184,297,154
TOTAL
3,288,311,033
2,329,254,491
- Before prior period items
37.31
23.97
- After prior period items
33.92
23.97
Earnings per share (Face Value of Rs. 10 each)
Basic & Diluted :
(Refer Note 4.2.9 of Schedule 19)
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
As per our report of even date
For K. C. Khanna & Co.
Chartered Accountants.
Nitin K. Jain
Partner
Membership No 83084
Place: New Delhi
Date: June 18, 2004
Deepak Puri
Chairman and Managing Director
19
Harnam D.Wahi
Director
Minni Katariya
Company Secretary
R Ganesan
General Manager Accounts
schedules to the consolidated accounts
As at 31st March (Amount in Rupees)
1
2004
2003
1,425,000,000
625,000,000
SHARE CAPITAL
Authorised
142,500,000 (Previous Year 62,500,000) Equity Shares of Rs.10 each
750,000 Preference Shares of Rs.100 each
75,000,000
75,000,000
1,500,000,000
700,000,000
1,115,129,440
484,064,720
1,000,000
1,000,000
As per last Balance Sheet
4,583,484,724
4,583,484,724
Added during the year
4,792,200,000
--
9,375,684,724
4,583,484,724
Issued, Subscribed and Paid-up
*111,512,944 (Previous Year 48,406,472)
Equity Shares of Rs. 10 each fully paid up
Note
* Includes:
-
48,406,472 Shares issued as fully paid Bonus Shares by capitalisation of
Securities Premium; and
-
14,700,000 Shares allotted in cash at a premium of Rs. 326 each to
Deutsche Bank Trust Company Americas (DBTCA), DBTCA issued 147,000
Global Depository Receipts (GDRs), each GDR represents 100 Shares,
to Woodgreen Investment Limited.
2
RESERVES AND SURPLUS
Capital Reserve
State Capital Investment Subsidy
Securities Premium Account
Less: Utilised during the year
484,064,720
--
8,891,620,004
4,583,484,724
6,315,901,265
4,097,388,308
General Reserve
As per last Balance Sheet
Add: Adjustment for Deferred Tax Liability as on 01.04.2001
Transfer from Profit and Loss Account
TOTAL
3
--
34,215,803
3,099,610,223
2,184,297,154
9,415,511,488
6,315,901,265
18,308,131,492
10,900,385,989
SECURED LOANS
1
Term Loans
A.
Rupee Loans
i)
Export Import Bank of India-EXIM Bank
##
Working Capital Term Loan (WCTL)
30,750,000
51,250,000
##
Research & Development Loan (R&D)
48,000,000
64,000,000
##
Production Equipment Finance Loan
42,310,944
70,518,240
121,060,944
185,768,240
ii)
The Federal Bank
500,000,000
500,000,000
#
iii)
ING-Vysya Bank
450,000,000
450,000,000
##
iv)
State Bank of India - I
154,122,522
253,693,988
v)
State Bank of India - II
250,000,000
--
vi)
Union Bank of India (including interest accrued and due - Rs. 3,445,355)
509,090,866
--
vii)
State Bank of Saurashtra
500,000,000
--
#
viii) Canara Bank
260,000,000
--
ix)
IDBI Bank Ltd
200,000,000
--
x)
United Bank of India
500,000,000
--
xi)
State Bank of Indore
500,000,000
--
xii)
Syndicate Bank
499,999,691
--
xiii) State Bank of Mysore
249,997,380
--
xiv) Indian Bank (including interest accrued and due - Rs. 10,960)
500,010,960
--
5,194,282,363
1,389,462,228
schedules to the consolidated accounts
As at 31st March (Amount in Rupees)
3
2004
2003
783,720,300
1,141,461,000
134,121,032
230,000,671
1,793,667,046
1,481,779,861
896,833,523
740,889,916
SECURED LOANS (Contd..)
B)
#
Foreign Currency Loans
i)
From Exim Bank of India
(US$ 17,930,000: Previous Year US$ 23,930,000)
##
ii)
From Industrial Development Bank of India
(US$ 3,068,429: Previous year US$ 4,821,817)
iii)
From Bayeriesche Hypo - und Vereinsbank AG, (Munich)
(Euro 33,370,549: Previous year Euro 28,359,424)
iv)
From ANZ Bank, (Frankfurt)
(Euro 16,685,275: Previous year Euro 14,179,711)
v)
From Standard Chartered Bank (London)
896,833,523
740,889,916
vi)
(Euro 16,685,275: Previous year Euro 14,179,711)
From Canara Bank
655,650,000
715,500,000
218,550,000
238,500,000
1,569,500,000
1,831,362,500
(US$ 15,000,000: Previous year US$ 15,000,000)
##
vii)
From Karnataka Bank
(US$ 5,000,000: Previous year US$ 5,000,000)
viii) From International Finance Corporation, Washington, USA
(Euro 29,200,000: Previous year Euro 35,050,000)
2
6,948,875,424
7,120,383,864
12,143,157,787
8,509,846,092
2,241,548,089
2,475,178,894
2,971,319
1,773,736
Other Loans
A)
Short Term Loans from Banks:
(@ including interest accrued and due Rs. 1,314,921)
@
Secured by hypothecation of stock-in-trade and book debts.
(Guaranteed by directors to the extent of Rs. 921,212,462: Previous Year 1,275,902,114)
B)
From Others:
Secured by hypothecation of specific vehicles
(Amount due within one year Rs. 667,747: Previous year Rs. 666,108)
TOTAL
2,244,519,408
2,476,952,630
14,387,677,195
10,986,798,722
Notes:
1
2
Loans from State Bank of India, Union Bank of India, State Bank of Saurashtra, Canara Bank, Federal Bank, Exim Bank - WCTL, R&D loans and Foreign currency loans from banks/financial
institutions are secured by way of first mortgage and charge on all the immovable and movable assets, present and future, of the Company (subject to prior charge on specified movables as
otherwise stated, including in favour of the company's bankers by way of security for the borrowing for working capital), ranking pari-passu with charges for the Term Loans.
Production Equipment Finance Loan from Exim Bank is secured by way of hypothecation of specific equipments acquired/to be acquired with finance out of the loan.
3
Loan from ING Vysya Bank is secured by way of pari-passu first charge on current assets.
4
Loan from IDBI Bank is secured by way of subsequent and subservient charge on Current Assets.
5
Loans from United Bank of India, State Bank of Indore, Syndicate Bank and State Bank of Mysore are secured by way of hypothecation of whole of the movable fixed assets.
6
Loan from Indian Bank is secured by way of hypothecation of whole of the movable assets.
7
Guaranteed by #2 Directors, ##3 Directors of the Company
8
Term Loans repayable within one year - Rs. 2,801.12 million (Previous year - Rs. 1,498.77 million)
9
Charges are registered after Balance Sheet date in respect of Term Loans taken from State Bank of India (Rs. 250 Million) and Indian Bank (Rs. 500 Million)
10
Foreign currency converted @ US$ 1 = Rs 43.71 : (Previous year US$1 = Rs 47.70) and @ 1 Euro - Rs 53.75 (Previous year 1 Euro - Rs 52.25)
4
UNSECURED LOANS
Short term loans - from banks
- Rupee Loan
- Foreign Currency Loans (USD 3,023,735 : Previous year USD 14,000,000)
Add: Interest accrued and due
Total
Note: Foreign currency converted @ US$ 1 = Rs 43.71 : (Previous year US$1 = Rs 47.70)
--
100,025,500
132,167,476
667,800,000
132,167,476
767,825,500
--
4,550,236
132,167,476
772,375,736
schedules to the consolidated accounts
As at 31st March, 2004 (Amount in Rupees)
5
FIXED ASSETS
DESCRIPTION
As at
01.04.2003
GROSS BLOCK
Additions
Deductions
As at
31.03.2004
Upto
01.04.2003
DEPRECIATION
For the Deductions
year
Upto
31.03.2004
NET BLOCK
As at
As at
31.03.2004
31.3.2003
Tangible Assets
Land (Leasehold except to
the extent of Rs 170,081) 268,919,516
--268,919,516
2,598,005
2,911,722
-5,509,727
263,409,789
Buildings
1,871,472,542
146,228,828
3,542,611 2,014,158,759
101,169,313
65,161,935 1,920,633
164,410,615
1,849,748,144
Leasehold Improvements
-22,497,009
-22,497,009
-1,864,320
-1,864,230
20,632,689
Plant and Machinery,
Electrical Installation
and other Equipments
17,413,041,086 7,346,424,630 95,764,454 24,663,701,262 2,234,144,549 2,159,217,924 7,501,181 4,385,861,292 20,277,839,970
Furniture, Fixtures
and Office Equipments
96,139,696
36,123,263
3,313,150
128,949,809
20,371,205
8,004,510 1,682,748
26,692,967
102,256,842
Computers
41,909,113
33,936,562
724,835
75,120,840
7,781,985
10,086,938
177,281
17,691,642
57,429,198
Vehicles
13,985,574
1,001,815
16,662
14,970,727
3,841,095
1,544,433
205,020
5,180,508
9,790,219
Intangible Assets
Software
9,785,106
7,995,264
-17,780,370
5,367
3,028,947
-3,034,314
14,746,056
Technical Know How
52,083,202
52,260,269
-104,343,471
-16,392,302
-16,392,302
87,951,169
Leased Assets
Vechicles
3,035,876
1,613,806
-4,649,682
1,240,016
657,108
-1,897,124
2,752,558
Total
19,770,371,711 7,648,081,446 103,361,712 27,315,091,445 2,371,151,535 2,268,870,139 11,486,863 4,628,534,811 22,686,556,634
PREVIOUS YEAR
9,134,244,794 10,670,048,287 33,921,370 19,770,371,711 1,205,785,593 1,175,278,410 9,912,468 2,371,151,535
Capital work-in-Progress (including capital advances Rs. 93,838,078 : Previous year Rs. 83,784,046)
940,150,593
Total
23,626,707,227
Notes:
1. Additions to fixed assets include Rs.291,871,810 (Previous year Rs. 684,596,111) and deductions include Rs. 78,099,384 (Previous year Rs Nil)on account of exchange differences.
2. Interest Capitalised during the year Rs. 21,148,355 ( Previous Year Rs. 68,710,975).
As at 31st March (Amount in Rupees)
266,321,511
1,770,303,229
--
15,178,896,537
75,768,491
34,127,128
10,144,479
9,779,739
52,083,202
1,795,860
17,399,220,176
797,940,483
18,197,160,659
2004
2003
99,003,414
331,147,605
Consumption of Materials, Stores, Tools etc
--
60,637,648
Electricity and Power
--
71,244,390
16,928,034
51,582,948
6
INCIDENTAL EXPENDITURE
PENDING CAPITALISATION (New Projects)
Opening Balance
Additions during the year :
Salaries, allowances and other benefits
Travelling Expenses (including for Directors)
Interest & Financial Charges (net)
Insurance
2,895,795
6,017,877
18,950,736
110,828,550
--
12,204,514
9,296,741
13,749,665
Legal and Professional Charges
Total
-147,074,720
16,172,507
673,585,704
Less: Capitalised during the year
142,213,683
574,582,290
4,861,037
99,003,414
Miscellaneous Expenses
Balance carried to Balance Sheet as at the year end
7
INVESTMENTS
Long Term: Unquoted - at cost (Trade):
Investments in Others
CAPCO LUXEMBOURG S.a.r.l.
