HYUNDAI MOTOR INDIA LIMITED
ANNUAL REPORT 2010-2011
DIRECTOR'S REPORT
Your Directors have pleasure in presenting the Fifteenth Annual Report of
the Company together with Audited Accounts for the financial year ended
31st March, 2011.
CORPORATE RESULTS
The financial performance of the Company for the year ended 31st March 2011
as compared to the previous Financial Year is summarized below:
Rs. In Millions
PARTICULARS 2010-11 2009-2010
Sales and Services 209,933 207,719
Less: Excise Duty 15,851 11,494
Add: Other Income 8,614 6,468
Less: Manufacturing & Other
Expenditure 183,037 188,566
Profit before Interest
and Depreciation 19,659 14,127
Less: Interest and
Financial charges 454 968
Depreciation 7,077 7,529
Profit before Tax 12,128 5,630
Less: Provision for tax
- Current Tax 4,402 2,537
- Deferred Tax (215) (662)
- Fringe Benefits Tax (2) -
Profit after Tax 7,942 3,755
Add: Surplus brought forward 24,153 22,007
Amount available for
Appropriation 32,096 25,762
APPROPRIATIONS
Proposed Dividend 1,219 1,219
Tax on Proposed Dividend 198 202
Transfer to General Reserve 397 188
Surplus transferred to
Balance Sheet 30,282 24,153
Earnings per share Basic
& Diluted (in Rs.)
- Including exceptional item 978 462
- Excluding Exceptional Item 978 462
Weighted Average Number of Shares 8,125,411 8,125,411
OPERATING RESULTS
Global economy during the financial year 2010-11 showed signs of recovery
after decline in the year 2009-10, but the recovery was very slow and
uneven. While the advanced economies grew modestly by 3% against a decline
of 3.4% in previous year, emerging as developing economies grew in excess
of 7% mainly led by China and India.
During the financial year under review, Indias GDP witnessed a growth of
8.6% as compared to 8% during the previous year with agriculture sector
showing a high growth of 5.4%. International Trade showed good performance
with the export growing up by 37.5% and the import by 21.6% which helped to
reduce the current account deficit to 2.5% of GDP as against 2.8% in the
previous year.
While the above were the positive developments, higher level of inflation
despite good monsoon was the main concern. This was mainly due to high cost
of food items which then spread to non food items. Slow down in the
Industrial growth is another area of concern. However the automobile market
showed improved results during the financial year 2010-11 compared to 2009-
10 with the opening up of rural market. The passenger vehicle segment
registered a sales of 24,56,142 units, showing a 24.8% growth over the
previous year.
Your Company achieved a total production of 594,630 units as against
589,536 units last year, representing a growth of 1%. The Company renovated
and upgraded the Paint shop I during the year, which led to longer plant
shutdown and loss of normal production. Your company has crossed the
milestone of 3 million cars of production and sales, during the year under
review.In the domestic front, supported by strong product offerings, the
company has done well by registering a growth of 13% by penetrating into
rural segment. The volume grew from 316,623 units to 358,583 units. The
growth was mainly due to introduction of Verna Transform, next generation
i10 and globally well accepted Santa Fe.
Your company maintained a market share of 18.1% in the passenger car
segment. In exports, the companys volume was down by 18% from 285,638 units
to 233,058 units, due to slow recovery of European market. The company
continues to export to Africa, Middle East, Asia, Europe and Latin America.
Currently the company exports to more than 120 countries.
The Company recorded a domestic turnover of Rs.135,858 Million compared to
previous year Rs.111,429 Million registering a growth of 22%. Export
turnover was Rs.74,075 Million compared to previous year Rs.96,289 Million.
Inflation remains a cause of concern as raw material and other intermediary
inputs have become costlier. The Company continues to focus on cost control
measures which have started yielding good results.
PROFITABILITY
The Profit Before Tax and Profit After Tax for 2010-11 was Rs.12,128
Million and Rs.7,942 Million respectively as compared to Rs. 5,630 Million
and Rs.3,755 Million respectively, recording a growth of 115 % in PBT and
111% in PAT. The growth was mainly due to increased domestic volume,
savings in interest cost and finance charges on account of repayment of
loans, favorable exchange realization of export sales during the period and
reduction in advertisement cost in the export markets.