1 Equity share of Euro 125 each
63,366 Preferred Equity Certificates of Euro 125 each
4,961
4,961
320,668,823
320,668,823
320,673,784
320,673,784
Global Data Media FZ LLC (Associate)*
7,194 Shares of AED 1,000 each
61,763,540
(Refer Note 2.2 of Schedule 19)
TOTAL (aggregate value of unquoted investments)
(*Acquired during the year)
(For movements in other investments - Refer Note 4.2.4 of Schedule 19)
382,437,324
320,673,784
schedules to the consolidated accounts
As at 31st March (Amount in Rupees)
2004
2003
Raw Materials and Components
842,735,460
368,188,197
Work in Process
351,034,267
192,851,987
Manufactured Finished Goods
435,567,182
267,007,765
8
INVENTORIES (As taken, valued and certified by the Management)
Trading Stock
Stores and Spares
Total
9
1,163,328
47,517,545
354,476,186
162,638,970
1,984,976,423
1,038,204,464
SUNDRY DEBTORS (Unsecured - considered good, unless otherwise stated)
Debts outstanding for a period exceeding six months
Considered Good
Considered Doubtful
Less: Provision for Doubtful Debts
306,887,998
24,114,070
54,102,105
38,108,747
360,990,103
54,102,105
62,222,817
38,108,747
306,887,998
24,114,070
2,753,060,318
2,684,359,604
Other Debts
Considered Good
Considered Doubtful
Less: Provision for Doubtful Debts
TOTAL
10
6,582,661
--
2,759,642,979
2,684,359,604
6,582,661
--
2,753,060,318
2,684,359,604
3,059,948,316
2,708,473,674
115,271,158
33,634,505
CASH AND BANK BALANCES
Cash on hand including cheques/drafts and imprest balances with employees
(*includes cheques - Rs 54,285,261 : Previous year Rs. 4,630,663)
Balances with Scheduled Banks:
Current Accounts
Margin Money/Fixed Deposit Accounts
514,318,671
186,304,078
6,988,229,819
2,122,097,606
5,709,205
5,382,909
(Including interest accrued)
Unclaimed Dividend Account
EEFC Accounts (Euro 104,717 and USD 550,460
Previous Year Euro 2,361 and USD 48,366)
29,341,423
2,405,257
7,537,599,118
2,316,189,850
--
124,825
5,316,795
380,813,122
327,622,299
--
14,310,577
13,811,998
Balances with Other Banks:
Current Account with China Trust Commercial bank
Balances held outside India:
-
ABN Amro Bank N.V. - Current Account
(Euro 100,907 : Previous year Euro 3,335,704 ;
GBP 20,815 ; USD 4,412,682)
-
ING Bank N.V. - Current Account
(Euro 6,217,992 : Previous year Nil)
-
Deutsche Bank A.G. - Deposit Account
(Euro 271,599 : Previous year Euro 269,660)
Total
347,249,671
394,625,120
8,000,119,947
2,744,574,300
Notes:
1
Maximum balance outstanding at any time during the year was:
- ABN Amro Bank N.V. : Euro 5,383,040 : Previous year Euro 4,741,664) (Rs. 283,632,378 : Previous year Rs. 242,868,030)
- ING Bank N.V. : (Euro 6,217,922 : Previous year Nil) (Rs. 327,622,299 : Previous year Rs. Nil)
- Deutsche Bank A.G. : (Euro 271,599 : Previous year Euro 6,348,099) (Rs. 14,310,577 : Previous year Rs. 267,001,040)
- China Trust Commercial Bank : (Rs. 124,825 : Previous year Rs. 124,925)
2
Rate of conversion applied:
Euro 1 = Rs. 52.69; USD 1 = Rs. 43.28 : Previous year Euro 1 = Rs. 51.22; GBP 1 = Rs. 74.34; USD 1 = Rs. 47.23
schedules to the consolidated accounts
As at 31st March (Amount in Rupees)
11
2004
2003
636,445,920
427,408,226
LOANS AND ADVANCES (Unsecured - Considered Good, unless otherwise stated)
Advances and other amounts recoverable in cash or
in kind or for value to be received
- Considered Good
- Considered Doubtful
Less: Provision for Doubtful Advances
195,000
2,695,000
636,640,920
430,103,226
195,000
2,695,000
636,445,920
427,408,226
Balance with Excise Authorities
11,506,818
6,953,818
Earnest Money/Security Deposits
11,662,857
9,554,199
Advance Tax/Tax Deducted at Source
100,835,074
51,017,316
Total
760,450,669
494,933,559
12
CURRENT LIABILITIES AND PROVISIONS
A.
Current Liabilities:
Sundry Creditors
-
Small Scale Industrial Undertakings
-
Others
Due to Directors
Other Liabilities (Includes Rs. 63,546,003 : Previous year Rs. 119,560,438 due to banks
being cheques issued in excess of book balances)
1,190,151
1,989,979,011
2,802,021,429
1,991,169,162
545,341
545,341
185,756,277
254,259,344
Security Deposits
44,028,892
12,950,989
Interest accrued but not due on Loans
39,034,721
52,505,346
Unclaimed Dividend
Total
B
971,751
2,801,049,678
5,105,305
4,809,891
3,076,491,965
2,316,240,073
Provisions:
For Taxation
74,243,548
32,892,855
167,269,416
121,016,180
For Corporate tax on Dividend
21,431,394
15,505,198
For Retirement Benefits (Gratuity/Leave Encashment)
10,375,017
4,063,749
273,319,375
3,349,811,340
173,477,982
2,489,718,055
Deferred Revenue Expenditure
--
25,556,827
Share/Right Issue Expenses
--
120,747
Total
--
25,677,574
93,869,503
43,051,554
For Proposed Dividend
Total
Total
13
14
MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted)
OTHER INCOME
Interest Received (Gross):
a)
On Deposits with banks
b)
Others
(Tax Deducted at Source Rs.15,713,446 : Previous year Rs. 9,942,307)
Excess provisions and unclaimed credit balances written back
4,334,481
199,285
98,203,984
43,250,839
8,340,496
4,258,222
Difference in Exchange Rates (Net)
30,799,918
165,248,567
Profit on sale of Forward Contracts (Net)
15,286,497
12,925,620
Profit on sale of Fixed Assets
Surplus on Divestment of Subsidiary
57,714
--
103,386,961
--
-593,386
13,125
135,673
Divident from:
-
long term investments
current investments
Miscellaneous Income
Total
76,207,281
63,554,250
332,876,237
289,386,296
schedules to the consolidated accounts
As at 31st March (Amount in Rupees)
2004
2003
Finished Goods
436,730,510
314,525,310
Work in Process
351,034,267
192,851,987
787,764,777
507,377,297
Finished Goods
314,525,310
1,296,311,594
Work in Process
192,851,987
181,038,649
507,377,297
1,477,350,243
280,387,480
(969,972,946)
467,645,353
23,537,449
294,838,830
15,003,966
34,470,586
21,479,307
15
INCREASE/(DECREASE) IN STOCK OF FINISHED GOODS/WORK IN PROCESS
Closing Stock:
Less: Opening Stock:
Total Increase/(Decrease)
16
PERSONNEL EXPENSES
Salaries, Allowances and Bonus
Contribution to Provident Fund and Other Funds
Employees Welfare Expenses
Leave Encashment
3,659,636
155,270
Gratuity
6,563,176
3,803,680
535,876,200
335,281,053
503,402,620
356,682,670
1,917,743
1,043,199
Total
17
ADMINISTRATION AND OTHER EXPENSES
Electricity and Power
Excise Duty
Commission on Sales (Other Selling Agents)
16,326,732
522,226
Rent (Including Lease Rent)
32,700,226
43,016,099
Repairs and Maintenance:
-
Building
-
Plant and Machinery
-
Others
2,164,250
469,325
12,408,987
4,093,059
15,279,435
8,619,447
Freight and Forwarding
358,280,811
236,259,845
Insurance
101,153,454
74,599,319
Rates and Taxes
5,641,778
2,931,174
Director's Sitting Fees
Remuneration to Auditors
589,050
4,068,520
145,000
3,661,450
811,761,616
704,839,739
Royalty/Technical Know-how Fees
Loss on sale of long term investments
Bad Debts Written Off
Provision for doubtful debts and advances
Miscellaneous Expenses
Stock Written Off
1,249,867
7,500
33,533,940
30,292,383
60,684,766
38,850,137
389,616,785
217,806,762
155,583
39,762,632
Fixed Assets Written Off
(Refer Note 4.2.12(a) of Schedule 19)
14,417,593
5,152,450
Provision for Taxation (Foreign Branch)
200,467
2,895,433
Miscellaneous Expenditure Written Off
120,747
419,731
25,556,827
2,572,170
2,391,231,797
1,774,641,750
Deferred Revenue Expenditure Written Off
(Refer Note 4.2.12(b) of Schedule 19)
Total
18
INTEREST AND FINANCE CHARGES
On Term Loans
531,476,176
328,968,297
Others (Including Bank Charges)
162,170,857
214,412,737
Total
693,647,033
543,381,034
schedules to the consolidated accounts
19
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
1.
Basis of Preparation of Consolidated Financial Statemtents:
1.1 Consolidated Financial Statements (CFS) of the Company (Parent), its subsidiaries and associates are prepared to comply, in all material respects with applicable statutory/
regulatory provisions, Accounting Standards/generally accepted accounting principles and practices prevailing in India, unless otherwise stated.
1.2 The consolidated Financial Statements are prepared under the historical cost convention and on accrual basis.
2
Subsidiaries and Associates:
2.1 The Consolidated Financial Statements (CFS) comprise the results of the Parent and the subsidiaries/associates:
2.1.1 Name of Subsidiary (Overseas)
Country of Incorporation
Proportion of Ownership
Glyphics Media Inc.
Rochester, New York, USA
95% (upto 31st August, 2003)
European Optic Media Technology GmbH
Erfurt, Germany
100%
2.1.2 Associates:
The particulars of associate considered in the Consolidated Financial Statements are as under :
Name of Associate (Overseas)
Country of Incorporation
Proportion of Ownership
Global Data Media FZ LLC
Dubai, United Arab Emirates
49%
2.2 Parcitulars of the Investments in Associates:
Sl. no. Particulars
3
(a)
(b)
Cost of investments in associates
Goodwill on acquisition included in (a) above
(c)
Share of post acquisition profits/(loss) (Net)
(d)
Investments as at 31.03.2004 (a+c)
As at 31.03.2004 (Rs)
As at 31.03.2003 (Rs.)
92,532,185
--
---
(30,768,645)
--
61,763,540
--
Consolidation Procedure:
3.1 The Consolidated Financial Statements are prepared in accordance with Accounting Standard (AS-21) “Consolidated Financial Statements” issued by the Institute of
Chartered Accountants of India (ICAI). The financial statements of the Parent and its subsidiaries are combined on a line by line basis by adding together sums of like nature,
comprising assets, liabilities, income and expenses, after eliminating intra-group balances/ transactions and resulting unrealized profit/ loss.
3.2 The Financial Statements of subsidiaries, which are overseas, are prepared by them on the basis of generally accepted accounting principles, local laws and regulations as
prevalent in their respective countries and such financial statements are considered for consolidation. The effect of adjustments on account of variance in accounting policies of
overseas subsidiaries vis '-à-vis those of the parent is not material, and accordingly, not considered.
The Financial Statements of associate is prepared by them on the basis of generally accepted accounting principles, local laws and regulations as prevalent in the respective
country. The effect of adjustments on account of variance in accounting policies of associate vis-à-vis that of the parent is not considered material and, accordingly, not
considered.
3.3 Investments in associate are accounted for under the Equity Method as per AS-23 “Accounting for Investments in Associates in Consolidated Financial Statements” issued by
The Institute of Chartered Accountants of India based on the financial statements of the associate upto period ended on 31st December, 2003.
3.4 Minority interest in the net income of subsidiary has been identified and adjusted against the income of the group in order to arrive at the net income attributable to the Parent
company.
3.5 The financial statements of the subsidiaries viz Glyphics Media Inc has been drawn upto 31st August, 2003 i.e. upto the date of holding before divestment; European Optic
Media Technology GmbH has been drawn for the period from 30th January, 2003 to 31st March, 2004 and that of the associate have been drawn for the period from 17th
September, 2002 to 31st December, 2003. There are no significant transactions or other events between 1st January, 2004 to 31st March, 2004 requiring adjustment
therein.
3.6 One of the subsidiaries viz. European Optic Media Technology GmbH, the financial statements of which, as per local laws/regulations are not required to be audited, have been
considered as such in the consolidated financial statements.
3.7 The Parent’s cost of its investment in its subsidiaries has been eliminated against the Parent’s portion of equity of each subsidiary as at the year end, instead of Parent’s
portion of equity of each subsidiary as on the date on which investment is made in the subsidiary. The amount of Goodwill/ Capital Reserve on consolidation has not arisen being
newly formed companies.
3.8 The difference between the proceeds from disposal of investment in a subsidiary and the carrying amount of its assets less liabilities as of the date of disposal is recognised in
the consolidated statement of Profit and Loss Account as the profit or loss on disposal of investment in subsidiary.
3.9 For the purpose of compilation of the consolidated financial statements the foreign currency assets, liabilities , income and expenditure are translated as per Accounting
Standard (AS-11) on 'Accounting for the effects of changes in foreign exchange rates', issued by the Institute of Chartered Accountants of India.
3.10 Additional Disclosures:
Additional information disclosed in the separate financial statements of the parent and the subsidiaries having no bearing on the true and fair view of the CFS, as also the
information pertaining to the items which are not material, have not been disclosed in the CFS.
4
Significant Accounting Policies and Notes on Accounts of the Parent:
4.1 Significant Accounting Policies:
4.1.1 Method of Accounting
The financial statements are prepared in accordance with the historical cost convention on an accrual basis of accounting and in accordance with generally accepted
accounting practices in India and conform to the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant provisions of
the Companies Act, 1956.
4.1.2 Use of Estimates
The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect
the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period.
Difference between the actual results and estimates is recognised in the period in which the results are crystallised.
schedules to the consolidated accounts
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (contd...)
4.1.3 Revenue Recognition
Revenue from sales of goods is recognised on transfer of significant risks and rewards of ownership to the customer and when no significant uncertainty exists
regarding realisation of the consideration. Sales are recorded net of sales returns, rebates and trade discounts and price differences and are inclusive of duties
(including excise duty).
4.1.4 Fixed Assets
Tangible Fixed Assets are stated at cost less accumulated depreciation. Cost includes all direct and incidental expenses including borrowing cost.
Expenses of revenue nature which can be regarded as incidental and related to projects being set-up are transferred to "Incidental Expenditure Pending Capitalization".
These expenses are allocated to related productive fixed assets in the year of commencement of the related project.
Intangible fixed assets are stated at cost less accumulated amortization.
4.1.5 Depreciation/Amortization
Depreciation on tangible fixed assets is provided on straight-line method on pro-rata basis at rates and in the manner specified in Schedule XIV to the Companies Act,
1956 other than on certain Plant and Machinery at the Magnetic and Optical Media manufacturing units which is depreciated at the rate of 10.34% which has been
determined based on the management's estimate of useful life of the assets and is higher than the rates specified in Schedule XIV to the Companies Act, 1956.
Intangible fixed assets are amortized on equated basis over their estimated economic life not exceeding 10 years.
Leasehold Land and improvement to the leased premises are amortised over the period of the lease.
The assets taken on finance lease are depreciated over the lease period.
4.1.6 Investments
Long term investments are stated at cost of acquisition inclusive of expenditure incidental to acquisition. A provision for diminution is made to recognise a decline, other
than temporary in the value of long term investments.
Current investments are stated at lower of cost and fair value determined on an individual basis.
4.1.7 Inventory Valuation
Finished Goods, Work in process, Goods held for resale
Raw Materials, Packing Materials and Stores and Spares
}
At lower of cost and net
realisable value
Cost of Raw material, goods held for resale, packing materials and stores and spares, is determined on the basis of weighted average method.
Cost of Work in process and finished goods, is determined by considering direct material cost and appropriate portion of overheads.
Liability for excise duty in respect of goods manufactured by the company, other than for exports, is accounted upon completion of manufacture, and provision is made
for exciseable manufactured goods.
Customs duty exigible on materials (intended for domestic consumption), lying in bonded warehouses, is provided on accrual basis.
4.1.8 Government Grants
Grants of the nature of contribution towards capital cost of setting up projects, are treated as Capital Reserve and grants in respect of specific fixed assets are
adjusted from the cost of the related fixed assets.
4.1.9 Borrowing Costs
Borrowing costs directly attributable to the acquisition of qualifying assets are capitalised as part of the cost of assets till the date of commencement of commercial
use of the asset. All other borrowing costs are charged to the Profit and Loss Account.
4.1.10 Retirement Benefits
Liability towards gratuity payable on death/retirement of employees is accrued based on an actuarial valuation, and covered by funding/premium as determined by Life
Insurance Corporation of India.
Provision for the benefit of leave encashment to the employees as per Company's policy is based on an actuarial valuation as of the balance sheet date.
4.1.11 Foreign Currency Transactions
Transactions in foreign currency are converted at the exchange rate prevailing at the date of the transactions. Foreign currency monetary assets and liabilities not
covered by forward exchange contracts are restated at the year end rates and the resultant gains or losses are recognised in the Profit and Loss Account, except
exchange differences arising on settlement and/or translation of foreign currency liabilities relating to acquisition of fixed assets which are adjusted against the
carrying costs of respective fixed assets.
In respect of foreign branches, all revenues, expenses, monetary assets/liabilities and fixed assets are accounted at the exchange rate prevailing on the date of the
transaction. Monetary assets and liabilities are restated at the year end rates and resultant gains or losses are recognised in the Profit and Loss Account.
Gains and losses on foreign exchange forward contracts are recognised in the Profit and Loss Account over the life of the contract, except in respect of liabilities
incurred for acquiring fixed assets, in which case such difference is adjusted to the carrying amount of the respective fixed assets. Any profit or loss arising on
cancellation of a forward contract is recognised as income or expense for the period.
4.1.12 Miscellaneous Expenditure
Expenditure in respect of issue of shares, pre-incorporation and other preliminary expenses, is written-off over a period of 10 years from the year in which these are
incurred.
4.1.13 Taxation
Provision is made for current income tax liability based on the applicable provisions of the Income Tax Act 1961, for the income chargeable under the said Act and as per
the applicable overseas laws relating to the foreign branch.
The Company provides for deferred tax using the net liability method based on the tax effect of timing differences resulting from recognition of items in the financial
statements. The deferred tax charge or credit is recognized using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.
4.1.14 Leases
Assets acquired under finance leases are recognised as Asset and a Liability at the lower of the fair value of the leased assets at inception of the lease and the present
value of minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is
allocated to periods during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
schedules to the consolidated accounts
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (contd...)
4.1.15 Employees Stock Option Scheme
Stock options granted to the employees under the Company's Employees Stock Option Scheme are accounted in accordance with Securities and Exchange Board of
India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999. Accordingly, the excess, if any, of the market price of the underlying
equity shares as of the date of the grant of the option over the exercise price of the option, is recognised as employee compensation cost and amortised on straight line
basis over the vesting period.
4.2 Notes on Accounts
4.2.1 Contingent Liabilities etc.
i)
In respect of:
-
Bank guarantees given on behalf of the Company Rs.255.72 Million (Previous Year Rs.240.24 Million)
-
Letters of Credit opened by banks on behalf of the Company-Rs.2387.00 Million (Previous Year Rs.1688.86 Million)
ii)
Disputed demands in respect of Income tax Rs.Nil (Previous year Rs. 43.26 Million); Entry tax Rs.106.06 Million (Previous year Rs. 91.72 Million); Service tax
Rs.60.87 Million (Previous year Rs. Nil); Excise duty Rs.0.11 MIllion(Previous year Rs. Nil) and Custom duty Rs.140.71 Million (Previous year Rs. Nil).
iii)
Claims against the Company not acknowledged as debts - Rs 1.47 Million (Previous Year Rs. 7.34 Million).
4.2.2 Capital Commitments
Estimated value of contracts remaining to be executed on capital account and not provided for (net of advances)-Rs.2245.48 Million (Previous Year Rs.1438.70
Million).
4.2.3 Lease Obligations
Future obligations for rentals under operating leases amount to Rs. 146.69 Million (Previous year Rs. 16.57 Million). The total lease payments recognised in the
statement of profit and loss account amounting to Rs. 21.35 Million (Previous year Rs. 20.90 Million)
Future obligations for rentals under finance lease arrangement for plant and machinery amount to Rs. Nil (Previous year Rs. 1.90 Million).
Reconciliation of minimum lease payments and their present value in respect of vehicles taken on lease, is as under
Present value of
Minimum Lease
minimum lease
Lease
payments (Rs)
payments (Rs)
charges (Rs)
2,579,558
1,587,512
992,046
994,009
667,747
326,262
Amount payable later than one year but not later than five years
2,646,019
2,312,022
333,997
Total
6,219,586
4,567,281
1,652,305
Previous year
4,299,025
2,641,606
1,657,419
Amount paid upto 31.3.2004
Amount payable not later than one year
The total cost of the vehicles and their carrying amount as at 31st March 2004 are Rs. 4,649,682 (Previous Year Rs.3,035,876) and Rs.2,752,558 (Previous Year
Rs.1,795,860) respectively.
4.2.4 Movements in Other Investments
2003-04
Current Investments (Unquoted)
No.
2002-03
Cost (Rs.)
No.
Cost (Rs.)
(Mutual Fund Units of the Face value of Rs. 10 each
acquired/sold during the year)
-
Birla Sun Life Mutual Fund
51,025,506
550,316,573
21,209,115
225,000,000
-
Prudential ICICI Mutual Fund
22,650,584
285,219,588
11,640,524
160,000,000
-
SBI Mutual Fund
Total
4,755,111
50,038,012
--
--
78,431,201
885,574,173
32,849,639
385,000,000
4.2.5 Taxation
Provision for taxation has been made based on Minimum Alternate Tax as applicable to the company for the current year in accordance with the relevant provisions of
the Income Tax Act, 1961.
During the year ended 31.03.2003, based on expert opinion obtained, the deferred tax liability was considered at nil, in view of the exemption available to the
undertakings of the company under Income Tax Act, 1961, the computation / determination of such tax liability being measured in the proportion of profits of the
undertakings from domestic operations in section 10A/10B of the said act in accordance with the expert opinion obtained to that effect.
The management has made a review of the matter and sought a fresh opinion as regard the interpretation of ASI-5 read with AS-22 'Accounting for Taxes on Income'
issued by the Institute of Chartered Accountants of India; and based thereon and as a prudent measure decided to provide for the deferred tax liability upto the year
2003-04.
Deferred tax liability is net of deferred tax asset of Rs. 860,126,966 on account of losses to be setoff against taxable profit in future. Based on its existing and
potential business in the near future, including projections / profitability the management is virtually certain of such setoff of the unabsorbed losses; on which
assertion the auditor have placed reliance.
schedules to the consolidated accounts
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (contd...)
In consonance with the methodology so adopted, a recomputation of deferred tax liability has been made for the year, as well as upto the preceding year end (which has
been considered as a prior period item and separately shown in the Profit and Loss Account).
The Break up of Net Deferred Tax Liability is as under:
(Amount in Rs.)
Particulars of Timing Differences
(a)
Deferred Tax
Deferred Tax
Net Deferred
Assets
Liability
Tax Liability
--
790,769,638
790,769,638
443,874,000
--
(443,874,000)
Upto the Financial year 2002-03
Depreciation
Unabsorbed Depreciation
Brought Forward Losses
Total
(b)
18,464,638
--
(18,464,638)
462,338,638
790,769,638
328,431,000
For the Financial year 2003-04
Depreciation
--
414,501,328
414,501,328
Unabsorbed Depreciation
397,788,328
--
(397,788,328)
Total
397,788,328
414,501,328
Total Deferred Tax Liabilty
16,713,000
345,144,000
4.2.6 Employee Stock Option Plan (ESOP)
The Company, has on 09-01-2004, in terms of ESOP granted 2,030,300 stock options to its employees, at the exercise price of Rs. 342 per share. The Options
granted are vested over a period of maximum of four years from the date of grant. As at the date of balance sheet no option has been exercised by any employee.
4.2.7 Other Disclosures
In terms of interpretation ASI-15 issued on Accounting Standard - 21 ('Consolidated Financial Statements') by the Institute of Chartered Accountants of India,
additional information pursuant to requirements of Part II of Schedule VI to The Companies Act, 1956, which are not material, have not been disclosed in these notes
to the Consolidated Financial Statements.
i)
Managerial Remuneration (Remuneration to Directors):
(figures in bracket are for the previous year)
(Amount in Rupees)
DEEPAK PURI*
NITA PURI*
RATUL PURI*
Managing Director Whole time director Whole time director
a)
b)
c)
Salaries/Allowances
PF contribution
Perquisites
Total
Previous Year
1,725,600
454,800
2,910,000
(1,440,000)
(420,000)
(2,220,000)
115,200
36,000
180,000
(115,200)
(36,000)
(180,000)
95,054
(357,600)
103,400
(112,517)
107,990
(772,068)
1,935,854
594,200
3,197,990
(1,912,800)
( 568,517)
(3,172,068)
* Key Management Personnel
Note: Provision for leave encashment and Gratuity amounting to Rs. 272,988 and Rs. 652,309 respectively made during the year has not been included above.
ii)
Remuneration to Auditors:
(Amount in Rupees)
2003-04
2002-03
2,088,000
1,946,700
This comprises the following, including Service Tax :
For Statutory audit ( incl. branch auditor's fee Rs Nil : Previous year Rs. 2,700)
For Limited Review
For Certification / Other Reports
For reimbursement of out of pocket expenses
Total
648,000
756,000
1,112,400
813,000
220,120
145,750
4,068,520
3,661,450
4.2.8 Related Party Disclosures
As required by Accounting Standard AS (18) on `Related Party Disclosures' issued by the Institute of Chartered Accountants of India, since Consolidated Financial
Statements presents information about the Parent and its subsidiary as a single reporting enterprise, it is not necessary to disclose intra-group transactions.
schedules to the consolidated accounts
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (contd...)