The Company continues to adopt the Government of India guidelines regarding
capitalization of long term exchange gain or loss to fixed assets.
Accordingly the company capitalized Rs.79 million of exchange gain arising
out of long term loans to fixed assets. The company will apply the same
principle till end March, 2012.
FINANCE
Your company has successfully managed its cash flows efficiently and
preserved credit lines to maintain a comfortable liquidity position by
following a prudent financial policy with optimum financial gearing at all
times.
The Company continued to maintain highest credit rating P1+ from CRISIL for
its short term borrowings. During the Financial year under review, the
company repaid two installments of External Commercial borrowing of USD 25
millions. The Companys total debt to equity ratio was 0.65 as at March 31,
2011. Your Companys conservative exchange risk management policy - a
combination of natural hedge and forward helped to mitigate exchange risk
during the year.
HUMAN RESOURCE
The overall employee relation was peaceful and harmonious throughout the
year. Your company continues to ensure a motivated atmosphere with
continuous learning and caring environment by implementing comprehensive HR
policies. The Company had 61 employees who were in receipt of remuneration
of not less than Rs.60 lacs during the year or Rs.5 lacs per month during
any part of the said year. The information required under Section 217(2A)
of the Companies Act, 1956 and the Rules made thereunder is provided in the
Annexure forming part of the Report. In terms of Section 219(1) (b) (iv) of
the Act, the Report and Accounts are being sent to the shareholders
excluding the aforesaid Annexure. Any Shareholder interested in obtaining a
copy of the same may write to the Company Secretary.SAFETY,
HEALTH AND ENVIRONMENT
Your Company continues to demonstrate a strong commitment towards Safety,
Health and Environment. The Safety and Occupational Health of its employees
are embedded as core organizational values of the Company. Your Company
obtained OHSAS 18001 certification along with the renewal of ISO 9001 & ISO
14001 certificates.
AWARDS
During the financial year your company has won the following awards:- Santa
Fe bagged many awards as the best SUV of the Year by CNBC TV18 Motoring
Awards, Business Standard NDTV Car & Bike Award etc Received All India
award for export excellence by Engineering Export Promotion Council for the
year 2008-09 Most coveted Niryat Shree Gold & Silver Trophies from the
Federation of Indian Export Organisation 2008-09 Prestigious Corporate
Social Responsibility Award as the Best Commercial and Industrial
institution given by Government of Tamil Nadu for the year 2009-10.
Received Sir Visvesvaraya Industrial Award in appreciation of significant
contribution in the area of manufacturing excellence and regional
industrial development
SUBSIDIARY COMPANY
For the financial year ended 31st March, 2011 your Companys wholly owned
Subsidiary Hyundai Motor India Engineering Private Limited, (HMIE),has
significantly improved its financial performance and registered a total
income of Rs.741 Million. as compared to Rs.578 Million during 2009-10.
HMIE has also registered a Profit before Tax (PBT) and Profit after Tax
(PAT) of Rs.43 million and Rs. 39 million during the year as against Rs.31
million and Rs.7 million respectively for the previous Year. The Report and
Accounts of HMIE is attached to this Report along with the Statement
pursuant to Section 212 (1) (e) of the Companies Act, 1956. (Annexure-A).
CORPORATE SOCIAL RESPONSIBILITY
Your Company has been carrying out diverse programs through its CSR arm
Hyundai Motor India Foundation (HMIF) in the areas of Community
Development, Education, Road Safety, Art, Culture and Science, Heritage
etc. Education and Training: HMIF so far donated 21,200 sets of Benches and
Desks covering more than 80 Government schools from Chennai, Kancheepuram
and Thiruvallur districts benefiting more than 60,000 school children. Our
efforts in providing better facilities for the rural education today widens
to providing good table and chairs for the benefit of teachers in 25
schools around the Company. This will provide proper facilities to more
than 100 teaching staff in these schools.
Community DevelopmentAs part of ongoing support to the rural community
around the Company, the Foundation has worked out an ambitious programme
which involves developing eight villages as Model Villages by imparting
soft skills, development of roads infrastructure, creation of hygienic
environment, construction of toilet facilities, providing street lights,
maintaining greeneries in villages, to bring long term sustainability.