4.2.9 Earning per share
(Amount in Rupees)
2003-04
a)
No. of Shares at the beginning of the year
48,406,472
46,406,472
Bonus Issue during the FY 2003-04 in 1:1 ratio
48,406,472
48,406,472
Equity Shares issued on 29 March, 2004
14,700,000
--
111,512,944
96,812,944
Equity shares outstanding for 365 days
96,812,944
48,406,472
Equity shares outstanding for 3 days
14,700,000
--
Weighted Average number of equity shares outstanding during the year
96,933,766
96,812,944
3,288,311,033
2,320,818,532
Total number of equity shares outstanding at the end of the year
b)
2002-03
Calculation of Weighted Average number of equity shares of Rs. 10 each
Net Profit after tax available for equity shareholders
Earnings per share (face value per share Rs. 10 each)
Basic and Diluted:
-
Before prior period items (Rs.)
37.31
23.97
-
After prior period items (Rs.)
33.92
23.97
Note: Due to the issue of bonus Shares during the year 2003-04, the Earnings Per Share for financial year 2002-03 has been recomputed/restated.
4.2.10 Secondary segment information (by Geographic segments)
(Amount in Rupees)
Domestic
Operations
Overseas
Operations
Total
Revenues-Sales (net of taxes/duties) (Current Year)
2,348,182,348
12,862,410,660
15,210,593,008
Revenues-Sales (net of taxes/duties) (Previous Year)
10,926,572,485
1,225,058,915
9,701,513,570
Carrying Amount of Segment Assets (Current Year)
130,155,808
2,929,792,508
3,059,948,316
Carrying Amount of Segment Assets (Previous Year)
139,160,146
2,569,313,528
2,708,473,674
Notes on Segment Information:
Considering the nature of the company's business, its activities and operations, the internal financial reporting and the element of risk and returns, as also that it is
predominantly engaged in the manufacture of storage media products, there are no business segments within the meaning of AS 17 - Segment Reporting,Information
has therefore, been given as above in relation to the domestic/overseas operations, by way of geographic segments.
4.2.11 Pursuant to an agreement dated 25.03.2004, the Company issued 5,400,000 Share Warrants, each convertible into one equity share at an exercise price of Rs. 336
per warrant. The Company has received an advance of 10% of the exercise price, amounting to Rs. 181,440,000 from Woodgreen Investment Limited (WIL). The
warrants may be exercised at the sole option of WIL at any time before September 28, 2005. If the warrants are exercised by WIL, the Company will allot 5,400,000
fully paid equity shares of Rs. 10 each on receipt of the balance consideratino of Rs. 1,632,960,000. If the warrants are not exercised by WIL, the advance will be
forfeited by the Company.
5
4.2.12 a)
Fixed Assets written off comprise assets discarded (Rs. 14,417,593) on redundancy due to discontinuation of manufacturing operations in respect of one of
the product line.
b)
Deferred Revenue expenditure (Schedule 17 - Administration and Other Expenses) includes Rs. 10,931,719 pertaining to a product line discontinued during
the year.
Significant Accounting Policies and Notes of the subsidiaries:
A.
Glyphics Media Inc.
i)
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
ii)
Inventories
Inventories stated at the lower of cost or market, consist of optical and magnetic storage media held for resale. Cost is determined on a first-in, first-out basis.
iii)
Income taxes
Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statement and tax basis of assets
and liabilities, as measured by the enacted rates which are expected to be in effect when 'these differences reverse. Deferred tax assets and liabilities are
classified as current and non-current, depending on the classification of the asset and liabilities to which they relate. Deferred tax assets and liabilities not
related to an assets or liabilities are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.
The principle type of temporary difference between assets and liabilities for financial statements and tax returns results from a net operating loss
carryforward.
B.
European Optic Media Technology GmbH
i)
General
European Optic Media Technology was incorporated in Erfurt, Germany on January 30, 2003. The Company has its registered office at Maiozerhofstrabe 12,
99084 Erfurt, Germany.
The object of the company are the pan-European trade and production of data media. The Company may conduct all business which directly or indirectly
promotes its objects or which furthers the developments of its product.
The first financial year begun on 30th January 2003 and terminated on 31st March 2004.
Pursuant to section 316 of the German Commercial Code, no audit is required under German Law as the Company does not fulfill during the year 2003 the
criteria's specified therein.
schedules to the consolidated accounts
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (contd...)
ii)
Summary of significant accounting policies
a)
Foreign currencies
The accounts are held in EURO. Assets, Liabilities, Income and expenses are recorded at the rates prevailing at the balance sheet date. Realised gains
and losses as well as unrealised losses are recorded in the Profit and Loss Account.
b)
Project expenses
Project expenses represent expenses incurred during the project stage, which will be apportioned to the value of the assets capitalized.
C.
Global Data Media FZ LLC
Following are the accounting policies adopted by the associate company in preparation of their annual accounts which are not in consonance of the policies that followed
by the parent company. No adjustment has been carried out in the consolidation of Financial Statements as it is not practicable to make appropriate adjustment in the
associates Financial Statements.
i)
Inventories
Traded inventory amounting to Rs. 113.20 million has been valued at First In First Out (FIFO) basis. However, as per MBIL cost is determined on Weighted
Average Cost basis.
ii)
Equipment and Motor Vehicles
Useful life of equipment and motor vehicles is expected to be three years. Effectively, these assets are being depreciated at rates higher than those specified in
Schedule XIV to the Companies Act, 1956.
iii)
6.
Goodwill
Goodwill is amortised using the straight line method over its estimated useful life of 10 years. Accordingly an amount of AED 281,000 (Rs. 3.5 million) has been
charged to the Profit and Loss Account during the year.
Previous Years' Figures
Previous years' figures of the group entities have been rearranged/ recast/ regrouped wherever considered necessary.
7.
Schedules 1 to 19 are annexed to and form an integral part of the Consolidated Balance Sheet as at 31.3.2004 and the Consolidated Profit and Loss Account for the year ended on
that date.
For K. C. Khanna & Co.
Chartered Accountants.
Nitin K. Jain
Partner
Membership No 83084
Place: New Delhi
Date: June 18, 2004
Deepak Puri
Chairman and Managing Director
Harnam D.Wahi
Director
Minni Katariya
Company Secretary
R Ganesan
General Manager Accounts
consolidated cash flow statement
(Pursuant to Listing Agreement with Stock Exchanges)
For the year ended 31st March (Rupees in Million)
A
2004
2003
3,676.27
2,314.44
2,268,87
1,175.28
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit before tax
Adjustments for:
Depreciation
Interest Expense
693.65
543.38
Interest Income
(98.20)
(43.25)
(0.59)
(0.15)
0.35
9.93
Income from Investments
Finance Lease Payments
Profit on Fixed Assets sold
(0.06)
--
Loss on sale of Investments
(0.05)
0.01
Miscellaneous Expenditure written off
0.12
0.42
Deferred revenue expenditure written off
25.56
2.57
Bad Debts Written off
33.53
30.87
Provision for Bad & Doubtful Debts
60.68
38.85
Unclaimed Balances Written Back
(8.34)
(4.26)
Provision for Gratuity & Leave Encashment
7.44
3.96
Taxation on Foreign Branch
0.20
2.90
Stock Written off
1.91
50.72
Fixed Asset Written off
Unrealised foreign exchange (gain)/loss
14.42
5.15
112.39
(165.25)
Share of loss in Associate
30.77
--
Surplus on desubsidisation
(103.39)
--
Operating profit before working capital changes
6,715.53
3,965.57
Adjustments for:
- Trade and Other Receivables
(709.94)
248.37
- Inventories
(948.69)
1,365.87
- Trade and Other Payables
Cash generated from operations
- Direct Taxes Paid
- Miscellaneous Expenditure
Net cash from operating activities
B
914.83
6,494,64
(26.79)
4.37
--
64.14
5,759.05
6,563.15
(7,444.09)
(9,922.97)
(48.07)
2,906.53
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Fixed Assets
Capital Work in Progress (including Incidental Expenditure)
Sale of fixed assets
91.93
--
Sale of investments
885.62
385.20
(978.11)
(385.00)
Purchase of investments
Profit on sale of long term investment (sale of subsidiary)
Interest Received
Income from Investments
Net cash used in investing activities
C
728.94
5,785.84
103.39
--
72.25
42.42
0.59
0.15
(7,316.49)
(6,973.67)
5,120.64
--
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Issue of Share Capital/Share Warrants
(including Share Premium)
Repayment of Preference Share Capital
Proceeds from Long Term Borrowings
Repayment of Long Term Borrowings
Proceeds from short term borrowings (net)
Finance Lease Rent Payment (Principal Portion)
Interest Paid
--
(75.00)
4,615.72
9,896.08
(1,836.38)
(6,618.49)
(232.43)
(413.01)
(0.35)
(9.93)
(709.54)
(489.57)
Dividend Paid (Including Corporate Dividend Tax)
(144.67)
(126.24)
Net cash from financing activities
6,812.99
2,163.84
consolidated cash flow statement (contd.)
(Pursuant to Listing Agreement with Stock Exchanges)
For the year ended 31st March (Rupees in Million)
D
2004
2003
1,753.32
NET INCREASE IN CASH AND CASH EQUIVALENT (A+B+C)
5,255.55
Cash and cash equivalents at the beginning of the year
2,744.57
991.25
Cash and cash equivalents at the end of the year
8,000.12
2,744.57
Cash and cash equivalents comprise:
Cash, Cheques / Drafts and imprest balances with employees
Fixed Deposits
Balance with Scheduled Banks
115.27
33.63
6,988.23
2,122.10
896.62
588.84
8,000.12
2,744.57
Notes:
1
The above Cash flow statement has been prepared under the indirect method set out in AS-3 'Cash Flow Statements' issued by the Institute of Chartered Accountants of India
2.
3
Interest paid is exclusive of and purchase of Fixed Assets is inclusive of interest capitalised Rs. 21.15 Million (Previous Year Rs. 68.71 Million)
Previous year's figures have been regrouped and recast wherever necessary to conform to the current year classification
4
Following non cash transactions have not been considered in the cash flow statement
5
-
Tax deducted at source
-
Assets acquired on credit/lease/hire purchase
Cash and cash equivalents include Rs. 5,709,205: Previous year Rs. 5,382,909 which are not available for use by the Company. (Refer schedule 10 in the accounts)
As per our report of even date
For K. C. Khanna & Co.
Chartered Accountants.
Nitin K. Jain
Partner
Membership No 83084
Place: New Delhi
Date: June 18, 2004
Deepak Puri
Chairman and Managing Director
Harnam D.Wahi
Director
Minni Katariya
Company Secretary
R Ganesan
General Manager Accounts
MOSER BAER INDIA LIMITED
Regd. Office: 43-A, Okhla Industrial Estate, New Delhi-110020
Tel: 51635201-05, 26911570-74 Fax: 51635211, 26911860
E-mail: [email protected], [email protected]
NOTICE
st
th
Notice is hereby given that the 21 Annual General Meeting of the company will be held on Monday, 26 July, 2004 at 9.30 A.M. at FICCI Golden Jubilee Auditorium,
Federation House, Tansen Marg, New Delhi-110001 to transact the following business: st
1.
To receive, consider and adopt the audited Balance Sheet as at 31 March 2004, Profit and Loss Account for the year ended on that date and the Reports of
2.
To declare dividend on Equity Shares of the company.
3.
To appoint a Director in place of Mr. Ratul Puri, who retires by rotation and being eligible, offers himself for re-appointment.
4.
To appoint a Director in place of Mr. Harnam D Wahi, who retires by rotation and being eligible, offers himself for re-appointment:
5.
To consider and, if thought fit to pass with or without modification(s), the following resolution as a Special Resolution:
the Directors and Auditors thereon.
“RESOLVED THAT M/s. Price Waterhouse, Chartered Accountants, be and are hereby appointed Auditors of the company, in place of M/s. K.C. Khanna &
Co., Chartered Accountants, the retiring Statutory Auditors, to hold office from the conclusion of this Annual General Meeting until the conclusion of the next
Annual General Meeting and that they may be paid the remuneration which may be decided by the Board of Directors/ Audit Committee of the Board of
Directors of the company.
6.
To consider and, if thought fit to pass with or without modification(s), the following resolution as an Ordinary Resolution:
“RESOLVED THAT in accordance with the provisions of Sections 198, 269 & 309 read with Schedule XIII and other applicable provisions, if any, of the
Companies Act, 1956, and Articles of Association of the company, consent of the company be and is hereby accorded to increase the remuneration of Mr.
st
Deepak Puri, Managing Director of the company, for the financial year 2004-05, to take on effect from 1 April, 2004, to an amount the details of which are
given in the Explanatory Statement annexed hereto.
FURTHER RESOLVED THAT where in any financial year during the currency of tenure of Mr. Deepak Puri as Managing Director, the company has no profits or
its profits are inadequate, then remuneration may be paid to him in accordance with the provisions of Section II of Part II of Schedule XIII of the Companies Act,
1956 at that time.
FURTHER RESOLVED THAT the Board of Directors of the company or any committee thereof be and is hereby authorized to do all such acts, deeds and
things as in its absolute discretion it may think necessary, expedient or desirable and to settle any question or doubt that may arise in relation thereto in order
to give effect to the foregoing resolution and to amend, alter or otherwise vary the terms and conditions of appointment of Mr. Deepak Puri, including his
remuneration provided such remuneration does not exceed limits prescribed under the provisions of the Companies Act, 1956 and any statutory
modifications or re-enactment thereof or any other guidelines relating to managerial remuneration as may be notified by the Government of India from time to
time as may be considered by it to be in the best interest of the company.”
7.
To consider and, if thought fit to pass with or without modification(s), the following resolution as an Ordinary Resolution:
“RESOLVED THAT in accordance with the provisions of Sections 198, 269 & 309 read with Schedule XIII and other applicable provisions, if any, of the
Companies Act, 1956, and Articles of Association of the company, consent of the company be and is hereby accorded to increase the remuneration of Mr.
st
Ratul Puri, Executive Director of the company, for the financial year 2004-05, to take on effect from 1 April, 2004, to an amount the details of which are given in
the Explanatory Statement annexed hereto.
FURTHER RESOLVED THAT where in any financial year during the currency of tenure of Mr. Ratul Puri as Executive Director, the company has no profits or its
profits are inadequate, then remuneration may be paid to him on the basis of effective capital of the company calculated in accordance with the provisions of
Section II of Part II of Schedule XIII of the Companies Act, 1956 at that time.
FURTHER RESOLVED THAT the Board of Directors of the company or any committee thereof be and is hereby authorized to do all such acts, deeds and
things as in its absolute discretion it may think necessary, expedient or desirable and to settle any question or doubt that may arise in relation thereto in order
to give effect to the foregoing resolution and to amend, alter or otherwise vary the terms and conditions of appointment of Mr. Ratul Puri, including his
remuneration provided such remuneration does not exceed limits prescribed under the provisions of the Companies Act, 1956 and any statutory
modifications or re-enactment thereof or any other guidelines relating to managerial remuneration as may be notified by the Government of India from time to
time as may be considered by it to be in the best interest of the company.”
8.
To consider and, if thought fit, to pass with or without modifications, the following resolution as a Special Resolution:
“RESOLVED THAT pursuant to Section 31 and other applicable provisions, if any, of the Companies Act, 1956, the following existing Articles of Association of
the company be and are hereby amended by addition/deletion/substitution of the following Articles at suitable places as mentioned hereinafter:
1.
ARTICLE 1
(a) The definition of “Shares” in Clause 1 of Article 1 shall be amended to read as follows:“Shares” means the equity and voting share capital of the company, including Global Depository Receipts, American Depository Receipts or such
other similar instruments and the underlying Equity Shares in relation thereto, at a par value of Rs. 10 per share, and shall, for the avoidance of
doubt, include the Warrants provided that in relation to Articles71-73, 75 and 82-85, the term “Shares” shall not include Global Depository
Receipts, American Depository Receipts or such other similar instruments or Warrants, to the extent these instruments do not carry, or the holders
of these instruments do not enjoy, the right to vote.”
(b) The following definitions shall be inserted after the definition of “Debt” in the Article 1 titled “Further Definitions":
(i)
(ii)
“Affiliate” with respect to a specified Person, means, any other Person (a) directly or indirectly Controlling, Controlled by or under common
Control with such specified Person.
“Capital Restructuring” shall have the meaning ascribed to it in Article 39B(a).
(iii) “Commission” shall have the meaning ascribed to it in Article 39A(e).
(iv) “Controlling”, “Controlled by”, or “Control”, with respect to any Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management, business or policies of such Person, whether through the ownership of voting securities, by contract
or otherwise, or the power to elect or appoint at least 50% of the directors, managers, partners or other individuals exercising similar authority
with respect to such Person
(v)
“Further Securities” shall have the meaning ascribed to it in Article 39A(d).
(vi) “Independent Directors” shall have the meaning ascribed to it in Article 91A(b).
(vii) “Investors” means collectively BIL, EIL, RIL and WIL and each one of them shall individually be referred to as an “ Investor”. It is hereby clarified
that the term “Investors” or “Investor” shall include:
(a) at the option of the Investors (which shall be exercisable in writing), any of the Affiliates of the Investors holding Equity Shares in the
Company,
(b) all the Affiliates of BIL, EIL, RIL or WIL to whom, BIL, EIL, RIL or WIL has assigned or transferred (without notice or consent) part or whole of
its rights and obligations under these Articles and other rights accruing in relation to ownership of the Shares, and
(c) all third parties (other than Affiliates of BIL, EIL, RIL or WIL) to whom BIL, EIL, RIL or WIL has assigned or transferred part or whole of its
rights and obligations under or pursuant to these Articles and other rights accruing in relation to the ownership of Shares, provided that
such assignment or transfer: (a) relates to more than 5% shareholding in the Company, and (b) has been consented to in writing by the
Promoters.
(viii) “Offered Shares” shall have the meaning ascribed to it in Article 39B(b).
(ix) “Purchaser” shall have the meaning ascribed to it in Article 39B(b).
(x)
“Restricted Party” shall mean the entities as agreed from time to time between the Investors, the Promoters and the Company.
(xi) “Selling Promoter” shall have the meaning ascribed to it in Article 39B(b).
(xii) “Senior Management” means (a) key managerial personnel of the rank of general manager or above employed or retained by the Company or
(b) any employee of the Company whose annual compensation (inclusive of all benefits) exceeds Rs. 1,000,000;
(xiii) “Statutory Auditor” shall have the meaning ascribed to it in Article 157.
th
(xiv) “Subsidiary” means a subsidiary of the Company (whether existing as on 25 March, 2004 or established in the future) and shall have the
meaning as set forth in Section 4 of the Companies Act, 1956 as may be amended from time to time.
(xv) “Tag Along Shares” shall have the meaning ascribed to it in Article 39B(b).
(xvi) “WIL” means Woodgreen Investment Ltd.”
(c) The following definitions in Article 1 shall be deleted:
(i)
The definition of “Electra Partners Mauritius Limited”
(ii)
The definition of “The Auditor” or “Auditor”
(d) All references to the “Auditor” in the Articles shall be amended to “Statutory Auditor”.
(e) Except for the references in Article 1 (vii), all other references to BIL, EIL and RIL (collectively) in the Articles shall be amended to the “Investors” and
all references to each of BIL, EIL, RIL shall be referred to individually as an “Investor”.
(f)
2.
All references to “Electra Partners” shall be deleted.
ARTICLE 39(ii)
Article 39(ii) shall be deleted
3.
ARTICLE 39(iii)
Article 39 (iii) shall be amended to read as follows:“In the event the collective shareholding of the Investors or the shareholding of the Promoters is reduced below 7.5% of the issued and outstanding
Shares, their respective rights as stated in these Articles shall stand terminated (except as a result of breach of these Articles by the Company or the
Promoters). The obligations and liabilities of the Promoters under these Articles shall continue regardless of the extent of their shareholding in the
Company.”
4.
ARTICLE 39A
Article 39 A shall be amended to read as follows: “(a) Subject to Article 39A(b), the Investors shall have the unrestricted freedom, and right (without notice or consent to any Person) at any time, to
transfer any or all of the Shares held by them to any Person. If in the case of such transfer or attempted transfer of Shares held by any Investor(s) is
restricted by the Company or any Promoter (or their nominee Directors on the Board), then the Company or the Promoters, as the case may be,
shall be liable to indemnify and hold harmless each of such Investor(s) in respect of all costs, liabilities and damages that may incur (including,
attorneys' fees and expenses) as a result of such restriction on transfer or attempted restriction on transfer and efforts to enforce the indemnity
granted hereby.
(b) The Investors shall not transfer all or any of the Shares held by them to any of the Restricted Parties, save and except if: (x) such transfer occurs
through a sale of the Shares on any recognised stock exchange only if the Investors are unaware that a proposed transferee is a Restricted Party; or
(y) such Transfer occurs to private equity funds, or mutual funds or other institutional investors only if the Investors are unaware that a proposed
transferee is a Restricted Party, or (z) such Transfer is effected after the written consent of any of: (i) Mr. Deepak Puri, or (ii) Mr. Ratul Puri, or (iii) any of
their heirs. The Parties may add to or delete from the list of Restricted Parties from time to time by mutual agreement.
(c) The Promoter(s) and the company agree that they shall provide and extend all assistance requested by any Investor in procuring any approval from
any governmental authority in the exercise of its rights under this Article 39A, including providing any documents required for such purpose.
(d) (i)
Subject to applicable laws and the execution of confidentiality agreements (as are customary in such transactions), the Promoters and the
company agree and undertake to provide all reasonably necessary assistance to enable any potential purchaser, identified by the Investors
to purchase all or part of the Shares held by the Investors, to carry out a due diligence review of the company as may be generally required or
reasonably requested by any such potential purchaser.
(ii)
The company and the Promoters agree and undertake that upon receipt of a written request from the Investors informing the company of the
Investors' decision to sell whole or part of the Shares then held by the Investors (including by way of one or more privately negotiated
transaction(s) or by way of public offer(s) of securities to be listed on a stock exchange in India or abroad, or a combination thereof, at the
Investors' sole option), the company and the Promoters shall, within four months of receiving such a request, make reasonable efforts,
subject to applicable laws, to facilitate the sale, including but not limited to preparing and signing the relevant offer documents, conducting
road shows, entering into such documents, providing all necessary information and documents necessary for preparing the offer document,
obtaining such regulatory or other approvals and doing such further reasonable acts or deeds as may be necessary to effect such a sale by
the Investors. Further, the company agrees to comply with all the procedures and execute documents in each case as are customary in
transactions of such nature.
(iii) The company and the Promoters agree that the Investors shall be entitled to make one or more requests for sale of their Shares under this
Article 39A(d), either in whole or in part, and the company and the Promoters shall comply with the requirements of this Article 39A(d) in
respect of each such request.
(iv) For the purpose of this Article 39A(d), the Investors shall have the sole right to determine the nature of securities to be offered and the price for
such offering. The stock exchange(s) on which the securities shall be listed and the appointment of an investment bank as book runner for the
offering shall be mutually agreed between the Promoters, Investors and the company. In the event that the company, the Promoters and the
Investors do not reach an agreement with regard to the choice of stock exchange(s) on which the securities are to be listed and/or the choice
of investment banker to be appointed as book runner for the offering, the Investors shall have the option, at their sole discretion, to (a) require
the listing of the securities on any one of the following stock exchanges: Singapore Stock Exchange, London Stock Exchange or Luxembourg
Stock Exchange, and (b) appoint any one or more of the following investment banks as book runner(s) for the offering: (i) Credit Lyonnais,
Merrill Lynch, Citigroup, Morgan Stanley, Kotak Mahindra, or UBS Warburg, or (ii) the Affiliates or joint ventures, in India or abroad, of the
aforesaid entities. It is hereby clarified that the Investors shall have the right to appoint, at their sole discretion, any investment bank(s) as a
member(s) of the syndicate, co-lead manager(s) or other advisor(s) to the offering. The costs and expenses in respect of such sale of
securities shall be borne by the Investors in the same proportion that the securities sold by the Investors bears to the total securities that are
sold in the offering under this Article 39A(d). Where the securities sold in such offering consist solely of Shares sold by the Investors, then the
Investors shall bear all the expenses and costs related to such offering.