Towards creation of self-employment opportunities to the rural youth,
Hyundai Driving School has so far trained 150 youths as licensed drivers.
Our support to upgrade the quality of ITI at Ulundurpet to make a Centre of
Excellence, the Foundation has constructed a hostel to benefit 150
students. Your Company is working on other bigger projects commensurate
with the size of the organization which will support the community for long
term sustainability.Road safety To reduce accidents on the Highways, 120
street lights along the National Highway 4, were installed to a stretch of
4 Kilo Meters including provisioning of Traffic signaling system. This has
been well appreciated by the Road users including the society around the
factory. Hyundai Student Traffic Squad Scheme in Chennai, New Delhi, and
Kolkata involving about 300 college student volunteers supporting local
police in Traffic management continues to get appreciation from the public.
The Foundation has plans to extend this scheme to other cities.
DIRECTORS
Mr. Bo Shin Seo is retiring by rotation at the ensuing Annual General
Meeting and being eligible offer himself for re-appointment.Mr. Young Sook
Roh is retiring by rotation at the ensuing Annual General Meeting and being
eligible, offer himself for re-appointment.
AUDIT COMMITTEE
The Audit Committee of your Company consists of the following Directors:
Chairman : Mr. Han Woo Park, Managing Director Members : Mr. Young Sook
Roh, Director Mr. Won Hee Lee, DirectorDuring the financial year, the Audit
Committee met two times and reviewed the financial statements before
submission to the Board for approval. The Committee also reviewed the
adequacy of internal control systems and internal audit systems prevailing
in the Company.
ACKNOWLEDGEMENT
The company has been progressing steadily during the last 14 years
overcoming many challenges. This was made possible only because of the high
quality standard maintained in all its operations and support extended by
all stakeholders. Your Directors wish to convey their appreciation to all
the employees for their continuous support for the growth of the
organization.
Your Directors take this opportunity to acknowledge the continuous support
of Hyundai Motor Company, Korea.Your Directors thank the various
departments and agencies of the Central Government, State Governments,
Banks, Financial Institutions, Excise, Customs and Port Authorities, DGFT,
Customers, Dealers and Vendors for their continuous support extended to the
company.
AUDITORS
M/s. Deloitte Haskins & Sells, the Statutory Auditors of the Company will
retire at the conclusion of this Annual General Meeting. They have offered
themselves for reappointment as Statutory Auditors and have confirmed that
their re-appointment, if made, would be within the limits prescribed under
Section 224 (1B) of the Companies Act, 1956.
FIXED DEPOSITS
Your Company has neither accepted nor renewed fixed deposits falling within
the purview of provisions of Section 58A and Section 58AA of the Companies
Act, 1956.
ANNEXURE A TO THE DIRECTORS REPORT
Statement Pursuant to Section 212 (1) (e) of the Companies Act, 1956
relating to Subsidiary CompanyName of the Subsidiary Company Hyundai Motor
India Engineering Private LimitedFinancial Year of the Subsidiary Company
ended on 31 03 2011 Number of shares held and extent of holding there of by
the holding Company in Hyundai Motor India Engineering Private Limited at
the above date:
a) The number of equity shares of Rs.1000/- each fully paid
b) Extent of holding in percentage termsThe net aggregate profits or
(losses) of the Subsidiary Company for the current Financial Year so far as
it concerns the Member of the Holding Companya) Dealt with or provided in
the accounts of the Holding Company
c) Not dealt with or provided in the accounts of the Holding CompanyThe net
aggregate profits or (losses) of the Subsidiary Company for the previous
Financial Years since it became subsidiary so far as it concerns the Member
of the Holding Company.
Future Plan of action Customization during development of a new model for
Indian Market. Upgrade test facilities to include Particulate counter for
able to test as per Euro Vb norms.
Expenditure on R & D:
Particulars Rs. in millions
Capital 28.28
Revenue 91.07
Total 119.35
Total R & D expenditure
as % of Total turnover 0.06%
Han Woo Park Unsu Kim
Managing Director Senior Director Finance
Firm no. 00062234 Firm no. 02968803
Date : 21/06/2011