(v)
In the event that the company issues American Depository Receipts, Global Depository Receipts or such other similar instruments (the
“Further Securities”) that are listed or are to be listed on any stock exchange, then subject to applicable laws, upon written request by the
Investors, the company shall re-classify, as may be required, and list the Shares held by the Investors on the same date (or at a future date, if
requested in writing by the Investors) and on the same stock exchange(s) on which listing of the Further Securities occurs. The company's
obligations to list the Shares held by the Investors under this Article 39A(d)(v) shall exist irrespective of whether the Investors sell their Shares
pursuant to such listing or not.
(e) In the event that the company files with the United States Securities and Exchange Commission (“Commission”), a registration statement for the
company's securities:
(i)
at the Investors' written request, the company shall cover in such registration transfers of all Shares and Warrants (including by means of any
distribution to the limited or general partners of any Affiliates of the Investors) on behalf of the Investors and any permitted transferees. The
expenses of preparation and filing of such registration statement and the fees/commission payable to the underwriters appointed shall be
borne by the Investors in the same proportion that the securities transferred by the Investors under this Article 39A(e) bears to the total
securities that are registered with the Commission as part of the offering. Upon filing the registration statement, the company will use its best
efforts to cause the registration statement to be declared effective by the Commission and to keep the registration statement effective with the
Commission so long as necessary under applicable law to permit the transfer of the securities by the Investors;
(ii)
if the Investors choose not to effect registration of the Shares and/or Warrants held by the Investors at the time of registration by the company
of its securities, then the company shall be obligated to register the Shares and/or warrants held by the Investors at any later date upon written
request of the Investors. If the Investors choose to register their Shares and/or warrants at a later date and at such date: (x) no other securities
of the company are being registered, then the expenses of such registration shall be borne solely by the Investors, or (y) if other securities of
the company are being registered, then the expenses for such registration shall be borne by the Investors in the same proportion that the
securities registered by the Investors bears to the total securities that are registered at such date.
(iii)
if the company lists its securities on NASDAQ, the New York Stock Exchange or such other exchange, upon written request by the Investors,
the company shall be obligated to list the Shares held by the Investors on the same date (or at a future date, if requested in writing by the
Investors) and on the same stock exchange(s) on which listing of the securities takes place; and
(iv) the company's obligations as regards listing/registration under this Article 39A (e) shall exist irrespective of whether the Investors sell their
Shares pursuant to such listing/registration or not.”
5.
ARTICLE 39B (a)
Article 39B (a) shall be substituted with the following:
“(i) The Promoters may freely transfer, in whole or in part, without any restriction including without complying with the provisions of Article 39B (a)(ii)
below or Article 39B (b), such number of Shares held by them that are in excess of 17,000,000 Shares, and provided that the Promoters continue to
hold 17,000,000 or more Shares following any such transfer. For the avoidance of doubt, it is clarified that the inter-se transfer of any Shares
amongst the Promoters shall be exempt from any restriction provided that the Promoters give written notice to the Investors within 30 days of any
such Transfer.
(ii)
In the event that the Promoters wish to effect any transfer of their Shares where either (x) such transfer would result in their aggregate shareholding
in the company falling below 17,000,000 Shares, or (y) their aggregate shareholding in the company is already below 17,000,000 Shares, then
each Promoter hereby covenants, undertakes and agrees that they shall not transfer any Shares held by them, without for each such transfer:
(x) the prior written consent of the Investors, and (y) complying with the provisions of Article 39B (b).
(iii) In the event that the company undertakes any form of restructuring of its share capital (“Capital Restructuring”), including, but not limited to: (i)
consolidation or subdivision or splitting of its Shares; (ii) issue of bonus Shares; (iii) issue of Shares in a scheme of arrangement (including
amalgamation or de-merger); (iv) reclassification of Shares or variation of rights, into other kinds of securities, then the number of Shares of
17,000,000 referred to in Article 39B(a)(i) and (ii)above and Article 39B(b), or the number of Shares of 10,000,000 referred to in Article 39B(b) , as
the case may be, shall be proportionately adjusted to ensure that the aggregate shareholding of the Promoters relative to the other shareholders of
the company after the occurrence of such Capital Restructuring is not different from their aggregate shareholding relative to the other shareholders
of the company as it existed prior to the occurrence of such Capital Restructuring.”
6.
ARTICLE 39B (b)
Article 39B (b) shall be substituted with the following new clause:“(i) If any Promoter(s) (such Promoter(s), the “Selling Promoter(s)”) desire to sell any number of Shares held by such Person to any other Person, then
the Selling Promoter(s) shall, prior to completing such sale send a written notice to each Investor setting out all relevant details of the proposed sale
including but not limited to the (1) number of Shares proposed to be transferred (the “Offered Shares”), (2) the name and address of the proposed
transferee, (3) the proposed purchase price and (4) the material terms of the transfer.
(ii)
Within a period of thirty (30) days from the date of receipt of the notice mentioned in Article 39B(b)(i) above, the Investors, by way of written notice to,
the Purchaser, Selling Promoter(s) and Mr. Deepak Puri, shall have the right to require the Selling Promoter(s) to cause the Person to whom the
Selling Promoter(s) intends to sell the Shares (such Person, the “ Purchaser”) to purchase from the Investors the Shares (excluding any global
depository receipts and American depository receipts or any similar instrument unless these have been converted to the underlying shares in the
company, in the event that the Purchaser is a resident of India) owned by the Investors as a condition precedent to the completion of the sale and
purchase between the Selling Promoter(s) and the Purchaser. The Investors shall provide notice to the Selling Promoter(s) setting out the number
of Shares (the “Tag Along Shares”) in respect of which they propose to exercise the tag along rights as set out in this Article 39B(b).
(iii) Subject to the provisions of Articles 39B (b)(iv) and 39B(b) (v) below, within a period of thirty (30) days from the date of receipt of the notice from the
Investors, the Selling Promoter(s) shall cause the Purchaser to acquire the Tag Along Shares offered for sale by the Investors. The Investors shall be
paid the same price per Tag Along Share and the sale shall be effected upon the same terms and conditions as are received by the Selling
Promoter(s), provided that the only representation that the Investors may in this case be required to provide shall be limited to the title of the Shares
being sold. The Selling Promoter(s) shall not complete the sale of any of their Shares unless the Purchaser has purchased the Tag Along Shares
from the Investors in accordance with the provisions of this Article 39B(b).
(iv) Where (A) the Promoters' aggregate shareholding in the company is equal to or less than 17,000,000 Shares but equal to or greater than
10,000,000 Shares as on the date that the Selling Promoter(s) provides notice in Article 39B(b) (i) above, and (B) any proposed Transfer of Shares
would not result in the Promoters' aggregate shareholding in the company falling below 10,000,000 Shares, then in the event the Purchaser is
unwilling or unable to acquire all the Shares proposed to be sold by the Selling Promoter(s) and the Tag Along Shares, then the number of Shares to
be sold by the Selling Promoter(s) and the Investors to the Purchaser shall be calculated as follows:
(a)
the Shares to be sold by the Selling Promoter(s) to the Purchaser shall be:
= XxZ
Y
where:
X = Total number of Shares held by the Promoters as on the date that the Selling Promoter(s) provides notice in Article 39B(b) (i) above
Y = Total number of Shares held in the aggregate by the Promoters and the Investors as on the date that the Selling Promoter(s) provides
notice in Article 39B(b) (i) above
Z = Offered Shares
(b) The Shares to be sold by the Investors to the Purchaser shall be the difference between the Offered Shares and the Shares to be sold by the
Selling Promoter(s) to the Purchaser calculated in accordance with Article 39B(b)(iv)(a) above.
For the purpose of this Article 39B(b)(iv), the Investors agree that Global Depository Receipts, American Depository Receipts or such similar
instruments shall be included in the Tag Along Shares only if the Purchaser is desirous of purchasing the Global Depository Receipts, American
Depository Receipts or such similar instruments, failing which such instruments may be included in the Tag Along Shares only if they are converted
into Equity Shares of the company.
(v)
Where the Selling Promoter(s) wish to effect any transfer of their Shares where either (A) such transfer would result in their shareholding in the
company falling below 10,000,000 Shares, or (B) the Promoters' shareholding in the company is already less than 10,000,000 Shares as on the
date that the Selling Promoter(s) provide notice in Article 39B(b) (i) above, then the Investors shall have the right to transfer all of the Tag Along
Shares (subject to a maximum of the number of Offered Shares) and the Selling Promoter(s) shall ensure that all such Tag Along Shares are
purchased from the Investors."
7.
ARTICLE 39B (c) and (d)
Article 39B (c) and (d) shall be deleted
8.
ARTICLE 67A(a)
Article 67A(a) shall be substituted with the following new clause :
“The quorum for a general meeting of the shareholders of the company shall be the presence in person of at least 5 members; provided, however, no
obligation of the company or any of its Subsidiaries will be entered into, no decision or determination will be made and no action will be taken by or with
respect to the company or any of its Subsidiaries in respect of any of the matters listed in Article 117C(b), unless at least one representative of the
Investors (collectively) and one representative of the Promoters (collectively) is either: (A) present and at a properly constituted general meeting of the
company gives his/ her approval and authorization to such action, or (B) gives his/ her consent in writing to the company prior to the general meeting at
which such action is to be considered.”
9.
ARTICLE 67A(b)
Article 67A(b) shall be deleted
10. ARTICLE 90A
Article 90A shall be deleted
11. ARTICLE 91A(b)
Article 91A(b) shall be substituted with the following new clause:
“(i) In addition to the existing independent Directors, the company agrees to appoint three (3) new independent directors (the “Independent
Directors”) on the Board by September 30, 2005 in accordance with the following schedule:
(a)
the first such director shall be appointed not later than September 30, 2004;
(b) the second such director shall be appointed not later than March 31, 2005; and
(c)
(ii)
the third such director shall be appointed not later than September 30, 2005.
All the Independent Directors shall be nominated by the Promoters and appointed after due consultation with, and after obtaining the prior written
consent of, the Investors. The Promoters shall provide, in writing, the names of three individuals for each Independent Director to be appointed. The
Investors shall exercise their rights of (i) choosing an Independent Director from the names suggested, or (ii) disapproving all the names
suggested, within 30 days from the date of intimation of the names by the Promoters. In the event the Investors do not approve of the persons
identified by the Promoters, the Promoters shall, within 6 weeks from the date of intimation of such disapproval by the Investors, identify and
provide the names of three other persons to the Investors for their consent. This process shall be followed until the Investors provide their consent
to the persons identified by the Promoters. The process, as provided in this Article 91A(b)(ii), shall be followed separately for the appointment of
each Independent Director in accordance with Article 91A(b)(i)(A)-(C). The Promoters and the Investors shall vote the Shares held by them to elect
and appoint the Independent Directors that are chosen pursuant to this Article 91A(b)(ii).
(iii) In the event that any or all of the Independent Director(s) appointed as aforesaid, cease for any reason, to be a Director of the company, the
company shall immediately appoint such number of Independent Director(s) in accordance with this Article, with the prior written consent of the
Investors and the Promoters, as is required to replace such number of Independent Director(s), within 6 (six) months of the Independent Director(s)
ceasing to be a Director.
(iv) For the purpose of these Articles, it is hereby expressly stated that the term “Independent Director” shall have the same meaning as under the
applicable law in force from time to time.
(v)
In the event that the Independent Directors cannot be appointed in the manner specified in Article 91A(b)(i) above, on account of the failure of the
Promoters and the Investors to agree to the nominees suggested, it shall not be deemed to be a breach of this Article 91A(b) by the Promoters
and/or the company, provided that the Promoters/company have duly complied with their obligations under Article 91A(b).”
12. ARTICLE 91A(c)
Article 91A(c) shall be substituted with the following new clause:
“The (i) Investors shall collectively have the right to appoint at least 1 (one) member, and (ii) Promoters shall collectively have the right to appoint at least
th
1 (one) member, on every committee of the Board of the company which is in existence as on 25 March, 2004 and which may be constituted by the
Board from time to time.”
13. ARTICLE 91A(e)
A new Article 91A(e) shall be added:
“All the rights of the Investors and the Promoters in Article 91A with respect to appointment of Directors on the Board and each committee shall apply to
each of the Subsidiaries in the same manner as such rights apply to the company.”
14. ARTICLE 105A
Article 105A shall be deleted.
15. ARTICLE 107A(a)
Article 107A(a) shall be renumbered as Article 107A and Article 107A(b) shall be deleted.
16. ARTICLE 117C (b)
First paragraph of Article 117C (b) shall be amended to read as follows:
“Notwithstanding any other provisions of these Articles to the contrary, (and notwithstanding that any such matter may be adopted by the Board by
passing of resolutions by circulation), no obligation of the company or any of its Subsidiaries will be entered into, no decision or determination will be
made and no action will be taken by or with respect to the company or any of its Subsidiaries in respect of any of the following matters, unless at least
one Director nominated by the Investors and a Director nominated by the Promoters (A) is present and at a properly constituted meeting of the Board
gives his/her approval and authorisation to such action (or, in the case of resolutions by circulation, at least one Director nominated by the Investors and
a Director nominated by the Promoters has approved and authorised such resolutions in writing) or (B) has given his/her consent in writing to the Board
prior to the Board meeting at which such action is to be considered:
(i)
the entering into of, an amalgamation, merger or consolidation with any other body corporate, or Person or a de-merger, arrangement or
compromise;
(ii)
the taking of any steps to wind-up or terminate the corporate existence, filing for bankruptcy or as a “sick” company or entering into any
arrangement with the creditors;
(iii) acquisition of any business, creation of or entering into of any joint venture or partnership and the creation of or investment in any Subsidiary of the
company or other forms of investments.
(iv) the transfer (including any lease or exchange) of assets of the company to any Person of a value and amount aggregating more than Rs.200 million
on a cumulative basis in any Financial Year;
(v)
incurring or committing to incur any capital expenditure from acquisition of assets or otherwise of a value and amount aggregating more than
Rs.300 million on a cumulative basis in any Financial Year, except if a nominee Director of any Investor had accorded their consent on the resolution
approving the Capital Expenditure Budget for such Financial Year;
(vi) any increase, reduction, buy back, modification or alteration of the authorized or issued share capital of the company, including the issue of
Shares, convertible preference shares, non-voting shares, warrants, options, convertible debentures or other instruments or securities which may
be converted into Shares and or which accord the holder voting rights in the company;
(vii) any agreement with or commitment to or any transaction with any Promoter or any Investor or any associate, relative or Affiliate of any Promoter or
of any Investor;
(viii) any amendments to the company's Memorandum of Association or Articles of Association, including any increase in the number of Directors on
the Board;
(ix) appointment of the Chief Financial Officer of the company;
(x)
appointment or removal of Senior Management;
(xi) the appointment or removal of the Statutory Auditor or internal auditor of the company;
(xii) the appointment or removal of the Managing Director (other than Mr. Deepak Puri or Mr. Ratul Puri) or the CEO/COO;
(xiii) approval or amendment of the Business Plan;
(xiv) commencement of any business other than the Business or any other business conducted by the company as of June 1, 2000;
(xv) any action or commitment whereby the ratio of the company's Debt to the Equity of the Company's shareholders exceeds 1.5:1 at any time;
(xvi) settlement of any litigation or dispute between the company or any Person arising out of the same cause of action where the settlement amount
exceeds Rs.20 million in the aggregate value;
(xvii) changes in the material accounting or taxation policies of the company;
(xviii) giving of any security or guarantee to any Person of an amount aggregating more than Rs.10 million on a cumulative basis in any Financial Year;
(xix) declaration or payment of any dividend in a Financial Year in excess of the lower of (a) Rs.3 per Share or (b) 20% of the profits of the company after
deduction of all taxes payable;
(xx) any investment by the company (by way of a loan, advance, deposit or otherwise given by the company to any Person) of a value and amount
aggregating more than Rs.100 million on a cumulative basis in any Financial Year, or any such investment by the company of a value and amount
aggregating more than Rs.50 million on a cumulative basis in any Financial Year which is made in favour of any one Person (including its Affiliates).
For avoidance of doubt, such investment excludes:
(a)
deposits made by the company with any one or more of the banks agreed between the Promoters and the Investors, provided that the
aggregate deposits with certain banks, as may be agreed upon by the Promoters, company and the Investors, shall not exceed either
Rs. 500 million or Rs. 200 million, as may be specified;
(b) purchase of Government of India securities;
(xxi) giving of or agreeing to give any loan, advance or debt of a value or amount aggregating more than Rs.50 million on a cumulative basis in any
Financial Year, except if an advance was given in connection with a capital expenditure which was approved by a nominee Director of any Investor
on a resolution approving the Capital Expenditure Budget;
(xxii) agreeing to any swap agreement, cap agreement, collar agreement, futures contract, forward contract, derivative transaction or similar
arrangement with respect to interest rates, currencies and securities, except the hedging contracts entered into in the ordinary course of business
consistent with past practice of the company;
(xxiii) trading, or agreeing to trade, in securities of any nature and kind whatsoever;
(xxiv) calling or convening a general meeting of the shareholders of the company to consider any matter, directly or indirectly, relating to any of the
foregoing;
(xxiv) any agreement or commitment to do any of the foregoing.”
17.
ARTICLE 117C
A new Article 117C (c) shall be inserted after Article 117C (b):
“(i) It is hereby clarified that if any of the matters specified in Article 117C(b) require the approval of the shareholders of the company at a general
meeting, then no obligation of the company or any of its Subsidiaries will be entered into, no decision or determination will be made and no action
will be taken with respect to the company or any of the Subsidiaries in respect of any of the matters specified in Article 117C(b) unless: (A) the
authorised representative of both the Investors and the Promoters at the general meeting vote in favour of such resolution, or (B) the Investors and
the Promoters give their consent in writing prior to such general meeting.
(ii)
It is further clarified that the matters specified in Article 117C(b) shall refer not only to matters pertaining to the company but also to such matters as
are applicable to any of its Subsidiaries. In case of financial limits specified in Article 117C(b), such limits shall apply to the company and all of its
Subsidiaries in the aggregate and not only to the company.”
18. ARTICLE 157
Article 157 shall be substituted with the following new Article:
“(i) The company shall, in accordance with all applicable laws, keep true and accurate books and records of account in accordance with generally
accepted accounting principles consistently applied. All such books and records (and any supporting documents relating thereto) shall be kept at
the company's registered office or such other mutually acceptable place as appropriate under applicable law, and shall be available at all
reasonable hours for inspection and review by the Investors or their authorised representatives. At the end of each Financial Year, the books and
records of the company shall be audited, and requisite financial and income statements and balance sheets prepared and certified, by the
Statutory Auditor.
(ii)
The company's statutory audit shall be undertaken by one of the four internationally recognised firms of chartered accountants or their
representatives in India (the “Statutory Auditor”), either individually or jointly, with any other firm of chartered accountants appointed by the
company. The company and the Promoters undertake to appoint the Statutory Auditor no later than June 30, 2004. The Statutory Auditor so
appointed, along with any other firm of chartered accountants that may be appointed, shall be responsible for undertaking the statutory audit for
the period commencing with the financial year ending March 31, 2005.”
19. ARTICLES 172 AND 173
Articles 172 and 173 shall be deleted.
20. ARTICLE 175
The first paragraph of Article 175 shall be substituted with the following paragraph:
“Subject to applicable laws, the company shall provide the Investors and the Promoters, unless otherwise instructed in writing by the Investors or the
Promoters, as the case may be, the following on a regular basis in relation to: (i) the company and (ii) its Subsidiaries, and (iii) such other entities as may
be agreed from time to time between the Investors, the Promoters and the company.”
21. ARTICLE 175
A new Article 175 (j) shall be added at the end of Article 175 (i):
“(j) Within 15 days from the end of each calendar quarter, the following information shall be provided to the Board of Directors of the company for the
relevant quarter then ended:
i.
A statement on profitability of each unit and key products of the company, containing details as agreed in writing amongst the Promoters, the
Investors and the company;
ii.
A statement summarizing the age-wise analysis of receivables outstanding at the end of each quarter, and the extent to which these
receivables are credit-insured;
iii.
Quarterly reports on operating and capital expenditure, including a comparison of actual expenditure against budgets;
iv.
Minutes of the Board meetings held during the quarter;
v.
Minutes of shareholder meetings held during the quarter;
vi.
Minutes of meetings of committees of the Board held during the quarter.
Provided that the rights/information set out in Articles 175(e), 175(g) and 175(i) shall be provided only in respect of the company and its
Subsidiaries.”
22. NEW ARTICLE NUMBER 176
A new Article shall be inserted after Article 175 and shall be numbered as Article 176.
“In the event that there is any change in the shareholding of any one or more Investor(s) and/or their Affiliates holding Shares in the company (“Relevant
Shareholder(s)”) such that the Investors and/or their Affiliates and/or other Affiliates of Warburg Pincus LLC own in aggregate less than 76% of the equity
shares or common voting stock of the Relevant Shareholder(s), or the Relevant Shareholder(s) ceases to be Controlled by the Investors and/or their
Affiliates and/or other Affiliates of Warburg Pincus LLC (“Material Change in Shareholding”) then such Relevant Shareholder(s) shall not thereafter be
entitled to any rights nor be subject to any of the obligations under or pursuant to these Articles with effect from the date of closing of the transactions
that results in a Material Change in Shareholding of the Investor(s). Subject to Article 39(iii), such Material Change in Shareholding of a Relevant
Shareholder shall not affect the rights and obligations of the other Investors under these Articles. The Investor(s) shall, within 30 days of occurrence of
any Material Change in Shareholding of a Relevant Shareholder inform the company and the Promoters of such an occurrence. The rights and
obligations of the Relevant Shareholder(s) under or pursuant to these Articles shall be re-instated if at any time the Investors and/or their Affiliates and/or
other Affiliates of Warburg Pincus LLC re-acquire in aggregate more than 76% of the equity shares or common voting stock or re-acquire Control of the
Relevant Shareholder(s) unless the rights of the other Investors under these Articles have already ceased pursuant to Article 39(iii).”
Regd. Office:
By order of the Board of Directors
43-A, Okhla Industrial Estate,
for MOSER BAER INDIA LTD
New Delhi - 110 020.
Sd/-
Date: 29th June, 2004
COMPANY SECRETARY
NOTES
1.
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON POLL ON HIS BEHALF. A
PROXY NEED NOT BE A MEMBER OF THE COMPANY. A PROXY, IN ORDER TO BE EFFECTIVE, MUST BE RECEIVED AT THE OFFICE OF THE COMPANY'S
REGISTRAR AND SHARE TRANSFER AGENT- MCS LIMITED LOCATED AT W-40, OKHLA INDUSTRIAL AREA, PHASE-II, NEW DELHI-110020 NOT LESS
THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. A BLANK PROXY FORM IS ENCLOSED
2.
The Explanatory Statement under Section 173 (2) of the Companies Act, 1956 is annexed hereto.
3.
The Register of Members and Share Transfer Books of the company will remain closed from Thursday, 22 July, 2004 to Monday, 26 July, 2004 (both days
4.
The dividend for the year 2003-2004 as recommended by the Directors and if declared at the Annual General Meeting will be paid on or before Tuesday, 24
nd
th
inclusive).
th
August, 2004, to those members whose names appear:
th
a)
as beneficial owners as at the closure of business hours on Monday, 26 July, 2004 as per the list being furnished by National Securities Depository
Limited and Central Depository Services (India) Limited in respect of the shares held in electronic form, and
th
b)
5.
as members in the Register of Members of the company as at the closure of business hours on Monday, 26 July, 2004.
Members holding shares in physical form are requested to notify their change of address/ residential status, if any, under their signatures and quoting
respective folio nos. to the Registrar and Share Transfer Agent of the company- MCS Limited, whose office is located at W-40, Okhla Industrial Area, Phase-II,
st
New Delhi-110020, on or before Wednesday, 21 July, 2004. Members holding shares in electronic form may update such details with their respective
Depository Participants.
6.
The company will transfer the amount remaining unpaid in its dividend account for the year 1996-97 to the Investor Education and Protection Fund by Friday,
th
10 December, 2004. Those members who have not yet encashed their dividend warrants for the said year may refer the matter along with relevant details to
the Company Secretary at the Registered Office of the company located at 43-A, Okhla Industrial Estate, New Delhi - 110020 latest by Monday,
th
15 November, 2004 to claim their unpaid dividend.
7.
Members are requested to bring their Client ID and DP ID or Folio Numbers, as may be applicable, for easy identification of attendance at the meeting.
8.
Members / Proxies should bring the Attendance Slips duly filled in for attending the meeting.
9.
Members desirous of getting any information about the Accounts and operations of the company are requested to submit their queries addressed to the
Company Secretary at least 7 days in advance of the meeting so that the information called for can be made available at the meeting.
st
10. Particulars of Directors to be appointed / re-appointed at the 21 Annual General Meeting: a.
Mr. Ratul Puri
Mr. Ratul Puri, who holds a Bachelor's degree in Maths and Computer Science from Carnegie Mellon University, is the Executive Director of the
company. It is due to the efforts of the team led by him that your Company's optical and magnetic media are exported to 82 countries across six
continents and the company has strong tie-ups with all major technology brands in the world. Mr. Ratul Puri does not hold any other Directorship.
Mr. Ratul Puri retires by rotation at this Annual General Meeting and, being eligible, offers himself for re-appointment. The Board of Directors
recommends this resolution for approval by the shareholders. None of the Directors except Mr. Ratul Puri himself, Mr. Deepak Puri, Managing Director
and Mrs. Nita Puri, Director are concerned or interested in the resolution.
b.
Mr. Harnam D Wahi
Mr. Harnam D Wahi is a renowned management expert. He has been associated with the company since May, 1992 and has been instrumental in the
phenomenal growth of the company. Mr. Harnam D Wahi brings with him a wealth of experience and global expertise to Moser Baer India Limited,
having worked in several senior positions in prestigious Indian and international organizations such as the Inchcape Group, London, where he was
Chairman/ Managing Director/ Director of many highly diversified and reputed companies.
Apart from being a senior committee member of a number of Trade & Industries Associations, e.g. Indian Tea Association; Port Commissioners,
Calcutta; Deputy Chairman of Associated Chambers of Commerce & Industry and Deputy Chairman of Employers' Federation of India, Mr. Wahi was
also President of Bengal Chamber of Commerce, Indian Jute Mills Association and Indian Rope Manufacturers Association.
Mr. Wahi is a recipient of “Padma Shri” awarded by the President of India.
Mr. Harnam D Wahi retires by rotation at this Annual General Meeting and, being eligible, offers himself for re-appointment. The Board of Directors
recommends his re-appointment. Mr. Harnam D Wahi does not hold any other Directorship. He is a member of the following committees of your
company:-
a)
Compensation Committee - Chairman
b)
Investors' Grievances Committee - Chairman
c)
Audit Committee - Chairman
d)
Capex Committee - Chairman
e)
Banking and Finance Committee - Member
11. Kindly bring your copies of the Annual Report to the meeting.
12. Memorandum and Articles of Association and all the statutory records and registers required to be kept open for inspection in terms of the provisions of the
Companies Act, 1956 and the rules made thereunder, are available for inspection by the members of the company at its Registered Office between 11.00
A.M. and 1.00 P.M. on each working day upto the meeting date and also at the place of the meeting on the meeting day.
13. The investors may contact the Company Secretary for redressal of their grievances/queries. For this purpose, they may either write to her at the following
address: Moser Baer India Ltd
43-A, Okhla Industrial Estate,
New Delhi -110020.
Tel. Nos. 51635201-51635205, 26911570-26911574
Fax Nos. 51635211, 26911860
or e-mail their grievances / queries to the Company Secretary at the following e-mail address: - [email protected]
EXPLANATORY STATEMENT PURSUANT TO THE PROVISIONS OF SECTION 173(2) OF THE COMPANIES ACT, 1956
ITEM NO. 5
The term of M/s. K. C. Khanna & Co., Chartered Accountants is due to expire at the forthcoming Annual General Meeting. Pursuant to a resolution of the Board of
Directors of the company, it has been resolved that, subject to the approval of the members in a general meeting by Special Resolution, M/s. Price Waterhouse,
Chartered Accountants, be appointed as Statutory Auditors of the company, in their place.
ITEM NO. 6
th
Mr. Deepak Puri is a co-promoter and Managing Director of the company. At the Annual General Meeting of the company held on 28 September, 2001, the
st
shareholders had re-appointed him as the Managing Director for a period of five years at a monthly remuneration of Rs. 1,50,000 with effect from 1 September,
2001. Now, the Board of Directors is of the opinion that keeping in view his technical qualifications, thorough knowledge of various laws relating to the company's
affairs and excellent administrative capabilities and experience in handling various kinds of situations and the progress made by the Company, his remuneration
may be increased.
Following are the details of the annual salary (payable monthly) proposed to be paid to Mr. Deepak Puri, Managing Director: Consolidated Salary, Perquisites and Performance Bonus etc.: Rs. 4,00,00,000 (Rupees Four Hundred Lacs Only) per annum.
In addition to the above, he shall be entitled to receive the following: i)
Company's contribution towards Provident Fund, Superannuation Fund or Annuity Fund will not be included in the computation of ceiling on perquisites to the
extent these singly or put together are not taxable under the Income Tax Act, 1961.
ii)
Gratuity as per the rules of the company, but not exceeding half a month's salary for each completed year of service.
iii)
Encashment of leave at the end of tenure.
iv)
Provision of car for use on company's business.
v)
Free landline telephone facility at residence along with free mobile telephone facility. Long distance personal calls to be recovered by the company.
vi)
The Managing Director shall also be entitled to reimbursement of entertainment expenses actually and properly incurred in the course of business of the
company.
The increased remuneration would be paid only after the approval of shareholders in the Annual General Meeting.
None of the Directors, except Mr. Deepak Puri himself, Mrs. Nita Puri, Director and Mr. Ratul Puri, Executive Director are concerned or interested in the resolution.
This may be treated as an abstract pursuant to the provisions of Section 302 of the Companies Act, 1956.
ITEM NO. 7
th
Mr. Ratul Puri is the Executive Director of the Company. At the Annual General Meeting of the company held on 28 September, 2001, the shareholders had
st
appointed him as the Executive Director for a period of five years at a monthly remuneration of Rs. 2,50,000 with effect from 1 October, 2001. Now, the Board of
Directors is of the opinion that keeping in view the efforts put in by him for expansion and diversification of your company's business, his remuneration may be
increased.
Following are the details of the annual salary (payable monthly) proposed to be paid to Mr. Ratul Puri, Executive Director: Consolidated Salary, Perquisites and Performance Bonus etc.: Rs. 2,40,00,000 (Rupees Two Hundred Forty Lacs Only) per annum.
In addition to the above, he shall be entitled to receive the following: i)
Company's contribution towards Provident Fund, Superannuation Fund or Annuity Fund will not be included in the computation of ceiling on perquisites to the
extent these singly or put together are not taxable under the Income Tax Act, 1961.
ii)
Gratuity as per the rules of the company, but not exceeding half a month's salary for each completed year of service.
iii)
Encashment of leave at the end of tenure.
iv)
Provision of car for use on company's business.
v)
Free landline telephone facility at residence along with free mobile telephone facility. Long distance personal calls to be recovered by the company.
vi)
The Executive Director shall also be entitled to reimbursement of entertainment expenses actually and properly incurred in the course of business of the
company.
The increased remuneration would be paid only after the approval of shareholders in the Annual General Meeting.
None of the Directors, except Mr. Ratul Puri himself, Mr. Deepak Puri, Managing Director and Mrs. Nita Puri, Director are concerned or interested in the resolution.
This may be treated as an abstract pursuant to the provisions of Section 302 of the Companies Act, 1956.
ITEM NO. 8
Pursuant to the execution of First Amendment to the Shareholders Agreement between your company, the Promoters of your Company and Bloom Investments
th
Limited, Ealing Investments Limited, Randall Investments Limited and Woodgreen Investment Ltd. on 25 March, 2004, it has become necessary to
add/delete/substitute some of the Articles of Association of the company with the ones mentioned in the aforesaid resolution. As per the provisions of Section 31 of
the Companies Act, 1956, a company may alter its Articles of Association by passing a Special Resolution to this effect. The Board recommends this resolution for
approval of the shareholders. None of the Directors, except Mr. Deepak Puri, Managing Director, Mrs. Nita Puri, Director, Mr. Ratul Puri, Executive Director and Mr.
Rajesh Khanna, Nominee Director of Bloom Investments Limited (BIL), Ealing Investments Limited (EIL), Randall Investments Limited (RIL) and Woodgreen
Investment Ltd. (WIL) (BIL, EIL, RIL and WIL are affiliates of Warburg Pincus LLC) are concerned or interested in this resolution.
Regd. Office:
43-A, Okhla Industrial Estate,
By order of the Board of Directors
for MOSER BAER INDIA LTD
New Delhi - 110 020.
Date: 29th June, 2004
Sd/COMPANY SECRETARY
LISTING AT STOCK EXCHANGES
The Equity Shares of the company are listed at the following Stock Exchanges and the Company has paid the Annual Listing Fees for the year 2004-05 to all of
these Stock Exchanges:1.
The Stock Exchange, Mumbai
Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400001
2.
National Stock Exchange of India Limited
“Exchange Plaza”, Bandra- Kurla Complex,
Bandra (East), Mumbai- 400 051.
The company had applied for delisting of its shares from the Calcutta Stock Exchange Association Limited located at 7, Lyons Range, Kolkata- 700001 and has
completed all the formalities in this regard. However, the Calcutta Stock Exchange Association Limited has not yet given its approval for the same.
REWRITING THE FUTURE
MOSER BAER INDIA LIMITED
Regd. Office: 43-A, Okhla Industrial Estate, New Delhi-110020
Tel: 51635201-05, 26911570-74 Fax: 51635211, 26911860
E-mail: [email protected], [email protected]
ATTENDANCE SLIP
Annual General Meeting - Monday, 26th July, 2004
Name _________________________________________________ Name of Proxy ____________________________________________
Joint holder's name _____________________________________ Address of the member with Pin Code ________________________
_________________________________________________________________________________________________________________
Father's/husband's name (of first holder) _____________________________
Number of shares held in physical mode ____________________ Number of shares held in demat mode _______________________
Regd. Folio number* ____________________________ DP ID No**______________________ Client ID Number** ______________
* (Please note that folio no. must be provided)
**(Please note that DP ID and Client ID No. must be provided)
(To be filled in by the Member)
I certify that I am a registered Member/Proxy of the registered Member of the company.
I hereby record my presence at the Annual General Meeting of the company held on Monday, 26th July, 2004 at 9.30 AM at FICCI
Golden Jubilee Auditorium, Federation house, Tansen Marg, New Delhi - 110 001.
______________________________________________
_________________________________________
Meber's/Proxy's name in BLOCK LETTERS
Member's/Proxy's Signature
Note: Please fill in this attendance slip and sign at the time of handing it over for registration at the meeting place.
PROXY FORM
Annual General Meeting - Monday, 26th July, 2004
Number of shares held in physical mode ____________________ Number of shares held in demat mode _______________________
Regd. Folio number* ____________________________
* (Please note that folio no. must be provided)
DP ID No** _______________ Client ID Number**____________
**(Please note that DP ID and Client ID No. must be provided)
(To be filled in by the Member)
I/We ________________________________________ of _____________________________ in the district of ______________________
being member/members of above named company, hereby appoint _________________________ of __________________________
in the disctrict of ________________________________ or failing him ________________________ of ___________________________
in the disctrict of ______________________________________________ as my/our proxy to attend and vote for me/us in my/our behalf at
the Annual General Meeting of the company to he held on Monday, 26th July, 2004 at 9.30 AM at FICCI Golden Jubilee Auditorium,
Federation House, Tansen Marg, New Delhi - 110 001 and at any adjournment thereof.
Signed this ........................................ day of .......................... 2004
Affix
Re. 1
Revenue
Signature _ _ _ _ _ _ _ _ Stamp
_____________
NOTE: THIS FORM IN ORDER TO BE EFFECTIVE MUST BE DULY STAMPED, COMPLETED AND SIGNED AND MUST BE DEPOSITED
AT THE OFFICE OF THE COMPANY'S REGISTRAR AND SHARE TRANSFER AGENT- MCS LIMITED, W-40, OKHLA INDUSTRIAL AREA,
PHASE II, NEW DELHI - 110 020, NOT LESS THAN 48 HOURS BEFORE THE MEETING.
NO GIFTS OR COUPONS WILL BE DISTRIBUTED
REWRITING THE FUTURE
43-A, Okhla Industrial Estate, New Delhi 110 020, India.
Tel: + 91 11 51635201 - 07
Fax: + 91 11 51635211
Email: [email protected]